June 5, 2025 • 27 mins
- Matt Bennett, AgMarket.net
- Aaron Curtis, MID-CO.com
- Ellen Dearden, AgReview
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the June 5 edition of Commodity Welcome to
Commodity Week. I am ToddGleason. Our panelists for the
day include Matt Bennett. He'sat AgMarket.net. Erin Curtis
(00:21):
joins us from Midco.
Alan Dearden is here as well.Commodity Week is a production
of Illinois Public Media. It'spublic radio for the farming
world online on demand atwillag.org. That's willag.0rg.
Let's get a list of items fromeach of you that we might want
(00:41):
to take up.
Ellen, what's on your listtoday?
Ellen Dearden (00:44):
I'd sure like to talk about tariffs and why the,
most recent reactions have beenpretty blunted anytime there's
more information out.
Todd Gleason (00:56):
From Midco, Aaron Curtis on your list.
Aaron Curtis (00:58):
Yeah. We've had three positive days here in
Corn. I know it hasn't been awhole lot, but is there much
more to to come? What are thefactors that could help, maybe
per corn up a little more as wemove through, this early summer
months? And do we expect a lotof activity in the June reports,
either supply demand or acreageand stocks at the end of the
(01:19):
month?
Todd Gleason (01:20):
And finally, Matt Bennett of AgMarket.net on your
list.
Matt Bennett (01:23):
Yeah. I think both those reports would be fun to
talk about, you know, especiallygiven, you know, some of the
spread activity and some of thethoughts that there's gonna
still be tightness relativelyspeaking as far as old crop
stocks go, but I'd like to coverthose reports pretty good here
today.
Todd Gleason (01:41):
Well, let's begin, Aaron, with the three positive
days for corn this week. We'rerecording on Thursday afternoon.
What factors do you think aremost important going forward?
Aaron Curtis (01:51):
Well, a couple things. Right? I think a little
bit of optimism on some tradetalks between the EU and The U.
S. I think last few days priorto this little bounce, little
bit of concern, especially withsome corn sales still destined
for Europe yet this marketingyear that maybe something would
change there.
But the fact that they bothparties came out and said that
(02:11):
they were at least talking andnot as concerned about these
steel and aluminum tariffsincrease in here midweek was a
little bit positive to themarket. Obviously, we've had a
little bit of bearishness goingin this until this three day
period. So probably due for abounce as well. And then still a
little bit of talk about a ridgedevelopment here as we move
(02:31):
through the latter part of themonth. And I see I think we're
putting just a touch of weatherpremium back in the new crop
contracts, which has also helpedweaken up those new or old new
crop spreads this week by alarge amount.
But Henry, up until now, Ihadn't have a lot of weather
premium in this east corncontract. Seasonally, we try to
(02:53):
bounce a little bit here untilthe June. So it seems like we're
paying a little bit moreattention to the extended
forecast. I don't know ifthere's a big concern, but there
is obviously if you look at thedrought monitor from Nebraska up
through Northern Illinois, thosesoil moistures are a little
drier than what they would liketo be, especially after a dry
(03:14):
winter and early spring. Thatarea is going be closely
watched.
And if we have an extendedperiod of some dry weather, I
think the corn market is goingto pay a little bit of attention
to that. Between a little bitpositive tariff talk and trade
talk, and then maybe it's just alittle bit of concern about the
extended forecast Todd.
Todd Gleason (03:32):
Ellen, let's stay with the tariff and trade talk
this week. The presidentimposing a steel and aluminum
tariff, particularly, I think,targeted at the European Union,
but it was across the board of50%. And, also, president Xi and
president Trump met by phone onThursday. You say the market
(03:56):
reaction was blunt, and clearlythat was the case. Why do you
suppose that was the case?
Ellen Dearden (04:02):
I think the the trade in general is tired of
talking about tariffs and everyheadline that comes out, people
instead of going, oh my gosh,the sky is falling, seem to be
saying, Well, wait a second.What do you think that means?
And the steel and aluminumtariffs are certainly a big
(04:24):
factor. But the fact that themarket really didn't react very
negatively to that, I took as apositive. I don't know if that's
just wanting to be positive ornot, but I think that's the way
the market's reactions havebeen.
Todd Gleason (04:43):
When you couple that with the three days of good
news out of the corn market thisweek, what do you see going
forward into the June 12 WASDEreport?
Ellen Dearden (04:55):
Well, first of all, I think part of the lift
that's come in corn has beenbecause the wheat looks awfully
bottoming. If you look at awheat chart, the nearby July
chart, particularly in theKansas City, but also in the
Chicago, shows a head andshoulders bottom. That's a good
sign, I think, it will spillinto corn and has been spilling
(05:19):
into corn. We talked, Aarontalked a little bit about the
July Dees corn spread, but thatthing has been losing ground now
for several weeks. This isn'tthe first week we've seen the
July lose to the December or theDecember gain against the July,
whichever way you want to lookat it.
But putting carry back into thismarket really suggests that the
(05:42):
old crop stocks, the trade looksat old crop stocks as being just
enough to get us throughharvest.
Todd Gleason (05:50):
Do you believe, Matt Bennett, that when we see
those supply and demand tablesfrom USDA next week that they
will adjust the export market upfor corn?
Matt Bennett (06:00):
Well, I mean, they've got the ammunition to do
that. You know, and in allhonesty, I mean, I kind of agree
with, you know, what Ellen saidis that, essentially, I think
we've got a tight situation.It's significantly tighter than
what it was a year ago, but thetrade season has been enough.
So, you know, I would assumethat even though spread activity
(06:21):
and the performance of the Julycorn contract would tell you
otherwise, I think that you'regoing to be looking at a
tightening old crop balancesheet once again based on the
back of exports getting adjustedmaybe 0 point 5 0 to $0.75
higher. So our official estimatewas to take exports up 75 and,
(06:42):
you know, go ahead and bringfeed and residual down 25.
