July 3, 2025 • 33 mins
Panelists
- Matt Bennett, AgMarket.net
- Chip Nellinger, BlueReef.Ag
- Arlan Suderman, StoneX.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the July 3 edition of Commodity Week. Todd
(00:08):
Gleason services are madeavailable to WILL by University
of Illinois Extension. Well, toCommodity Week. I am Todd
Gleason. Our panelists for theday include Arlen Suderman.
He's at Stonax out of KansasCity. We're joined by Chip
Nellinger of Blue ReefAgrimarketing in Morton,
Illinois. And Matt Bennett ishere agmarket dot net. He's in
(00:29):
Windsor, IL. Commodity Week is aproduction of Illinois Public
Media.
It's public radio for thefarming world online on demand.
Anytime you'd like to listen tous at willag.org willag.org or
search us out in your favoritepodcast applications or if you
happen to be an NPR listener youcan search it out in the NPR
(00:50):
list right there in the NPR app.Let's get a list of items
speaking to that of things thatwe should talk about today.
Arlen Suderman, I think I'llstart with you. What's on your
mind?
Arlan Suderman (01:01):
Well, as we entered the holiday weekend, we
had a couple of issues ofuncertainty starting to approach
clarification. One was the taxbill, of course, but I think
tariffs are probably the mostinteresting thing going forward.
It could have implications foragriculture and the agreement we
got with Vietnam, I think,provides some encouragement
(01:24):
along that line of what we maysee more of in the days ahead.
Todd Gleason (01:28):
Matt Bennett from agmarket.net on your list.
Matt Bennett (01:31):
Yeah. I mean, clearly, it's, been a pretty
rough go. Up until the lastcouple days, US market didn't
have any pulse whatsoever. So,obviously, what Arlen was
talking about, I think, maybepropped us up a little bit, you
know, some whispers of whatmight happen out in Des Moines
here this evening. I'm talkingThursday, of course, with
president Trump visiting outthere.
(01:52):
I think there's plenty todiscuss. Of course, there's a
lot of, there's not a whole lotof certainty there, but, you
know, whenever you factorweather and everything else in,
be interested to see what theother guys think as well about
what kind of legs this thing mayhave. I think it might be a very
interesting trade Sunday night,of course, depending on
forecast.
Todd Gleason (02:11):
And Chip Nellinger of Blue Reef Agri Marketing on
your list.
Chip Nellinger (02:14):
Yeah. Not a lot to add. I think that, covers a
lot of ground right there.President Trump's meeting
tonight and what he says, just amassive amount of optimism in
the market that he's gonnaannounce some, you know,
massive, bazooka of, good newsfor the ag markets, maybe even a
Chinese trade agreement typestatement. I'm not sure I buy
(02:36):
that, but there's sure someoptimism in the market about
that.
And obviously, the weather got alot of rain digested. There's a
lot in the forecast. Will itconfirm and fall where it's
projected? And then what is theextended weather model look like
Sunday night and Monday couldreally have a big bearing on,
you know, what direction we takethe next couple of weeks?
Todd Gleason (02:56):
Well, let's start with, something that we don't
know and pretend that we do fromboth sides. So the president
goes, to Iowa. He makes anannouncement about trade, but it
is one of those announcementsthat says we have a framework to
agree on the implementation ofsomething we were thinking
(03:17):
about. What happens in thatcase, Chip Nellinger?
Chip Nellinger (03:21):
Well, I think that given some of the optimism
and the rally that we had goinginto this long weekend, unless
there are some specifics inactual bushel amounts or dollar
amounts that someone's gonnatake of US agricultural
products, I think it leaves thedoor open for quite a bit of
disappointment in the market'smind. Just, you know, it's just
(03:42):
kind of amazing to me and therehasn't been an official
statement, there hasn't beenanything to to that I've seen to
lead people to believe this, butthere's just all this bubbling
optimism in the market thatthere's gonna be some massive
announcement. So I think unlessit's specific big numbers, you
might be a little bitdisappointed to the market. But
I would say that in this inthis, I guess, generation of the
(04:08):
the administration, the secondTrump two point o here, a lot of
times where there's smoke,there's fire when you get some
of these rumors and and markets,not just ag markets but outside
markets start moving. There'sreason for that ultimately.
So, we'll see. Sometimes wherethere's smoke, there's fire but
I I think it's a real stretchright now to get super
(04:29):
optimistic about, some massiveannouncement. I hope I'm wrong.
I hope we get it tonight, but, Ithink it could leave the market
a little disappointed.
Todd Gleason (04:37):
Arlen Suderman, what have you heard about the
potential of the announcement?This was a late breaking sort of
thing. I believe that he wouldbe in Des Moines. The president
does like to travel to placeswhere he is very well liked, and
Des Moines carried him a coupleof times. Well, not Des Moines
itself, but certainly Iowa Iowaworked to carry him.
(05:00):
Do you think there'll be anannouncement worth the the trip
to that state?
Arlan Suderman (05:06):
Well, I think the fact that he this kind of
became a last minuteannouncement that he was going
to Iowa and became public lastminute, I think, adds a little
bit more to the intrigue becausewhy go there right ahead of the
fourth of July Independence Dayholiday and unless you
specifically have somethingrelated to agriculture that you
(05:27):
want to announce. So that's whatcreated all the intrigue. I
agree with what Chip said,though, that unless it's a
commitment on a large volume,something specific, the markets
are quickly going to go back totrading weather. It's that time
of year when our focus issupply. We have to have
(05:47):
commitments on demand side tocounter that and that optimism.
That certainly is a possibilitygoing forward, but you have to
have some pretty strong newsright off the bat in order to be
able to counter what seasonallyis the biggest driver in the
marketplace.
Todd Gleason (06:05):
Okay, Matt. I need to put some numbers to this, and
I'm going to ask you to do that.So let's say that there are
numbers. It is a Chinese tradeagreement, and their actual
buying numbers. What would be abig number that would or what
would be a number that wouldmake the market set up on Monday
or Sunday evening as this casewill be, and actually trade in a
(06:31):
bullish tone, and what would bea number that they wouldn't care
about?
Matt Bennett (06:35):
That's a good question, Todd. I think when you
look back at the phase one tradeagreement, I mean, obviously,
you can look at that with a lotof different angles. But,
clearly, they bought a lot ofcorn 2020 on the month of
August. They step in and buymassive amounts of corn. I think
if you come in here and you say,hey.
We're going to essentiallyenforce the trade agreement that
(06:59):
we originally came to, you know,and and you could put some
tonnages with it. I mean, I'massuming anything that would be,
oh, I don't know. Maybe the sizeof the of the increase in the
Brazilian crop or better, youknow, 10, 15,000,000 tons, that
would certainly be viewed by thetrade as a as a fantastic type
(07:22):
of number. I mean, I think we'reasking for a lot to to get to
something like that. I mean,I've been thinking, you know, it
could be something along thatline.
It might be fifteen year round,which has kind of been clearly
something everyone's talkedabout. But by all means, I don't
think he's going out there, youknow, just to shake hands. I
mean, I'm along with kinda whatArlen was saying. I do think the
(07:44):
timing of it is veryinteresting, and I think he
wants to make a big splash. Andso I've gotta think that there's
something with some teeth thathe's actually going to announce.
