December 5, 2025 • 26 mins
Panelists
- Matt Bennett, AgMarket.net
- Ellen Dearden, AgReview
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the December 5 edition of Commodity
Week. Todd Gleason's servicesare made available to WILL by
University of IllinoisExtension. Well, welcome to
Commodity Week. I am ToddGleason. Our panelists for the
day include Matt Bennett fromagmarket.net and Ellen Dearden
(00:23):
of AgReview.
Matt is in Mattoon, Illinois,and Ellen is in Morton,
Illinois. Stay with us. We'lltalk to them individually. Matt
will take up the marketplace ingreat detail with some
information as it's related tomarketing, and then we'll turn
our attention to Ellen who willtell us about the livestock
sector, particularly about beefcattle. Matt will touch on that
(00:46):
some, but Ellen will flesh thatout in ways I think you will
find interesting.
You'll want to stay with us forthe whole of the program. We'll
do that in just a moment. In themean space, I do wanna remind
you that next Friday on thetwelfth, we'll be at the
AgriCenter for the Farm AssetsConference. I hope you will join
us for the day. It is afantastic lineup.
(01:07):
We'll take up all kinds ofthings related to demand and the
future. You won't want to missthat, and we'll discuss, of
course the marketplace, but theFarmDoc team and crop sciences
will be there too. The cost isjust $80 but you really do need
to register. That's $80 throughthe December. It will jump up to
a $100 after that.
(01:28):
And if you happen to walk in atthe Agra Center oh, the same
thing will happen for theIllinois Farm Economic Summits
too. Those are the followingweek on the fifteenth,
sixteenth, and seventeenth inDeKal, Peoria, and Mount Vernon.
The PharmDoc team and I will beon the road that week, going
into the winter break. You canjoin us for half day events, all
(01:49):
end with your noon hour meal.The cost for them is $80 as
well.
All the details are online and away to register at
willag.orgwillag.org or@farmdocdaily.illinois.edu. Now
let's begin commodity week. MattBennett of agmarket.net will
(02:11):
begin with you. Let's start withjust the basics of the
fundamentals of supply anddemand. Begin with the corn
market.
Lay them out for me as you seethem today.
Matt Bennett (02:22):
Yeah. I mean, if you look at, for instance,
what's going on this exportdeal, I mean, we got numbers as
of the October this week. And,again, huge export sales for
corn. It's something that we'veknown all along was going on.
But whenever you look at that,it certainly calls into
question, we're running vastlyahead of the USDA pace.
(02:45):
That's all there is to it. Andso can we maintain that pace? Of
course, it's a big question.And, obviously, I don't think we
can maintain the pace that we'recurrently we're currently at.
But, you know, this week, wefound out, of course, we had
another screwworm case.
So you've gotta assume that eventhough people have felt Mexico
is front loading some of theirexports, you know, they're still
(03:07):
gonna have a big need forexports as long as they're
feeding all those cattle southof the border. So I think
exports will probably stay thesame for the time being. I don't
see USDA make any bigadjustments this early in the
year. And if they did, I wouldhave to think that if they take
exports higher, they're almostgonna have to take feed and
residual usage lower. So in allhonesty, demand is all kind of
(03:28):
dependent upon one another.
And then of course, you got tothink about supply. So the
things that could rally thismarket, of course, over the next
few months, it'd be two glaringthings as demand's awfully good
right now. So what's supplygoing to do? And so you look at
US supply, is yield gonna comedown? And I think that the trade
(03:49):
is kind of anticipating theyield adjustment lower.
But the other thing, of course,is gonna be the safrinha crop.
So one thing I would point out,Todd, is that if we wanna talk
about supply and demandfundamentals, I don't wanna
ignore the world. The last WASDEshowed, you know, that world
production of corn for thismarketing year up 55,000,000
tons, but that we were gonnalose about 10,000,000 tons of
(04:11):
supply. So actually, demandwould outpace that 55,000,000
bushel increase in production by10,000,000 tons. So you've got
record world demand, record USdemand.
As long as you've got thatstrong demand, what you have is
the need to produce. So we'redefinitely going to be in that
position to where if we get asupply disruption, the market
(04:33):
should be very reactive. If wedon't, we've probably got enough
corn to get us by, and it mightbe, kicking the can down the
road again.
Todd Gleason (04:40):
When you tease out the exports, and you talked
about the rail going across theborder into Mexico to feed the
extra cattle that are therebecause of the screwworm and the
closure of the border betweenThe United States and Mexico to
those beef cattle being fedhere, and the feed and residual
number being offset. But I'mwondering whether our export
(05:03):
numbers, which we reallyoftentimes think more about, as
being, waterborne, are thosekeeping pace as well? And are
they are they doing as well asas the other side, the the
Mexico, our number one outlet?
Matt Bennett (05:21):
You know, we've we've had some Gulf exports.
We've had some PNW exports.There's only so much that can go
out of the PNW, first of all. Asfar as The Gulf goes, there's a
lot of question marks, you know,as to if we do have a good
export program, it's gonna bepretty tough. I mean, most
forecasts right now are showingthat river levels could be, you
(05:44):
know, eight feet below a normalpool.
And that's definitely not whatyou want to hear, you know, as
you're trying to ramp up theexport program as far as beans
are concerned, know, and goahead and get some of this corn
exported out. But there's noquestion that Mexico has been,
you know, by far and away ournumber one destination at this
point. So your question isdefinitely valid. As of right
(06:06):
now, we've got some exports, butthe lion's share, you know, has
certainly been gobbled up out ofMexico now. You know, Colombia
bought some corn here this week.
