June 12, 2025 • 32 mins
Panelists
- Greg Johnson, TGM TotalGrainMarketing.com
- Logan Kimmel, RoachAg.com
- Mike Zuzolo, GlobalCommResearch.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the June 12 edition of Commodity Week.
Todd Gleason services are madeavailable to WILL by University
of Illinois Extension. Well,welcome to Commodity Week. I am
Todd Gleason. Our panelists forthe day include Greg Johnson.
(00:20):
He's a totalgrainmarketing.comout of Champaign, Illinois.
Logan Kimmel joins us from RoachAg at RoachAg@.com in
Naperville, Illinois. And MikeSussolo at at globalcomresearch
dot com out of Atchison, Kansasis here as well. Commodity Week
is a production of IllinoisPublic Media. It's public radio
for the farming world online ondemand@willag.org.
(00:44):
Let's get a list of items thateach of you think we should
discuss for the day. Of course,we'll take up this morning's
USDA WASDE numbers. GregJohnson, what else is on your
list?
Greg Johnson (00:55):
I think all the uncertainty over the Trump trade
talks and tariffs with not onlyChina, but, also, we've got the
renewable biodiesel, decisionthat may or may not come out
tomorrow. So I think a lot ofthe government policy issues
probably we need to talk about.
Todd Gleason (01:13):
Logan Kimmel, from Roach Ag on your list.
Logan Kimmel (01:16):
Yeah. As we're looking at the calendar here,
June, typically, it's that timeof the year where, the market
provides marketingopportunities. So been fielding
a lot of questions here on folkshanging on to a little old crop,
but also searching for someideas maybe on some new crop
marketing now that we're in thatcalendar window here. So
(01:37):
possibly going over some targetsand some ideas for the next oh,
thirty to sixty days on, old andnew crop marketing.
Todd Gleason (01:45):
And Mike Souzla, globalcomresearch.com.
Mike Zuzolo (01:48):
The only thing to add to those great comments are
the ideas that maybe the fundsare finally gonna be seen as out
of position by being long beansand short corn after the report
came out this week, Todd.
Todd Gleason (01:59):
Why do you think that will be the case?
Mike Zuzolo (02:01):
Well, I think the big thing is is that we just
aren't backing down on corndemand. And the domestic number
going back down to 1,365,000,000bushels takes us down to levels
not seen since twenty two-twentythree, when we were at
1,360,000,000. Probably evenmore stark and more important is
(02:22):
the the world ending stocks andstocks to use ratios were 2012
was razor thin. I would callwhat we saw on Thursday's report
a thin situation because we'renow at 21.6% stocks to use in
for June corn globally. 2012 was16.5, and yet the funds were
(02:43):
over a 150,000 contracts netshort as of last Friday in the
CFTC update.
So I I continue to feel likethat they're way out of
position. They've bought inSouth America's Brazilian corn
crops specifically is gonna comein here and really wreak havoc
on our demand. I I think, youknow, U of I have has done some
(03:05):
really great research on, yes,they may have a bigger crop, but
their exports are probably gonnaactually be down because of
their ethanol and domesticdemand usage increasing so much
over the past few years. So I Ithink between the the trade and
tariffs and what Greg alludedto, and this week, we've built
some premium in the soybeans.We'll see if we take it out this
(03:26):
next month.
Todd Gleason (03:27):
Greg, tell me a little bit about the uncertainty
within the trade talks and thetariffs and what that means to
you?
Greg Johnson (03:34):
Well, the the report, you know, the, Newswire
report says that things aregoing smoothly and China and The
US are getting along great andeverything's perfect. And I
think, I don't know, I've beendoing this long enough, I guess
I'm jaded. I just don't thinkit's going to happen as quickly
as what it makes the newswirereports make it out to be. Yes,
we've agreed on letting Chinesestudents attend our
(03:57):
universities. And yes, it soundslike China is going to release
some rare earth minerals.
But as far as trade, as far ascorn and soybeans and wheat, I
think that's weeks, if notmonths, still in negotiations.
And so, if we're looking for aquick fix there, I think we're
going to be disappointed. Ithink that's going to take
longer than what it may soundlike today. And then the other
(04:19):
thing is with the renewablebiodiesel mandates, the devil
will be in the details, and Ijust wonder how many details
we'll get tomorrow. It may beone of these framework type
announcements where if we don'tknow how many small refinery
exceptions there are, it'sreally going to be hard to put a
dollars and cents number on theimpact tomorrow.
(04:42):
So maybe just more uncertaintyis what I'm afraid of, I guess.
Todd Gleason (04:46):
So the RVOs, the renewable volume obligations are
expected to be announced. US EPAshould get those, but you're
just worried that the, well, thesupply side, relatively
speaking, if you're thinkingabout it in that way, may be
offset in a different way by thedemand side or, the exemptions,
for the small refineries. Andyou're worried, I guess, that
(05:10):
those won't be announced at thesame time. So it'd be very
difficult to really understandhow much might be used in the
coming year, particularly forsoybean, oil, ethanol as well, I
would suppose.
Greg Johnson (05:22):
Exactly. I mean, it it could work to our favor.
It could it could be a somewhatfriendly report or it could be a
negative report. I guess myassumption is, expectation is
that it won't be bullish orbearish, it'll be uncertain. And
so we'll continue to tradesideways like we have, at least
that part of the news will nothave a market impact.
(05:45):
We'll have to look to theweather. We'll have to look to
the funds. We'll have to look tosome other items to get the
market to move one way or theother. I'm just not sure that
the announcement tomorrow willbe the big market mover that it
could potentially be if we getall the details. I just don't
think that'll happen tomorrow.
Todd Gleason (05:59):
So, Logan, if you could go through some of the
numbers, from USDA WASDE thatyou thought were important. Mike
talked a little bit about theglobal numbers. What about the
domestic numbers? Was there muchthat changed that would mean
anything to producers today?
Logan Kimmel (06:14):
Well, I think there's just more confirmation
of the corn ending stocksgetting smaller due to an
increase in exports of thedemand pace that we're on. And
it is a little frustrating goingback to last year's June WASDE
for this crop where they startedat a 2.1 carryout. Here we are
(06:38):
today, almost a little over700,000,000 bushel lower than
that. And it seems like thismarket's not reacting because I
look at the numbers today, atleast on the corn side,
justified increases in exportsand cuts to the carry out. But
yet, those numbers came out andthe market seemed like it's just
(06:59):
back to trading and focusing onthe weather and the demand and
maybe focusing on the U.
S. Dollar. So I think when youlook at the report today, kind
of came in as we thought, butmore focus coming in on the end
of the month here with the Junenumbers and further progression
(07:19):
of the South American crop. So Idon't think it's anything to
ignore though how tight ofstocks on this old crop are
coming into new. And that justmakes the weather here for the
rest of this growing seasonstill important.
