June 26, 2025 • 31 mins
Panelists
- Naomi Blohm, TotalFarmMarketing.com
- Jim McCormick, AgMarket.net
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the June 26 edition of Commodity Week.
announcer (00:10):
Todd Gleason's services are made available to
WILL by University of IllinoisExtension.
Todd Gleason (00:15):
Well, welcome to Commodity Week. I am Todd
Gleason. Our panelists for theday include Naomi Bloem. She's
at totalfarmmarketing.com out ofWest Bend, Wisconsin. And Jim
McCormick from agmarket.net.
He is in Barrington, Illinois.Let's begin by getting a list of
items that we should discuss forthe day. Naomi, I'll start with
(00:35):
you. What's on your list?
Noami Blohm (00:37):
Well, just wanting to get, farmers to be ready for
Monday's quarterly stocks reportand planted acres report in case
there's any surprises that comefrom that. So we just need to
have some strategies ready goinginto that.
Todd Gleason (00:51):
And Jim McCormick, what have you been watching and
what's on your list?
Jim McCormick (00:55):
Well, I think Naomi nailed it. The big thing
we gotta look at is thisquarterly stocks and acreage
number on Monday, but also wemight want to talk about what
happens after that. You've got afew days later, Todd, we got the
holiday three day weekend. Wecome out of that three day
weekend. Then we have the end ofthe President Trump's ninety day
pause of the tariffs that comedue on July 9.
(01:15):
We'll see if we have any newtrade deals done, and then of
course, a couple days later, wehave the July WASI report. So
just a lot of data coming at usover the next two weeks.
Todd Gleason (01:24):
I had forgotten about the ninety day pause.
Well, I hadn't forgotten. I justhadn't realized it was quite
that quick. I was thinking itwas more like OG one, but July 9
is the date we'll have to talkabout. Thank you for that quick
update.
I do, and, Naomi, wanna turn toyou real quick, as it's related
to the markets today, and Jim aswell for this week. What's the
(01:47):
possibility that we might mightbe able to put in a spike low
based on old crop movement, andit's just simply flushing the
marketplace out for corn at thistime.
Noami Blohm (02:01):
Right. So looking at the July and September corn
contracts, we are so close tothat $4 value, so that's both
technical and psychologicalsupport. And for Pete's sake,
we're still looking at justhistorically significantly tight
carryout at 1,300,000,000bushels. So we'll see if we have
any friendly news on thequarterly stocks report come
(02:21):
Monday that might allow for anice price recovery bounce.
It'll also be first notice, say,for July grains, so sometimes
that in and of itself can alsoadd some price volatility and
market movement.
And then like Jim was saying,going into fourth of July week
and weekend, now seasonally,traditionally, and I know
seasonals haven't been workingthat great so far this spring,
(02:43):
but usually there's some kind ofa bounce during fourth of July
week, and then that isoftentimes an opportunity to do
some catch up sales. So we'llsee if that can present itself,
and then at at that time, see ifthe $4 value area holds for both
the July and September corncontracts.
Todd Gleason (02:59):
Now, Jim, I know your stable mate there in
Barrington, Brian Split, does alot of work on the charts. I
suspect you talk to him prettyregularly. What's he been
telling you?
Jim McCormick (03:09):
Well, we're looking at plain and simple,
Todd. If you look the continuousweekly corn chart, there was a
gap that we left last fallroughly between $3.95 and a
quarter, and then we kind ofback filled it to roughly $3.99
That's when the Septembercontract went off the board from
being front month when itexpired and the December corn
became the front month and leftthe gap due to the carry. So
(03:31):
that is kind of maybe atechnical objective to go down
and fill like Naomi said, we'revery close to it. So I could see
us go down and fill it and thenwe'll see what happens on this
report. It's been a veryinteresting situation.
You got a carry out right nowprojected at $13.65 a year ago
this time, Todd, we areprojecting the old crop carry
(03:51):
out around 2,000,000,000. Rightnow we're projecting the new
crop carry out of $17.50, a yearago is closer to 2,000,000,000.
So the prices are reallydepressed. We've got this number
coming out tomorrow on Monday onthe stocks. And the fact of the
matter is the trade hasabsolutely zero clue of what
their government's going to say.
And what I mean by that is eightout of the last eleven years,
(04:13):
the trade, the government'snumber came in over a
100,000,000 higher than what thetrade was thinking or a
100,000,000 lower. It's kind ofequally divided with the average
being about a 150,000,000bushels. So we have the
opportunity for maybe a boysurprise. The market has
definitely washed a lot ofpeople out. There's no doubt
about it talking to our clients.
Unfortunately, there werefarmers who were selling cash
(04:35):
grain this week simply becausethey needed to generate cash
flow at the end of the month andat the end of the quarter as
well. So I think that was partof the weakness we saw this
week.
Todd Gleason (04:44):
So Jim, I just want to make sure that I
understand what the chart lookslike and what you think or what
the possibility is. So you'resuggesting that in the best
scenario case, you would fillthe gap so that it's done
sometime yet this week, meaningwe'd have to still go lower
tomorrow or before the report isreleased on Monday and hopefully
(05:06):
see a report that would befriendly to bullish to bounce
this marketplace back up.
Jim McCormick (05:11):
Yes. And you, Todd, you could actually see it
during the report becauseremember, you're actually
getting two different reports.You're gonna get the stocks
report and you're also gonna getthe acreage report. And the hard
part about this is you could getone being a bullish report, one
being a bearish report. Youdon't know which way the
analogs, computer systems aregonna trade it.
And we've seen one of thesereports where the market will,
the initial reaction may be downon a per se, maybe more corn
(05:34):
acres and what the average tradeguest says. And then the next
instantaneous, the trade trades,the stock number, which may be a
little bit more bullish and whatthe trade is they can. And then
you may actually go down, fillthe gap and then close stronger.
So you just don't know whichnumber is going to take
precedent and which number theymay trade first, unfortunately,
and you're just, you're kind ofalong for the ride.
Todd Gleason (05:54):
Naomi, can you talk a little about these
reports and what you at TotalFarm Marketing have been
thinking as it's related andmaybe start with the grain
stocks and then move into theacreage report for me?
Noami Blohm (06:06):
Yeah, so looking at grain stocks, you know, thinking
that we're going to definitelysee a tighter number on corn
than year ago levels, whichshould be supported in and of
itself. Not really looking for alot of changes from a year ago
in terms of that soybean number,but to Jim's point, the
quarterly stocks reportsometimes can be almost as much,
if not more of a market moverthan the acreage report, because
(06:28):
that's where the little surprisenuggets can be in the
marketplace. So you really wantto make sure we're looking at
those numbers closely. And thenwhen you look at the acreage
information, traders have atendency and market has a
tendency that the soybeanacreage number, sometimes what
is released comes out to be justa little smaller than the trade
estimate and the corn number hasa tendency to be a little
(06:50):
higher. But I'm curious thisyear because on the March report
we already had that biggersurprise announcement of a
million more acres than whattrade was anticipating at that
time.
And so now we're of coursewondering, were there any last
minute movement on acres? Ithink we're all definitely in
agreement that corn acres aremuch, much higher than soybeans.
