January 8, 2026 • 29 mins
Panelists
- Naomi Blohm, TotalFarmMarketing.com
- Ellen Dearden, AgReview
- Chuck Shelby, RMCommodities.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the January 8 edition of Commodity
(00:03):
Week. Todd Gleason's servicesare made available to WILL by
University of IllinoisExtension. Welcome to Commodity
Week. I am Todd Gleason. Ourpanelists for the day include
Naomi Bloom.
She's at Total Farm Marketing.That's totalfarmmarketing.com
online in West Bend, Wisconsin.Ellen Dearden is with AgReview
(00:27):
out of Morton, Illinois. ChuckShelby joins us from Risk
Management Commodities, adivision of Zaner Ag. He is in
Lafayette, Indiana.
Good afternoon to you all.Thanks so much for being with
us. Let's turn our attention tothe items that maybe we should
discuss for the day. I think,Chuck, I'll start with you.
What's on your list?
Chuck Shelby (00:47):
Well, we're beginning a new year here, and,
I was talking to some farmerstoday is what's the mixture of
acres gonna be for '26? Arebeans going to get the
attention? Are we going to havea good enough price there? So
just looking ahead what we'regoing to plant next year.
Todd Gleason (01:04):
Ellen Dearden from AgriView, on your mind?
Ellen Dearden (01:06):
I sure have had a lot of calls in this last week
about old crop corn, settlingold crop corn, and my guess is
that the farmer has half his oldcrop corn yet to move.
Todd Gleason (01:20):
And finally, Naomi Bloom with Total Farm Marketing.
Naomi Blohm (01:23):
And I would like to talk about new crop corn and the
value that it's at now versuswhere it was a year ago. And
also keeping an eye on thepotential supreme court
announcement for Friday, wemight find out if these tariffs
are legal or illegal.
Todd Gleason (01:36):
Well, let's take that up first because by the
time this airs on WILL and manyof the radio stations that carry
our program or when people hearit on the podcast, that decision
may have been delivered. I thinkit's due if it actually comes,
and these are only opinions.It's it's not necessary that
this will show up. But if itdoes come, it'll come on Friday
(01:57):
morning. What do we think, mightbe the results, Naomi Blohm, if
the Supreme Court says that thetariffs are not legal?
And if they do say that they arelegal, how much of a difference
does it make?
Naomi Blohm (02:13):
Well, I would say if it's, deemed legal, then we
kind of continue on as is forthe moment. And then it'll be
interesting to see how Chinacomes into play because I feel
like China has been draggingtheir feet with some of their
purchases regarding US beans,waiting to see if this tariff
announcement was going to belegal or not. Now, if it is
deemed illegal, then I don'tknow what is going to transpire
(02:35):
because it affects all thecommodity markets and outside
markets. And we might just see alot of trader jitters or
position squaring heading intothe weekend. So be ready for
anything that comes from it.
But to your point, right, theSupreme Court may just come out
with thoughts and feelings andand tell us, you know, just kind
of an update on things but maynot officially announce a
(02:55):
decision. So you just gotta beready for anything and, again,
how that might affect outsidemarkets and then trickle down
into US ag as well.
Todd Gleason (03:04):
If there is a decision that's rendered and it,
is posted as illegal. I'mwondering if that makes a
difference, Chuck Shelby, onMonday morning, at 11AM central
time when USDA releases theworld agricultural supply and
demand estimates. It does alwaysuse policies that are in place
(03:25):
at the time of the release, soit could change things.
Chuck Shelby (03:29):
Yeah. You talk about some surprises that always
happen in USDA reports. That'sone that could skew the
information of the day. But likemost things that happen anymore,
especially in reports, we see aninitial reaction and the market
kind of evaluates theinformation. And I think
eventually, you know, no matterwhat they say, the report is
(03:53):
gonna be important goingforward, especially like, we
talked about corn.
Todd Gleason (03:57):
So at this point, if you've not looked yet to see
whether US Supreme Court hasreleased something as it's
related to tariffs, probablyought to take a look and to
think about that as it's relatedto what might happen on Monday
or what's happening in theFriday trade from the CME Group
in Chicago. Let's move on now.We'll begin with old crop corn
(04:21):
sales. You mentioned, EllenDearden, that your thought was
that around 50% of the corn wasyet to be sold by producers. I'm
wondering whether that is moreor less than normal at this time
of year and if that makes muchof a difference, and then what
you've been telling producers asthey call.
Ellen Dearden (04:40):
I believe it is there is more corn still in
storage both at home and incommercial storage at this time
of year compared to normal. In,Central Illinois anyway,
typically move a lot of corn inJanuary, February, March
timeframe. I would say therewere some Jan sales made. Those
(05:04):
may all be delivered in the nextweek with this, rather good
weather that we've had andthere's nothing booked for
February, March, and I thinkthat's problematic. I think
mister Farmer is still lookingthat last year we rallied during
the month of February and,thinking that maybe that will
(05:24):
happen again.
You know, we all have prettyshort memories.
Todd Gleason (05:28):
And you don't believe that's the case?
Ellen Dearden (05:30):
I think that it's it's illogical to see much
upside. Well, probably muchdownside in the corn. They're so
locked into a narrow tradingrange. You know, if we would see
some kind of new information outon Monday from USDA, maybe we'd
see a pop but I don't believethat even an upside breakout
(05:54):
above this $4.51 level will onthe March will take us very far.
Todd Gleason (06:00):
Naomi, can you plumb that narrow trading range?
I think you and I talked aboutthat a bit, Ma, during your
closing market report appearanceon Tuesday of this week and
what, the charts look like atthis time.
Naomi Blohm (06:12):
Yeah. So building on that March corn contract has
been in about a a two and a halfmonth sideways trading pattern
where, in general, the Marchcontract has had a hard time
getting above $4.50, where $4.35seems to be pretty solid
support. So the biggest thing Iwant to have people think about
and look at is that there's twodifferent chart formations
(06:34):
happening on this chart,actually potentially three. So
you have a pennant flagformation where we have had the
uptrend channel line from Augusthold as support and you have the
downward channel line from ayear ago holding as resistance.
It's a sideways pen and flag.
