November 21, 2025 • 29 mins
Panelist
- Naomi Blohm, TotalFarmMarketing.com
- Jim McCormick, AgMarket.net
- Arlan Suderman, StoneX.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the November 20 edition of Commodity
(00:03):
Week.
announce (00:09):
Todd Gleason services are made available to WILL by
University of IllinoisExtension.
Todd Gleason (00:14):
Oh, welcome to Commodity Week. I am Todd
Gleason. Our panelists for theday include Arlen Suderman. He
is with Stonex. Naomi Bloem ishere from Total Farm Marketing,
and we're joined by JimMcCormick at agmarket.net.
Commodity Week is a productionof Illinois. Public media, you
can find and listen to us onlineat willag.org, willag.0rg. Our
(00:35):
winter meeting season for theFarm Doc team kicks off in
December on the twelfth at theFarm Assets Conference, the Agra
Center in Bloomington. The costfor this daylong event,
including your new meal, is just$80. The Farm Doc team will be
there along with representativesfrom the corn growers, the
soybean association, agleadership in the state of
(00:55):
Illinois.
And you should double that up,by the way, with following
weeks, Illinois Farm EconomicSummits. The PharmDoc team and
myself will be on the road.We'll be in DeKalb, Peoria, and
Mount Vernon on Monday, Tuesday,and Wednesday, December. You can
sign up for all of thosemeetings at the PharmDoc daily
website. It's actually easier tofind if you just go to
(01:17):
willag.org, willag.0rg.
You'll find it right at the topof the page. Farm assets is
easy. Just hit the registrationpage. There's a little link
there that says IFES, I f e s,for Illinois Farm Economic
Summit to get yourselfregistered for that as well. I
think you should register forboth.
Probably important, your bankerwill be there. I see those all
(01:38):
come in. You probably should besitting in the room to hear the
same information they arehearing as well. Sign up today.
Now let's talk a little bitabout the marketplace.
Jim McCormick, we'll start withyou. What are the most important
things that have happened in thelast two weeks in your opinion
as it's related to the corn,soybean, sweet, or other
commodity markets?
Jim McCormick (01:59):
Well, I think the two major prod things are,
first, Todd, we did have theUSDA report, and, I'd say the
corn yield is definitelyquestionable by the farm
community. They just don't thinkthat one eighty six is there.
The other thing we definitelyhave to talk about is it does
look like China is starting toexecute on their pledge to buy
beans from The United States.Now how much are they gonna buy?
I think it's still up fromdebate.
(02:20):
We know what the White Housesaid, 12,000,000 metric tons. We
don't know what really theChinese actually agreed to
because they've yet to sayanything, but they have started
to do some buying, and I thinkthat's something we definitely
need to dive into.
Todd Gleason (02:31):
Arlen, because you're here, we'll start with
that one eighty six number. Youget blamed for it a little bit
because Stonax did come out witha number that was in that range
just before the November cropproduction report was released.
How did you come up with thenumber, and how did USDA come up
with the number relativelyspeaking? We have some ideas on
both of those, but how's you youyou came at them from two
(02:52):
different directions. USDA, ofcourse, had their October
samples.
They had their November samplesand farmer surveys. How about
you?
Arlan Suderman (03:00):
Yeah. And ours is customer surveys. And
frankly, I was I was shockedthat it was still at one eighty
six, but it is what ourcustomers have told us, and our
customers have a great trackrecord of pegging the yield. And
so I have confidence in that fornow, and we'll see where USDA
now USDA, as you said, surveyedfarmers, they sampled fields. In
(03:21):
some states, the sample numberswere lower than normal.
Other states, they were prettynormal. So it varied by state,
but it did match up with whatour customer survey was and what
they were seeing in the field.And I know there are some areas
of the Midwest where the yieldswere very disappointing this
year, but there are other areasthat nobody talked about where
the yields were just fantastic,very impressive, and broke
(03:44):
records by quite a margin. Thetwo sides balance each other
out, so to speak. So regardless,it is a big crop.
The the only argument is howbig, how much of a record is it,
and USDA will settle that inJanuary once they're able to get
their stocks numbers in there tokind of act as a correction.
Todd Gleason (04:04):
Naomi, when we talked on Tuesday, you said
we're gonna talk more about thiswhen I get to Thursday in NAFB
in Kansas City. That's wherewe're all located today at the
National Association of FarmBroadcasting Convention. The
numbers at one eighty six is abig number. It's I don't know
that you heard that exactly fromyour clientele base, and and I
(04:25):
don't know whether the farmersbelieve it or not. The question
really is, should they andshould they act as if the USDA
is correct?
Mostly over the decades, brokershave said, you know, in the end,
regardless of what you think,USDA is right because that's the
number we end up with.
Naomi Blohm (04:43):
Yeah. Good points all the way around. You know, I
I'm still of the opinion thatthe USDA will lower the yield
number in January. I don't thinkthey're gonna make it any
bigger. But the question wouldbe, do they just lower it one or
two bushels?
I don't think that they'll gobelow one eighty one probably.
So we we will wait and see. Andthat's gonna be the thing with
the markets right now is thatwhile we're waiting to see corn
(05:06):
market, corn futures mightstruggle to gain traction for
pricing opportunities. So whereI wanna bring this back to is
what the producer needs to bemindful of. So we can argue all
day long until we're boom in theface about where those yield
numbers gonna be at.
You know, again, my clientstelling me very, very different
numbers that were on the lowerspectrum of things. So that's my
(05:27):
bias why it's gonna be down. Butas a farmer, the tricky part is
balancing all of these differentfundamentals that are coming out
and ultimately knowing whenyou're going to pull the trigger
on those cash sales because youguys have corn in the bins.
You're sitting on it, and Idon't know what kind of hail
Mary you're gonna be waitingfor. But we want that kind of a
you know, some kind of a marketrally, but we have to be
(05:49):
realistic with the potentialprice points that are out there.
So now that's when we lean ontechnical charts. That's when we
lean on outside marketinformation. That's when we lean
on seasonal patterns to help usto be ready to pull the trigger
in case we get some sort of a apush higher here into the New
Year.
Todd Gleason (06:06):
So I'm gonna follow-up with you, on what
producers ought to do. So,technically, where should they
be thinking about themarketplace? And I guess,
technically, what what are yourtargets? And how should they go
about setting, orders for makingcash sales?
Naomi Blohm (06:25):
Okay. So a couple of things. When I look at our
March corn futures chart, wehave big resistance at four
fifty on the daily chart. When Ilook at the chart right now,
there is an upside down invertedhead and shoulders formation
that potentially, if we getfriendly news, would point to an
upside swing objective of about35¢. So if you add 35¢ to $4.50,
(06:48):
you're talking $4.85.
Notice I'm not saying $5 corn.Let me repeat that. Notice I'm
not saying $5 corn. Okay? Sowe're looking at March futures
potentially to $4.85.
So I think from a a friendlierstandpoint, that could be a
potential target to get somecash sales triggered for corn in
your bin. But, again, if wedon't get the friendly news, we
(07:11):
could just be stuck in asideways trading pattern where
we are in a range of $4.50,maybe down to $4.35 for a few
weeks.
