October 9, 2025 • 34 mins
Panelists
- Shane Holtorf, LogicAg.com
- Collin Watters, ILCorn.org
- Mike Zuzolo, GlobalCommResearch.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Gleason (00:00):
This is the October 9 edition of Commodity
(00:03):
Week. Welcome to Commodity Week.I am Todd Gleason. Our panelists
for the day include ShaneHoltorf. He's at Logic Ag Market
in Alta, Iowa.
Collin Watters joins us from theIllinois Corn Growers
(00:25):
Association in Bloomington. MikeZuzlow is here from
globalcomresearch.com. He is inAtchison, Kansas. Do visit our
website where you can sign upfor the farm assets conference
today. It's a part of thePharmDoc team's winter meeting
season and it will be held nextto ICGA at the Agra Center in
(00:46):
Bloomington this year on Friday,December 12.
Colin Waters, in fact, will beon one of the panels discussing
logistics and new uses as wellfor corn. Colin, thank you for
doing that. Let's start with youtoday. I'd like to know what's
on your list of items that weshould talk about, and I'll bet
the Mississippi River is there.
Collin Watters (01:07):
Yeah. That's right, Todd. You know, I I think
the last time that we spoke, Iwas fairly optimistic with, you
know, where the, at least, thethe weather forecast was. I
guess that was probably back inFarm Progress Show. I was wrong.
And yeah, basically the droughthas really affected water levels
(01:30):
on the Mississippi. That said,recent rain kind of in the Ohio
Valley definitely helped, butwe're still, we're still under
restrictions moving southboundand northbound.
Todd Gleason (01:45):
Is there anything else on your list we should
discuss today?
Collin Watters (01:48):
I I would maybe just throw out, you know, the
government shutdown is, is gonnaimpact, you know, the publicly
available, data. So so that'ssomething that's out there as
well that's kind of adding alittle bit more uncertainty into
the situation.
Todd Gleason (02:04):
Mike Zuzlow on your list.
Mike Zuzolo (02:05):
Yeah. Two things, Todd, that really, I think, came
into focus on Thursday with theMideast peace plan is we've got
two very large geopoliticalextremes building here. One
being the Middle East peace planphase one, what it does with the
crude oil and dollar andtherefore, commodities. And then
it seems like as we get closerto the APEC meeting and and The
(02:26):
US China negotiations andbilateral meeting between the
two presidents, we're getting aframework developed here as far
as how things are looking as weget towards the end of the month
with these two the two largesteconomies of the world.
Todd Gleason (02:40):
We will take those up in just a bit. And Shane
Holtorf, what's on your mindtoday?
Shane Holtorf (02:45):
Yeah. On my mind is probably what's what's
happening out in the fields,conversations that we've had
with farmers on the the yields,maybe versus some expectations,
as well as just, you know, thestrong export demand that we've
seen on the corn side over thelast sixty days here.
Todd Gleason (03:02):
Let's start with yields in your area. I know you
are a farmer and you've been inthe field. Lots of concern in
Iowa from every place else inthe country as it's related to
southern rust. I think from Iowafarmers too. What have you been
hearing and finding?
Shane Holtorf (03:18):
Yeah, so it's been interesting. The southern
rust was definitely real, so I'mone that I apply fungicide
pretty early on my farm and itdefinitely snuck up on me this
year from the from the latterpart of the fall or latter part
of the summer that when thesouthern rust really came in it
(03:40):
took the top end off of my cropand chatting with farmers, we
cover, I'm gonna say we've abulk of our customers are in
Western Iowa, we stretch toWisconsin, Minnesota, South
Dakota. The big conversationthat we've had with guys is
yields are good, but they're notmeeting their expectations that
(04:02):
maybe that they had laid out forthem in July and August, so I'm
probably going to be right at mycrop insurance APH maybe a touch
above it on the corn side seemsto be the flavor for a lot of
guys. There's been some reallyexciting yields, you can move a
mile down the road and find areally really disappointing
(04:23):
yield. We're seeing a 120 to a150 bushels of variability on
the corn side, which is just,insane to even think about.
Todd Gleason (04:31):
Do you think that USDA in its last report, of
course, there was supposed to beone on this date that we're
recording, Thursday, October,that did not place take place.
But in September, they put thecorn yield at a 186.7. Is the
national yield higher or lowerthan that at this point?
Shane Holtorf (04:50):
You know, I'm going to lead lean towards
lower. You know, I don't I don'tknow if it will be by by much,
know, but, you know, we start toshave a bushel or two off here
or there and keep our strongexport demand and all of a
sudden things to continue to gettighter, but I just look at you
(05:11):
know the gradual feel from folksfrom the field you know the last
couple years you could feel theexcitement you know it's our
third record crop in a row youknow you'd have a ton of
conversations, and they're justnot there, this year, and I
think those were theconversations that were gonna
have to take place to reach thislofty yield expectation that we
had out there.
Todd Gleason (05:32):
And Mike Suslow from, your clientele across the
breadth of the Midwest. What areyou hearing?
Mike Zuzolo (05:38):
Yeah. I'm I'm feeling the exact same way,
Todd. I mean, it seems to methat anecdotally, at least this
at this level, especiallyEastern Corn Belt or East Of The
Mississippi River, Central AndEastern Corn Belt there, lot a
of the guys are finished up onbeans at this point, and they
came in very, very good. And andI know there are some fifties,
and then there's some really badtalk down South Of I US 50 down
(06:02):
by Alney and on farther south.And and but it you know, there
there are patches of really badbeans, but it seems like it's a
lot easier to find conversationswhere that great big corn crop
is just not there like wasthought forty five days ago.
And so it seems to me thatthat's kind of where we're
headed, and maybe the trade willpick up on that. We'll have to
be watching the spreads, andwe'll have to be watching the
(06:24):
cash basis now that we've gonedark. Even the export sales on
Thursday were not released nowthis week. So, we're going to be
a dearth of information to beable to, you know, see where
we're headed as far as bothdemand and supply.
Todd Gleason (06:37):
Cullen Waters, does the Illinois Corn Growers
Association get updatedinformation as it it's related
to what, yields across thecountry might be? And more
importantly, I might ask it thisway. While farmers are not
looking forward to theexceptional crop they thought
they had in late July, earlyAugust, is it really that much
(07:00):
smaller than what USDA gave usin September?
Collin Watters (07:04):
Yeah. That's a million dollar question. I think
that at least most of theinformation that I have is very
anecdotal. And even when USDAcame out with those really big
numbers, I think there was a lotof skepticism you know that it
was even possible. And this isyou know coming on the heels of
(07:26):
some big crops.
I think you know definitely theyou know the July, August, the
discrepancy between the two interms of the weather. I mean
August was just it really tookthe top end out of this crop I
think. But I think most of thefolks that I've talked to didn't
(07:50):
necessarily believe it to beginwith. I don't know if their
expectations are now tempered alittle bit. But but I would say,
you know, on the on the soybeanside, I I have heard some fairly
positive news.
You know, guys who were justweren't expecting it to to to
have much of a crop at all.They, you know, it it made it
(08:11):
through. So but it it it'sincredibly variable, you know,
like in in Southern Illinois, itwas really kind of catastrophic.