So I kind of agree with Mike, Iwonder what the spec fund
positioning does if you do havea little bit of a scare maybe
(07:43):
into July and August with thelower stocks to use and ending
stocks, that big of a shortposition, you got to figure out
you get some covering, if notmaybe a net long move here from
the funds on the corn side ofthings.
Todd Gleason (07:57):
So Mike, I have to ask you, because we often talk
about a weather premium beingbuilt into the marketplace. Is
there a tariff premium or atrade premium built into this
marketplace at at today, becauseof the president's policies?
Mike Zuzolo (08:17):
I would word it this way, Todd. I think that the
soybeans and the S and P 500have priced in a premium
assuming that everything will gosmoothly and that we'll come out
on the other side of thisunscathed in terms of demand in
the in the soybeans and in termsof no recession in The United
(08:40):
States and or China. Kindadovetailing with what Greg was
talking about. I I just rightbefore we jumped on and start
taping, I was listening toJameson Greer, the US trade
representative on a Fox programbeing interviewed. And these are
almost his exact words.
President Trump likes thetariffs. He wants the tariffs. I
I will go back to what we talkedabout way back in February at
(09:03):
the at the beef house meeting.President Trump's policy is to
bring manufacturing back to TheUnited States. No if, ands, or
buts.
And I think this is where thatuncertainty that Greg's talking
about, it's not going to go awaybecause our policy is to bring
manufacturing back. And so whatI've told clients and
subscribers the last thirty toforty five days is I'm an old
(09:27):
fashioned risk manager. I grewup in the mid nineties before
China joined the WTO. There werestill set aside. There were
still what was the old termwhere you had the price
underneath the price for forUSDA average prices that you
were able to be compensated for.
To me, the beans, because of thepolicy and the cattle, because
(09:50):
of the screwworm and the policyat the border, I think they're
near perfect examples of whyyou'd want to buy puts here and
have floors in place. Maybe inboth of them, you're not making
a lot of money. Maybe in somecases, you're not even breaking
through a cost of productionsituation, but that doesn't stop
you from potentially gainingprofit and adding to your
(10:12):
eventual net selling price. AndI would stress in the area of of
WILL and especially southtowards Olney and Bone Gap and
Belleville and on south. I thinkthere's a major basis play
potentially coming aroundbecause of the planting issues
and the replanting issues.
So I see a pathway toprofitability this year, but I
(10:34):
think it starts with the beansand and the cattle and having
some puts in place in case thesepolicies, you know, end up
creating a push to the downside,and and we do pull out that
theoretical tariff premium.
Todd Gleason (10:45):
I have to admit, Greg Johnson, that I had meant
to ask Mike about a suppressionrather than a premium in the
marketplace related to trade. Hedid tell us there was a premium
there, but I do wanna know aboutsuppressed prices.
Greg Johnson (11:01):
I don't know if it's suppressing the the market
or not because you could make anargument that, Trump could come
out with a trade agreement withChina that requires them to buy
so many metric million metrictons of US soybeans and that
would be friendly or he couldcome up with an RVO number
that's higher than what thetrade is expecting or he could
(11:22):
not allow the SREs, smallrefinery exemptions and all of
those would be potentiallybullish. But you could just
easily make the case the otherway that China is going to push
back and hold out for the bestpossible deal, which could take
several months. And with the bigSouth American soybean crop and
(11:42):
potentially big South Americancorn crop, we could lose some
export business. So it can goeither way and unfortunately we
just don't know yet. And so Ithink we're kind of sitting in
the middle.
Is there a premium in there?Well, yes, if things don't work
out as well as what we wouldhope, corn and bean prices could
(12:02):
go substantially lower. But onthe other hand, if we can get
something worked out to benefitagriculture, then we could,
especially with the soybeans,the potential is there because
the spending stocks number istight. And so any increase in
demand via RVO, via soybean oiltrickling down to soybeans would
(12:24):
certainly be friendly. I don'tknow that that's priced into the
market yet necessarily, but Idon't know that China not buying
any soybeans is priced into themarket either.
So I know that's kind of a wishywashy answer, but I think the
market just doesn't know what'sgonna happen. And so not only do
we have to try to outguess theweather, we have to try to
outguess trade policy as well.
Todd Gleason (12:45):
It is something that could be both, a
suppression and in the nearterm, depending on what you
think of as the near term, Isuppose, Greg, if there if the
president really is holding outfor a metric tons deal like
phase one in his administration,which the Chinese might really
(13:12):
drag their feet upon, but onceagreed upon would put a real up
push in the marketplace. I'mwondering, Logan Kimmel, as you
think about these marketingplans and ideas, what should
producers do and consider asit's related to new and old
crop?
Logan Kimmel (13:30):
Yeah. To Greg's point, if we do get some
positive news, here here in thecoming weeks to months, and
maybe that catalyst, is a tradedeal or a weather event. I think
for producers wanting to knowwhat to do, maybe on their last
(13:50):
bit of old crop, call itgambling bushels, that probably
is your opportunity. The windowis closing here and maybe pick
up paces, swings oropportunities and be a marketer
now that we're already throughthe almost June. As we look to
new crop, I think anyopportunities we get probably
(14:11):
are wise to get caught up onsales.
I think the new crop marketing,some producers might feel a
little behind just because wehaven't had a very good market
this to the most part on newcrop this far into the marketing
year. So, put options underneathproduction, even just to limit
(14:33):
losses might not be a bad ideaalso on a weather rally. Right
now, might not be the bestmarketing spot here today. I
guess on the other side for theold crop, what kind of generated
some questions too hereyesterday is big Central
Illinois bean processor droppingtheir bid off July over to the
(14:55):
new crop November now, whichisn't the news we want to see,
especially if you're hanging onto old crops. I think that's
just an example of marketing,market rallies are probably ones
to be aggressive on, get caughtup, and we still have time,
there still is a crop to grow,but use any headline, any
(15:15):
positive news to be a seller andget caught up on marketing.
Todd Gleason (15:19):
Mike Zuslow, I'm gonna turn your attention back
to South America. You mentioned,some of the work that, had been
done by the PharmDoc team,Joanna Colucci and others,
considering the domestic usageof corn there for both the
livestock and ethanol sectors.And while there's a larger crop
(15:42):
of, and in total there, more ofit will be staying put, less of
it will be exported. Does thatoffer an opportunity for corn
exports to increase from TheUnited States in the next
marketing year?
Mike Zuzolo (15:56):
I really think so, Todd. And I think this is where
because we have so much goodcoming from Mexico as our our
primary buyer. And because thedollar just made a new, what,
thirty eight or thirty ninemonth low on the index against a
basket of currencies onThursday, if you have any kind
of issues with other countries,we are still I think I haven't
(16:22):
seen the Argentine price lately.But I think the last time I
looked at it a few days ago, wewere still the cheapest as far
as where we were going out ofthe Gulf Of Mexico. And I I
think that we have still verystrong upside price fundamentals
in the corn.