Todd Gleason (07:20):
Your colleague is a good technician, Brian Split.
You sit in the same office withhim, Jim McCormick. What do you
and he been talking about asit's related to targets? And how
is JSA and agmarket.net gettingproducers set to take advantage
of those targets?
Jim McCormick (07:36):
We see the exact same chart pattern that Naomi's
talking about, so that would beyour chart chart objective. On
the fundamental side, I'm alittle bit worried, Todd. I
mean, the fact of the matter iswe the trade was trading a
1,300,000,000.0 carryout allmentally all last summer. It
ended up being a 1.5. Thismarket spot corn couldn't get
over four forty corn from July 4on, and we've been in a dead
(08:00):
sideways market literally forthe last six months.
You got a carryout hanging outat 2,100,000,000.0. A lot of
people do believe the air thatyield's gonna go lower. I'm in
that camp, but I think the feednumber's too high. That's gonna
keep that carryout, I think,right around 2,100,000,000. If
you're an end user, I fear whychase corn over four fifty?
(08:20):
They'll let it pop up here, andthen they just say, look.
There's no economic reason to doit unless we have an outside
force. China come in and arebuying or maybe a problem with
the South American crop. Sowe're actually encouraging some
guys to consider, you know,maybe don't look at the spot
month. You've got grain in thebin.
Consider selling that carry thatyou may not you may shoot for
that four eighty five corn inthe spot, but you might get it
(08:40):
in the July contract. If theopportune opportunity to lock
that in for those levels, wewould do some of it simply
because we don't know what thegovernment's gonna give us on
Friday or, excuse me, inJanuary.
Todd Gleason (08:51):
What's JSA telling you of the elevator system that
you guys, agmarket.net works soclosely with, telling you about
the size of the crop and and thekinds of things that they are
hearing as it relates to demand,domestically and in the export
market.
Jim McCormick (09:07):
Right now, the export market's been phenomenal.
We really don't know exactlywhat it is because we got the
flash sale update, but we don'tknow the day to day. And I'm not
sure why it's gonna take thegovernment a year a month and a
half, two months to give us thisdata. It's the same argument on
the c t CFTC numbers. I don'tunderstand why they can't just
give us this data in this modernage.
(09:29):
But right now, the export demandhas been very good for the corn.
We think it's gonna sustainitself. We do anticipate the
basis to improve in general incertain locations as a farmer
holds very, very tight. I thinkin general, though, the
commercial guys seem to thinkthe crop is there. I think
they're in a little bit more onthe higher end, like, one eighty
three to one eighty six zone, Ithink, is where it seems like it
is.
The crop in the West reallyseems big.
Todd Gleason (09:50):
Arlen Suderman, I wanna ask a different question
because I want you to remind meexactly and the listeners
exactly what it is that Stonexdoes. What is the primary
purpose of the company?
Arlan Suderman (10:01):
We're risk mitigators. I mean, what we do
is work with everyone fromproducers to end users to help
mitigate their risk. So ifyou're a producer, obviously
your risk is prices going downbefore you've been able before
you're able to sell. And so wewould help them put on positions
to protect that risk. If you'rean end user, your risk is that
(10:23):
prices go up.
And so we help put on thosepositions. So to us, it doesn't
matter the size of the crop, butit does matter to provide as
accurate information as we canto help our customers make those
decisions on where their riskslie. And I would just go back to
what Jim's saying is ouranalysis based on our customer
surveys who are out there isthat it's a good sized crop, but
(10:47):
he talked about the endingstocks. That's the bottom line.
The market's eventually going totrade.
And I'd say there's two factorshere. First, USDA is helping the
farmer by printing an abnormallylow ending stocks. And when we
say abnormally low2,100,000,000, they were
basically solving for that bykeeping feed stuff feed usage
(11:08):
elevated, 600,000,000 bushelincrease from year to year on
feed usage when we have feweranimals out there being fed.
That can't hold up. So USDA ishoping that the yield comes down
so they can erase some of thatfeed usage.
That's item number one. Theother is we have a China premium
in there. We don't know at whatpoint that China premium will go
(11:30):
away when the trade agreementmight fall apart because China
is already welching on the rareearth minerals part of it, and
that is the number one priorityfor the Trump administration
from a national securitystandpoint. So all of this could
fall apart at any point. So riskmanagement is essential here,
not trying to get the highestprice possible.
(11:50):
Although it's we'd all like tohave $8 for our corn, but making
sure you're not caught if thissuddenly the headlines in the
morning are that 100% tariffsare coming back on and China's
stopping purchases.
Todd Gleason (12:02):
Can I ask you a question about the end users,
particularly food companiesbecause they're working on the
margin as it's related both tothe cost of of the raw commodity
into their food item? It'sgenerally a very small cost,
which means it's on the marginfor them. How they manage that
risk because it it's just adifferent leverage point, I
(12:27):
think. I mean, you would thinkthey're looking for the lowest
price, but, really, they'relooking for a consistent price,
and that's low. It's it's just adifferent way of looking, and
and I'm sure you see that fromyour perspective.
Arlan Suderman (12:39):
Yeah. It's all about margins, and they're
looking at it from a businessperspective just as the farmer
should be looking at it from abusiness perspective. What's our
margin? And they may not likethe price, but they know what
they can't afford the price tobe. And same thing, the mar
farmer may not like the price,but he knows what he cannot
afford the price to be in orderto stay in business.
And so when you look at our endusers, they're everything from
(13:02):
feedlots to ethanol producers tothe popular restaurant you like
to go to on Friday night. Ifit's a major chain, they're
trying to mitigate what theirrisk is all the way from the
beef that they serve to the porkthey serve to even including the
cheese and the packaging, theplastics and everything. We help
(13:23):
rip help them lock in theirmargins so they can stay in
business and and be in businessa year from now.
Todd Gleason (13:30):
Do you also work with them on things like
aluminum and glass and such?Yeah. So so I'd I'd you have to
forgive me because aluminum is abig deal on on the tariff side,
and it makes a huge differencefor the for for the beverage
companies, which makes a hugedifference for corn producers
because that could cut into themargin that they're willing to
(13:51):
pay for high fructose cornsyrup.
Arlan Suderman (13:54):
Yeah. It's all about margins, and they're
looking at everything incombination and what they can
afford to pay for thecommodities that they're that
they're purchasing and the foodcommodities as well as packaging
commodities. Every piece ofthat, we work with them on that
to help make sure that they canstay in business.
Todd Gleason (14:11):
Alright. So let's get back to the things at hand.
One more thing for you because Ididn't ask. How should producers
and I like this idea of managingit on the margin. I mean,
knowing what price I can't take.
How do you convince producers toknow what price they can't take
and to make a sale at a pricethat they maybe should or can
(14:38):
take?
Arlan Suderman (14:39):
Yeah. I got I got my start in this by working
individually with farmers andwhat are their cash flow needs
or other expenses. Farmers hatethat part of it. And so it's
awfully hard sometimes to getthem to pull the numbers
together and push the pencil onthat, but you have to know what
your breakeven is. And thatmeans separating out your fixed
(15:00):
costs from your variable costs.