But, as far as what would be adisappointing, number or
scenario, I would say, hey.We've got this beautiful, trade
agreement with, you know, withChina, and, you know, they're
they've they've promised to dosomething, you know, sub
(08:05):
10,000,000 tons. Anything wouldbe fantastic. Don't get me
wrong. But I think if thenumbers are a little bit on the
lower side or if there's anysort of way to interpret it, you
know, as not having teeth in it,you know, where he doesn't come
up with specific totals, I thinkthat the trade's gonna be pretty
disappointing.
Todd Gleason (08:23):
Okay, Arlen. So there are a couple of things I
want you to walk me through. Soif he makes an e fifteen year
round announcement, that seemsdisappointing to me. I want to
know what you think about that.If he were to announce that
phase one was going to beimplemented in full, that's 25%
left to buy that they didn'tpurchase.
That's fine, but that doesn'tseem like a big deal either.
(08:48):
What what are you considering?
Arlan Suderman (08:49):
Well, I'd start by approaching it from the
opposite standpoint of they havezero new crop soybeans to their
name right now. And typically,they start ramping up
aggressively in the month ofJuly for fourth quarter
delivery. They've been redoing.We're right now basically on
pace with where we were a yearago when they were very slow to
(09:09):
start on new crop contracts ornew crop purchases for total new
crop soybean sales. So we needsomething to exceed that.
With what we see in the tax billin the way of domestic demand,
the export number doesn't haveto be as big, but we can't have
(09:30):
China totally gone. So in myopinion, they only got about
22,500,000 metric tons ofsoybeans from us this last year.
If we had some guarantees thatthey would match the 22,500,000
metric tons, which is the lowestwe've been since the African
swine fever outbreak, which alsocoincided with the last trade
(09:51):
war we had with them. If wecould match that 22,500,000
metric tons with the increaseddomestic demand we anticipate,
barring what we find out withsmall refinery exemptions, then
I think that would be verybullish for demand for soybeans,
and we better not have anyweather hiccups at all in
(10:13):
August.
Todd Gleason (10:14):
So you're talking about s the renewable volume
obligations or something withinthe tax bill?
Arlan Suderman (10:19):
Well, I'm I'm talking about the tax bill has
the 45Z in it, and it's verygood, for biofuels. And so what
was in the bill for the 45Z isvery supportive of domestic
demand without knowing yet whatthe SREs are gonna be, the small
refinery exemptions. Assumingthat they're not damaging, that
(10:42):
part's gonna be good. So withgood, strong domestic demand,
just a guarantee of China buyingwhat they bought this past year,
I think, would be very good fordemand. I'm still not optimistic
that we're gonna get that, butI'm certainly hopeful that we
could.
Todd Gleason (10:59):
I I may did make note, and I haven't seen what
Scott Irwin has pinned onTwitter or other places still.
Much of this he usually putsinto other social media and
sometimes onto Farm Block, butit's not there as well, about
the 45 z. However, he thoughtthat that would be good for
ethanol. Did not mention so muchhow it might play out for
(11:25):
soybeans, soy diesel inparticular I would think,
biofuels. What are you hearingon that front, Arlen?
What what kind of push mightthere be?
Arlan Suderman (11:36):
Well, I think, first of all, we're seeing that
the foreign feedstocks prettymuch are locked out except for
what comes from North America,from our USMCA partners. So that
shuts out used cooking oil asthe expectation. So that's a big
positive. The indirect land usepenalty has been dropped, so we
(12:01):
no longer deal with that. Thatshould be favorable as well.
I think overall, when we look atthe RVO combined with the fact
that we favor feedstocks fromNorth America combined with the
(12:22):
funding mechanism that's in thistax bill. I think it's strong
demand for US soy oil and canolaoil. And I think it's gonna have
our crushers working nearcapacity assuming we don't get
all this undermined with bigSREs.
Todd Gleason (12:39):
We will find out whether those small refinery
exemptions go into place, Andthe the thought on that process
is that from the Trumpadministration is that even if
they go into place, they'llforce other refineries to pick
them up. Do you not thinkthat'll happen?
Arlan Suderman (12:56):
Oh, we hope so. That's a rumor we're hearing.
But until we actually seesomething in writing, we don't
know. And so the industry isgenerally expecting something
positive. When you havepresident Trump's telling
farmers, plant, plant, plantbecause get ready for strong
domestic demand.
Where else could that be? Butbiofuels, where he could have
(13:19):
that impact on demand. And sofar, everything that we have
seen from the EPA as well asfrom Congress that he advocated
for has been positive forbiofuels. So in the middle of
the tariff war, he's been tryingto support agriculture via
biofuels. Now we have yet to seethat one missing piece.
(13:40):
The 45 z was one piece. The RVOwas one piece. The SREs are the
final piece that we simply needto see it in writing.
Todd Gleason (13:48):
Alright. Chip Nellinger, let's turn your
attention more directly to thecorn and the soybean market. You
said, before we came on the airthat you, in the Peoria Morton
area were running a little shyof rainfall. I take it the crops
actually still look reallypretty good in your area,
though.
Chip Nellinger (14:06):
Crops look really good, Todd, and in spite
of some of that heat we had. Ifyou look at the rainfall here in
the last couple, two, even threeweeks, really about, there's
kind of a circle in the middleof the entire Midwest that
covers, maybe not every area,but, the bulk of the Northern
half maybe, you know, fourfifths of, I shouldn't say,
(14:31):
three fifths of, of NorthernIllinois. We're dry, our lawns
are starting to dry out a littlebit, not much mowing is needed.
We need a rain in here, but toyour point, it's not showing up
with much stress yet. I think,know, just looking at our local
forecast, supposed to be up, youknow, in the low to mid nineties
(14:52):
here by the weekend again.
And, if we don't get much rain,I think maybe then it does start
an argument that we're, youknow, at least stressing the
crop. But, the problem that themarket sees is, you look at the
ten day you know, weather mapsand there is a lot of rain out
there that most of the corn Beltis supposed to get. So, I I I
(15:13):
think earlier in the week, wekinda baked that into prices
when we were on the lows andthen, you know, kinda had a good
old fashioned short coveringrally off of everything that
we've said so far, you know, thethe the Trump you know,
engagement tonight, the youknow, the the good demand on the
you know, biodiesel side, soil,put a nice rally in this week
(15:36):
even though it's back off alittle bit today. So, weather
wise, we're dry, we need rain. Ithink you know, psychologically,
this long Fourth of July weekendis is really front and center in
most people's minds if you're atrader of ag products because
you've seen big swingshistorically from really good
weather to poor weather and thenvice versa from really hot, dry
(15:59):
weather And then over the fourthof July weekend, the the weather
turns and you get, cooler tempsand and better rainfall.
So that's front and center ineveryone's mind on this long
weekend is, are we gonna havesome major change, in the
forecast? Or are these rainsgonna come through as advertised
on the, you know, noonforecasts?