The the biggest issue remainsthe wheat. We've seen that once
again. Last week, we were makingnew monthly highs on China
(16:45):
drought. This week, we're makingnew monthly lows on a great big
fat Russian crop. Meanwhile, I'mlooking at satellite data, soil
moisture profiles, looking atMoscow Times putting out news
updates of an agriculturedrought emergency in the Rostov
oblast, which is part of the thepart of the country that
(17:08):
represents 30 plus percent of ofRussia's wheat crop.
But we we just continue to behamstrung by the wheat market,
and it's more of a sentimentmindset than it is supply
demand. Because even even todayexcuse me. Thursday's crop
report, to see the domesticwheat number and and the fact
that, you know, we've got anaverage price that actually went
(17:30):
up on 25,000,000 more bushels ofexports, and we're now at $5.40,
and Toledo's at $5.00 9. Ireally wonder how much more
downside could we have. I mean,the old lows at around $4.90,
$4.95 area.
Yeah. Maybe. But, yeah, it'sharvest seasonal, but I still
think the wheat's gotta do itsjob in bottoming before anything
(17:50):
else can in in the big pictureunless you wanna talk about a a
corn and bean weather rally.
Todd Gleason (17:56):
No, Greg. Let's talk a bit about marketing, what
producers should do. And I wannafocus on new crop, something we
discussed with Matt Bennett, inthis week as well, and that
producers are well aware of,particularly when we're in the
midst of a growing season andthe price is low. And over the
(18:17):
past five years, they have quitelikely increased their, coverage
levels for crop insurance. Howshould they consider that?
I know that, you know, withwithin their within the
financial system, the banks feelbetter if crop insurance is in
(18:40):
place, and producers, I think,have gotten used to buying
greater amounts of cropinsurance. Is this something
that they can use to theiradvantage as they look forward
to October?
Greg Johnson (18:53):
Yeah, the higher levels of insurance protect them
so they don't have to be quiteas aggressive when it comes to
making sales because they have alittle bit more protection on
the crop insurance, but thatstill doesn't excuse anybody
from not having a marketing planin place and we do want to get
it sold. And we're at $4.4December corn today and last
(19:17):
year corn was as low as $3.9 inthe fall and $4.9 at the high.
So we're right in the middle. Wecould go $0.50 higher, $0.00
lower. I agree with Mike andLogan, we have some potentially
friendly things out there.
The funds are short, the exportdemand is good, South America
even with the big crop isprobably going to keep a lot of
(19:39):
that there. So that gives usmore of the export market. I
still think the weather, eventhough corn's only a foot tall
in a lot of places and we don'tneed a lot of rain, if you look
at the subsoil moisture maps,Northern Illinois, Iowa, two
pretty big areas, are deficitsubsoil moisture. Now you can't
(20:00):
see it looking at the cropstoday because the small crops
quite frankly don't needmoisture, but you know, will we
get timely rains? I guess that'swhat that boils down to.
So I guess my point is I stillthink there's an opportunity for
a rally whether the funds covera little bit for whatever
reason, some weather premium,some continued good export
demand. There's some friendlypotential things out there. But
(20:24):
in the same breath, we want totake advantage of that because
if we have anything close to anormal crop, you know, we could
be pushing $4 corn. So at 4.4I'm not real crazy about
encouraging farmers to sellcorn, but let's say we get a
$0.25 to $0.30 rally. That seemslike a big wish, a big ask
today, but historically that'snot unheard of, especially in in
(20:47):
late June, early July if we getany kind of a weather scare at
all.
And there are forecasters outthere that are saying,
especially West Of TheMississippi River, that we could
be in for some hotter and drierweather. So I would encourage
farmers you know, maybe notnecessarily sell anything today,
but at least to have a plan inplace to take advantage of any
small rallies we might get herein the next thirty to forty five
(21:09):
days.
Todd Gleason (21:09):
Logan, when was the last time for corn, wheat,
or soybeans that roach ag threwa sell signal? Do you recall?
Logan Kimmel (21:17):
We had a couple of opportunities on the soybeans in
May. We most recently had oneand also in the corn market. And
the wheat market actually gaveus some opportunities in June as
it kind of came off the mat andrallied up. So we've had a
(21:41):
handful of opportunities, notanything we were super excited
about since May. And really thefocus was cleaning up old crop
on those and slightly increasingnew crop percentages just
because we're in the camp alsothat you still got some time on
(22:04):
this new crop.
We are not excited about theseprices here, but small
opportunities, 5% sale here forfolks that will want to get more
in the books on this new crop.We've had a couple. But again, I
think patients here see this outand if we do get a rally, I
(22:24):
think again, it's important tohave a plan and maybe that's
have orders in place. To Greg'spoint, if we get, say a 30 or
40¢ rally, right now it doesseem like a tall order. That
would put us back up to maybethe April or February highs on
corn.
(22:44):
But I find myself thinking thissometimes too, if it run up to
4.8 well hey, it looks like itmight go to $5 let's wait and
sell. If we fall short of thatand you don't get anything done
on a later summer weather rally,we do end up having a halfway
decent crop and we're well belowthis price at fall, I don't want
(23:07):
to be kicking ourselves for notcapturing a market move between
now and harvest. So that's whereI think having a plan and orders
in place if we do climb up hereand start getting some positive
news in the market, don't letthat go by the wayside and get
caught up with where the marketmaybe could keep going to
(23:30):
because we are in that seasonalwindow. Usually this is some of
the better opportunities. Sothat's kind of our thoughts here
on on new crop marketing.
Todd Gleason (23:38):
Hey, Mike. What else have you been watching
across the planet, whether it'sa macroeconomic issue, the
dollar, the price of gold, therecovering price of crude oil.
What what's on your list?
Mike Zuzolo (23:52):
Yeah. You know, this is a little bit of an out
there one, Todd, but I think ithas to be talked about a little
bit anyway. But for the time intwenty one years, the nuclear
watchdog agency that has beenmonitoring Iran came out for the
time this week and said they'renot living up to their their
agreement in terms ofenrichment. And a lot of the
(24:15):
Middle Eastern sources that Ilook at are really in very
strong mindset that we will seesome type of attack on Iran in
the very, very short term,meaning the next couple weeks.
And, you know, this harkens backto what we've talked about
amongst us all, but, you know,especially on Friday afternoons,
(24:36):
you and I have talked a lotabout this being a lot like the
mid seventies through the mideighties.