Your fixed costs, your landcosts, you're going to pay
anyway. But your variable costsare the costs of putting in that
crop and harvesting it. And ifyou can exceed that, then you're
going to go ahead and put thecrop in. A lot of times farmers
will put the crop in anywaybecause they're eternal
optimists. They always believethat it's going to happen.
That's what gets them throughthe hard times. But you have to
(15:22):
know what those numbers are soyou can recognize, okay, this is
a value that is going to covermy variable costs and is going
to keep me in business foranother year. And then hopefully
you can cover your fixed costsas well so you can grow the
equity in your operation andhave some money left over for
the family as well to have somehave some enjoyable time at the
(15:43):
lake, hopefully.
Todd Gleason (15:44):
Numbers that they can get help out with by simply
looking possibly at theirschedule f if they fill those
out because the numbers comefrom there, or they can go to
land grants and search out thecrop budgets from the FarmDoc
team. If you do that, you'llfind it. And it's now listed
that the crop budget is for theaverage cash rent. Yes. And so
if you own land, it's a littledifferent, but the average the
(16:06):
crop budgets include thatnumber.
The land numb land charge numberis a cash rent charge in the
state, and other states do itthe same way. You, I know, when
you sat down, Naomi, are fillingout paperwork with farmers to
try to figure out these cropbudgets and what what their
numbers really are. I don't knowwhether you do that every year,
but I'm sure that you and andJim also look at those numbers
(16:28):
and try to talk your producersthrough, okay. This is we have
to have something aboutbreakeven. This is where we
can't be.
How do we manage that?
Naomi Blohm (16:37):
Yeah. Absolutely. It's one of the things that you
have to start your marketingyear with annually, of course,
as a as a producer and doublecheck-in on that a few times a
year and and just be I think thehardest thing for farmers is to
continue to try to, on a dailybasis, put your business cap
mindset on. You know, you're sodistracted with so many moving
(16:59):
parts to your farm, but at theend of the day, you are a
business. And I I just I reallyappreciate Arlen's insight with
that just to to remind producersthat, you know, you know, you
can love agriculture.
You can love Americanagriculture. You can love being
out working in the field andworking with the livestock. But
at the end of the day, you are abusiness, and and that it just
can't be ignored.
Jim McCormick (17:20):
They said it best. I mean, you really know
know to know your breakevens,you also need to you know, a lot
of people run here this time ofyear, and then they tend to walk
away from it. You gottarecalibrate. This year is a
different year. A lot of peoplehad rust for the first time.
They had to spray multipletimes, so it changed their
budget. The other thing that wealways tell clients to do is as
you're running that budget, weuse our app to essentially
(17:41):
adjust for the yield. Because ifyour yield starts moving better,
potentially, that's gonna adjustyour budget. Also, way we look
at it, Todd, is when you dosales. Because if you sell some
bushels above breakeven, eventhough the price goes lower, you
may be able to sell some bushelseven lower than what you feel
you comfortably could.
But because you sold somehigher, your breakevens are
(18:02):
still better, and you can goahead and market it. But it's
something you've gotta do yearround. No one likes to do it. No
one likes to do accounting yearround, especially when the
budgets are negative likethey've been in the last couple
of years, but it's very crucialif you wanna stay farming in the
next decade. It's about dollarsper acre
Todd Gleason (18:16):
as opposed to yield per acre.
Jim McCormick (18:19):
100%. You gotta you know, you're you've gotta
get it down to dollars per acre,and, you know, you gotta farm
for profit. Too many farmersswing for the fences. They
remember the 2012 drought wherethey made a lot of money. They
remember the move here recentlybecause of the Ukrainian war.
The goal is to be profitable.Farming is the one group I find
that they tend to always swingfor the fences. Like, Arlen was
(18:41):
talking, a lot of the peoplethey deal with, they're looking
at margins making five, ten, 15%maybe a good margin. The farmer
wants to just always try toswing for the fences. And
sometimes in the uncertain timeslike we have right now, the
China uncertainty is huge.
The yield uncertainty is huge.What looks profitable today
could be absolutely break youknow, below breakeven tomorrow
(19:02):
on one tweet. So you've gottaknow where your breakevens are
and execute when you have thatopportunity.
Todd Gleason (19:07):
So have the spreadsheet set up, update the
numbers as you develop them,yields change, pop those in.
When you add a fungicideapplication, drop that in as
well. They can put all thosenumbers in for the crop that
they already have and have andhave a hard baseline still yet
that they know in which tomarket. Going forward, for new
(19:27):
crop, they have to guess at manyof them, not all of them, and
then they have to come up withsome targets. That's where you
help them out for new cropsales.
Jim McCormick (19:36):
Well, that's where you wanna try to come in.
You wanna keep their breakevens.And then, you know, our our
viewpoint coming into this year,you wanna be very flexible.
That's where the market comesin. You can use options out of
Florida, but they'll actuallycommit you to anything.
You may wanna go ahead and dosome cash sales, which you may
say, hey. Look. I wanna reownsome grain. I'm encouraging guys
if they do cash sales that areprofitable, you wanna own
options. Because we talked aboutThe US balance sheet.
(19:58):
It is very ugly. But the fact isthe world balance sheet for the
corn is actually tightening up.It's some of the tightest it's
been in ten years. So if thereis a stumble in The US or if
there is a stumble in SouthAmerica's frantic crop, you're
gonna change that dynamic. Soyou need to be able to play it
both ways.
You need to defend yourprofitability, but you also
wanna be able to take advantageof a potential move if it would
(20:18):
show so happen.
Todd Gleason (20:20):
New crop advice.
Naomi Blohm (20:22):
Be mindful of two potential seasonal rallies that
can occur, during the year. Sothe first one I wanna remind
producers of for, like, Decembercorn, November beans for next
year, There can be a seasonaltendency for a price rally mid
January to mid February. So sobe ready to contemplate, you
know, should should you bepulling the trigger on new crop
(20:43):
sales already in just in twomonths from now. Also, the next
time, of course, would be thesummer rally, which is no longer
summer. It used to be likeMother's Day to Father's Day,
and now it's even starting to bemore like April.
So you've gotta just again, thisis where it comes down to being
aware of cost of production,being aware of of revenue, being
aware of of pulling the triggerand having the discipline,
(21:05):
having the courage to make thecash sales, and then potentially
using other hedging tools asneeded to fill in the gaps.
Arlan Suderman (21:13):
I've talked a lot about the the taking prices
that we don't want andeverything, but I do wanna also
include some of those becausewe've heard from, Naomi and Jim
about, having some flexibility.We know that Russia probably
will reduce winter wheat acresby 6% this year. So that means a
smaller crop next yearpotentially. China, 20% of their
(21:35):
winter wheat crop is not plantedyet, and we're in late November
because of adverse weatherthere. They have a year supply
of reserves, but that'ssomething that keeps them makes
them uncomfortable is eatinginto those reserves.
Those are that's potentialbusiness that could be there.
