August 28, 2025 • 31 mins
Panelists
- Matt Bennett, AgMarket.net
- Arlan Suderman, StoneX.com
- Collin Watters, Illinois Corn Growers Association
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the August 28 edition of commodity week.
Todd Gleason services are madeavailable to WILL by University
of Illinois Extension. Well,welcome to commodity week. I am
Todd Gleason. Our panelists forthe day include Matt Bennett of
agmarket.net.
We're joined by Arlen Sudermanwith Stonex, and Colin Waters is
here. He is with the IllinoisCorn Growers Association. Our
(00:24):
program comes to you today fromthe Farm Progress Show in
Decatur, Illinois. Remember, youcan always find commodity week
online on demand anytime you'dlike at willag.0rg. Arlen
Suderman, let's begin with youfor the day.
You've spent three days here atthe Farm Progress Show in
(00:44):
Decatur. You and Matt and a fewothers have been in the varied
industries tent, and I wantMatt's take on this too. What
have farmers been asking youmost often?
Arlan Suderman (00:55):
Well, it all comes down to the size of the
corn crop, the size of soybeancrop, and whether we're gonna
sell soybeans to China. I thinkthose are the three big things,
and, that's the focus. And whenare we you know, how do we put
the bottom in the market? That'swhat everybody wants to know.
Todd Gleason (01:12):
And, Matt Bennett, are they asking you the same
question or something different?
Matt Bennett (01:16):
Yeah. They're asking when's the corn market
gonna rally? I mean, that's thefirst question I get asked. So
Todd Gleason (01:21):
Do you tell them it already has a little bit?
Matt Bennett (01:24):
Yeah. I mean, I tell them whenever you take a
report like the August 1, whichis arguably one of the most
bearish reports I've ever seenin my life, and you take these
corn down on the week a quarterof a penny, that would be called
a win in my book. And so there'svarious reasons that we can go
into as to why I kind of feellike the market has acted like
(01:46):
it has, but absolutely thingscould look worse than what they
do right now.
Todd Gleason (01:50):
They could look worse. I do want to hear about a
conversation I think both of youheard or talked with Scott
Erwin, agricultural economistfrom the University of Illinois
about. This has to do with farmpolicy, particularly coming out
of Washington DC and the EPA.SREs or the small refinery
exemptions aren't quite set, butit sounded to me, and I'll start
(02:14):
here, Matt, with you on this,that Scott and we've heard this
on the radio from him already onThursday afternoon, but Scott
really is pretty bullish tosoybeans over time as it's
related to biofuels and thecrush. Can you tell me about
that conversation you had withhim?
Matt Bennett (02:36):
Yeah. And so I actually came to this, drove by
the tent and saw Scott out. Isaid I better stop and talk to
him. And after we talked aboutIllinois football and some other
stuff, you know, in the
Todd Gleason (02:47):
fact I take it, Gary. Sniffke was sniffke was
not there to talk about OhioState.
Matt Bennett (02:51):
Are so high, which is very scary as an Illinois
football fan.
Todd Gleason (02:55):
Before you get into the rest of the story, and
maybe you will have made note ofthis too because you're a
University of Illinois grad,this summer when I have been out
at the state fair and farmprogress show and all the other
events, there are moreUniversity of Illinois Illini
hats and shirts out than I haveseen in decades, and it has to
(03:15):
do with the sports teams.
Matt Bennett (03:16):
No. Absolutely. I mean, we've got good athletic
programs all the way around. Butas you know, Todd, the best
thing for an Illini footballteam is low expectations because
when they're high, it doesn'talways pan out for us. But I'm a
huge dilemma fan.
Coach is he's doing a good jobthere. But, yeah, so I stopped
talking to Scott, and we had agreat conversation and I was
(03:38):
getting ready to leave. He saidwoah, woah, woah. He said we
need to talk. And I said aboutwhat?
He said basically I'm bullishsoybean I said yeah, I am too.
He said no, I'm bullish soybeanoil. And I said, yeah, I get it.
So no doubt about it, when youlook at the policy right now,
clearly everything isn't set instone, but everything we're
(04:01):
getting is actually veryfriendly. And so bottom line,
over the course of time, thebuild out of the crush industry
is not going to happenovernight, but there will be
reason for it.
There will be profit margin. Thecrush margins are still good
even today. They should get alot better if soybean oil goes
in the direction that we thinkit's going to go, which would be
(04:22):
a fair amount higher than wherewe sit today. Bottom line is
Scott is very friendly.
Todd Gleason (04:28):
From the Stonax side and you have deep roots
into the industry from Stonak's,what do we know, understand
about the policy and how itworks, and and how do you see
this playing out? Are you asbullish as Scott is, and how
long of a horizon?
Arlan Suderman (04:46):
Yeah. Our edible oils team is is very friendly to
soy oil demand. When we look atthe policies that have been
released so far, they've beenvery farmer friendly on the
biofuel side. And I think a bigreason for that is the Trump
administration trying to findother areas to agriculture
during the tariff war. When welook at what we know so far, the
(05:08):
two big questions that have notyet been answered has been, the
offsets for the SREs that weregranted, the smaller refinery
exemptions.
How many of those will have tobe made up by the larger
refineries? And at this point,we believe that even if there
are no offsets, that's stillfriendly for demand. The other
(05:28):
piece of the equation is the 50%credit RIN credit for, foreign
or from overseas feedstocks. Andthat's one that farmers
obviously cheered when it wentdown to 50% to try to favor
domestic feedstocks. The big oilreally opposed that, and the
(05:50):
reason is they're worried wedon't have enough feedstock.
And that may be one we have togive on because if we lose big
oil support, they're veryinvested in this industry, that
could end up hurting us. So I dothink that we're tight on
feedstock. That may be one thatwe see some change. Maybe it
goes to 75%. Maybe it goes a100%.
(06:11):
I don't know. But right now, thetwo remaining things that are
left, we still feel it's gonnabe bullish for soy oil demand.
The big problem is gettingenough crush built. Right now,
USDA has their crush number forthe next marketing year about as
high as it can be with theexisting crush capacity. So we
(06:33):
need to get more built.
That's gonna take a year or twoto do. But in the long run, this
is gonna be very friendly, Ithink, for soybeans.
Todd Gleason (06:41):
Yesterday, I was talking to a producer from
Mitchell, South Dakota. They areapparently putting a new crush
plant up there, so capacity isstill being It is. Brought on
board. Do you think those, thosecrushing plants that were
planned but that were paused orstopped. Will they come back on
(07:01):
board quickly now?
Arlan Suderman (07:02):
Yeah. We do see most of those coming on board.
It's it's just restarting, jumpstarting everything, and that's
in the process now. It justtakes that time to build it. And
but at least they're that faralong.
So that'll make it quicker thanif they had to start from
scratch.
Todd Gleason (07:17):
Arlen Suderman, of course, is with Stonex. Colin
Waters is here too. He's withthe Illinois Corn Growers
Association. I know you havethese policy things in the back
of your mind as they're relatedto corn. We've been talking
about soybeans, but it's not theonly part of this.
