pressure

The pressure on the agriculture markets continues to come from drought, the war on Ukraine and crop tour reports as was discussed by Randy Koenen of the Red River Farm Network and Randy Martinson of Martinson Ag Risk Management on Friday, Aug. 25, during the Agweek Market Wrap.

The latest news to hit the markets came from comments from Federal Reserve Chairman Jerome Powell at the annual symposium on the morning of Friday, August 25. In his talk he mentioned that the fight against inflation is ongoing. This kind of threw a wet blanket on the market, according to Martinson, as the potential of higher interest rates tends to slow spending.

With the

Pro Farmer Crop Tour coming to close

this week, the results hampered the markets early and seemed to boost later on as the tour reached into parts of the northern Plains. Martinson said in the end, the results came in close to a five-year average. He anticipates a little smaller yield than expected.

Weather remains a concern for producers as it’s mostly too dry, but in some areas of the northern Plains, fairly wet. Weather is going to trim yields, according to Martinson. It appears hot and dry weather will cause some soybeans to abort pods.

“Corn is kind of stuck in between, you know, kind of in purgatory. Whether it follows wheat or do I follow the soybeans,” Martinson said.

Koenen mentioned that

the corn market

is not yet made and could be trimmed with more drought conditions. Martinson said it will be the western Corn Belt that makes the difference. Koenen said it appears that the eastern Corn Belt is getting more of the storms. Concern about conditions getting too wet is building.

Wheat struggled this week due to low demand and the harvest taking place. Harvest conditions should be taking off with the mostly warm and dry weather. The high production coming out of Russia is hurting the wheat market, but a lower price on corn and soybeans is helping to build some demand for exports, according to Martinson.

As harvest starts to commence in the northern Plains, preparation is happening for the next planting season to start September 15 in South America. Logistically, that’s not easy because they are still trying to harvest in some cases as ports are backlogged with product, Martinson said.

Wheat conditions could be trimmed in Argentina because dry conditions persist there.

“There is still some concerns that Argentina might not see the production that we estimated for them right now,” Martinson said.

Martinson talked briefly about soybean demand at home. He noted that

the Spiritwood Station will come on board

this fall to start crushing. That and others are coming on board to increase demand for soybeans.

The livestock market has been looking for some direction as barbecue season is drawing down.

Martinson said what’s helping is that meat storage numbers are down “tremendously.” What may shrink back the market is that a lot of cattle may soon be headed to market.

Koenen brought up the high losses across the country due to heat. Martinson confirmed that high heat and humidity caused about a 6% loss in some feedlots.

These conditions are causing a back and forth in the market.

“It’s going to be interesting, you know normally we see demand slow down when we go into the fall, but we’re going to see extremely tight stocks, tight supplies, and that should maintain the market, but I still think seasonally we could see a little bit of a drawdown,” Martinson said.

(The Agweek Market Wrap is sponsored by Gateway Building Systems.)

Michael Johnson is the news editor for Agweek. He lives in rural Deer Creek, Minn., where he is starting to homestead with his two children and wife.
You can reach Michael at mjohnson@agweek.com or 218-640-2312.