And so, you know, I believe thatwe ended up, oh, thirteen sixty.
So be interesting to see, youknow, how close we are here,
but, I do think that you'regonna be looking to the
tightening balance sheet for oldcrop here.
Todd Gleason (07:00):
Ellen, I do wanna come back to you. I wanna talk a
little bit about wheat. Howquickly do you think it can
bottom and historically does itbottom prior to harvest across
The United States, for wheat? Isthat is that something that has
happened, does happen? I I don'twatch that market very much.
Ellen Dearden (07:22):
Yes. It has happened and it tends to happen
in years when we have lateproduction problems. And I would
consider the heavy rains thathave hit Kansas and Oklahoma in
particular would be late seasonweather problems, I. E. More
disease in this week, even ifthe bushels are there, more
(07:43):
disease, even lower test weight.
So that I think is a positiveand could could have meant that
the low is made already theseasonal low in wheat.
Todd Gleason (07:55):
And, Aaron, would you agree with that assessment?
Is that that how you view thatmarketplace, and how does it
translate back into old cropstocks for corn?
Aaron Curtis (08:03):
Yeah. I think the wheat is definitely a market to
watch. I mean, not only SouthernPlains, Southern Illinois
obviously is going to have somewheat concern. It feels like
with all the rain that they'vehad. We've also got some dry
conditions in Canada and China,Black Sea as well that are
trying to keep wheat somewhatsupported.
I mean, the years, wheat's beena hard market to trust. So we
(08:25):
have definitely seen someincreased feeding of wheat and
sorghum out to the West. So Ithink that probably does bring
that feed number down on corn alittle bit. I just don't know if
the USDA is going to wait untilafter the stocks number at the
end of the month before theymake much adjustments. So maybe
see something more in the Julyand August reports as far as old
(08:47):
crop, feed demand.
But, definitely in terms of itsrelationship, to feed wheat, if
we do get some sort of bouncehere in wheat, that's going to
be supportive to corn or itshould be.
Todd Gleason (08:58):
Yeah. So those who are out looking at both the hard
red winter wheat and the softred winter wheat crop, Kansas
and Illinois found record cropsizes. However, the breeders
from both would have told youthat they also found, at least
in Kansas disease, which wouldbecome more problematic, I
think, as usually is the case inhard red winter wheat with the
(09:20):
rainfall, and certainly thebreeder here on campus, small
grains, said, you know, it was abig crop there, but the
potential can be blunted prettyeffectively by disease,
especially if rains continue tocome. So we'll be watching that
closely, and maybe I'll check-inwith her again next week early
to see whether she's hearingmuch about wheat in Southern
(09:43):
Illinois and disease within thatcrop because of rainfall. Let's
do turn your attention, MattBennett, to the end of the month
acreage stocks figures, which,Erin mentioned.
How do you suppose USDA willdeal with them? I can recall
that Darrell Goode would tell usand probably you too in class
(10:06):
and otherwise that the June 1can be pretty wonky as it's
related to the numbers that theyget.
Matt Bennett (10:15):
Yeah. I mean, there's no doubt it can get
pretty wild. You know,obviously, we're all gonna be
interested in this acreagenumber. Of course, stocks, a lot
of times will come in and be thesurprise of the report. But
whenever you start kind oftalking acreage, I know a lot of
folks are out here sayingthere's got to be some loss of
(10:36):
acreage due to what's going onin Ohio through the Delta and,
of course, parts of SouthernIllinois.
And there's probably going to besome prevent plan. Don't get me
wrong. But I guess I would bevery cautious as to assume
acreage goes down, especiallywhen we see the pace of planting
across the Western Corn Belt. Idon't want to be, you know, bear
(10:57):
a bad news by any means, but Isure wouldn't bet against maybe
acreage even staying as high aswhat it was there in March or
even going higher. As far asstocks go, you've got to assume
the way that these spreads haveworked that you could get some
sort of a bear surprise there.
I mean, clearly, feed usageshould have been called into
(11:18):
question in the first half ofthe marketing year with all of
the poultry that we eliminated,and that's your biggest consumer
of corn. And so you've got tothink that maybe overall usage
due to feed could maybe back offjust a shade. But at the same
time, of course, we've reallyposted good ethanol numbers.
(11:38):
We've had phenomenal exportsales and inspections. So you've
got to hope that if you getbearish acreage new, and I know
hope is not a strategy, but yougot to hope that maybe this
stocks number doesn't come inand get too bearish on us as
well.
Todd Gleason (11:55):
I know, Ellen, that you will be watching the
feed and residual number reallyclosely, on both the WASDE and
then the grain stocks figure andwhat it shows as it's related
to, the end of the year and howmuch is left. Your expectations
over those, intervening days,how how do you see the market
dealing with each of them andwhat
Aaron Curtis (12:17):
do
Todd Gleason (12:17):
you think the stocks figure might look like at
the end of the month?
Ellen Dearden (12:20):
I don't know what the stocks figure is gonna look
like, but it's always such awild card that you hate to say
much anything. I do anticipatethat USDA will lower that feed
use and, probably should havecome down a little bit on the
last report, but they'llprobably lower that feed use
some. I'm hearing more and morereports about Milo being fed.
(12:43):
You know, typically, it's a bigexport market going to China,
and that market, of course, hasfallen apart. It's not used as
much in ethanol as, what I wasled to believe, a year ago.
So I'm gonna continue to watchthat. I think the number to
watch on this report is gonna bewhat corn acres look like. And I
(13:08):
say that because my anticipationwould have been that the corn
acres would be up 2,000,000acres from the already high
number that was put out inMarch. However, this,
exceptional amount of rain inthe in the Delta and the Mid
South probably will leave that,acreage number pretty unchanged
(13:29):
on corn.