The SREs, of course, are there.That has to do with ethanol. E
15 potentially as a year roundfunction. What are the things
(07:39):
that you've been watching, andwhat might they mean for demand?
Collin Watters (07:43):
So so I guess one of the things that we we
tend to think about, and thisactually gets back to some of
the work that Scott has done inthe past is, you know, the SREs,
yes, is really, reallyimportant. It's really more
important on the ethanol on theplant profitability side. Some
of the work that he's done hasbasically shown that there
really isn't correlation withthe SREs and overall corn
(08:04):
demand, right? Right. So from afarmer perspective, kind of keep
that in mind.
We tend to get wrapped aroundthe axle on SREs and a lot of
that policy. But, you know, E15is definitely something that
needs to be done. In the grandscheme of things, I'm not sure
that, you know, even just kindof addressing kind of the
(08:28):
patchwork issues that we haveright now, if that will really
generate true demand, likesignificant demand, right? I
think there's kind of amisconception that, know, you go
to E15, well, that'll just, youknow, 50% more ethanol, right?
Well, no, not really.
Because in in some of thesemarkets where E15 is still
allowed and you don't need awaiver and all that, it it
(08:49):
really hasn't penetrated as muchas you would think. There's
other impediments, right? Soit's stuff like underground tank
warranties and equipment
Todd Gleason (09:00):
Having to install the pump.
Collin Watters (09:02):
It's incredibly complicated, right? So it's not
like you just flip a switch whenyou say E15 is all good, done
and done, and we're going tohave 50% more corn demand.
That's not the case.
Todd Gleason (09:12):
And the big orange warning label that says e 15, I
doubt is very helpful. Onlybecause of the color of the darn
Yeah.
Collin Watters (09:19):
And I and what's what's really interesting to me
is that you're you're now seeinga lot of a a a lot of stations
that are selling the 87 octane,but it's E15, right? And so if
you need E10, you got to pay forthe premium. You got to get 93,
right, or 91. So there is thereare some changes happening in
the marketplace, but it's not anacross the board thing. Anyways,
(09:42):
think that right now the waythat we're looking at it is that
2019 was really kind of the highwatermark for ethanol demand in
The United States.
And we've kind of plateaued. Itlooks like we're going to
probably absent any major policychange that we will see a slow
erosion of domestic ethanoldemand.
Todd Gleason (10:04):
Colin or Arlen, and I don't know who will be
better at this, on the SREsgoing forward, It's not a
completely done deal as it goesto policy just yet because it's
not quite clear if they will berequired to be picked up by the
large producers, so there willbe a reallocation of them. But
(10:29):
if they are reallocated, thatcould, I believe, if I remember
the conversation with Scottcorrectly, cause some kind of
demand push.
Arlan Suderman (10:39):
Yeah. Certainly. So we expect that. And for what
the EPA has ruled on so far,there's about 1,400,000,000 RINs
that are affected that are up orare they gonna be reallocated,
but that doesn't include theapplications for 02/2025. So you
add those two, and it gets toabout 2,000,000,000 RINs that
(10:59):
would be divided up among thevarious fuels and stuff.
So we anticipate, the EPA torelease several different
options, that's at the OMB nowor going to the OMB now, and
then it'll come for publiccomment. Maybe a ruling by the
October that may be squeezingthe counter a little bit. That's
the big thing now is when are wegonna have some certainty? We
(11:22):
believe it's gonna be positivefor demand, but, again, it's
uncertain, and the market'skinda trading that uncertainty
now until we know more, and it'sgonna be another couple months
probably before we really do.
Todd Gleason (11:34):
Okay, Matt. Back to what producers have been
telling you here at the FarmProgress Show from across the
Midwest as they've been walkingthrough. Are they talking about
the variability in the crop orare they simply telling you, you
know, actually I have a reallygood crop?
Matt Bennett (11:49):
You know, I I would say the most common thing
I'm hearing, and this is amultistate conversation, is that
my crop was phenomenal, but nowit's really good. We have not
had a good finishing August. Andso, you know, I've tried to tell
people, hey, I'm not trying toget bullish on you. What I'm
(12:11):
trying to impress upon you isthat we started with incredible
potential. And now, like forinstance on my farm, my yard is
brown.
So what's that tell you? Ididn't finish well. So clearly,
whenever you have mid Mayplanted corn that's already
dented, you brought it along tooquickly and you're not going to
(12:33):
have that good finish you reallywant to see with big test
weights and corn that weighsreally good. Disease is
certainly going to be a factor.A good friend of mine went
through Iowa yesterday and hadseveral stops and said he didn't
have one stop withoutsignificant rust issues.
And most of these fields weresprayed. Now, whether it's going
(12:54):
to have a large yield impactdepending upon a lot of that
rust is below the ear in someplaces, so you don't know. I
mean, it's lower in the plant ifit's really going to affect
things. But yeah, Todd, I thinkthe most common thing I've heard
is that, you know, I was lookingat maybe a two sixty, two
seventy type yield. Now it'sprobably twenty, thirty below
that, which is still awfullygood corn.
And so there's a lot to belearned here still. I think that
(13:17):
whenever you look at the cropsize in total, I'm certainly
well below the USDA's Augustnumber. But at the same time,
I'm still in the camp that it'svery likely to be a record crop,
Something north of 180. I justdon't know if it's as far north
of 180 as what some people feel.
Todd Gleason (13:34):
Greenville, of course, is about light
interception. So if it's belowthe the ear, less so than
clearly if it is above the earand how much photosynthesis is
able to be done. What have youheard kind of the same thing as
it's related to the size of thiscrop?
Arlan Suderman (13:52):
Yeah. Certainly so. And I think one of the
things that I've noticed as I'vebeen crisscrossing the Midwest
here over the last few weeks ishow many top leaves are burning,
a lot of fields. That's nevergood to see that, burning
starting from the top goingdown. And so we definitely are
taking some of the top off.
It's still a big crop. It'sstill gonna give us some storage
(14:12):
issues, especially in theWestern Midwest. The Dakotas
have a record crop regardless,and they deserve having a crop
good crop up there. But it it'snot what it was, certainly.
Todd Gleason (14:25):
The man from the Mitchell, South Dakota told me
200 or better for his corn crop,and Mitchell's not exactly in
the Eastern Side of SouthDakota. And and or on the best
of ground, I would think.
Matt Bennett (14:39):
Well, I mean, you you get in that Southeast Of
Sioux Falls area East Of SiouxFalls, and that's just as good a
dirt as what we're looking ataround here. Lot of that, some
of those guys have pulled off240s and 250s in the last few
years. But yeah, you
Todd Gleason (14:54):
go West Of Sioux Falls, it changes significantly.
I was surprised and he waspretty straightforward honest
about it. He was like, I have agood crop. I have a really good
crop. Okay, Collin, he mentionedlogistics.
I want to hear about thelogistics related to storing
(15:16):
this crop. Soybeans not goingout of North Dakota are a
problem throughout the Midwest.Is that correct?
Collin Watters (15:24):
Sure. I mean, anything that will kind of upset
the entire system. I think thelogistics system in The U. S. Is
like a balloon.