Todd Gleason (16:18):
Yeah. So, Matt Bennett, if you could think
through the last two and a halfweeks where we dropped
precipitously, made new contractlows for both corn nearby
contract and the Decemberfutures. And then we rallied
back with them fairly sharplyjust one day this week, but
(16:39):
continued that on Thursday witha smaller rally. Not still in
the grand scheme of a prettygood comeback after what was
really a tough two week period.How do things play out on
Monday?
And I know it depends a lot onwhat the president says on
(17:01):
Thursday evening. But if youwell, the question is, how how
how would you expect things toplay out without some
announcements?
Matt Bennett (17:12):
Well, without announcements, I mean, clearly,
it's going to depend on theweather. Whenever you look at
how this market traded onFriday, you know, December corn,
of course, it, it rallied upthere and kinda pushed on that,
fifty day moving average andthen settled back below it. But
even settling back below it, webasically settled into that
range that we've been tradingover the last, month and a half
(17:34):
to two months. And so, you know,is that a range that we can
hold, or are we gonna go backdown and test the lows? And
that's all gonna be dependentupon mother nature, in my
opinion.
I think with an announcement,you know, then you start hunting
down moving averages. If you goahead and move through that
fifty days, you'd go up to that,you know, the 200 up there
around $4.48 and then rightunder $4.50. You know, you've
(17:56):
got the 100 day. And so, youknow, if you get an announcement
along with the weathersituation, I think you push back
over four fifty fairly easily,but that's considering both
things happen. And so as Chipsaid, a lot of times, this July
4 seems to be kind of a swing,you know, as far as weather's
concerned.
I know talking to some of theweather guys we talked to, a
(18:18):
couple of them have mentionedhere lately that it's it's hard
to hold a weather pattern muchlonger than eight weeks at a
time. And and, clearly, a fairamount, especially west of us
and north, those guys have beenfairly wet for some time in
here. You know? Is that gonnachange around? I don't know.
And so, yeah, the noon mapslooked good. I mean, I hope the
noon maps come to pass for us inour part of the world because
(18:40):
we're kinda like, Chip, we'vegot pretty good looking crops
here. But I'll tell you what,we've been shortchanged on
rainfall over the last two tothree weeks in that hot weather
last week, you know, it itdefinitely sapped a lot of
moisture out of the ground. Someof this came through looking
pretty good, with that beingconsidered, but we are also
right around the corner frompollination. So we can't forget
that if we do get a weatherforecast, Todd, that's ominous,
(19:04):
we have to understand that a lotof corn's already tasseled.
The April corn's tasseled inthis part of the world, and a
lot of it in Iowa's tasseling aswell. And so pollination is upon
us. So, the last thing you wannahave is a hot dry forecast,
going into that.
Todd Gleason (19:18):
Arlen, given Stonex's global footprint, I
wanna know how you see themarketplace moving grain across
the planet, particularly that,that's coming out of Brazil.
Soybeans at the moment, corneventually, will it be delayed,
and how much of an issue is thatlarge safrinha crop that they
(19:41):
have coming on?
Arlan Suderman (19:43):
Yeah. The Brazil crop is coming on a little bit
more delayed because theplanting was delayed and
development delayed and and partof that is because they didn't
have the heat units that theycould have had as well once it
was planted, but the yields arecoming off very well. And our
last customer survey puts totalcorn production over 134,000,000
(20:05):
metric tons, not a record yet.But certainly a bin buster would
be considered that. And sothey're gonna have a lot of
exportable supply.
They are increasing corn forethanol this coming year,
probably by about 5,000,000metric tons to offset some of
those exports. But with the sizeof this crop, I think we're
(20:26):
still gonna see some growth inexports overall, particularly
when you add it to the fact thatArgentina's corn crop, which is
nearly two thirds harvested now,looks to be a good crop as well,
not a bin buster, but a goodcrop, a good normal crop, I
would say. And so the exportablesupplies are going to be there.
(20:47):
And so I think without a tradeagreement with China to
guarantee some corn purchases ofsize, it makes it difficult to
hit USDA's export target. Andthat's even considering that
Mexico imports more cornbecause, frankly, they're having
(21:08):
to feed more cattle down thererather than send a feeder cattle
north.
And so we're shipping corn downto feed their feeder cattle,
even with the border open now,it's gonna be slow going, moving
those cattle across the border.So a lot of them are gonna be
fed down there and then they'llship the meat up here. So I do
think we'll see a good feednumber and export, excuse me, a
(21:28):
lower feed number here in TheUnited States as a result than
what USD currently has a betterexport number. But we've got to
have that business from Chinaand then hoping that China
getting it from us doesn'tdisplace business they would
have done from Brazil. Thatsimply goes to another one of
our customers.
And this fourth of July holidayweekend, we simpily got to be
cautious because it's known forits being pivotal. Coming back
(21:53):
from the holiday, if theforecasters or if the traders
look at that fifteen dayoutlook, which peers through
pollination and they seepleasant weather. They like to
short the corn market if they,unless there's some other reason
not to. And if it shows hot anddry, they like to buy it. And a
lot of times that startshappening on Sunday night before
(22:16):
the farmer has a chance toreally respond.
So we need to go into theweekend very cautiously.
Todd Gleason (22:21):
I wanna follow-up with you on the screw room very
quickly, the Mexico situationyou started to talk about
because I really haven'tfollowed it very well. Do you
have a synopsis of how, how thattrade changes or changed, aft
before and after we closed theborder, and what took place? The
(22:42):
screwworm is an insect pest thatThe United States does not wanna
import into it, into its beefcattle herds, and it has worked
really hard over decades, Iknow, flying, on, past actual,
screwworms that could breed andbury sterile into Mexico with
Mexico's permission. But howdoes the how does the how was
(23:05):
the trade impacted?
Arlan Suderman (23:08):
Well, prior to the problem with the new world
screwworm, they were shipping onaverage about 30,000 head of
feeder cattle across the borderinto United States to be fed
each week. So that's atremendous number of cattle that
were coming each week intoUnited States. Mind you, this is
a time when we're tight on thesupply of cattle that are
(23:30):
available. And then when it wasshut down because the new world
screwworm, which last was inUnited States in 1966, I believe
it was, was coming far enoughnorth in Mexico that it was
becoming more difficult to beable to control with the release
of the sterile males. And so atthat point, Secretary Rawlins
(23:52):
shut down the border until shecould implement some steps, and
those steps have included addingmore production sites beyond
just Panama in order to producethese sterile males so we could
increase the number of sterilemales available.
The female only mates once ayear. So she mates with ster
male. You can eliminate thatcycle, so to speak, and then
(24:15):
start releasing these inSouthern United States, Southern
Texas, and in parts of Mexico.And they have effectively
stopped the northward movementof the new world screw worm. Now
it's still further north we'dlike, but they've stopped it
further north movement.
They think they can push it backsouth. So they're gonna start
(24:37):
releasing cattle very slowlythrough just certain points
where they can have intenseinspections. And gradually as
Mexico works with us to pushthose screwworm infestations
further south, and we can openup to more and more states
within Mexico to ship theircattle north. And we think
that's gonna take some time, butMexico does seem to be
(24:58):
cooperating very well in thiseffort.
