Market to Market - April 25, 2025

Paul Yeager:  Coming up on Market to Market -

Two trading giants offer differing views on how negotiations are going. 

The nation is dry around the edges while the middle gets drenched. 

Farmers navigate changes to labor policy.

And commodity market analysis with Ted Seifried. Next.

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Announcer: This is the Friday, April 25th edition of Market to Market, the weekly journal of Rural America.

Hello. I’m Paul Yeager.  

The cost to those borrowing money is always part of the deal. Whether it’s to buy land, a car or a house, the points on the interest can add up quickly. 

Existing homes sales were off 5.9 percent in March, the biggest monthly drop since 2022 and slowest March since 2009. Higher mortgage rates and broader economic questions weighed on the minds of buyers. Inventory is also low and expensive. 

New home sales, the smaller pool of places to live, jumped 7.4 percent last month – even as mortgage rates approach 7 percent. 

Strong demand for commercial aircraft lifted the orders for long-lasting manufactured goods. Durable goods surged higher by 9.2 percent.

Some of those purchases are still trying to beat the deadlines of tariffs and trade disputes.

This week, a pull back on two parts of the equation.

Peter Tubbs updates us on what happened this week in tariff and trade news. 

Peter Tubbs: This week, the Trump administration stated they were negotiating with China to find a solution to the tariff conflict President Trump amplified three weeks ago. 

President Donald Trump: “They had a meeting this morning…it doesn’t matter who ‘they’ is. We may reveal it later, but they had meetings this morning, and we’ve been meeting with China.” 

The Chinese Foreign Ministry denies that talks  are occurring, and demanded the removal of all unilateral tariffs.

Guo Jiakun, Chinese Foreign Ministry spokesperson: “This is all false information. As far as I know, China and the U.S. have not conducted consultations or negotiations on tariff issues, let alone reached an agreement. This tariff war was initiated by the U.S., and China's stance is consistent and clear. We will fight, if we must, and our doors are open if the U.S. wants to talk. Dialogue and negotiation must be equal, respectful and mutually beneficial.”

While higher tariff rates have been paused for most nations, tariffs on the import of Chinese goods remain at 145% percent.

Tariffs are paid by the companies that are importing goods, and the costs are usually passed on to consumers.

For Market to Market, I’m Peter Tubbs.

Paul Yeager: Rain on Easter Sunday is supposed to bring rain the next seven Sundays. 

Whether that holds true this year is yet to be seen.

But what fell from the sky this week delayed fieldwork and planting in at least part the Grain Belt. 

Here’s David Miller with our weather report.

David Miller: Rain was more common in the Plains this week than machinery in the field.

Wide systems started on Easter Sunday with rain in much of the Midwest. 

Weekly precipitation levels were in the 1 to 4 inch range from Michigan to Texas.

Oklahoma experienced the triple impact of heavy rain, hail and tornadoes. At least two people were killed by flood waters in the southern part of Oklahoma City over the weekend. 

Fields in Iowa were mostly wet for the week as planting was 18 percent complete, twice as fast as the 5 year average. Nationally, the work is 12 percent complete and is also ahead of the average pace. Wide-ranging rains slowed planting progress in key growing areas. 

The Drought Monitor did reveal minimal change in readings taken before Tuesday morning. However, west of the Missouri River and across parts of the nation from southern Texas to California remain locked in the two most severe drought categories - the highest nationally since November of 2023.  

Wildfires roared across New Jersey as a growing area of concern builds along the East Coast from Florida to Maine with dry conditions posing long-term concerns. 

For Market to Market, I’m David Miller.

Paul Yeager: On the first day of his second term in office, President Donald Trump signed an executive order aimed at reducing illegal immigration at the border between the United States and Mexico. Growers and ranchers who farm along the border rely on a comprehensive immigration program to stay ahead in a competitive marketplace. But dwindling guest worker numbers and a strict border policy have some south Texas producers worrying they won’t have the hands they need when they need them most. 

John Torpy reports in this week’s Cover Story.

