Market to Market - September 22, 2023

Paul Yeager:  Coming up on market to market, low water levels plague a major shipping channel again, fighting back against the use of food as a weapon. Then we're going to tell you about breaking barriers in the vet clinic. And market analysis with Chris Robinson, next.

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Announcer:  This is the Friday, September 22nd edition of Market to Market, The weekly Journal of Rural America.

Paul Yeager:  Hello. I'm Paul Yeager. It was deal and no deal this week with the economy. There is no deal with Congress keeping the US government operation deal or an agreement between the United Autoworkers and the Big Three automakers. The Fed did make a deal to keep interest rates the same, but left the door wide open to at least one more hike in 2023.

Existing home sales, which have slowed on higher inventories and lower availability, fell for the third consecutive month in August by 7/10 of a percent for the year. The market is down 21% over the same eight months in 2022. The rural Main Street index sank below growth neutral for the first time since March. The monthly survey of bank CEOs in ten states dropped on anticipated lower farm income

Much of the same region surveyed by Creighton University has been in a dry weather pattern this summer.The bill for reduced flows in to the Mississippi River is coming due and again forcing changes in how goods are shipped up and downstream. Here's David Miller.

Miller: A dry year in the Mississippi River basin has resulted in a dramatically reduced water flow along nearly the entire navigable portion of the river. 

Ricky Boyett, Chief of Public Affairs, U.S. Army Corps of Engineers: "The challenge that we have here as well as everywhere else in the country is the answer is rain and we don't see rain in the in the Mississippi valley and so we're going to continue to face these challenges, we're going to have to continue to be proactive and work with our locals and our state, our governments but until we get rain we're going to be faced with these kind of situations."

Miller: The low river levels have created a repeat of 2022 with barges and  tows parked along the river bank. The slower flow pushed barge rates sharply higher in late August and those rates have now doubled. 

Last year’s trend of barges being loaded at lower weights has returned. Transport companies have announced restrictions on the volume of freight due to shallow draft conditions in the main channel. 

Mark Wright, Southern Region Vice President, American Waterways Operators: "When it slows down and you can't have as much throughput, you can't push as much through that river system then ultimately it's going to affect the initial producer, which is the farmer, right? "

Miller: Winter snow and spring rains helped recharge the watershed - albeit temporarily. However, a dry summer has greatly reduced the  overall flow. The Mississippi River at Memphis, Tennessee set a record low last year and the current reading is near that same mark. 

Low flow rates have also been observed on the Ohio, Illinois and Missouri Rivers. The current levels hit about a month earlier than they did in 2022

What started as an issue upstream, has led to challenges downstream. Here in New Orleans, where fresh and saltwater meet, a new issue has arisen. 

Ricky Boyett, Chief of Public Affairs, U.S. Army Corps of Engineers: "Our challenge is we don't have enough force in the river and that allows salt water to move from the Gulf of Mexico upriver when unimpeded it could move as far as New Orleans and Baton Rouge."

Miller: Rain did fall in isolated areas of the Corn Belt this week, but only delayed the harvest a day or two. The level of severity in this week’s Drought Monitor increased by almost 4 points to 55.67, the highest level of severity since mid-June.

For Market to Market, I’m David Miller.

Paul Yeager: World leaders descended on the United Nations in New York City this week for the annual general debate. The high level theme this year was rebuilding trust and reigniting global solidarity. Food has been known to be a weapon between feuding countries for much of the last 18 months. The world has watched Russia invade Ukraine with grain and the farmers producing it caught in the middle. Peter Tub's reports.

Peter Tubbs: 

Criticism of Russian grain export policies grew this week. During opening debate at the 78th General Assembly of the United Nations, Ukrainian President 

Volodymyr Zelensky defended his country’s attempts at maintaining port access to the Black Sea, which allows Ukrainian grain to be exported to global markets. 

President Volodymyr Zelensky, Ukraine: “The Ukrainian ports in the Back and Azoph Seas have been blocked by Russia. And it is a clear Russia's attempt to weaponize the food shortage on the global market in exchange for recognition for some, if not all, of the captured territories. Russia is launching the food prices as weapons.” 

Tubbs: Russia did not renew the Black Sea Grain Initiative in July, and the pace of grain exports leaving the Black Sea has slowed. Concern about food insecurity in developing nations has grown as a result of Russia’s actions. Around 10 percent of the world’s population is food insecure.

(Translated from French) Catherine Colonna, French Foreign Minister:  “The challenges that should bring us together here and elsewhere, are used as geopolitical arms. The energy weapon, you know it, has been used, and now is the food weapon that Russia exploits in a completely unscrupulous blackmail.”

Secretary Janet Yellen, U.S. Treasury: “Hunger and poor nutrition undermines health and educational outcomes and well-being. Food insecurity also has economy-wide impacts, contributing to lower productivity that holds back economic growth.”