Sure sure nice to see businessother than Mexico. But I think
one of the things that's reallyinteresting, Todd, is, you know,
there's been some whispers thatChina might be looking for a
(06:26):
little bit of corn due to theflooding that they've had during
harvest. They're gonna lose someproduction. But the other thing
is is that there's a bigquestion on quality of Chinese
corn. So if and that's a big if,Todd.
If China would show up to buycorn, it could definitely change
the dynamics of this market.There's no question. It should
(06:48):
be very supportive if they wouldstep in. Now to what tune they
do, I don't know. But by allmeans, given that the supply
right now or that the quality ofthat crop is just not that
great, you've gotta assume thatthey might be out there hunting
for a little bit of good qualitycorn.
Todd Gleason (07:03):
I suppose part of my question and concern was that
if the export market for cornout of The Gulf hasn't been
moving very quickly, And Ithought maybe it might have been
because soybeans weren't movingso that, you know, they would be
loading barges and and trying toship corn instead. If that's not
really been pushed, I'mwondering whether we'll be off,
(07:27):
as it relates to exports in thecoming months. Sounds as if you
don't think that'll be the case.
Matt Bennett (07:33):
To be honest, I feel like right now, the pace
we've got to this point, theUSDA is suggesting that, we'll
be 9% ahead of a year ago. We'recurrently running 31% ahead of a
year ago. As far as paceanalysis goes, I do not expect
that to continue, though, Todd.I wanna be pretty clear on that.
Now are we gonna be able to hitthe USDA goal this year?
(07:56):
I feel pretty confident that,with the current state of
affairs, that's a very likelyscenario. But, again, I don't
expect us to keep, shipping cornas quickly as what we have here,
you know, over the course of thefirst four or five months.
Todd Gleason (08:10):
You know, we've been talking a lot about the
supply and demand tables. Thereis a WASD, or World Ag Supply
and Demand estimate due outTuesday, not a crop production
report month in November. Therewill be one in January. That'll
be the final. I take it that youdon't expect a lot to change
next Tuesday, but maybe thechange is really to come in
January?
Matt Bennett (08:30):
Yeah. I mean, that's the thing is that we're
likely to get a pretty big dumpof information there, in
January. You know, a lot offolks are saying, well, last
year, of course, they droppedyield four bushel. Maybe they're
gonna do the same thing againthis year. It depends on what
part of the world you're in onyour expectations for that.
You know, I just did podcast awith with Joe Backelvik this
(08:54):
morning. We talked about that alittle bit. You know, there's
parts of the Western Corn Beltthat had wildly better yields
than what, you know, than whatthey had a year ago whereas, of
course, a large chunk of Iowawas reporting, you know, good
corn, but not as good as a yearago. So Illinois, parts of
Illinois, the same type ofthing. It's more of a mixed bag,
(09:15):
but especially the farther southyou get, of course, it got a lot
worse.
But, you know, we we wouldexpect that you'll see some sort
of a reduction in yield wheneveryou get around to January. As
far as the December report goes,typically, it's a nonevent, but
I've gotta think that therecould be some adjustments this
year given that the Octoberreport was never released. So
I've gotta think if there'srevisions that they see could be
(09:37):
made instead of simply takingthe month off, and I hate to put
it that way, but it seems likethat's what has been done in the
past. You know, I I thinkthere's maybe a little better
chance they're gonna make somerevisions. And, of course, as
you suggested, you know, itmight be more on the demand side
of things.
Todd Gleason (09:52):
The weather forecasters have told us, and
I'll switch to soybeans here,but remain with the WASDE this
month, that the, soybean crop inBrazil, Argentina, while having
suffered through some dryspells, are in pretty good
condition. Do you suppose USDAwill raise the numbers for total
production from both of thosenations on Tuesday?
Matt Bennett (10:14):
It's tough to say. You know, we went the whole last
marketing year kind of expectingthat that would happen from
USDA, and they just never reallydid. I think whenever I look at
Brazil, I could certainly makethe case. If you look at several
of the reports out of Brazilright now, it's indicating that
you could be looking at amassive crop. Now Southern
Brazil and Argentina arecertainly on the drier bias
(10:36):
right now, and forecasts don'tlook all that promising.
So if we would have some issuesin Argentina, the typical
protocol, of course, is thatsoybean meal market could be
fairly strong. We've alreadyseen a pretty nice little bounce
off the lows that we had therein October. I mean, we were
trading down there at COVID typelevels in the low 2 seventy's,
(10:57):
raced all the way up to over$330 And now we're sitting here
around $3.00 $8 to $310 And sobut I would say, Todd, if
Argentina would stay dry andturn on the warmer biases, lot
of people are predicting, thatcould be somewhat supportive.
But, no, I don't really expectthe USDA to make a lot of
(11:18):
changes on South Americanproduction next week.
Todd Gleason (11:21):
Turn your attention to the 26, 27 crop
here in The United States. Thecrops that will be planted in
the spring. You've been outprobably enough at this point in
the winter mating season, reallygetting kicked off and started.
But to get an idea of whatproducers are thinking about
their crop ratios, and whattheir rotation will look like,
(11:41):
what are they telling you aboutcorn and soybean planted acres?
Matt Bennett (11:45):
That's a good question, Todd. You know, three
two, three months ago, I wouldhave told you. I thought, you
know, and I probably did tellyou. I thought corn acres would
fall, precipitously. But at thisat this stage of the game, I
just don't see it happeningbased on what we're hearing from
the ag chem retailer.
Now there's no doubt that dryfertilizer tonnages were off,
(12:07):
but a lot of folks chose, toback off on phosphate,
especially where their fertilitylevels look good. In some cases,
they did it just because theycouldn't find any black ink with
a normal ratio on fertilizer.And so I still think a lot of
growers are still going to plantcorn, especially in areas in
parts of Iowa. Some of thereports out, I saw something
(12:29):
from Iowa State this week thatsuggested the Iowa grower may
actually plant more corn thiscoming year. So if we planted 98
and change this year, I wouldexpect that's going to come down
somewhat just simply due to areally high corn year typically
correlates to a bit of a switchjust because of your corn to
beans, beans to corn guys.