Todd Gleason (13:30):
Does anybody think that USDA WASI, and they only do
this on occasionally from theWorld Agriculture Outlook Board,
will change the acreage numbernext week prior to the time that
we get to the acreage report,actual acreage report at the end
of the month? There's a lot ofdata that they will have gotten
at that point.
Matt Bennett (13:50):
No. No. If you look at precedents, don't I
don't I don't really I don'tthink so. I mean, could be
wrong.
Aaron Curtis (13:57):
I'd be interested to
Matt Bennett (13:58):
hear what everyone else thinks, but I I I don't see
it happening.
Ellen Dearden (14:01):
I think it might be a bigger question to ask is
whether there's gonna be aresurvey in August of acres.
Todd Gleason (14:07):
We'll find that out, I suppose. I know we will.
By the time we get to the end ofthe month, you'd yeah. It could
be.
Ellen Dearden (14:13):
Yeah.
Todd Gleason (14:14):
Yeah. And they would resurvey Ohio, parts of
Indiana, Indiana Yeah. MaybeIllinois too, I I suppose. So
it'll be interesting to
Ellen Dearden (14:24):
watch. Too.
Todd Gleason (14:25):
Yeah. And Kentucky. Yep. So we'll find
out. Acreage acreage, by theway, for corn at 95.3 at this
point.
For soybeans planted, that is at83 and a half million acres. We
haven't talked much aboutsoybeans, Aaron Curtis. What's
the thing you've been watchingin the last week in it?
Aaron Curtis (14:46):
Well, we are starting to see little bit of
competitiveness now for The USfor late summer into Europe.
Brazil premiums have perked uphere a little bit in the last
couple weeks or a little bitmore competitive in terms of
export business going intoEurope here late summer. So
that's gonna be interesting towatch to see if we, have an
(15:06):
opportunity to to increaseexports. The question is gonna
be probably where do some ofthese beans come from. We're
already seeing, you know, someespecially to the East, some
pretty well elevated basislevels at the processor side.
So we continue to see basisoverall. The processor continue
to be well supported. A farmerreally owns the remaining beans,
(15:28):
whether it's 15% to 25%. Andhere at ten fifty and below,
they just haven't had a lot ofinterest in moving. So it's
gonna be interesting to kindakeep an eye on this bean basis
because it could have some spotsaround the Midwest where we get,
get into the fireworks here aswe continue to move forward if
we do not rally this board.
(15:48):
Obviously, the conversationtoday between the president of
China and president Trump is isinteresting to watch. Want to
continue to try to get some sortof trade agreement done before
this fall because new crop saleson the books today are pretty
dismal. Of course, they weredismal last year at this point
too. So maybe can't read a wholelot into that. But obviously,
(16:09):
we'd feel a little bit bettergoing into the new marketing
year if we had some sort ofagreement or at least some sort
of handshake between the twocountries that they're going to
continue to look for us for alion's share, or at least our
portion of their bean needshere, going into the new
marketing year.
Todd Gleason (16:29):
Alan, how how should the trade or maybe just
you think about what presidentTrump has said about the phone
call that he had with Xi Jinpingon Thursday and that leadership,
from the administrations, eachof them would be meeting soon to
talk about, trade. But that ingeneral, the president likes to
(16:54):
make the final decisions and dothat, more personally. Does this
mean we have quite a bit of timeto deal with China and we're not
as we're not that close at thispoint?
Ellen Dearden (17:07):
I would say that we're not that close at this
point. And, yes, I wouldanticipate that trying Trump
would make the final, thumbs upor thumbs down with anything,
dealing with China. And I thinkhe's hesitant.
Todd Gleason (17:23):
And it's something we will watch and see how it and
follow along and see how itmoves. As you said, the trade
has had a, blunted review ofthese market volatility things
this week. Do you think that'sgood or bad, by the way, that
the trade has been more cautiouswith them?
Ellen Dearden (17:44):
Personally, I think it is, a positive to
trade, by I wouldn't sayignoring the the tariff talks,
but just looking at the thesideways glance rather than the
full front.
Todd Gleason (17:59):
Alright. So let's talk a little bit about what
producers maybe should thinkabout as it's related to
marketing. And we can deal withthe old crop if you want, but
mostly I'd like to talk aboutnew crop corn and soybeans.
Matt, how far along do you thinkproducers really are and how
much pressure do they have inthe next month to make new crop
(18:23):
sales?
Matt Bennett (18:24):
You know, the the problem I see, is that, a lot of
these producers aren't very faralong at all. I I do know that
there's, of course, gonna besome exceptions to the rule. Is
these corn shade under $4.5right now and no beans at $10.33
I mean essentially a vastmajority of growers would share
(18:45):
most likely that if they haveaverage yields, a good crop, but
not a banger necessarily, ifthat's the case that they're not
necessarily profitable here. Andso it's been very hard for them
to step in and get realaggressive at any point in time.
I mean, we know this crop wasobviously expensive to put in
(19:08):
the field again this year, andso it makes it problematic.
I mean, how much, you know,pressure is there on them, to
answer your question? That alldepends on their situation at
home. You know? If you don'thave a whole lot of storage, you
know, I'd be very cautious as togo into harvest and try to make
that decision during harvest.You're gonna run out of time for
(19:32):
a weather market at some pointthis summer.
We know that's a ways down theroad, as Aaron suggested. A lot
of these models are in agreementthat we could dry out towards
the June. And then whenever yougo into July and August, a lot
of your longer term models,especially in the Western Corn
Belt, you know, are suggestingthat that Nebraska, western
Iowa, western Minnesota, and theDakotas could be awfully dry. If
(19:54):
that's the case, maybe thismarket gets a chance. But if I'm
a grower and I'm underwater, Icertainly don't wanna make a
decision right now here in Junebefore I have a chance to see
whether mother nature is gonnahelp us out any.
So, you know, as far as gettingscared into making sales right
now, I'm not sure that that'ssomething that, I wanna
(20:15):
propagate. I do wanna have agrower, though, that has a a
plan moving forward and has gotsome sales, some targeted sales
in here and has some flexibilityjust in case they do end up
drying out after after all.
