Market to Market - March 28, 2025

Paul Yeager:  Coming up on Market to Market - The final countdown to a pair of major government reports as spring planting approaches. It is a panel discussion with Naomi Blohm, Matthew Bennett and Ted Seifried, next. 

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Announcer: “This is the Friday, March 28, 2025 edition of Market to Market - the Weekly Journal of Rural America.”

Hello. I’m Paul Yeager.  

The arrival of spring brings optimism and the return of the outdoor construction season.

The sale of new homes increased last month by 1.8 percent as warmer weather and a pullback in mortgage rates enticed buyers off the sidelines.

Another month of gains was added to the orders for durable goods. The measure of items built to last three or more years was up 0.9 percent. 

The preferred inflation gauge of the PCE hit 2.8 percent last month. The personal consumption expenditures index revealed lower growth coupled with higher prices. 

If next week’s jobs report reveals an increased unemployment rate, we’ll likely start hearing more about stagflation.

For now, we’re also focused on another pair of government reports with the three other people seated at this table.

Naomi Blohm is Senior Market Advisor for Total Farm Marketing. 

Ted Seifried is Chief Market Strategist at Zaner Ag Hedge.

Matthew Bennett is co-founder of AgMarket.net.

We’ll bring them into the conversation in a moment. 

First, this week’s numbers. 

Fresh news has been hard to come by ahead of the acreage and stocks report due next week.

The nearby wheat contract lost 30 cents, while the May corn contract fell 11 cents. 

Optimism on a compromise for bio-diesel rallied the market late week.. 

The May soybean contract added 13 cents, while the May meal contract subtracted $6.80 per ton.

May cotton expanded $1.54 per hundredweight. 

Over in the dairy parlor May Class three milk futures found 33 cents.

The livestock market finished in positive territory as the June cattle contract improved $2.07. May feeders put on 8 cents and the June lean hog contract added $6.12. 

In the currency markets, the US dollar index lost  1 tick. 

May crude oil improved $1.07 per barrel. COMEX gold surged $62.50 per ounce, and the Goldman Sachs Commodity Index gained almost 2 points to settle at 562.35.

All right, Matt and Ted, Naomi. Hello again. I'll actually let you talk this time, too. How about that? How's it going? I want to start with you. All right. Let's talk about equities for a minute because there's, just like in the commodities, there's discussion about inflation. There's discussion about tariffs. There's discussion about pullback in an economy. What is the equities market telling farmers right now. And just people of the economy in general.

Ted Seifried: Friday was a bad day for equities. Last I saw we were down almost 800 points in the Dow 115 points lower in the S&P, that different times, things like that mean different things for commodities, right. You go back to the end of February and a sharply lower stock market, meant risk off, which meant the funds who at the time were about as long in corn as they ever had been. Went running for the doors, not because of a change in fundamentals in corn, necessarily, but because they wanted less risk. But you look at the market back up now for corn and beans and you've got funds pretty much flat, right? I mean, they could be 30,000 on either side. So risk off doesn't mean the same thing. There's no risk for the large speculator in corn soybeans. So it's really kind of a non-factor in the short run. In the long run you worry about demand. You think if people are going to stop spending as much money on beef, does that cut into feed further on down the line? But on the other side of that, I think you can maybe see a little bit of a silver lining here, because if you look at what speculators do when they're getting hurt, they don't like the equities market, they look for something else is flight to safety. And that's been gold. Gold's made new highs time after time after time throughout this this calendar year. But at some point they might start looking elsewhere. And if you go back to 2008, the other place that they went at that time was soybeans. In 2008, there were two markets that were unchanged or higher on the year. Everything else was lower. Those two markets were gold and soybeans. So at some point you might see interest coming into soybeans in particular, just based on that flight to safety.

Paul Yeager: Matt, do you subscribe to that idea?