Todd Gleason (25:01):
Thank you very much. I appreciate that. I I
understand the economicimportance of diseases and
insect pests, on the farm andwhat that really means, within
the industry itself, but it'sfun to hear how it takes place.
So now let's get down to, somefinal things to take up. I do
(25:25):
wanna look at that extendedweather forecast, Chip
Denlinger.
What do you think on Mondaymight be the issues related to
it?
Chip Nellinger (25:33):
Well, Todd, I think there's a couple really.
First of all, earlier in theweek when we, you know, put the
lows for the weekend in Decembercorn, there's a tremendous
amount of rain that was digestedand expected on this ten day
extended forecast. It didn'treally change much by Thursday.
So, we do have some amount ofrainfall baked in the prices in
(25:55):
here. So, even if the rains fallis advertised, you know, over
the weekend and in the earlynext week, some of that's baked
into prices but beyond that, ifyou, to Arlen's point earlier,
if you come in Sunday night,Monday, and that extended the
new run of the of the ten dayforecast continues to show some
(26:15):
additional rainfall and thetemps aren't you know blistering
hot.
I think that's where the marketstarts thinking. Okay, we've
turned the corner and it's youknow, higher probability chance
now of having a trend line ormaybe even a slightly above
trend line yield and then themarket probably falls under its
own weight assuming there's notyou know, some major
(26:38):
announcement from the presidentin Des Moines tonight. The funds
would probably get back on thesell side. We've corrected the
oversold conditions from earlierin the week. The flip side of
that is because there is somerain that is baked into prices.
If we miss them, if you come inSunday night and Monday and the
rains are disappointing and theytake rain out of the extended
(27:01):
forecast and heat thetemperature up. Then, you've got
the funds that are still short afair amount of corn in here and
they would be ready, especiallyon a close back above that
moving average, which issomewhere the fifty day moving
average somewhere around fourforty two, four forty three,
previous swing high at fourforty seven. You get a close
above $4.47, The funds arelikely going to start in mass
(27:24):
coming out of their shorts. So,we're at a real critical point
here price wise and on theproduction calendar and a long
holiday weekend and you know, Iguess if you had to write a you
know, a a a drama series for TVbased on the corn market, it
would be exactly what we'refacing going into this long
(27:44):
weekend right now, Todd.
Todd Gleason (27:46):
Let's get a final word from each of you now. Matt
Bennett from agmarket.net. I'llstart with you today.
Matt Bennett (27:52):
Yeah, Todd. I think there's a lot that's gonna
happen here over the next coupleof weeks. I mean, yes, we all
wanna see a rally. If we do, Ithink the rally could be over
just as quickly as what it getsstarted. If we do get some sort
of a hotter dryer forecast onwith Chip, you could see some
serious short covering in inshort order, but at the same
time, you know, when thatweather flips potentially, you
(28:12):
know, it could be a mass exodusand pushing, you know, funds
maybe even taking a record shortposition.
Last summer, we saw what thatlooked like. It wasn't much fun.
So by all means, if we do getthis rally, let's have some
offers in place and at least,from a flexible standpoint, step
in and then manage some of ourrisk if we get that rally.
Todd Gleason (28:32):
Arlen Suderman from Stonax, your final word?
Arlan Suderman (28:35):
We've talked about a lot of things that here
that could move these markets.And I always think it's helpful
in the midst of this. The farmersays, okay, I've heard all these
things. What does it mean for mein my marketing? I think it's
important to recognize thatwe're still in that part of the
ag cycle when our bigger concernis going to be protecting the
(28:56):
equity in our farms or ourbigger concern is going to be
downside price risk.
Yes, we may have rallies so far.All of our rallies have been
basically speculativeshortcoming because we haven't
had anything to justify to thispoint, a sustained rally that
was really demand driven. Maybewe'll get that, but at this
point, we don't have anyindications of it. And these
(29:18):
cycles usually last four or fiveyears. And during this phase, we
need to have the mindset thatwe're taking advantage of
rallies to lock in pricesthat'll protect the equity we
have in our farm, lock in inputcosts, etcetera, and, to be
defensive in our marketing andnot take too many chances, so to
(29:39):
speak, on, well, if I hang on,maybe I can hit a home run.
Let's let's go with singles anddoubles.
Todd Gleason (29:45):
And finally, Chip Nellinger of Blue Reef Ag
Remarketing, your final word forthe day.
Chip Nellinger (29:49):
Yeah, I think that was well put by Arlen. I
think you have to be reallywilling to protect these rallies
that we see with defensivestrategies, maybe that's puts,
maybe that's minimum pricecontracts, you still have upside
potential. I think it's alsoreally important right now,
especially in corn to go back toyour crop insurance. People have
different coverages, some peoplebought up with higher coverages
(30:11):
than 85% but take what yourMarch spring crop insurance
guarantee was. Run a coupleexamples, divide back into it
what you think your actual yieldis back into that original March
revenue guarantee.
It'll tell you what priceDecember corn needs to be in
October in order to trigger acrop insurance payment. In some
(30:32):
cases, that's gonna be fairlynot too far from where we're at.
So you can kinda have some peacesleeping at night that to know
that, you know, we don't have amajor gap from where prices are
to where your crop insurancekicks in. That's good to know.
If you're in an area that's beengetting rain, you got implanted
early, you've got way above APHyield potential, that gap from
(30:55):
where we're at to where yourcrop insurance kicks in on the
downside is probably bigger.
And if you do the exercise inbeans, the gap is enormous
because we just didn't have ahigh enough revenue guarantee.
Take that into considerationwhen you're, you know, making
decisions on your marketingplan. I think there's gonna be
tons of volatility but we haveto be willing as Arlen said,
protect the protect the ralliesand the and the revenue while
(31:18):
it's here even if it's not quiteas high as what you'd like on
the profitability side.
Todd Gleason (31:23):
Commodity week is a production of Illinois Public
Media. You may listen to thewhole of the program anytime
you'd like at willag.org,willag.0rg. Our thanks go to our
panelists today, including ArlenSuderman, Matt Bennett, and Chip
Dellinger. I will also directyou to the closing market report
from Thursday of this past weekwhen we talked with Boris
(31:48):
Camilletti who is the extensionplant pathologist. Plant
pathologists from across theland grant spectrum have gotten
together and there are a coupleof tools related to tar spot and
many other plant diseases bothfor corn and soybeans, wheat as
well, that you can access.
He'll talk about those but moreimportantly he will discuss
(32:10):
fungicide timing and sprays andwhether those are worthwhile.
One of the tools will tell youwhether tar spot has been found
in your county. The second oneto use will tell you if it's
likely to continue to develop inyour county and on your field in
(32:30):
fact, and if you put thattogether with whether you've
scouted or not and found it, youmay very well not need to make a
fungicide application today. Andif you do, you might still have
to make a second one later, andit depends mostly on whether tar
spot is present or not. That'san economic on the farm that you
(32:50):
want to know about.