For Market to Market, I’m Peter Tubbs

Paul Yeager: Those who finish first get remembered. 

We know Ameliea Earhart, Oprah Winfrey and Danica Patrick for their entries in male-dominated industries. Add in a woman breaking the glass ceiling or in this case the barn door, it is worthy of telling her story. A warning here, the following story does discuss suicide. Here is Colleen Bradford Krantz with our Cover Story

Krantz:

An online search for: “Who was the first female veterinarian in the United States,” generates top results that are a bit misleading.

No, it wasn’t Dr. Florence Kimbell.

Nor was it Dr. Elinor McGrath.

While both of these 1910 vet school grads helped pave the way for other women in a male-dominated field, the search should have favored a woman who graduated seven years earlier: Dr. Mignon Nicholson.

Dr. Howard Erickson, Kansas State University: “If you go worldwide, there were some earlier than her, but she was the first in the U.S…. Unfortunately…nobody really knew much about Mignon Nicholson.”

Krantz: When Dr. Erickson, a professor emeritus with Kansas State University’s veterinary college, was asked once to give a speech about pioneering women in veterinary medicine, he found Mignon Nicholson’s story elusive enough that he asked a couple librarians for help. Together, they were able to pull together a rough picture of the 1903 graduate’s life.

Dr. Howard Erickson, Kansas State University: “Her childhood, as far as we know, was in Ravenswood. It’s a part of Long Island in… New York City. And all I know is she took care of the dogs and cats in the community. She read about dogs and cats, and she read about human medicine and surgery... She also married at a young age as well too, from what we know. And her first husband was a traveling salesman so she was home alone.”

Krantz: It’s unclear what brought an end to the marriage, but, by the time she was in her early 20s, she had moved to Chicago. Defying the odds – and likely surprising administrators when she applied -- Nicholson was accepted into McKillip Veterinary College in 1900.

Dr. Howard Erickson, Kansas State University: “It was one of the largest private veterinary colleges of that day. It had some 1200 graduates I think at that time. McKillip was probably one of the more progressive schools."

Krantz: The now-defunct Chicago college was co-founded in 1892 by a local horse farrier Matthew McKillip, who also had a veterinary practice. Although not owned by his descendants and now in a different location, his veterinary practice still exists today.

Besides admitting a woman, McKillip Veterinary College also had, four years earlier, admitted Thomas Madison Doram, believed to be the third African American to earn a professional veterinary degree in the U.S.

Erickson said there can be challenges in determining these “firsts” in veterinary medicine due to a failure to preserve journals and other documents from more than 40 now-defunct vet schools. In 2011, a University of Missouri veterinary school librarian’s study showed no indexed records could be found for 18 of these schools, which the author described as a loss of essential information in the history of veterinary medicine.

Although most of McKillip college’s journals have been lost to history, a handful did survive, including several at the University of Illinois-Urbana-Champaign, but they aren’t from the years when Nicholson was a student.

Erickson did find evidence in a Chicago city directory that Nicholson ran a small animal practice during her first year at McKillip, probably from her home. She added pet boarding during her second year.

Dr. Howard Erickson, Kansas State University: “The horse was the primary species that was studied at the time, although they did study dogs and cats and small animals. But it was unusual for someone to establish a small animal hospital.”

Krantz: It’s possible some of her peers and professors were less than welcoming to a woman. An American Veterinary Medical Association article reported that one of Michigan State University’s earliest female vet students, Dr. Dorothy Segal, ran into barriers three decades later. According to the article, the dean called Segal and the six other female students into his office and told them to “go back to the kitchen.”

Segal, at least, didn’t listen. And today, women account for about 80 percent of U.S. veterinarian college students.

As Nicholson neared her graduation, she was featured in a 1902 article in the Chicago Tribune, which declared: “No other woman, so far as known, has done this kind of work.”

Within six months of graduating, in September of 1903, she married a man named John Jackson, co-owner of a Chicago restaurant called Becker & Jackson. It’s unclear if she continued practicing after her marriage but later news articles would imply she was struggling with alcohol addiction. Her marriage fell apart. Finally, just three years after becoming the first female to earn a veterinarian degree in the U.S., her life came to a tragic end.

Dr. Howard Erickson, Kansas State University: “She’d gone to the café to try to patch things up again and he said, ‘It’s no use.’ They had gone back together once before and she’d gone back to drinking again and he said it’s no use. So she stood up and pulled out a resolver and shot herself, right there in the cafe.”

Krantz: Back then, Dr. Erickson points out, alcohol and mental health treatment was less advanced than today,  and her struggles should not diminish her accomplishments

Dr. Howard Erickson, Kansas State University: “I would just say that there is suicide in all professions today, and it happens in veterinary medicine too…You gotta admire her that she had enough, you know, grit to go through the curriculum at McKillip.”