John Torpy: Sun drenched fields along the banks of Rio Grande River provide the landscape south Texas farmers need to grow citrus and green leafy vegetables for consumers across the country. But a steady, reliable labor source that is paramount to bringing south Texas commodities to market is in short supply and many growers are worried their crops, and their profits, will be left to wither in the fields. 

Dante Galeazzi, President and CEO, Texas International Produce Association: “We can grow anything we want in South Texas, right? We're only one of three places in all of the United States that can grow fruits and vegetables in the dead of winter.”

John Torpy: Galeazzi is the President and CEO of the Texas International Produce Association, an advocacy organization for foreign and domestic produce operations in Texas. Galeazzi believes farmers struggling to find  crews to work in the farm fields of south Texas is directly related to harvesting the specialty crops particular to this area of the country.

Dante Galeazzi, President and CEO, Texas International Produce Association: “In Texas we grow 60 different fresh fruit vegetable crops. Only six of them can be mechanically harvested. So that means 54 other crops require a hand harvest. Now, we have largely depended on Mexico to provide us with the workers for the last century. Our government has put together a program called H-2a, and that gives foreign workers a visa, which is a permission to temporarily be here in the country.”

The H-2A Temporary Agricultural Program, commonly known as the H-2A Visa Program, provides farmers the ability to bring seasonal agricultural workers from other countries into the U.S. legally for up to one year to plant, perform field work, and harvest crops. 

Texas Department of Agriculture Commissioner Sid Miller notes there is an abundance of H-2A guest worker slots available. But it’s the harsh financial penalties for hiring illegal workers which has decreased the number of undocumented individuals entering the United States. 

Commissioner Sid Miller, Texas Department of Agriculture: “We have a guest worker program, a legal migrant worker program, which is what we should have. We had about 78,000 slots. Okay. So we could get 78,000 workers up here to harvest our crops on a temporary basis since then. Now we have almost 400,000 slots, so we've got 400,000 legal migrant workers up here. So that's, you know, that's 300,000 less illegals that we don’t need. 

Overseen by the U.S. Department of Labor, the program helps producers meet their operational needs at critical times during the growing season. However, some growers have discovered navigating the ins and outs of the program can be time consuming and expensive. The agencies who arrange for some work crews also pay thousands of dollars per guest worker between application fees and to day to day expenses. Some farmers see the option of hiring illegal immigrants as a way to save on costs and get the work completed on their farms.

According to data from USDA and the U.S. Department of Labor, between 2020 and 2022, 42% of farm laborers in the United States were undocumented.  

Dante Galeazzi, President and CEO, Texas International Produce Association: “Here in Texas, the equivalent for using that program is somewhere between paying this person $20 to $22 an hour. But if you don't have enough of those folks and that cost continues to increase because of the cost of regulatory compliance, what are the farmers going to do? They start to have to shrink their crew sizes. And that's even more difficult when you can't find the crews out there. And so this problem expands. And it's not just unique to Texas. It's our entire country is facing this.”

Galeazzi says farmers in south Texas have limited options when they are facing tough production decisions. Choices on what crop to plant can depend on what kind of labor the farmer can afford. 

Dante Galeazzi, President and CEO, Texas International Produce Association: I can grow watermelons and I can grow onions at the same time. And both would help me become profitable. If I don't have enough workers, I have to pick one or the other. And the problem with that is it goes back to that crop mix scenario, right? What if too many people grow watermelons or too many people grow onions and you gambled on the wrong crop? Now you're not making a profit that year. ”

At the Pharr-Reynosa International Bridge, over 50,000 trucks a month bring products of all kinds from Mexico into the U.S. Twenty thousand of those trucks only carry fresh produce, making this crossing the number one port of entry for produce from Mexico.

Tony Martinez, Primo Trading Services: “The majority of what's at the grocery stores right now is, is, is imports. Because the United States, sadly does not does not, produce enough to sustain itself. That's fact. I feel that's that's a reality that as an industry, we need to do a better job of educating the consumer and letting them know, hey, you know, we do rely on imports.” 

Tony Martinez is vice chairman of the Pharr - Reynosa International Bridge board and a managing member of Primo Trading Services, a fresh produce brokerage. Martinez farms in both the U.S. and Mexico and acknowledges having farms on both sides of the border has provided a way for him to navigate labor issues that impact the region.  