(12:50):
But I don't expect a six or7,000,000 acre drop. I think you
could make a case right now forsomewhere in that 94, 95,000,000
acre range, which is certainlyenough corn acres. But again, we
probably need to be planting afair amount of corn if this
demand is going to be racinglike the like we've seen it
here. And so it'd be veryinteresting how it plays out.
But, you know, if you had topinpoint me right now, I'd say
(13:12):
corn acres lose maybe three,three and a half million acres
and those would go directlytowards soybeans.
Todd Gleason (13:18):
Okay, so if you're higher corn acres but demand
really good, I don't know whatyou're thinking about as far as
early sales for corn. And thenwhat do you do about soybean
sales?
Matt Bennett (13:30):
Yeah, I mean, I'll just go over corn real quick. I
mean, one thing that we'vetalked to growers about for
bushels going in the bin is, youknow, what's it look like to
maybe hedge some four seventy,these 26 corn. This last fall,
of course, we had a carry up to35¢ from these to July. And so
if we simply hedged Decembercorn, which I know a lot of
(13:50):
people don't have the stomachfor those type of margin
requirements, but if they did,you know, far as putting bushels
in the bin, if you hedged at$4.7 with the thoughts that, you
know, when you get carried$30.35 cents, you could work
your way into some $5 corn inthe bin, and then you're just
dependent upon what basis does.You know, as far as 26 beans go,
(14:11):
we gotta remember, you know,we're one time here over the
last month, you know, we were ata a fifteen month high in the
bean market.
Now you're still looking at nope26 beans as we speak, you know,
at eleven thirteen. And so Iknow that that's not what it
once was over eleven thirty, butthat's a heck of a lot better
(14:32):
than what most people marketedbeans for the 25 crop. And so,
you know, you could do the samesort of thing on beans. I know
most people that I know don'twant anything to do with soybean
futures and I don't blame them.It's a volatile deal.
But if you hedge or maybe evenyou HTA'd some beans, I don't
like the HTA as much, butcertainly it doesn't have the
(14:52):
margin requirements. But if youhedge somewhere in here, I mean,
the carry from Nove to July atone time this last fall got up
to 65¢. So that's something thatwe certainly don't want to
ignore. Now, another way oflooking at it is, you know,
maybe I just put an $11 floor onthese beans and to do that,
because it's going to be anexpensive put option, I may have
to sell a call up there at like12.5 somewhere like that. But
(15:15):
you know, if I did that on 20%of my bushels, if my worst case
scenario is I got locked intosome 12.5 beans, I'm not going
to be heartbroken over that.
So I do think we need to step inhere and at least get some
marketed ag market as a group.We're actually up to 40%. Most
of those are flexible hedgesthat's got the opportunity to
run up to that twelve, twelvefifty level. But by all means,
(15:37):
we're trying to get a floorunder some of these beans just
in case this thing turns south.
Todd Gleason (15:40):
Thank you much. I appreciate it, Matt.
Matt Bennett (15:42):
Oh, absolutely. Thank you.
Todd Gleason (15:43):
That's Matt Bennett. He is with
agmarket.net. Ellen Dearden nowjoins us from AgReview. She is
in Morton, Illinois. Hello,Ellen.
Thank you for taking some timeon a Friday morning and for
holding off, on recordingcommodity week with me this week
as I was busy, doing some otherthings Thursday afternoon with
(16:04):
you. I'd like to begin with thelivestock sector, particularly
all the things that arehappening in, the beef supply.
There's the screwworm, corngoing across, the border to
Mexico to keep cattle that arebeing fed out there, being fed.
And here in The United States,really high prices, and a
(16:28):
constant turn of what thepolicies might be. Can you talk
to me about that sector and howthings have been changing
throughout the calendar year?
Ellen Dearden (16:37):
Since the October highs, we really have seen a
substantial break in the livecattle and the feeder cattle
both, but have turned rightaround and rebounded again. It
seems to me that there's been alot of talk about trying to
lower prices for consumers atthe beef counter. And how that
(17:01):
will play out is really up forgrabs. But there's a lot of
talk, but not a whole lot ofaction. I thought it was
interesting when Thursday theFDA approved a topical cream for
dealing with screw worms.
(17:21):
And that could be a game changerbecause it would be applicable
to both beef cattle, but alsonon lactating dairy cattle.
Could be something to reallywatch how that happens. And if
it is a successful product, wemay end up seeing the border
(17:45):
from Mexico reopen sometimelater in 2026. However, we're
feeding cattle in Mexico, sowe're using corn exported from
The US to feed those cattle. Sowith the number of cattle in
(18:05):
North America, in CentralAmerica, is probably not down as
low as what The US numbers show.
Todd Gleason (18:13):
Yeah. So talk to me about that because what the
USDA numbers show are recordlows at this point in the size
of the herd for decades. Andwhat you're telling me is that
this is a border issue and thosecattle, it's not that they're
not there, they're just not inThe United States. How do cattle
generally, when the border isopen, move across the border and
(18:38):
through the feedlots? Are theyfeeders or cow calf pairs in
Mexico?
What happens generally? Do youknow?
Ellen Dearden (18:49):
No, they're feeders. They're not cow calf
pairs moving north. What wetypically see is rather regular
movement of cattle into feedlotsboth in the Texas Panhandle,
Oklahoma, Kansas, and up as farnorth as Nebraska. We have
(19:13):
friends who are in the truckingbusiness who have really seen
that business just shut offcompletely over the last year's
time. So I'm pretty familiarwith at least what they talk
about.
