Market to Market - June 21, 2024

Coming up on Market to Market - the weather window provides a mixed bag across the Grain Belt. Wildfires erupt in the Southwest claiming lives and property. Tama Jim Wilson - from immigrant farm boy to longest-serving cabinet member. And commodity market analysis with Kristi Van Ahn Kjeseth, next.

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 at Pioneer, our name is our mission.

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Family owned and operated for more than 60 years, Sukup Manufacturing is a full-service provider of grain handling, storage and drying equipment, helping farmers feed and fuel the world.

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For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at 877-559-7887.

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

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This is the Friday, June 21 edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

Like most things with the economy - there is nuance in the numbers. Take this week’s round of reports for example.

Retail sales were up 0.1 percent - a gain, but also an indication the American shopper is slowing purchases with high prices on groceries and other necessities.

The median price for existing home sales was up last month but the overall mark was off 0.7 percent.

Farmland prices fell again in ten states surveyed by Creighton University. The Rural Mainstreet index added a 10th month below growth neutral with a reading of 41.7 mostly on weaker commodity prices and shrinking farm equipment sales.

The weather outlook has been favorable for those who love high temperatures.

The city of Caribou, Maine, just 10 miles from the Canadian border, saw a record 103 degrees on the heat index, which combines heat and humidity and was hotter than Miami Beach.

David Miller has our weather report.

The country experienced a mixed bag of weather conditions this week as a heat wave rolled over portions of the Northeast and Southwest while parts of the South were underwater.

A blistering heat wave stretched from the Midwest to the East coast hitting more than 135 million people. Heat warnings were issued as dangerous temperatures with heat indexes above 100 degrees precipitated cancellations of outdoor activities.

The National Weather Service predicts the heat wave will peak by the weekend.

Alberto, the first named tropical storm of the season, became a tropical depression and moved inland over Mexico. Cities and towns along the Gulf coast of the U.S. experienced flooding.

Drought is quickly making a return to the continental U.S. as 12 points have been added to the category of some form of drought in the last two weeks. Tropical rains washed away the entrenched moderate to severe drought that had covered southern Florida while abnormally dry conditions in the northeast persisted. 

In the south, the drought expanded near the Mississippi River as well as parts of western Arkansas and portions of the “I” states. Heavy rain that fell in the panhandles of Texas and Oklahoma continued northeast to the Upper Peninsula of Michigan.

The West remains dry but New Mexico is drier than normal increasing the risk of wildfires.

The Climate Prediction Center's 6-10 day outlook favors a continuation of above normal temperatures for the vast majority of the country.

For Market to Market, I’m David Miller. Needed water

California’s wildfire pace is well above last year as well as the 5-year average.

So far, the number of acres burned has topped 100,000 this year but, for the last half decade, that annual amount has been just above 17,000.

The current hot spot is just to the south where more than 97 percent of the state is in some form of drought.

Peter Tubbs has the story.

While heavy rain on Wednesday provided some assistance to firefighters battling wildfires in New Mexico, the fires remain mostly uncontained.

Laura McCarthy, New Mexico State Forester: "This fire is dangerous and fast moving. The winds are strong. They're not quite at the red flag level, but they are close. And the fire behavior that we saw yesterday and that is picking up now this afternoon is extreme fire behavior."

Over 23,000 acres have burned in southeast New Mexico, There have been two confirmed deaths, and over 1400 structures have been destroyed.

Evacuation orders have been placed over multiple towns and villages, as well as a portion of the Mescalero Apache Reservation.

Calaveras County in Northern California is also battling wildfires with aircraft. Over eight square miles have been burned since the fire began on Monday.

California has seen 90,000 acres burn during the current fire season.

For Market to Market, I’m Peter Tubbs

Three cabinet secretaries have served more than 12 years in their positions.

If Tom Vilsack completes his term at USDA in 2025, he’ll still be just short of a dozen years in that role.

They all trail one man who worked for three different presidents and served four terms.

Colleen Bradford Krantz introduces us to an immigrant and Iowa farm boy who holds a record in government that may stand for a long time.