(07:13):
That's not anything that's goingbe in question. But is it just
going be small adjustments or isthere going to be any surprise
bigger adjustment out there? SoI think with this report, the
bigger factor is going to belooking at the quarterly stocks
because that just sets thedemand tone yet heading now into
the next quarter.
Todd Gleason (07:31):
So it will set the tone at least usually it's a
three month tone, but this willset the tone until we get to the
August USDA crop productionreport likely, unless there's
something in the WASDE or, youknow, as Jim, suggested, there
might be something on July 9before the WASDE is released. Do
you have anything to addactually on the acreage before
(07:53):
we move to that July 9 date andwhat, the surprises that could
come there might mean?
Jim McCormick (07:59):
Well, I think on the acreage, I think it's gonna
be relevant. I mean, the averagetrade guess is roughly 95.35
versus the March intentions95.326. So it's very limited. I
think, we're looking for alittle bit more acres, plain and
simple. We thought we probablylost some acres in Southern
Illinois and Indiana potentiallyin the corn due to the wet
spring, but Northern Illinois,where I'm at parts of Iowa, they
(08:21):
got in pretty quick and ourclimax and the seed industry
said they suggest that maybe weplanted a few more acres.
But like Naomi said, I think thesurprise, if there's going to be
one, it's gonna be in thestocks. As for the trade deal,
Todd, it's gonna be interestingto see. I mean, the Trump
administration has said, they'vegot a lot of deals ready to
(08:42):
announce, but if you look atkind of the rhetoric coming out
Twitter and some of thenewspapers, what they're saying,
they're still negotiating. Likejust this afternoon, The US had
released its version of its Conproposal to the EU. And Japan
(09:03):
came back last night and saidthey were upset about a 25%
tariff on all cars coming intoThe United States.
And then the other problem we'vegot Todd with this is these are
the reciprocal tariffs thatPresident Trump's talking about.
They could cut that deal but alot of these countries are very
hesitant because there's anotherprocess going on right now where
(09:23):
on a sidebar, the Trumppresidency could come in here
and say on a separate dealbesides the reciprocal, we're
gonna slap additional tariffs onsteel or minerals or some other
reason for an economic agenda.So we'll see if they can
actually get a deal done andwhat that means when it's all
(09:43):
said and done. I think if theydo get deals, it's gonna be a
flurry at the last moment. Andthen we'll see where we're at.
I mean, my guess is when it'sall said and done, they're gonna
try to nail everybody with aminimum of 10% tariff on
everything coming in. If youlook back six months ago in the
Senate Budget Committee, theywere actually budgeting for a
10% tariff on all goods comingacross the border, plain and
(10:07):
simple as a way to finance thetax cut. The question is, is it
going to be 10% in my mind, oris it going be 20 or 30%? And
then how does that affect, youknow, the overall growth of the
economy?
Todd Gleason (10:17):
There were other things that were happening in
Washington DC, Naomi, over thelast couple of weeks. We have
talked about them, but there hasbeen some time and they have
settled out at least in themarketplace, particularly the
RVO or the renewable volumes.And I'm wondering what that
means to the soybean market overover the next, let's go three,
(10:40):
four months, and then afterJanuary 1, because it feels like
that's the division time, anddoes it make much of a
difference in those first fewmonths, of the marketing year
that is, so once we get into thenew crop marketing year?
Noami Blohm (10:53):
Yeah. So the the news, of course, was welcomed
that we received a few weeksago, and that's what provided
the soybean market to have thatlift higher. For nearby
contracts and for the remainderof this year, there weren't a
lot of dramatic revisions. Itwas very supportive, though, for
demand for 2026 and 2027, and sowe're going to see that on the
January balance sheet. We shouldsee strong demand for the
(11:17):
biofuels on that January report.
But between now and then, whatthat has done, it allows the
administration to have someflexibility from the stand point
of they can say, hey, we havethis new domestic demand for
farmers just in case we can'tget these trade deals a little
bit more solidified with Chinaif we do lose some demand on
(11:38):
exports to China because theyare purchasing 70% of their
soybeans from Brazil. And ofcourse, not a secret, we've lost
market share over the years. Butif we can't get any further
deals done with China, thisadditional biofuels demand helps
to offset some potential exportloss. So that's where the demand
(11:59):
sheet is going to be shiftingand maneuvering as we head into
the ending part of 2025 andapproach the new year next year.
And by then, we'll know how muchChina has bought of us or not.
China, I think they're going toshow up to the table when?
August, right? When we'regetting ready for our harvest
lows, and usually soybean pricesare a little bit cheaper. And
(12:22):
I'm sure they're keeping an eyeon our weather here in The
United States this summer justto get a feel for if we'll have
a big crop or not, and thatcould be part of their waiting
and watching for theirnegotiating as well. So friendly
news without a doubt withbiofuels, Let's just keep it
going, and hopefully we get sometrade deals done sooner than
(12:45):
later.
Todd Gleason (12:45):
On that note, I'll come back to you, Jim, because I
do wanna talk about China andthe potential trade deals there.
That nation has been looking toBrazil for more of its soybeans,
particularly during the season.It however, it's also been for
its imports, is, but it's alsonot been buying as many soybeans
(13:06):
kind of across the board, andit's been pushing its
production, and changing the wayits hog herd is using bean meal
and the protein additives. Whatdoes it all mean to you about
how much it will show up on theworld stage?
Jim McCormick (13:24):
Well, think what it's showing you in the world
stage in the overarching longterm is we've got to find a
different use. We're producingbeans, we've to find a different
use of beans as opposed toselling to China. I mean, the
fact of the matter is China isinvesting billions upon billions
of dollars into South America.They just opened that new port
here was it in Chile, just a fewmonths ago. The next part of the
(13:48):
phase of that deal is going tobe putting rail lines from
Brazil to that port.
They didn't spend that money tobuild a port just to not use it.
So, the reality is we've beenlosing market share for the last
twenty years. It's probablygoing to continue to lose Todd.
That is why this renewable is soimportant for American
agriculture, because if we'regoing to continue to use shares
(14:11):
and then on top of it, like yousaid, China's trying to figure
out a way to use less meal forhogs. And then on top of that,
they are starting to use moreand more GMO technology and
essentially we'll start bringingin their national yields for
beans and corn, the closer maybeThe US is at.
We've got, like I said, we'vegot an excess supply potentially
building over the next five, tenyears. Renewables, I believe,
(14:31):
are going to be the source to,you know, consume those, not
just the beans, but also thecorn.
Todd Gleason (14:37):
So we'll be watching that closely. I will
stay with you for just a moment,Jim, and turn your attention
back to corn as it's related toBrazil. There are some new
consultancy numbers out ofBrazil this week that jumped the
size of that crop in anextraordinary way. That had to
put pressure on the market aswell. How will USDA be looking
(14:59):
in that going into that WASDE inJuly and what it means to the
marketplace?
Jim McCormick (15:06):
Well, it was a monster upward revision compared
to what the USDA had in June,compared to what most of the
other analysts down in Brazilsaying, is that accurate? Time
will tell if USDA is history isany indication, Todd, they will
not jump to that number at all.They will keep it up. And
there's a very good chance thatessentially we're going to agree
(15:26):
to disagree to the size of theSouth American crop compared to
what their people are saying andwhat we're saying. Because if
you look historically, they tendnot to matter, to match always,
but plain and simple, when youlook at the corn market, it
absolutely weakened this week.
