Markets Now Early - 9-10-26 Randy Martinson, Martinson Ag

0:00Markets now is brought to you by Pervant Seeds. There are wins and then there are wins that you get with Pervant Seeds. Big game-changing wins that turn heads and make people take notice. Get started at Pervant.com slash Change the Game. And welcome to Markets now. I'm Michelle. I work with Randy Martinson of Martinson Ag. Well, in the grain space this morning we're seeing Corn and Swaybean slightly higher wheat futures are mixed and we're seeing a little bit higher trade in most of the contracts in cattle mixed in the hogs. Randy, let's start off talking about the Swaybean market. It's kind of leading the charge here today. Lots of discussion about the flash sales. We've seen the last couple of days, especially from China and the fact that they may have bought up to a million metric tons this week. Yeah, that certainly is helping to push that soybean market. You know, we've been seeing wheat as the leader up until last week and now all of a sudden Swaybean has started to become the leader. And I think there's a lot of excitement starting to build with the Chi Trump meeting that's going to take place here on September 24.

1:06So I think that's adding a little bit to it and expecting to see more announcements as far as egg products are concerned for purchasing. So I mean, so it means right now we're kind of grabbing the attention and the kind of leading us as we go into this week. What do you have the running total for China at right now? Right now, you know, if you look at confirmed purchases of China, it's like 13 million metric ton of the 25 they talked about. I think if you throw in on no one's, it gets to be a little bit better than that. Yeah, so they're well on their way to the 25 million metric tons. They have to do that by the end of the year. And you know, what's your sense of this meeting coming up here on the 24th? Will we start to see more frame purchases be announced there? Or will we get a lowering of tariffs or what's going to happen to you think? Well, I think I mean, I know they talked about doing the lowering of tariffs. I mean dropping a 10% tariff that both countries have on each other. So that was part of the discussion that they had back and I believe it was October November when they met the first time.

2:10So I think that will be part of the discussion. I do think that China will come in and make some more announcements of some more purchases of soybeans while they're here. And I do think that they will look at some announcements of some of the other grains. Hopefully, yeah, corn, not likely, but it would be nice if we could see them make some announcement on that one as well. It sure would. What about the diesel prices hitting record levels here? Do you think that that is supportive to the oil prices because it's supporting heating well and they're all tied together? Yeah, I mean, Benoil definitely has a part of the fuels now or the energy markets because of the renewable diesel fields. So, you know, last week or the last couple of weeks, we saw that you know, Benoil come under some pretty heavy pressure off of the expectation for the EPA waivers. Now that's out of the way. I think that's helped relax the market. And I do think the higher diesel fuel prices are helping to push and make it more economical, even for the bio or the renewable diesel fuel.

3:12Is that so fairly expensive to make and now it's starting to compete even with regular diesel fuel? For sure. So the corn market trying to bounce just a little bit this morning. It's been down five days in a row that markets been kind of seeing some profit taking, heading into the WASD correct. It is. I mean, that's what everybody's kind of anticipating is what is USDA going to say for the corn yield? And that's going to be the main focus of the numbers tomorrow. Right now the average straight estimate hasn't coming in, you know, less of course than last month, the 178 to I think it is. So if we see something around that area, I think that would be somewhat or below that would be supportive. If we come in at that, I think the market will kind of react negatively to this or at least it won't be friendly to the corn market. Well, for sure, because don't you think that we already have a lower number than whether you use 178.2 or 178.4, whichever wire service you use, we're already trading a number that's below that in corn. Don't you think?

4:15Yeah, I do. I think we are. I mean, especially when you look at how the crop ratings have been coming in, they've been coming in lower, not just for the northern plains and the western corn belt, but also for the rest of the corn belt as well. So, you know, we've been seeing a crop that has been deteriorating. I would be surprised that the USDA didn't drop down to at least at 178. But if they don't, that is going to be somewhat negative to the market just because of work conditions have been falling. Yeah, and speaking of conditions, you're in North Dakota and what 48% of the corn crop is corn to very poor. So you are going to have a, you know, a tough time up there as far as the harvest aren't you? Yeah, we are. I mean, it's a train wreck. We're already starting to hear some guys going out and combining, you know, their corn starting because of, you know, we're starting to see eardrops, they're starting to fall on the ground, we're starting to see stock integrity where the plants are starting to tip over. I mean, basically the plant is cannibalized itself to try to survive and it's taking it down so that the integrity of the plant is gone.

5:17Kind of seen the same thing in soybeans as a lot of the pods there have started to see, you know, the peas start to dissolve as the crop kind of cannibalizes itself as well. Yeah, not the best finish, obviously, with the heat and the dryness in the western plains, northwestern corn belt here for either corn or soybeans, but soybeans, we probably won't see much of a change in terms of the yield number. Do you think? I don't think we will. I mean, it's too early for that. I mean, I think that'll come more in the next report when the US data is a little more surveying. So I would expect that soybeans won't see much of a change. That's going to be, so we follow more off of what happens in the demand numbers. You know, corn demand also should see a little bit of tweaking as you know, the exports for old crop were ended about 22 million bushels above the expectation. So we should see a little tweaking of an old crop demand as well. Do you think there will be a change in harvested acres? Will corn come down because of silage cutting because of what you just talked about with the drought?