And when you get into thatnarrow point, once the market
breaks out a particulardirection, you can kind of get a
(06:58):
feel for how much thedirectional move would be based
on the wide end of the pen andflag. It's pointing to about
potentially 40¢ for a potentialmove. Now we don't know if the
move is higher or lower. That'sgoing to depend on the actual
news that comes from the USDA onMonday. We also have an
potential upside down head andshoulders formation that if we
get friendly news, points to a40¢ rally.
(07:21):
But again, we need the friendlynews from the USDA to make that
happen. Then we have the two anda half month sideways trading
range, which would point to moreof a short term $0.15 breakout
higher or lower. But the longermarket trades in a sideways
pattern, the bigger the breakoutis going to be once the news
transpires. So this report onMonday, it is going to set the
(07:43):
cornerstone for prices goinginto the new year. It is our
fundamental setup.
Then farmers, of course,regarding cash sales, old crop,
new crop, we have to focus onthat. That would also then of
course lead into the acreageconversation for the springtime
and where prices are going tobe. So we're gonna see some, I
(08:04):
think, pretty big fireworks nextweek, depending on whatever this
report comes out and says.
Todd Gleason (08:10):
Ellen Deirden, I wanna give you an opportunity to
talk about some of these charts.I know you follow that fairly
closely as well. And then,Chuck, I'll I'll turn to you at
that point to talk aboutacreage. But this net this
report set of reports, all fourof them, the grain stocks, crop
production, WASDE, and the wheatacreage figures are really
important for setting the tonefor the first three months of
(08:30):
the year. When you look at thosecharts, what are they telling
you, from, the perspective thatyou're looking at them from
Ellen?
Ellen Dearden (08:40):
I can see Naomi's upside bias, would say,
particularly on that tenantformation. It just seems to me
that we have a hard time movingin one direction or another.
We've got to get some littlecycle lows put in here in the
(09:01):
next month's time before I couldget a little more friendly.
Todd Gleason (09:05):
Okay. Now let's turn to the acreage figures, a
battle that may or may not needto ensue. I think most are
thinking what that there shouldbe a lot more soybean acres this
year than there were last. Isthat what you're hearing, Chuck?
Chuck Shelby (09:21):
It's a consideration to the guys I
talked to today. They'dcertainly like to see beans
rally into the $11 or maybeabove there to make that
decision. I think that goes backto what that report does Monday,
how important that is. If we canget the breakout that Naomi has
(09:41):
been discussing here, then Ithink it leans probably more
favorable towards corn. If we dosee the tariffs aren't legal,
then I think that could hurtsoybeans and that would damage
the case for more bean acres.
There's a practicality point.Certain farmers in certain parts
(10:01):
of the country, corn on cornisn't probably their best choice
where if you're in Illinois,Indiana, Iowa, parts of
Minnesota, corn on corn is a loteasier and maybe more
profitable. So a lot of thingsto go that we don't know yet. I
think next Monday will probablybe a point of a decision that
(10:24):
will help the producer make,make his decision.
Todd Gleason (10:27):
Okay. So I wanna follow-up with you just a bit
because you're in one of thoseareas where they could do corn
on corn, but really a primarysoybean production area known
actually as a soybean productionarea across the whole of the
Midwest, there around Lafayetteand, you know, spanning from
Kankakee going West throughLafayette and into Indiana. Are
(10:48):
producers considering corn oncorn more often than not there
than they have in the past?
Chuck Shelby (10:55):
I think in a lot of areas, the confidence level
of their corn yield has been inthe last few years with pretty
good yields. They have moreconfidence in their corn yield.
The beans are so subject tothose August rains. And in the
past several years, a lot ofareas have been short on rain.
(11:17):
So, and profitability wise,again, if you can grow a really
good corn yield, it still worksbetter than beans with less
confidence on what you're goingto yield.
So inputs are certainly highertoo. We were booking some
nitrogen today and it's higherthan last year. So that's a
(11:38):
little bit concerning. It's alot of moving parts at this
point in time and I think youguys are going to need more
information. What's a cropinsurance price going to be in
February?
I think that's going to have animpact too on what producers
decide to plant next spring.
Todd Gleason (11:54):
While I have you in your home area, I wanna
follow a tangent that's notquite related to the
marketplace, but I think youwill have noticed, and I don't
know what your practices arelike on your own farm, cover
crops, for those who have beenfollowing them, just like
soybeans, which are a productionhigh in that part of the world,
(12:16):
cover crops apparently are alsoa really big thing through your
area. Many people will drivethat and say, hey. There are a
lot of cover crops in this area.Have they changed the way
producers think about beanproduction very much? Because
they would come in after corngenerally.
Chuck Shelby (12:34):
Oh, my answer to wheat has always been make it
the national cover crop, andthat would solve a big part of a
wheat problem. Know, use covercrops on our farm and minimum
programs for several years. Youknow, one of the problems or
difficulties, I guess, inestablishing cover crops is
(12:56):
always, what kind of weather doyou have in the fall? We've had
really dry falls last severalyears. So getting your cover
crops established has beenchallenging.
So it's certainly part of thepuzzle pieces, but I don't know
that that is an answer up towhat we're going to plant or not
(13:20):
going to plant. It's a lot ofinput. It is more expensive this
year any way you cut it.
Todd Gleason (13:26):
Yeah. So it was mostly I was interested in the
use of cover crops in that areaand the production side of as
opposed to the impact actually.Although there would be an
impact if people get used tousing cover crops on there
because they really need beansin the rotation to pull that
off. Still doesn't work all thatgreat with corn, though maybe
you've had better luck thanothers. I don't know.
We can talk about that atanother point. So let's look
(13:48):
forward to some of the othernumbers that are coming, in the
Monday reports. Let's start withthe grain stocks. Ellen Dearden,
I want you to talk a little bitabout what the grain stocks on
farm and off farm might looklike given that you think, that
half of the crop has yet to besold. Where is it stored?
Ellen Dearden (14:08):
I would imagine that a larger than normal,
percentage of corn will belocated on farm. And the reason
I say that is it's not justupright bins that are holding
corn, but it is also bags. Andthere are some areas that bags
are very prevalent. And I thinkthat will be a little difficult
(14:28):
to count however. We know whatthe bag's supposed to hold, but,
you know, really what does ithold?