Her feature is our Cover Story.

The easy-to-miss sign along a central Iowa gravel road just west of the town of Traer runs a bit light on details, declaring only: “‘Tama Jim’ Wilson Home Site and Farm.”

But most in this area of Tama County already know the details. It’s the rest of the nation that may have forgotten the immigrant farm boy whose arrival in the Midwest in the mid-1800s took him down a path of public service ending with the federal government’s top food production job: U.S. Secretary of Agriculture.

Leo Landis, State Historical Society: “I think most…today have no idea who Tama Jim Wilson is, and yet he was the longest serving Secretary of Agriculture in United States history. Our current secretary, Tom Vilsack, has a long way to go to catch Tama Jim.”

“Tama Jim” – whose real name was James Wilson – held that position for 16 years -- the longest of any cabinet position.

Leo Landis, State Historical Society: “Tama Jim Wilson was a transformative Secretary of Agriculture, a transformative Iowan.”

The nickname “Tama Jim” was a term of endearment associated with his home county earned after being elected to the U.S. House of Representatives.

George Kadrmas, board member, Traer Historical Museum, Traer, Iowa: “When he was elected, there were two James Wilsons from Iowa that were elected to the U.S. House of Representatives. So, they nicknamed him Tama Jim and other Jim Wilson was Jefferson Jim from Jefferson County, Iowa.”

His family emigrated from Scotland in 1851, the year James, the oldest of 14 children, turned 16. The Wilsons lived in Connecticut for a few years before moving to Iowa in 1855 to buy farmland.

George Kadrmas, board member, Traer Historical Museum, Traer, Iowa: “It was before the town of Traer was formed…They came to an area which is west of Traer and was settled by a group of Scottish families…He did attend school but had limited opportunity for education…He did go to Grinnell College for a short period of time. And he was, as I understand it, he did a lot of reading and self-study.”

In the early 1860s, Wilson acquired his own farm, became editor of the local newspaper in Traer, and married Esther Wilbur. He held several local government offices, joining the group that established the Republican party in Iowa. By 1867, he had been elected to the Iowa General Assembly, eventually serving as Speaker of the House.

Leo Landis, State Historical Society: “So when he’s in the Iowa House in the 1860s, he’s a founder and leader of that party. And the thing to understand, it’s part of those reform movements…. the suffrage issues, anti-slavery issues, which is what the Republic Party is: to…not allow slavery in the territories.”

In 1873, Tama Jim was elected to the U.S. House of Representatives, where he served two successive terms before returning to his Iowa farm. Wilson returned to Washington for a final term that ran from 1883 to 1885.

Leo Landis, State Historical Society: “He’s a critic of the state agricultural college in Ames and the way it’s teaching its student about agriculture.”

It was that criticism and his desire to improve farming that led to his appointment in 1891 as head of what was then the Iowa Agricultural College’s experiment station. He was also a professor of agriculture at the campus that became Iowa State University.

George Kadrmas, board member, Traer Historical Museum, Traer, Iowa: “There was a strong movement to educate farmers and help them improve their farming practices and productivity.”

Only a year after moving to Ames for the appointment, however, tragedy struck at home. His wife, Esther, then 56, was found dead in a nearby creek.

George Kadrmas, board member, Traer Historical Museum, Traer, Iowa: “It’s not real clear if it was all mental health, but there was a mental aspect to it, and her death was ruled a suicide. It was very tragic at the time.”

Tama Jim Wilson also taught George Washington Carver, whose later fame later as a botanist and horticulturalist would match Wilson’s own. The two kept in touch over the years. In one letter, preserved among Wilson’s personal papers at Iowa State University, Tama Jim wrote:

Letter from June 1897, Wilson to Carver: “You have a magnificent field opened up to you, and it will be your privilege to prepare others to go out and teach, not only among the colored, but you will find the whites ready listeners, and just as soon as the country becomes filled with colored teachers the color line will vanish away so thoroughly that people will wonder what was the matter with the folks of the 19th century, who established color lines rather than lines of merit, worth, and intelligence.”