There's no doubt about it. Partof it was the good weather we're
getting here in The UnitedStates. Part of it was
definitely farmer liquidatingsome positions and there's no
(15:48):
doubt about it. That Braziliancrop definitely put pressure on
the market because it is morecompetition for, you know, on
the world market.
Todd Gleason (15:56):
Now let's deal with new crop corn sales, those
bushels that must go across thescale, particularly those that
the producer has not yet priced.How, Naomi, have you been
thinking about this, as it'srelated to the fall and the
harvest season and gettingproducers in a position where
(16:19):
they might be able to do betterthan what will be available, or
likely to be available based onfutures prices right now as they
harvest.
Noami Blohm (16:29):
Yeah. So looking at the December corn chart and the
December seasonal, what did cometo fruition was this little mini
head and shoulders formation onthe daily December corn chart,
along with the December cornseasonal that after June 20,
prices have a tendency to tipover lower. So that's exactly
what happened. We had encouragedproducers to look at potentially
(16:50):
buying some puts, either shortdated puts or just regular
traditional puts, to protect incase that price moved lower in
the shorter term, because westill have a lot of summer
weather to get through, andthere could be some sort of a
bounce higher down the road, butthe tricky part is that right
(17:11):
now we still have maybepotentially, to Jim's earlier
comment, corn might go just alittle lower before we have the
chance of a recovery bounce.Now, the July there is a strong
tendency, last year it didn'thappen, but there is that strong
tendency of a price recoverybounce in the July 4 week.
And so, if that should occur,that would be a good place for
(17:31):
producers to potentially makesome sales for what they know
that they're going to have tosell at harvest right off the
combine. A recovery bounce wouldtake us back up to $4.35 on the
December board, and that mightbe as good as it gets for the
short term, barring any othersurprises from the quarterly
stocks. The other tricky thingto navigate is that the funds
(17:53):
right now are short probablycloser to 200,000 contracts in
corn. And a year ago and in2020, when they decided to be
bullies and just sell thismarket off throughout the summer
timeframe, they got to as muchas almost 350,000 contracts
short by early August, andprices then went below that $4
(18:13):
value. So I think we have tohave a little bit of a defensive
mindset yet and hope forsomething friendly on Monday to
give us that recovery bounce,but I just know if we're gonna
get anything that's over the topbullish that's gonna just really
take out that $4.50 majoroverhead resistance, but we
could maybe get that recoverybounce back up to $4.35.
Todd Gleason (18:36):
Jim, if you look at the charts, this year
compared to last year, we are,where we were last year about a
month earlier than we were lastyear, maybe a month and a half,
depending on whether you'relooking at nearby or or new
crop. How do you view thismarketplace and how much lower
it could go?
Jim McCormick (18:57):
Well, I mean, that's going to kind of depend
on what we get the next twoweeks, whether it kind of
depends on how this quarterlystock report comes in. If it
comes in bullish, it might limitthe downside. If it comes in
bearish and let's say we find200,000,000 bushels of corn,
then I think you could see itextend maybe as low as $3.75
(19:18):
into the fall. The thing I'mlooking at Todd though, in the
long run, like when we said, Ithink hopefully we can get a
bounce, that bounce probablyneeds to be sold. But in the
ultra long run, I think you'regonna put in a low early like
last year.
And I think we have a shot athaving a weird two years in a
row kind of receiving into thefall. And the reason why I say
(19:38):
that is a vast majority of theproducers are massively under
pressure right now. The price ofgrain, both corn and beans is
below the breakevens. The bankswe are talking to are hearing
phone calls from clients likethey haven't heard in the last
ten years about refinancing,trying to get ahead of the
curve, very nervous about it. Sowhen I look at what's going to
(19:58):
happen, no matter what the sizeof this crop is, if we do not
get a rally, the fact of thematter is we're probably going
to lose a lot of acres in 2026.
You're probably looking atcloser to 90,000,000 acres of
corn, maybe even a little bitless, which then means we're
going to have to really bigyield just to meet that roughly
15,000,000,000 bushel demandwe're using year in year out
roughly. So I think if you'rethe Mexican buyers, they're
(20:22):
going to be just like we werethis past year and be very
aggressive buying to put thislow end because plain and
simple, we don't get that rally.The farmers don't have the money
to plant 95,000,000 acres ofcorn next year. They cut it back
to 90. It puts us in a verytight balance sheet.
If I know that as an end user,just like Naomi said about the
Chinese buying the beans, Ithink they'll be coming in and
buying the corn. So I think wewill put in a really low end,
(20:44):
but near term, if you'restressing about what to do,
options, plus where at least toput the floor in, but gives you
an opportunity to, in case we doget a surprise. We may get a
really, who knows, Todd? Maybepresident Trump cuts a really
good deal with the Chinese onThursday next week or in two
weeks, and China commits to buya lot of U. Agriculture.
We have no clue.
Todd Gleason (21:04):
So for both of you and Naomi, I guess I'll have you
answer first based on Jim'sresponse there, relating to
buying time, with, refinancing,in their loans. Is that
something you think they oughtto do at this time, or is there
another way to set about makingthat happen in the marketplace?
Noami Blohm (21:29):
Well, I would say to always just be aware of the
options in front of you and tojust be thinking ahead of what
could be or could not be. Myfear would be that we go into a
trough of low prices like we sawfrom 2014 to 2019 if we end up
having big crops here or ifSouth America next winter has a
(21:54):
big crop. So, there's alwaysthat risk in agriculture. Jim's
point is just to stay on top ofit, be on your toes, think about
what's available out there toyou. I know that it's tight in
the countryside, and there'smaybe more hope that, yes, we
(22:15):
get a trade deal done or we geta next round of Trump bucks to
come in and save the farmers.
But at the end of the day, youhave to not only wear your
farmer producer hat, but youhave to wear your business hat.
So do be mindful of anyopportunities that may be out
there in the lending community.Of course, be on top of the
(22:37):
marketplace as well.
Todd Gleason (22:38):
Not yet, Jim. A lot of talk about an MFP style
payment for this coming year.And then, within the big
beautiful bill, there's still alot of debate about it itself.
It would have an impact on themarketplace or things that are
related to, SEO, ECO, and someconservation functions. However,
(23:01):
most of that has to do withsnap.
So as producers look forward, Iwas thinking about when they
have these discussions withtheir bankers. Their bankers are
probably going to say, you know,you've got your crop insurance
coverage until you get to theend of month of October. And at
that point, the banker may bewanting them, particularly if
(23:22):
there's going to be a cropinsurance payment, to go ahead
and make a sale to fill out thecash market, cash that they need
to have available. How might youthink about that as it's related
to helping them get a higherprice later on?