We're we're really just fightinga lot of geopolitical issues,
and we've really just come offof in in the wheat and in the
crude oil, you know, essentiallythree plus year lows in the not
too distant past. So I don'tthink the market until this week
(24:57):
was really prepared for anythinglike that. They're trying to
play catch up, but, you know, wewe, I think, still have issues
that could bring us into weatherslash supply side surprises or
factors that could give us quickflash moves to the upside that
would get us in into profitableterritories in the grains. The
(25:20):
only other thing I'd mention isthe cattle. We still have the
screwworm issue.
But once that is settled, I'mreally nervous that we're gonna
pull back pretty dramaticallybecause the funds are so short
corn, and they're so long, thefeeder cattle. They've been
playing that feeder corn ratiosince I think last spring of
twenty four. And at some point,I think that's gonna unwind
(25:41):
itself.
Todd Gleason (25:42):
The undertow of what you're hearing about Iran,
is that, an Israel issue, a b bNetanyahu issue, or does it
include The United States insome way?
Mike Zuzolo (25:52):
In some of the Middle Eastern papers, it
includes The United States, andIran has come out as of Thursday
of this week and suggested thatthey will attack even our
partners in the Middle East ifanything would happen. And and
what I'm trying to put togetherhere is is one plus one equals
two that if if Israel attacks,the Iranians are probably gonna
(26:14):
assume The United States gavethem the okay. And so my opinion
would be that the gloves thencould come off in The Middle
East, kinda like what we've allbeen worried about for the last
couple years. And then,obviously, what's going on with
Russia and Ukraine is still redhot too.
Todd Gleason (26:29):
It'll be interesting to follow suit with
all of that. When I waslistening, Mike, to, the German
Marshall Fund Conference takingplace in Brussels this week, and
we ran some information, somecomments from the CEO of
ExxonMobil. But in some of theother sessions that were
(26:52):
available, there was a lot ofdiscussion about The US's role
across the planet andparticularly the role of Turkey,
as it relates to the MiddleEast. What are you what are you
thinking about that, and how, itis the gateway from Russia and
the Black Sea area into, theMiddle East for wheat and other
(27:17):
products.
Mike Zuzolo (27:18):
Yeah. Historically, if you if you talk to somebody
at U of I, I bet that's a ahistorian, they would probably
say that Turkey has beeninvolved in almost every major
issue in the world history eversince the seventeen hundreds.
And so Turkey is something youwanna keep your eye on. I I
think this issue of thisconference you're talking about,
(27:38):
and it kinda harkens back towhat Greg was talking about,
what I was thinking about whilehe was talking, and that is the
dedollarization mindset isgrowing. The the Asian countries
are trying to figure out a wayto probably trade more with each
other and less with us.
And and I'm not trying to beanti anybody right now. I'm just
trying to call it as I see itwith what I see in some of the
(28:01):
Asian news. And and Asian newsthat is typically very pro
American, I'll I'll add to that.So I I do think that time is of
the essence, and I'll I'llremain on the same side as I've
always been at this point untilI'm proven wrong that I'm I'm
less worried about '25, muchmore worried about '26 and '27
when it comes to agriculture ifwe don't, you know, bring this
(28:22):
situation back around.
Todd Gleason (28:24):
Yeah. On that note, India, and you can talk
about whether that's Asia ornot, but India was at this
conference, and they certainlywere discussing the free trade
agreement that they are now inthe middle of negotiating with
the European Union.
Mike Zuzolo (28:41):
Yeah. And they were very unhappy, from the Indian
press that I look at, veryunhappy with the crackdown on on
Indian students, and and theyweren't real happy with how we
took a neutral role with thePakistan India border issue,
even though I feel like it wasthe right thing to do. Peace is
always the right way to go, atleast as a try. But I I told
(29:03):
another group of people, Ireally wish we'd get a deal with
India before China because Ithink that changed everything.
Todd Gleason (29:09):
Alright. Let's get a final word now from each of
you. Greg Johnson from TotalGrain Marketing, the elevator
system that belongs or elevatorthat belongs to the system
within Growmark and FS. Can yougive me your thoughts please?
Greg Johnson (29:24):
Sure. I just want to touch on one or emphasize one
thing that Mike touched on andthat is that correlation between
crude oil prices and corn. It'stough for corn to do much when
crude oil prices are in themid-60s. But if we do have any
kind of tensions in The MiddleEast that would cause crude oil
prices to go up and counteractsome of the previous
(29:46):
administration's emphasis onEVs, which hurt crude oil. You
know, that could help crude oilprices, which in turn would help
corn prices.
So I think we've got thirty toforty five days here of
basically the weather, giving usan opportunity to hopefully get
a little bit of a small rally.And so I think farmers want to
take advantage of that.Typically the funds are long
(30:09):
this time of year. So if thefunds were long like they
typically are, would probably bemore aggressive in getting
farmers sold, more heavily sold.But since the funds are short at
this point, I think there's moreof a chance that we get a bump
up rather than a bump down overthe next thirty days.
Todd Gleason (30:25):
Logan Kimmel in Naperville at Roach Ag, your
final word for the day?
Logan Kimmel (30:28):
One comment that might apply to some of the
listeners out there, it's asector that we're watching here,
livestock, and Mike touched onit there with the cattle, but
one market that's been very hotand caught a lot of buying here
is the hog market. We've seenthese prices since April do
(30:50):
nothing but go up and that wouldinclude the back months too.
That's driven on the spec fundsnearly doubling their long
position in the hog market. Sowhat we've seen and what we've
noticed here is that's given hogproducers some of the best
margins since 2014. So I thinkif you're a producer and we've
(31:13):
seen what we've seen here fromJune, July all the way out to
even the winter months, theselevels might warrant layering in
a floor and locking in some ofthese profits because it's been
a market that is screaminghigher for a reason, but you're
in a position now that I thinkwarrants taking action if you
can put a little bit of a floorunderneath these great prices.
(31:37):
It's one market that's beenheavily bought and moving
sharply higher, so something toconsider.
Todd Gleason (31:44):
And finally, Mike Zuzla, globalcomresearch.com out
of Atchison, Kansas. Your finalword for the day.
Mike Zuzolo (31:50):
Well, we made new monthly lows in the soft red
wheat after the crop report. I'mhoping we can heal these charts
up on Friday, Todd. If not,looks like we're heading into a
seasonal break to the downsideon Northern Hemisphere harvest.
Having said that, the thetypical lows could come right
around that July 4 time period.And I I would look for that
given the fact that our stocksbelow two sixty three million
(32:13):
metric tons is the smallestsince 2015.
We're just underplaying thiswheat market if you ask me.
Todd Gleason (32:18):
Commodity week, of course, is a production of
Illinois Public Media. You maylisten to the whole of the
program anytime you'd like atwillag.org, willag.0rg. Our
thanks go to our panelists thisweek including Mike Zuzolo,
Logan Kimmel, and Greg Johnson.I'm University of Illinois
Extension's Todd Gleeson.