Todd Gleason (20:27):
I know, Aaron, you will be talking to producers and
growers and giving them someideas of what those targets
ought to be. What are youtelling them?
Aaron Curtis (20:34):
Well, we bought less than 5% of new crop across
the Midwest. So once again,we're going into the summer
months with very little on thebooks overall. If you remember
last year, did the same thing.Of course, corn market now last
year never really gave anybodymuch of an opportunity. The
seasonal didn't really play outand really never had any weather
scares and it was kind of a slowretreat all summer and into
(20:57):
fall.
Seasonally, we still thinkthere's a chance for a little
bit of a bounce in heretypically into this mid June
timeframe. We'll see if the cropreport next week helps us out
with that at all. But today, ifI was looking at numbers, 4.75
ish is kind of an objective toadd to sales, which is still
(21:18):
another $0.25 higher. But Iguess still, call it hope or
call it wishing, but I stillthink we get a little bit of a
corn bounce in here at somepoint this summer to add to
those sales and hopefullyincrease that risk management
here as we go into the fall.
Todd Gleason (21:34):
And Ellen, your thoughts on old crop or on new
crop corn?
Ellen Dearden (21:37):
I'm very cautious about the guys that need to sell
off the combine because they donot have home storage. And for
those particular fellows, I'mreally anxious for them to be
50% sold with feeling that theywant to be a % sold of the new
crop. They have to sell off thecombine on the corn in that
(22:00):
$4.60 to $4.75 range.
Todd Gleason (22:03):
How about for soybean?
Ellen Dearden (22:04):
Beans, I'm I have a little bit more hope because
we got a little bit moretargeted time frame that weather
issues look to be, a little bitmore on the hot and dry side. So
I think we've got a little timeon our side. However, saying
that, I would caution that keepin mind that weather markets
(22:25):
don't last very long. If you getfive trading days to ten trading
days for a weather market tomake their move, that's what
it's going to be. But that tensixty, 10 70 area, November's
where I'm targeting to makesales.
Todd Gleason (22:43):
On the soybean map, Bennett, they also have
acreage on their side becauseit's what down at that 83 and a
half million. And the areas thatare wet plant more bean acres a
lot of times than they do corn.
Matt Bennett (22:56):
Yeah. I mean, there's, there's no doubt that
you could see a few more beanacres, you know, at the same
time, some of these areas thatare wet, it's going to factor in
later on, of course, gettingthose beans planted in such a
late fashion. Now we know we canstill raise good beans there.
But as far as acreage isconcerned with soybeans, I'm
(23:18):
probably pretty close to wherewe were for March intentions.
First of all, as far as sellingbeans, I'm like Ellen, I would
like to see something above thatspring price of $10.54 and we've
visited that a couple of times,whereas with corn, we haven't
gotten back up to that $4.70level.
Over the last twenty years, whenwe come out of the month at a
(23:40):
lower price than that averagefor February, we've always gone
back and revisited on corn. Wehaven't done that so so far, but
soybeans, you know, we have. SoI I'd still like to get back up
closer to that $10.75 levelbefore I get real aggressive. I
think if you could get guys abid in front of them pushing
$10.50 out of the field, they'dprobably show some interest.
Todd Gleason (24:01):
And then finally, I'll turn to you Aaron. You
talked about being 5% soldacross the Midwest for corn. Do
you have an estimate forsoybeans? And and then what's
your suggestion?
Aaron Curtis (24:14):
It would be similar on beans. It's not very
heavy. It's been pretty light onbeans as well. So I'm going to
say somewhere in that five ishpercent as well. So very light
sales for both new crop corn andsoybeans.
But to me, right around that$10.75 area for November beans
is what I'd be looking for as atarget to increase sales if we
(24:38):
get there.
Todd Gleason (24:39):
What do you want to watch most closely in the
next, I guess, two to threeweeks? Or and is that the time
frame you're thinking about andwhat changes that time frame if
it's not?
Aaron Curtis (24:52):
Yeah, so these extended models, if they
continue to advertise a littlebit of hot dry weather, I'd be
using that to the advantage ofhopefully get a little bit of
bounce here. I still thinkthey're just a negative
sentiment on the grains that arecontinued despite the fact that
old crop carry out is relativelytight. I mean, you look at the
(25:14):
world numbers, taking China out,the balance sheet is even
tighter than what it is in TheU. S. So that should be
relatively supportive for corn,got a big Brazil crop comment as
well.
So continue to watch thatcompetitiveness versus The U. S.
For the corn side. But I guess Iwouldn't fall in love with any
(25:36):
big rallies if we see them basedon weather because I still think
there is a little bit ofnegative sentiment from some of
the managed money. So I wouldn'ttrust a very extended rally.
We'll be getting some offers inif we do see a little bit of a
weather rally to add to somesales.
Todd Gleason (25:52):
And, Alan, because we talked with Matt about the
cattle market during the closingmarket report on Thursday
afternoon, folks can find thatonline @willag.org. Look in the
podcast section. It'll be therefor five or six days there. Can
you tell me about yourassessment of what's been
happening in that marketplace?
Ellen Dearden (26:12):
We've been showing, the cash market leading
the futures market. That's abullish scenario for the cattle.
And we have continued to see thefutures market work higher,
making new contract highs everyday. That's not a market, but I
think we're in some pretty loftylevels. You have to be cautious.
Todd Gleason (26:34):
Commodity Week, of course, is a production of
Illinois Public Media. You mayfind and listen to the whole of
the program anytime you'd like.You can do that again on our
website. The address there iswillag.org. Our thanks go to our
panelists this week includingEllen Dearden of AgReview.
She's in Morton, Illinois. FromMidco in Bloomington, Illinois,
(26:55):
Erin Curtis joined us. And fromWindsor, Illinois, we were
joined by Matt Bennett ofAgMarket.net. I'm University of
Illinois Extension's ToddGleason.