Central Illinois seems to bedoing okay, but I don't I
wouldn't I wouldn't bet onanother record right now.
Todd Gleason (08:28):
Shane, what did you have for soybean harvest and
how is it going out in yourarea?
Shane Holtorf (08:32):
Yeah. So the soybean harvest, you know, it's
kind of interesting where I'mat. Callan County is is is where
I farm, so if you start in theNorthwest corner of the state
count four counties down, fourcounties over, is where I sit
and we've never been exceptionalsoybean farmers here, so if you
could catch the low 60s fromyear to year, you know that was
(08:56):
really good and this year inCalhoun County soybeans were mid
to upper 60s, even some low 70s,but if you go west to Buena
Vista where my office sits atAlta, now those guys are known
for growing 75 to 80 bushelbeans year in year out and
(09:18):
they're also in the mid 60s andso it kind of leveled the
playing field so to speak insome of these Northwest Iowa
counties instead of the you knowthe big big producers. They kind
of fell down to where everyoneelse was at. So it's it's kind
of interesting with that dataand you know what's interesting
(09:39):
we we also sell crop insuranceso you start to get some of
these reports come in and whatI've kind of found is you know,
the big yields were talked aboutreally early on and when we
wrapped up soybean harvest, wewere harvesting 8% beans and so,
you know, you lose some yieldthere as well.
Todd Gleason (09:56):
It'll be interesting to see how all that
plays out. Have the NorthDakota, South Dakota soybeans
not moving out the PNW had muchof an impact on your local basis
for soybean?
Shane Holtorf (10:09):
Yeah. That's a good question. So we we've got a
new crush plant, soybean crushplant right now to and they had
talked very heavily aboutrailing some beans in in
September. Don't think it evergot done. They got very, very
aggressive, at the start of beanharvest on basis, so we were
looking at a 40 under, and thenit shut off to a 70 under, even
(10:33):
75 under there for a little bit,and now I see they've snapped it
back to a 50 under.
And so very quickly, basis gotwide. Now I think they're
starting to realize that maybeit's not out there, and they've
they've starting to pull it backin.
Todd Gleason (10:47):
Mike, are you hearing the same thing about
basis across the Western part ofthe nation?
Mike Zuzolo (10:52):
Yeah. I am. And in fact, one of the things that I
reason I brought up Alney was Inoticed that Alney went from
about 33 under in soybeans to 20under just today and now 15 over
on the corn. And so I think itreally goes with what Colin
talking about with thevariability. We're still stuck
at 75 under on soybeans.
(11:12):
I think we're certainly feelingthe heat, so to speak, from the
Northern Plains. Some havetalked about today on the end of
the week here, Todd, that thePacific Northwest was bouncing a
little bit. Not seeing it in theDakotas yet. One of the key
areas I look at North Dakota isstill at 155 under, still being
talked about that they're goingto have a hard time finding a
(11:35):
place to sell soybeans. I wouldsay based upon last weekend's
drive, I've never seen intwelve, thirteen, fourteen years
being out here in NortheastKansas going across the border
into Northwestern Missouri,never seen the amount of bags
being used and how much is beingset aside on the edge of fields
this fall.
(11:55):
So while I think our yields areon the top end here in this part
of Kansas, and I think you don'thave to go very far to see some
weaker yields, but certainlyfeeling the pinch of of the
issues with what's going on withthe Chinese demand.
Todd Gleason (12:12):
Why why do you think that Olney's bids are
closing up at this point. Idon't know. Are they close
enough to the Ohio River thatthat's what's happening, or is
it something else in the area?
Mike Zuzolo (12:26):
I think it goes back to maybe what Colin was
talking about where thecommercial's prepared for a big,
big crop. And now that they'rein the crop, the producers down
there never really believed itwas happening. And you don't
have to go too far south ofOlney. I've seen text messages
of producers saying that they'rebaling their soybeans instead of
cutting them. They're using themfor essentially straw.
(12:48):
And the same would be for thecorn. That August heat,
overnight heat, really took ahit on terms of not just what we
were hearing from our gentlemenin Iowa about the low 8%
soybeans, but also the kerneldepth on the corn. So I think
the reality of the cash basis isstarting to set in versus what
(13:08):
USDA is suggesting. I I'm gonnahave a hard time staying above
$1.84 on corn. I think I canstay above 53 on beans at this
point, but it's gonna be hardfor me to stay above one eighty
four nationally on corn fromwhat I'm hearing and seeing.
Todd Gleason (13:22):
Tell me about the Mississippi River, Colin, as you
see it and, its flow at themoment, what constriction that
has on the marketplace.
Collin Watters (13:31):
Yeah. So the, current, restrictions, I I
believe that below or atMemphis, the restriction is 11
feet. So it's, you know, it'snot nearly as bad as it has
been, you know, it's I guess,was that in '22 when, you know,
it was a a nine footrestriction. But it's still, you
(13:55):
know, it definitely itdefinitely doesn't help. Right?
Any anytime that you restrictthe size of the toes or the, you
know, number of barges in thetoe, you you basically just
increase the cost of that thatproduct to the to to export. So
(14:16):
so, you know, I I guess the thethe short version is that it's
it's not as bad as it as itcould have been, but I guess I
am I'm not gonna go out on alimb this time and and make any
weather predictions because, youknow, it's it's looking like it
could still be dry here for thenext few weeks, and this is
gonna be potentially moreproblematic.
Todd Gleason (14:39):
Shane, you wanted to talk about the export market,
I think, as it was related tocorn as opposed to soybeans. But
if you could address what yourconcerns or your look forward to
great things to happen might be.
Shane Holtorf (14:54):
We've seen very, very strong export demand in the
last sixty days on the cornside, you know, beans have, you
know they've been less thanoppressive. Think everyone's
just waiting on on China andthat's the number one focus that
was you know alluded to earlierin the conversation is sitting
on the heels of these tradetalks with China, but you know
(15:16):
one thing that I like to talkabout with folks is global
demand is still global demand,and while it feels good to have
China buy our beans, they'remisplacing buyers in South
America that are going to cometo us and if you take a look you
know we're just for roundfigures call it $15 a ton
cheaper than South America andon corn and 40 on beans you know
(15:42):
we're the essentially the lowcost producer in the world right
now and so I think that the corndemand is very very good right
now and I look for it to stayvery good and I think that
beans, you know, there's areason that we're the lowest
price, and that's because we'vegot to spur a little bit of
demand here, and I think we'regonna do it at these prices.
(16:03):
And if we can get a trade dealput together, all the better.
Todd Gleason (16:07):
Mike Isuzlow, if you would talk about the APEC
framework that you have beenwatching develop, how do you
think that will impact themarketplace? And you can discuss
corn along the way too.
Mike Zuzolo (16:20):
Yeah. I mean, broad brushing it and and following up
with what Shane talked about, II think I'm most concerned with
the idea that we probably in thetrade the futures trade have not
gotten it through our minds yet,Todd, that we probably are not
gonna get anything with Chinaanytime soon. And this week, it
seemed as though, unfortunately,that was the directional mindset
(16:45):
that we saw both from The USside and the Chinese side. We US
put on fresh sanctions forChinese firms buying Iranian
oil. China turned around andsaid, okay.