Matt Bennett: I think it's certainly a possibility. I mean, obviously soybeans haven't been able to get a friend for quite some time because you've got such large world stocks. At the same time, you look over at corn and it's a different story. So corn has restricting world stocks. You know, I'm not so sure that, if the weather is conducive, is not conducive to a big crop this year. You know, that there might be some flight to people wanting to own some corn. Not only corn, but wheat. I mean, feed grains in total on a world basis or alarmingly low as far as stocks are concerned versus the last several years. And so you know, I always tell people, though, if you really want to see a rally in the corn market, hope for a rally in the soybean market, because by all means, that is one indicator that we'll have something going good there. One thing I would say this ratio from soybeans to corn, it seems to really start working the other way. I'm not so sure that people aren't taking a look at this acreage discussion and saying, hey, maybe we need to be buying some beans in here. I think that that had a little bit to do with the rally as well. You know, along with what you mentioned.

Paul Yeager: Naomi, the last time we had the three of you together was two years ago. Lots of changed since then, but let's look ahead to next week. Normally we do a react to the, to the numbers. This. We're doing a one last pregame show on it. Which report do producers need to be watching the most closely on next week.

Naomi Blohm: Well they're both are important. The quarterly stocks is what I'm really anxious and excited for corn. I feel like the quarterly stocks number should be supportive and we'll see a smaller supply, because the USDA has not acknowledged the tighter demand on the February day nor on the march. And I feel like the quarterly stocks report is where we're going to see some of that higher export demand finally show up. And then that transpires into tighter ending stocks on the April ways we're trading. and we have 1.5 billion bushel carryout for corn right now. But we're ignoring that. And it really might be tighter. So there's portions to be mindful of that. The ending stocks quarterly stocks could be supportive on corn could just be neutral for soybeans and wheat. But that is the beginning piece of the puzzle to then look at the acres. Because then from there we can start doing the new math to say, okay, if we do actually have 4 or 5 million more planted acres of corn next year, we can see where the beginning stocks are, and then we can decide how much of a weather premium needs to matter down the road. So I feel both reports are equally important this go around.

Paul Yeager: You can't pick a favorite kid.

Ted Seifried: Yeah, but I mean, really the reaction that we get after these reports come out is almost always to acreage, very rarely to quarterly grain stocks. The big exception to that that I can think of was the 2013, where we found an extra 400 million bushels of corn that trumped that sent us limit down for three days in a row. So quarterly grain stocks can be the dark horse. It can come in. The US has an opportunity to come in and change last year's production. If they find more bushels of corn of beans, with the way that they lowered production at the very end, because of hot, dry last year, I could imagine them maybe increasing production and that being why they haven't tighten the balance sheet in the last two to the February and March reports. Really, anything can happen on this quarterly grain stocks report. But if there isn't a big show happening there acreage, that's 100% what the market is going to be looking for. Everybody can come up with an acreage number. but that really sets the tone for the growing season.

Matt Bennett: Yeah. I mean, whenever I look at grain stocks, to me, I subscribe to a lot of what Naomi said. But, you know, it's like a regional basis. Some areas are seeing basis really improve and others are not where they're saying, hey, we've got all kinds of coverage and parts of Iowa you're seeing. It's pretty hot in places, whereas we're where I'm at, right in central Illinois, that's not the case. And I think a lot of folks did a really good job buying corn when it was cheap, you know? And so I think that their coverage is quite a ways out there. But at the same time, you know, these exports just won't slow down. I mean, we've had phenomenal corn exports and shipments. And so I do think that I'm going to be watching closely. But I do agree with Ted, if we come out here and we say, hey, we're 95.7 or 95.8 that's too big of a number. Most likely. Okay. If you come out here and you say, actually, I think everyone took the head fake and it's only 92.6, in my opinion. That's super supportive. So I think that's going to be the initial number everyone looks at. And then they go back to one more thing. Naomi said. I think what we all have to be prepared for, if the acreage numbers as big as I think it will be, then the maize day, the new crop balance sheet, no matter what the old crop is, new crop balance sheet is going to be big. That's all there is to it, cause they're going to use 181. And so it's going to be very interesting to see how they handle this. And if we don't get a big shock. And in stocks are actually lower, I think that you're looking at some spread action that will be really interesting in that July-Dec spread.