So that may be in question. Ithink the, we will see the
Western Corn Belt with a large,amount of corn in commercial
storage, however.
Todd Gleason (14:47):
Oh, interesting. Why do you suppose that's the
case?
Ellen Dearden (14:50):
The crop was big and, they carried over some crop
from the previous year, the justin case bushels. And, I think we
will just see, that that we'venot seen a big outflow of corn
out of bins, the commercial binsbecause of the fewer outlets for
(15:12):
that corn.
Todd Gleason (15:13):
Well, I wanna follow-up with you just a little
bit because, I jumped to theconclusion that you were talking
about in commercial storage, butyou were talking about just in
storage across the board in inboth commercial and on farm in
the Western United States?
Ellen Dearden (15:26):
I think on farm, in in the Eastern Corn Belt or
the Central Corn Belt will be alarger percentage than normal.
In the Western Corn Belt, it maynot be as big a factor on farm.
Todd Gleason (15:38):
Naomi, in that, Western Corn Belt, if it's in
commercial storage or maybe evenif it's in the bin, oftentimes
because, they have far differentstorage conditions than we do,
the drier moisture levels inthose parts of the world allow
them to store grain for muchlonger periods of time. You
(15:59):
know, if we get to July andthere's still corn around, you
really have to think about howhard that is. If there's
soybeans around, then you mightbe in trouble. But in that part
of the world, they can storethings for a couple two, three
years sometimes. How much of adifference does that make for
the availability of corn,particularly, to move into the
(16:20):
feedlots or to back up intoethanol plants and to the
Mississippi River in the comingyear?
Naomi Blohm (16:26):
Well, is something to be mindful of. In talking
with clients that I have inthose areas, I think there's
always like a handful ofproducers that maybe have a
couple of years worth of grainon farm or in storage. I'm not
sure how prevalent that is thisyear. I'm very curious, I think
Ellen had just a lot of greatpoints about the amount of grain
(16:47):
that could be in storage. Thequarterly grain stocks is going
to be a real big component toMonday's report for sure.
But you know, the thing thatproducers need to be thinking
about if they've got grain instorage is, and this is where I
agree with Ellen. Like if wedon't get a really friendly
report on Monday, the path ofleast resistance is sideways to
(17:10):
lower. And so if you're notmoving your grain in the coming
weeks, then what you're gonnaend up doing most likely is
saving it and storing it andkind of hoping maybe, I hate to
say it like this, but hoping fora drought in order to make
prices rally in the summer, inorder to pay for storing your
(17:31):
grain all those extra months.You know, just truly at the end
of the day, you got to rememberas a farmer, you are a business
person and you've got to bemoving your product. Like I
said, it's we gotta have an overthe top friendly report or
prices may struggle here in theshort term.
Todd Gleason (17:52):
This brings me, Chuck, to the production
agriculture side, the bridgepayments, which many
agricultural economists arefearful that producers may use,
so they may have learned theirlesson through the m f a MFP
period, not to use it to wait,as a way to increase cash
payments or to increase thekinds of fertilizer inputs that
(18:16):
there are chemical inputsthey're putting on, but actually
to go ahead and service debt andto make sales both. So are you
of a mind that sooner ratherthan later is a better option
still?
Chuck Shelby (18:29):
Yes. I think that's the best plan of action.
You know, another interestingthing, there are a lot more bags
around than I've ever seenbefore, but the practicality of
that is it's not frozen outthere right now and you can't
get that out of there. So thatmight be a factor of why bags
(18:49):
are a great alternative atharvest if you don't anywhere to
go, but unless the weathercooperates here and it starts
getting really cold and freezesup that grain is not going to
move it's stuck out there so alittle interesting caveat that
we haven't really seen in thelast year or two but another
interesting thing about this,you know, payment, it's not
(19:12):
supposed to come to theFebruary. I'm wondering if we
have another government shutdownhere at the January.
I know USDA is still open, butdoes that treasury still send
those checks out at the Februaryif we're in a government
shutdown again? So anotherunknown out there that it it
(19:33):
could impact us in agriculture,but we don't know the answer.
Todd Gleason (19:36):
Okay. Let's talk more about you're right. I don't
know what I don't know where togo from there, but but but you
certainly are correct, andproducers will have to think
about what that means too. Ihadn't considered that as an
option. Let let's talk moreabout the reports on Monday.
Feed and residual, Chuck, thatnumber all year long has been
(19:59):
one of the banes, I think, ofthe industry because it's so
large. And it it along withexports when combined is a a
super big number, though thethough there's you know, it's
not clear feeding a smallernumber of beef cattle has made
(20:20):
up for that to heavier weightsthat is and or how the exports,
which have been on a terror of apace to Mexico, change what
those numbers look like. WillUSDA adjust them on Monday, do
you suppose?
Chuck Shelby (20:34):
You know, that's a, you know, the really big wild
card. I think going into thereport though, if you look at
the estimates, they're notreally the averages are not
really bringing the yield downthat much. And so they're not
really changing the carry outthat much. So to me, if we could
get any kind of reductionwithout an offset on the feed
(20:56):
and residual, then that's gonnabe the positive catalyst. So I
think you got to look at theattitude of all the people that
try to analyze what USDA isgoing say, they're really not
changing it much.
So if we get a reduction I thinkthat could give us a positive,
you know going forward.
Todd Gleason (21:14):
Ellen Dearden, if you could follow-up on the
exports and the livestockconsumption patterns and what
you've been considering as it'srelated to the Monday reports, I
would appreciate it.
Ellen Dearden (21:25):
Corn exports have been outstanding. Phenomenal
might be a better word and, thatwill probably continue. Although
I did notice that the recentbuys on the corn instead of all
going to Mexico, now we'reseeing some go to South Korea
and some to Japan. And I likethat it's being spread out a
(21:47):
little bit. I also think thatthat, we need to always keep in
mind that feed is feed andresidual.