We're gonna go ahead and make amove and restrict even more the
rare earth mineral exports. Andafter that happened, president
(17:05):
Trump had a cabinet meeting onThursday afternoon. The
secretary of agriculture madeheadlines saying that we were
going to go ahead and getsomething out to producers
because of their losses and thehurt they're feeling right now,
but it won't be until after thegovernment opens back up again.
So that kind of answered thatquestion to the market as far as
what we were waiting for, andwe're gonna have to wait until
(17:28):
the government opens up.President Trump, I think, made a
bigger piece of news, though,when he said he wants to discuss
soybeans with President Xi, butmaybe we'll have to stop
importing massive amounts fromChina to get his attention,
essentially.
So we're going the wrongdirection, and I wish that we
would turn our attention moretowards the domestic side, the
(17:49):
biofuel side, and really workharder on insulating ourselves
from China. Because to whatShane was talking about earlier,
I agree with him 100%. We're alot cheaper than Brazil right
now in beans, but we are seeinga barter system set up between
China and Brazil. We're seeingrecord numbers of EV cars from
China being sent into Brazil andessentially paying for the
(18:12):
soybeans without having to payin US dollars. And I think
that's the issue, not just now,but heading into 2026.
And because we're dark from thegovernment shutdown, it makes to
me the November 25 deliveryprocess at the end of this month
extremely important in thateither the cash market's too
(18:34):
cheap because the yields are lowand what we've been talking
about here on the program, orthe futures market's too
expensive and needs to come downbecause it hasn't reconciled
itself with the lost demand yet.And, yeah, we're only down,
what, 17% versus last year inoverall soybean exports. But we
also have a bigger crop beinggrown right now starting in
(18:56):
Brazil. So I'm watching 25 beansfor the idea. Maybe I should get
some more hedges on in '26 as weget closer to $11 if we can pop
that number again.
Todd Gleason (19:07):
Cullen Mudders, that tees you up for the
government shutdown you wantedto talk about. I don't know
whether it was on those issuesthat Mike addressed, but you can
tell me what you're thinking.
Collin Watters (19:17):
Yeah. Well, I mean, it's already been
mentioned. You know, we've,we've missed out on some export
sale reporting. The was supposedto be out today. You know, that
kind of lack of information isnot is is not very helpful.
I guess that's probably thenicest way to put it. And and
(19:40):
that and I I'm optimistic, Iguess, that they'll be able to
broker a deal and get throughthe politics of the shutdown
here soon and and kinda get usget everything back on track.
You know, in in terms of thepotential government payments
that would be going out, youknow, I I definitely understand
there's a lot of folks that arein a world of hurt right now,
and anything would be would behelpful. But, you know, I I
(20:05):
think that what what Mike hadmentioned is is really, really
important. You know, long term,need strong demand if we're
going to improve prices.
Will keep growing more and morecorn, beans, whatever, and we
need stronger markets, whetherit's export or domestic, it
(20:26):
really doesn't matter. So, youknow, I I think that there could
be some, you know, light at theend of the tunnel on on
biofuels. I I don't know if, youknow, the political climate is
is right for for them to workout a deal for, you know, higher
blends of ethanol, you know, inthe in the real near term, but,
(20:49):
you know, I I think that thatthat probably is is maybe more
beneficial to the on the soybeanside of the ledger. But, yeah,
you know, having havinggovernment kinda out to lunch
indefinitely, it it reallydoesn't help anybody.
Todd Gleason (21:08):
Iowa senator Chuck Grassley calling this week
talked about when congress comesback after a settlement is made,
and they have to attack, howfunding of any kind of payments
to producers might need to be,funneled into USDA because
there's not enough money at CCCat the moment to pull that off.
(21:32):
Also including e 15, which iswhat you just mentioned as it's
related to higher blends, youdon't think that's really in the
works that e 15 can be bundledin with those as a way to help
producers out across theMidwest?
Collin Watters (21:46):
Oh, I I I think that anything is possible. I
just don't I just don't know howlikely how likely that is right
now. You know, there's it youknow, obviously, when you're
talking about the fuel market,it's there's there's a lot of
interested parties that havenothing to do with with farm
country. Right? So, yeah, I Ithink that it's it's certainly
(22:10):
within the realm of possibility.
I just I I just don't know thatI'd bet on it right now.
Todd Gleason (22:15):
Shane Holtorf, I wanna come back to you as you
were talking about soybeans.Corn too. You were talking about
being, the least cost, produceron the planet, actually about
the least cost availability onthe planet. However, it appears
that China is now certainly notgoing to buy for the 2025
(22:40):
calendar year. They'll turntheir attention, of course, to
Brazil in 2026.
Do you suppose they can manageto get through to next fall
easily enough without purchasingUS soybeans?
Shane Holtorf (22:54):
Yeah. I certainly think that they've gotten their
self set up, to do so. You know,they were well prepared in this
game. I'll give them that. Youknow, essentially, they're going
to have to skate for anotherthree months to be able to do
so.
But, you know, sitting here,reading a lot of different
analysts opinion and certainlythere's a lot of folks that
(23:17):
would agree with you and I'm oneof them Todd that I don't think
they're going to come to thetable on their own even if we
are the lowest cost producer. Ithink it's a matter of you know
a political point at this pointin time and so unless we strike
a deal you know and putsomething together. I think
(23:40):
they're gonna go without us forthe time being.
Todd Gleason (23:42):
Mike Zuzalo, I wanna come back to you on these
trade issues. I was thinkingabout this just today and
looking up to see where we wereas it related to either
frameworks or deals or what thetariffs might be on different
countries. Of course, they'reall countries across the planet
have a have an incoming tarifffrom The United States. Not many
(24:03):
have imposed much in return onThe United States as it relates
to our exports to them. However,Mexico is still needing to be
taken care of.
The Canadian prime minister wasin this week. Those two places
are large export destinationsfor agricultural products. Do
(24:27):
you have concerns about eitherof them?
Mike Zuzolo (24:29):
I they're paramount. I mean, let's just be
blunt. They they have to bethere for us next year, and I I
hope that we understand that inthe policy making arena. I think
we do. And and I'll reiteratewhat we talked about several
months ago, Todd.
I I get it and understand whypresident Trump made this move.
You know, his trade policy,economic policy, and foreign
(24:51):
policy are all one and the same,and he is bringing other
countries to the table to getsomething done foreign policy
wise through economic trademeans. And he's also sincere,
and his trade people are sincereabout bringing manufacturing
back to The United States. Andso this has to be underscored
(25:11):
because that's not going to goaway. And as Shane was talking
about, China was very wellprepared for this.
You know, I've been doing aspecial report about the gold
market and Bitcoin and thesemetals markets against the
weakening dollar and found outthat now for eleven months in a
row, China has added to theirgold reserves. Their central
(25:34):
bank has bought gold for elevenmonths in a row, and their US
treasury holdings as of lateJuly are down 41% from the 2015.
He came into power in 2012, andhe essentially started the Belt
and Road project. And that'swhat we're seeing right now
unfold. So to get to youranswers, we have to hold on to
(25:54):
Latin, South America.