This is the June 5 edition of Commodity Welcome to
Commodity Week. I am ToddGleason. Our panelists for the
day include Matt Bennett. He'sat AgMarket.net. Erin Curtis
(00:21):
joins us from Midco.
Alan Dearden is here as well.Commodity Week is a production
of Illinois Public Media. It'spublic radio for the farming
world online on demand atwillag.org. That's willag.0rg.
Let's get a list of items fromeach of you that we might want
(00:41):
to take up.
Ellen, what's on your listtoday?
Ellen Dearden (00:44):
I'd sure like to talk about tariffs and why the,
most recent reactions have beenpretty blunted anytime there's
more information out.
Todd Gleason (00:56):
From Midco, Aaron Curtis on your list.
Aaron Curtis (00:58):
Yeah. We've had three positive days here in
Corn. I know it hasn't been awhole lot, but is there much
more to to come? What are thefactors that could help, maybe
per corn up a little more as wemove through, this early summer
months? And do we expect a lotof activity in the June reports,
either supply demand or acreageand stocks at the end of the
(01:19):
month?
Todd Gleason (01:20):
And finally, Matt Bennett of AgMarket.net on your
list.
Matt Bennett (01:23):
Yeah. I think both those reports would be fun to
talk about, you know, especiallygiven, you know, some of the
spread activity and some of thethoughts that there's gonna
still be tightness relativelyspeaking as far as old crop
stocks go, but I'd like to coverthose reports pretty good here
today.
Todd Gleason (01:41):
Well, let's begin, Aaron, with the three positive
days for corn this week. We'rerecording on Thursday afternoon.
What factors do you think aremost important going forward?
Aaron Curtis (01:51):
Well, a couple things. Right? I think a little
bit of optimism on some tradetalks between the EU and The U.
S. I think last few days priorto this little bounce, little
bit of concern, especially withsome corn sales still destined
for Europe yet this marketingyear that maybe something would
change there.
But the fact that they bothparties came out and said that
(02:11):
they were at least talking andnot as concerned about these
steel and aluminum tariffsincrease in here midweek was a
little bit positive to themarket. Obviously, we've had a
little bit of bearishness goingin this until this three day
period. So probably due for abounce as well. And then still a
little bit of talk about a ridgedevelopment here as we move
(02:31):
through the latter part of themonth. And I see I think we're
putting just a touch of weatherpremium back in the new crop
contracts, which has also helpedweaken up those new or old new
crop spreads this week by alarge amount.
But Henry, up until now, Ihadn't have a lot of weather
premium in this east corncontract. Seasonally, we try to
(02:53):
bounce a little bit here untilthe June. So it seems like we're
paying a little bit moreattention to the extended
forecast. I don't know ifthere's a big concern, but there
is obviously if you look at thedrought monitor from Nebraska up
through Northern Illinois, thosesoil moistures are a little
drier than what they would liketo be, especially after a dry
(03:14):
winter and early spring. Thatarea is going be closely
watched.
And if we have an extendedperiod of some dry weather, I
think the corn market is goingto pay a little bit of attention
to that. Between a little bitpositive tariff talk and trade
talk, and then maybe it's just alittle bit of concern about the
extended forecast Todd.
Todd Gleason (03:32):
Ellen, let's stay with the tariff and trade talk
this week. The presidentimposing a steel and aluminum
tariff, particularly, I think,targeted at the European Union,
but it was across the board of50%. And, also, president Xi and
president Trump met by phone onThursday. You say the market
(03:56):
reaction was blunt, and clearlythat was the case. Why do you
suppose that was the case?
Ellen Dearden (04:02):
I think the the trade in general is tired of
talking about tariffs and everyheadline that comes out, people
instead of going, oh my gosh,the sky is falling, seem to be
saying, Well, wait a second.What do you think that means?
And the steel and aluminumtariffs are certainly a big
(04:24):
factor. But the fact that themarket really didn't react very
negatively to that, I took as apositive. I don't know if that's
just wanting to be positive ornot, but I think that's the way
the market's reactions havebeen.
Todd Gleason (04:43):
When you couple that with the three days of good
news out of the corn market thisweek, what do you see going
forward into the June 12 WASDEreport?
Ellen Dearden (04:55):
Well, first of all, I think part of the lift
that's come in corn has beenbecause the wheat looks awfully
bottoming. If you look at awheat chart, the nearby July
chart, particularly in theKansas City, but also in the
Chicago, shows a head andshoulders bottom. That's a good
sign, I think, it will spillinto corn and has been spilling
(05:19):
into corn. We talked, Aarontalked a little bit about the
July Dees corn spread, but thatthing has been losing ground now
for several weeks. This isn'tthe first week we've seen the
July lose to the December or theDecember gain against the July,
whichever way you want to lookat it.
But putting carry back into thismarket really suggests that the
(05:42):
old crop stocks, the trade looksat old crop stocks as being just
enough to get us throughharvest.
Todd Gleason (05:50):
Do you believe, Matt Bennett, that when we see
those supply and demand tablesfrom USDA next week that they
will adjust the export market upfor corn?
Matt Bennett (06:00):
Well, I mean, they've got the ammunition to do
that. You know, and in allhonesty, I mean, I kind of agree
with, you know, what Ellen saidis that, essentially, I think
we've got a tight situation.It's significantly tighter than
what it was a year ago, but thetrade season has been enough.
So, you know, I would assumethat even though spread activity
(06:21):
and the performance of the Julycorn contract would tell you
otherwise, I think that you'regoing to be looking at a
tightening old crop balancesheet once again based on the
back of exports getting adjustedmaybe 0 point 5 0 to $0.75
higher. So our official estimatewas to take exports up 75 and,
(06:42):
you know, go ahead and bringfeed and residual down 25.
And so, you know, I believe thatwe ended up, oh, thirteen sixty.
