Market to Market - January 3, 2025

Paul Yeager: Coming up on Market to Market -

2024 ends on a severe weather note in the South.

The biggest stories of the year that was.

Remembering a former president who changed rural America.

And commodity market analysis with Kristi Van Ahn-Kjeseth, next. 

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 at Pioneer our name is our mission.

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“This is the Friday, January 3, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Paul Yeager: Hello, I'm Paul Yeager. 

The economic report machine is mostly paused this week as the new year begins.

We’ll soon get an idea on jobs, inflation and sales figures from the holiday season.

As the clock struck midnight Wednesday, the 30-year mortgage hovered around seven percent - nearly a six-month high.

The S and P 500 wrapped up with the two best  consecutive years of annual gains since the late 1990s. 

However, the week between Christmas and New Year’s was the worst end to a year since 1952 when the data first became available for tracking this benchmark.

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The number of counties under a weather watch also increased this week as a major system is expected in the I-70 corridor this weekend. 

Peter Tubbs looks at the other major weather stories of the week. 

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[Peter Tubbs] Cleanup continues across a swath of the southern United States in the aftermath of severe storms that swept through the region earlier in the week.

Over 30 tornadoes were reported from Texas to South Carolina. There have been four confirmed fatalities.

Sasha Zamora, Montgomery County, Texas:

"It was a catastrophe. It was. It was incredible. The ground was shaking. It was the, the the wind was so strong. I can feel it. And it only happened in a matter of seconds."

[Peter Tubbs] Two of the tornadoes were rated as EF3, with peak winds of about 140 miles per hour.

Over 200,000 homes in eight states lost power in the aftermath of the storms.

Although uncommon for December, warm air from the Gulf of Mexico can combine with a northern cold front to spawn severe weather.

For Market to Market, I’m Peter Tubbs.

[Yeager] The year 2025 has plenty of monumental changes scheduled. 

It’s those unplanned events that will make headlines and be reported. 

And some things will be an extension of what we’ve already seen. 

Here’s our annual look back at the year in rural America. 

Weather was again a constant in rural America in 2024.

First a snowy start led to what has become a traditional spring event - severe weather. 

A doorbell camera captured the precise moment a tornado hit a home in Portage, Michigan. Storms hit across the country that week in May adding to planting delays for some and erasing widespread drought conditions for others. 

Once the crop was in the ground, the skies opened up in June, leaving behind more than 10 inches of rain in areas of Minnesota, South Dakota and Iowa – washing out roads and fields and capping potential on what’s become a major corn producing area.  

Ideal growing conditions across much of the Grain Belt lasted for much of the summer. High temperatures and wildfires also played out across the country in their traditional summer patterns. 

By late August, the rains stopped, drought conditions returned, again limiting record yield potential, just weeks before harvest. 

Hurricane season hit hard in September with Francine, Helene and Milton doing major damage.

Helene cut off much of North Carolina from the region with rains, killing more than 200, damaging infrastructure that will take years to repair and lives upended in the near term. 

Cotton producers were devastated - some losing half their crop. Even at the end of the year, their farms were still dealing with the impact. 

Chris Hopkins, Georgia Farmer: "Well, our harvest has been much slower as the cotton has been blown over and blown down and we're having to cut paths in the fields and clean up around the fields just to get in and do the harvest and that's slowed our process down. 

[Yeager] Disease was also a fight for producers across the country. 

Avian influenza or bird flu migrated from infecting mostly poultry to other livestock.

The outbreak ratched up so quickly and widely a state of emergency was issued in December for the state of California and the dairy industry.

In Louisiana, a farm worker is thought to be the first severe human case. The infected person had underlying medical problems, was over 65 and had also been in contact with sick and dead birds.

The poultry industry, still recovering from previous outbreaks, saw output reduced, sending fewer eggs to the grocery store, driving up prices in an already impacted industry by inflation.    

The year started with optimism of passing a farm bill, but the House and Senate failed to agree on a new piece of legislation. An extension was approved in late December.

2024 was a presidential election year. 

Joe Biden dropped out of the race vaulting Kamala Harris to the nomination. 

Donald Trump and JD Vance won both the popular and electoral votes. 

Republicans swept the White House, Congress and the Senate, setting up a big year for the right in 2025 even if the two chambers have razor thin majorities. 

The lame duck session did provide drama in getting a budget extension passed. A bipartisan deal failed the first vote, but a smaller version was approved the Friday before Christmas. 

[Yeager] 2024 ended with the passing of former president Jimmy Carter.

Tributes focused on his humble beginnings to his service after he left office. 

His legacy still leaves a lasting impression in agriculture for many reasons. 

David Miller looks back at the life of our 39th president. 

[Dave Miller] James Earl Carter, Jr., was born in Plains, Georgia in 1924. While his work would take him far away from his rural home, he was never far from the roots that grounded him. 