So seeing that 6,100,000,000bushel number there, is high but
may not, we need to considerthat residuals thrown in there
too. Ethanol should shouldremain steady I think at that
(22:11):
5,600,000,000 bushel place. I Ithink the the thing that has to
happen is ending stocks of cornhave to drop below 2,000,000,000
bushel to even see an inkling ofpeople wanting to buy.
Todd Gleason (22:24):
Naomi, do you think that's very possible?
Naomi Blohm (22:27):
Well, it depends on what to do with yield. That's
just the bottom line. Last year,the January report was the game
changer with the yield goinglast year from one eighty three
point one down to one seventynine point three. That was the
game changer for the entirereport last year. But we had
carry out in the December WASDElast year at 1,700,000,000
(22:49):
bushels, and then on the JanuaryWASDE it changed to
1,500,000,000 bushels.
Now we're sitting with carryoutgoing into this report at
2,000,000,000 bushels. We're ata higher level of carryout
already. We really do need acombination of the lower yield,
lower than expectations. We needto see the USDA keep the export
(23:12):
demand numbers strong, keep thatethanol demand numbers strong.
Then as we were talking aboutearlier, the elephant in the
room is that feed and residualnumber and what they do to that
because we're at 6.1 right now,like Ellen was saying, but a
year ago at this time, we wereat 5.77.
(23:33):
So That's the big concerningnumber that traders have been
talking about, and that's theone that could get shifted.
Plenty of front moving parts onthis report. The algorithms are
gonna go, I think, really,ballistic over the first couple
minutes after this report comesout line by line, and then we'll
(23:55):
be able to see where the dustsettles and and where everything
falls.
Todd Gleason (23:59):
Okay. Once the dust settles, and I think I want
all three of you to think aboutthis and maybe tell me a little
bit about your thoughts, andthere is a tone, a direction
set. Usually, this is for aboutthree months until we get to the
acreage report, that we'vediscussed with Chuck some.
During that three month period,if it is a friendly report, I
(24:23):
won't say bullish because I'mnot sure that that'll happen,
but it could. A friendly report,how should farmers think about
at that as it's related to bothold and new crop marketing?
And on the opposite side, if itis a bearish report, and I
suppose we can say either ofthose are half a million half a
billion to a billion bushelsmove in either direction, what
(24:45):
should producers do? So howpatient are they once this
report comes out given thedirection or tone of the report?
And Ellen Dearden, I'll startwith you, follow-up with Chuck,
and then Naomi, you can pick up.
Ellen Dearden (24:58):
Farmers going into this report own too much
inventory, just flat out own toomuch. And I think they have
always thought that there'sgonna be something to bail them
out. So if this report shouldturn up to be not friendly and
prices don't rally, then they'regonna say, well, we'll just wait
(25:20):
till the plantings report. We'llsee what that plantings report
say. They're always looking thatkind of a mindset.
And I think that we need to havea time give up point as well as
a price give up point on bushelsand have offers in at the report
(25:41):
and after the report.
Chuck Shelby (25:42):
If we get a positive report I think you'll
see producers let go of theircorn that they've been holding
on. Most producers I think havesold a higher percentage of
beans so the corn is the issue.If we get the rally, I think
it's a good opportunity to getrid of the old crop and to start
looking at new crop. On thedownside, I would say you'd be
(26:05):
still be choppy sideways becausethe demand is so good. You look
at the, you know, ethanol blendset a record here the other day
at over 11%.
So I think the demand would kindof keep us in the range. So we
might visit the lower end of therange. So if a negative report
or not one that's positive, Ithink producers are gonna have
(26:27):
to look to let it go. And thenagain, there's some extremely
cheap options out there. If you,you know, can't stomach the idea
that letting it go or, you know,you're wishful for a positive
bullish acreage report.
It's better to, you know, cashit in and pay your bills and pre
(26:49):
owned on a paper if that's, youknow, what it takes to get the
job done and moving to corn.
Todd Gleason (26:54):
The record, by the way, that Chuck is referring to
is 11% ethanol in the gas aslean supply for the full 2025
calendar year. That's neverhappened before. By law,
supposed to be about 10%. Itdoes range somewhere around nine
and a half to 10 and a halfgenerally in any given year. So
(27:15):
an 11% number is a big number,and that includes, of course,
the exports, which have beenreally, really good for ethanol.
Finally, Naomi, your thoughtsas, related to what to do given
the tone of the reports,whichever direction that happens
to be on Monday.
Naomi Blohm (27:33):
I would take a strategic tone with it and, look
at March corn puts. You can geta $4.40 put for 7 and a half
cents. It's good for forty twodays. That gives you downside
protection just in case thereport is bearish. That way you
have some price protectionthere.
Also, it leaves your upsideopen. So in the same breath,
(27:53):
have the puts there as a pricefloor, but have those cash
targets higher. And on the Marchchart, $4.75, $4.80, $4.85 would
be targets higher if we get afriendly report and have those
orders in at the elevator aheadof time. Because reality, in my
opinion, is that we don't have areason for corn to get above $5
(28:13):
unless the USDA report is sofriendly. Then you need to have
some bearish, I should say badweather in South America to make
their crops smaller to justifycorn prices to go through $5 I'm
saying those are slight odds.
Have some realistic cash targetsin place between $4.75 and
(28:34):
$4.85. Have those March puts inplace just in case the report is
negative. And then on new crop,this is the thing I want to
really have people focus on. Youknow, right now we've got Dec
corn, you know, between the46465 area and $4.75 is big
resistance on the Decembercontract so far for 2025 during
(28:55):
2025. When you look at thetwenty six December corn price,
the high price was 4.77 back onJune 9 for the December 2026
contract.
Last year, when we were talkingabout new crop corn, these corn
had a hard time getting over$4.90. So we are kind of in the
(29:17):
vicinity where you've got somepotential higher end value from
a historical perspective. Sodon't ignore the December corn,
your new crop corn, to bethinking about forward
contracting at these levels aswell.
Todd Gleason (29:30):
Commodity week, of course, is a production of
Illinois Public Media. You mayfind and listen to the whole of
the program anytime you'd likeon our website. That's at
willag.org. Our thanks go to ourpanelists today including Naomi
Bloem at Total Farm Marketing,Ellen Dearden from AgReview, and
Chuck Shelby of Risk ManagementCommodities on University of
(29:51):
Illinois Extension's ToddGleeson.