Naomi Blohm: Yeah, I'm speaking of that July-Dec spread, that that could be the play to be watching where we have supportive old crop information and numbers and a bearish new crop. a lot of producers we talked to, they are a lot of them sold out of corn already or have only just a little bit left price. And so when you have that scenario heading into a summer, that is also something that can help support a rally down the road. So I'm thinking though, that, it would be interesting if the number came in just as expected because we're pricing in a bearish report, we're pricing in 4 million more acres. We that is known like that is what the market is clinging on to. So if it comes out to be a neutral report or pretty much within the range of estimates, we might see the market have a little bit of a rebound. We saw corn today on the daily charts finish with a bullish key reversal after testing major uptrend line support. So the market is trying to say hey we recognize that there might be some type of shift in direction coming. Plus we got the just ending of the month happening end of the quarter and we might see new money flow happening starting April 1st.

Paul Yeager: Ted, when you look at let's keep going on corn for a moment. when you look at the discussion of, okay, one little weather hiccup here, one little, are we going to hang, is that going to be enough to hang a market on for the next few weeks?

Ted Seifried: Well, whether is going to matter, as much as acreage. Right. So if we have, a 95, 96, 97 million acres that, that make that makes weather just a little bit less important, right? Because then you have downside room in the yield the more acres you have. but I wonder how much we've actually factored in the analysts trade guesses for corner in the 94 and change million acre. I feel like the market's factored in something 95 or above really. So I really wonder what a bearish acreage report would be for corn at this point. After the drop that we've seen in the last two weeks? I don't know. one sort of side note here, Paul, going back to the spreads, I really like that September is trading a carry to December. I think if you want to look at the weather issues, because that I think starts after we get the report out of the way, that talk will start after we get acreage out of the way. If you want to do something to protect against the weather or have a re ownership strategy, I really like using that September contract. There's good, there's good, volume in that contract. It's at the lowest price on the board out through December. And if we get a rally, it's going to take on the properties of old crop and tight stocks. At the end of the marketing year. That September contract to me has the most upside potential on the board. So I would even use that to be hedging new crop production. Not hedging to the downside, but like re ownership strategies or hedging the bushels that you have sold just to make sure you have them, you know, things like that. I like the September contract.

Paul Yeager: Naomi, do you have any other corn advice ahead of next week that we should think about in addition to what Ted's talking about?

Naomi Blohm: Well, I think just in general, be ready for anything to unfold. as soon as we get that report out of the way, everybody's going to do their one day of math to figure out where all of the, you know, potential scenarios for weather in summer can be. But then we will have April 2nd, the next round of trade and tariff information out there next week is just going to be terrifically volatile. it might be great because we could maybe see something unexpectedly friendly and markets move higher, or we could just see just large daily market swings. So, be ready for anything.

Ted Seifried: Yeah. And it could be a situation where we get something bullish on Monday. But all of that is forgotten by mid week when we start talking about reciprocal tariffs. The big one for me is are we putting on the port fees for any vessel that has anything to do with China. you know, these are bigger, broader fundamentals that kind of trump individual market fundamentals. And that might the start of the week is definitely going to be about USDA and corn fundamentals. Acreage stocks the end of the week might be broader picture global trade you know global economy things like that

Matt Bennett: I agree. I also think though that playing the long game, what it's going to boil down to eventually, if I'm a world grain originator is what are the fundamentals, what are the world fundamentals. And there's no doubt whenever you look at Brazil, Argentina, Ukraine, the lowest corn supplies they've had in ten years, you know, you look at our total world supply, it's more than ten years wheat. We're in a situation to where going back to what you said to Ted earlier, a weather issue is going to be watched very closely this year. Yes. We've got all kinds of problems with world trade, I get that. But at the same time, you got to be really cautious is to assume you're not going to get major buying. Come in, come in. If you run into a weather issue going back to one other thing, 96 million acres, if it's 95.5, 96, to me it's going to be really hard. Yes, they're going to put a 181 against it in May, but how do you get 181 whenever you're going to have so many corn on corn acres and so many fringe acres going to corn, I think it's something we all have to keep in the back of our mind. I don't want to get bullish here. I'm just saying there's a lot of weather to consider right now. There's not just one guy talking about some of the issues that they see with summer weather potentially. And so I want to stay quite flexible here. And if you're talking about marketing strategies for this week, I don't like making them after a volatile report. And right now, why would a grower get aggressive? Whenever most growers you talk to, you can't make money at these price levels anyway.