In 1946, he graduated from the Naval Academy and served in the U.S. Navy, eventually returning home to help with the family's peanut business. 

In the early 60s, Carter started a political career as a Democrat, was elected governor of Georgia in 1970 and by 1976 he was nominated as the dark-horse candidate for the Presidency. He defeated incumbent Republican president Gerald R. Ford to become the 39th President of the United States. 

Carter was a champion of the environment in a time when it was unpopular to be one. During the 1979 energy crisis, he looked to renewable energy to help fill the gap and became a vocal advocate for both ethanol and solar power.

But politically, he was plagued by high inflation and unstable world events. In late 1979, the Soviet Union invaded Afghanistan. In response, President Carter embargoed U.S. grain sales to the Soviets on January 1, 1980. The move, as reported in this edition of Market to Market, caused the Chicago Board of Trade to suspend trading for two days. 

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Carter’s attempt to use food as a weapon failed. President Ronald Reagan lifted the embargo after taking office. The Soviets remained in Afghanistan for 10 years before leaving in defeat. 

According to some sources, the effects of the embargo lingered for nearly two decades. The overall effect on Russia was minimal as buyers found cheaper grain in other countries like Argentina. The embargo had little overall impact on U.S. grain prices but producers did see prices fall initially.

The Soviet Grain Embargo was one of the reasons Carter was defeated in the 1980 presidential election and some point to this as one of the major factors in sparking the 1980s Farm Crisis.

 The cause of the Crisis has been attributed to other factors in play during his presidency including the fallout from federal farm policies adopted before he took office, overproduction of farm commodities, a high inflation rate and an expensive U.S. dollar. 

After losing political office, Carter returned to Plains to begin a career focusing on humanitarian aid, this included the establishment of the Carter Institute in 1982 under the motto “waging peace, fighting disease, building hope.” He would often be seen working with Habitat for Humanity, a social service organization that makes it possible for people with low socioeconomic status to afford a single family home. 

In 2002, Carter was awarded the Nobel Peace Prize for his decades of work to find peaceful solutions to international conflicts, to advance democracy and human rights, and to promote economic and social development. 

At the end of his life, Carter was still active in politics, continued to support Civil Rights and participated in several humanitarian aid projects. 

In late February of 2023, after a series of short hospital stays, Carter announced through a statement that he would be returning to Plains, Georgia for home hospice care. 

President Biden acknowledged that Jimmy Carter aspired to make the government “competent and compassionate” and responsive to the American people and their expectations. 

Jimmy Carter passed away on Sunday, December 29, 2024 at the age of 100.

For Market to Market, I’m David Miller.

[Yeager] Export business -  or the lack thereof - has pressured much of the grain trade as the strong American dollar dampened global interest in U.S. commodities. 

For the week …

The nearby wheat contract lost 17 cents and the March corn contract fell 3 cents. 

The meal trade helped steady the soy complex as the Brazilian weather stayed in the ideal category.

The March soybean contract gained 2 cents while March meal cut $1.90 per ton.

March cotton contracted $1.23 per hundredweight. 

Over in the dairy parlor, February Class Three milk futures improved 12 cents.

The livestock market was mixed. February cattle added $3.40. March feeders put on $3.63 and the February lean hog contract fell $3.37. 

In the currency markets, the US dollar index added 107 ticks. 

February crude oil found $3.80 per barrel. 

COMEX gold expanded $20.20 per ounce, and the Goldman Sachs Commodity Index moved almost 13 points higher to settle at 552.95.

Joining us now is regular market analyst, Kristi Van Ahn - Kjeseth. 

Kristi Van Ahn-Kjeseth: Hello.

Paul Yeager: Happy new year.

Kristi Van Ahn-Kjeseth: Happy new year.

Paul Yeager: But we're stuck with some of the same issues from the old one. Yes, it comes to wheat. however, there is potential. We'll get to that in a minute. Let's talk about the current state of affairs. Russia continues to cast this large shadow that's impacting the American farmer when it comes to wheat. Do I still read that accurately? Is that changed?

Kristi Van Ahn-Kjeseth: No, I think that's still a case. You do have their production down taking slightly. So I mean that is a benefit. But in general if you look at world carry out of wheat, it's actually at a very low stage. You know, one of those stages we haven't seen since I think like 2012, 2014. And so it's got friendly statistics behind it. But the U.S. is not part of that friendly situation. We have plenty of wheat around here. And that's the problem. I think overall.

Paul Yeager: And moisture coming this week and we talk about the I-70 is going to impact cattle a little bit, but it's also going to give a blanket if it doesn't already have a blanket on that wheat crop. So if I have a producer sitting in there and in Kansas and Oklahoma, what am I thinking about this weekend?