Tony Martinez, Primo Trading Services: “People used to grow peppers in Rio Grande Valley. Can't do it anymore because it's just so labor intensive. You know, green beans in the valley can't do it anymore. It's just so labor intensive. And, you're just not going to get the hands to to do it. /We're able to shift it to Mexico. And we can we can plant it cheaper over there. And the labor is, is is, although it is difficult in Mexico as well, but it's not as difficult as in the United States”

To help fill the gap in the ongoing labor shortage, south Texas producers, farm advocacy groups, and agricultural officials are looking to Congress and the next Farm Bill to help change the farm labor landscape.

Dante Galeazzi, President and CEO, Texas International Produce Association: “The farm bill is the single biggest investment that the country makes to keep agriculture modern and satisfying the needs of the American people./ What we're asking for is for the government to invest in building the tools that farmers can then buy to make efficient operations. .”

Commissioner Sid Miller, Texas Department of Agriculture: “First time in my lifetime we have an agriculture trade deficit, and it's going to grow this year from $32 billion to over $45 billion. AG trade deficit. That means we're going to buy $45 billion more food than we export now. We can't sustain ourselves if we're dependent on some foreign power to feed and clothe us That's when we're in jeopardy of losing all of our freedom. So that has to be turned around that that's going to have to be a focus. And that's not going to be easy to win those customers back.”

For Market to Market, I’m John Torpy

Announcer: Next, the Market to Market report.

Paul Yeager: Wheat is still looking for a compelling story, posting four consecutive days of losses before rallying. And the rest of the trade was in a choppy trade pattern for the week. The nearby wheat contract lost $0.17 and the July corn contract fell a nickel. A surge in soy oil gave a jolt to the soy complex. The July soybean contract added $0.12, while July meal shed for 60 per ton. July cotton expanded $1.67 per 100 weight over in the dairy parlor. June class or milk futures sold off a $1.18. The livestock market was higher. June cattle improved $4.17. August feeders put on $3.42, and the June lean hog contract increased $3.12. In the currency markets, U.S. dollar index expanded by 15 ticks. June crude oil fell by $0.77 per barrel. Comex gold weakened by $25.80 per ounce, and the Goldman Sachs Commodity Index dropped by more than two points to settle at $536.25. Joining us now, regular market analyst Ted Seifried. Hi, Ted.

Ted Seifried: Hey, Paul.

Paul Yeager: Where's the story in wheat? What's it going to be? I mean, of course, if you knew what it was, you could, you know, you would not be here.

Ted Seifried: Yeah

Paul Yeager: But what does it need? What type of a story to get it going?

Ted Seifried: You know, I don't know, Paul. you know, go back to the end of last week and kind of felt like, hey, maybe we found a near term bottom. Maybe we can build off of this. And then we have this week and we fall flat on our face. didn't make new contract lows, so. That's nice, but didn't come far from doing it. So I, I don't know. You think, we might need some help from corn? and what, what would, what would a resolution to Russia - Ukraine war do for wheat? And unfortunately, I think in the short term that's actually maybe negative. I think Russia might end up pulling back on some of the wheat sales. I do feel like Russia has been aggressive on their sales, keeping prices low in order to bring that cash in. If the war gets resolved or if there is some sort of resolution and ends. Do they slow down wheat sales? Could that be friendly? or does the prospect of much bigger Ukrainian production and exports weigh on the market? I mean, we trade futures, not today's. So, unfortunately, I don't know if we'd be able to see the bright side of that and it does seem like we are working towards some sort of resolution, but I don't know, you know, what is going to spark the wheat? I mean, you look at the crop conditions for wheat, they're really not good for winter wheat. You know, that should have maybe given us some strength. We really haven't been able to do that. We know that wheat does have nine lives and can end up, you know, being a very good crop, but I think we just had a lot of reason to try to move higher. Just it's, just not been able to sustain.

Paul Yeager: So at that point or with that being said, what does one do?