Ted Seifried: Question though, how many times have we been concerned about long term forecasts at the end of March, only to watch weather play out to be a lot better than expected? I'm just saying take those long term forecasts with a grain of salt. Recognize there, there. As I said, I'm for I think this is a great year for re ownership strategies using the September contract and corn. But do be mindful that forecasts can change in a big, big way. And we could have a really good growing season.

Naomi Blohm: And speaking of forecasts, let's also keep in mind to Brazil with that second crop corn. Right. So they're heading into pollination for April. The world needs them to have a perfect crop that corn is spoken for in terms of demand. And that's an important place to be weather watching of course. Also with China, they're the second largest grower of corn in the world. So part of me wonders, too, if some of the trade and tariffs, issues or results that could occur next year depend on what this report says Monday, because food is the most important thing to all of these countries. And if there's a friendly USDA report and they say we've got tighter supplies of corn, and the acres are kind of just as expected, and all of a sudden the seasonal rally begins April 1st, maybe we should see some of those countries come to the table quicker on trade and tariffs, because they've got to feed their people.

Paul Yeager: All right. Matt, I'm going to use a question from Matt in Ohio to kind of tie this up a little bit. this is he's asking, with grain prices near below breakeven, aren't the markets telling us we want less acres?

Matt Bennett: Yeah. I mean, essentially, but at the same time, I mean, yeah, and we're losing acres in the U.S, we have been in the last several years. I mean, it doesn't take much driving around to see you know, but at the same time, whenever you look at, for instance, we're going to lose Cotton Acres this year. There's no doubt in my mind, I still think that the grower, they like to plant corn. Okay, he's right, though. It makes it a very tough situation that we're in. But a lot of decisions have already been made. you go back two weeks ago, and right in central Illinois, there was a lot of anhydrous that went on. And what we heard from again, retailers is that it was their biggest spring run for corn on corn that they've had in years. You know, and so I think that people start putting in hydrogen and they said, holy smokes, you know, beans at the elevator for this fall or $9.70. I'm just going to keep putting gas on because it was going on so good. So I think that that's part of the reason why I'm pretty strong on acres. it's interesting to know that several people are well above 178 combined this year. I think that there's a possibility simply due to the fact that, profitability for, for instance, cotton is going to probably cough up a million, million half acres.

Ted Seifried: Matt and Matt, both. Matt. Matt's from Illinois, Matt from Ohio. It's extremely hard for a market to destroy supply. It is very easy for markets to destroy demand by using high prices. Low prices do not kick acres out because of the way things are set up. If you pay $20,000 for an acre, you're going to plant it. That's just how that's going to work. Plus, with government subsidies, everything like that, it's set up that we are going to plant. Yeah, right. Market can't use it has a very hard time using low prices to dissuade planting. Right. Exactly. So yeah, the market might be telling us that. But the way that that's set up, it just doesn't happen that way.

Paul Yeager: All right. Ted said something about beans Naomi that was of interest. And he just kind of slipped it in about this ship fee. But here's the other piece of news out of China in relationship to beans this year. Coming up, they said this week they're going to avoid, as best they can as a source of grain. What's that going to do to the soy market?

Naomi Blohm: well, of course, down the road it could be a very serious issue. And there are still over a million metric tons of beans that need to leave the country. Yet that have been sold to China but still need to scoot on out. So there is a fear of some cancellation there. there could be fear of what would happen next year. So of course lost demand. Here's my silver lining in this. Trump has asked. President Trump has asked the biofuels groups sit down, get together, oil people, farm groups, work out a plan, bring me a proposal. Let's get this done. So I feel like there is groundwork for plan B happening, that in case tariffs really kick in and China does not buy as much from us in the soybean market, maybe they're trying to increase domestic demand with the biofuels by getting these two groups, these two major groups who have not gotten their stuff together for years. He is asking and telling them, make it happen. Bring me the proposal. Let's get her done. So I'm optimistic.

Matt Bennett: And it's paramount because the last few years, not only have we lost world market share to Brazil, we've actually been, going lower as far as how many beans that we've been able to export here the last 3 or 4 years. And so we have to have domestic consumption. I mean, that is all there is to it. If there's one thing we had a guy on our team is actually one of his clients is going to have, Secretary Rollins visit their farm. And he said, is there one thing that you would say to her? I said, biofuels, we have to have a commitment to renewable fuels here for domestic consumption, you know, because if we don't, you know, I think that the it could be pretty rough sailing ahead. Brazil's not going to quit growing at this stage of the game. They're going to continue to grow. And it's certainly going to cost us world exports here.