Todd Gleason (19:26):
Right. And so what we're really saying is, and what
you're telling me is that thebeef cattle herd is there. Why,
if that is the case, are beefprices so very high?
Ellen Dearden (19:39):
Beef prices are high because demand is high, and
that runs counter to what Ithink the White House is trying
to say, that beef demand is notthere, but it is. So we are
continuing to see fewer amountof beef, particularly grain fed
(20:01):
beef, come into the market andthat drives up prices.
Todd Gleason (20:06):
The folks that you talked to in Nebraska and other
places, how concerned were theyat the closure of the beef
processing plant there?
Ellen Dearden (20:14):
They were extremely concerned. They think
that it's going to add a lot ofcost to move cattle away from
Central Nebraska to other placesfor killing. But also, it's not
just that Tyson plant that wasclosed, but a cutback in the
(20:35):
Amarillo Tyson plant to just oneshift. And so that, I think, is
a huge difference. Cargill andsome of the other packers will
continue to pick up some of thatbusiness, but that leaves a real
hole in Central Nebraska.
Todd Gleason (20:55):
Is there concern about where those animals that
cannot be processed there mightend up and how it would change
the feed out of animals? Forinstance, do they process very
many in Mexico, and might thisbe an option for Tyson and
others to open plants or toincrease the runs at plants if
(21:21):
they have them in Mexico? I'mjust not familiar.
Ellen Dearden (21:23):
I'm not familiar with that either, Todd.
Todd Gleason (21:25):
It'll be interesting to follow questions
I'll have to ask and find out.Thank you for taking some time
on the livestock side. Now let'stalk about what this means for
producers here in the Midwestwho normally would be shipping a
great deal of corn to feedlotsin Texas, some into Nebraska, of
(21:45):
course, and that coming out ofIowa. I'm wondering how you see
this impacting basis in our partof the world and across the corn
growing states.
Ellen Dearden (21:58):
Over the last couple of years, from Central
Illinois West, shipped a lot ofcorn for feedlot and also for
ethanol use. And some of thatwent down into the Texas
Panhandle. With a much bettercrop this year in the Western
(22:19):
Corn Belt than in the lastseveral years. That big movement
of corn out of this area, atleast around Peoria, has really
been cut off and the demand iscoming from local ethanol plants
and also to The US Gulf.
Todd Gleason (22:36):
And that is where things have really been hopping.
The export demand for corn hasbeen really, really good so far
this fall.
Ellen Dearden (22:43):
It has been excellent. Excellent.
Todd Gleason (22:45):
How good has it been?
Ellen Dearden (22:46):
It has probably been day in day out 10 to 15¢
better basis than what we havetypically seen in this early
December time period.
Todd Gleason (22:58):
When you think about what this means going
forward into January, February,March, what does it tell you
about the marketplace?
Ellen Dearden (23:04):
Well, if we talk about futures on the corn side
of things, there's a strongseasonal appreciation of futures
prices going here from theDecember into the February at
least. And I think that thattrend looks like it could
continue this year. How thebasis goes is really gonna be
(23:26):
very dependent here in theCentral part of Illinois on the
export markets and whether thosecontinue, particularly into
Mexico.
Todd Gleason (23:37):
How far along in their marketing do you suppose
producers are, and how long howfar long do you think they
should be for old crop?
Ellen Dearden (23:43):
If we're talking the corn side of things, I think
producers are probably a shy 40%sold. Typically they would be,
oh, 50% sold, so I don't thinkthey're very far behind. I don't
have any qualms of being 40 to50% sold at this stage of the
game.
Todd Gleason (24:02):
And the soybean?
Ellen Dearden (24:03):
On the bean side of things, I think they're
further ahead than that.Probably at 65% to 70% sold. I
think we've had an awfully nicebean rally and that the market's
saying to me that maybe we'renot going to continue to work
higher for right now. We didhave a big sale reported this
(24:26):
morning to China, but the marketkind of took that and said,
Yeah, show us more. The marketcontinues to be disappointed at
the tonnage of sales,particularly to China being made
on the bean side.
So I'm a little bit more anxiousto sell beans in here.
Todd Gleason (24:46):
Secretary Bessence on Wednesday of this week
suggested, you know, the12,000,000 metric tons, will be
over the next two, two and ahalf month period through the
February. That would work on theChinese calendar year instead of
our calendar year. May have beena translation function. Who
knows? But still only 12,000,000metric tons by then.
(25:08):
And I suppose if you're workingoff their calendar year, you're
looking at twenty five millionmetric tons from March through
February 2027 then, possibly.What's your, what's your feeling
about how this impacts themarketplace, especially given
that those, you know, that thatFebruary timeframe really would
(25:30):
not belong to The United Statesnormally as it relates to export
of soybeans.
Ellen Dearden (25:35):
Yes, this is true. I think the market really
wants to just see the sales, getthem on the books, and start
making some actual shipments.You know, we're really kind of
trading blind because our exportbookings reports are only up
through the October. That'sgenerally a period that The US
(25:57):
owns the market, in the beanside of things, and, we still
have seen just tepid sales.
Todd Gleason (26:04):
Anything else before I let you go for the day?
Ellen Dearden (26:06):
Just keep watching the river basis.
Improvements on the river, showsexport business.
Todd Gleason (26:12):
Ellen Dearden is with AgReview. She's in Morton,
Illinois. Joined us along withour other guests, Matt Bennett
of agmarket.net out of Mattoon,Illinois on this December
edition of Commodity Week. Youmay always find it up on our
website at wilag.org. That'swillag.org.
There you'll find not onlyCommodity Week, but the daily
(26:33):
closing market report, ouropening market report, and
information that comes to youdirectly from the crop scientist
and the agricultural economist,as well as the animal scientist
here on the Urbana Champaigncampus of the University of
Illinois. On Extension's ToddGleeson. Hi.