You've got something you push onone end, it's got to go
somewhere else, right? Yeah, I'manticipating that there's going
be ground piles you know, prettymuch all over the place.
Logistics wise, don't know, itkind of ties back into some of
(15:48):
the questions that Arlen hadbrought up about China and the
being demand and how much ofthat, you know, how much of that
grain is going to be leaving thekind of the northern tier out
the PNW, I don't know. I don'thave a good answer for that
honestly. But in overall, rivertransportation seems to be
(16:08):
looking fairly good.
The forecast at least it doesn'tlook like we're going have a low
water situation. Hopefullyfingers crossed. Rail seems to
be working well with theexception of maybe some of the
issues Mexico you know, Feromexgetting cars and power back, you
know, to The U. S. But I'mfairly optimistic, I guess,
(16:33):
about our situation.
That and that discounts, youknow, everything else, all the
global shipping issues. So westill have that, whether it's in
the Red Sea or other, you know,other struggles. But, you know,
I think I think we're going tohave a lot of grain on the
ground. But hopefully thehopefully the system works.
Todd Gleason (16:54):
So anticipated not it's not a problem moving the
crop. It's about putting it onthe ground and storing the crop.
Collin Watters (17:01):
Yeah. I mean, ultimately, that's I guess my
bigger concern is that we if wecontinue to see kind of slack
export demand and beans, notnecessarily slack, but just off.
And we have we've had a reallygreat export program in corn, so
hopefully hopefully thatcontinues. I mean, really need
to have those export markets,especially I mean, we're we're
(17:24):
very competitively priced rightnow, so I would hope I would
hope that that that continues.
Todd Gleason (17:28):
Matt, this is a conversation we've had many
times in the last month and ahalf. This is going to be about
the basis. You have experience,of course, in the elevator
business. Putting a crop down onthe ground, corn, is going to be
an issue, particularly as itrelates to storage space because
farmers are gonna wanna selltheir beans across the scale,
(17:50):
and we're gonna talk about thatin a second. But just basis is
going to be an issue.
And I think how do you see thatdeveloping?
Matt Bennett (17:58):
Yeah. I mean, I think one of my biggest concerns
is a grower that, for instance,knows they've got forty, fifty
thousand bushels that has to goto town that they cannot store.
They don't know what they'regoing do with it yet. I would
just as soon have a plan for itnow is to wait until October
fifteenth because if you'reputting corn on the ground, from
my own personal experience,putting it on the ground is a
(18:22):
little easier than picking itback up And none of us enjoy
doing it. And I can tell you, ifyou want to rain in Central
Illinois, now start piling cornon the ground somewhere because
that's when it starts raining.
Okay? And then you've gotquality issues. And so I've been
telling guys don't get in aposition where the elevator says
you can deliver, but you'regoing to have to sell in order
(18:44):
to deliver. And by the way,congratulations, there's a 50
under basis to go along with it.And I don't think that that
number is going to be too faroff.
We've already got some folks atthirty five and forty under in
our part of the world. And Ithink 50 under or worse could
happen in the thick of harvest.And so I don't want to get
caught
Todd Gleason (19:03):
in that.
Matt Bennett (19:03):
And so the way I'm looking at this, the grower is
still very much under sold onnew crop corn. And some of your
originators have told me thatthey're still willing to have a
little bit of wiggle room onbasis. Of course, it's going to
probably be for quantity. But ifyou called your guy and said,
hey, you know what, I've got 25,thirty, fifty thousand bushels.
(19:25):
Could you go from 3,500 to 25,27 under?
It has been happening. I knowthat. And so, you know, you at
least have to take advantage inmy opinion of having that
ability to make thatconversation happen right now
because I don't think you'regoing to get to have it once you
get harvest going in fullearnest.
Todd Gleason (19:45):
So you are of a mind just off the quick
calculation that basisdepreciates somewhere between
1520%?
Matt Bennett (19:54):
Yeah. I mean, I think that if I'm just gonna put
cents on it, I'm gonna say atleast ten to fifteen cents. It
could be 20. I think one thingthat's going to maybe slow it
from getting super wide isthere's a whole lot of folks
talking about bagging corn everyyear. More and more of them are
bagging more and more corn.
So if you're going to bag thecorn, obviously it will take a
(20:15):
little pressure off the system.I have had a few originators
tell me that they feel like twothings. The crops probably if it
was a 188.8, Todd, I could haveseen basis levels that would
make your head explode. But youtake that down just a little
bit, it's going to take a littlepressure off. And then of course
guys find another home for thatcorn, in my opinion, is going to
(20:37):
make the elevator maybe not nearas horrific as what we thought
it might have been originally.
Todd Gleason (20:42):
Arlen, I wanna talk about basis a little bit,
but I also wanna talk aboutcompetition. The safrinha corn
crop is coming out of Brazil. Ithink market it into just about
now, it should be coming in inin making it to port there if I
remember correctly. That'scompetition.
Arlan Suderman (21:01):
We are extremely competitive on the world market
right now because Brazil farmersare not selling. They basically
have finished harvesting thecrop, but it's not moving. And,
on the way here earlier thisweek, I was on the phone while
driving, talking to one of ourtop brokers in the Mato Grosso
area, and I said, Jonas, when isthe farmer they're gonna sell?
(21:24):
What's what's his target? Hesaid, they're waiting for the
rally.
They're waiting for the
Todd Gleason (21:31):
Sounds familiar.
Arlan Suderman (21:32):
Rally in the board. I said, just like The US
farmer then. And, so they'rebehind, and they're selling as
well. And it's it's got theirbasis at extremely high levels
because they're not selling, andthat's why our exports are
strong. The other reason ourexports are strong, and I wanted
to mention this, is a year ago,we had 30,000 head of feeder
(21:53):
cattle a week coming across theborder out of Mexico in The
United States to be fed here.
And the border's closed nowbecause of the new world
screwworm. So we're exportingthe corn to Mexico so they can
feed the cattle down there,slaughter them, send the beef up
here. So USDA should have cuttheir their feed usage number in
(22:16):
August on August 12, andinstead, they bumped it another
250,000,000 bushels. The numbersdon't add up. And so while
there's a lot of positives outhere, that's one you gotta be
aware that as the crop getssmaller, demand is gonna get
smaller as well.
(22:36):
USDA fluffed up that feed usagenumber, and that's going to
shrink as the crop gets smaller.I don't wanna be the the big
bear here on that. But here Isay, is the more basis falls at
harvest time, the more it hasthe opportunity to recover and
the person be able to capture itas long as they have a home for
(22:58):
that corn that they plannedahead.
Todd Gleason (22:59):
Did Jonas also tell you that when you asked
when they would sell it, itwould be after they got back
from the Farm Progress Show orabout the same time that
producers here are gonna beforced to sell across the scale?
Arlan Suderman (23:11):
Yeah. Absolutely. He's very familiar
with the Farm Progress Show.
Matt Bennett (23:14):
Yeah. A couple of couple of things. Of course,
Arlen and I have had a chance totalk together. Seems like almost
every day here lately. But onething, and I don't know if you
saw this, Todd, but theBrazilian grower who made a lot
of money in the last twentyyears, they're on the struggle
bus right now.