You can listen to BorisCamilletti in the Thursday, July
3 edition of the closing marketreport. It is at willag.org on
University of IllinoisExtensions, Todd Gleason.
This is the July 3 edition of Commodity Week. Todd
(00:08):
Gleason services are madeavailable to WILL by University
of Illinois Extension. Well, toCommodity Week. I am Todd
Gleason. Our panelists for theday include Arlen Suderman.
He's at Stonax out of KansasCity. We're joined by Chip
Nellinger of Blue ReefAgrimarketing in Morton,
Illinois. And Matt Bennett ishere agmarket dot net. He's in
(00:29):
Windsor, IL. Commodity Week is aproduction of Illinois Public
Media.
It's public radio for thefarming world online on demand.
Anytime you'd like to listen tous at willag.org willag.org or
search us out in your favoritepodcast applications or if you
happen to be an NPR listener youcan search it out in the NPR
(00:50):
list right there in the NPR app.Let's get a list of items
speaking to that of things thatwe should talk about today.
Arlen Suderman, I think I'llstart with you. What's on your
mind?
Arlan Suderman (01:01):
Well, as we entered the holiday weekend, we
had a couple of issues ofuncertainty starting to approach
clarification. One was the taxbill, of course, but I think
tariffs are probably the mostinteresting thing going forward.
It could have implications foragriculture and the agreement we
got with Vietnam, I think,provides some encouragement
(01:24):
along that line of what we maysee more of in the days ahead.
Todd Gleason (01:28):
Matt Bennett from agmarket.net on your list.
Matt Bennett (01:31):
Yeah. I mean, clearly, it's, been a pretty
rough go. Up until the lastcouple days, US market didn't
have any pulse whatsoever. So,obviously, what Arlen was
talking about, I think, maybepropped us up a little bit, you
know, some whispers of whatmight happen out in Des Moines
here this evening. I'm talkingThursday, of course, with
president Trump visiting outthere.
(01:52):
I think there's plenty todiscuss. Of course, there's a
lot of, there's not a whole lotof certainty there, but, you
know, whenever you factorweather and everything else in,
be interested to see what theother guys think as well about
what kind of legs this thing mayhave. I think it might be a very
interesting trade Sunday night,of course, depending on
forecast.
Todd Gleason (02:11):
And Chip Nellinger of Blue Reef Agri Marketing on
your list.
Chip Nellinger (02:14):
Yeah. Not a lot to add. I think that, covers a
lot of ground right there.President Trump's meeting
tonight and what he says, just amassive amount of optimism in
the market that he's gonnaannounce some, you know,
massive, bazooka of, good newsfor the ag markets, maybe even a
Chinese trade agreement typestatement. I'm not sure I buy
(02:36):
that, but there's sure someoptimism in the market about
that.
And obviously, the weather got alot of rain digested. There's a
lot in the forecast. Will itconfirm and fall where it's
projected? And then what is theextended weather model look like
Sunday night and Monday couldreally have a big bearing on,
you know, what direction we takethe next couple of weeks?
Todd Gleason (02:56):
Well, let's start with, something that we don't
know and pretend that we do fromboth sides. So the president
goes, to Iowa. He makes anannouncement about trade, but it
is one of those announcementsthat says we have a framework to
agree on the implementation ofsomething we were thinking
(03:17):
about. What happens in thatcase, Chip Nellinger?
Chip Nellinger (03:21):
Well, I think that given some of the optimism
and the rally that we had goinginto this long weekend, unless
there are some specifics inactual bushel amounts or dollar
amounts that someone's gonnatake of US agricultural
products, I think it leaves thedoor open for quite a bit of
disappointment in the market'smind. Just, you know, it's just
(03:42):
kind of amazing to me and therehasn't been an official
statement, there hasn't beenanything to to that I've seen to
lead people to believe this, butthere's just all this bubbling
optimism in the market thatthere's gonna be some massive
announcement. So I think unlessit's specific big numbers, you
might be a little bitdisappointed to the market. But
I would say that in this inthis, I guess, generation of the
(04:08):
the administration, the secondTrump two point o here, a lot of
times where there's smoke,there's fire when you get some
of these rumors and and markets,not just ag markets but outside
markets start moving. There'sreason for that ultimately.
So, we'll see. Sometimes wherethere's smoke, there's fire but
I I think it's a real stretchright now to get super
(04:29):
optimistic about, some massiveannouncement. I hope I'm wrong.
I hope we get it tonight, but, Ithink it could leave the market
a little disappointed.
Todd Gleason (04:37):
Arlen Suderman, what have you heard about the
potential of the announcement?This was a late breaking sort of
thing. I believe that he wouldbe in Des Moines. The president
does like to travel to placeswhere he is very well liked, and
Des Moines carried him a coupleof times. Well, not Des Moines
itself, but certainly Iowa Iowaworked to carry him.
(05:00):
Do you think there'll be anannouncement worth the the trip
to that state?
Arlan Suderman (05:06):
Well, I think the fact that he this kind of
became a last minuteannouncement that he was going
to Iowa and became public lastminute, I think, adds a little
bit more to the intrigue becausewhy go there right ahead of the
fourth of July Independence Dayholiday and unless you
specifically have somethingrelated to agriculture that you
(05:27):
want to announce. So that's whatcreated all the intrigue. I
agree with what Chip said,though, that unless it's a
commitment on a large volume,something specific, the markets
are quickly going to go back totrading weather. It's that time
of year when our focus issupply. We have to have
(05:47):
commitments on demand side tocounter that and that optimism.
That certainly is a possibilitygoing forward, but you have to
have some pretty strong newsright off the bat in order to be
able to counter what seasonallyis the biggest driver in the
marketplace.
Todd Gleason (06:05):
Okay, Matt. I need to put some numbers to this, and
I'm going to ask you to do that.So let's say that there are
numbers. It is a Chinese tradeagreement, and their actual
buying numbers. What would be abig number that would or what
would be a number that wouldmake the market set up on Monday
or Sunday evening as this casewill be, and actually trade in a
(06:31):
bullish tone, and what would bea number that they wouldn't care
about?
Matt Bennett (06:35):
That's a good question, Todd. I think when you
look back at the phase one tradeagreement, I mean, obviously,
you can look at that with a lotof different angles. But,
clearly, they bought a lot ofcorn 2020 on the month of
August. They step in and buymassive amounts of corn. I think
if you come in here and you say,hey.
We're going to essentiallyenforce the trade agreement that
(06:59):
we originally came to, you know,and and you could put some
tonnages with it. I mean, I'massuming anything that would be,
oh, I don't know. Maybe the sizeof the of the increase in the
Brazilian crop or better, youknow, 10, 15,000,000 tons, that
would certainly be viewed by thetrade as a as a fantastic type
(07:22):
of number. I mean, I think we'reasking for a lot to to get to
something like that. I mean,I've been thinking, you know, it
could be something along thatline.
It might be fifteen year round,which has kind of been clearly
something everyone's talkedabout. But by all means, I don't
think he's going out there, youknow, just to shake hands. I
mean, I'm along with kinda whatArlen was saying. I do think the
(07:44):
timing of it is veryinteresting, and I think he
wants to make a big splash. Andso I've gotta think that there's
something with some teeth thathe's actually going to announce.