I just saw across the wires onThursday afternoon, the
$20,000,000,000 bond bailout toArgentina got approved by the
treasury secretary. That's adirect relation to holding on to
Argentina and not losing them toChina like we essentially have
lost Brazil. And I'm not sayingwe lost them. I'm just saying
those countries made thosedecisions to move with China
(26:17):
instead of move with us. So thethe Mexico Canada issue is
paramount.
I feel good about Canada. Ithink there's some headway made.
I was actually thinking maybewe'd see something on the
ethanol and biofuels by the endof this week because of the good
meeting that I had heard theyhad. Mexico biggest thing to
watch, I think, with Mexico istheir drought ending and whether
(26:38):
that is gonna decrease naturallytheir need for our corn because
that's been a big part of whythey've been buying these past
three years.
Todd Gleason (26:44):
Then that wouldn't happen, of course, until next
year sometime for the increaseof corn if that was or decrease
in corn, I mean, if that was thecase.
Mike Zuzolo (26:54):
Yeah. I would guess because of their planting
schedule, it probably wouldn'thappen until around June at the
earliest of next year. And andgoing back to, you know, Brazil
and and China in your earlierquestion, I do think China's
going to buy probably after thefirst of the calendar year of
2026, but I also saw that one oftheir largest pig producers,
(27:15):
Muwan, came in and said, we'regonna slaughter 12 to 14 and a
half million piglets instead ofeight to 12,000,000. The Dalian
hog futures was down 6% on thatnews and hit a new forty three
month low. So we still havedeflation and calling going on
in China too, and that's areality.
Todd Gleason (27:33):
Colin Waters, when folks are just talking at the
corn growers headquarters therein Bloomington or if you're
talking to NCGA in Saint Louis,what conversations are most
often happening as it relates topolicies?
Collin Watters (27:48):
Well, right now, obviously, trade is kind of top
of mind for everybody. Thewe're, you know, talking about
Canada and Mexico. The USMCAreview is coming up next year.
So, you know, we're puttingtogether comments to submit to
the federal register. And, youknow, obviously, the you know,
(28:13):
some of the some of the otherkind of top line stuff is is
really biofuels driven.
You know, we're we we've reallypeaked in 2019 in terms of
ethanol demand in The US. And,you know, as as cars just, you
know, become more efficient andso forth, we're gonna probably
(28:33):
see this kind of steady erosion.It's not a you know, I don't I
don't expect some kind of cliff,but, that that market's not
growing, And and, you know,production is. Right? So we're
we're we're out of balance.
And, that's, I guess, ultimatelywhat, you know, what what we're
focused on is how can we helpdrive demand.
Todd Gleason (28:55):
President Trump this week mentioned that the
USMCA negotiations would betaking place next year. Do you
suppose that means that he'skicking the can down the road
for both Canada and Mexico?
Collin Watters (29:08):
No. I mean, that's all part of the original
deal is there's a a review setin, in in the language
originally. So, you know,there's a few different ways it
could go. You know, in theory,it could it it could get blown
up and everybody just walksaway. I don't I don't really
(29:30):
think that that's a realisticpossibility.
I I suspect that we'll we'll seesome, you know, some some
changes kind of on the margins.There there's you know, for for
for ag, it's absolutelycritical. You know? There there
is no there's no other way tosay it. Mexico is by far the
largest importer of US corn, andCanada is by far the largest
(29:54):
importer of US ethanol.
For the, you know, the cornsector, it's our our neighbors
are absolutely critical. Butthere's a lot of other sectors
in the economy that don'tnecessarily see it that way.
Right? So, you know, autos andand, you know, the dairy issues
with Canada, it that's it's apretty long list of of folks
(30:16):
that are, you know, interestedin this deal. So I suspect we're
gonna hear a lot about, thedifferent problems, but we're
also gonna hear a lot about the,the positives of the of the
agreement.
And, you know, realistically,our our supply chains are so so
integrated, you know, justacross the board, you know,
regardless of of the the sectorof the economy. It's I think
(30:39):
it's gonna be really difficultfor for us to, you know, walk
away from from the deal. So I Isuspect, you know, minor changes
and a renewal for, you know,some period of time next year.
Todd Gleason (30:53):
Shane Holtorf, when we have talked to you, last
month, I think, you discussedthat producers were rolling
forward their old crop into intothe new crop, what they had
left, and maintaining it forcorn particularly. Are they also
not making sales at this pointon a continuing basis?
Shane Holtorf (31:18):
Yeah. So we did see a lot of bins get cleaned
out the last second, and Ithink, you know, if you look
past the last couple years, youget to late August, early
September, and basis gets verydesperate. You know we didn't
have that this year, you knowthere was a lot of end users
(31:38):
that were carrying forward alittle bit of production, but by
and large we saw the farmerseventually fold in and deliver a
good chunk of their productionat you know the absolute worst
time that they could have, butnow we're seeing you know every
place that they can put corn,every place that they can put
(32:00):
beans is getting full. They'regonna utilize the storage again
to what we've talked a littlebit about here is they probably
didn't believe the crop was outthere from the start, so they've
made plans on how to carry thiscrop and wait out a little bit
of a yield change. You know onthe corn side probably more so
(32:20):
than the beans, but you knowonce they shut those doors
they're certainly not going toopen them until you know they
feel that either the basisnecessitates that move or
futures does the work and so Ithink we're going to see a
little bit of that back andforth now just because they've
cleared their bins of the oldcrop and they were ready to hang
(32:43):
tight here for a while.
Todd Gleason (32:45):
Finally, Mike Suzlow, before I let everybody
go for the day, I want to checkone of the things that you, had
put on your list. It was thecrude oil and the dollar. What
were those relationships to thecommodity markets you're
thinking about?
Mike Zuzolo (33:00):
Yeah. So far since this phase one Mideast peace
plan's been announced, Todd,we've seen a new two month high
in the US dollar. It's aboutthree and a half percent off its
lows from last month, and we'vealso seen a new move back into
close to the five month low inthe crude oil market. And what I
think is still occurring,unfortunately, is wheat is
(33:22):
trapped by the US dollar and thecrude oil price action like
that. And that's increasinglytrapping the corn market.
And what I mean by that is overthe medium term, with the wheat
corn spread now firmly below adollar, Asian buyers, and this
is coming from Japan, Asianbuyers have just gotten
comfortable with really rampingup buying corn because it was so
(33:42):
cheap. Now we're going to get toa point if we get too much lower
in the wheat market because ofthe crude and the dollar, we may
have to face a situation whereAsia goes back to feeding wheat
instead of corn. Another one ofthose things we can't have
happen essentially in this kindof a market environment. So we
really need to be monitoringthat wheat market and the crude
and the and the dollar. And itjust goes back to the similar
(34:05):
analysis that to me, it seemslike wheat really does hold many
of the cards to an ultimate lowin this overall grain market.
Todd Gleason (34:12):
Commodity Week of course is a production of
Illinois Public Media. It'spublic radio for the farming
world. You may find and listento the whole of the program
anytime you'd like. You can dothat at willag.org, willag.0rg,
where you can sign up for theDecember 12 Farm Assets
Conference and the Illinois FarmEconomic Summit soon enough as
(34:33):
well. Check all the details outonline at willag.org or at
farmdocdaily.illinois.edur.