And so I saw I read a column theother day that one of the larger
(23:35):
lenders in Brazil, 600,000clients, about 20,000 of them
are currently in default. Andso, you know, one thing I've
told a lot of growers lookingforward, is that this is a
situation where if The U. S.Farmer is having a hard time
making money planting corn dueto high fertilizer costs, high
input costs, we're not alone.We're not rowing in that boat
(23:59):
alone.
So whereas we know the grower isgoing to plant a lot of beans
this year, the verdict is out onwhat their appetite is going to
be to ramp up corn acreagesignificantly if input costs, we
don't get some sort of relief.And right now from a fertilizer
standpoint, you know, Arlen'sbuddy, Josh Glenville, agree
(24:19):
with me on this because it's whyI have the opinion I have
because I talk to him all thetime. I don't see a lot of
relief on fertilizer. It's veryconcerning. So I just want to go
back to you said what aregrowers asking me?
They're saying what if I don'tput my fertilizer on this fall?
Can I expect it to be cheapernext spring? I'm very concerned
with that mentality, Todd, andhere's why. At some point, the
(24:42):
focus, in my opinion, is goingto shift to 26. And even without
this big demand increase, you'vegot phenomenal world and US
demand for corn.
And so if you take acreage downsignificantly due to liquidity
concerns, due to high inputcosts, due to the natural shift
on corn to beans, beans to cornguys, all of a sudden people are
(25:04):
going to take a look at thebalance sheet and say we don't
have the room to have a weatherissue. So will we buy some
acres? I don't know. Is it goingto come from corn going up or
beans going down? I don't know.
But if you get a corn rally, Ican assure you fertilizer is not
going to come down. Last point,real quick, sorry. Five forty
five million bushel increase indemand on this report. Okay? And
(25:28):
so one thing Arlen and I havebeen trying to help people
understand is that that's a bigjump, you know?
And that's the protocol. USDAtypically, if they increase
production, they raise demand aswell. So if you go ahead and you
take five, six bushel off thiscrop over the next two reports,
you've got all the demand andthen some to offset that if you
(25:49):
want to. Now there's reasons tobelieve that we could leave
exports the same, but I'm withArlen. This feed and residual,
it gives them some wiggle room,you know.
I think that they're gonna haveto dial that back. And so we've
gotta be cautious as to assume,hey, this is a one eighty four
and a half yield in September.I'm not saying that's what'll
(26:11):
happen if it was. These guys aregonna say this is bullish. I'd
be careful in that assumption onold crop.
Todd Gleason (26:18):
Yeah. Because you're you're suggesting then at
that point at colander, whatthey're really suggesting is
demand offsets whatever decreasein yield might come. So to make
it easy, every bushel, but itdrops a million a million.
Matt Bennett (26:37):
It probably won't be one for one, but good luck
getting much under2,000,000,000.
Todd Gleason (26:40):
Yeah. Yeah. So it it yes. Correct. So we don't
change that very much.
No. Do you see that are are youwith them because this is what
you do on the demand side beingtoo heavy?
Collin Watters (26:53):
Well, obviously, these guys are the experts.
Right? So I'm I feel like aninterloper here, but my my best
guess is that yes, well, do seeopportunity in the export
market, especially with howcompetitively priced The U. S.
Origin is right now.
That could certainly change,right? So it's really
(27:16):
interesting in Brazil how theacreage is changing. They're
increasing their demand for cornethanol. They're building more
and more corn ethanol plants.They're consuming a lot more of
that corn right now.
They'll be competing in theethanol exports, distillers
export markets as well. Thatdynamic is interesting to me.
(27:41):
Also, South America andArgentina, policy changes that
they're undertaking and reducingthe export taxes and so forth. I
am confident that we will seeArgentina become a much stronger
competitor in the world marketcoming on pretty soon. So that I
know, it's a very mixed bag.
(28:02):
And I honestly, I don't knowthat I have a really good
answer, but I would defer tothese guys. They know what
they're talking about.
Todd Gleason (28:09):
Alright. We're gonna get a final word from each
of you at this point. I will saythat if you're interested in the
numbers from Brazil, I have adifficult time sometimes looking
at them in metric tons becausethey always come in that way.
You can go to willag.0rg. Thereis a tab there that says USDA,
and the supply and demand tablesfor both corn and soybeans are
(28:30):
converted, the actual s and dtables, into bushels, and I find
it easier to think about it inthat way.
Arlen Suderman from Stonex,let's start with your final
thoughts for our program.
Arlan Suderman (28:42):
I'd just like to highlight, be talking. Be
talking to your suppliers. Betalking to people who buy from
you. Have the conversation soyou can plan and don't get
caught off guard.
Todd Gleason (28:53):
Colin Waters from the Illinois Corn Growers
Association.
Collin Watters (28:56):
Yeah. I guess the only thing that I would just
add is a little bit on the theinput side of things. So the
Illinois corn growers, we'rejust 100% focused on farmer
profitability. We're working ashard as we can to help develop
markets and expand markets. Butwe're also working on the input
side, really trying to get asmuch relief as we possibly can.
We're talking to the fertilizercompanies, talking to the tech
(29:19):
companies and everybody elsebecause, you know, honestly,
there's a lot of policy stuffthat's going on right now that
could help or hurt on somelevel, like the the
$10,000,000,000, you know,emergency payment that came out
last last December. I I don'tknow that that it was a Band
Aid. Right? But I don't know ifthat I I have a feeling that
(29:41):
that's structurally not helpfulfor farmers. Right?
Because there's, you know, whatwhat, input supplier, what
landlord is going to say, oh,yeah. I can see you're really
having a hard time here when youjust got a government check.
Right?
Todd Gleason (29:54):
Possibly built into the fertilizer price.
Collin Watters (29:56):
And it it will and so that until the structure
until it fundamentally changes,I think we're gonna be
struggling. But, we're we'reworking every day as hard as we
can to help farmers.
Todd Gleason (30:06):
And Matt Bennett from agmarket.net, your final
word for the day.
Matt Bennett (30:10):
I mean, there's no doubt this is a challenging
environment. It's one of themost probably the most
challenging environment for alot of folks younger than me.
And so, you know, for me, Ithink we have to look at a
couple of different things andone of those is that we do have
very strong corn demand. It'sgoing to be a real feather in
(30:32):
our cap moving forward. I thinkit's a very dynamic environment
we've got with input costs.
You know, we could see a bit ofa pendulum swing over the next
several months. And so I don'twant to just put my head in the
sand and do nothing here. If Ihave the ability to have a home
for corn like Arlen was talking,I certainly think that it's
(30:52):
probably a smart idea. Look atthe carries in the market, what
can we do with this crop, sellthe carry, wait on basis to come
back to you, handle it like agrain elevator does. I think
it's something that that we thatwe we can have base hits and at
least live to play another daybecause, it's not
Todd Gleason (31:09):
all lost. Commodity week, of course, is a
production of Illinois PublicMedia. It's public radio for the
farming world. You may find andlisten to us on demand anytime
you'd like at willag.org. That'swillag.0rg.