But, as far as what would be adisappointing, number or
scenario, I would say, hey.We've got this beautiful, trade
agreement with, you know, withChina, and, you know, they're
they've they've promised to dosomething, you know, sub
(08:05):
10,000,000 tons. Anything wouldbe fantastic. Don't get me
wrong. But I think if thenumbers are a little bit on the
lower side or if there's anysort of way to interpret it, you
know, as not having teeth in it,you know, where he doesn't come
up with specific totals, I thinkthat the trade's gonna be pretty
disappointing.
Todd Gleason (08:23):
Okay, Arlen. So there are a couple of things I
want you to walk me through. Soif he makes an e fifteen year
round announcement, that seemsdisappointing to me. I want to
know what you think about that.If he were to announce that
phase one was going to beimplemented in full, that's 25%
left to buy that they didn'tpurchase.
That's fine, but that doesn'tseem like a big deal either.
(08:48):
What what are you considering?
Arlan Suderman (08:49):
Well, I'd start by approaching it from the
opposite standpoint of they havezero new crop soybeans to their
name right now. And typically,they start ramping up
aggressively in the month ofJuly for fourth quarter
delivery. They've been redoing.We're right now basically on
pace with where we were a yearago when they were very slow to
(09:09):
start on new crop contracts ornew crop purchases for total new
crop soybean sales. So we needsomething to exceed that.
With what we see in the tax billin the way of domestic demand,
the export number doesn't haveto be as big, but we can't have
(09:30):
China totally gone. So in myopinion, they only got about
22,500,000 metric tons ofsoybeans from us this last year.
If we had some guarantees thatthey would match the 22,500,000
metric tons, which is the lowestwe've been since the African
swine fever outbreak, which alsocoincided with the last trade
(09:51):
war we had with them. If wecould match that 22,500,000
metric tons with the increaseddomestic demand we anticipate,
barring what we find out withsmall refinery exemptions, then
I think that would be verybullish for demand for soybeans,
and we better not have anyweather hiccups at all in
(10:13):
August.
Todd Gleason (10:14):
So you're talking about s the renewable volume
obligations or something withinthe tax bill?
Arlan Suderman (10:19):
Well, I'm I'm talking about the tax bill has
the 45Z in it, and it's verygood, for biofuels. And so what
was in the bill for the 45Z isvery supportive of domestic
demand without knowing yet whatthe SREs are gonna be, the small
refinery exemptions. Assumingthat they're not damaging, that
(10:42):
part's gonna be good. So withgood, strong domestic demand,
just a guarantee of China buyingwhat they bought this past year,
I think, would be very good fordemand. I'm still not optimistic
that we're gonna get that, butI'm certainly hopeful that we
could.
Todd Gleason (10:59):
I I may did make note, and I haven't seen what
Scott Irwin has pinned onTwitter or other places still.
Much of this he usually putsinto other social media and
sometimes onto Farm Block, butit's not there as well, about
the 45 z. However, he thoughtthat that would be good for
ethanol. Did not mention so muchhow it might play out for
(11:25):
soybeans, soy diesel inparticular I would think,
biofuels. What are you hearingon that front, Arlen?
What what kind of push mightthere be?
Arlan Suderman (11:36):
Well, I think, first of all, we're seeing that
the foreign feedstocks prettymuch are locked out except for
what comes from North America,from our USMCA partners. So that
shuts out used cooking oil asthe expectation. So that's a big
positive. The indirect land usepenalty has been dropped, so we
(12:01):
no longer deal with that. Thatshould be favorable as well.
I think overall, when we look atthe RVO combined with the fact
that we favor feedstocks fromNorth America combined with the
(12:22):
funding mechanism that's in thistax bill. I think it's strong
demand for US soy oil and canolaoil. And I think it's gonna have
our crushers working nearcapacity assuming we don't get
all this undermined with bigSREs.
Todd Gleason (12:39):
We will find out whether those small refinery
exemptions go into place, Andthe the thought on that process
is that from the Trumpadministration is that even if
they go into place, they'llforce other refineries to pick
them up. Do you not thinkthat'll happen?
Arlan Suderman (12:56):
Oh, we hope so. That's a rumor we're hearing.
But until we actually seesomething in writing, we don't
know. And so the industry isgenerally expecting something
positive. When you havepresident Trump's telling
farmers, plant, plant, plantbecause get ready for strong
domestic demand.
Where else could that be? Butbiofuels, where he could have
(13:19):
that impact on demand. And sofar, everything that we have
seen from the EPA as well asfrom Congress that he advocated
for has been positive forbiofuels. So in the middle of
the tariff war, he's been tryingto support agriculture via
biofuels. Now we have yet to seethat one missing piece.
(13:40):
The 45 z was one piece. The RVOwas one piece. The SREs are the
final piece that we simply needto see it in writing.
Todd Gleason (13:48):
Alright. Chip Nellinger, let's turn your
attention more directly to thecorn and the soybean market. You
said, before we came on the airthat you, in the Peoria Morton
area were running a little shyof rainfall. I take it the crops
actually still look reallypretty good in your area,
though.
Chip Nellinger (14:06):
Crops look really good, Todd, and in spite
of some of that heat we had. Ifyou look at the rainfall here in
the last couple, two, even threeweeks, really about, there's
kind of a circle in the middleof the entire Midwest that
covers, maybe not every area,but, the bulk of the Northern
half maybe, you know, fourfifths of, I shouldn't say,
(14:31):
three fifths of, of NorthernIllinois. We're dry, our lawns
are starting to dry out a littlebit, not much mowing is needed.
We need a rain in here, but toyour point, it's not showing up
with much stress yet. I think,know, just looking at our local
forecast, supposed to be up, youknow, in the low to mid nineties
(14:52):
here by the weekend again.
And, if we don't get much rain,I think maybe then it does start
an argument that we're, youknow, at least stressing the
crop. But, the problem that themarket sees is, you look at the
ten day you know, weather mapsand there is a lot of rain out
there that most of the corn Beltis supposed to get. So, I I I
(15:13):
think earlier in the week, wekinda baked that into prices
when we were on the lows andthen, you know, kinda had a good
old fashioned short coveringrally off of everything that
we've said so far, you know, thethe the Trump you know,
engagement tonight, the youknow, the the good demand on the
you know, biodiesel side, soil,put a nice rally in this week
(15:36):
even though it's back off alittle bit today. So, weather
wise, we're dry, we need rain. Ithink you know, psychologically,
this long Fourth of July weekendis is really front and center in
most people's minds if you're atrader of ag products because
you've seen big swingshistorically from really good
weather to poor weather and thenvice versa from really hot, dry
(15:59):
weather And then over the fourthof July weekend, the the weather
turns and you get, cooler tempsand and better rainfall.
So that's front and center ineveryone's mind on this long
weekend is, are we gonna havesome major change, in the
forecast? Or are these rainsgonna come through as advertised
on the, you know, noonforecasts?