And finally, Black Sea, we'reprobably seeing the most risk
towards shipping right now thatwe've seen since the war
(21:58):
started. And so we're seeing alot of escalation of that war,
which could could being in quotemarks, start to impact shipping
and freight rates coming out ofthe Black Sea, which could be a
positive for both wheat andcorn. So those are things that
we need to keep our eyes on tothe upside.
Todd Gleason (22:16):
Last week was the first time I've heard about them
bombing, for instance, supportagain on the Black Sea. I think
this one must have been a littlefurther up the the river, but
not right on the right on thesea itself. But still, they're
getting more aggressive and inKyiv as well.
Arlan Suderman (22:33):
Exactly right. And the big port that Ukraine
hit had the oil energyinfrastructure there. Some of
their grain facilities gotdebris and shrapnel from it. The
big question is at what point dothey start going directly after
ships? Hasn't happened yet.
The odds of that are still low,but that risk is still there.
(22:54):
And if that were were to happen,then we could totally change the
dynamics of this market.
Todd Gleason (22:59):
And it it only has to be the perception that
they're going to go after thetrade
Arlan Suderman (23:02):
ships, which is what happened early on. And
insurers would not insure aship, so they would not sail
into the ports along Ukraine'sSouthern Coast and the Black
Sea. So we'll have to watchthat. What are the other things
that you're worried about,Arlen, on the global front
related to policies andgeopolitics? I think number one
(23:26):
is rare earth minerals andmagnets.
China controls 90% of them.President Trump is trying to
change that, but that takes timedepending on the mineral, one to
three years minimum. And soright now, we're seeing that
China suspended theirrestrictions to The United
States. They have not done sofor Europe. Europe is
negotiating it.
(23:46):
That is really heating up. Butthey say they suspended it, but
they're putting in a licensingprocess that still keeps it from
going to military assets and anycompany that may be tied. So a
lot of our auto and aircraftcompanies also have a military
contract. So that can curtailproduction, that curtails their
ability to make defense weapons.So we could see Trump just pull
(24:08):
the plug and say, 100% tariffsat any point once again because
it's a national security issue,and, that could cause all this
to fall apart at any point.
Let's turn
Todd Gleason (24:19):
our attention to the things that are directly
related to that, to the farmers,the 12,000,000 metric tons for
this year for soybean sales, 25,25, and 25 for the following
three years. How concerned doesthe conversation that we just
heard from from Arlen make youabout the 12,000,000 metric tons
over the following years? Well,
Jim McCormick (24:43):
the that's the start of the following years. I
personally think that was just athrow in as part of the deal. I
mean, the fact of the matter iseven this mineral deal, if they
can execute, it was only a oneyear deal. Why did you do the
one year deal for 12, but theythe you know, for the minerals,
but you waited a four year dealfor the grains? That's just
that's illogical for how Chinathinks.
(25:03):
So I I don't I'm not eventhinking they're gonna do the
25. I my fear is it'll fallapart. It'll get renegotiated.
As for the 12, they're startingto buy. I think they got, what,
12% bought so far.
It's a good sign. But to bequite honest, this could fall
apart tomorrow, and none of it'sbeen shipped. So I think you've
gotta take advantage of thiswhile you can and mitigate the
(25:25):
risk because there is a lot ofChina premium in the market, I
believe.
Todd Gleason (25:28):
Did any of you see the the small news report that
took place earlier in the weekas it's related to RINs and the
soybean oil and using it asrenewable diesel, as as well as
that which might come in fromother countries where they had
thought about doing that at 50%rent, and and now they're
(25:48):
saying, well, maybe we'll pushthat off, and it'll be a 100%
rent, which would mean thosecooking oil would continue to
come into The United States.
Jim McCormick (25:57):
The real question, Todd, is well, you're
talking about the rents. Is thatis it a real policy change, or
are they just floating a trialballoon to see what kind of
pushback they're gonna get fromthe farm group because you
they're they're talking aboutessentially not limiting the RIN
credits like they were for twoyears. The oil industry likes
(26:18):
it. The farm lobby doesn't likeit, but the farm lobby likes the
fact that they've got Chinabuying beans. And I don't like I
said, this is not this is anunnamed source reporting to a
news agency, and that is aclassic Washington.
Put up a trial balloon, see howthe market reacts, and if it
reacts negatively and the farmgroup is reacting negatively,
(26:41):
you may you may hear never hearanything else about it.
Todd Gleason (26:44):
Let's get a final word now from each of you. Naomi
Bloom at total farm marketingdot com out of West Bend,
Wisconsin. What's your finalword for the day?
Naomi Blohm (26:53):
I think my final word would be, keep things
realistic. Keep your visionrealistic on price expectations
because at this point, it wouldI feel take it just a dramatic
weather issue on the negativeside to see really dramatic
higher grain prices this winter.And I also am mindful that the
current administration is reallytrying to do what it can to keep
(27:18):
the value of food pricespotentially lower as they have
been adamant about with the beefmarket. So it makes me question
if if they would be anopportunity to have extremely
high grain prices or not. So,while I don't want to be the
naysayer, I want to keep thingsa little bit realistic to say
that it it may be a struggle tosee soybean prices in the bigger
(27:39):
picture go above 12 and wheatprices in Chicago to go above 6
or corn prices to go above 5.
We we may be in that lowertrough of production or lower
trough of prices on sufficientproduction.
Todd Gleason (27:53):
Arlen Suderman from Stonax here in Kansas City.
Your final word?
Arlan Suderman (27:57):
Watch the soybean crush numbers. They've
been impressive. NOPA, NationalOilseed Process Association
accounts for around 95% of allcrushed. And we've had two
months worth of data now for thenew marketing year. Each month,
was about 20,000,000 bushelsabove the previous year, showing
that our capacity has grown bymore than expected and USDA's
(28:18):
target is probably too low.
So when you look at that, we canoffset some lost China business.
So if China buys anywhere closeto 10,000,000 metric tons, we
should be okay. And then we'lllook to this next year's weather
and whether we have any type ofweather story in the next
growing season. Crush is goingto be strong, but we still need
(28:40):
China. We need China to comethrough.
Todd Gleason (28:43):
And Jim McCormick from agmarket.net.
Jim McCormick (28:46):
Well, we're moving into a holiday season
that tends to be a little bitquiet, but we you know, the
government was shut down, Todd.We're gonna be playing catch up
on the CFTC data. We're gonna beplaying catch up on the export
data. There could be surprisesin there. The one thing I like
to point out to clients, the mtwo money supply, it is at all
time highs.
There is people looking to placemoney certain ways. We've seen
(29:09):
in certain areas, we've seen alot of volatility in the metal
market. We've seen a lot ofvolatility in stock market. If
you get a little bit ofinflation vibe into agriculture,
I'm gonna argue corn, beans, orcorn and wheat, especially but
even beans compared to some ofthese other assets are
relatively cheap. So if you getthe right storyline, we could
get it could get reallyinteresting in 2026 if, that
(29:29):
money comes into our, grainpits.
Todd Gleason (29:31):
Commodity Week is a production of Illinois Public
Media. It's public radio for thefarming world. Our panelists
today include Naomi Bloem, JimMcCormick, and Arlen Suderman on
University of IllinoisExtension's Todd Gleason. Find
us online at willag.0rg.