Our thanks go to our paneliststoday, Matt Bennett, Colin
Waters, and Arlen Suderman. I'mUniversity of Illinois
(31:30):
Extension's Todd Gleeson.
This is the August 28 edition of commodity week.
Todd Gleason services are madeavailable to WILL by University
of Illinois Extension. Well,welcome to commodity week. I am
Todd Gleason. Our panelists forthe day include Matt Bennett of
agmarket.net.
We're joined by Arlen Sudermanwith Stonex, and Colin Waters is
here. He is with the IllinoisCorn Growers Association. Our
(00:24):
program comes to you today fromthe Farm Progress Show in
Decatur, Illinois. Remember, youcan always find commodity week
online on demand anytime you'dlike at willag.0rg. Arlen
Suderman, let's begin with youfor the day.
You've spent three days here atthe Farm Progress Show in
(00:44):
Decatur. You and Matt and a fewothers have been in the varied
industries tent, and I wantMatt's take on this too. What
have farmers been asking youmost often?
Arlan Suderman (00:55):
Well, it all comes down to the size of the
corn crop, the size of soybeancrop, and whether we're gonna
sell soybeans to China. I thinkthose are the three big things,
and, that's the focus. And whenare we you know, how do we put
the bottom in the market? That'swhat everybody wants to know.
Todd Gleason (01:12):
And, Matt Bennett, are they asking you the same
question or something different?
Matt Bennett (01:16):
Yeah. They're asking when's the corn market
gonna rally? I mean, that's thefirst question I get asked. So
Todd Gleason (01:21):
Do you tell them it already has a little bit?
Matt Bennett (01:24):
Yeah. I mean, I tell them whenever you take a
report like the August 1, whichis arguably one of the most
bearish reports I've ever seenin my life, and you take these
corn down on the week a quarterof a penny, that would be called
a win in my book. And so there'svarious reasons that we can go
into as to why I kind of feellike the market has acted like
(01:46):
it has, but absolutely thingscould look worse than what they
do right now.
Todd Gleason (01:50):
They could look worse. I do want to hear about a
conversation I think both of youheard or talked with Scott
Erwin, agricultural economistfrom the University of Illinois
about. This has to do with farmpolicy, particularly coming out
of Washington DC and the EPA.SREs or the small refinery
exemptions aren't quite set, butit sounded to me, and I'll start
(02:14):
here, Matt, with you on this,that Scott and we've heard this
on the radio from him already onThursday afternoon, but Scott
really is pretty bullish tosoybeans over time as it's
related to biofuels and thecrush. Can you tell me about
that conversation you had withhim?
Matt Bennett (02:36):
Yeah. And so I actually came to this, drove by
the tent and saw Scott out. Isaid I better stop and talk to
him. And after we talked aboutIllinois football and some other
stuff, you know, in the
Todd Gleason (02:47):
fact I take it, Gary. Sniffke was sniffke was
not there to talk about OhioState.
Matt Bennett (02:51):
Are so high, which is very scary as an Illinois
football fan.
Todd Gleason (02:55):
Before you get into the rest of the story, and
maybe you will have made note ofthis too because you're a
University of Illinois grad,this summer when I have been out
at the state fair and farmprogress show and all the other
events, there are moreUniversity of Illinois Illini
hats and shirts out than I haveseen in decades, and it has to
(03:15):
do with the sports teams.
Matt Bennett (03:16):
No. Absolutely. I mean, we've got good athletic
programs all the way around. Butas you know, Todd, the best
thing for an Illini footballteam is low expectations because
when they're high, it doesn'talways pan out for us. But I'm a
huge dilemma fan.
Coach is he's doing a good jobthere. But, yeah, so I stopped
talking to Scott, and we had agreat conversation and I was
(03:38):
getting ready to leave. He saidwoah, woah, woah. He said we
need to talk. And I said aboutwhat?
He said basically I'm bullishsoybean I said yeah, I am too.
He said no, I'm bullish soybeanoil. And I said, yeah, I get it.
So no doubt about it, when youlook at the policy right now,
clearly everything isn't set instone, but everything we're
(04:01):
getting is actually veryfriendly. And so bottom line,
over the course of time, thebuild out of the crush industry
is not going to happenovernight, but there will be
reason for it.
There will be profit margin. Thecrush margins are still good
even today. They should get alot better if soybean oil goes
in the direction that we thinkit's going to go, which would be
(04:22):
a fair amount higher than wherewe sit today. Bottom line is
Scott is very friendly.
Todd Gleason (04:28):
From the Stonax side and you have deep roots
into the industry from Stonak's,what do we know, understand
about the policy and how itworks, and and how do you see
this playing out? Are you asbullish as Scott is, and how
long of a horizon?
Arlan Suderman (04:46):
Yeah. Our edible oils team is is very friendly to
soy oil demand. When we look atthe policies that have been
released so far, they've beenvery farmer friendly on the
biofuel side. And I think a bigreason for that is the Trump
administration trying to findother areas to agriculture
during the tariff war. When welook at what we know so far, the
(05:08):
two big questions that have notyet been answered has been, the
offsets for the SREs that weregranted, the smaller refinery
exemptions.
How many of those will have tobe made up by the larger
refineries? And at this point,we believe that even if there
are no offsets, that's stillfriendly for demand. The other
(05:28):
piece of the equation is the 50%credit RIN credit for, foreign
or from overseas feedstocks. Andthat's one that farmers
obviously cheered when it wentdown to 50% to try to favor
domestic feedstocks. The big oilreally opposed that, and the
(05:50):
reason is they're worried wedon't have enough feedstock.
And that may be one we have togive on because if we lose big
oil support, they're veryinvested in this industry, that
could end up hurting us. So I dothink that we're tight on
feedstock. That may be one thatwe see some change. Maybe it
goes to 75%. Maybe it goes a100%.
(06:11):
I don't know. But right now, thetwo remaining things that are
left, we still feel it's gonnabe bullish for soy oil demand.
The big problem is gettingenough crush built. Right now,
USDA has their crush number forthe next marketing year about as
high as it can be with theexisting crush capacity. So we
(06:33):
need to get more built.
That's gonna take a year or twoto do. But in the long run, this
is gonna be very friendly, Ithink, for soybeans.
Todd Gleason (06:41):
Yesterday, I was talking to a producer from
Mitchell, South Dakota. They areapparently putting a new crush
plant up there, so capacity isstill being It is. Brought on
board. Do you think those, thosecrushing plants that were
planned but that were paused orstopped. Will they come back on
(07:01):
board quickly now?
Arlan Suderman (07:02):
Yeah. We do see most of those coming on board.
It's it's just restarting, jumpstarting everything, and that's
in the process now. It justtakes that time to build it. And
but at least they're that faralong.
So that'll make it quicker thanif they had to start from
scratch.
Todd Gleason (07:17):
Arlen Suderman, of course, is with Stonex. Colin
Waters is here too. He's withthe Illinois Corn Growers
Association. I know you havethese policy things in the back
of your mind as they're relatedto corn. We've been talking
about soybeans, but it's not theonly part of this.
The SREs, of course, are there.That has to do with ethanol. E
15 potentially as a year roundfunction. What are the things
(07:39):
that you've been watching, andwhat might they mean for demand?