This is the January 8 edition of Commodity
(00:03):
Week. Todd Gleason's servicesare made available to WILL by
University of IllinoisExtension. Welcome to Commodity
Week. I am Todd Gleason. Ourpanelists for the day include
Naomi Bloom.
She's at Total Farm Marketing.That's totalfarmmarketing.com
online in West Bend, Wisconsin.Ellen Dearden is with AgReview
(00:27):
out of Morton, Illinois. ChuckShelby joins us from Risk
Management Commodities, adivision of Zaner Ag. He is in
Lafayette, Indiana.
Good afternoon to you all.Thanks so much for being with
us. Let's turn our attention tothe items that maybe we should
discuss for the day. I think,Chuck, I'll start with you.
What's on your list?
Chuck Shelby (00:47):
Well, we're beginning a new year here, and,
I was talking to some farmerstoday is what's the mixture of
acres gonna be for '26? Arebeans going to get the
attention? Are we going to havea good enough price there? So
just looking ahead what we'regoing to plant next year.
Todd Gleason (01:04):
Ellen Dearden from AgriView, on your mind?
Ellen Dearden (01:06):
I sure have had a lot of calls in this last week
about old crop corn, settlingold crop corn, and my guess is
that the farmer has half his oldcrop corn yet to move.
Todd Gleason (01:20):
And finally, Naomi Bloom with Total Farm Marketing.
Naomi Blohm (01:23):
And I would like to talk about new crop corn and the
value that it's at now versuswhere it was a year ago. And
also keeping an eye on thepotential supreme court
announcement for Friday, wemight find out if these tariffs
are legal or illegal.
Todd Gleason (01:36):
Well, let's take that up first because by the
time this airs on WILL and manyof the radio stations that carry
our program or when people hearit on the podcast, that decision
may have been delivered. I thinkit's due if it actually comes,
and these are only opinions.It's it's not necessary that
this will show up. But if itdoes come, it'll come on Friday
(01:57):
morning. What do we think, mightbe the results, Naomi Blohm, if
the Supreme Court says that thetariffs are not legal?
And if they do say that they arelegal, how much of a difference
does it make?
Naomi Blohm (02:13):
Well, I would say if it's, deemed legal, then we
kind of continue on as is forthe moment. And then it'll be
interesting to see how Chinacomes into play because I feel
like China has been draggingtheir feet with some of their
purchases regarding US beans,waiting to see if this tariff
announcement was going to belegal or not. Now, if it is
deemed illegal, then I don'tknow what is going to transpire
(02:35):
because it affects all thecommodity markets and outside
markets. And we might just see alot of trader jitters or
position squaring heading intothe weekend. So be ready for
anything that comes from it.
But to your point, right, theSupreme Court may just come out
with thoughts and feelings andand tell us, you know, just kind
of an update on things but maynot officially announce a
(02:55):
decision. So you just gotta beready for anything and, again,
how that might affect outsidemarkets and then trickle down
into US ag as well.
Todd Gleason (03:04):
If there is a decision that's rendered and it,
is posted as illegal. I'mwondering if that makes a
difference, Chuck Shelby, onMonday morning, at 11AM central
time when USDA releases theworld agricultural supply and
demand estimates. It does alwaysuse policies that are in place
(03:25):
at the time of the release, soit could change things.
Chuck Shelby (03:29):
Yeah. You talk about some surprises that always
happen in USDA reports. That'sone that could skew the
information of the day. But likemost things that happen anymore,
especially in reports, we see aninitial reaction and the market
kind of evaluates theinformation. And I think
eventually, you know, no matterwhat they say, the report is
(03:53):
gonna be important goingforward, especially like, we
talked about corn.
Todd Gleason (03:57):
So at this point, if you've not looked yet to see
whether US Supreme Court hasreleased something as it's
related to tariffs, probablyought to take a look and to
think about that as it's relatedto what might happen on Monday
or what's happening in theFriday trade from the CME Group
in Chicago. Let's move on now.We'll begin with old crop corn
(04:21):
sales. You mentioned, EllenDearden, that your thought was
that around 50% of the corn wasyet to be sold by producers. I'm
wondering whether that is moreor less than normal at this time
of year and if that makes muchof a difference, and then what
you've been telling producers asthey call.
Ellen Dearden (04:40):
I believe it is there is more corn still in
storage both at home and incommercial storage at this time
of year compared to normal. In,Central Illinois anyway,
typically move a lot of corn inJanuary, February, March
timeframe. I would say therewere some Jan sales made. Those
(05:04):
may all be delivered in the nextweek with this, rather good
weather that we've had andthere's nothing booked for
February, March, and I thinkthat's problematic. I think
mister Farmer is still lookingthat last year we rallied during
the month of February and,thinking that maybe that will
(05:24):
happen again.
You know, we all have prettyshort memories.
Todd Gleason (05:28):
And you don't believe that's the case?
Ellen Dearden (05:30):
I think that it's it's illogical to see much
upside. Well, probably muchdownside in the corn. They're so
locked into a narrow tradingrange. You know, if we would see
some kind of new information outon Monday from USDA, maybe we'd
see a pop but I don't believethat even an upside breakout
(05:54):
above this $4.51 level will onthe March will take us very far.
Todd Gleason (06:00):
Naomi, can you plumb that narrow trading range?
I think you and I talked aboutthat a bit, Ma, during your
closing market report appearanceon Tuesday of this week and
what, the charts look like atthis time.
Naomi Blohm (06:12):
Yeah. So building on that March corn contract has
been in about a a two and a halfmonth sideways trading pattern
where, in general, the Marchcontract has had a hard time
getting above $4.50, where $4.35seems to be pretty solid
support. So the biggest thing Iwant to have people think about
and look at is that there's twodifferent chart formations
(06:34):
happening on this chart,actually potentially three. So
you have a pennant flagformation where we have had the
uptrend channel line from Augusthold as support and you have the
downward channel line from ayear ago holding as resistance.
It's a sideways pen and flag.