This is the December 5 edition of Commodity
Week. Todd Gleason's servicesare made available to WILL by
University of IllinoisExtension. Well, welcome to
Commodity Week. I am ToddGleason. Our panelists for the
day include Matt Bennett fromagmarket.net and Ellen Dearden
(00:23):
of AgReview.
Matt is in Mattoon, Illinois,and Ellen is in Morton,
Illinois. Stay with us. We'lltalk to them individually. Matt
will take up the marketplace ingreat detail with some
information as it's related tomarketing, and then we'll turn
our attention to Ellen who willtell us about the livestock
sector, particularly about beefcattle. Matt will touch on that
(00:46):
some, but Ellen will flesh thatout in ways I think you will
find interesting.
You'll want to stay with us forthe whole of the program. We'll
do that in just a moment. In themean space, I do wanna remind
you that next Friday on thetwelfth, we'll be at the
AgriCenter for the Farm AssetsConference. I hope you will join
us for the day. It is afantastic lineup.
(01:07):
We'll take up all kinds ofthings related to demand and the
future. You won't want to missthat, and we'll discuss, of
course the marketplace, but theFarmDoc team and crop sciences
will be there too. The cost isjust $80 but you really do need
to register. That's $80 throughthe December. It will jump up to
a $100 after that.
(01:28):
And if you happen to walk in atthe Agra Center oh, the same
thing will happen for theIllinois Farm Economic Summits
too. Those are the followingweek on the fifteenth,
sixteenth, and seventeenth inDeKal, Peoria, and Mount Vernon.
The PharmDoc team and I will beon the road that week, going
into the winter break. You canjoin us for half day events, all
(01:49):
end with your noon hour meal.The cost for them is $80 as
well.
All the details are online and away to register at
willag.orgwillag.org or@farmdocdaily.illinois.edu. Now
let's begin commodity week. MattBennett of agmarket.net will
(02:11):
begin with you. Let's start withjust the basics of the
fundamentals of supply anddemand. Begin with the corn
market.
Lay them out for me as you seethem today.
Matt Bennett (02:22):
Yeah. I mean, if you look at, for instance,
what's going on this exportdeal, I mean, we got numbers as
of the October this week. And,again, huge export sales for
corn. It's something that we'veknown all along was going on.
But whenever you look at that,it certainly calls into
question, we're running vastlyahead of the USDA pace.
(02:45):
That's all there is to it. Andso can we maintain that pace? Of
course, it's a big question.And, obviously, I don't think we
can maintain the pace that we'recurrently we're currently at.
But, you know, this week, wefound out, of course, we had
another screwworm case.
So you've gotta assume that eventhough people have felt Mexico
is front loading some of theirexports, you know, they're still
(03:07):
gonna have a big need forexports as long as they're
feeding all those cattle southof the border. So I think
exports will probably stay thesame for the time being. I don't
see USDA make any bigadjustments this early in the
year. And if they did, I wouldhave to think that if they take
exports higher, they're almostgonna have to take feed and
residual usage lower. So in allhonesty, demand is all kind of
(03:28):
dependent upon one another.
And then of course, you got tothink about supply. So the
things that could rally thismarket, of course, over the next
few months, it'd be two glaringthings as demand's awfully good
right now. So what's supplygoing to do? And so you look at
US supply, is yield gonna comedown? And I think that the trade
(03:49):
is kind of anticipating theyield adjustment lower.
But the other thing, of course,is gonna be the safrinha crop.
So one thing I would point out,Todd, is that if we wanna talk
about supply and demandfundamentals, I don't wanna
ignore the world. The last WASDEshowed, you know, that world
production of corn for thismarketing year up 55,000,000
tons, but that we were gonnalose about 10,000,000 tons of
(04:11):
supply. So actually, demandwould outpace that 55,000,000
bushel increase in production by10,000,000 tons. So you've got
record world demand, record USdemand.
As long as you've got thatstrong demand, what you have is
the need to produce. So we'redefinitely going to be in that
position to where if we get asupply disruption, the market
(04:33):
should be very reactive. If wedon't, we've probably got enough
corn to get us by, and it mightbe, kicking the can down the
road again.
Todd Gleason (04:40):
When you tease out the exports, and you talked
about the rail going across theborder into Mexico to feed the
extra cattle that are therebecause of the screwworm and the
closure of the border betweenThe United States and Mexico to
those beef cattle being fedhere, and the feed and residual
number being offset. But I'mwondering whether our export
(05:03):
numbers, which we reallyoftentimes think more about, as
being, waterborne, are thosekeeping pace as well? And are
they are they doing as well asas the other side, the the
Mexico, our number one outlet?
Matt Bennett (05:21):
You know, we've we've had some Gulf exports.
We've had some PNW exports.There's only so much that can go
out of the PNW, first of all. Asfar as The Gulf goes, there's a
lot of question marks, you know,as to if we do have a good
export program, it's gonna bepretty tough. I mean, most
forecasts right now are showingthat river levels could be, you
(05:44):
know, eight feet below a normalpool.
And that's definitely not whatyou want to hear, you know, as
you're trying to ramp up theexport program as far as beans
are concerned, know, and goahead and get some of this corn
exported out. But there's noquestion that Mexico has been,
you know, by far and away ournumber one destination at this
point. So your question isdefinitely valid. As of right
(06:06):
now, we've got some exports, butthe lion's share, you know, has
certainly been gobbled up out ofMexico now. You know, Colombia
bought some corn here this week.
Sure sure nice to see businessother than Mexico. But I think
one of the things that's reallyinteresting, Todd, is, you know,
there's been some whispers thatChina might be looking for a
(06:26):
little bit of corn due to theflooding that they've had during
harvest. They're gonna lose someproduction. But the other thing
is is that there's a bigquestion on quality of Chinese
corn. So if and that's a big if,Todd.