Ted Seifried: Yeah. I think you have to be making cash sales, even if you really don't want to. But I do think re ownerships re ownership strategies make a lot of sense. because wheat, in my opinion, has a fair amount of upside. If that spark happens. but who knows if that spark happens or not? I mean, that's we've been waiting for it, hoping for it, thinking it could happen for a while, and it just hasn’t.

Paul Yeager: Let's talk. Sparks. We have that in a question that came in. Mike in Iowa wants to know from you, Ted, what are your thoughts on $5 Dec corn with good weather? Are you bullish enough to wear the corn hat?

Ted Seifried: Well, let's, let's answer your question. All right. So this comes with an asterisk, but I do think $5 corn is possible. Now, we got very close to $5 corn in the July contract. But I think the question is about December. There is a path. Right. And that path involves, well, clearing up some trade issues that we have currently. If a trade deal were to include corn sales to China, all of a sudden we have a ball game. The rest of the world's demand has been pretty good. There was talk on Friday that Japan might buy even more corn, even though they're sharply higher over the last few years, they've been buying. But maybe they could buy even more. So I think there's a lot of things that could happen to really push corn higher, outside of whether. But whether it's going to be the biggest one. Right.

Paul Yeager: I'll take it. Going to keep going.

Ted Seifried: Yeah. Weather is going to be the biggest one right? There's been a lot of forecasts that are concerned about hot and dry for the western half of the growing area. during the growing season. And if that happens. Well, that certainly can give us some reason to go higher. The extra acreage that we've got this year compared to last year does give us a bit of a cushion.

But if we get a big weather problem, then yeah, there's upside.

Paul Yeager: Well, so that's the thing. The weather story. It's not even the first day of May. Right. Which means we can't quite move into a weather story yet on corn.

Ted Seifried: Yeah. It's tough right? Right. Right now we're focused on planting. We actually would like to see it dry out in a couple of areas so that we can get more planted, but then we'll worry about is it going to turn hot and dry. So yeah, it's very hard with a climate of improving South American expectations to get terribly worried about a longer term weather issue. That's months and months out. I say it often, you trust long term forecasts about as far as you can throw them. until we get closer to it. We can't get worried about it, especially in the climate of, you know, trade wars and things like that. I mean, what is the global economy going to look like? What is global demand going to look like? There's too much uncertainty to get terribly excited about long term weather forecasts at this point.

Paul Yeager: So with that being said, do we already think that summer high in corn is going to come still in spring and not wait until summer to at least put some certainty in the books?

Ted Seifried: I mean, it's a really tough call, right? if you take out the, what I'm going to say, macro fundamentals, the non corn specific fundamentals, if you do away with that then I think there is still that upside potential to make new highs. But if we continue down the path of a deepening trade war with China, into a global recession, domestic recession, we start worrying about what corn demand might be for fuel and for feed. You can kind of throw seasonals out the window. Is this that year or not? Again, that look in markets and I guess in life, you know, we go from a series of unpredictable events to another series of predictable events. Some years we have more predictability than others. Sometimes it's just the weather. This year we have the weather, but we have everything else going on. So it's a very difficult year to manage marketing, to manage expectations and to predict weather. Seasonality is going to work or not.

Paul Yeager: Does that answer hold for what's going on in soybeans too?

Ted Seifried: You know, soybeans? Look, if you two, three weeks ago said, hey, we're going to be three weeks from now, we're going to be deeply entrenched in a trade war with China, with only glimmers of hope, of some sort of negotiation happening, in two sides arguing about whether that negotiations even happening or not yet. Soybeans are going to be $0.80 higher.

I just say that's kind of crazy. But what's happened is we've seen a lot of pressure have, come on top of the US dollar, that lower currency and that currency advantage is making us a little bit more attractive to countries outside of China, not China. And so the idea is that maybe we're going to get, some more exports there, maybe that extends our export window. But the problem is we haven't seen that yet. Paul, last week's export sales number, was more indicative of a closing of that export window. And we haven't seen any daily flash sales, really. So, I worry that that soybeans are being way too optimistic for their own good. The question is, again, how long is this trade war going to happen? Is this going to be like the first time around where China comes to the table and purchases a whole lot of American agriculture in order to, make, make things look good? Or is this something where, we're going to fight an extended battle for a reason that hasn't been explicitly said, which would be taking the wind out of the sails of China's aspirations to become the number one superpower in the world, i.e.Their motto, China 2025, which they've been talking about for 15 years. And I think that is the bigger deal. I think that is the real goal. And if that is the case, well, we're not going to have an interest to really make any major deals with China for a long period of time. That's going to be a real tough, uphill battle for soybean demand.