And when you get into thatnarrow point, once the market
breaks out a particulardirection, you can kind of get a
(06:58):
feel for how much thedirectional move would be based
on the wide end of the pen andflag. It's pointing to about
potentially 40¢ for a potentialmove. Now we don't know if the
move is higher or lower. That'sgoing to depend on the actual
news that comes from the USDA onMonday. We also have an
potential upside down head andshoulders formation that if we
get friendly news, points to a40¢ rally.
(07:21):
But again, we need the friendlynews from the USDA to make that
happen. Then we have the two anda half month sideways trading
range, which would point to moreof a short term $0.15 breakout
higher or lower. But the longermarket trades in a sideways
pattern, the bigger the breakoutis going to be once the news
transpires. So this report onMonday, it is going to set the
(07:43):
cornerstone for prices goinginto the new year. It is our
fundamental setup.
Then farmers, of course,regarding cash sales, old crop,
new crop, we have to focus onthat. That would also then of
course lead into the acreageconversation for the springtime
and where prices are going tobe. So we're gonna see some, I
(08:04):
think, pretty big fireworks nextweek, depending on whatever this
report comes out and says.
Todd Gleason (08:10):
Ellen Deirden, I wanna give you an opportunity to
talk about some of these charts.I know you follow that fairly
closely as well. And then,Chuck, I'll I'll turn to you at
that point to talk aboutacreage. But this net this
report set of reports, all fourof them, the grain stocks, crop
production, WASDE, and the wheatacreage figures are really
important for setting the tonefor the first three months of
(08:30):
the year. When you look at thosecharts, what are they telling
you, from, the perspective thatyou're looking at them from
Ellen?
Ellen Dearden (08:40):
I can see Naomi's upside bias, would say,
particularly on that tenantformation. It just seems to me
that we have a hard time movingin one direction or another.
We've got to get some littlecycle lows put in here in the
(09:01):
next month's time before I couldget a little more friendly.
Todd Gleason (09:05):
Okay. Now let's turn to the acreage figures, a
battle that may or may not needto ensue. I think most are
thinking what that there shouldbe a lot more soybean acres this
year than there were last. Isthat what you're hearing, Chuck?
Chuck Shelby (09:21):
It's a consideration to the guys I
talked to today. They'dcertainly like to see beans
rally into the $11 or maybeabove there to make that
decision. I think that goes backto what that report does Monday,
how important that is. If we canget the breakout that Naomi has
(09:41):
been discussing here, then Ithink it leans probably more
favorable towards corn. If we dosee the tariffs aren't legal,
then I think that could hurtsoybeans and that would damage
the case for more bean acres.
There's a practicality point.Certain farmers in certain parts
(10:01):
of the country, corn on cornisn't probably their best choice
where if you're in Illinois,Indiana, Iowa, parts of
Minnesota, corn on corn is a loteasier and maybe more
profitable. So a lot of thingsto go that we don't know yet. I
think next Monday will probablybe a point of a decision that
(10:24):
will help the producer make,make his decision.
Todd Gleason (10:27):
Okay. So I wanna follow-up with you just a bit
because you're in one of thoseareas where they could do corn
on corn, but really a primarysoybean production area known
actually as a soybean productionarea across the whole of the
Midwest, there around Lafayetteand, you know, spanning from
Kankakee going West throughLafayette and into Indiana. Are
(10:48):
producers considering corn oncorn more often than not there
than they have in the past?
Chuck Shelby (10:55):
I think in a lot of areas, the confidence level
of their corn yield has been inthe last few years with pretty
good yields. They have moreconfidence in their corn yield.
The beans are so subject tothose August rains. And in the
past several years, a lot ofareas have been short on rain.
(11:17):
So, and profitability wise,again, if you can grow a really
good corn yield, it still worksbetter than beans with less
confidence on what you're goingto yield.
So inputs are certainly highertoo. We were booking some
nitrogen today and it's higherthan last year. So that's a
(11:38):
little bit concerning. It's alot of moving parts at this
point in time and I think youguys are going to need more
information. What's a cropinsurance price going to be in
February?
I think that's going to have animpact too on what producers
decide to plant next spring.
Todd Gleason (11:54):
While I have you in your home area, I wanna
follow a tangent that's notquite related to the
marketplace, but I think youwill have noticed, and I don't
know what your practices arelike on your own farm, cover
crops, for those who have beenfollowing them, just like
soybeans, which are a productionhigh in that part of the world,
(12:16):
cover crops apparently are alsoa really big thing through your
area. Many people will drivethat and say, hey. There are a
lot of cover crops in this area.Have they changed the way
producers think about beanproduction very much? Because
they would come in after corngenerally.
Chuck Shelby (12:34):
Oh, my answer to wheat has always been make it
the national cover crop, andthat would solve a big part of a
wheat problem. Know, use covercrops on our farm and minimum
programs for several years. Youknow, one of the problems or
difficulties, I guess, inestablishing cover crops is
(12:56):
always, what kind of weather doyou have in the fall? We've had
really dry falls last severalyears. So getting your cover
crops established has beenchallenging.
So it's certainly part of thepuzzle pieces, but I don't know
that that is an answer up towhat we're going to plant or not
(13:20):
going to plant. It's a lot ofinput. It is more expensive this
year any way you cut it.
Todd Gleason (13:26):
Yeah. So it was mostly I was interested in the
use of cover crops in that areaand the production side of as
opposed to the impact actually.Although there would be an
impact if people get used tousing cover crops on there
because they really need beansin the rotation to pull that
off. Still doesn't work all thatgreat with corn, though maybe
you've had better luck thanothers. I don't know.
We can talk about that atanother point. So let's look
(13:48):
forward to some of the othernumbers that are coming, in the
Monday reports. Let's start withthe grain stocks. Ellen Dearden,
I want you to talk a little bitabout what the grain stocks on
farm and off farm might looklike given that you think, that
half of the crop has yet to besold. Where is it stored?
Ellen Dearden (14:08):
I would imagine that a larger than normal,
percentage of corn will belocated on farm. And the reason
I say that is it's not justupright bins that are holding
corn, but it is also bags. Andthere are some areas that bags
are very prevalent. And I thinkthat will be a little difficult
(14:28):
to count however. We know whatthe bag's supposed to hold, but,
you know, really what does ithold?