This is the November 20 edition of Commodity
(00:03):
Week.
announce (00:09):
Todd Gleason services are made available to WILL by
University of IllinoisExtension.
Todd Gleason (00:14):
Oh, welcome to Commodity Week. I am Todd
Gleason. Our panelists for theday include Arlen Suderman. He
is with Stonex. Naomi Bloem ishere from Total Farm Marketing,
and we're joined by JimMcCormick at agmarket.net.
Commodity Week is a productionof Illinois. Public media, you
can find and listen to us onlineat willag.org, willag.0rg. Our
(00:35):
winter meeting season for theFarm Doc team kicks off in
December on the twelfth at theFarm Assets Conference, the Agra
Center in Bloomington. The costfor this daylong event,
including your new meal, is just$80. The Farm Doc team will be
there along with representativesfrom the corn growers, the
soybean association, agleadership in the state of
(00:55):
Illinois.
And you should double that up,by the way, with following
weeks, Illinois Farm EconomicSummits. The PharmDoc team and
myself will be on the road.We'll be in DeKalb, Peoria, and
Mount Vernon on Monday, Tuesday,and Wednesday, December. You can
sign up for all of thosemeetings at the PharmDoc daily
website. It's actually easier tofind if you just go to
(01:17):
willag.org, willag.0rg.
You'll find it right at the topof the page. Farm assets is
easy. Just hit the registrationpage. There's a little link
there that says IFES, I f e s,for Illinois Farm Economic
Summit to get yourselfregistered for that as well. I
think you should register forboth.
Probably important, your bankerwill be there. I see those all
(01:38):
come in. You probably should besitting in the room to hear the
same information they arehearing as well. Sign up today.
Now let's talk a little bitabout the marketplace.
Jim McCormick, we'll start withyou. What are the most important
things that have happened in thelast two weeks in your opinion
as it's related to the corn,soybean, sweet, or other
commodity markets?
Jim McCormick (01:59):
Well, I think the two major prod things are,
first, Todd, we did have theUSDA report, and, I'd say the
corn yield is definitelyquestionable by the farm
community. They just don't thinkthat one eighty six is there.
The other thing we definitelyhave to talk about is it does
look like China is starting toexecute on their pledge to buy
beans from The United States.Now how much are they gonna buy?
I think it's still up fromdebate.
(02:20):
We know what the White Housesaid, 12,000,000 metric tons. We
don't know what really theChinese actually agreed to
because they've yet to sayanything, but they have started
to do some buying, and I thinkthat's something we definitely
need to dive into.
Todd Gleason (02:31):
Arlen, because you're here, we'll start with
that one eighty six number. Youget blamed for it a little bit
because Stonax did come out witha number that was in that range
just before the November cropproduction report was released.
How did you come up with thenumber, and how did USDA come up
with the number relativelyspeaking? We have some ideas on
both of those, but how's you youyou came at them from two
(02:52):
different directions. USDA, ofcourse, had their October
samples.
They had their November samplesand farmer surveys. How about
you?
Arlan Suderman (03:00):
Yeah. And ours is customer surveys. And
frankly, I was I was shockedthat it was still at one eighty
six, but it is what ourcustomers have told us, and our
customers have a great trackrecord of pegging the yield. And
so I have confidence in that fornow, and we'll see where USDA
now USDA, as you said, surveyedfarmers, they sampled fields. In
(03:21):
some states, the sample numberswere lower than normal.
Other states, they were prettynormal. So it varied by state,
but it did match up with whatour customer survey was and what
they were seeing in the field.And I know there are some areas
of the Midwest where the yieldswere very disappointing this
year, but there are other areasthat nobody talked about where
the yields were just fantastic,very impressive, and broke
(03:44):
records by quite a margin. Thetwo sides balance each other
out, so to speak. So regardless,it is a big crop.
The the only argument is howbig, how much of a record is it,
and USDA will settle that inJanuary once they're able to get
their stocks numbers in there tokind of act as a correction.
Todd Gleason (04:04):
Naomi, when we talked on Tuesday, you said
we're gonna talk more about thiswhen I get to Thursday in NAFB
in Kansas City. That's wherewe're all located today at the
National Association of FarmBroadcasting Convention. The
numbers at one eighty six is abig number. It's I don't know
that you heard that exactly fromyour clientele base, and and I
(04:25):
don't know whether the farmersbelieve it or not. The question
really is, should they andshould they act as if the USDA
is correct?
Mostly over the decades, brokershave said, you know, in the end,
regardless of what you think,USDA is right because that's the
number we end up with.
Naomi Blohm (04:43):
Yeah. Good points all the way around. You know, I
I'm still of the opinion thatthe USDA will lower the yield
number in January. I don't thinkthey're gonna make it any
bigger. But the question wouldbe, do they just lower it one or
two bushels?
I don't think that they'll gobelow one eighty one probably.
So we we will wait and see. Andthat's gonna be the thing with
the markets right now is thatwhile we're waiting to see corn
(05:06):
market, corn futures mightstruggle to gain traction for
pricing opportunities. So whereI wanna bring this back to is
what the producer needs to bemindful of. So we can argue all
day long until we're boom in theface about where those yield
numbers gonna be at.
You know, again, my clientstelling me very, very different
numbers that were on the lowerspectrum of things. So that's my
(05:27):
bias why it's gonna be down. Butas a farmer, the tricky part is
balancing all of these differentfundamentals that are coming out
and ultimately knowing whenyou're going to pull the trigger
on those cash sales because youguys have corn in the bins.
You're sitting on it, and Idon't know what kind of hail
Mary you're gonna be waitingfor. But we want that kind of a
you know, some kind of a marketrally, but we have to be
(05:49):
realistic with the potentialprice points that are out there.
So now that's when we lean ontechnical charts. That's when we
lean on outside marketinformation. That's when we lean
on seasonal patterns to help usto be ready to pull the trigger
in case we get some sort of a apush higher here into the New
Year.
Todd Gleason (06:06):
So I'm gonna follow-up with you, on what
producers ought to do. So,technically, where should they
be thinking about themarketplace? And I guess,
technically, what what are yourtargets? And how should they go
about setting, orders for makingcash sales?
Naomi Blohm (06:25):
Okay. So a couple of things. When I look at our
March corn futures chart, wehave big resistance at four
fifty on the daily chart. When Ilook at the chart right now,
there is an upside down invertedhead and shoulders formation
that potentially, if we getfriendly news, would point to an
upside swing objective of about35¢. So if you add 35¢ to $4.50,
(06:48):
you're talking $4.85.
Notice I'm not saying $5 corn.Let me repeat that. Notice I'm
not saying $5 corn. Okay? Sowe're looking at March futures
potentially to $4.85.
So I think from a a friendlierstandpoint, that could be a
potential target to get somecash sales triggered for corn in
your bin. But, again, if wedon't get the friendly news, we
(07:11):
could just be stuck in asideways trading pattern where
we are in a range of $4.50,maybe down to $4.35 for a few
weeks.