Krantz: For Market to Market, I’m Colleen Bradford Krantz.

Announcer Next, the Market to Market report.

Paul Yeager:  Russian wheat exports continued flooding the market while harvest pressure and outside markets weighed in for attention for the week. The nearby wheat contract fell a quarter while the December corn contract added a penny. The soybean yields may be better than expected. While technical bots pushed the trade lower. The November contract dropped by $0.44 and the December meal contract shed 630 per ton. December cotton shrank by $0.53 per hundred weight. Over in the dairy parlor, October, class three, milk futures tumbled $0.98. The livestock market was mixed. October cattle improved $0.15. October feeders cut 533 and the October lean hog contract declined a dollar 60. In the currency markets, the US dollar index added 35 ticks. November crude oil fell a penny per barrel. Comex gold lost a dollar per ounce and the Goldman Sachs Commodity Index shed nearly ten points to settle at six 1160. Joining us now, market analyst Chris Robinson. Hi, Chris.

Chris Robinson:  Good to see you. Good to see you.

Paul Yeager:  Let's talk with wheat like we do. Demand is maybe starting to pick up, but we still have this Black Sea issue flooding the market, altering prices. How much longer can that narrative play out and impact U.S. farmers?

Chris Robinson:  I wish I knew. I mean, this is the year or if you followed fundamental if you were a fundamental trader, you would have thought on multiple times we should have had much, much higher prices. And every rally was met with more selling from Russia. So it was really something I think it would be studying this for a while because with all of the risk and all the worry every week and we went home, what's going to happen? What's going to happen? And every time we got a good dollar rally to rally, it did not hold. So at the end of the day, I think that, you know, we're trying to find a bottom around here were two year lows. But then we get into this game, it's like it's like playing mousetrap. They go back and look for what's the next level, What's the next level?

And at some point, we're probably going to have like a big reversal. But boy, anybody that's tried to buy that bottom in this past year and no, it's it's been very, very difficult. And it's been especially hard because we have had a couple of good rallies and you think, okay, we're going to be alright. And then they're just they've been so short lived. It was a really, really tough marketing year for wheat.

Paul Yeager:  So with Co-Bank saying this week that Russian wheat exports remain the biggest threat or risk to U.S. wheat elevators, what do you do if you're sitting on December wheat or March wheat is selling yet? I mean, it's hard to when you say engineer.

Chris Robinson:  Low, we're at two year lows. Right. And it's it's really hard to sell into a dollar or $2. We just dropped $2.12 in six, seven weeks ago. We were it looks like we're going to be alright. So I think it's hard to do that if you don't want to sell it, don't kid yourself. I mean, there could be another another one more downdraft. If you go back and look at 2013, which was the last year, we had kind of similar market action to this both corn and wheat. From September to December, they dropped a buck. So for somebody to say, no, it's it can't go any lower, I think that's disingenuous. I think that you've got to keep a floor. If you're going to store it, you've got to keep a floor. And I just you know, you don't want to spend too much because we're already at two year lows, but doesn't mean we can't go lower. So store it, protect it if you have to sell it. I mean, if you have to sell it, please take a look at re owning it because we are so overdue for a correction higher. And I don't think that you that's something where you sell it and then you're going to run it for next week. You re on it for three or four months.

Paul Yeager:  You could also probably say some of the same things about corn right now too.

Chris Robinson:  Absolutely. Sitting at two year lows with the commodity funds short but short corn and short wheat. So they're leaning on that market. You know, they're still long soybeans. They're actually long the whole soy complex. Although we did get some sell pressure here this week. They sold some last week. I'm sure they sold some more this week. You know, you mentioned that stat earlier. I think we're down $0.40 on the week for soybeans. And what's what's been driving that is the yields are bigger. The first stories of yields are better than people thought. A lot of people thought that the two weeks of heat was really going to clip the yield and it hasn't. And now, you know, this is a big weekend. A lot of guys are probably going to get rolling and we're going to start, you know, the rubber is going to meet the road and we're going to find out what the yields actually are.

Paul Yeager : Let's put a bow on corn for just a moment on that deferred contract. Or do you see any hesitation from people to pull the trigger on a sale or even do a re ownership that you're talking about? I mean, is there hesitation or is there a what more can I do, throw my hands up in the air?

Chris Robinson:  Well, I think it depends on what you've done in your marketing year. We had over 100 days of corn north of $6. You know, we had opportunities this year. We go back ten or 12 years ago, we would get above 433 or four times. Right. And it didn't it wasn't very long lasting. Soybeans. You know, we were well above $14 for a while. Wheat, I think, was a different story. It just was basically drifted lower with a couple of returns. So it depends on where somebody hedged. We had a lot of opportunities to hedge or sell corn around $6. So if you're unhedged and you're you're thinking, well, you know, I don't want to lose down here are these two year lows, then I think you've got to make sure that you keep some sort of a floor under it, set it and forget it. 