Thanks go to our panelists todayincluding Shane Holtorf, Colin
Waters, and Mike Suslow. I'mUniversity of Illinois
Extinction's Todd Gleeson.
This is the October 9 edition of Commodity
(00:03):
Week. Welcome to Commodity Week.I am Todd Gleason. Our panelists
for the day include ShaneHoltorf. He's at Logic Ag Market
in Alta, Iowa.
Collin Watters joins us from theIllinois Corn Growers
(00:25):
Association in Bloomington. MikeZuzlow is here from
globalcomresearch.com. He is inAtchison, Kansas. Do visit our
website where you can sign upfor the farm assets conference
today. It's a part of thePharmDoc team's winter meeting
season and it will be held nextto ICGA at the Agra Center in
(00:46):
Bloomington this year on Friday,December 12.
Colin Waters, in fact, will beon one of the panels discussing
logistics and new uses as wellfor corn. Colin, thank you for
doing that. Let's start with youtoday. I'd like to know what's
on your list of items that weshould talk about, and I'll bet
the Mississippi River is there.
Collin Watters (01:07):
Yeah. That's right, Todd. You know, I I think
the last time that we spoke, Iwas fairly optimistic with, you
know, where the, at least, thethe weather forecast was. I
guess that was probably back inFarm Progress Show. I was wrong.
And yeah, basically the droughthas really affected water levels
(01:30):
on the Mississippi. That said,recent rain kind of in the Ohio
Valley definitely helped, butwe're still, we're still under
restrictions moving southboundand northbound.
Todd Gleason (01:45):
Is there anything else on your list we should
discuss today?
Collin Watters (01:48):
I I would maybe just throw out, you know, the
government shutdown is, is gonnaimpact, you know, the publicly
available, data. So so that'ssomething that's out there as
well that's kind of adding alittle bit more uncertainty into
the situation.
Todd Gleason (02:04):
Mike Zuzlow on your list.
Mike Zuzolo (02:05):
Yeah. Two things, Todd, that really, I think, came
into focus on Thursday with theMideast peace plan is we've got
two very large geopoliticalextremes building here. One
being the Middle East peace planphase one, what it does with the
crude oil and dollar andtherefore, commodities. And then
it seems like as we get closerto the APEC meeting and and The
(02:26):
US China negotiations andbilateral meeting between the
two presidents, we're getting aframework developed here as far
as how things are looking as weget towards the end of the month
with these two the two largesteconomies of the world.
Todd Gleason (02:40):
We will take those up in just a bit. And Shane
Holtorf, what's on your mindtoday?
Shane Holtorf (02:45):
Yeah. On my mind is probably what's what's
happening out in the fields,conversations that we've had
with farmers on the the yields,maybe versus some expectations,
as well as just, you know, thestrong export demand that we've
seen on the corn side over thelast sixty days here.
Todd Gleason (03:02):
Let's start with yields in your area. I know you
are a farmer and you've been inthe field. Lots of concern in
Iowa from every place else inthe country as it's related to
southern rust. I think from Iowafarmers too. What have you been
hearing and finding?
Shane Holtorf (03:18):
Yeah, so it's been interesting. The southern
rust was definitely real, so I'mone that I apply fungicide
pretty early on my farm and itdefinitely snuck up on me this
year from the from the latterpart of the fall or latter part
of the summer that when thesouthern rust really came in it
(03:40):
took the top end off of my cropand chatting with farmers, we
cover, I'm gonna say we've abulk of our customers are in
Western Iowa, we stretch toWisconsin, Minnesota, South
Dakota. The big conversationthat we've had with guys is
yields are good, but they're notmeeting their expectations that
(04:02):
maybe that they had laid out forthem in July and August, so I'm
probably going to be right at mycrop insurance APH maybe a touch
above it on the corn side seemsto be the flavor for a lot of
guys. There's been some reallyexciting yields, you can move a
mile down the road and find areally really disappointing
(04:23):
yield. We're seeing a 120 to a150 bushels of variability on
the corn side, which is just,insane to even think about.
Todd Gleason (04:31):
Do you think that USDA in its last report, of
course, there was supposed to beone on this date that we're
recording, Thursday, October,that did not place take place.
But in September, they put thecorn yield at a 186.7. Is the
national yield higher or lowerthan that at this point?
Shane Holtorf (04:50):
You know, I'm going to lead lean towards
lower. You know, I don't I don'tknow if it will be by by much,
know, but, you know, we start toshave a bushel or two off here
or there and keep our strongexport demand and all of a
sudden things to continue to gettighter, but I just look at you
(05:11):
know the gradual feel from folksfrom the field you know the last
couple years you could feel theexcitement you know it's our
third record crop in a row youknow you'd have a ton of
conversations, and they're justnot there, this year, and I
think those were theconversations that were gonna
have to take place to reach thislofty yield expectation that we
had out there.
Todd Gleason (05:32):
And Mike Suslow from, your clientele across the
breadth of the Midwest. What areyou hearing?
Mike Zuzolo (05:38):
Yeah. I'm I'm feeling the exact same way,
Todd. I mean, it seems to methat anecdotally, at least this
at this level, especiallyEastern Corn Belt or East Of The
Mississippi River, Central AndEastern Corn Belt there, lot a
of the guys are finished up onbeans at this point, and they
came in very, very good. And andI know there are some fifties,
and then there's some really badtalk down South Of I US 50 down
(06:02):
by Alney and on farther south.And and but it you know, there
there are patches of really badbeans, but it seems like it's a
lot easier to find conversationswhere that great big corn crop
is just not there like wasthought forty five days ago.
And so it seems to me thatthat's kind of where we're
headed, and maybe the trade willpick up on that. We'll have to
be watching the spreads, andwe'll have to be watching the
(06:24):
cash basis now that we've gonedark. Even the export sales on
Thursday were not released nowthis week. So, we're going to be
a dearth of information to beable to, you know, see where
we're headed as far as bothdemand and supply.
Todd Gleason (06:37):
Cullen Waters, does the Illinois Corn Growers
Association get updatedinformation as it it's related
to what, yields across thecountry might be? And more
importantly, I might ask it thisway. While farmers are not
looking forward to theexceptional crop they thought
they had in late July, earlyAugust, is it really that much
(07:00):
smaller than what USDA gave usin September?
Collin Watters (07:04):
Yeah. That's a million dollar question. I think
that at least most of theinformation that I have is very
anecdotal. And even when USDAcame out with those really big
numbers, I think there was a lotof skepticism you know that it
was even possible. And this isyou know coming on the heels of
(07:26):
some big crops.
I think you know definitely theyou know the July, August, the
discrepancy between the two interms of the weather. I mean
August was just it really tookthe top end out of this crop I
think. But I think most of thefolks that I've talked to didn't
(07:50):
necessarily believe it to beginwith. I don't know if their
expectations are now tempered alittle bit. But but I would say,
you know, on the on the soybeanside, I I have heard some fairly
positive news.
You know, guys who were justweren't expecting it to to to
have much of a crop at all.They, you know, it it made it
(08:11):
through. So but it it it'sincredibly variable, you know,
like in in Southern Illinois, itwas really kind of catastrophic.
Central Illinois seems to bedoing okay, but I don't I
wouldn't I wouldn't bet onanother record right now.