Todd Gleason (07:20):
Your colleague is a good technician, Brian Split.
You sit in the same office withhim, Jim McCormick. What do you
and he been talking about asit's related to targets? And how
is JSA and agmarket.net gettingproducers set to take advantage
of those targets?
Jim McCormick (07:36):
We see the exact same chart pattern that Naomi's
talking about, so that would beyour chart chart objective. On
the fundamental side, I'm alittle bit worried, Todd. I
mean, the fact of the matter iswe the trade was trading a
1,300,000,000.0 carryout allmentally all last summer. It
ended up being a 1.5. Thismarket spot corn couldn't get
over four forty corn from July 4on, and we've been in a dead
(08:00):
sideways market literally forthe last six months.
You got a carryout hanging outat 2,100,000,000.0. A lot of
people do believe the air thatyield's gonna go lower. I'm in
that camp, but I think the feednumber's too high. That's gonna
keep that carryout, I think,right around 2,100,000,000. If
you're an end user, I fear whychase corn over four fifty?
(08:20):
They'll let it pop up here, andthen they just say, look.
There's no economic reason to doit unless we have an outside
force. China come in and arebuying or maybe a problem with
the South American crop. Sowe're actually encouraging some
guys to consider, you know,maybe don't look at the spot
month. You've got grain in thebin.
Consider selling that carry thatyou may not you may shoot for
that four eighty five corn inthe spot, but you might get it
(08:40):
in the July contract. If theopportune opportunity to lock
that in for those levels, wewould do some of it simply
because we don't know what thegovernment's gonna give us on
Friday or, excuse me, inJanuary.
Todd Gleason (08:51):
What's JSA telling you of the elevator system that
you guys, agmarket.net works soclosely with, telling you about
the size of the crop and and thekinds of things that they are
hearing as it relates to demand,domestically and in the export
market.
Jim McCormick (09:07):
Right now, the export market's been phenomenal.
We really don't know exactlywhat it is because we got the
flash sale update, but we don'tknow the day to day. And I'm not
sure why it's gonna take thegovernment a year a month and a
half, two months to give us thisdata. It's the same argument on
the c t CFTC numbers. I don'tunderstand why they can't just
give us this data in this modernage.
(09:29):
But right now, the export demandhas been very good for the corn.
We think it's gonna sustainitself. We do anticipate the
basis to improve in general incertain locations as a farmer
holds very, very tight. I thinkin general, though, the
commercial guys seem to thinkthe crop is there. I think
they're in a little bit more onthe higher end, like, one eighty
three to one eighty six zone, Ithink, is where it seems like it
is.
The crop in the West reallyseems big.
Todd Gleason (09:50):
Arlen Suderman, I wanna ask a different question
because I want you to remind meexactly and the listeners
exactly what it is that Stonexdoes. What is the primary
purpose of the company?
Arlan Suderman (10:01):
We're risk mitigators. I mean, what we do
is work with everyone fromproducers to end users to help
mitigate their risk. So ifyou're a producer, obviously
your risk is prices going downbefore you've been able before
you're able to sell. And so wewould help them put on positions
to protect that risk. If you'rean end user, your risk is that
(10:23):
prices go up.
And so we help put on thosepositions. So to us, it doesn't
matter the size of the crop, butit does matter to provide as
accurate information as we canto help our customers make those
decisions on where their riskslie. And I would just go back to
what Jim's saying is ouranalysis based on our customer
surveys who are out there isthat it's a good sized crop, but
(10:47):
he talked about the endingstocks. That's the bottom line.
The market's eventually going totrade.
And I'd say there's two factorshere. First, USDA is helping the
farmer by printing an abnormallylow ending stocks. And when we
say abnormally low2,100,000,000, they were
basically solving for that bykeeping feed stuff feed usage
(11:08):
elevated, 600,000,000 bushelincrease from year to year on
feed usage when we have feweranimals out there being fed.
That can't hold up. So USDA ishoping that the yield comes down
so they can erase some of thatfeed usage.
That's item number one. Theother is we have a China premium
in there. We don't know at whatpoint that China premium will go
(11:30):
away when the trade agreementmight fall apart because China
is already welching on the rareearth minerals part of it, and
that is the number one priorityfor the Trump administration
from a national securitystandpoint. So all of this could
fall apart at any point. So riskmanagement is essential here,
not trying to get the highestprice possible.
(11:50):
Although it's we'd all like tohave $8 for our corn, but making
sure you're not caught if thissuddenly the headlines in the
morning are that 100% tariffsare coming back on and China's
stopping purchases.
Todd Gleason (12:02):
Can I ask you a question about the end users,
particularly food companiesbecause they're working on the
margin as it's related both tothe cost of of the raw commodity
into their food item? It'sgenerally a very small cost,
which means it's on the marginfor them. How they manage that
risk because it it's just adifferent leverage point, I
(12:27):
think. I mean, you would thinkthey're looking for the lowest
price, but, really, they'relooking for a consistent price,
and that's low. It's it's just adifferent way of looking, and
and I'm sure you see that fromyour perspective.
Arlan Suderman (12:39):
Yeah. It's all about margins, and they're
looking at it from a businessperspective just as the farmer
should be looking at it from abusiness perspective. What's our
margin? And they may not likethe price, but they know what
they can't afford the price tobe. And same thing, the mar
farmer may not like the price,but he knows what he cannot
afford the price to be in orderto stay in business.
And so when you look at our endusers, they're everything from
(13:02):
feedlots to ethanol producers tothe popular restaurant you like
to go to on Friday night. Ifit's a major chain, they're
trying to mitigate what theirrisk is all the way from the
beef that they serve to the porkthey serve to even including the
cheese and the packaging, theplastics and everything. We help
(13:23):
rip help them lock in theirmargins so they can stay in
business and and be in businessa year from now.
Todd Gleason (13:30):
Do you also work with them on things like
aluminum and glass and such?Yeah. So so I'd I'd you have to
forgive me because aluminum is abig deal on on the tariff side,
and it makes a huge differencefor the for for the beverage
companies, which makes a hugedifference for corn producers
because that could cut into themargin that they're willing to
(13:51):
pay for high fructose cornsyrup.
Arlan Suderman (13:54):
Yeah. It's all about margins, and they're
looking at everything incombination and what they can
afford to pay for thecommodities that they're that
they're purchasing and the foodcommodities as well as packaging
commodities. Every piece ofthat, we work with them on that
to help make sure that they canstay in business.
Todd Gleason (14:11):
Alright. So let's get back to the things at hand.
One more thing for you because Ididn't ask. How should producers
and I like this idea of managingit on the margin. I mean,
knowing what price I can't take.
How do you convince producers toknow what price they can't take
and to make a sale at a pricethat they maybe should or can
(14:38):
take?
Arlan Suderman (14:39):
Yeah. I got I got my start in this by working
individually with farmers andwhat are their cash flow needs
or other expenses. Farmers hatethat part of it. And so it's
awfully hard sometimes to getthem to pull the numbers
together and push the pencil onthat, but you have to know what
your breakeven is. And thatmeans separating out your fixed
(15:00):
costs from your variable costs.