If China would show up to buycorn, it could definitely change
the dynamics of this market.There's no question. It should
(06:48):
be very supportive if they wouldstep in. Now to what tune they
do, I don't know. But by allmeans, given that the supply
right now or that the quality ofthat crop is just not that
great, you've gotta assume thatthey might be out there hunting
for a little bit of good qualitycorn.
Todd Gleason (07:03):
I suppose part of my question and concern was that
if the export market for cornout of The Gulf hasn't been
moving very quickly, And Ithought maybe it might have been
because soybeans weren't movingso that, you know, they would be
loading barges and and trying toship corn instead. If that's not
really been pushed, I'mwondering whether we'll be off,
(07:27):
as it relates to exports in thecoming months. Sounds as if you
don't think that'll be the case.
Matt Bennett (07:33):
To be honest, I feel like right now, the pace
we've got to this point, theUSDA is suggesting that, we'll
be 9% ahead of a year ago. We'recurrently running 31% ahead of a
year ago. As far as paceanalysis goes, I do not expect
that to continue, though, Todd.I wanna be pretty clear on that.
Now are we gonna be able to hitthe USDA goal this year?
(07:56):
I feel pretty confident that,with the current state of
affairs, that's a very likelyscenario. But, again, I don't
expect us to keep, shipping cornas quickly as what we have here,
you know, over the course of thefirst four or five months.
Todd Gleason (08:10):
You know, we've been talking a lot about the
supply and demand tables. Thereis a WASD, or World Ag Supply
and Demand estimate due outTuesday, not a crop production
report month in November. Therewill be one in January. That'll
be the final. I take it that youdon't expect a lot to change
next Tuesday, but maybe thechange is really to come in
January?
Matt Bennett (08:30):
Yeah. I mean, that's the thing is that we're
likely to get a pretty big dumpof information there, in
January. You know, a lot offolks are saying, well, last
year, of course, they droppedyield four bushel. Maybe they're
gonna do the same thing againthis year. It depends on what
part of the world you're in onyour expectations for that.
You know, I just did podcast awith with Joe Backelvik this
(08:54):
morning. We talked about that alittle bit. You know, there's
parts of the Western Corn Beltthat had wildly better yields
than what, you know, than whatthey had a year ago whereas, of
course, a large chunk of Iowawas reporting, you know, good
corn, but not as good as a yearago. So Illinois, parts of
Illinois, the same type ofthing. It's more of a mixed bag,
(09:15):
but especially the farther southyou get, of course, it got a lot
worse.
But, you know, we we wouldexpect that you'll see some sort
of a reduction in yield wheneveryou get around to January. As
far as the December report goes,typically, it's a nonevent, but
I've gotta think that therecould be some adjustments this
year given that the Octoberreport was never released. So
I've gotta think if there'srevisions that they see could be
(09:37):
made instead of simply takingthe month off, and I hate to put
it that way, but it seems likethat's what has been done in the
past. You know, I I thinkthere's maybe a little better
chance they're gonna make somerevisions. And, of course, as
you suggested, you know, itmight be more on the demand side
of things.
Todd Gleason (09:52):
The weather forecasters have told us, and
I'll switch to soybeans here,but remain with the WASDE this
month, that the, soybean crop inBrazil, Argentina, while having
suffered through some dryspells, are in pretty good
condition. Do you suppose USDAwill raise the numbers for total
production from both of thosenations on Tuesday?
Matt Bennett (10:14):
It's tough to say. You know, we went the whole last
marketing year kind of expectingthat that would happen from
USDA, and they just never reallydid. I think whenever I look at
Brazil, I could certainly makethe case. If you look at several
of the reports out of Brazilright now, it's indicating that
you could be looking at amassive crop. Now Southern
Brazil and Argentina arecertainly on the drier bias
(10:36):
right now, and forecasts don'tlook all that promising.
So if we would have some issuesin Argentina, the typical
protocol, of course, is thatsoybean meal market could be
fairly strong. We've alreadyseen a pretty nice little bounce
off the lows that we had therein October. I mean, we were
trading down there at COVID typelevels in the low 2 seventy's,
(10:57):
raced all the way up to over$330 And now we're sitting here
around $3.00 $8 to $310 And sobut I would say, Todd, if
Argentina would stay dry andturn on the warmer biases, lot
of people are predicting, thatcould be somewhat supportive.
But, no, I don't really expectthe USDA to make a lot of
(11:18):
changes on South Americanproduction next week.
Todd Gleason (11:21):
Turn your attention to the 26, 27 crop
here in The United States. Thecrops that will be planted in
the spring. You've been outprobably enough at this point in
the winter mating season, reallygetting kicked off and started.
But to get an idea of whatproducers are thinking about
their crop ratios, and whattheir rotation will look like,
(11:41):
what are they telling you aboutcorn and soybean planted acres?
Matt Bennett (11:45):
That's a good question, Todd. You know, three
two, three months ago, I wouldhave told you. I thought, you
know, and I probably did tellyou. I thought corn acres would
fall, precipitously. But at thisat this stage of the game, I
just don't see it happeningbased on what we're hearing from
the ag chem retailer.
Now there's no doubt that dryfertilizer tonnages were off,
(12:07):
but a lot of folks chose, toback off on phosphate,
especially where their fertilitylevels look good. In some cases,
they did it just because theycouldn't find any black ink with
a normal ratio on fertilizer.And so I still think a lot of
growers are still going to plantcorn, especially in areas in
parts of Iowa. Some of thereports out, I saw something
(12:29):
from Iowa State this week thatsuggested the Iowa grower may
actually plant more corn thiscoming year. So if we planted 98
and change this year, I wouldexpect that's going to come down
somewhat just simply due to areally high corn year typically
correlates to a bit of a switchjust because of your corn to
beans, beans to corn guys.