So that may be in question. Ithink the, we will see the
Western Corn Belt with a large,amount of corn in commercial
storage, however.
Todd Gleason (14:47):
Oh, interesting. Why do you suppose that's the
case?
Ellen Dearden (14:50):
The crop was big and, they carried over some crop
from the previous year, the justin case bushels. And, I think we
will just see, that that we'venot seen a big outflow of corn
out of bins, the commercial binsbecause of the fewer outlets for
(15:12):
that corn.
Todd Gleason (15:13):
Well, I wanna follow-up with you just a little
bit because, I jumped to theconclusion that you were talking
about in commercial storage, butyou were talking about just in
storage across the board in inboth commercial and on farm in
the Western United States?
Ellen Dearden (15:26):
I think on farm, in in the Eastern Corn Belt or
the Central Corn Belt will be alarger percentage than normal.
In the Western Corn Belt, it maynot be as big a factor on farm.
Todd Gleason (15:38):
Naomi, in that, Western Corn Belt, if it's in
commercial storage or maybe evenif it's in the bin, oftentimes
because, they have far differentstorage conditions than we do,
the drier moisture levels inthose parts of the world allow
them to store grain for muchlonger periods of time. You
(15:59):
know, if we get to July andthere's still corn around, you
really have to think about howhard that is. If there's
soybeans around, then you mightbe in trouble. But in that part
of the world, they can storethings for a couple two, three
years sometimes. How much of adifference does that make for
the availability of corn,particularly, to move into the
(16:20):
feedlots or to back up intoethanol plants and to the
Mississippi River in the comingyear?
Naomi Blohm (16:26):
Well, is something to be mindful of. In talking
with clients that I have inthose areas, I think there's
always like a handful ofproducers that maybe have a
couple of years worth of grainon farm or in storage. I'm not
sure how prevalent that is thisyear. I'm very curious, I think
Ellen had just a lot of greatpoints about the amount of grain
(16:47):
that could be in storage. Thequarterly grain stocks is going
to be a real big component toMonday's report for sure.
But you know, the thing thatproducers need to be thinking
about if they've got grain instorage is, and this is where I
agree with Ellen. Like if wedon't get a really friendly
report on Monday, the path ofleast resistance is sideways to
(17:10):
lower. And so if you're notmoving your grain in the coming
weeks, then what you're gonnaend up doing most likely is
saving it and storing it andkind of hoping maybe, I hate to
say it like this, but hoping fora drought in order to make
prices rally in the summer, inorder to pay for storing your
(17:31):
grain all those extra months.You know, just truly at the end
of the day, you got to rememberas a farmer, you are a business
person and you've got to bemoving your product. Like I
said, it's we gotta have an overthe top friendly report or
prices may struggle here in theshort term.
Todd Gleason (17:52):
This brings me, Chuck, to the production
agriculture side, the bridgepayments, which many
agricultural economists arefearful that producers may use,
so they may have learned theirlesson through the m f a MFP
period, not to use it to wait,as a way to increase cash
payments or to increase thekinds of fertilizer inputs that
(18:16):
there are chemical inputsthey're putting on, but actually
to go ahead and service debt andto make sales both. So are you
of a mind that sooner ratherthan later is a better option
still?
Chuck Shelby (18:29):
Yes. I think that's the best plan of action.
You know, another interestingthing, there are a lot more bags
around than I've ever seenbefore, but the practicality of
that is it's not frozen outthere right now and you can't
get that out of there. So thatmight be a factor of why bags
(18:49):
are a great alternative atharvest if you don't anywhere to
go, but unless the weathercooperates here and it starts
getting really cold and freezesup that grain is not going to
move it's stuck out there so alittle interesting caveat that
we haven't really seen in thelast year or two but another
interesting thing about this,you know, payment, it's not
(19:12):
supposed to come to theFebruary. I'm wondering if we
have another government shutdownhere at the January.
I know USDA is still open, butdoes that treasury still send
those checks out at the Februaryif we're in a government
shutdown again? So anotherunknown out there that it it
(19:33):
could impact us in agriculture,but we don't know the answer.
Todd Gleason (19:36):
Okay. Let's talk more about you're right. I don't
know what I don't know where togo from there, but but but you
certainly are correct, andproducers will have to think
about what that means too. Ihadn't considered that as an
option. Let let's talk moreabout the reports on Monday.
Feed and residual, Chuck, thatnumber all year long has been
(19:59):
one of the banes, I think, ofthe industry because it's so
large. And it it along withexports when combined is a a
super big number, though thethough there's you know, it's
not clear feeding a smallernumber of beef cattle has made
(20:20):
up for that to heavier weightsthat is and or how the exports,
which have been on a terror of apace to Mexico, change what
those numbers look like. WillUSDA adjust them on Monday, do
you suppose?
Chuck Shelby (20:34):
You know, that's a, you know, the really big wild
card. I think going into thereport though, if you look at
the estimates, they're notreally the averages are not
really bringing the yield downthat much. And so they're not
really changing the carry outthat much. So to me, if we could
get any kind of reductionwithout an offset on the feed
(20:56):
and residual, then that's gonnabe the positive catalyst. So I
think you got to look at theattitude of all the people that
try to analyze what USDA isgoing say, they're really not
changing it much.
So if we get a reduction I thinkthat could give us a positive,
you know going forward.
Todd Gleason (21:14):
Ellen Dearden, if you could follow-up on the
exports and the livestockconsumption patterns and what
you've been considering as it'srelated to the Monday reports, I
would appreciate it.
Ellen Dearden (21:25):
Corn exports have been outstanding. Phenomenal
might be a better word and, thatwill probably continue. Although
I did notice that the recentbuys on the corn instead of all
going to Mexico, now we'reseeing some go to South Korea
and some to Japan. And I likethat it's being spread out a
(21:47):
little bit. I also think thatthat, we need to always keep in
mind that feed is feed andresidual.
So seeing that 6,100,000,000bushel number there, is high but
may not, we need to considerthat residuals thrown in there
too. Ethanol should shouldremain steady I think at that
(22:11):
5,600,000,000 bushel place. I Ithink the the thing that has to
happen is ending stocks of cornhave to drop below 2,000,000,000
bushel to even see an inkling ofpeople wanting to buy.