Paul Yeager: Ted, I have to cover wheat before we move to livestock. What was the big story for you this week?

Ted Seifried: With wheat, new contract lows, right? I mean, we can't buy any support. You just can't find any support. yeah. Okay. Black sea. deal. You know, I don't know, I feel like the market's gotten very jaded on any sort of, Russia Ukraine events. Because anytime somebody blow something up, shipments keep to seem to keep happening. Either way, we just can't find a bottom. It just keeps kind of drifting lower. I think one of the keys for corner go sharply higher would be wheat to actually find a bottom, but it just doesn't seem to want to happen.

Naomi Blohm: Oh. I think spring wheat might be the one to watch there. Minneapolis market. More producers I talk in North Dakota, there does seem to be more corn acres going to get planted and less spring wheat. And so I feel like spring, it might be a market. It had a double bottom on the charts this week and might get some firm footing on the acreage report Monday.

That's the one I'm watching.

Paul Yeager: Anything firm for the life or the dairy industry right now.

Naomi Blohm: So the dairy complex, it's just been on a downtrend for two months for the class three milk prices. And a lot of it is attributed to the fears of tariff and retaliation. You know, China is one of our major customers when it comes to dairy exports. we had a milk production report that came out and on paper, at first it looked friendly because milk production was down 2.5% from the February from the year prior, but it was a leap year. So when you account for the extra day of production, when all is said and done, it was a pretty neutral report. But now, right now, we're going to be looking for Thursday. We have the new export report for the dairy market. So traders are going to be watching that. And we're going to be keeping an eye on the trade in tariff news. So that's the biggest thing.

Paul Yeager: Ted, live cattle. You kind of mentioned a little bit earlier about the consumer pulling back. Is that, a biggest your biggest move in live cattle here?

Ted Seifried: That's my thing, is that's my biggest concern. I mean, the live cattle market made new highs this week, and box beef prices are very strong. We're getting into seasonality where box beef prices should strengthen in the spring grilling season. and they really didn't break seasonally like, like they normally do through the winter doldrums. So I mean, the live cattle market when you just focus on it, you say, hey, there's some there's more upside potential here. But then you take the bigger, broader picture into mind. And if people do finally stop, there's start saying to themselves, I can't be spending this much money at the grocery store, and in particular at the butcher's counter. That's my biggest concern for the cattle market and the fact that we're already at very elevated prices. So I think it's a great time to be taking protection to the downside.

Paul Yeager: And for hogs, Matt, we our pork supply is the lowest in 28 years. The herd's the same as last year's pork. an alternative for anything.

Matt Bennett: I mean, you know, when you're talking, because I want to mix a little cattle in here, but when you're talking, I mean, 215 people were paying 215 in the last couple of days is what we heard, you know? And so, I mean, you're. Yes, absolutely. I mean, if you're going to pay, $80 for a steak, some people might say, hey, that pork chop doesn't look too bad. So I actually think it could be a substitute. If we continue on this path and you damage consumer confidence, you know, if you get into that era where people are saying, gosh, you know, this is getting a little bit scary in an 800 down day on the Dow will certainly do that to some people. but yeah, it would be a concern to me. But right now this cattle market's fundamentals are just fantastic.

Ted Seifried: By the way. I think at some point you might have the large speculators looking at the pork or looking at the hogs market as a recessionary hedge. Okay. Seeing that as a cheaper substitute might get more demand.

Paul Yeager: That's Ted Seifried, Matt Bennett, Naomi Blohm, thank you so very much. Appreciate your time. We're going to pause the analysis real fast here. Continue our discussion in our Market Plus segment. You can find both of them on our website of Markettomarket.org Next week. By the way, each Monday that's next week, we do send out the market Insider newsletter. It's sent out with behind the scenes information on this program. We talk about how we put stories together and also exclusive details about our 50th season celebration. We'll see you Monday. Lincoln, Nebraska. Sign up now at Market to Market Talk. Next week we'll honor the tradition of cheesemaking. Thank you so much for watching. Have a great week.

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: 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 feel the world. 

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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