Your fixed costs, your landcosts, you're going to pay
anyway. But your variable costsare the costs of putting in that
crop and harvesting it. And ifyou can exceed that, then you're
going to go ahead and put thecrop in. A lot of times farmers
will put the crop in anywaybecause they're eternal
optimists. They always believethat it's going to happen.
That's what gets them throughthe hard times. But you have to
(15:22):
know what those numbers are soyou can recognize, okay, this is
a value that is going to covermy variable costs and is going
to keep me in business foranother year. And then hopefully
you can cover your fixed costsas well so you can grow the
equity in your operation andhave some money left over for
the family as well to have somehave some enjoyable time at the
(15:43):
lake, hopefully.
Todd Gleason (15:44):
Numbers that they can get help out with by simply
looking possibly at theirschedule f if they fill those
out because the numbers comefrom there, or they can go to
land grants and search out thecrop budgets from the FarmDoc
team. If you do that, you'llfind it. And it's now listed
that the crop budget is for theaverage cash rent. Yes. And so
if you own land, it's a littledifferent, but the average the
(16:06):
crop budgets include thatnumber.
The land numb land charge numberis a cash rent charge in the
state, and other states do itthe same way. You, I know, when
you sat down, Naomi, are fillingout paperwork with farmers to
try to figure out these cropbudgets and what what their
numbers really are. I don't knowwhether you do that every year,
but I'm sure that you and andJim also look at those numbers
(16:28):
and try to talk your producersthrough, okay. This is we have
to have something aboutbreakeven. This is where we
can't be.
How do we manage that?
Naomi Blohm (16:37):
Yeah. Absolutely. It's one of the things that you
have to start your marketingyear with annually, of course,
as a as a producer and doublecheck-in on that a few times a
year and and just be I think thehardest thing for farmers is to
continue to try to, on a dailybasis, put your business cap
mindset on. You know, you're sodistracted with so many moving
(16:59):
parts to your farm, but at theend of the day, you are a
business. And I I just I reallyappreciate Arlen's insight with
that just to to remind producersthat, you know, you know, you
can love agriculture.
You can love Americanagriculture. You can love being
out working in the field andworking with the livestock. But
at the end of the day, you are abusiness, and and that it just
can't be ignored.
Jim McCormick (17:20):
They said it best. I mean, you really know
know to know your breakevens,you also need to you know, a lot
of people run here this time ofyear, and then they tend to walk
away from it. You gottarecalibrate. This year is a
different year. A lot of peoplehad rust for the first time.
They had to spray multipletimes, so it changed their
budget. The other thing that wealways tell clients to do is as
you're running that budget, weuse our app to essentially
(17:41):
adjust for the yield. Because ifyour yield starts moving better,
potentially, that's gonna adjustyour budget. Also, way we look
at it, Todd, is when you dosales. Because if you sell some
bushels above breakeven, eventhough the price goes lower, you
may be able to sell some bushelseven lower than what you feel
you comfortably could.
But because you sold somehigher, your breakevens are
(18:02):
still better, and you can goahead and market it. But it's
something you've gotta do yearround. No one likes to do it. No
one likes to do accounting yearround, especially when the
budgets are negative likethey've been in the last couple
of years, but it's very crucialif you wanna stay farming in the
next decade. It's about dollarsper acre
Todd Gleason (18:16):
as opposed to yield per acre.
Jim McCormick (18:19):
100%. You gotta you know, you're you've gotta
get it down to dollars per acre,and, you know, you gotta farm
for profit. Too many farmersswing for the fences. They
remember the 2012 drought wherethey made a lot of money. They
remember the move here recentlybecause of the Ukrainian war.
The goal is to be profitable.Farming is the one group I find
that they tend to always swingfor the fences. Like, Arlen was
(18:41):
talking, a lot of the peoplethey deal with, they're looking
at margins making five, ten, 15%maybe a good margin. The farmer
wants to just always try toswing for the fences. And
sometimes in the uncertain timeslike we have right now, the
China uncertainty is huge.
The yield uncertainty is huge.What looks profitable today
could be absolutely break youknow, below breakeven tomorrow
(19:02):
on one tweet. So you've gottaknow where your breakevens are
and execute when you have thatopportunity.
Todd Gleason (19:07):
So have the spreadsheet set up, update the
numbers as you develop them,yields change, pop those in.
When you add a fungicideapplication, drop that in as
well. They can put all thosenumbers in for the crop that
they already have and have andhave a hard baseline still yet
that they know in which tomarket. Going forward, for new
(19:27):
crop, they have to guess at manyof them, not all of them, and
then they have to come up withsome targets. That's where you
help them out for new cropsales.
Jim McCormick (19:36):
Well, that's where you wanna try to come in.
You wanna keep their breakevens.And then, you know, our our
viewpoint coming into this year,you wanna be very flexible.
That's where the market comesin. You can use options out of
Florida, but they'll actuallycommit you to anything.
You may wanna go ahead and dosome cash sales, which you may
say, hey. Look. I wanna reownsome grain. I'm encouraging guys
if they do cash sales that areprofitable, you wanna own
options. Because we talked aboutThe US balance sheet.
(19:58):
It is very ugly. But the fact isthe world balance sheet for the
corn is actually tightening up.It's some of the tightest it's
been in ten years. So if thereis a stumble in The US or if
there is a stumble in SouthAmerica's frantic crop, you're
gonna change that dynamic. Soyou need to be able to play it
both ways.
You need to defend yourprofitability, but you also
wanna be able to take advantageof a potential move if it would
(20:18):
show so happen.
Todd Gleason (20:20):
New crop advice.
Naomi Blohm (20:22):
Be mindful of two potential seasonal rallies that
can occur, during the year. Sothe first one I wanna remind
producers of for, like, Decembercorn, November beans for next
year, There can be a seasonaltendency for a price rally mid
January to mid February. So sobe ready to contemplate, you
know, should should you bepulling the trigger on new crop
(20:43):
sales already in just in twomonths from now. Also, the next
time, of course, would be thesummer rally, which is no longer
summer. It used to be likeMother's Day to Father's Day,
and now it's even starting to bemore like April.
So you've gotta just again, thisis where it comes down to being
aware of cost of production,being aware of of revenue, being
aware of of pulling the triggerand having the discipline,
(21:05):
having the courage to make thecash sales, and then potentially
using other hedging tools asneeded to fill in the gaps.
Arlan Suderman (21:13):
I've talked a lot about the the taking prices
that we don't want andeverything, but I do wanna also
include some of those becausewe've heard from, Naomi and Jim
about, having some flexibility.We know that Russia probably
will reduce winter wheat acresby 6% this year. So that means a
smaller crop next yearpotentially. China, 20% of their
(21:35):
winter wheat crop is not plantedyet, and we're in late November
because of adverse weatherthere. They have a year supply
of reserves, but that'ssomething that keeps them makes
them uncomfortable is eatinginto those reserves.
Those are that's potentialbusiness that could be there.
And finally, Black Sea, we'reprobably seeing the most risk
towards shipping right now thatwe've seen since the war
(21:58):
started. And so we're seeing alot of escalation of that war,
which could could being in quotemarks, start to impact shipping
and freight rates coming out ofthe Black Sea, which could be a
positive for both wheat andcorn. So those are things that
we need to keep our eyes on tothe upside.