Jim McCormick (23:39):
Well, it's a situation kind of like you said,
it depends when they're forcedto. I mean, you know, if you you
know, a lot of people, it kindof depends where their yields
are going to be. You know, Iwould say like right now, if you
can get the rally, dead capbounce, fourth of July rally,
stocks rally, you hedge it byputs, look for it to go down. If
it goes deep enough into it,just like we did last year,
(24:00):
maybe in early August, earlySeptember low, and it's looking
like we're gonna bottom out, theChinese are coming in, then you
might actually come in here andactually use options or futures
as a way to essentially lock inyour insurance. Because the
biggest game we're gonna belooking at if prices do break
hard into a lot of part ofsummer, we put an early fall low
and you may have an insuranceindemnity payment, but based on
(24:22):
the insurance being paid outbased on the average price of
October, it may be a situationyou've actually got to come into
the marketplace to buy futuresor buy calls as a way to, in
essence, defend, you know, ofgiving back that indemnity that
market has given you due topotentially an early fall low.
Todd Gleason (24:38):
All right. So what else have we been thinking
about? And Naomi, I'll I'll letyou take off at this point.
Could be if you are a purchaserof these commodity markets, with
your livestock producer, arethere things that they need to
be considering at this time?
Noami Blohm (24:57):
Well, in general, this is just tremendously cheap
value, unexpected compared towhere the ending stocks are for
old crop. And so for end users,when you look at long term
charts, anytime corn is in that$4 value area, even when you go
back and look at the trough oflow prices we had from 2014 to
(25:17):
2019, anytime it was near $4 itwould maybe go to $3.75
sometimes 3.5 but it doesn'tstay low for too long. So I
would really encourage end usersto consider using this as an
opportunity to get some of theirneeds booked between now and
even potentially to the end ofthe year because in general the
(25:39):
demand is so strong and we stillhave a lot of weather to get
through, so use that as anopportunity to book in these
lower values. Talking aboutlivestock, something to be aware
of there on the cattle side isthat for live cattle and feeder
cattle futures, the market hashad a really nice correction
over the past few weeks, andwe're sitting at a point where
(26:02):
we're testing the forty day andfifty day moving averages on
these charts. In the past fourtimes this has occurred over the
past year, it's been a pointwhere the market will sit at
these values for about a week,wait to see how cash news
trades, and then has so farresumed the uptrend.
So now the question though thistime is, are we going to have
(26:24):
the ability on the livestockmarket for the cattle to resume
an uptrend or not? So we'rewaiting to see how the cash
market fares this week, becauseour holiday demand has been met,
and now we're gonna see, if thepackers have any need to do any
aggressive buying in the shortterm here. So keep an eye on the
cattle market, the cattlefutures, and watching cash
(26:47):
inventory week.
Todd Gleason (26:49):
Anything else to add, Jim, on the livestock side
or other end users?
Jim McCormick (26:54):
Well, the only thing I would say is, like, she
went over the market great. Iwould just, you know, I'm just
gonna default to if you canprotect profits, you need to do
it. I mean, plain and simple,everything looks bullish to its
bearish. There is a lot ofuncertainty on these Trump trade
deals. There's a lot ofuncertainty what it's the impact
it's going to have on theeconomy.
And the one thing I always liketo point out to people in the
(27:17):
beef market, I find kind ofinteresting is if you watch TV
right now, what's McDonald'spromoting? They're not promoting
hamburger, they're promotingchicken. A couple of weeks ago,
I was watching one of thebasketball NBA finals games and
I was noticing what was TacoBell promoting? Chicken nuggets,
not tacos, but chicken nuggets.This industry is obviously
(27:40):
trying to get people to buy thecheaper protein.
We've always, I've always viewedthe cattle market and the supply
is incredibly tight. Thequestion is when is this
consumer gonna crack? There wasa stat that said something like
8075 to 80% of Americans Toddare living paycheck to paycheck.
Okay. When you think about thatone, three and four people are
(28:01):
living paycheck to paycheck.
This goes back to the tariffs,the tariffs. If you're tariffing
everything coming in for thecountry at a minimum of 10%,
which seems to be the baselinethat pretty much means anything
that's coming into Walmart isgonna cost you 10% more
eventually. And it could be evenmore than that. How is that
person who's already livingpaycheck to paycheck? 75% of the
(28:22):
people in our country are doingthat.
Going to be able to take thatessentially 10% tax. They're
not, they're going to have tocut spending somewhere and it
tends to be the beef market. Andthen one other thing you gotta
remember, all payments werefrozen under president Trump.
They continue to be frozen underpresident Biden. President Trump
has, hey, you gotta startrepaying it.
(28:43):
JPMorgan estimates on the lowend, it's $3,000,000,000 coming
out of the economy per month. Onthe high end, it's
$6,000,000,000 and that's moneythat student loan person maybe
gone out to eat, did somethingin the economy, he can no longer
has that income to spend to goout to eat. He's got to pay back
his loan to the government,which just goes down hopefully
(29:04):
to pay off our debt. So you arereally contracting the amount of
people that are having to beable to afford this high priced
beef. So if I'm a beef producer,I'm a pork producer.
The markets have been on fire.Do not be afraid to lock in
those profits.
Todd Gleason (29:18):
Let's get a final word from each of you. Naomi
Bloom, I'll turn to you fromTotal Farm Marketing out of West
Bend, Wisconsin. Your finalthoughts for the day.
Noami Blohm (29:28):
Well, don't be complacent as producers. I know
that pricing on the grain sideof things is not overly
attractive, but there is somepossibility for some volatility
next week. And it's gonna justbe a four day week with markets
closed Friday, so whatever kindof hopefully friendly news we
can squeak out of this, or aweather forecast that shifts to
hotter and drier might be anopportunity for the grain
(29:51):
markets to have a pricerecovery, in which case we could
use that bounce to make somemore cash sales or look at
protecting unpriced bushelsafter that. So just be on your
toes. Have fun for your fourthof July holiday week, but don't
forget to watch the market.
Todd Gleason (30:08):
And Jim McCormick from Barrington, Illinois,
managmarket.net.
Jim McCormick (30:13):
I'm gonna piggyback on what Naomi said,
but I'm gonna say, you know,don't just watch it, get your
orders working. There's gonna bea lot of volatility and the
markets move very, very fast andyou may get it like, look what
happened, you know, you'll getthe move maybe in the night
market that doesn't happen inthe day market. Like I said, we
have those stocks report onMonday. We have a three day week
in which tends to get volatile.Coming out of the weekend, we
(30:34):
have a trade deal.
You may get leaks in theovernight market about what
these trade deals might be. Andthen lastly, you got that July
WASDE report. So hopefully,there's some opportunity. Get
the orders work and make thatdecision where you wanna pull
it. Get the order work with yourcash elevator.
Get it with your broker and, youknow, enjoy your fourth of July
weekend and hope for a fewfireworks to the upside.
Todd Gleason (30:54):
Commodity week is a production of Illinois Public
Media. It's public radio for thefarming world online on demand
anytime you'd like to listen tothe whole of the program at
willag.org. That's willag.0rg.And where right now, we'd like
you to hit the donate button aswe finish up our fiscal year
(31:15):
that closes out on June 30 andwe need to have everything we
will be spending in the nextfiscal year starting July 1 in
the bank. Thank you for makingthat pledge of support to
agricultural programming thatcomes to you from the Urbana
Champaign campus of theUniversity of Illinois.