Todd Gleason (08:28):
Shane, what did you have for soybean harvest and
how is it going out in yourarea?
Shane Holtorf (08:32):
Yeah. So the soybean harvest, you know, it's
kind of interesting where I'mat. Callan County is is is where
I farm, so if you start in theNorthwest corner of the state
count four counties down, fourcounties over, is where I sit
and we've never been exceptionalsoybean farmers here, so if you
could catch the low 60s fromyear to year, you know that was
(08:56):
really good and this year inCalhoun County soybeans were mid
to upper 60s, even some low 70s,but if you go west to Buena
Vista where my office sits atAlta, now those guys are known
for growing 75 to 80 bushelbeans year in year out and
(09:18):
they're also in the mid 60s andso it kind of leveled the
playing field so to speak insome of these Northwest Iowa
counties instead of the you knowthe big big producers. They kind
of fell down to where everyoneelse was at. So it's it's kind
of interesting with that dataand you know what's interesting
(09:39):
we we also sell crop insuranceso you start to get some of
these reports come in and whatI've kind of found is you know,
the big yields were talked aboutreally early on and when we
wrapped up soybean harvest, wewere harvesting 8% beans and so,
you know, you lose some yieldthere as well.
Todd Gleason (09:56):
It'll be interesting to see how all that
plays out. Have the NorthDakota, South Dakota soybeans
not moving out the PNW had muchof an impact on your local basis
for soybean?
Shane Holtorf (10:09):
Yeah. That's a good question. So we we've got a
new crush plant, soybean crushplant right now to and they had
talked very heavily aboutrailing some beans in in
September. Don't think it evergot done. They got very, very
aggressive, at the start of beanharvest on basis, so we were
looking at a 40 under, and thenit shut off to a 70 under, even
(10:33):
75 under there for a little bit,and now I see they've snapped it
back to a 50 under.
And so very quickly, basis gotwide. Now I think they're
starting to realize that maybeit's not out there, and they've
they've starting to pull it backin.
Todd Gleason (10:47):
Mike, are you hearing the same thing about
basis across the Western part ofthe nation?
Mike Zuzolo (10:52):
Yeah. I am. And in fact, one of the things that I
reason I brought up Alney was Inoticed that Alney went from
about 33 under in soybeans to 20under just today and now 15 over
on the corn. And so I think itreally goes with what Colin
talking about with thevariability. We're still stuck
at 75 under on soybeans.
(11:12):
I think we're certainly feelingthe heat, so to speak, from the
Northern Plains. Some havetalked about today on the end of
the week here, Todd, that thePacific Northwest was bouncing a
little bit. Not seeing it in theDakotas yet. One of the key
areas I look at North Dakota isstill at 155 under, still being
talked about that they're goingto have a hard time finding a
(11:35):
place to sell soybeans. I wouldsay based upon last weekend's
drive, I've never seen intwelve, thirteen, fourteen years
being out here in NortheastKansas going across the border
into Northwestern Missouri,never seen the amount of bags
being used and how much is beingset aside on the edge of fields
this fall.
(11:55):
So while I think our yields areon the top end here in this part
of Kansas, and I think you don'thave to go very far to see some
weaker yields, but certainlyfeeling the pinch of of the
issues with what's going on withthe Chinese demand.
Todd Gleason (12:12):
Why why do you think that Olney's bids are
closing up at this point. Idon't know. Are they close
enough to the Ohio River thatthat's what's happening, or is
it something else in the area?
Mike Zuzolo (12:26):
I think it goes back to maybe what Colin was
talking about where thecommercial's prepared for a big,
big crop. And now that they'rein the crop, the producers down
there never really believed itwas happening. And you don't
have to go too far south ofOlney. I've seen text messages
of producers saying that they'rebaling their soybeans instead of
cutting them. They're using themfor essentially straw.
(12:48):
And the same would be for thecorn. That August heat,
overnight heat, really took ahit on terms of not just what we
were hearing from our gentlemenin Iowa about the low 8%
soybeans, but also the kerneldepth on the corn. So I think
the reality of the cash basis isstarting to set in versus what
(13:08):
USDA is suggesting. I I'm gonnahave a hard time staying above
$1.84 on corn. I think I canstay above 53 on beans at this
point, but it's gonna be hardfor me to stay above one eighty
four nationally on corn fromwhat I'm hearing and seeing.
Todd Gleason (13:22):
Tell me about the Mississippi River, Colin, as you
see it and, its flow at themoment, what constriction that
has on the marketplace.
Collin Watters (13:31):
Yeah. So the, current, restrictions, I I
believe that below or atMemphis, the restriction is 11
feet. So it's, you know, it'snot nearly as bad as it has
been, you know, it's I guess,was that in '22 when, you know,
it was a a nine footrestriction. But it's still, you
(13:55):
know, it definitely itdefinitely doesn't help. Right?
Any anytime that you restrictthe size of the toes or the, you
know, number of barges in thetoe, you you basically just
increase the cost of that thatproduct to the to to export. So
(14:16):
so, you know, I I guess the thethe short version is that it's
it's not as bad as it as itcould have been, but I guess I
am I'm not gonna go out on alimb this time and and make any
weather predictions because, youknow, it's it's looking like it
could still be dry here for thenext few weeks, and this is
gonna be potentially moreproblematic.
Todd Gleason (14:39):
Shane, you wanted to talk about the export market,
I think, as it was related tocorn as opposed to soybeans. But
if you could address what yourconcerns or your look forward to
great things to happen might be.
Shane Holtorf (14:54):
We've seen very, very strong export demand in the
last sixty days on the cornside, you know, beans have, you
know they've been less thanoppressive. Think everyone's
just waiting on on China andthat's the number one focus that
was you know alluded to earlierin the conversation is sitting
on the heels of these tradetalks with China, but you know
(15:16):
one thing that I like to talkabout with folks is global
demand is still global demand,and while it feels good to have
China buy our beans, they'remisplacing buyers in South
America that are going to cometo us and if you take a look you
know we're just for roundfigures call it $15 a ton
cheaper than South America andon corn and 40 on beans you know
(15:42):
we're the essentially the lowcost producer in the world right
now and so I think that the corndemand is very very good right
now and I look for it to stayvery good and I think that
beans, you know, there's areason that we're the lowest
price, and that's because we'vegot to spur a little bit of
demand here, and I think we'regonna do it at these prices.
(16:03):
And if we can get a trade dealput together, all the better.
Todd Gleason (16:07):
Mike Isuzlow, if you would talk about the APEC
framework that you have beenwatching develop, how do you
think that will impact themarketplace? And you can discuss
corn along the way too.
Mike Zuzolo (16:20):
Yeah. I mean, broad brushing it and and following up
with what Shane talked about, II think I'm most concerned with
the idea that we probably in thetrade the futures trade have not
gotten it through our minds yet,Todd, that we probably are not
gonna get anything with Chinaanytime soon. And this week, it
seemed as though, unfortunately,that was the directional mindset
(16:45):
that we saw both from The USside and the Chinese side. We US
put on fresh sanctions forChinese firms buying Iranian
oil. China turned around andsaid, okay.