So be interesting to see, youknow, how close we are here,
but, I do think that you'regonna be looking to the
tightening balance sheet for oldcrop here.
Todd Gleason (07:00):
Ellen, I do wanna come back to you. I wanna talk a
little bit about wheat. Howquickly do you think it can
bottom and historically does itbottom prior to harvest across
The United States, for wheat? Isthat is that something that has
happened, does happen? I I don'twatch that market very much.
Ellen Dearden (07:22):
Yes. It has happened and it tends to happen
in years when we have lateproduction problems. And I would
consider the heavy rains thathave hit Kansas and Oklahoma in
particular would be late seasonweather problems, I. E. More
disease in this week, even ifthe bushels are there, more
(07:43):
disease, even lower test weight.
So that I think is a positiveand could could have meant that
the low is made already theseasonal low in wheat.
Todd Gleason (07:55):
And, Aaron, would you agree with that assessment?
Is that that how you view thatmarketplace, and how does it
translate back into old cropstocks for corn?
Aaron Curtis (08:03):
Yeah. I think the wheat is definitely a market to
watch. I mean, not only SouthernPlains, Southern Illinois
obviously is going to have somewheat concern. It feels like
with all the rain that they'vehad. We've also got some dry
conditions in Canada and China,Black Sea as well that are
trying to keep wheat somewhatsupported.
I mean, the years, wheat's beena hard market to trust. So we
(08:25):
have definitely seen someincreased feeding of wheat and
sorghum out to the West. So Ithink that probably does bring
that feed number down on corn alittle bit. I just don't know if
the USDA is going to wait untilafter the stocks number at the
end of the month before theymake much adjustments. So maybe
see something more in the Julyand August reports as far as old
(08:47):
crop, feed demand.
But, definitely in terms of itsrelationship, to feed wheat, if
we do get some sort of bouncehere in wheat, that's going to
be supportive to corn or itshould be.
Todd Gleason (08:58):
Yeah. So those who are out looking at both the hard
red winter wheat and the softred winter wheat crop, Kansas
and Illinois found record cropsizes. However, the breeders
from both would have told youthat they also found, at least
in Kansas disease, which wouldbecome more problematic, I
think, as usually is the case inhard red winter wheat with the
(09:20):
rainfall, and certainly thebreeder here on campus, small
grains, said, you know, it was abig crop there, but the
potential can be blunted prettyeffectively by disease,
especially if rains continue tocome. So we'll be watching that
closely, and maybe I'll check-inwith her again next week early
to see whether she's hearingmuch about wheat in Southern
(09:43):
Illinois and disease within thatcrop because of rainfall. Let's
do turn your attention, MattBennett, to the end of the month
acreage stocks figures, which,Erin mentioned.
How do you suppose USDA willdeal with them? I can recall
that Darrell Goode would tell usand probably you too in class
(10:06):
and otherwise that the June 1can be pretty wonky as it's
related to the numbers that theyget.
Matt Bennett (10:15):
Yeah. I mean, there's no doubt it can get
pretty wild. You know,obviously, we're all gonna be
interested in this acreagenumber. Of course, stocks, a lot
of times will come in and be thesurprise of the report. But
whenever you start kind oftalking acreage, I know a lot of
folks are out here sayingthere's got to be some loss of
(10:36):
acreage due to what's going onin Ohio through the Delta and,
of course, parts of SouthernIllinois.
And there's probably going to besome prevent plan. Don't get me
wrong. But I guess I would bevery cautious as to assume
acreage goes down, especiallywhen we see the pace of planting
across the Western Corn Belt. Idon't want to be, you know, bear
(10:57):
a bad news by any means, but Isure wouldn't bet against maybe
acreage even staying as high aswhat it was there in March or
even going higher. As far asstocks go, you've got to assume
the way that these spreads haveworked that you could get some
sort of a bear surprise there.
I mean, clearly, feed usageshould have been called into
(11:18):
question in the first half ofthe marketing year with all of
the poultry that we eliminated,and that's your biggest consumer
of corn. And so you've got tothink that maybe overall usage
due to feed could maybe back offjust a shade. But at the same
time, of course, we've reallyposted good ethanol numbers.
(11:38):
We've had phenomenal exportsales and inspections. So you've
got to hope that if you getbearish acreage new, and I know
hope is not a strategy, but yougot to hope that maybe this
stocks number doesn't come inand get too bearish on us as
well.
Todd Gleason (11:55):
I know, Ellen, that you will be watching the
feed and residual number reallyclosely, on both the WASDE and
then the grain stocks figure andwhat it shows as it's related
to, the end of the year and howmuch is left. Your expectations
over those, intervening days,how how do you see the market
dealing with each of them andwhat
Aaron Curtis (12:17):
do
Todd Gleason (12:17):
you think the stocks figure might look like at
the end of the month?
Ellen Dearden (12:20):
I don't know what the stocks figure is gonna look
like, but it's always such awild card that you hate to say
much anything. I do anticipatethat USDA will lower that feed
use and, probably should havecome down a little bit on the
last report, but they'llprobably lower that feed use
some. I'm hearing more and morereports about Milo being fed.
(12:43):
You know, typically, it's a bigexport market going to China,
and that market, of course, hasfallen apart. It's not used as
much in ethanol as, what I wasled to believe, a year ago.
So I'm gonna continue to watchthat. I think the number to
watch on this report is gonna bewhat corn acres look like. And I
(13:08):
say that because my anticipationwould have been that the corn
acres would be up 2,000,000acres from the already high
number that was put out inMarch. However, this,
exceptional amount of rain inthe in the Delta and the Mid
South probably will leave that,acreage number pretty unchanged
(13:29):
on corn.
Todd Gleason (13:30):
Does anybody think that USDA WASI, and they only do
this on occasionally from theWorld Agriculture Outlook Board,
will change the acreage numbernext week prior to the time that
we get to the acreage report,actual acreage report at the end
of the month? There's a lot ofdata that they will have gotten
at that point.