Collin Watters (07:43):
So so I guess one of the things that we we
tend to think about, and thisactually gets back to some of
the work that Scott has done inthe past is, you know, the SREs,
yes, is really, reallyimportant. It's really more
important on the ethanol on theplant profitability side. Some
of the work that he's done hasbasically shown that there
really isn't correlation withthe SREs and overall corn
(08:04):
demand, right? Right. So from afarmer perspective, kind of keep
that in mind.
We tend to get wrapped aroundthe axle on SREs and a lot of
that policy. But, you know, E15is definitely something that
needs to be done. In the grandscheme of things, I'm not sure
that, you know, even just kindof addressing kind of the
(08:28):
patchwork issues that we haveright now, if that will really
generate true demand, likesignificant demand, right? I
think there's kind of amisconception that, know, you go
to E15, well, that'll just, youknow, 50% more ethanol, right?
Well, no, not really.
Because in in some of thesemarkets where E15 is still
allowed and you don't need awaiver and all that, it it
(08:49):
really hasn't penetrated as muchas you would think. There's
other impediments, right? Soit's stuff like underground tank
warranties and equipment
Todd Gleason (09:00):
Having to install the pump.
Collin Watters (09:02):
It's incredibly complicated, right? So it's not
like you just flip a switch whenyou say E15 is all good, done
and done, and we're going tohave 50% more corn demand.
That's not the case.
Todd Gleason (09:12):
And the big orange warning label that says e 15, I
doubt is very helpful. Onlybecause of the color of the darn
Yeah.
Collin Watters (09:19):
And I and what's what's really interesting to me
is that you're you're now seeinga lot of a a a lot of stations
that are selling the 87 octane,but it's E15, right? And so if
you need E10, you got to pay forthe premium. You got to get 93,
right, or 91. So there is thereare some changes happening in
the marketplace, but it's not anacross the board thing. Anyways,
(09:42):
think that right now the waythat we're looking at it is that
2019 was really kind of the highwatermark for ethanol demand in
The United States.
And we've kind of plateaued. Itlooks like we're going to
probably absent any major policychange that we will see a slow
erosion of domestic ethanoldemand.
Todd Gleason (10:04):
Colin or Arlen, and I don't know who will be
better at this, on the SREsgoing forward, It's not a
completely done deal as it goesto policy just yet because it's
not quite clear if they will berequired to be picked up by the
large producers, so there willbe a reallocation of them. But
(10:29):
if they are reallocated, thatcould, I believe, if I remember
the conversation with Scottcorrectly, cause some kind of
demand push.
Arlan Suderman (10:39):
Yeah. Certainly. So we expect that. And for what
the EPA has ruled on so far,there's about 1,400,000,000 RINs
that are affected that are up orare they gonna be reallocated,
but that doesn't include theapplications for 02/2025. So you
add those two, and it gets toabout 2,000,000,000 RINs that
(10:59):
would be divided up among thevarious fuels and stuff.
So we anticipate, the EPA torelease several different
options, that's at the OMB nowor going to the OMB now, and
then it'll come for publiccomment. Maybe a ruling by the
October that may be squeezingthe counter a little bit. That's
the big thing now is when are wegonna have some certainty? We
(11:22):
believe it's gonna be positivefor demand, but, again, it's
uncertain, and the market'skinda trading that uncertainty
now until we know more, and it'sgonna be another couple months
probably before we really do.
Todd Gleason (11:34):
Okay, Matt. Back to what producers have been
telling you here at the FarmProgress Show from across the
Midwest as they've been walkingthrough. Are they talking about
the variability in the crop orare they simply telling you, you
know, actually I have a reallygood crop?
Matt Bennett (11:49):
You know, I I would say the most common thing
I'm hearing, and this is amultistate conversation, is that
my crop was phenomenal, but nowit's really good. We have not
had a good finishing August. Andso, you know, I've tried to tell
people, hey, I'm not trying toget bullish on you. What I'm
(12:11):
trying to impress upon you isthat we started with incredible
potential. And now, like forinstance on my farm, my yard is
brown.
So what's that tell you? Ididn't finish well. So clearly,
whenever you have mid Mayplanted corn that's already
dented, you brought it along tooquickly and you're not going to
(12:33):
have that good finish you reallywant to see with big test
weights and corn that weighsreally good. Disease is
certainly going to be a factor.A good friend of mine went
through Iowa yesterday and hadseveral stops and said he didn't
have one stop withoutsignificant rust issues.
And most of these fields weresprayed. Now, whether it's going
(12:54):
to have a large yield impactdepending upon a lot of that
rust is below the ear in someplaces, so you don't know. I
mean, it's lower in the plant ifit's really going to affect
things. But yeah, Todd, I thinkthe most common thing I've heard
is that, you know, I was lookingat maybe a two sixty, two
seventy type yield. Now it'sprobably twenty, thirty below
that, which is still awfullygood corn.
And so there's a lot to belearned here still. I think that
(13:17):
whenever you look at the cropsize in total, I'm certainly
well below the USDA's Augustnumber. But at the same time,
I'm still in the camp that it'svery likely to be a record crop,
Something north of 180. I justdon't know if it's as far north
of 180 as what some people feel.
Todd Gleason (13:34):
Greenville, of course, is about light
interception. So if it's belowthe the ear, less so than
clearly if it is above the earand how much photosynthesis is
able to be done. What have youheard kind of the same thing as
it's related to the size of thiscrop?
Arlan Suderman (13:52):
Yeah. Certainly so. And I think one of the
things that I've noticed as I'vebeen crisscrossing the Midwest
here over the last few weeks ishow many top leaves are burning,
a lot of fields. That's nevergood to see that, burning
starting from the top goingdown. And so we definitely are
taking some of the top off.
It's still a big crop. It'sstill gonna give us some storage
(14:12):
issues, especially in theWestern Midwest. The Dakotas
have a record crop regardless,and they deserve having a crop
good crop up there. But it it'snot what it was, certainly.
Todd Gleason (14:25):
The man from the Mitchell, South Dakota told me
200 or better for his corn crop,and Mitchell's not exactly in
the Eastern Side of SouthDakota. And and or on the best
of ground, I would think.
Matt Bennett (14:39):
Well, I mean, you you get in that Southeast Of
Sioux Falls area East Of SiouxFalls, and that's just as good a
dirt as what we're looking ataround here. Lot of that, some
of those guys have pulled off240s and 250s in the last few
years. But yeah, you
Todd Gleason (14:54):
go West Of Sioux Falls, it changes significantly.
I was surprised and he waspretty straightforward honest
about it. He was like, I have agood crop. I have a really good
crop. Okay, Collin, he mentionedlogistics.
I want to hear about thelogistics related to storing
(15:16):
this crop. Soybeans not goingout of North Dakota are a
problem throughout the Midwest.Is that correct?
Collin Watters (15:24):
Sure. I mean, anything that will kind of upset
the entire system. I think thelogistics system in The U. S. Is
like a balloon.
You've got something you push onone end, it's got to go
somewhere else, right? Yeah, I'manticipating that there's going
be ground piles you know, prettymuch all over the place.