I'm Extension's Todd Gleason.
This is the June 26 edition of Commodity Week.
announcer (00:10):
Todd Gleason's services are made available to
WILL by University of IllinoisExtension.
Todd Gleason (00:15):
Well, welcome to Commodity Week. I am Todd
Gleason. Our panelists for theday include Naomi Bloem. She's
at totalfarmmarketing.com out ofWest Bend, Wisconsin. And Jim
McCormick from agmarket.net.
He is in Barrington, Illinois.Let's begin by getting a list of
items that we should discuss forthe day. Naomi, I'll start with
(00:35):
you. What's on your list?
Noami Blohm (00:37):
Well, just wanting to get, farmers to be ready for
Monday's quarterly stocks reportand planted acres report in case
there's any surprises that comefrom that. So we just need to
have some strategies ready goinginto that.
Todd Gleason (00:51):
And Jim McCormick, what have you been watching and
what's on your list?
Jim McCormick (00:55):
Well, I think Naomi nailed it. The big thing
we gotta look at is thisquarterly stocks and acreage
number on Monday, but also wemight want to talk about what
happens after that. You've got afew days later, Todd, we got the
holiday three day weekend. Wecome out of that three day
weekend. Then we have the end ofthe President Trump's ninety day
pause of the tariffs that comedue on July 9.
(01:15):
We'll see if we have any newtrade deals done, and then of
course, a couple days later, wehave the July WASI report. So
just a lot of data coming at usover the next two weeks.
Todd Gleason (01:24):
I had forgotten about the ninety day pause.
Well, I hadn't forgotten. I justhadn't realized it was quite
that quick. I was thinking itwas more like OG one, but July 9
is the date we'll have to talkabout. Thank you for that quick
update.
I do, and, Naomi, wanna turn toyou real quick, as it's related
to the markets today, and Jim aswell for this week. What's the
(01:47):
possibility that we might mightbe able to put in a spike low
based on old crop movement, andit's just simply flushing the
marketplace out for corn at thistime.
Noami Blohm (02:01):
Right. So looking at the July and September corn
contracts, we are so close tothat $4 value, so that's both
technical and psychologicalsupport. And for Pete's sake,
we're still looking at justhistorically significantly tight
carryout at 1,300,000,000bushels. So we'll see if we have
any friendly news on thequarterly stocks report come
(02:21):
Monday that might allow for anice price recovery bounce.
It'll also be first notice, say,for July grains, so sometimes
that in and of itself can alsoadd some price volatility and
market movement.
And then like Jim was saying,going into fourth of July week
and weekend, now seasonally,traditionally, and I know
seasonals haven't been workingthat great so far this spring,
(02:43):
but usually there's some kind ofa bounce during fourth of July
week, and then that isoftentimes an opportunity to do
some catch up sales. So we'llsee if that can present itself,
and then at at that time, see ifthe $4 value area holds for both
the July and September corncontracts.
Todd Gleason (02:59):
Now, Jim, I know your stable mate there in
Barrington, Brian Split, does alot of work on the charts. I
suspect you talk to him prettyregularly. What's he been
telling you?
Jim McCormick (03:09):
Well, we're looking at plain and simple,
Todd. If you look the continuousweekly corn chart, there was a
gap that we left last fallroughly between $3.95 and a
quarter, and then we kind ofback filled it to roughly $3.99
That's when the Septembercontract went off the board from
being front month when itexpired and the December corn
became the front month and leftthe gap due to the carry. So
(03:31):
that is kind of maybe atechnical objective to go down
and fill like Naomi said, we'revery close to it. So I could see
us go down and fill it and thenwe'll see what happens on this
report. It's been a veryinteresting situation.
You got a carry out right nowprojected at $13.65 a year ago
this time, Todd, we areprojecting the old crop carry
(03:51):
out around 2,000,000,000. Rightnow we're projecting the new
crop carry out of $17.50, a yearago is closer to 2,000,000,000.
So the prices are reallydepressed. We've got this number
coming out tomorrow on Monday onthe stocks. And the fact of the
matter is the trade hasabsolutely zero clue of what
their government's going to say.
And what I mean by that is eightout of the last eleven years,
(04:13):
the trade, the government'snumber came in over a
100,000,000 higher than what thetrade was thinking or a
100,000,000 lower. It's kind ofequally divided with the average
being about a 150,000,000bushels. So we have the
opportunity for maybe a boysurprise. The market has
definitely washed a lot ofpeople out. There's no doubt
about it talking to our clients.
Unfortunately, there werefarmers who were selling cash
(04:35):
grain this week simply becausethey needed to generate cash
flow at the end of the month andat the end of the quarter as
well. So I think that was partof the weakness we saw this
week.
Todd Gleason (04:44):
So Jim, I just want to make sure that I
understand what the chart lookslike and what you think or what
the possibility is. So you'resuggesting that in the best
scenario case, you would fillthe gap so that it's done
sometime yet this week, meaningwe'd have to still go lower
tomorrow or before the report isreleased on Monday and hopefully
(05:06):
see a report that would befriendly to bullish to bounce
this marketplace back up.
Jim McCormick (05:11):
Yes. And you, Todd, you could actually see it
during the report becauseremember, you're actually
getting two different reports.You're gonna get the stocks
report and you're also gonna getthe acreage report. And the hard
part about this is you could getone being a bullish report, one
being a bearish report. Youdon't know which way the
analogs, computer systems aregonna trade it.
And we've seen one of thesereports where the market will,
the initial reaction may be downon a per se, maybe more corn
(05:34):
acres and what the average tradeguest says. And then the next
instantaneous, the trade trades,the stock number, which may be a
little bit more bullish and whatthe trade is they can. And then
you may actually go down, fillthe gap and then close stronger.
So you just don't know whichnumber is going to take
precedent and which number theymay trade first, unfortunately,
and you're just, you're kind ofalong for the ride.
Todd Gleason (05:54):
Naomi, can you talk a little about these
reports and what you at TotalFarm Marketing have been
thinking as it's related andmaybe start with the grain
stocks and then move into theacreage report for me?
Noami Blohm (06:06):
Yeah, so looking at grain stocks, you know, thinking
that we're going to definitelysee a tighter number on corn
than year ago levels, whichshould be supported in and of
itself. Not really looking for alot of changes from a year ago
in terms of that soybean number,but to Jim's point, the
quarterly stocks reportsometimes can be almost as much,
if not more of a market moverthan the acreage report, because
(06:28):
that's where the little surprisenuggets can be in the
marketplace. So you really wantto make sure we're looking at
those numbers closely. And thenwhen you look at the acreage
information, traders have atendency and market has a
tendency that the soybeanacreage number, sometimes what
is released comes out to be justa little smaller than the trade
estimate and the corn number hasa tendency to be a little
(06:50):
higher. But I'm curious thisyear because on the March report
we already had that biggersurprise announcement of a
million more acres than whattrade was anticipating at that
time.
And so now we're of coursewondering, were there any last
minute movement on acres? Ithink we're all definitely in
agreement that corn acres aremuch, much higher than soybeans.