This is the June 12 edition of Commodity Week.
Todd Gleason services are madeavailable to WILL by University
of Illinois Extension. Well,welcome to Commodity Week. I am
Todd Gleason. Our panelists forthe day include Greg Johnson.
(00:20):
He's a totalgrainmarketing.comout of Champaign, Illinois.
Logan Kimmel joins us from RoachAg at RoachAg@.com in
Naperville, Illinois. And MikeSussolo at at globalcomresearch
dot com out of Atchison, Kansasis here as well. Commodity Week
is a production of IllinoisPublic Media. It's public radio
for the farming world online ondemand@willag.org.
(00:44):
Let's get a list of items thateach of you think we should
discuss for the day. Of course,we'll take up this morning's
USDA WASDE numbers. GregJohnson, what else is on your
list?
Greg Johnson (00:55):
I think all the uncertainty over the Trump trade
talks and tariffs with not onlyChina, but, also, we've got the
renewable biodiesel, decisionthat may or may not come out
tomorrow. So I think a lot ofthe government policy issues
probably we need to talk about.
Todd Gleason (01:13):
Logan Kimmel, from Roach Ag on your list.
Logan Kimmel (01:16):
Yeah. As we're looking at the calendar here,
June, typically, it's that timeof the year where, the market
provides marketingopportunities. So been fielding
a lot of questions here on folkshanging on to a little old crop,
but also searching for someideas maybe on some new crop
marketing now that we're in thatcalendar window here. So
(01:37):
possibly going over some targetsand some ideas for the next oh,
thirty to sixty days on, old andnew crop marketing.
Todd Gleason (01:45):
And Mike Souzla, globalcomresearch.com.
Mike Zuzolo (01:48):
The only thing to add to those great comments are
the ideas that maybe the fundsare finally gonna be seen as out
of position by being long beansand short corn after the report
came out this week, Todd.
Todd Gleason (01:59):
Why do you think that will be the case?
Mike Zuzolo (02:01):
Well, I think the big thing is is that we just
aren't backing down on corndemand. And the domestic number
going back down to 1,365,000,000bushels takes us down to levels
not seen since twenty two-twentythree, when we were at
1,360,000,000. Probably evenmore stark and more important is
(02:22):
the the world ending stocks andstocks to use ratios were 2012
was razor thin. I would callwhat we saw on Thursday's report
a thin situation because we'renow at 21.6% stocks to use in
for June corn globally. 2012 was16.5, and yet the funds were
(02:43):
over a 150,000 contracts netshort as of last Friday in the
CFTC update.
So I I continue to feel likethat they're way out of
position. They've bought inSouth America's Brazilian corn
crops specifically is gonna comein here and really wreak havoc
on our demand. I I think, youknow, U of I have has done some
(03:05):
really great research on, yes,they may have a bigger crop, but
their exports are probably gonnaactually be down because of
their ethanol and domesticdemand usage increasing so much
over the past few years. So I Ithink between the the trade and
tariffs and what Greg alludedto, and this week, we've built
some premium in the soybeans.We'll see if we take it out this
(03:26):
next month.
Todd Gleason (03:27):
Greg, tell me a little bit about the uncertainty
within the trade talks and thetariffs and what that means to
you?
Greg Johnson (03:34):
Well, the the report, you know, the, Newswire
report says that things aregoing smoothly and China and The
US are getting along great andeverything's perfect. And I
think, I don't know, I've beendoing this long enough, I guess
I'm jaded. I just don't thinkit's going to happen as quickly
as what it makes the newswirereports make it out to be. Yes,
we've agreed on letting Chinesestudents attend our
(03:57):
universities. And yes, it soundslike China is going to release
some rare earth minerals.
But as far as trade, as far ascorn and soybeans and wheat, I
think that's weeks, if notmonths, still in negotiations.
And so, if we're looking for aquick fix there, I think we're
going to be disappointed. Ithink that's going to take
longer than what it may soundlike today. And then the other
(04:19):
thing is with the renewablebiodiesel mandates, the devil
will be in the details, and Ijust wonder how many details
we'll get tomorrow. It may beone of these framework type
announcements where if we don'tknow how many small refinery
exceptions there are, it'sreally going to be hard to put a
dollars and cents number on theimpact tomorrow.
(04:42):
So maybe just more uncertaintyis what I'm afraid of, I guess.
Todd Gleason (04:46):
So the RVOs, the renewable volume obligations are
expected to be announced. US EPAshould get those, but you're
just worried that the, well, thesupply side, relatively
speaking, if you're thinkingabout it in that way, may be
offset in a different way by thedemand side or, the exemptions,
for the small refineries. Andyou're worried, I guess, that
(05:10):
those won't be announced at thesame time. So it'd be very
difficult to really understandhow much might be used in the
coming year, particularly forsoybean, oil, ethanol as well, I
would suppose.
Greg Johnson (05:22):
Exactly. I mean, it it could work to our favor.
It could it could be a somewhatfriendly report or it could be a
negative report. I guess myassumption is, expectation is
that it won't be bullish orbearish, it'll be uncertain. And
so we'll continue to tradesideways like we have, at least
that part of the news will nothave a market impact.
(05:45):
We'll have to look to theweather. We'll have to look to
the funds. We'll have to look tosome other items to get the
market to move one way or theother. I'm just not sure that
the announcement tomorrow willbe the big market mover that it
could potentially be if we getall the details. I just don't
think that'll happen tomorrow.
Todd Gleason (05:59):
So, Logan, if you could go through some of the
numbers, from USDA WASDE thatyou thought were important. Mike
talked a little bit about theglobal numbers. What about the
domestic numbers? Was there muchthat changed that would mean
anything to producers today?
Logan Kimmel (06:14):
Well, I think there's just more confirmation
of the corn ending stocksgetting smaller due to an
increase in exports of thedemand pace that we're on. And
it is a little frustrating goingback to last year's June WASDE
for this crop where they startedat a 2.1 carryout. Here we are
(06:38):
today, almost a little over700,000,000 bushel lower than
that. And it seems like thismarket's not reacting because I
look at the numbers today, atleast on the corn side,
justified increases in exportsand cuts to the carry out. But
yet, those numbers came out andthe market seemed like it's just
(06:59):
back to trading and focusing onthe weather and the demand and
maybe focusing on the U.
S. Dollar. So I think when youlook at the report today, kind
of came in as we thought, butmore focus coming in on the end
of the month here with the Junenumbers and further progression
(07:19):
of the South American crop. So Idon't think it's anything to
ignore though how tight ofstocks on this old crop are
coming into new. And that justmakes the weather here for the
rest of this growing seasonstill important.