Todd Gleason (16:18):
Yeah. So, Matt Bennett, if you could think
through the last two and a halfweeks where we dropped
precipitously, made new contractlows for both corn nearby
contract and the Decemberfutures. And then we rallied
back with them fairly sharplyjust one day this week, but
(16:39):
continued that on Thursday witha smaller rally. Not still in
the grand scheme of a prettygood comeback after what was
really a tough two week period.How do things play out on
Monday?
And I know it depends a lot onwhat the president says on
(17:01):
Thursday evening. But if youwell, the question is, how how
how would you expect things toplay out without some
announcements?
Matt Bennett (17:12):
Well, without announcements, I mean, clearly,
it's going to depend on theweather. Whenever you look at
how this market traded onFriday, you know, December corn,
of course, it, it rallied upthere and kinda pushed on that,
fifty day moving average andthen settled back below it. But
even settling back below it, webasically settled into that
range that we've been tradingover the last, month and a half
(17:34):
to two months. And so, you know,is that a range that we can
hold, or are we gonna go backdown and test the lows? And
that's all gonna be dependentupon mother nature, in my
opinion.
I think with an announcement,you know, then you start hunting
down moving averages. If you goahead and move through that
fifty days, you'd go up to that,you know, the 200 up there
around $4.48 and then rightunder $4.50. You know, you've
(17:56):
got the 100 day. And so, youknow, if you get an announcement
along with the weathersituation, I think you push back
over four fifty fairly easily,but that's considering both
things happen. And so as Chipsaid, a lot of times, this July
4 seems to be kind of a swing,you know, as far as weather's
concerned.
I know talking to some of theweather guys we talked to, a
(18:18):
couple of them have mentionedhere lately that it's it's hard
to hold a weather pattern muchlonger than eight weeks at a
time. And and, clearly, a fairamount, especially west of us
and north, those guys have beenfairly wet for some time in
here. You know? Is that gonnachange around? I don't know.
And so, yeah, the noon mapslooked good. I mean, I hope the
noon maps come to pass for us inour part of the world because
(18:40):
we're kinda like, Chip, we'vegot pretty good looking crops
here. But I'll tell you what,we've been shortchanged on
rainfall over the last two tothree weeks in that hot weather
last week, you know, it itdefinitely sapped a lot of
moisture out of the ground. Someof this came through looking
pretty good, with that beingconsidered, but we are also
right around the corner frompollination. So we can't forget
that if we do get a weatherforecast, Todd, that's ominous,
(19:04):
we have to understand that a lotof corn's already tasseled.
The April corn's tasseled inthis part of the world, and a
lot of it in Iowa's tasseling aswell. And so pollination is upon
us. So, the last thing you wannahave is a hot dry forecast,
going into that.
Todd Gleason (19:18):
Arlen, given Stonex's global footprint, I
wanna know how you see themarketplace moving grain across
the planet, particularly that,that's coming out of Brazil.
Soybeans at the moment, corneventually, will it be delayed,
and how much of an issue is thatlarge safrinha crop that they
(19:41):
have coming on?
Arlan Suderman (19:43):
Yeah. The Brazil crop is coming on a little bit
more delayed because theplanting was delayed and
development delayed and and partof that is because they didn't
have the heat units that theycould have had as well once it
was planted, but the yields arecoming off very well. And our
last customer survey puts totalcorn production over 134,000,000
(20:05):
metric tons, not a record yet.But certainly a bin buster would
be considered that. And sothey're gonna have a lot of
exportable supply.
They are increasing corn forethanol this coming year,
probably by about 5,000,000metric tons to offset some of
those exports. But with the sizeof this crop, I think we're
(20:26):
still gonna see some growth inexports overall, particularly
when you add it to the fact thatArgentina's corn crop, which is
nearly two thirds harvested now,looks to be a good crop as well,
not a bin buster, but a goodcrop, a good normal crop, I
would say. And so the exportablesupplies are going to be there.
(20:47):
And so I think without a tradeagreement with China to
guarantee some corn purchases ofsize, it makes it difficult to
hit USDA's export target. Andthat's even considering that
Mexico imports more cornbecause, frankly, they're having
(21:08):
to feed more cattle down thererather than send a feeder cattle
north.
And so we're shipping corn downto feed their feeder cattle,
even with the border open now,it's gonna be slow going, moving
those cattle across the border.So a lot of them are gonna be
fed down there and then they'llship the meat up here. So I do
think we'll see a good feednumber and export, excuse me, a
(21:28):
lower feed number here in TheUnited States as a result than
what USD currently has a betterexport number. But we've got to
have that business from Chinaand then hoping that China
getting it from us doesn'tdisplace business they would
have done from Brazil. Thatsimply goes to another one of
our customers.
And this fourth of July holidayweekend, we simpily got to be
cautious because it's known forits being pivotal. Coming back
(21:53):
from the holiday, if theforecasters or if the traders
look at that fifteen dayoutlook, which peers through
pollination and they seepleasant weather. They like to
short the corn market if they,unless there's some other reason
not to. And if it shows hot anddry, they like to buy it. And a
lot of times that startshappening on Sunday night before
(22:16):
the farmer has a chance toreally respond.
So we need to go into theweekend very cautiously.
Todd Gleason (22:21):
I wanna follow-up with you on the screw room very
quickly, the Mexico situationyou started to talk about
because I really haven'tfollowed it very well. Do you
have a synopsis of how, how thattrade changes or changed, aft
before and after we closed theborder, and what took place? The
(22:42):
screwworm is an insect pest thatThe United States does not wanna
import into it, into its beefcattle herds, and it has worked
really hard over decades, Iknow, flying, on, past actual,
screwworms that could breed andbury sterile into Mexico with
Mexico's permission. But howdoes the how does the how was
(23:05):
the trade impacted?
Arlan Suderman (23:08):
Well, prior to the problem with the new world
screwworm, they were shipping onaverage about 30,000 head of
feeder cattle across the borderinto United States to be fed
each week. So that's atremendous number of cattle that
were coming each week intoUnited States. Mind you, this is
a time when we're tight on thesupply of cattle that are
(23:30):
available. And then when it wasshut down because the new world
screwworm, which last was inUnited States in 1966, I believe
it was, was coming far enoughnorth in Mexico that it was
becoming more difficult to beable to control with the release
of the sterile males. And so atthat point, Secretary Rawlins
(23:52):
shut down the border until shecould implement some steps, and
those steps have included addingmore production sites beyond
just Panama in order to producethese sterile males so we could
increase the number of sterilemales available.
The female only mates once ayear. So she mates with ster
male. You can eliminate thatcycle, so to speak, and then
(24:15):
start releasing these inSouthern United States, Southern
Texas, and in parts of Mexico.And they have effectively
stopped the northward movementof the new world screw worm. Now
it's still further north we'dlike, but they've stopped it
further north movement.
They think they can push it backsouth. So they're gonna start
(24:37):
releasing cattle very slowlythrough just certain points
where they can have intenseinspections. And gradually as
Mexico works with us to pushthose screwworm infestations
further south, and we can openup to more and more states
within Mexico to ship theircattle north. And we think
that's gonna take some time, butMexico does seem to be
(24:58):
cooperating very well in thiseffort.