Todd Gleason (22:24):
Naomi, do you think that's very possible?
Naomi Blohm (22:27):
Well, it depends on what to do with yield. That's
just the bottom line. Last year,the January report was the game
changer with the yield goinglast year from one eighty three
point one down to one seventynine point three. That was the
game changer for the entirereport last year. But we had
carry out in the December WASDElast year at 1,700,000,000
(22:49):
bushels, and then on the JanuaryWASDE it changed to
1,500,000,000 bushels.
Now we're sitting with carryoutgoing into this report at
2,000,000,000 bushels. We're ata higher level of carryout
already. We really do need acombination of the lower yield,
lower than expectations. We needto see the USDA keep the export
(23:12):
demand numbers strong, keep thatethanol demand numbers strong.
Then as we were talking aboutearlier, the elephant in the
room is that feed and residualnumber and what they do to that
because we're at 6.1 right now,like Ellen was saying, but a
year ago at this time, we wereat 5.77.
(23:33):
So That's the big concerningnumber that traders have been
talking about, and that's theone that could get shifted.
Plenty of front moving parts onthis report. The algorithms are
gonna go, I think, really,ballistic over the first couple
minutes after this report comesout line by line, and then we'll
(23:55):
be able to see where the dustsettles and and where everything
falls.
Todd Gleason (23:59):
Okay. Once the dust settles, and I think I want
all three of you to think aboutthis and maybe tell me a little
bit about your thoughts, andthere is a tone, a direction
set. Usually, this is for aboutthree months until we get to the
acreage report, that we'vediscussed with Chuck some.
During that three month period,if it is a friendly report, I
(24:23):
won't say bullish because I'mnot sure that that'll happen,
but it could. A friendly report,how should farmers think about
at that as it's related to bothold and new crop marketing?
And on the opposite side, if itis a bearish report, and I
suppose we can say either ofthose are half a million half a
billion to a billion bushelsmove in either direction, what
(24:45):
should producers do? So howpatient are they once this
report comes out given thedirection or tone of the report?
And Ellen Dearden, I'll startwith you, follow-up with Chuck,
and then Naomi, you can pick up.
Ellen Dearden (24:58):
Farmers going into this report own too much
inventory, just flat out own toomuch. And I think they have
always thought that there'sgonna be something to bail them
out. So if this report shouldturn up to be not friendly and
prices don't rally, then they'regonna say, well, we'll just wait
(25:20):
till the plantings report. We'llsee what that plantings report
say. They're always looking thatkind of a mindset.
And I think that we need to havea time give up point as well as
a price give up point on bushelsand have offers in at the report
(25:41):
and after the report.
Chuck Shelby (25:42):
If we get a positive report I think you'll
see producers let go of theircorn that they've been holding
on. Most producers I think havesold a higher percentage of
beans so the corn is the issue.If we get the rally, I think
it's a good opportunity to getrid of the old crop and to start
looking at new crop. On thedownside, I would say you'd be
(26:05):
still be choppy sideways becausethe demand is so good. You look
at the, you know, ethanol blendset a record here the other day
at over 11%.
So I think the demand would kindof keep us in the range. So we
might visit the lower end of therange. So if a negative report
or not one that's positive, Ithink producers are gonna have
(26:27):
to look to let it go. And thenagain, there's some extremely
cheap options out there. If you,you know, can't stomach the idea
that letting it go or, you know,you're wishful for a positive
bullish acreage report.
It's better to, you know, cashit in and pay your bills and pre
(26:49):
owned on a paper if that's, youknow, what it takes to get the
job done and moving to corn.
Todd Gleason (26:54):
The record, by the way, that Chuck is referring to
is 11% ethanol in the gas aslean supply for the full 2025
calendar year. That's neverhappened before. By law,
supposed to be about 10%. Itdoes range somewhere around nine
and a half to 10 and a halfgenerally in any given year. So
(27:15):
an 11% number is a big number,and that includes, of course,
the exports, which have beenreally, really good for ethanol.
Finally, Naomi, your thoughtsas, related to what to do given
the tone of the reports,whichever direction that happens
to be on Monday.
Naomi Blohm (27:33):
I would take a strategic tone with it and, look
at March corn puts. You can geta $4.40 put for 7 and a half
cents. It's good for forty twodays. That gives you downside
protection just in case thereport is bearish. That way you
have some price protectionthere.
Also, it leaves your upsideopen. So in the same breath,
(27:53):
have the puts there as a pricefloor, but have those cash
targets higher. And on the Marchchart, $4.75, $4.80, $4.85 would
be targets higher if we get afriendly report and have those
orders in at the elevator aheadof time. Because reality, in my
opinion, is that we don't have areason for corn to get above $5
(28:13):
unless the USDA report is sofriendly. Then you need to have
some bearish, I should say badweather in South America to make
their crops smaller to justifycorn prices to go through $5 I'm
saying those are slight odds.
Have some realistic cash targetsin place between $4.75 and
(28:34):
$4.85. Have those March puts inplace just in case the report is
negative. And then on new crop,this is the thing I want to
really have people focus on. Youknow, right now we've got Dec
corn, you know, between the46465 area and $4.75 is big
resistance on the Decembercontract so far for 2025 during
(28:55):
2025. When you look at thetwenty six December corn price,
the high price was 4.77 back onJune 9 for the December 2026
contract.
Last year, when we were talkingabout new crop corn, these corn
had a hard time getting over$4.90. So we are kind of in the
(29:17):
vicinity where you've got somepotential higher end value from
a historical perspective. Sodon't ignore the December corn,
your new crop corn, to bethinking about forward
contracting at these levels aswell.
Todd Gleason (29:30):
Commodity week, of course, is a production of
Illinois Public Media. You mayfind and listen to the whole of
the program anytime you'd likeon our website. That's at
willag.org. Our thanks go to ourpanelists today including Naomi
Bloem at Total Farm Marketing,Ellen Dearden from AgReview, and
Chuck Shelby of Risk ManagementCommodities on University of
(29:51):
Illinois Extension's ToddGleeson.
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On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!