(07:13):
That's not anything that's goingbe in question. But is it just
going be small adjustments or isthere going to be any surprise
bigger adjustment out there? SoI think with this report, the
bigger factor is going to belooking at the quarterly stocks
because that just sets thedemand tone yet heading now into
the next quarter.
Todd Gleason (07:31):
So it will set the tone at least usually it's a
three month tone, but this willset the tone until we get to the
August USDA crop productionreport likely, unless there's
something in the WASDE or, youknow, as Jim, suggested, there
might be something on July 9before the WASDE is released. Do
you have anything to addactually on the acreage before
(07:53):
we move to that July 9 date andwhat, the surprises that could
come there might mean?
Jim McCormick (07:59):
Well, I think on the acreage, I think it's gonna
be relevant. I mean, the averagetrade guess is roughly 95.35
versus the March intentions95.326. So it's very limited. I
think, we're looking for alittle bit more acres, plain and
simple. We thought we probablylost some acres in Southern
Illinois and Indiana potentiallyin the corn due to the wet
spring, but Northern Illinois,where I'm at parts of Iowa, they
(08:21):
got in pretty quick and ourclimax and the seed industry
said they suggest that maybe weplanted a few more acres.
But like Naomi said, I think thesurprise, if there's going to be
one, it's gonna be in thestocks. As for the trade deal,
Todd, it's gonna be interestingto see. I mean, the Trump
administration has said, they'vegot a lot of deals ready to
(08:42):
announce, but if you look atkind of the rhetoric coming out
Twitter and some of thenewspapers, what they're saying,
they're still negotiating. Likejust this afternoon, The US had
released its version of its Conproposal to the EU. And Japan
(09:03):
came back last night and saidthey were upset about a 25%
tariff on all cars coming intoThe United States.
And then the other problem we'vegot Todd with this is these are
the reciprocal tariffs thatPresident Trump's talking about.
They could cut that deal but alot of these countries are very
hesitant because there's anotherprocess going on right now where
(09:23):
on a sidebar, the Trumppresidency could come in here
and say on a separate dealbesides the reciprocal, we're
gonna slap additional tariffs onsteel or minerals or some other
reason for an economic agenda.So we'll see if they can
actually get a deal done andwhat that means when it's all
(09:43):
said and done. I think if theydo get deals, it's gonna be a
flurry at the last moment. Andthen we'll see where we're at.
I mean, my guess is when it'sall said and done, they're gonna
try to nail everybody with aminimum of 10% tariff on
everything coming in. If youlook back six months ago in the
Senate Budget Committee, theywere actually budgeting for a
10% tariff on all goods comingacross the border, plain and
(10:07):
simple as a way to finance thetax cut. The question is, is it
going to be 10% in my mind, oris it going be 20 or 30%? And
then how does that affect, youknow, the overall growth of the
economy?
Todd Gleason (10:17):
There were other things that were happening in
Washington DC, Naomi, over thelast couple of weeks. We have
talked about them, but there hasbeen some time and they have
settled out at least in themarketplace, particularly the
RVO or the renewable volumes.And I'm wondering what that
means to the soybean market overover the next, let's go three,
(10:40):
four months, and then afterJanuary 1, because it feels like
that's the division time, anddoes it make much of a
difference in those first fewmonths, of the marketing year
that is, so once we get into thenew crop marketing year?
Noami Blohm (10:53):
Yeah. So the the news, of course, was welcomed
that we received a few weeksago, and that's what provided
the soybean market to have thatlift higher. For nearby
contracts and for the remainderof this year, there weren't a
lot of dramatic revisions. Itwas very supportive, though, for
demand for 2026 and 2027, and sowe're going to see that on the
January balance sheet. We shouldsee strong demand for the
(11:17):
biofuels on that January report.
But between now and then, whatthat has done, it allows the
administration to have someflexibility from the stand point
of they can say, hey, we havethis new domestic demand for
farmers just in case we can'tget these trade deals a little
bit more solidified with Chinaif we do lose some demand on
(11:38):
exports to China because theyare purchasing 70% of their
soybeans from Brazil. And ofcourse, not a secret, we've lost
market share over the years. Butif we can't get any further
deals done with China, thisadditional biofuels demand helps
to offset some potential exportloss. So that's where the demand
(11:59):
sheet is going to be shiftingand maneuvering as we head into
the ending part of 2025 andapproach the new year next year.
And by then, we'll know how muchChina has bought of us or not.
China, I think they're going toshow up to the table when?
August, right? When we'regetting ready for our harvest
lows, and usually soybean pricesare a little bit cheaper. And
(12:22):
I'm sure they're keeping an eyeon our weather here in The
United States this summer justto get a feel for if we'll have
a big crop or not, and thatcould be part of their waiting
and watching for theirnegotiating as well. So friendly
news without a doubt withbiofuels, Let's just keep it
going, and hopefully we get sometrade deals done sooner than
(12:45):
later.
Todd Gleason (12:45):
On that note, I'll come back to you, Jim, because I
do wanna talk about China andthe potential trade deals there.
That nation has been looking toBrazil for more of its soybeans,
particularly during the season.It however, it's also been for
its imports, is, but it's alsonot been buying as many soybeans
(13:06):
kind of across the board, andit's been pushing its
production, and changing the wayits hog herd is using bean meal
and the protein additives. Whatdoes it all mean to you about
how much it will show up on theworld stage?
Jim McCormick (13:24):
Well, think what it's showing you in the world
stage in the overarching longterm is we've got to find a
different use. We're producingbeans, we've to find a different
use of beans as opposed toselling to China. I mean, the
fact of the matter is China isinvesting billions upon billions
of dollars into South America.They just opened that new port
here was it in Chile, just a fewmonths ago. The next part of the
(13:48):
phase of that deal is going tobe putting rail lines from
Brazil to that port.
They didn't spend that money tobuild a port just to not use it.
So, the reality is we've beenlosing market share for the last
twenty years. It's probablygoing to continue to lose Todd.
That is why this renewable is soimportant for American
agriculture, because if we'regoing to continue to use shares
(14:11):
and then on top of it, like yousaid, China's trying to figure
out a way to use less meal forhogs. And then on top of that,
they are starting to use moreand more GMO technology and
essentially we'll start bringingin their national yields for
beans and corn, the closer maybeThe US is at.
We've got, like I said, we'vegot an excess supply potentially
building over the next five, tenyears. Renewables, I believe,
(14:31):
are going to be the source to,you know, consume those, not
just the beans, but also thecorn.
Todd Gleason (14:37):
So we'll be watching that closely. I will
stay with you for just a moment,Jim, and turn your attention
back to corn as it's related toBrazil. There are some new
consultancy numbers out ofBrazil this week that jumped the
size of that crop in anextraordinary way. That had to
put pressure on the market aswell. How will USDA be looking
(14:59):
in that going into that WASDE inJuly and what it means to the
marketplace?
Jim McCormick (15:06):
Well, it was a monster upward revision compared
to what the USDA had in June,compared to what most of the
other analysts down in Brazilsaying, is that accurate? Time
will tell if USDA is history isany indication, Todd, they will
not jump to that number at all.They will keep it up. And
there's a very good chance thatessentially we're going to agree
(15:26):
to disagree to the size of theSouth American crop compared to
what their people are saying andwhat we're saying. Because if
you look historically, they tendnot to matter, to match always,
but plain and simple, when youlook at the corn market, it
absolutely weakened this week.