Kristi Van Ahn-Kjeseth: Yeah, I for the most part for wheat, I think the word patience is what brings true with me, for the most part, is that you hope that if prices aren't, great, at least you can get the big yields and, help yourself out that way. But I think wheat has that story more of a spring wheat story, honestly, I think, than anything. But you look at those world carryout situations and wheat and that is probably that friendly statistic. I think overall it's just where is the spark we made new lows and new contract lows in all three wheats, about a week and a half, two weeks ago. And we really need to build off of that to try and get some extension, some retracement counts out there, and they're just not there right now. And I think everyone for the longest time has wanted to be friendly. Wheat and everyone for the longest time has wanted to be on the long side of wheat. But it just can't find that spark.

Paul Yeager: You set yourself up for this question. Let's do this one. We have a question that came in via social. Scott in Wisconsin wants to know what commodity has the most upside in 25, and which has the biggest downside in 25.

Kristi Van Ahn-Kjeseth: Yeah. So I think spring wheat is, a market that we're watching pretty closely. if you look at the Drought Monitor from the end of October, everything was lit up. Since then, we've had great improvement in so many areas, and it really took that bullish situation out of wheat sales for winter wheat country. Now you start to see where it's dry. And I think if you're going to have that drought start, which people I think want to talk about the dry forecast that's out there for summer, and the, you know, the tree ring studies and all of that. I think you want to talk about that. But I do wonder if that's not going to start in the West, because that's where you have the dry concerns. And that could potentially be in spring wheat country. I also think there's going to be a lack of acreage for spring wheat. I think that corn is going to be that winter in so many areas. So I think if you want to do see a spark, it could be in spring wheat. But in the same breath, I'm itching to get on some Nov. 

Paul Yeager: So if you had to say the one that has the what is the actual question? What has the biggest downside? Yeah, but you're also saying that soybeans have the potential to swing up too.

Kristi Van Ahn-Kjeseth: Yeah. I mean, have you really had anyone that wants to be a friend of beans for a while? Yeah. So, I'm still in that camp. I mean, that is a conversation that I have talked about a lot over the last two weeks is soybean marketing, along with corn marketing. But, soybean marketing and $10 has been a level that's been very tricky for soybeans to be able to get through. And I just think that soybeans are in this spot. That's the mid zone that if we come into this next administration talk tariffs, and you continue to have that ideal situation in Brazil, you can see beans fall down to that $9.11 to even $8.55, which is not what we want to see happen. And that's futures prices. But in the same breath that you come in here and you don't have those acres and we do have a drought, you're not prepared for that, I don't think. And we know that President Trump wants to get ahead of these tariff talks. And we've been through this once with China. So China knows kind of how to go about this. I think those conversations hopefully can go better. I'm more concerned about the tariff talk that's, been kind of talked about between Canada and Mexico in the US than I am the ones with China.

Paul Yeager: Stories written late this week about relationships, waiting to see what president Xi is going to do. Is he going to come to the US for the inauguration? Is there going to be the talk? But you mentioned trading partners one and two for the U.S. with grain that impacts corn. We had a story that happened, right before Christmas about biotech corn in Mexico. Did that have any carryover through Christmas, new year's for you and corn?

Kristi Van Ahn-Kjeseth: I think that corn actually has friendly statistics behind it. Your carry out of, just over 1.7 billion bushel carryout is, a decent carryout. It's, you know, well below 2 billion bushel carryout. demand is ran really, really hot. And so I think you can justify getting to it. And after that December 10th report, I actually giggled out loud when I saw that our carryout level was much higher and corn was a good $0.30 to $0.50 higher than where we currently are. So I think the prices in general are very suppressed right now too. And so I think that you could justify that corn one. We moved on corn marketing, over this last week. And one of the biggest things is that I feel like corn is going to have a hard time going at it alone, and I can't find, the short term friendly nature in soybeans and wheat to be able to support that corn market. And it's just been tricky for it to support itself.

Paul Yeager: So nobody's really going to be able to go buy themselves. They need a dance partner. They do. And you if you had to pick one, it sounds like maybe Wheat's the partner and that could be June, right? July before we see that.

Kristi Van Ahn-Kjeseth: Yeah. For example, a couple days ago you watched, soybeans. They had a, like a 12 cent trading range and, corn had like a 3 cent trading range. But corn was consistently trading how soybeans wanted to trade. Soybeans traded negative also. And corn was down like a half cent. And then soybeans were able to find those buyers come in and all of a sudden corn was up a penny. And so it just seems like it's tethered to that. And to be honest, they're completely different situations. Corn has friendly fundamentals. Soybeans have disaster fundamentals, especially world wide corns manage money holding that. You have funds, that have continued to buy corn. We'll find out, what they did last Tuesday to Tuesday later. But, they are long corn. Where in soybeans, they're short yet. And so I think they're just so different. They're having a hard time correlating together.