6:18You know, I don't think you as deal make that change in this report. I think they'll wait till the October numbers before they are before they make that change just because it's still a little bit early. I mean, a lot of this was being done as of September 1. So chopping was just getting going at that point. So I don't think they'll make much of a change as far as the harvest today. Cursor concerned. Yeah. Brandy, even if you come down on corn to the 178.4, you still get ending stocks right down to almost 1.5 billion bushels. So we're getting below that 10% stocks to use ratio. So that at least should be supportive. Shouldn't it? It should be at least put it'll keep a base in this market. So I mean, we can't you know any kind of a retracement isn't going to be very large. I think as more of what we're setting ourselves up for. I would expect that this market needs to clean itself up a little bit and see some retracement. We've kind of like you mentioned seen a little bit of that. But overall, I would expect that this will put a floor in the market prevented from dropping too low.

7:20And it does mean that we will have to continue to try to ration supply. Let's talk as well about another news story that came out. Argentina looks like it's had record exports of corn here for July and September. Right. They have seen a really good export market there. You know, their crop continues to get bigger. I mean, I know even Rosio grain exchange came out this morning and increased their size of their corn crop again because of the strong yields that they're seen. So that in it's going to continue to make Argentina a little bit of a competition for us as far as corn exports. More so, I think you know, for some of the Europe and in that region, I don't think that they'll be able to cross over and get take too much of our business away with Mexico. Yeah. Okay, let's talk about wheat because we've been trading headlines. They're chasing headlines again on the black sea. We update and escalation of the war haven't we? And sometimes I guess Putin is talking peace. It depends on what day.

8:20Exactly. And that in wheat is right now. You're exactly right. It's chasing the headlines. I mean, last week we we dropped hard off of the news that peace was possible or talks were possible. Of course, then over the weekend Putin said, no, he's comfortable to keep the war going now. He's talking about possibility of sitting down and negotiating again, but in the big picture, you know, wheat is going to be somewhat spurred off of what's going on in the black sea region. If they do get peace, that's certainly going to be bearish to the wheat market as we are going to then see them get back into the export market. But it's going to take time. I mean, they've got there's damage done that it's going to take months to fix that. So hopefully that means the US will get some business. And that's really what we need to look for is US needs to increase their exports of wheat. Otherwise, all of this is really just kind of chasing headlines again. Yeah. And we're going to need to see that pretty sooner. We we don't have any evidence of it yet that the US is picking up businesses or resolve. And not really. I mean, we've seen the wheat exports and shipments increase a little bit over the normal, but nothing major. But yeah, where you need to see it soon, because if they do cause some if they do go into some peace talks and stop the fighting, it's three to four months and they'll be able to be back to semi normal, which would be pretty bearish to the wheat market.

9:41What's the expectation in the market for winter wheat acres here? Is that something that the market is starting to price in? I think Kansas City is. I mean, Kansas City has been carrying a premium to the other weeds. And now that's a little. It should carry the premium to the Chicago, not so much to Minneapolis, but it has been. And I think a lot of that is because of the concerns with the headlines. But at this point, it's pushed the prices up enough where it's going to encourage an increase in acres. And I wouldn't be surprised to see winter week acres increase seven to 10% because of the higher base price for crop insurance. And the fact that the guys in the Southern Plains have no risk in planning that winter wheat. Yeah, because they can double crop right? Exactly. You know, if the problem even if they do get the wheat crop and they get it harvested early enough, they can then double crop or if it fails, they can go in take, you know, their insurance on the wheat crop and then go in and plant a spring crop. Yeah, they're going to need some rain soon to get that crop in the field though, aren't they? They are. I mean, I think you know, the entire plains is going to need some rain here pretty soon because it's it's starting to get critical.

10:47What about the cattle market? It looks like we're trying to consolidate off the lows and the cash market's going to be key here, isn't it? It is. I mean, I think that's what everybody's waiting for is to see where cash is going to trade. I mean, there's last week we traded decent. It's been improving. And that certainly has helped to stabilize the market here a little bit. I'm still worried that, you know, because of the inflationary numbers and because of crew, rallying and stock market seeing some concerns. Then the talk that we might see interest rates increase. I still am a little worried that cattle maybe aren't done with their downward spiral. Okay, thanks so much. That's Randy Martinson with Martin Sennag and markets now. You can just pejorate the anticipation before the big moment, the ban playing, be adrenaline flowing, the confidence that you're about to hit the field and simply dominate. Now you know what it feels like to plant a field of bravant seeds because when you choose bravant seeds, you're not looking for a simple win.

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