Matt Bennett (13:50):
No. No. If you look at precedents, don't I
don't I don't really I don'tthink so. I mean, could be
wrong.
Aaron Curtis (13:57):
I'd be interested to
Matt Bennett (13:58):
hear what everyone else thinks, but I I I don't see
it happening.
Ellen Dearden (14:01):
I think it might be a bigger question to ask is
whether there's gonna be aresurvey in August of acres.
Todd Gleason (14:07):
We'll find that out, I suppose. I know we will.
By the time we get to the end ofthe month, you'd yeah. It could
be.
Ellen Dearden (14:13):
Yeah.
Todd Gleason (14:14):
Yeah. And they would resurvey Ohio, parts of
Indiana, Indiana Yeah. MaybeIllinois too, I I suppose. So
it'll be interesting to
Ellen Dearden (14:24):
watch. Too.
Todd Gleason (14:25):
Yeah. And Kentucky. Yep. So we'll find
out. Acreage acreage, by theway, for corn at 95.3 at this
point.
For soybeans planted, that is at83 and a half million acres. We
haven't talked much aboutsoybeans, Aaron Curtis. What's
the thing you've been watchingin the last week in it?
Aaron Curtis (14:46):
Well, we are starting to see little bit of
competitiveness now for The USfor late summer into Europe.
Brazil premiums have perked uphere a little bit in the last
couple weeks or a little bitmore competitive in terms of
export business going intoEurope here late summer. So
that's gonna be interesting towatch to see if we, have an
(15:06):
opportunity to to increaseexports. The question is gonna
be probably where do some ofthese beans come from. We're
already seeing, you know, someespecially to the East, some
pretty well elevated basislevels at the processor side.
So we continue to see basisoverall. The processor continue
to be well supported. A farmerreally owns the remaining beans,
(15:28):
whether it's 15% to 25%. Andhere at ten fifty and below,
they just haven't had a lot ofinterest in moving. So it's
gonna be interesting to kindakeep an eye on this bean basis
because it could have some spotsaround the Midwest where we get,
get into the fireworks here aswe continue to move forward if
we do not rally this board.
(15:48):
Obviously, the conversationtoday between the president of
China and president Trump is isinteresting to watch. Want to
continue to try to get some sortof trade agreement done before
this fall because new crop saleson the books today are pretty
dismal. Of course, they weredismal last year at this point
too. So maybe can't read a wholelot into that. But obviously,
(16:09):
we'd feel a little bit bettergoing into the new marketing
year if we had some sort ofagreement or at least some sort
of handshake between the twocountries that they're going to
continue to look for us for alion's share, or at least our
portion of their bean needshere, going into the new
marketing year.
Todd Gleason (16:29):
Alan, how how should the trade or maybe just
you think about what presidentTrump has said about the phone
call that he had with Xi Jinpingon Thursday and that leadership,
from the administrations, eachof them would be meeting soon to
talk about, trade. But that ingeneral, the president likes to
(16:54):
make the final decisions and dothat, more personally. Does this
mean we have quite a bit of timeto deal with China and we're not
as we're not that close at thispoint?
Ellen Dearden (17:07):
I would say that we're not that close at this
point. And, yes, I wouldanticipate that trying Trump
would make the final, thumbs upor thumbs down with anything,
dealing with China. And I thinkhe's hesitant.
Todd Gleason (17:23):
And it's something we will watch and see how it and
follow along and see how itmoves. As you said, the trade
has had a, blunted review ofthese market volatility things
this week. Do you think that'sgood or bad, by the way, that
the trade has been more cautiouswith them?
Ellen Dearden (17:44):
Personally, I think it is, a positive to
trade, by I wouldn't sayignoring the the tariff talks,
but just looking at the thesideways glance rather than the
full front.
Todd Gleason (17:59):
Alright. So let's talk a little bit about what
producers maybe should thinkabout as it's related to
marketing. And we can deal withthe old crop if you want, but
mostly I'd like to talk aboutnew crop corn and soybeans.
Matt, how far along do you thinkproducers really are and how
much pressure do they have inthe next month to make new crop
(18:23):
sales?
Matt Bennett (18:24):
You know, the the problem I see, is that, a lot of
these producers aren't very faralong at all. I I do know that
there's, of course, gonna besome exceptions to the rule. Is
these corn shade under $4.5right now and no beans at $10.33
I mean essentially a vastmajority of growers would share
(18:45):
most likely that if they haveaverage yields, a good crop, but
not a banger necessarily, ifthat's the case that they're not
necessarily profitable here. Andso it's been very hard for them
to step in and get realaggressive at any point in time.
I mean, we know this crop wasobviously expensive to put in
(19:08):
the field again this year, andso it makes it problematic.
I mean, how much, you know,pressure is there on them, to
answer your question? That alldepends on their situation at
home. You know? If you don'thave a whole lot of storage, you
know, I'd be very cautious as togo into harvest and try to make
that decision during harvest.You're gonna run out of time for
(19:32):
a weather market at some pointthis summer.
We know that's a ways down theroad, as Aaron suggested. A lot
of these models are in agreementthat we could dry out towards
the June. And then whenever yougo into July and August, a lot
of your longer term models,especially in the Western Corn
Belt, you know, are suggestingthat that Nebraska, western
Iowa, western Minnesota, and theDakotas could be awfully dry. If
(19:54):
that's the case, maybe thismarket gets a chance. But if I'm
a grower and I'm underwater, Icertainly don't wanna make a
decision right now here in Junebefore I have a chance to see
whether mother nature is gonnahelp us out any.
So, you know, as far as gettingscared into making sales right
now, I'm not sure that that'ssomething that, I wanna
(20:15):
propagate. I do wanna have agrower, though, that has a a
plan moving forward and has gotsome sales, some targeted sales
in here and has some flexibilityjust in case they do end up
drying out after after all.