Todd Gleason (22:16):
Last week was the first time I've heard about them
bombing, for instance, supportagain on the Black Sea. I think
this one must have been a littlefurther up the the river, but
not right on the right on thesea itself. But still, they're
getting more aggressive and inKyiv as well.
Arlan Suderman (22:33):
Exactly right. And the big port that Ukraine
hit had the oil energyinfrastructure there. Some of
their grain facilities gotdebris and shrapnel from it. The
big question is at what point dothey start going directly after
ships? Hasn't happened yet.
The odds of that are still low,but that risk is still there.
(22:54):
And if that were were to happen,then we could totally change the
dynamics of this market.
Todd Gleason (22:59):
And it it only has to be the perception that
they're going to go after thetrade
Arlan Suderman (23:02):
ships, which is what happened early on. And
insurers would not insure aship, so they would not sail
into the ports along Ukraine'sSouthern Coast and the Black
Sea. So we'll have to watchthat. What are the other things
that you're worried about,Arlen, on the global front
related to policies andgeopolitics? I think number one
(23:26):
is rare earth minerals andmagnets.
China controls 90% of them.President Trump is trying to
change that, but that takes timedepending on the mineral, one to
three years minimum. And soright now, we're seeing that
China suspended theirrestrictions to The United
States. They have not done sofor Europe. Europe is
negotiating it.
(23:46):
That is really heating up. Butthey say they suspended it, but
they're putting in a licensingprocess that still keeps it from
going to military assets and anycompany that may be tied. So a
lot of our auto and aircraftcompanies also have a military
contract. So that can curtailproduction, that curtails their
ability to make defense weapons.So we could see Trump just pull
(24:08):
the plug and say, 100% tariffsat any point once again because
it's a national security issue,and, that could cause all this
to fall apart at any point.
Let's turn
Todd Gleason (24:19):
our attention to the things that are directly
related to that, to the farmers,the 12,000,000 metric tons for
this year for soybean sales, 25,25, and 25 for the following
three years. How concerned doesthe conversation that we just
heard from from Arlen make youabout the 12,000,000 metric tons
over the following years? Well,
Jim McCormick (24:43):
the that's the start of the following years. I
personally think that was just athrow in as part of the deal. I
mean, the fact of the matter iseven this mineral deal, if they
can execute, it was only a oneyear deal. Why did you do the
one year deal for 12, but theythe you know, for the minerals,
but you waited a four year dealfor the grains? That's just
that's illogical for how Chinathinks.
(25:03):
So I I don't I'm not eventhinking they're gonna do the
25. I my fear is it'll fallapart. It'll get renegotiated.
As for the 12, they're startingto buy. I think they got, what,
12% bought so far.
It's a good sign. But to bequite honest, this could fall
apart tomorrow, and none of it'sbeen shipped. So I think you've
gotta take advantage of thiswhile you can and mitigate the
(25:25):
risk because there is a lot ofChina premium in the market, I
believe.
Todd Gleason (25:28):
Did any of you see the the small news report that
took place earlier in the weekas it's related to RINs and the
soybean oil and using it asrenewable diesel, as as well as
that which might come in fromother countries where they had
thought about doing that at 50%rent, and and now they're
(25:48):
saying, well, maybe we'll pushthat off, and it'll be a 100%
rent, which would mean thosecooking oil would continue to
come into The United States.
Jim McCormick (25:57):
The real question, Todd, is well, you're
talking about the rents. Is thatis it a real policy change, or
are they just floating a trialballoon to see what kind of
pushback they're gonna get fromthe farm group because you
they're they're talking aboutessentially not limiting the RIN
credits like they were for twoyears. The oil industry likes
(26:18):
it. The farm lobby doesn't likeit, but the farm lobby likes the
fact that they've got Chinabuying beans. And I don't like I
said, this is not this is anunnamed source reporting to a
news agency, and that is aclassic Washington.
Put up a trial balloon, see howthe market reacts, and if it
reacts negatively and the farmgroup is reacting negatively,
(26:41):
you may you may hear never hearanything else about it.
Todd Gleason (26:44):
Let's get a final word now from each of you. Naomi
Bloom at total farm marketingdot com out of West Bend,
Wisconsin. What's your finalword for the day?
Naomi Blohm (26:53):
I think my final word would be, keep things
realistic. Keep your visionrealistic on price expectations
because at this point, it wouldI feel take it just a dramatic
weather issue on the negativeside to see really dramatic
higher grain prices this winter.And I also am mindful that the
current administration is reallytrying to do what it can to keep
(27:18):
the value of food pricespotentially lower as they have
been adamant about with the beefmarket. So it makes me question
if if they would be anopportunity to have extremely
high grain prices or not. So,while I don't want to be the
naysayer, I want to keep thingsa little bit realistic to say
that it it may be a struggle tosee soybean prices in the bigger
(27:39):
picture go above 12 and wheatprices in Chicago to go above 6
or corn prices to go above 5.
We we may be in that lowertrough of production or lower
trough of prices on sufficientproduction.
Todd Gleason (27:53):
Arlen Suderman from Stonax here in Kansas City.
Your final word?
Arlan Suderman (27:57):
Watch the soybean crush numbers. They've
been impressive. NOPA, NationalOilseed Process Association
accounts for around 95% of allcrushed. And we've had two
months worth of data now for thenew marketing year. Each month,
was about 20,000,000 bushelsabove the previous year, showing
that our capacity has grown bymore than expected and USDA's
(28:18):
target is probably too low.
So when you look at that, we canoffset some lost China business.
So if China buys anywhere closeto 10,000,000 metric tons, we
should be okay. And then we'lllook to this next year's weather
and whether we have any type ofweather story in the next
growing season. Crush is goingto be strong, but we still need
(28:40):
China. We need China to comethrough.
Todd Gleason (28:43):
And Jim McCormick from agmarket.net.
Jim McCormick (28:46):
Well, we're moving into a holiday season
that tends to be a little bitquiet, but we you know, the
government was shut down, Todd.We're gonna be playing catch up
on the CFTC data. We're gonna beplaying catch up on the export
data. There could be surprisesin there. The one thing I like
to point out to clients, the mtwo money supply, it is at all
time highs.
There is people looking to placemoney certain ways. We've seen
(29:09):
in certain areas, we've seen alot of volatility in the metal
market. We've seen a lot ofvolatility in stock market. If
you get a little bit ofinflation vibe into agriculture,
I'm gonna argue corn, beans, orcorn and wheat, especially but
even beans compared to some ofthese other assets are
relatively cheap. So if you getthe right storyline, we could
get it could get reallyinteresting in 2026 if, that
(29:29):
money comes into our, grainpits.
Todd Gleason (29:31):
Commodity Week is a production of Illinois Public
Media. It's public radio for thefarming world. Our panelists
today include Naomi Bloem, JimMcCormick, and Arlen Suderman on
University of IllinoisExtension's Todd Gleason. Find
us online at willag.0rg.
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