There's no doubt about it. Partof it was the good weather we're
getting here in The UnitedStates. Part of it was
definitely farmer liquidatingsome positions and there's no
(15:48):
doubt about it. That Braziliancrop definitely put pressure on
the market because it is morecompetition for, you know, on
the world market.
Todd Gleason (15:56):
Now let's deal with new crop corn sales, those
bushels that must go across thescale, particularly those that
the producer has not yet priced.How, Naomi, have you been
thinking about this, as it'srelated to the fall and the
harvest season and gettingproducers in a position where
(16:19):
they might be able to do betterthan what will be available, or
likely to be available based onfutures prices right now as they
harvest.
Noami Blohm (16:29):
Yeah. So looking at the December corn chart and the
December seasonal, what did cometo fruition was this little mini
head and shoulders formation onthe daily December corn chart,
along with the December cornseasonal that after June 20,
prices have a tendency to tipover lower. So that's exactly
what happened. We had encouragedproducers to look at potentially
(16:50):
buying some puts, either shortdated puts or just regular
traditional puts, to protect incase that price moved lower in
the shorter term, because westill have a lot of summer
weather to get through, andthere could be some sort of a
bounce higher down the road, butthe tricky part is that right
(17:11):
now we still have maybepotentially, to Jim's earlier
comment, corn might go just alittle lower before we have the
chance of a recovery bounce.Now, the July there is a strong
tendency, last year it didn'thappen, but there is that strong
tendency of a price recoverybounce in the July 4 week.
And so, if that should occur,that would be a good place for
(17:31):
producers to potentially makesome sales for what they know
that they're going to have tosell at harvest right off the
combine. A recovery bounce wouldtake us back up to $4.35 on the
December board, and that mightbe as good as it gets for the
short term, barring any othersurprises from the quarterly
stocks. The other tricky thingto navigate is that the funds
(17:53):
right now are short probablycloser to 200,000 contracts in
corn. And a year ago and in2020, when they decided to be
bullies and just sell thismarket off throughout the summer
timeframe, they got to as muchas almost 350,000 contracts
short by early August, andprices then went below that $4
(18:13):
value. So I think we have tohave a little bit of a defensive
mindset yet and hope forsomething friendly on Monday to
give us that recovery bounce,but I just know if we're gonna
get anything that's over the topbullish that's gonna just really
take out that $4.50 majoroverhead resistance, but we
could maybe get that recoverybounce back up to $4.35.
Todd Gleason (18:36):
Jim, if you look at the charts, this year
compared to last year, we are,where we were last year about a
month earlier than we were lastyear, maybe a month and a half,
depending on whether you'relooking at nearby or or new
crop. How do you view thismarketplace and how much lower
it could go?
Jim McCormick (18:57):
Well, I mean, that's going to kind of depend
on what we get the next twoweeks, whether it kind of
depends on how this quarterlystock report comes in. If it
comes in bullish, it might limitthe downside. If it comes in
bearish and let's say we find200,000,000 bushels of corn,
then I think you could see itextend maybe as low as $3.75
(19:18):
into the fall. The thing I'mlooking at Todd though, in the
long run, like when we said, Ithink hopefully we can get a
bounce, that bounce probablyneeds to be sold. But in the
ultra long run, I think you'regonna put in a low early like
last year.
And I think we have a shot athaving a weird two years in a
row kind of receiving into thefall. And the reason why I say
(19:38):
that is a vast majority of theproducers are massively under
pressure right now. The price ofgrain, both corn and beans is
below the breakevens. The bankswe are talking to are hearing
phone calls from clients likethey haven't heard in the last
ten years about refinancing,trying to get ahead of the
curve, very nervous about it. Sowhen I look at what's going to
(19:58):
happen, no matter what the sizeof this crop is, if we do not
get a rally, the fact of thematter is we're probably going
to lose a lot of acres in 2026.
You're probably looking atcloser to 90,000,000 acres of
corn, maybe even a little bitless, which then means we're
going to have to really bigyield just to meet that roughly
15,000,000,000 bushel demandwe're using year in year out
roughly. So I think if you'rethe Mexican buyers, they're
(20:22):
going to be just like we werethis past year and be very
aggressive buying to put thislow end because plain and
simple, we don't get that rally.The farmers don't have the money
to plant 95,000,000 acres ofcorn next year. They cut it back
to 90. It puts us in a verytight balance sheet.
If I know that as an end user,just like Naomi said about the
Chinese buying the beans, Ithink they'll be coming in and
buying the corn. So I think wewill put in a really low end,
(20:44):
but near term, if you'restressing about what to do,
options, plus where at least toput the floor in, but gives you
an opportunity to, in case we doget a surprise. We may get a
really, who knows, Todd? Maybepresident Trump cuts a really
good deal with the Chinese onThursday next week or in two
weeks, and China commits to buya lot of U. Agriculture.
We have no clue.
Todd Gleason (21:04):
So for both of you and Naomi, I guess I'll have you
answer first based on Jim'sresponse there, relating to
buying time, with, refinancing,in their loans. Is that
something you think they oughtto do at this time, or is there
another way to set about makingthat happen in the marketplace?
Noami Blohm (21:29):
Well, I would say to always just be aware of the
options in front of you and tojust be thinking ahead of what
could be or could not be. Myfear would be that we go into a
trough of low prices like we sawfrom 2014 to 2019 if we end up
having big crops here or ifSouth America next winter has a
(21:54):
big crop. So, there's alwaysthat risk in agriculture. Jim's
point is just to stay on top ofit, be on your toes, think about
what's available out there toyou. I know that it's tight in
the countryside, and there'smaybe more hope that, yes, we
(22:15):
get a trade deal done or we geta next round of Trump bucks to
come in and save the farmers.
But at the end of the day, youhave to not only wear your
farmer producer hat, but youhave to wear your business hat.
So do be mindful of anyopportunities that may be out
there in the lending community.Of course, be on top of the
(22:37):
marketplace as well.
Todd Gleason (22:38):
Not yet, Jim. A lot of talk about an MFP style
payment for this coming year.And then, within the big
beautiful bill, there's still alot of debate about it itself.
It would have an impact on themarketplace or things that are
related to, SEO, ECO, and someconservation functions. However,
(23:01):
most of that has to do withsnap.
So as producers look forward, Iwas thinking about when they
have these discussions withtheir bankers. Their bankers are
probably going to say, you know,you've got your crop insurance
coverage until you get to theend of month of October. And at
that point, the banker may bewanting them, particularly if
(23:22):
there's going to be a cropinsurance payment, to go ahead
and make a sale to fill out thecash market, cash that they need
to have available. How might youthink about that as it's related
to helping them get a higherprice later on?