In 1897, Tama Jim was appointed as the 4th Secretary of Agriculture at the request of President William McKinley. Wilson was with McKinley the day McKinley was shot in 1901. The wound lead to McKinley’s death eight days later.

Wilson subsequently served under President Theodore Roosevelt and President William Howard Taft.

George Kadrmas, board member, Traer Historical Museum, Traer, Iowa: “He was instrumental in looking at the breadth of what agriculture did and contributed to the country. The fact that we were developing trade with foreign countries, the growth of experimentation, improving farm practices, the Food and Drug Administration, and things like quarantines on livestock diseases…He was looking at all things that agriculture was involved in other than just at the farm gate.”

Leo Landis, State Historical Society: “James Wilson… really does modernize and makes the USDA a relevant cabinet-level department.”

Tama Jim left Washington D.C in 1913 at age 78 and returned to Traer, where he died in 1920.

Through his final years, he continued working with farmers and ranchers, the people he described once in a speech as a class that “works in the sunlight through long days, keeps level heads when others are excited, and reinforces all other classes when they wear out."

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

Next, the Market to Market report.

A major break in wheat comes as the U.S. harvest hits its stride and weather keeps moving other grains. For the week, the nearby wheat contract fell 51 cents and the July corn contract dropped 15 cents. The old standby of “rain makes grain” has pressured the soy complex as well. The July soybean contract lost 19 cents while July meal declined $6.60 per ton. July cotton shrank by $2.03 per hundredweight. Over in the dairy parlor, July Class Three milk futures weakened 86 cents. The livestock market was lower. August cattle fell 3 cents. August feeders cut $3.60. And the August lean hog contract dropped $1.12. In the currency markets, the US dollar index increased 26 ticks. August crude oil expanded $2.42 per barrel. COMEX gold lost $17.40 per ounce. And the Goldman Sachs Commodity Index was up 2.5 points, to settle at 580.75.

Yeager: Joining us now is regular Market Analyst Kristi Van Ahn-Kjeseth. Hello, Kristi.

Van Ahn-Kjeseth: Hi.

Yeager: I wish I could keep that smile.

Van Ahn-Kjeseth: I know.

Yeager: A lot of red on the board this week.

Van Ahn-Kjeseth: It has not been a good -- it hasn't been a couple of weeks that we've seen some positive action in it. But the nice thing is I think that you're getting to some support levels, should be at some support levels I should say for corn and soybeans.

Yeager: Let's start with the wheat for a minute though because almost 8.5% drop on the week. Harvest pressure is one. But you keep hearing conflicting stories out of Russia that yes, we've replanted, no we haven't, there's drought, there's -- what's the story?

Van Ahn-Kjeseth: Yeah, so the wheat is tricky because Minneapolis wheat made new contract lows, but when you're looking at Chicago and Kansas City wheat not so much. And so, there's still that gap in there. There's no technical indicators that look like this market is going to turn around. And the problem is you have that old logic of that you need to feed a bull and we haven't been able to get any of those stories. So, we initially knew that there were less than ideal situations in Russia and Ukraine, but we haven't had any confirmation on that. So, even if they're having continued problems, you're not just hearing about it and it's not getting there and it's not making a difference. So, I think right now wheat is just really struggling to find its foot. I think you said it right, harvest pressure. And then honestly there's still a ways to go for Chicago and Kansas City wheat before they hit some of those technical targets and that is problematic to me. I'm hoping that eventually you're going to see this bottom in here. But right now on the chart there's nothing to really grasp onto right now.

Yeager: When you look at the chart, and we'll show you the deferred here in a moment, we're almost back to the levels that we were a month ago. So, I guess, prior to 16 days ago, was that a gift? An aberration? What was that bump?

Van Ahn-Kjeseth: Yeah, we used it as a gift. So, we went really heavy on marketing, to be honest. So, we were behind on marketing. You have to go back all the way to last fall where producers just didn't know what to expect for their spring wheat and weren't really happy with some yields, got into the field and their yields were huge. And so, we had to kind of come back and fight back and when we got to those levels, we took it as a gift. But honestly this wheat market is going to be a roller coaster. And if you look at these deferred contracts or even the chance of some weather and talking about weather conditions going forward like La Nina, that would not be all that favorable when you look at wheat conditions. So, I think wheat still has its story down the road, but that's down the road here a while.