Paul Yeager: Okay. Let's talk about those who might still have 24 crop in the bean. Enough. No plan for it. Are you writing a number down right now? Of course. You always kind of have to have a number. Is there a number that you would write on a piece of paper for corn?

Kristi Van Ahn-Kjeseth: Yeah, it was this week. But if you wanted to say, hey, it's I want something higher. Right. Because I think everyone wants to shoot for something higher. I think that you could potentially look to like a $4.68 level. So $0.10 higher above that. You're looking at more $4.78. the upside is $4.97. And so I think those are all price counts you can think about. But in general I think they're going to be tricky to get to unless we have one week from now, a crop report that offers a slew of information and quarterly grain stocks, that will be a nice check in to say how hot is demand right now for corn?

Paul Yeager: You mentioned the low side target or not target, but low side potential for beans. I don't think I caught a top side if a couple of things happen. Do you have something in beans you like? Yeah.

Kristi Van Ahn-Kjeseth: Unfortunately you know, you're looking at, you know, for March soybeans, you know, $10.27. But if you really wanted to go higher, I think that you could potentially start to talk about like $10.46. That's a retracement count. so nothing close. And so it's kind of that tricky spot, you know, are you talking near-term does the grain need to be sold in the next month or two or are you talking, extended, you know, are you holding it for a while. Are we talking 2025? Because I think there's potential for some higher counts out there. But if you're talking that near-term, I think today was a perfect example of you can only get so far, before you hit those solid retracement counts.

Paul Yeager: Cattle market is kind of it's that wait and see. Right now we're trying to figure out how much we consumed, how much was purchased. But that already seems to be in the background. And there's buying happening.

Kristi Van Ahn-Kjeseth: Yes. So when you look at the cattle markets, you're actually looking really swell on the charts. so it looks good. but the problem is that you're starting to get into some resistance points or resistance points. So let's talk live cattle. you're at two standard deviations away from linear regression. For a technical, your upper price counts for the fourth price counts are 200 to 202 for live cattle. And that is not far away. And so that makes me nervous of how far can cash drive this. You also have managed money very long cattle. So you know, are they going to continue to add length or are they going to go to record length. But you start to get a little bit worried in this area that, can cash do it alone to support that? We're making new contract highs, which is great to see. seasonally we have, until, you know, February time frame, but I get a little bit nervous past that point that can we see the numbers improve into that? You know, March April time frame. Pair that with seasonals. Pair that with the fact that we're at third and fourth price counts. And two standard deviations. It gets me nervous. And I think even if you are friendlies something should be done here. Just to kind of put a floor underneath you because there's a lot of a lot of money into that.

Paul Yeager: And a lot of money in feeders too.

Kristi Van Ahn-Kjeseth: Yes. And feeders are a little bit different there at third price counts versus, you know, approaching those fourth price counts, but kind of that same situation that you have a lot of money on the table. You've rallied back so well, you do have a couple more months of seasonal tendencies, but I wouldn't risk at all in those seasonals.

Paul Yeager: Do you get the sense that market is very independent of cattle or is it dependent on other factors?

Kristi Van Ahn-Kjeseth: Yeah. So for the longest time I really thought they were dependent on the stock market. And just so tied closely to any kind of concern that we might have. when you talk recession or any of those situations, but cattle did a phenomenal job shaking off the stock market last week. You know, there was one point that the Dow market was down 700 points and cattle was able to still be slightly positive. And typically that can't happen. And so you do have that cash trade being able to shake off the rest of those outside markets at the time. but, you know, eventually we're going to get into this next president's and I think tariff talks are going to hold such a huge amount of information for agriculture in general.

Paul Yeager: Same for hogs. I mean, is it dependent on what presidential action is?

Kristi Van Ahn-Kjeseth: You know, hogs right now we need exports to pick up. Exports have been horrendous for hogs. You have managed money, record long hogs. So I think that you're probably starting to see some liquidation there. But I think the most part is that exports have been so poor. I think you can relate it back to the US dollar, how strong that is. I think that's going to shut off a lot of our exports, but we're already seeing it with the pork and I think that's been the most detrimental to pork. the one positive when you look at that is that pork is at, hovering around the 100 day. Really not far from the 200 day moving average and some retracement counts. So we should be starting to see some support.

Paul Yeager: All right. Thanks Kristi. Good to see you.

Kristi Van Ahn-Kjeseth: Thank you.

[Yeager] We are going to pause this 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.

Did you miss an episode? We have a way you can get video content before it is on your TV - by following our YouTube channel. Click on the bell to subscribe for notifications at youtube.com/market to market. You’ll know as soon as we drop the full program, Market Plus and podcasts. 

Next week, we look at year end crop reports and what that means in the near-term for the trade and for planning the months ahead.

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 at Pioneer our name is our mission.

Announcer: 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.

Announcer: Tomorrow. 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.

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