So I kind of agree with Mike, Iwonder what the spec fund
positioning does if you do havea little bit of a scare maybe
(07:43):
into July and August with thelower stocks to use and ending
stocks, that big of a shortposition, you got to figure out
you get some covering, if notmaybe a net long move here from
the funds on the corn side ofthings.
Todd Gleason (07:57):
So Mike, I have to ask you, because we often talk
about a weather premium beingbuilt into the marketplace. Is
there a tariff premium or atrade premium built into this
marketplace at at today, becauseof the president's policies?
Mike Zuzolo (08:17):
I would word it this way, Todd. I think that the
soybeans and the S and P 500have priced in a premium
assuming that everything will gosmoothly and that we'll come out
on the other side of thisunscathed in terms of demand in
the in the soybeans and in termsof no recession in The United
(08:40):
States and or China. Kindadovetailing with what Greg was
talking about. I I just rightbefore we jumped on and start
taping, I was listening toJameson Greer, the US trade
representative on a Fox programbeing interviewed. And these are
almost his exact words.
President Trump likes thetariffs. He wants the tariffs. I
I will go back to what we talkedabout way back in February at
(09:03):
the at the beef house meeting.President Trump's policy is to
bring manufacturing back to TheUnited States. No if, ands, or
buts.
And I think this is where thatuncertainty that Greg's talking
about, it's not going to go awaybecause our policy is to bring
manufacturing back. And so whatI've told clients and
subscribers the last thirty toforty five days is I'm an old
(09:27):
fashioned risk manager. I grewup in the mid nineties before
China joined the WTO. There werestill set aside. There were
still what was the old termwhere you had the price
underneath the price for forUSDA average prices that you
were able to be compensated for.
To me, the beans, because of thepolicy and the cattle, because
(09:50):
of the screwworm and the policyat the border, I think they're
near perfect examples of whyyou'd want to buy puts here and
have floors in place. Maybe inboth of them, you're not making
a lot of money. Maybe in somecases, you're not even breaking
through a cost of productionsituation, but that doesn't stop
you from potentially gainingprofit and adding to your
(10:12):
eventual net selling price. AndI would stress in the area of of
WILL and especially southtowards Olney and Bone Gap and
Belleville and on south. I thinkthere's a major basis play
potentially coming aroundbecause of the planting issues
and the replanting issues.
So I see a pathway toprofitability this year, but I
(10:34):
think it starts with the beansand and the cattle and having
some puts in place in case thesepolicies, you know, end up
creating a push to the downside,and and we do pull out that
theoretical tariff premium.
Todd Gleason (10:45):
I have to admit, Greg Johnson, that I had meant
to ask Mike about a suppressionrather than a premium in the
marketplace related to trade. Hedid tell us there was a premium
there, but I do wanna know aboutsuppressed prices.
Greg Johnson (11:01):
I don't know if it's suppressing the the market
or not because you could make anargument that, Trump could come
out with a trade agreement withChina that requires them to buy
so many metric million metrictons of US soybeans and that
would be friendly or he couldcome up with an RVO number
that's higher than what thetrade is expecting or he could
(11:22):
not allow the SREs, smallrefinery exemptions and all of
those would be potentiallybullish. But you could just
easily make the case the otherway that China is going to push
back and hold out for the bestpossible deal, which could take
several months. And with the bigSouth American soybean crop and
(11:42):
potentially big South Americancorn crop, we could lose some
export business. So it can goeither way and unfortunately we
just don't know yet. And so Ithink we're kind of sitting in
the middle.
Is there a premium in there?Well, yes, if things don't work
out as well as what we wouldhope, corn and bean prices could
(12:02):
go substantially lower. But onthe other hand, if we can get
something worked out to benefitagriculture, then we could,
especially with the soybeans,the potential is there because
the spending stocks number istight. And so any increase in
demand via RVO, via soybean oiltrickling down to soybeans would
(12:24):
certainly be friendly. I don'tknow that that's priced into the
market yet necessarily, but Idon't know that China not buying
any soybeans is priced into themarket either.
So I know that's kind of a wishywashy answer, but I think the
market just doesn't know what'sgonna happen. And so not only do
we have to try to outguess theweather, we have to try to
outguess trade policy as well.
Todd Gleason (12:45):
It is something that could be both, a
suppression and in the nearterm, depending on what you
think of as the near term, Isuppose, Greg, if there if the
president really is holding outfor a metric tons deal like
phase one in his administration,which the Chinese might really
(13:12):
drag their feet upon, but onceagreed upon would put a real up
push in the marketplace. I'mwondering, Logan Kimmel, as you
think about these marketingplans and ideas, what should
producers do and consider asit's related to new and old
crop?
Logan Kimmel (13:30):
Yeah. To Greg's point, if we do get some
positive news, here here in thecoming weeks to months, and
maybe that catalyst, is a tradedeal or a weather event. I think
for producers wanting to knowwhat to do, maybe on their last
(13:50):
bit of old crop, call itgambling bushels, that probably
is your opportunity. The windowis closing here and maybe pick
up paces, swings oropportunities and be a marketer
now that we're already throughthe almost June. As we look to
new crop, I think anyopportunities we get probably
(14:11):
are wise to get caught up onsales.
I think the new crop marketing,some producers might feel a
little behind just because wehaven't had a very good market
this to the most part on newcrop this far into the marketing
year. So, put options underneathproduction, even just to limit
(14:33):
losses might not be a bad ideaalso on a weather rally. Right
now, might not be the bestmarketing spot here today. I
guess on the other side for theold crop, what kind of generated
some questions too hereyesterday is big Central
Illinois bean processor droppingtheir bid off July over to the
(14:55):
new crop November now, whichisn't the news we want to see,
especially if you're hanging onto old crops. I think that's
just an example of marketing,market rallies are probably ones
to be aggressive on, get caughtup, and we still have time,
there still is a crop to grow,but use any headline, any
(15:15):
positive news to be a seller andget caught up on marketing.
Todd Gleason (15:19):
Mike Zuslow, I'm gonna turn your attention back
to South America. You mentioned,some of the work that, had been
done by the PharmDoc team,Joanna Colucci and others,
considering the domestic usageof corn there for both the
livestock and ethanol sectors.And while there's a larger crop
(15:42):
of, and in total there, more ofit will be staying put, less of
it will be exported. Does thatoffer an opportunity for corn
exports to increase from TheUnited States in the next
marketing year?
Mike Zuzolo (15:56):
I really think so, Todd. And I think this is where
because we have so much goodcoming from Mexico as our our
primary buyer. And because thedollar just made a new, what,
thirty eight or thirty ninemonth low on the index against a
basket of currencies onThursday, if you have any kind
of issues with other countries,we are still I think I haven't
(16:22):
seen the Argentine price lately.But I think the last time I
looked at it a few days ago, wewere still the cheapest as far
as where we were going out ofthe Gulf Of Mexico. And I I
think that we have still verystrong upside price fundamentals
in the corn.