Todd Gleason (20:27):
I know, Aaron, you will be talking to producers and
growers and giving them someideas of what those targets
ought to be. What are youtelling them?
Aaron Curtis (20:34):
Well, we bought less than 5% of new crop across
the Midwest. So once again,we're going into the summer
months with very little on thebooks overall. If you remember
last year, did the same thing.Of course, corn market now last
year never really gave anybodymuch of an opportunity. The
seasonal didn't really play outand really never had any weather
scares and it was kind of a slowretreat all summer and into
(20:57):
fall.
Seasonally, we still thinkthere's a chance for a little
bit of a bounce in heretypically into this mid June
timeframe. We'll see if the cropreport next week helps us out
with that at all. But today, ifI was looking at numbers, 4.75
ish is kind of an objective toadd to sales, which is still
(21:18):
another $0.25 higher. But Iguess still, call it hope or
call it wishing, but I stillthink we get a little bit of a
corn bounce in here at somepoint this summer to add to
those sales and hopefullyincrease that risk management
here as we go into the fall.
Todd Gleason (21:34):
And Ellen, your thoughts on old crop or on new
crop corn?
Ellen Dearden (21:37):
I'm very cautious about the guys that need to sell
off the combine because they donot have home storage. And for
those particular fellows, I'mreally anxious for them to be
50% sold with feeling that theywant to be a % sold of the new
crop. They have to sell off thecombine on the corn in that
(22:00):
$4.60 to $4.75 range.
Todd Gleason (22:03):
How about for soybean?
Ellen Dearden (22:04):
Beans, I'm I have a little bit more hope because
we got a little bit moretargeted time frame that weather
issues look to be, a little bitmore on the hot and dry side. So
I think we've got a little timeon our side. However, saying
that, I would caution that keepin mind that weather markets
(22:25):
don't last very long. If you getfive trading days to ten trading
days for a weather market tomake their move, that's what
it's going to be. But that tensixty, 10 70 area, November's
where I'm targeting to makesales.
Todd Gleason (22:43):
On the soybean map, Bennett, they also have
acreage on their side becauseit's what down at that 83 and a
half million. And the areas thatare wet plant more bean acres a
lot of times than they do corn.
Matt Bennett (22:56):
Yeah. I mean, there's, there's no doubt that
you could see a few more beanacres, you know, at the same
time, some of these areas thatare wet, it's going to factor in
later on, of course, gettingthose beans planted in such a
late fashion. Now we know we canstill raise good beans there.
But as far as acreage isconcerned with soybeans, I'm
(23:18):
probably pretty close to wherewe were for March intentions.
First of all, as far as sellingbeans, I'm like Ellen, I would
like to see something above thatspring price of $10.54 and we've
visited that a couple of times,whereas with corn, we haven't
gotten back up to that $4.70level.
Over the last twenty years, whenwe come out of the month at a
(23:40):
lower price than that averagefor February, we've always gone
back and revisited on corn. Wehaven't done that so so far, but
soybeans, you know, we have. SoI I'd still like to get back up
closer to that $10.75 levelbefore I get real aggressive. I
think if you could get guys abid in front of them pushing
$10.50 out of the field, they'dprobably show some interest.
Todd Gleason (24:01):
And then finally, I'll turn to you Aaron. You
talked about being 5% soldacross the Midwest for corn. Do
you have an estimate forsoybeans? And and then what's
your suggestion?
Aaron Curtis (24:14):
It would be similar on beans. It's not very
heavy. It's been pretty light onbeans as well. So I'm going to
say somewhere in that five ishpercent as well. So very light
sales for both new crop corn andsoybeans.
But to me, right around that$10.75 area for November beans
is what I'd be looking for as atarget to increase sales if we
(24:38):
get there.
Todd Gleason (24:39):
What do you want to watch most closely in the
next, I guess, two to threeweeks? Or and is that the time
frame you're thinking about andwhat changes that time frame if
it's not?
Aaron Curtis (24:52):
Yeah, so these extended models, if they
continue to advertise a littlebit of hot dry weather, I'd be
using that to the advantage ofhopefully get a little bit of
bounce here. I still thinkthey're just a negative
sentiment on the grains that arecontinued despite the fact that
old crop carry out is relativelytight. I mean, you look at the
(25:14):
world numbers, taking China out,the balance sheet is even
tighter than what it is in TheU. S. So that should be
relatively supportive for corn,got a big Brazil crop comment as
well.
So continue to watch thatcompetitiveness versus The U. S.
For the corn side. But I guess Iwouldn't fall in love with any
(25:36):
big rallies if we see them basedon weather because I still think
there is a little bit ofnegative sentiment from some of
the managed money. So I wouldn'ttrust a very extended rally.
We'll be getting some offers inif we do see a little bit of a
weather rally to add to somesales.
Todd Gleason (25:52):
And, Alan, because we talked with Matt about the
cattle market during the closingmarket report on Thursday
afternoon, folks can find thatonline @willag.org. Look in the
podcast section. It'll be therefor five or six days there. Can
you tell me about yourassessment of what's been
happening in that marketplace?
Ellen Dearden (26:12):
We've been showing, the cash market leading
the futures market. That's abullish scenario for the cattle.
And we have continued to see thefutures market work higher,
making new contract highs everyday. That's not a market, but I
think we're in some pretty loftylevels. You have to be cautious.
Todd Gleason (26:34):
Commodity Week, of course, is a production of
Illinois Public Media. You mayfind and listen to the whole of
the program anytime you'd like.You can do that again on our
website. The address there iswillag.org. Our thanks go to our
panelists this week includingEllen Dearden of AgReview.
She's in Morton, Illinois. FromMidco in Bloomington, Illinois,
(26:55):
Erin Curtis joined us. And fromWindsor, Illinois, we were
joined by Matt Bennett ofAgMarket.net. I'm University of
Illinois Extension's ToddGleason.
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