Jim McCormick (23:39):
Well, it's a situation kind of like you said,
it depends when they're forcedto. I mean, you know, if you you
know, a lot of people, it kindof depends where their yields
are going to be. You know, Iwould say like right now, if you
can get the rally, dead capbounce, fourth of July rally,
stocks rally, you hedge it byputs, look for it to go down. If
it goes deep enough into it,just like we did last year,
(24:00):
maybe in early August, earlySeptember low, and it's looking
like we're gonna bottom out, theChinese are coming in, then you
might actually come in here andactually use options or futures
as a way to essentially lock inyour insurance. Because the
biggest game we're gonna belooking at if prices do break
hard into a lot of part ofsummer, we put an early fall low
and you may have an insuranceindemnity payment, but based on
(24:22):
the insurance being paid outbased on the average price of
October, it may be a situationyou've actually got to come into
the marketplace to buy futuresor buy calls as a way to, in
essence, defend, you know, ofgiving back that indemnity that
market has given you due topotentially an early fall low.
Todd Gleason (24:38):
All right. So what else have we been thinking
about? And Naomi, I'll I'll letyou take off at this point.
Could be if you are a purchaserof these commodity markets, with
your livestock producer, arethere things that they need to
be considering at this time?
Noami Blohm (24:57):
Well, in general, this is just tremendously cheap
value, unexpected compared towhere the ending stocks are for
old crop. And so for end users,when you look at long term
charts, anytime corn is in that$4 value area, even when you go
back and look at the trough oflow prices we had from 2014 to
(25:17):
2019, anytime it was near $4 itwould maybe go to $3.75
sometimes 3.5 but it doesn'tstay low for too long. So I
would really encourage end usersto consider using this as an
opportunity to get some of theirneeds booked between now and
even potentially to the end ofthe year because in general the
(25:39):
demand is so strong and we stillhave a lot of weather to get
through, so use that as anopportunity to book in these
lower values. Talking aboutlivestock, something to be aware
of there on the cattle side isthat for live cattle and feeder
cattle futures, the market hashad a really nice correction
over the past few weeks, andwe're sitting at a point where
(26:02):
we're testing the forty day andfifty day moving averages on
these charts. In the past fourtimes this has occurred over the
past year, it's been a pointwhere the market will sit at
these values for about a week,wait to see how cash news
trades, and then has so farresumed the uptrend.
So now the question though thistime is, are we going to have
(26:24):
the ability on the livestockmarket for the cattle to resume
an uptrend or not? So we'rewaiting to see how the cash
market fares this week, becauseour holiday demand has been met,
and now we're gonna see, if thepackers have any need to do any
aggressive buying in the shortterm here. So keep an eye on the
cattle market, the cattlefutures, and watching cash
(26:47):
inventory week.
Todd Gleason (26:49):
Anything else to add, Jim, on the livestock side
or other end users?
Jim McCormick (26:54):
Well, the only thing I would say is, like, she
went over the market great. Iwould just, you know, I'm just
gonna default to if you canprotect profits, you need to do
it. I mean, plain and simple,everything looks bullish to its
bearish. There is a lot ofuncertainty on these Trump trade
deals. There's a lot ofuncertainty what it's the impact
it's going to have on theeconomy.
And the one thing I always liketo point out to people in the
(27:17):
beef market, I find kind ofinteresting is if you watch TV
right now, what's McDonald'spromoting? They're not promoting
hamburger, they're promotingchicken. A couple of weeks ago,
I was watching one of thebasketball NBA finals games and
I was noticing what was TacoBell promoting? Chicken nuggets,
not tacos, but chicken nuggets.This industry is obviously
(27:40):
trying to get people to buy thecheaper protein.
We've always, I've always viewedthe cattle market and the supply
is incredibly tight. Thequestion is when is this
consumer gonna crack? There wasa stat that said something like
8075 to 80% of Americans Toddare living paycheck to paycheck.
Okay. When you think about thatone, three and four people are
(28:01):
living paycheck to paycheck.
This goes back to the tariffs,the tariffs. If you're tariffing
everything coming in for thecountry at a minimum of 10%,
which seems to be the baselinethat pretty much means anything
that's coming into Walmart isgonna cost you 10% more
eventually. And it could be evenmore than that. How is that
person who's already livingpaycheck to paycheck? 75% of the
(28:22):
people in our country are doingthat.
Going to be able to take thatessentially 10% tax. They're
not, they're going to have tocut spending somewhere and it
tends to be the beef market. Andthen one other thing you gotta
remember, all payments werefrozen under president Trump.
They continue to be frozen underpresident Biden. President Trump
has, hey, you gotta startrepaying it.
(28:43):
JPMorgan estimates on the lowend, it's $3,000,000,000 coming
out of the economy per month. Onthe high end, it's
$6,000,000,000 and that's moneythat student loan person maybe
gone out to eat, did somethingin the economy, he can no longer
has that income to spend to goout to eat. He's got to pay back
his loan to the government,which just goes down hopefully
(29:04):
to pay off our debt. So you arereally contracting the amount of
people that are having to beable to afford this high priced
beef. So if I'm a beef producer,I'm a pork producer.
The markets have been on fire.Do not be afraid to lock in
those profits.
Todd Gleason (29:18):
Let's get a final word from each of you. Naomi
Bloom, I'll turn to you fromTotal Farm Marketing out of West
Bend, Wisconsin. Your finalthoughts for the day.
Noami Blohm (29:28):
Well, don't be complacent as producers. I know
that pricing on the grain sideof things is not overly
attractive, but there is somepossibility for some volatility
next week. And it's gonna justbe a four day week with markets
closed Friday, so whatever kindof hopefully friendly news we
can squeak out of this, or aweather forecast that shifts to
hotter and drier might be anopportunity for the grain
(29:51):
markets to have a pricerecovery, in which case we could
use that bounce to make somemore cash sales or look at
protecting unpriced bushelsafter that. So just be on your
toes. Have fun for your fourthof July holiday week, but don't
forget to watch the market.
Todd Gleason (30:08):
And Jim McCormick from Barrington, Illinois,
managmarket.net.
Jim McCormick (30:13):
I'm gonna piggyback on what Naomi said,
but I'm gonna say, you know,don't just watch it, get your
orders working. There's gonna bea lot of volatility and the
markets move very, very fast andyou may get it like, look what
happened, you know, you'll getthe move maybe in the night
market that doesn't happen inthe day market. Like I said, we
have those stocks report onMonday. We have a three day week
in which tends to get volatile.Coming out of the weekend, we
(30:34):
have a trade deal.
You may get leaks in theovernight market about what
these trade deals might be. Andthen lastly, you got that July
WASDE report. So hopefully,there's some opportunity. Get
the orders work and make thatdecision where you wanna pull
it. Get the order work with yourcash elevator.
Get it with your broker and, youknow, enjoy your fourth of July
weekend and hope for a fewfireworks to the upside.
Todd Gleason (30:54):
Commodity week is a production of Illinois Public
Media. It's public radio for thefarming world online on demand
anytime you'd like to listen tothe whole of the program at
willag.org. That's willag.0rg.And where right now, we'd like
you to hit the donate button aswe finish up our fiscal year
(31:15):
that closes out on June 30 andwe need to have everything we
will be spending in the nextfiscal year starting July 1 in
the bank. Thank you for makingthat pledge of support to
agricultural programming thatcomes to you from the Urbana
Champaign campus of theUniversity of Illinois.
I'm Extension's Todd Gleason.
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