The the biggest issue remainsthe wheat. We've seen that once
again. Last week, we were makingnew monthly highs on China
(16:45):
drought. This week, we're makingnew monthly lows on a great big
fat Russian crop. Meanwhile, I'mlooking at satellite data, soil
moisture profiles, looking atMoscow Times putting out news
updates of an agriculturedrought emergency in the Rostov
oblast, which is part of the thepart of the country that
(17:08):
represents 30 plus percent of ofRussia's wheat crop.
But we we just continue to behamstrung by the wheat market,
and it's more of a sentimentmindset than it is supply
demand. Because even even todayexcuse me. Thursday's crop
report, to see the domesticwheat number and and the fact
that, you know, we've got anaverage price that actually went
(17:30):
up on 25,000,000 more bushels ofexports, and we're now at $5.40,
and Toledo's at $5.00 9. Ireally wonder how much more
downside could we have. I mean,the old lows at around $4.90,
$4.95 area.
Yeah. Maybe. But, yeah, it'sharvest seasonal, but I still
think the wheat's gotta do itsjob in bottoming before anything
(17:50):
else can in in the big pictureunless you wanna talk about a a
corn and bean weather rally.
Todd Gleason (17:56):
No, Greg. Let's talk a bit about marketing, what
producers should do. And I wannafocus on new crop, something we
discussed with Matt Bennett, inthis week as well, and that
producers are well aware of,particularly when we're in the
midst of a growing season andthe price is low. And over the
(18:17):
past five years, they have quitelikely increased their, coverage
levels for crop insurance. Howshould they consider that?
I know that, you know, withwithin their within the
financial system, the banks feelbetter if crop insurance is in
(18:40):
place, and producers, I think,have gotten used to buying
greater amounts of cropinsurance. Is this something
that they can use to theiradvantage as they look forward
to October?
Greg Johnson (18:53):
Yeah, the higher levels of insurance protect them
so they don't have to be quiteas aggressive when it comes to
making sales because they have alittle bit more protection on
the crop insurance, but thatstill doesn't excuse anybody
from not having a marketing planin place and we do want to get
it sold. And we're at $4.4December corn today and last
(19:17):
year corn was as low as $3.9 inthe fall and $4.9 at the high.
So we're right in the middle. Wecould go $0.50 higher, $0.00
lower. I agree with Mike andLogan, we have some potentially
friendly things out there.
The funds are short, the exportdemand is good, South America
even with the big crop isprobably going to keep a lot of
(19:39):
that there. So that gives usmore of the export market. I
still think the weather, eventhough corn's only a foot tall
in a lot of places and we don'tneed a lot of rain, if you look
at the subsoil moisture maps,Northern Illinois, Iowa, two
pretty big areas, are deficitsubsoil moisture. Now you can't
(20:00):
see it looking at the cropstoday because the small crops
quite frankly don't needmoisture, but you know, will we
get timely rains? I guess that'swhat that boils down to.
So I guess my point is I stillthink there's an opportunity for
a rally whether the funds covera little bit for whatever
reason, some weather premium,some continued good export
demand. There's some friendlypotential things out there. But
(20:24):
in the same breath, we want totake advantage of that because
if we have anything close to anormal crop, you know, we could
be pushing $4 corn. So at 4.4I'm not real crazy about
encouraging farmers to sellcorn, but let's say we get a
$0.25 to $0.30 rally. That seemslike a big wish, a big ask
today, but historically that'snot unheard of, especially in in
(20:47):
late June, early July if we getany kind of a weather scare at
all.
And there are forecasters outthere that are saying,
especially West Of TheMississippi River, that we could
be in for some hotter and drierweather. So I would encourage
farmers you know, maybe notnecessarily sell anything today,
but at least to have a plan inplace to take advantage of any
small rallies we might get herein the next thirty to forty five
(21:09):
days.
Todd Gleason (21:09):
Logan, when was the last time for corn, wheat,
or soybeans that roach ag threwa sell signal? Do you recall?
Logan Kimmel (21:17):
We had a couple of opportunities on the soybeans in
May. We most recently had oneand also in the corn market. And
the wheat market actually gaveus some opportunities in June as
it kind of came off the mat andrallied up. So we've had a
(21:41):
handful of opportunities, notanything we were super excited
about since May. And really thefocus was cleaning up old crop
on those and slightly increasingnew crop percentages just
because we're in the camp alsothat you still got some time on
(22:04):
this new crop.
We are not excited about theseprices here, but small
opportunities, 5% sale here forfolks that will want to get more
in the books on this new crop.We've had a couple. But again, I
think patients here see this outand if we do get a rally, I
(22:24):
think again, it's important tohave a plan and maybe that's
have orders in place. To Greg'spoint, if we get, say a 30 or
40¢ rally, right now it doesseem like a tall order. That
would put us back up to maybethe April or February highs on
corn.
(22:44):
But I find myself thinking thissometimes too, if it run up to
4.8 well hey, it looks like itmight go to $5 let's wait and
sell. If we fall short of thatand you don't get anything done
on a later summer weather rally,we do end up having a halfway
decent crop and we're well belowthis price at fall, I don't want
(23:07):
to be kicking ourselves for notcapturing a market move between
now and harvest. So that's whereI think having a plan and orders
in place if we do climb up hereand start getting some positive
news in the market, don't letthat go by the wayside and get
caught up with where the marketmaybe could keep going to
(23:30):
because we are in that seasonalwindow. Usually this is some of
the better opportunities. Sothat's kind of our thoughts here
on on new crop marketing.
Todd Gleason (23:38):
Hey, Mike. What else have you been watching
across the planet, whether it'sa macroeconomic issue, the
dollar, the price of gold, therecovering price of crude oil.
What what's on your list?
Mike Zuzolo (23:52):
Yeah. You know, this is a little bit of an out
there one, Todd, but I think ithas to be talked about a little
bit anyway. But for the time intwenty one years, the nuclear
watchdog agency that has beenmonitoring Iran came out for the
time this week and said they'renot living up to their their
agreement in terms ofenrichment. And a lot of the
(24:15):
Middle Eastern sources that Ilook at are really in very
strong mindset that we will seesome type of attack on Iran in
the very, very short term,meaning the next couple weeks.
And, you know, this harkens backto what we've talked about
amongst us all, but, you know,especially on Friday afternoons,
(24:36):
you and I have talked a lotabout this being a lot like the
mid seventies through the mideighties.