We're gonna go ahead and make amove and restrict even more the
rare earth mineral exports. Andafter that happened, president
(17:05):
Trump had a cabinet meeting onThursday afternoon. The
secretary of agriculture madeheadlines saying that we were
going to go ahead and getsomething out to producers
because of their losses and thehurt they're feeling right now,
but it won't be until after thegovernment opens back up again.
So that kind of answered thatquestion to the market as far as
what we were waiting for, andwe're gonna have to wait until
(17:28):
the government opens up.President Trump, I think, made a
bigger piece of news, though,when he said he wants to discuss
soybeans with President Xi, butmaybe we'll have to stop
importing massive amounts fromChina to get his attention,
essentially.
So we're going the wrongdirection, and I wish that we
would turn our attention moretowards the domestic side, the
(17:49):
biofuel side, and really workharder on insulating ourselves
from China. Because to whatShane was talking about earlier,
I agree with him 100%. We're alot cheaper than Brazil right
now in beans, but we are seeinga barter system set up between
China and Brazil. We're seeingrecord numbers of EV cars from
China being sent into Brazil andessentially paying for the
(18:12):
soybeans without having to payin US dollars. And I think
that's the issue, not just now,but heading into 2026.
And because we're dark from thegovernment shutdown, it makes to
me the November 25 deliveryprocess at the end of this month
extremely important in thateither the cash market's too
(18:34):
cheap because the yields are lowand what we've been talking
about here on the program, orthe futures market's too
expensive and needs to come downbecause it hasn't reconciled
itself with the lost demand yet.And, yeah, we're only down,
what, 17% versus last year inoverall soybean exports. But we
also have a bigger crop beinggrown right now starting in
(18:56):
Brazil. So I'm watching 25 beansfor the idea. Maybe I should get
some more hedges on in '26 as weget closer to $11 if we can pop
that number again.
Todd Gleason (19:07):
Cullen Mudders, that tees you up for the
government shutdown you wantedto talk about. I don't know
whether it was on those issuesthat Mike addressed, but you can
tell me what you're thinking.
Collin Watters (19:17):
Yeah. Well, I mean, it's already been
mentioned. You know, we've,we've missed out on some export
sale reporting. The was supposedto be out today. You know, that
kind of lack of information isnot is is not very helpful.
I guess that's probably thenicest way to put it. And and
(19:40):
that and I I'm optimistic, Iguess, that they'll be able to
broker a deal and get throughthe politics of the shutdown
here soon and and kinda get usget everything back on track.
You know, in in terms of thepotential government payments
that would be going out, youknow, I I definitely understand
there's a lot of folks that arein a world of hurt right now,
and anything would be would behelpful. But, you know, I I
(20:05):
think that what what Mike hadmentioned is is really, really
important. You know, long term,need strong demand if we're
going to improve prices.
Will keep growing more and morecorn, beans, whatever, and we
need stronger markets, whetherit's export or domestic, it
(20:26):
really doesn't matter. So, youknow, I I think that there could
be some, you know, light at theend of the tunnel on on
biofuels. I I don't know if, youknow, the political climate is
is right for for them to workout a deal for, you know, higher
blends of ethanol, you know, inthe in the real near term, but,
(20:49):
you know, I I think that thatthat probably is is maybe more
beneficial to the on the soybeanside of the ledger. But, yeah,
you know, having havinggovernment kinda out to lunch
indefinitely, it it reallydoesn't help anybody.
Todd Gleason (21:08):
Iowa senator Chuck Grassley calling this week
talked about when congress comesback after a settlement is made,
and they have to attack, howfunding of any kind of payments
to producers might need to be,funneled into USDA because
there's not enough money at CCCat the moment to pull that off.
(21:32):
Also including e 15, which iswhat you just mentioned as it's
related to higher blends, youdon't think that's really in the
works that e 15 can be bundledin with those as a way to help
producers out across theMidwest?
Collin Watters (21:46):
Oh, I I I think that anything is possible. I
just don't I just don't know howlikely how likely that is right
now. You know, there's it youknow, obviously, when you're
talking about the fuel market,it's there's there's a lot of
interested parties that havenothing to do with with farm
country. Right? So, yeah, I Ithink that it's it's certainly
(22:10):
within the realm of possibility.
I just I I just don't know thatI'd bet on it right now.
Todd Gleason (22:15):
Shane Holtorf, I wanna come back to you as you
were talking about soybeans.Corn too. You were talking about
being, the least cost, produceron the planet, actually about
the least cost availability onthe planet. However, it appears
that China is now certainly notgoing to buy for the 2025
(22:40):
calendar year. They'll turntheir attention, of course, to
Brazil in 2026.
Do you suppose they can manageto get through to next fall
easily enough without purchasingUS soybeans?
Shane Holtorf (22:54):
Yeah. I certainly think that they've gotten their
self set up, to do so. You know,they were well prepared in this
game. I'll give them that. Youknow, essentially, they're going
to have to skate for anotherthree months to be able to do
so.
But, you know, sitting here,reading a lot of different
analysts opinion and certainlythere's a lot of folks that
(23:17):
would agree with you and I'm oneof them Todd that I don't think
they're going to come to thetable on their own even if we
are the lowest cost producer. Ithink it's a matter of you know
a political point at this pointin time and so unless we strike
a deal you know and putsomething together. I think
(23:40):
they're gonna go without us forthe time being.
Todd Gleason (23:42):
Mike Zuzalo, I wanna come back to you on these
trade issues. I was thinkingabout this just today and
looking up to see where we wereas it related to either
frameworks or deals or what thetariffs might be on different
countries. Of course, they'reall countries across the planet
have a have an incoming tarifffrom The United States. Not many
(24:03):
have imposed much in return onThe United States as it relates
to our exports to them. However,Mexico is still needing to be
taken care of.
The Canadian prime minister wasin this week. Those two places
are large export destinationsfor agricultural products. Do
(24:27):
you have concerns about eitherof them?
Mike Zuzolo (24:29):
I they're paramount. I mean, let's just be
blunt. They they have to bethere for us next year, and I I
hope that we understand that inthe policy making arena. I think
we do. And and I'll reiteratewhat we talked about several
months ago, Todd.
I I get it and understand whypresident Trump made this move.
You know, his trade policy,economic policy, and foreign
(24:51):
policy are all one and the same,and he is bringing other
countries to the table to getsomething done foreign policy
wise through economic trademeans. And he's also sincere,
and his trade people are sincereabout bringing manufacturing
back to The United States. Andso this has to be underscored
(25:11):
because that's not going to goaway. And as Shane was talking
about, China was very wellprepared for this.
You know, I've been doing aspecial report about the gold
market and Bitcoin and thesemetals markets against the
weakening dollar and found outthat now for eleven months in a
row, China has added to theirgold reserves. Their central
(25:34):
bank has bought gold for elevenmonths in a row, and their US
treasury holdings as of lateJuly are down 41% from the 2015.
He came into power in 2012, andhe essentially started the Belt
and Road project. And that'swhat we're seeing right now
unfold. So to get to youranswers, we have to hold on to
(25:54):
Latin, South America.
I just saw across the wires onThursday afternoon, the
$20,000,000,000 bond bailout toArgentina got approved by the
treasury secretary. That's adirect relation to holding on to
Argentina and not losing them toChina like we essentially have
lost Brazil. And I'm not sayingwe lost them. I'm just saying
those countries made thosedecisions to move with China
(26:17):
instead of move with us. So thethe Mexico Canada issue is
paramount.