Paul Yeager: Let me see if I can boil this down then. It sounds like a selling opportunity maybe needs to happen pretty much right now.

Ted Seifried: Yeah. You know, and it's tough to do because, you know, you look at soybean prices and you don't really feel that optimistic. And then you look at those long term weather forecasts and you say, well, you know, even if we do lose some demand, some export demand, there is upside potential because of the lower acreage number. So it's a really slippery slope. But I do think that there needs to be some sales made. I'd like to see 25 to 30, 25 to 35% sold on new crop. But I do think re ownership strategies are a great idea because there is a lot of upside potential from whether from trade deals. Hopefully I'm wrong in that we are really looking to make a deal with China and get all of this wonderful business. And if that's the case, I mean, there is a lot of upside potential, but I don't know. I'm very skeptical of that.

Paul Yeager: What about in live cattle? Because that has been every time someone comes on, can't go any higher, can't it?

Ted Seifried: Yeah. So the wonderful thing about live cattle is that our export business for beef is not the, that's not a huge deal right. So directly tariffs, especially with China, aren't a huge impact on consumption of beef. And the thing has been is we saw cold storage numbers come down yet production was higher. So people are still aggressively buying beef at the butcher's counter. The big risk that we have there is that you have an extended downturn in the economy and people start spending less, start getting more worried about spending on high priced beef. That hasn't happened yet. Until that happens, you have a good looking chart. There's still upside potential. We still have bullish fundamental fundamentals in place for the cattle complex.

Paul Yeager: So are you buying in the feeder market then.

Ted Seifried: You have a potential triple top in that August feeder contract. I'm a little bit nervous up here. And as you know, I am rather nervous about the economy in that, you know, the stock market, the enthusiasm that we saw midweek and really kind of into the end of the week is just optimism that is unfounded. And over time that might fade and it could get really, really ugly. So I do think it's a really good time to be owning puts, things like that. I do think protecting the downside is paramount for your account guys.

Paul Yeager: A couple of weeks in a row here in the hog market. Look out.

Ted Seifried: Yeah, hogs. Same thing. Right? Cold storage or supply down even though production was higher. We are buying proteins like gangbusters right now, Paul. And so that's really encouraging the market. The problem there is that pork is an export market. China is, a consumer of U.S. pork. Our weekly export sales were the marketing year low. They were down 82% from the four week average in. The main reason for that is that China canceled 12,000 metric tons. And so if we lose China, that export business can continue to suffer. it might change the look at some of those numbers. So, yeah, I do think there is, downside risk there in hogs. However, if you do have an extended break in the economy, you might see domestic consumers actually buying more pork. So I'm not as worried about the downside as I am in, in hogs, due to a economic downturn. But I think there's just risk. There's downside risk really everywhere. I think you really need to be protecting that. You need to understand the climate that we're in is a tremendous amount of risk, more than we've seen in recent years, really since the pandemic.

Paul Yeager: And we'll talk about that more in a minute. Thanks, Ted. Good to see you.

Ted Seifried: Always a pleasure, Paul. Thanks for having me.

Paul Yeager: That's Ted Seifried everyone. And as I said, we're going to pause. We have to continue. And we're going to talk about everything here in our Market Plus segment. You can find both analysis and plus on our website of markettomarket.org. We want to make sure that you never miss any of our content when you subscribe to our YouTube channel. At Market to Market, there are benefits of being there. When you turn on notifications, you'll be at the front of the line for our Stories Market Plus and the MTM podcast next week. A look at a mined product impacting the Corn Belt and the Rose Bowl. Thank you so much for watching. Have a great week.

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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, Steinar Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at (877) 559-7887. 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.

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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