Logistics wise, don't know, itkind of ties back into some of
(15:48):
the questions that Arlen hadbrought up about China and the
being demand and how much ofthat, you know, how much of that
grain is going to be leaving thekind of the northern tier out
the PNW, I don't know. I don'thave a good answer for that
honestly. But in overall, rivertransportation seems to be
(16:08):
looking fairly good.
The forecast at least it doesn'tlook like we're going have a low
water situation. Hopefullyfingers crossed. Rail seems to
be working well with theexception of maybe some of the
issues Mexico you know, Feromexgetting cars and power back, you
know, to The U. S. But I'mfairly optimistic, I guess,
(16:33):
about our situation.
That and that discounts, youknow, everything else, all the
global shipping issues. So westill have that, whether it's in
the Red Sea or other, you know,other struggles. But, you know,
I think I think we're going tohave a lot of grain on the
ground. But hopefully thehopefully the system works.
Todd Gleason (16:54):
So anticipated not it's not a problem moving the
crop. It's about putting it onthe ground and storing the crop.
Collin Watters (17:01):
Yeah. I mean, ultimately, that's I guess my
bigger concern is that we if wecontinue to see kind of slack
export demand and beans, notnecessarily slack, but just off.
And we have we've had a reallygreat export program in corn, so
hopefully hopefully thatcontinues. I mean, really need
to have those export markets,especially I mean, we're we're
(17:24):
very competitively priced rightnow, so I would hope I would
hope that that that continues.
Todd Gleason (17:28):
Matt, this is a conversation we've had many
times in the last month and ahalf. This is going to be about
the basis. You have experience,of course, in the elevator
business. Putting a crop down onthe ground, corn, is going to be
an issue, particularly as itrelates to storage space because
farmers are gonna wanna selltheir beans across the scale,
(17:50):
and we're gonna talk about thatin a second. But just basis is
going to be an issue.
And I think how do you see thatdeveloping?
Matt Bennett (17:58):
Yeah. I mean, I think one of my biggest concerns
is a grower that, for instance,knows they've got forty, fifty
thousand bushels that has to goto town that they cannot store.
They don't know what they'regoing do with it yet. I would
just as soon have a plan for itnow is to wait until October
fifteenth because if you'reputting corn on the ground, from
my own personal experience,putting it on the ground is a
(18:22):
little easier than picking itback up And none of us enjoy
doing it. And I can tell you, ifyou want to rain in Central
Illinois, now start piling cornon the ground somewhere because
that's when it starts raining.
Okay? And then you've gotquality issues. And so I've been
telling guys don't get in aposition where the elevator says
you can deliver, but you'regoing to have to sell in order
(18:44):
to deliver. And by the way,congratulations, there's a 50
under basis to go along with it.And I don't think that that
number is going to be too faroff.
We've already got some folks atthirty five and forty under in
our part of the world. And Ithink 50 under or worse could
happen in the thick of harvest.And so I don't want to get
caught
Todd Gleason (19:03):
in that.
Matt Bennett (19:03):
And so the way I'm looking at this, the grower is
still very much under sold onnew crop corn. And some of your
originators have told me thatthey're still willing to have a
little bit of wiggle room onbasis. Of course, it's going to
probably be for quantity. But ifyou called your guy and said,
hey, you know what, I've got 25,thirty, fifty thousand bushels.
(19:25):
Could you go from 3,500 to 25,27 under?
It has been happening. I knowthat. And so, you know, you at
least have to take advantage inmy opinion of having that
ability to make thatconversation happen right now
because I don't think you'regoing to get to have it once you
get harvest going in fullearnest.
Todd Gleason (19:45):
So you are of a mind just off the quick
calculation that basisdepreciates somewhere between
1520%?
Matt Bennett (19:54):
Yeah. I mean, I think that if I'm just gonna put
cents on it, I'm gonna say atleast ten to fifteen cents. It
could be 20. I think one thingthat's going to maybe slow it
from getting super wide isthere's a whole lot of folks
talking about bagging corn everyyear. More and more of them are
bagging more and more corn.
So if you're going to bag thecorn, obviously it will take a
(20:15):
little pressure off the system.I have had a few originators
tell me that they feel like twothings. The crops probably if it
was a 188.8, Todd, I could haveseen basis levels that would
make your head explode. But youtake that down just a little
bit, it's going to take a littlepressure off. And then of course
guys find another home for thatcorn, in my opinion, is going to
(20:37):
make the elevator maybe not nearas horrific as what we thought
it might have been originally.
Todd Gleason (20:42):
Arlen, I wanna talk about basis a little bit,
but I also wanna talk aboutcompetition. The safrinha corn
crop is coming out of Brazil. Ithink market it into just about
now, it should be coming in inin making it to port there if I
remember correctly. That'scompetition.
Arlan Suderman (21:01):
We are extremely competitive on the world market
right now because Brazil farmersare not selling. They basically
have finished harvesting thecrop, but it's not moving. And,
on the way here earlier thisweek, I was on the phone while
driving, talking to one of ourtop brokers in the Mato Grosso
area, and I said, Jonas, when isthe farmer they're gonna sell?
(21:24):
What's what's his target? Hesaid, they're waiting for the
rally.
They're waiting for the
Todd Gleason (21:31):
Sounds familiar.
Arlan Suderman (21:32):
Rally in the board. I said, just like The US
farmer then. And, so they'rebehind, and they're selling as
well. And it's it's got theirbasis at extremely high levels
because they're not selling, andthat's why our exports are
strong. The other reason ourexports are strong, and I wanted
to mention this, is a year ago,we had 30,000 head of feeder
(21:53):
cattle a week coming across theborder out of Mexico in The
United States to be fed here.
And the border's closed nowbecause of the new world
screwworm. So we're exportingthe corn to Mexico so they can
feed the cattle down there,slaughter them, send the beef up
here. So USDA should have cuttheir their feed usage number in
(22:16):
August on August 12, andinstead, they bumped it another
250,000,000 bushels. The numbersdon't add up. And so while
there's a lot of positives outhere, that's one you gotta be
aware that as the crop getssmaller, demand is gonna get
smaller as well.
(22:36):
USDA fluffed up that feed usagenumber, and that's going to
shrink as the crop gets smaller.I don't wanna be the the big
bear here on that. But here Isay, is the more basis falls at
harvest time, the more it hasthe opportunity to recover and
the person be able to capture itas long as they have a home for
(22:58):
that corn that they plannedahead.
Todd Gleason (22:59):
Did Jonas also tell you that when you asked
when they would sell it, itwould be after they got back
from the Farm Progress Show orabout the same time that
producers here are gonna beforced to sell across the scale?
Arlan Suderman (23:11):
Yeah. Absolutely. He's very familiar
with the Farm Progress Show.
Matt Bennett (23:14):
Yeah. A couple of couple of things. Of course,
Arlen and I have had a chance totalk together. Seems like almost
every day here lately. But onething, and I don't know if you
saw this, Todd, but theBrazilian grower who made a lot
of money in the last twentyyears, they're on the struggle
bus right now.