I feel good about Canada. Ithink there's some headway made.
I was actually thinking maybewe'd see something on the
ethanol and biofuels by the endof this week because of the good
meeting that I had heard theyhad. Mexico biggest thing to
watch, I think, with Mexico istheir drought ending and whether
(26:38):
that is gonna decrease naturallytheir need for our corn because
that's been a big part of whythey've been buying these past
three years.
Todd Gleason (26:44):
Then that wouldn't happen, of course, until next
year sometime for the increaseof corn if that was or decrease
in corn, I mean, if that was thecase.
Mike Zuzolo (26:54):
Yeah. I would guess because of their planting
schedule, it probably wouldn'thappen until around June at the
earliest of next year. And andgoing back to, you know, Brazil
and and China in your earlierquestion, I do think China's
going to buy probably after thefirst of the calendar year of
2026, but I also saw that one oftheir largest pig producers,
(27:15):
Muwan, came in and said, we'regonna slaughter 12 to 14 and a
half million piglets instead ofeight to 12,000,000. The Dalian
hog futures was down 6% on thatnews and hit a new forty three
month low. So we still havedeflation and calling going on
in China too, and that's areality.
Todd Gleason (27:33):
Colin Waters, when folks are just talking at the
corn growers headquarters therein Bloomington or if you're
talking to NCGA in Saint Louis,what conversations are most
often happening as it relates topolicies?
Collin Watters (27:48):
Well, right now, obviously, trade is kind of top
of mind for everybody. Thewe're, you know, talking about
Canada and Mexico. The USMCAreview is coming up next year.
So, you know, we're puttingtogether comments to submit to
the federal register. And, youknow, obviously, the you know,
(28:13):
some of the some of the otherkind of top line stuff is is
really biofuels driven.
You know, we're we we've reallypeaked in 2019 in terms of
ethanol demand in The US. And,you know, as as cars just, you
know, become more efficient andso forth, we're gonna probably
(28:33):
see this kind of steady erosion.It's not a you know, I don't I
don't expect some kind of cliff,but, that that market's not
growing, And and, you know,production is. Right? So we're
we're we're out of balance.
And, that's, I guess, ultimatelywhat, you know, what what we're
focused on is how can we helpdrive demand.
Todd Gleason (28:55):
President Trump this week mentioned that the
USMCA negotiations would betaking place next year. Do you
suppose that means that he'skicking the can down the road
for both Canada and Mexico?
Collin Watters (29:08):
No. I mean, that's all part of the original
deal is there's a a review setin, in in the language
originally. So, you know,there's a few different ways it
could go. You know, in theory,it could it it could get blown
up and everybody just walksaway. I don't I don't really
(29:30):
think that that's a realisticpossibility.
I I suspect that we'll we'll seesome, you know, some some
changes kind of on the margins.There there's you know, for for
for ag, it's absolutelycritical. You know? There there
is no there's no other way tosay it. Mexico is by far the
largest importer of US corn, andCanada is by far the largest
(29:54):
importer of US ethanol.
For the, you know, the cornsector, it's our our neighbors
are absolutely critical. Butthere's a lot of other sectors
in the economy that don'tnecessarily see it that way.
Right? So, you know, autos andand, you know, the dairy issues
with Canada, it that's it's apretty long list of of folks
(30:16):
that are, you know, interestedin this deal. So I suspect we're
gonna hear a lot about, thedifferent problems, but we're
also gonna hear a lot about the,the positives of the of the
agreement.
And, you know, realistically,our our supply chains are so so
integrated, you know, justacross the board, you know,
regardless of of the the sectorof the economy. It's I think
(30:39):
it's gonna be really difficultfor for us to, you know, walk
away from from the deal. So I Isuspect, you know, minor changes
and a renewal for, you know,some period of time next year.
Todd Gleason (30:53):
Shane Holtorf, when we have talked to you, last
month, I think, you discussedthat producers were rolling
forward their old crop into intothe new crop, what they had
left, and maintaining it forcorn particularly. Are they also
not making sales at this pointon a continuing basis?
Shane Holtorf (31:18):
Yeah. So we did see a lot of bins get cleaned
out the last second, and Ithink, you know, if you look
past the last couple years, youget to late August, early
September, and basis gets verydesperate. You know we didn't
have that this year, you knowthere was a lot of end users
(31:38):
that were carrying forward alittle bit of production, but by
and large we saw the farmerseventually fold in and deliver a
good chunk of their productionat you know the absolute worst
time that they could have, butnow we're seeing you know every
place that they can put corn,every place that they can put
(32:00):
beans is getting full. They'regonna utilize the storage again
to what we've talked a littlebit about here is they probably
didn't believe the crop was outthere from the start, so they've
made plans on how to carry thiscrop and wait out a little bit
of a yield change. You know onthe corn side probably more so
(32:20):
than the beans, but you knowonce they shut those doors
they're certainly not going toopen them until you know they
feel that either the basisnecessitates that move or
futures does the work and so Ithink we're going to see a
little bit of that back andforth now just because they've
cleared their bins of the oldcrop and they were ready to hang
(32:43):
tight here for a while.
Todd Gleason (32:45):
Finally, Mike Suzlow, before I let everybody
go for the day, I want to checkone of the things that you, had
put on your list. It was thecrude oil and the dollar. What
were those relationships to thecommodity markets you're
thinking about?
Mike Zuzolo (33:00):
Yeah. So far since this phase one Mideast peace
plan's been announced, Todd,we've seen a new two month high
in the US dollar. It's aboutthree and a half percent off its
lows from last month, and we'vealso seen a new move back into
close to the five month low inthe crude oil market. And what I
think is still occurring,unfortunately, is wheat is
(33:22):
trapped by the US dollar and thecrude oil price action like
that. And that's increasinglytrapping the corn market.
And what I mean by that is overthe medium term, with the wheat
corn spread now firmly below adollar, Asian buyers, and this
is coming from Japan, Asianbuyers have just gotten
comfortable with really rampingup buying corn because it was so
(33:42):
cheap. Now we're going to get toa point if we get too much lower
in the wheat market because ofthe crude and the dollar, we may
have to face a situation whereAsia goes back to feeding wheat
instead of corn. Another one ofthose things we can't have
happen essentially in this kindof a market environment. So we
really need to be monitoringthat wheat market and the crude
and the and the dollar. And itjust goes back to the similar
(34:05):
analysis that to me, it seemslike wheat really does hold many
of the cards to an ultimate lowin this overall grain market.
Todd Gleason (34:12):
Commodity Week of course is a production of
Illinois Public Media. It'spublic radio for the farming
world. You may find and listento the whole of the program
anytime you'd like. You can dothat at willag.org, willag.0rg,
where you can sign up for theDecember 12 Farm Assets
Conference and the Illinois FarmEconomic Summit soon enough as
(34:33):
well. Check all the details outonline at willag.org or at
farmdocdaily.illinois.edur.
Thanks go to our panelists todayincluding Shane Holtorf, Colin
Waters, and Mike Suslow. I'mUniversity of Illinois
Extinction's Todd Gleeson.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.