Yeager: Old crop corn has been, it didn't go along with wheat on that last bump, gift. It stayed somewhat steady. Why?

Van Ahn-Kjeseth: Yeah, I think that there is an abundance of supply. I do think that over the last little bit of a rally that you got into old crop a lot of corn was sold. If you talk to elevators, I think that they're going to say that there's still a lot out there. But there were a lot of bushels that were sold. There was some basis pushes. And now we’re kind of sitting here and we have to remember that it's already June 21st. You're running out of time to get that corn out of the bin So we're running out of time to really look and capitalize on this. We have seen some basis push here on corn lately. I do think that's a big help to this market that it's just saying that the farmer is not selling at these prices.

Yeager: We're showing December corn, so new crop. Every day the story changes. It's too dry here, it's too wet there, it's too -- what was the -- are you a paddler on your boat down here on the left or the right or both?

Van Ahn-Kjeseth: Yeah, it took both of them. There was a massive amount of rain. There is so much water around on the way down. And I think that's one thing is I'm trying not to get too much backyarditis of saying hey, this whole stretch down -- so last week I took it from Alexandria down to Marshall, this week obviously down here, we had a coworker down to Wisconsin Dells for a family trip and there is a lot of rain not only impacting these areas but forecasted again and then a lot of drowned out spots. And I think the tricky thing is, these areas that have drowned out spots did try to replant and now that replant, the chances of that actually sticking I think are slim to none. So, I actually think that there are some friendly tidbits if you want them in corn. We could discuss that so much more. But the big thing is we have such a big crop report one week from now that can change everything. But as of now I look around and I see these conditions and then I haven't been out east, but what I'm hearing from out east is that they're really dry out there. You can see it start to pop up on the drought monitor. And so, I think you have really less than ideal situations for so many areas right now, it really took me getting all the way almost to Des Moines before I really saw a crop that I was like oh, that corn actually looks really good. I couldn't believe entering into Iowa how short the corn was, how yellow the corn was. You could definitely tell if a producer was able to get that crop in early because that corn looked decent. But other than that, I was less than impressed.

Yeager: Are you impressed at all with beans right now?

Van Ahn-Kjeseth: No, I'm not. Beans are so sad. So, when you look at beans, I just think the tricky thing for beans is there is really nothing going for beans right now. Fundamentally, technically, you just don't have a lot. And we're right at a support line. If we break this support line, I do think it opens up targets to $10.78 for November beans and just talking about a 10 in front of beans, that is not fun. And I do think eventually you'll have that story. But right now, if we're going to say next week, we might think less corn acres. I think in the back of everyone's mind the worry is that does that mean more bean acres? And do you still have some time you're still going to see some people plugging in if we can get behind this rain to try on beans. So, beans just don't have a lot and it seems like they need a leader and right now no one wants to be a leader when you look at it.

Yeager: Do you see next week's report impacting, in the scenarios you just laid out, impacting corn or beans more?

Van Ahn-Kjeseth: Listen, this report can go any way, which is really, really hard. But what I can say is that this report is a big deal to the market. So, you really need to look at your personal farm and be saying, where is my risk? Is my risk more heavily on corn right now? Is my risk more heavily in soybeans? Have I been doing a decent job selling corn along the way? You need to look at that because you just don't know what kind of numbers you're going to get from USDA. I think one thing that is a little bit worrisome to me is that the general talk of less corn acres that are out there. The March number that we got for corn aces I thought there was no way you would see a lower number. We were so dry in so many areas. We love to plant corn. And then we had the spring that we had and so it was a lot different. So, I think now you're coming back and saying could we stick with this or lower? I think we really need to look back and say hey, 2019 was a really wet year, they took away acres in the June report, the WASDE June report, and by the end of June they added those acres back in when no one anticipated to see more corn acres. And that’s the type of report that this is, that it can really shock the market.