(12:50):
But I don't expect a six or7,000,000 acre drop. I think you
could make a case right now forsomewhere in that 94, 95,000,000
acre range, which is certainlyenough corn acres. But again, we
probably need to be planting afair amount of corn if this
demand is going to be racinglike the like we've seen it
here. And so it'd be veryinteresting how it plays out.
But, you know, if you had topinpoint me right now, I'd say
(13:12):
corn acres lose maybe three,three and a half million acres
and those would go directlytowards soybeans.
Todd Gleason (13:18):
Okay, so if you're higher corn acres but demand
really good, I don't know whatyou're thinking about as far as
early sales for corn. And thenwhat do you do about soybean
sales?
Matt Bennett (13:30):
Yeah, I mean, I'll just go over corn real quick. I
mean, one thing that we'vetalked to growers about for
bushels going in the bin is, youknow, what's it look like to
maybe hedge some four seventy,these 26 corn. This last fall,
of course, we had a carry up to35¢ from these to July. And so
if we simply hedged Decembercorn, which I know a lot of
(13:50):
people don't have the stomachfor those type of margin
requirements, but if they did,you know, far as putting bushels
in the bin, if you hedged at$4.7 with the thoughts that, you
know, when you get carried$30.35 cents, you could work
your way into some $5 corn inthe bin, and then you're just
dependent upon what basis does.You know, as far as 26 beans go,
(14:11):
we gotta remember, you know,we're one time here over the
last month, you know, we were ata a fifteen month high in the
bean market.
Now you're still looking at nope26 beans as we speak, you know,
at eleven thirteen. And so Iknow that that's not what it
once was over eleven thirty, butthat's a heck of a lot better
(14:32):
than what most people marketedbeans for the 25 crop. And so,
you know, you could do the samesort of thing on beans. I know
most people that I know don'twant anything to do with soybean
futures and I don't blame them.It's a volatile deal.
But if you hedge or maybe evenyou HTA'd some beans, I don't
like the HTA as much, butcertainly it doesn't have the
(14:52):
margin requirements. But if youhedge somewhere in here, I mean,
the carry from Nove to July atone time this last fall got up
to 65¢. So that's something thatwe certainly don't want to
ignore. Now, another way oflooking at it is, you know,
maybe I just put an $11 floor onthese beans and to do that,
because it's going to be anexpensive put option, I may have
to sell a call up there at like12.5 somewhere like that. But
(15:15):
you know, if I did that on 20%of my bushels, if my worst case
scenario is I got locked intosome 12.5 beans, I'm not going
to be heartbroken over that.
So I do think we need to step inhere and at least get some
marketed ag market as a group.We're actually up to 40%. Most
of those are flexible hedgesthat's got the opportunity to
run up to that twelve, twelvefifty level. But by all means,
(15:37):
we're trying to get a floorunder some of these beans just
in case this thing turns south.
Todd Gleason (15:40):
Thank you much. I appreciate it, Matt.
Matt Bennett (15:42):
Oh, absolutely. Thank you.
Todd Gleason (15:43):
That's Matt Bennett. He is with
agmarket.net. Ellen Dearden nowjoins us from AgReview. She is
in Morton, Illinois. Hello,Ellen.
Thank you for taking some timeon a Friday morning and for
holding off, on recordingcommodity week with me this week
as I was busy, doing some otherthings Thursday afternoon with
(16:04):
you. I'd like to begin with thelivestock sector, particularly
all the things that arehappening in, the beef supply.
There's the screwworm, corngoing across, the border to
Mexico to keep cattle that arebeing fed out there, being fed.
And here in The United States,really high prices, and a
(16:28):
constant turn of what thepolicies might be. Can you talk
to me about that sector and howthings have been changing
throughout the calendar year?
Ellen Dearden (16:37):
Since the October highs, we really have seen a
substantial break in the livecattle and the feeder cattle
both, but have turned rightaround and rebounded again. It
seems to me that there's been alot of talk about trying to
lower prices for consumers atthe beef counter. And how that
(17:01):
will play out is really up forgrabs. But there's a lot of
talk, but not a whole lot ofaction. I thought it was
interesting when Thursday theFDA approved a topical cream for
dealing with screw worms.
(17:21):
And that could be a game changerbecause it would be applicable
to both beef cattle, but alsonon lactating dairy cattle.
Could be something to reallywatch how that happens. And if
it is a successful product, wemay end up seeing the border
(17:45):
from Mexico reopen sometimelater in 2026. However, we're
feeding cattle in Mexico, sowe're using corn exported from
The US to feed those cattle. Sowith the number of cattle in
(18:05):
North America, in CentralAmerica, is probably not down as
low as what The US numbers show.
Todd Gleason (18:13):
Yeah. So talk to me about that because what the
USDA numbers show are recordlows at this point in the size
of the herd for decades. Andwhat you're telling me is that
this is a border issue and thosecattle, it's not that they're
not there, they're just not inThe United States. How do cattle
generally, when the border isopen, move across the border and
(18:38):
through the feedlots? Are theyfeeders or cow calf pairs in
Mexico?
What happens generally? Do youknow?
Ellen Dearden (18:49):
No, they're feeders. They're not cow calf
pairs moving north. What wetypically see is rather regular
movement of cattle into feedlotsboth in the Texas Panhandle,
Oklahoma, Kansas, and up as farnorth as Nebraska. We have
(19:13):
friends who are in the truckingbusiness who have really seen
that business just shut offcompletely over the last year's
time. So I'm pretty familiarwith at least what they talk
about.