We're we're really just fightinga lot of geopolitical issues,
and we've really just come offof in in the wheat and in the
crude oil, you know, essentiallythree plus year lows in the not
too distant past. So I don'tthink the market until this week
(24:57):
was really prepared for anythinglike that. They're trying to
play catch up, but, you know, wewe, I think, still have issues
that could bring us into weatherslash supply side surprises or
factors that could give us quickflash moves to the upside that
would get us in into profitableterritories in the grains. The
(25:20):
only other thing I'd mention isthe cattle. We still have the
screwworm issue.
But once that is settled, I'mreally nervous that we're gonna
pull back pretty dramaticallybecause the funds are so short
corn, and they're so long, thefeeder cattle. They've been
playing that feeder corn ratiosince I think last spring of
twenty four. And at some point,I think that's gonna unwind
(25:41):
itself.
Todd Gleason (25:42):
The undertow of what you're hearing about Iran,
is that, an Israel issue, a b bNetanyahu issue, or does it
include The United States insome way?
Mike Zuzolo (25:52):
In some of the Middle Eastern papers, it
includes The United States, andIran has come out as of Thursday
of this week and suggested thatthey will attack even our
partners in the Middle East ifanything would happen. And and
what I'm trying to put togetherhere is is one plus one equals
two that if if Israel attacks,the Iranians are probably gonna
(26:14):
assume The United States gavethem the okay. And so my opinion
would be that the gloves thencould come off in The Middle
East, kinda like what we've allbeen worried about for the last
couple years. And then,obviously, what's going on with
Russia and Ukraine is still redhot too.
Todd Gleason (26:29):
It'll be interesting to follow suit with
all of that. When I waslistening, Mike, to, the German
Marshall Fund Conference takingplace in Brussels this week, and
we ran some information, somecomments from the CEO of
ExxonMobil. But in some of theother sessions that were
(26:52):
available, there was a lot ofdiscussion about The US's role
across the planet andparticularly the role of Turkey,
as it relates to the MiddleEast. What are you what are you
thinking about that, and how, itis the gateway from Russia and
the Black Sea area into, theMiddle East for wheat and other
(27:17):
products.
Mike Zuzolo (27:18):
Yeah. Historically, if you if you talk to somebody
at U of I, I bet that's a ahistorian, they would probably
say that Turkey has beeninvolved in almost every major
issue in the world history eversince the seventeen hundreds.
And so Turkey is something youwanna keep your eye on. I I
think this issue of thisconference you're talking about,
(27:38):
and it kinda harkens back towhat Greg was talking about,
what I was thinking about whilehe was talking, and that is the
dedollarization mindset isgrowing. The the Asian countries
are trying to figure out a wayto probably trade more with each
other and less with us.
And and I'm not trying to beanti anybody right now. I'm just
trying to call it as I see itwith what I see in some of the
(28:01):
Asian news. And and Asian newsthat is typically very pro
American, I'll I'll add to that.So I I do think that time is of
the essence, and I'll I'llremain on the same side as I've
always been at this point untilI'm proven wrong that I'm I'm
less worried about '25, muchmore worried about '26 and '27
when it comes to agriculture ifwe don't, you know, bring this
(28:22):
situation back around.
Todd Gleason (28:24):
Yeah. On that note, India, and you can talk
about whether that's Asia ornot, but India was at this
conference, and they certainlywere discussing the free trade
agreement that they are now inthe middle of negotiating with
the European Union.
Mike Zuzolo (28:41):
Yeah. And they were very unhappy, from the Indian
press that I look at, veryunhappy with the crackdown on on
Indian students, and and theyweren't real happy with how we
took a neutral role with thePakistan India border issue,
even though I feel like it wasthe right thing to do. Peace is
always the right way to go, atleast as a try. But I I told
(29:03):
another group of people, Ireally wish we'd get a deal with
India before China because Ithink that changed everything.
Todd Gleason (29:09):
Alright. Let's get a final word now from each of
you. Greg Johnson from TotalGrain Marketing, the elevator
system that belongs or elevatorthat belongs to the system
within Growmark and FS. Can yougive me your thoughts please?
Greg Johnson (29:24):
Sure. I just want to touch on one or emphasize one
thing that Mike touched on andthat is that correlation between
crude oil prices and corn. It'stough for corn to do much when
crude oil prices are in themid-60s. But if we do have any
kind of tensions in The MiddleEast that would cause crude oil
prices to go up and counteractsome of the previous
(29:46):
administration's emphasis onEVs, which hurt crude oil. You
know, that could help crude oilprices, which in turn would help
corn prices.
So I think we've got thirty toforty five days here of
basically the weather, giving usan opportunity to hopefully get
a little bit of a small rally.And so I think farmers want to
take advantage of that.Typically the funds are long
(30:09):
this time of year. So if thefunds were long like they
typically are, would probably bemore aggressive in getting
farmers sold, more heavily sold.But since the funds are short at
this point, I think there's moreof a chance that we get a bump
up rather than a bump down overthe next thirty days.
Todd Gleason (30:25):
Logan Kimmel in Naperville at Roach Ag, your
final word for the day?
Logan Kimmel (30:28):
One comment that might apply to some of the
listeners out there, it's asector that we're watching here,
livestock, and Mike touched onit there with the cattle, but
one market that's been very hotand caught a lot of buying here
is the hog market. We've seenthese prices since April do
(30:50):
nothing but go up and that wouldinclude the back months too.
That's driven on the spec fundsnearly doubling their long
position in the hog market. Sowhat we've seen and what we've
noticed here is that's given hogproducers some of the best
margins since 2014. So I thinkif you're a producer and we've
(31:13):
seen what we've seen here fromJune, July all the way out to
even the winter months, theselevels might warrant layering in
a floor and locking in some ofthese profits because it's been
a market that is screaminghigher for a reason, but you're
in a position now that I thinkwarrants taking action if you
can put a little bit of a floorunderneath these great prices.
(31:37):
It's one market that's beenheavily bought and moving
sharply higher, so something toconsider.
Todd Gleason (31:44):
And finally, Mike Zuzla, globalcomresearch.com out
of Atchison, Kansas. Your finalword for the day.
Mike Zuzolo (31:50):
Well, we made new monthly lows in the soft red
wheat after the crop report. I'mhoping we can heal these charts
up on Friday, Todd. If not,looks like we're heading into a
seasonal break to the downsideon Northern Hemisphere harvest.
Having said that, the thetypical lows could come right
around that July 4 time period.And I I would look for that
given the fact that our stocksbelow two sixty three million
(32:13):
metric tons is the smallestsince 2015.
We're just underplaying thiswheat market if you ask me.
Todd Gleason (32:18):
Commodity week, of course, is a production of
Illinois Public Media. You maylisten to the whole of the
program anytime you'd like atwillag.org, willag.0rg. Our
thanks go to our panelists thisweek including Mike Zuzolo,
Logan Kimmel, and Greg Johnson.I'm University of Illinois
Extension's Todd Gleeson.
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