Is there is there carry that you can capture? We're going to get into one of these markets now where these are going to be carry. You and I were talking about this before. You've got to do the math because make sure you can capture that carry. It might make more sense to sell it and buy a T-bill where you can get 5% guaranteed rather than take the risk of not capturing the carry.

Paul Yeager:  Which could also be your play in soybeans, too. Absolutely right. So, I mean, you mentioned the capture, the carry opportunity. Technically, we've walked out, washed out 50, 102 hundred day moving averages. So technically, what does that tell you before you even look at the fundamental story?

Chris Robinson:  Well, technically, we're halfway back. We had our entire marketing year, one from 1130 to 14, 35 of those lows this summer. And when we got to 14, 35 people were talking about $15. So we're kind of back here to this 1280 1290 level. It's a very, very big report. You and I have talked about this in the last two years. We've seen so many market moves where it moves X, it comes back half of X or or it's we've seen it over and over again. That's the influence of these computer traders. It's been an amazing thing to watch. So we're at a key level. If you're thinking about selling soybeans here, the big number was $12.33. Why is that a big number? $12.33 puts you in the top one third of available prices for the whole year. If you're one of those person where you try $11.

Paul Yeager:  Let's get to livestock for a moment. Cattle on feed came out today. The headline is you the United States cattle on feed down 2%. Is the headline accurate?

Chris Robinson:  Yeah, as expected and friendly supportive. You know we've seen this for the last year and a half right. It's been the biggest bull market. Go back and look you know we've had a couple of corrections but the demand has held up. And despite all the other stories that are out there about, you know, are we going to have a recession, are we knocked out of recession? I think I think that the the consumer is going to be the person that's going to put the top end for for cattle, for cattle as people keep buying it. And as long as the herd is smaller than it needs to be, you know, these are we're at record high prices. What do you say when your record high prices?  You know.

Paul Yeager:  I'm going to go to something you said your newsletter today, but it's similar to both cattle and feeders here you were talking about when people ask you are the highs. Yes, I'm guilty of asking that question, but what does this pattern say? Is there anything different as we have hit a high and now kind of trended lower? Is there anything technically you see in that feeder chart?

Chris Robinson:  Not really. I mean, the feeder chart, I think that there's a trend line down there that we've hit a couple of times. The last time we were over there was in May. That was the last correction we've had. That's always there's always a risk that if we do have some something, change, somebody say something, some politician says something, something happens where something unexpected happens. You know, that we could have a a bigger correction lower. But technically, you know, you know, we've had so many outside days and reversal days and key reversal days. This market has just been full speed ahead. And it's been something really to watch. Sooner or later it's going to correct. But again, I think as long as the demand is there, you know, we may see these prices continue.

Paul Yeager:  I'm looking at hogs to see if there's anything different about them. Is there?

Chris Robinson: You know, the hogs had a difficult year. The first six months we just kept turning lower, lower. That was the spread. I call it the spread. This year, everybody wanted to be long cattle and they would hedge it by selling lean hogs. And it's just kind of a an economic decision to it's harder to rebuild a cattle herd just because of biology than it is to rebuild, You know, the hog herd. And, you know, we've had our fits and starts. We've had a couple of times where looks like we were about to turn the corner when the Chinese about two weeks ago decided that they were going to really hit the pedal and just print money to try and get turn their economy around. People were like, well, that money's going to come through. It's going to help pull up demand for for our lean hogs. But yeah, I think that you'll probably continue to see that spread, especially if people are want to stay long. And the interesting thing is the manage money, the funds, they're actually bet long the entire protein complex. So they're bet long with the producers.

Paul Yeager:  And we are long out of time. Chris Robinson, good to see you. Thank you so much.

Chris Robinson:  Thank you.

Paul Yeager Appreciate it. Hold tight. We're going to pause this analysis and continue our discussion about these markets in our market Plus segment, you can find both, plus an analysis on our website of market to market dot org. As you head to the field this fall, take us with you. We want to make sure that you keep up to date on commodity market analysis and news around agriculture with our three podcast offerings, two of them come out on Friday and the third the Moto M is released Tuesday. Subscribe or follow where you get your podcasts today. Next week we look at the ever moving fertilizer market. Thank you so much for watching. Have a great week.

Announcer:  Market to Market is a production of Iowa PBS, which is solely responsible for its content.

Announcer:  What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because a pioneer. Our name is our mission.

Announcer:  SUKUP manufacturing celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at SUKUP.com tomorrow.

Announcer:  For over 100 years, we've worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today.