Todd Gleason (19:26):
Right. And so what we're really saying is, and what
you're telling me is that thebeef cattle herd is there. Why,
if that is the case, are beefprices so very high?
Ellen Dearden (19:39):
Beef prices are high because demand is high, and
that runs counter to what Ithink the White House is trying
to say, that beef demand is notthere, but it is. So we are
continuing to see fewer amountof beef, particularly grain fed
(20:01):
beef, come into the market andthat drives up prices.
Todd Gleason (20:06):
The folks that you talked to in Nebraska and other
places, how concerned were theyat the closure of the beef
processing plant there?
Ellen Dearden (20:14):
They were extremely concerned. They think
that it's going to add a lot ofcost to move cattle away from
Central Nebraska to other placesfor killing. But also, it's not
just that Tyson plant that wasclosed, but a cutback in the
(20:35):
Amarillo Tyson plant to just oneshift. And so that, I think, is
a huge difference. Cargill andsome of the other packers will
continue to pick up some of thatbusiness, but that leaves a real
hole in Central Nebraska.
Todd Gleason (20:55):
Is there concern about where those animals that
cannot be processed there mightend up and how it would change
the feed out of animals? Forinstance, do they process very
many in Mexico, and might thisbe an option for Tyson and
others to open plants or toincrease the runs at plants if
(21:21):
they have them in Mexico? I'mjust not familiar.
Ellen Dearden (21:23):
I'm not familiar with that either, Todd.
Todd Gleason (21:25):
It'll be interesting to follow questions
I'll have to ask and find out.Thank you for taking some time
on the livestock side. Now let'stalk about what this means for
producers here in the Midwestwho normally would be shipping a
great deal of corn to feedlotsin Texas, some into Nebraska, of
(21:45):
course, and that coming out ofIowa. I'm wondering how you see
this impacting basis in our partof the world and across the corn
growing states.
Ellen Dearden (21:58):
Over the last couple of years, from Central
Illinois West, shipped a lot ofcorn for feedlot and also for
ethanol use. And some of thatwent down into the Texas
Panhandle. With a much bettercrop this year in the Western
(22:19):
Corn Belt than in the lastseveral years. That big movement
of corn out of this area, atleast around Peoria, has really
been cut off and the demand iscoming from local ethanol plants
and also to The US Gulf.
Todd Gleason (22:36):
And that is where things have really been hopping.
The export demand for corn hasbeen really, really good so far
this fall.
Ellen Dearden (22:43):
It has been excellent. Excellent.
Todd Gleason (22:45):
How good has it been?
Ellen Dearden (22:46):
It has probably been day in day out 10 to 15¢
better basis than what we havetypically seen in this early
December time period.
Todd Gleason (22:58):
When you think about what this means going
forward into January, February,March, what does it tell you
about the marketplace?
Ellen Dearden (23:04):
Well, if we talk about futures on the corn side
of things, there's a strongseasonal appreciation of futures
prices going here from theDecember into the February at
least. And I think that thattrend looks like it could
continue this year. How thebasis goes is really gonna be
(23:26):
very dependent here in theCentral part of Illinois on the
export markets and whether thosecontinue, particularly into
Mexico.
Todd Gleason (23:37):
How far along in their marketing do you suppose
producers are, and how long howfar long do you think they
should be for old crop?
Ellen Dearden (23:43):
If we're talking the corn side of things, I think
producers are probably a shy 40%sold. Typically they would be,
oh, 50% sold, so I don't thinkthey're very far behind. I don't
have any qualms of being 40 to50% sold at this stage of the
game.
Todd Gleason (24:02):
And the soybean?
Ellen Dearden (24:03):
On the bean side of things, I think they're
further ahead than that.Probably at 65% to 70% sold. I
think we've had an awfully nicebean rally and that the market's
saying to me that maybe we'renot going to continue to work
higher for right now. We didhave a big sale reported this
(24:26):
morning to China, but the marketkind of took that and said,
Yeah, show us more. The marketcontinues to be disappointed at
the tonnage of sales,particularly to China being made
on the bean side.
So I'm a little bit more anxiousto sell beans in here.
Todd Gleason (24:46):
Secretary Bessence on Wednesday of this week
suggested, you know, the12,000,000 metric tons, will be
over the next two, two and ahalf month period through the
February. That would work on theChinese calendar year instead of
our calendar year. May have beena translation function. Who
knows? But still only 12,000,000metric tons by then.
(25:08):
And I suppose if you're workingoff their calendar year, you're
looking at twenty five millionmetric tons from March through
February 2027 then, possibly.What's your, what's your feeling
about how this impacts themarketplace, especially given
that those, you know, that thatFebruary timeframe really would
(25:30):
not belong to The United Statesnormally as it relates to export
of soybeans.
Ellen Dearden (25:35):
Yes, this is true. I think the market really
wants to just see the sales, getthem on the books, and start
making some actual shipments.You know, we're really kind of
trading blind because our exportbookings reports are only up
through the October. That'sgenerally a period that The US
(25:57):
owns the market, in the beanside of things, and, we still
have seen just tepid sales.
Todd Gleason (26:04):
Anything else before I let you go for the day?
Ellen Dearden (26:06):
Just keep watching the river basis.
Improvements on the river, showsexport business.
Todd Gleason (26:12):
Ellen Dearden is with AgReview. She's in Morton,
Illinois. Joined us along withour other guests, Matt Bennett
of agmarket.net out of Mattoon,Illinois on this December
edition of Commodity Week. Youmay always find it up on our
website at wilag.org. That'swillag.org.
There you'll find not onlyCommodity Week, but the daily
(26:33):
closing market report, ouropening market report, and
information that comes to youdirectly from the crop scientist
and the agricultural economist,as well as the animal scientist
here on the Urbana Champaigncampus of the University of
Illinois. On Extension's ToddGleeson. Hi.
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