Todd Gleason (25:01):
Thank you very much. I appreciate that. I I
understand the economicimportance of diseases and
insect pests, on the farm andwhat that really means, within
the industry itself, but it'sfun to hear how it takes place.
So now let's get down to, somefinal things to take up. I do
(25:25):
wanna look at that extendedweather forecast, Chip
Denlinger.
What do you think on Mondaymight be the issues related to
it?
Chip Nellinger (25:33):
Well, Todd, I think there's a couple really.
First of all, earlier in theweek when we, you know, put the
lows for the weekend in Decembercorn, there's a tremendous
amount of rain that was digestedand expected on this ten day
extended forecast. It didn'treally change much by Thursday.
So, we do have some amount ofrainfall baked in the prices in
(25:55):
here. So, even if the rains fallis advertised, you know, over
the weekend and in the earlynext week, some of that's baked
into prices but beyond that, ifyou, to Arlen's point earlier,
if you come in Sunday night,Monday, and that extended the
new run of the of the ten dayforecast continues to show some
(26:15):
additional rainfall and thetemps aren't you know blistering
hot.
I think that's where the marketstarts thinking. Okay, we've
turned the corner and it's youknow, higher probability chance
now of having a trend line ormaybe even a slightly above
trend line yield and then themarket probably falls under its
own weight assuming there's notyou know, some major
(26:38):
announcement from the presidentin Des Moines tonight. The funds
would probably get back on thesell side. We've corrected the
oversold conditions from earlierin the week. The flip side of
that is because there is somerain that is baked into prices.
If we miss them, if you come inSunday night and Monday and the
rains are disappointing and theytake rain out of the extended
(27:01):
forecast and heat thetemperature up. Then, you've got
the funds that are still short afair amount of corn in here and
they would be ready, especiallyon a close back above that
moving average, which issomewhere the fifty day moving
average somewhere around fourforty two, four forty three,
previous swing high at fourforty seven. You get a close
above $4.47, The funds arelikely going to start in mass
(27:24):
coming out of their shorts. So,we're at a real critical point
here price wise and on theproduction calendar and a long
holiday weekend and you know, Iguess if you had to write a you
know, a a a drama series for TVbased on the corn market, it
would be exactly what we'refacing going into this long
(27:44):
weekend right now, Todd.
Todd Gleason (27:46):
Let's get a final word from each of you now. Matt
Bennett from agmarket.net. I'llstart with you today.
Matt Bennett (27:52):
Yeah, Todd. I think there's a lot that's gonna
happen here over the next coupleof weeks. I mean, yes, we all
wanna see a rally. If we do, Ithink the rally could be over
just as quickly as what it getsstarted. If we do get some sort
of a hotter dryer forecast onwith Chip, you could see some
serious short covering in inshort order, but at the same
time, you know, when thatweather flips potentially, you
(28:12):
know, it could be a mass exodusand pushing, you know, funds
maybe even taking a record shortposition.
Last summer, we saw what thatlooked like. It wasn't much fun.
So by all means, if we do getthis rally, let's have some
offers in place and at least,from a flexible standpoint, step
in and then manage some of ourrisk if we get that rally.
Todd Gleason (28:32):
Arlen Suderman from Stonax, your final word?
Arlan Suderman (28:35):
We've talked about a lot of things that here
that could move these markets.And I always think it's helpful
in the midst of this. The farmersays, okay, I've heard all these
things. What does it mean for mein my marketing? I think it's
important to recognize thatwe're still in that part of the
ag cycle when our bigger concernis going to be protecting the
(28:56):
equity in our farms or ourbigger concern is going to be
downside price risk.
Yes, we may have rallies so far.All of our rallies have been
basically speculativeshortcoming because we haven't
had anything to justify to thispoint, a sustained rally that
was really demand driven. Maybewe'll get that, but at this
point, we don't have anyindications of it. And these
(29:18):
cycles usually last four or fiveyears. And during this phase, we
need to have the mindset thatwe're taking advantage of
rallies to lock in pricesthat'll protect the equity we
have in our farm, lock in inputcosts, etcetera, and, to be
defensive in our marketing andnot take too many chances, so to
(29:39):
speak, on, well, if I hang on,maybe I can hit a home run.
Let's let's go with singles anddoubles.
Todd Gleason (29:45):
And finally, Chip Nellinger of Blue Reef Ag
Remarketing, your final word forthe day.
Chip Nellinger (29:49):
Yeah, I think that was well put by Arlen. I
think you have to be reallywilling to protect these rallies
that we see with defensivestrategies, maybe that's puts,
maybe that's minimum pricecontracts, you still have upside
potential. I think it's alsoreally important right now,
especially in corn to go back toyour crop insurance. People have
different coverages, some peoplebought up with higher coverages
(30:11):
than 85% but take what yourMarch spring crop insurance
guarantee was. Run a coupleexamples, divide back into it
what you think your actual yieldis back into that original March
revenue guarantee.
It'll tell you what priceDecember corn needs to be in
October in order to trigger acrop insurance payment. In some
(30:32):
cases, that's gonna be fairlynot too far from where we're at.
So you can kinda have some peacesleeping at night that to know
that, you know, we don't have amajor gap from where prices are
to where your crop insurancekicks in. That's good to know.
If you're in an area that's beengetting rain, you got implanted
early, you've got way above APHyield potential, that gap from
(30:55):
where we're at to where yourcrop insurance kicks in on the
downside is probably bigger.
And if you do the exercise inbeans, the gap is enormous
because we just didn't have ahigh enough revenue guarantee.
Take that into considerationwhen you're, you know, making
decisions on your marketingplan. I think there's gonna be
tons of volatility but we haveto be willing as Arlen said,
protect the protect the ralliesand the and the revenue while
(31:18):
it's here even if it's not quiteas high as what you'd like on
the profitability side.
Todd Gleason (31:23):
Commodity week is a production of Illinois Public
Media. You may listen to thewhole of the program anytime
you'd like at willag.org,willag.0rg. Our thanks go to our
panelists today, including ArlenSuderman, Matt Bennett, and Chip
Dellinger. I will also directyou to the closing market report
from Thursday of this past weekwhen we talked with Boris
(31:48):
Camilletti who is the extensionplant pathologist. Plant
pathologists from across theland grant spectrum have gotten
together and there are a coupleof tools related to tar spot and
many other plant diseases bothfor corn and soybeans, wheat as
well, that you can access.
He'll talk about those but moreimportantly he will discuss
(32:10):
fungicide timing and sprays andwhether those are worthwhile.
One of the tools will tell youwhether tar spot has been found
in your county. The second oneto use will tell you if it's
likely to continue to develop inyour county and on your field in
(32:30):
fact, and if you put thattogether with whether you've
scouted or not and found it, youmay very well not need to make a
fungicide application today. Andif you do, you might still have
to make a second one later, andit depends mostly on whether tar
spot is present or not. That'san economic on the farm that you
(32:50):
want to know about.
You can listen to BorisCamilletti in the Thursday, July
3 edition of the closing marketreport. It is at willag.org on
University of IllinoisExtensions, Todd Gleason.
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