And so I saw I read a column theother day that one of the larger
(23:35):
lenders in Brazil, 600,000clients, about 20,000 of them
are currently in default. Andso, you know, one thing I've
told a lot of growers lookingforward, is that this is a
situation where if The U. S.Farmer is having a hard time
making money planting corn dueto high fertilizer costs, high
input costs, we're not alone.We're not rowing in that boat
(23:59):
alone.
So whereas we know the grower isgoing to plant a lot of beans
this year, the verdict is out onwhat their appetite is going to
be to ramp up corn acreagesignificantly if input costs, we
don't get some sort of relief.And right now from a fertilizer
standpoint, you know, Arlen'sbuddy, Josh Glenville, agree
(24:19):
with me on this because it's whyI have the opinion I have
because I talk to him all thetime. I don't see a lot of
relief on fertilizer. It's veryconcerning. So I just want to go
back to you said what aregrowers asking me?
They're saying what if I don'tput my fertilizer on this fall?
Can I expect it to be cheapernext spring? I'm very concerned
with that mentality, Todd, andhere's why. At some point, the
(24:42):
focus, in my opinion, is goingto shift to 26. And even without
this big demand increase, you'vegot phenomenal world and US
demand for corn.
And so if you take acreage downsignificantly due to liquidity
concerns, due to high inputcosts, due to the natural shift
on corn to beans, beans to cornguys, all of a sudden people are
(25:04):
going to take a look at thebalance sheet and say we don't
have the room to have a weatherissue. So will we buy some
acres? I don't know. Is it goingto come from corn going up or
beans going down? I don't know.
But if you get a corn rally, Ican assure you fertilizer is not
going to come down. Last point,real quick, sorry. Five forty
five million bushel increase indemand on this report. Okay? And
(25:28):
so one thing Arlen and I havebeen trying to help people
understand is that that's a bigjump, you know?
And that's the protocol. USDAtypically, if they increase
production, they raise demand aswell. So if you go ahead and you
take five, six bushel off thiscrop over the next two reports,
you've got all the demand andthen some to offset that if you
(25:49):
want to. Now there's reasons tobelieve that we could leave
exports the same, but I'm withArlen. This feed and residual,
it gives them some wiggle room,you know.
I think that they're gonna haveto dial that back. And so we've
gotta be cautious as to assume,hey, this is a one eighty four
and a half yield in September.I'm not saying that's what'll
(26:11):
happen if it was. These guys aregonna say this is bullish. I'd
be careful in that assumption onold crop.
Todd Gleason (26:18):
Yeah. Because you're you're suggesting then at
that point at colander, whatthey're really suggesting is
demand offsets whatever decreasein yield might come. So to make
it easy, every bushel, but itdrops a million a million.
Matt Bennett (26:37):
It probably won't be one for one, but good luck
getting much under2,000,000,000.
Todd Gleason (26:40):
Yeah. Yeah. So it it yes. Correct. So we don't
change that very much.
No. Do you see that are are youwith them because this is what
you do on the demand side beingtoo heavy?
Collin Watters (26:53):
Well, obviously, these guys are the experts.
Right? So I'm I feel like aninterloper here, but my my best
guess is that yes, well, do seeopportunity in the export
market, especially with howcompetitively priced The U. S.
Origin is right now.
That could certainly change,right? So it's really
(27:16):
interesting in Brazil how theacreage is changing. They're
increasing their demand for cornethanol. They're building more
and more corn ethanol plants.They're consuming a lot more of
that corn right now.
They'll be competing in theethanol exports, distillers
export markets as well. Thatdynamic is interesting to me.
(27:41):
Also, South America andArgentina, policy changes that
they're undertaking and reducingthe export taxes and so forth. I
am confident that we will seeArgentina become a much stronger
competitor in the world marketcoming on pretty soon. So that I
know, it's a very mixed bag.
(28:02):
And I honestly, I don't knowthat I have a really good
answer, but I would defer tothese guys. They know what
they're talking about.
Todd Gleason (28:09):
Alright. We're gonna get a final word from each
of you at this point. I will saythat if you're interested in the
numbers from Brazil, I have adifficult time sometimes looking
at them in metric tons becausethey always come in that way.
You can go to willag.0rg. Thereis a tab there that says USDA,
and the supply and demand tablesfor both corn and soybeans are
(28:30):
converted, the actual s and dtables, into bushels, and I find
it easier to think about it inthat way.
Arlen Suderman from Stonex,let's start with your final
thoughts for our program.
Arlan Suderman (28:42):
I'd just like to highlight, be talking. Be
talking to your suppliers. Betalking to people who buy from
you. Have the conversation soyou can plan and don't get
caught off guard.
Todd Gleason (28:53):
Colin Waters from the Illinois Corn Growers
Association.
Collin Watters (28:56):
Yeah. I guess the only thing that I would just
add is a little bit on the theinput side of things. So the
Illinois corn growers, we'rejust 100% focused on farmer
profitability. We're working ashard as we can to help develop
markets and expand markets. Butwe're also working on the input
side, really trying to get asmuch relief as we possibly can.
We're talking to the fertilizercompanies, talking to the tech
(29:19):
companies and everybody elsebecause, you know, honestly,
there's a lot of policy stuffthat's going on right now that
could help or hurt on somelevel, like the the
$10,000,000,000, you know,emergency payment that came out
last last December. I I don'tknow that that it was a Band
Aid. Right? But I don't know ifthat I I have a feeling that
(29:41):
that's structurally not helpfulfor farmers. Right?
Because there's, you know, whatwhat, input supplier, what
landlord is going to say, oh,yeah. I can see you're really
having a hard time here when youjust got a government check.
Right?
Todd Gleason (29:54):
Possibly built into the fertilizer price.
Collin Watters (29:56):
And it it will and so that until the structure
until it fundamentally changes,I think we're gonna be
struggling. But, we're we'reworking every day as hard as we
can to help farmers.
Todd Gleason (30:06):
And Matt Bennett from agmarket.net, your final
word for the day.
Matt Bennett (30:10):
I mean, there's no doubt this is a challenging
environment. It's one of themost probably the most
challenging environment for alot of folks younger than me.
And so, you know, for me, Ithink we have to look at a
couple of different things andone of those is that we do have
very strong corn demand. It'sgoing to be a real feather in
(30:32):
our cap moving forward. I thinkit's a very dynamic environment
we've got with input costs.
You know, we could see a bit ofa pendulum swing over the next
several months. And so I don'twant to just put my head in the
sand and do nothing here. If Ihave the ability to have a home
for corn like Arlen was talking,I certainly think that it's
(30:52):
probably a smart idea. Look atthe carries in the market, what
can we do with this crop, sellthe carry, wait on basis to come
back to you, handle it like agrain elevator does. I think
it's something that that we thatwe we can have base hits and at
least live to play another daybecause, it's not
Todd Gleason (31:09):
all lost. Commodity week, of course, is a
production of Illinois PublicMedia. It's public radio for the
farming world. You may find andlisten to us on demand anytime
you'd like at willag.org. That'swillag.0rg.
Our thanks go to our paneliststoday, Matt Bennett, Colin
Waters, and Arlen Suderman. I'mUniversity of Illinois
(31:30):
Extension's Todd Gleeson.
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