Grain and livestock markets weakened to close out the month as traders assessed harvest pace, geopolitics, and economic signals. Randy Martinson of Martinson Ag Risk Management said the grain and livestock complex appears to be waiting for clarity on several fronts.
Martinson discussed the week’s moves with Jamie Dickerman of the Red River Farm Network on Friday, Oct. 30, noting that seasonal harvest pressure is evident across the United States. He added that premium has come out of several contracts, especially wheat, which is roughly 2 dollars lower on the December Chicago Board of Trade. Corn also posted sizable losses, while soybeans fell more modestly.
Talk of possible peace discussions between Ukraine and Russia, despite continued attacks, added to the downdraft in wheat, according to Martinson. He said the market is gauging whether a deal might be reached. In his view, few participants want to be long wheat if a trade or peace agreement restores larger flows of Ukrainian and Russian wheat and corn to export channels.
For corn and soybeans, advancing U.S. harvest kept prices on the defensive. Martinson noted that China has been an active soybean buyer, though the broader trade has not reacted strongly to the ongoing purchases.
Dickerman highlighted reports that China stepped in to buy some wheat this week. If that sale is finalized and China imports its typical 1 to 3 million bushels, it would be supportive, she said, recalling that China canceled a wheat order last year. Even so, Martinson said wheat buying has lacked consistency given that Ukraine and Russia, historically the two largest exporters, have faced disruptions.
Dickerman also asked about the U.S. Department of Agriculture’s change to the September corn production estimate that was issued in October. Martinson said the revision was notable and dented confidence in USDA data. He said the upcoming November report will be watched to see if the same approach is applied. Based on producer feedback from Nebraska and across the Corn Belt, he expects a further downward adjustment because yields have not matched earlier expectations.
Harvest progress and cattle futures under pressure
Turning to livestock, Martinson said the sector is seeking greater certainty about the economy. He described cattle as under pressure and said the hog market was “decimated” this week. He attributed some of the weakness to consumers scaling back at the grocery store, shifting eating habits toward less or lower cost protein. He added that November and December are typically not strong beef-buying months, which is an added headwind.
Looking ahead to next week’s midterm elections, Dickerman asked what factors he will watch in November. Martinson said markets tend to dislike uncertainty and that election outcomes could influence expectations for policy and the broader economy. He added, partly tongue-in-cheek, that gridlock might persist regardless of who controls Congress. He also cautioned that geopolitical developments could continue to disrupt markets.
Interview conducted during the Agweek Market Wrap.