Yeager: So, Paul, I want to let you know I did steal your question a little bit and we'll answer it for sure in depth in Market Plus. I need to move to livestock, Kristi. Live cattle, we've seen front month, back month, big discrepancies there. But the question to me still is the demand. Is it still there?

Van Ahn-Kjeseth: Yeah, I think so. I think cash is proving that. I think that you see cash remain very strong and I think there is that difference between it's kind of a nice thing for producers right now, hedgers if they can be hedging in the account and still seeing the cash value increase, their hedges increase. That doesn't happen very often. And so, it's nice to be able to see that. But I'm friendly cattle on feed after the close on Friday. That's going to play a role into Monday's trade. But for the most part to me it seems like futures and cash are not agreeing right now and you're seeing that separation. But I think the demand is still there.

Yeager: And they haven't been together in quite a while though. We've really seen an inverse there. Let's talk about that cattle on feed. I think it's 99% on feed, 104 placed and one other number, of course I set it away. What numbers stood out to you?

Van Ahn-Kjeseth: Yeah, the 104 placement I think is the biggest one. I think that's just going to be a big shock to the market to see that. And when you even come back to the demand side of things you can say we have not seen demand start to pick up in pork. I think that is one of the craziest things to me is that with the demand in the cash prices and the boxed beef cutouts that you have, you haven't started to see that shift yet. So, for me it feels like consumers want to stick to this product.

Yeager: Marketed was 100, disappearance during May 84. So, you mentioned the hogs, we'll get to that in a moment. But in the sense of has that story changed at all in the feeder market of what's available out there? There's not anything out there?

Van Ahn-Kjeseth: No, that has not changed and I don't foresee that really changing at all for the near-term to be honest. Interest rates the way they are, the ability to get feeders right now. So, I don't see that market changing any time soon. And I really think that's going to be the story that we continue to progress with throughout the year. And I do think that if you can get the futures on board, you can get the technical action behind the markets, I eventually think that you'll see cash and futures come together and I do think that would lean more towards a friendly futures market than it would the opposite.

Yeager: You mention there's some friendly tidbits out there for grains. Are there any friendly tidbits that can help the pork, the hog market right now?

Van Ahn-Kjeseth: Yeah, so the fundamentals behind pork, obviously we can't get the demand to pick up, continued problems, cash continues to be sluggish. But you look at a chart right now and you say, it's got to be time sooner rather than later. You have a lot of these futures markets for hogs at beyond two standard deviations away from linear regression. I know that sounds like a lot coming out of my mouth. But on a chart when you look at that there's not a lot of trade volume that happens beyond that. But it's kind of like where I look at corn market too is that it needs a spark to be able to do something and so far, for some odd reason, we cannot find that when it comes to pork. We can't find the demand. We can't see that pick up. But I do think eventually technicals alone could be supportive to that.

Yeager: Well, we'll find out what else is supportive in Market Plus because we have a few more questions for you to sort out. Thank you, Kristi.

Van Ahn-Kjeseth: Perfect, thank you.

Yeager: All right, that will do it here as we're going to pause the Analysis and continue our discussion about these markets in our Market Plus segment. You can find both Analysis and Plus on our website of markettomarket.org. Now, since you watch this program we have a recommendation for you, our MtoM podcast. Season 9 debuted Tuesday as we continue our conversations with those in and around agriculture, weather and energy. Sound familiar? Subscribe today wherever you get your podcasts. Next week, a roundup of new laws aimed at limiting farmland ownership. Thank you so much for watching. Have a great week.

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

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 at Pioneer, our name is our mission.

(music)

Family owned and operated for more than 60 years, Sukup Manufacturing is a full-service provider of grain handling, storage and drying equipment, helping farmers feed and fuel the world.

(music)

For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at 877-559-7887.

(music)

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

(music)

Trading in futures and options involves substantial risk. No warranty is given or implied by Iowa PBS or the analysts who appear on Market to Market. Past performance is not necessarily indicative of future results.