Paul Yeager: Joining us now, regular market analyst Jeff French. Hi, Jeff.

Jeff French: Hi, Paul. Good to be here.

Paul Yeager: Keep that smile because you have to smile through all of the week commentary right now. It is, as I wrote in italics here, to emphasize, weakest on the block. Do you disagree?

Jeff French: Well, it's, you know, right there, the Kansas City wheat, four year lows. I mean, you can say that with the corn as well. But yeah, pretty steady trend of lower lows and lower highs. I mean, it's a it's a pretty dismal trade right now. One positive is we were able to hold 550. I think that's a big psychological number in there.

Jeff French: But there's a couple of factors. You had the US dollar make four month highs here this week. That's going to limit our exports moving forward. And then news out of Russia, Black Sea, they're predicting potentially a record wheat crop in Russia as well as record exports.

Paul Yeager: And a cheap product that they keep putting out in the market.

Jeff French: Not only Russia, but also Frenchmen. Motif wheat is cheaper than our product right now, and that looks to continue. So, you know, you got the funds, you have the money flow and funds right now are pressing the short side. They are nearly record short corn and beans. They have plenty of ammunition selling ammunition, too, to add on to this wheat.

Paul Yeager: Ryan in South Dakota, ask a question that I was going to ask and plus, but I'll just use it right now. He asks. Every week you analysts predict that we just found its bottom. Do you think this week it actually has?

Jeff French: I'd like to say it has, but I just don't see that catalyst to shake the funds loose. And that's what you're going to need. And it's just the wrong time of year. Right now, the wheat looks excellent. The winter was good. There's been moisture. I was on the road down in southern Illinois last week. The wheat looks really good, so we need to get into the actual growing season to get that trigger so the funds buy back those short positions in corn.

Paul Yeager: The ag outlook form expects 91 million acres down 3.6, but carry out still really high. That's not a good recipe for corn. Does anything to improve that formula.

Jeff French: You bring down, you know, 2 to 300 million bushels. So that carry out. But, you know, a 2 billion bushel carry out is burdensome and we've had it in the past. And every time we've had it, we've had the corn futures in that 375 to 4 and a quarter area.

Paul Yeager: If you look at that deferred contract in December, as we put the trend line up on the screen here, in a moment, you will see that is like everything else. But is there a point that a producer has to say, I just better take this now before it could get worse?

Jeff French: So we don't advise of selling the cash into a market like this. We will buy put options to stop the bleed to give you a price floor. But absolutely. I mean, you look at it, you know, for 57, for 56 here, you know, if this thing turns into a bear market and many people are suggesting that I mean, you got to go back four years ago when the contract lows of December 24 corn were scored and that's 395 a bushel.

Jeff French: So if this is a true bear market, that contract low has a big target on its back.

Paul Yeager: Is the story different at all in soybeans? Yes.

Jeff French: Right now it's all about the Brazilian harvest. And right now the beans are in that 1150 1160 1170 area. And historically in the last 20 years, beans just don't trade in the elevens very often. You know, they're they're very few times and it's either from ten up to 12 very quickly or from 12 down to ten very quickly.

Jeff French: So with Brazil, only 25% harvested right now, I think there could be potentially some more harvest pressure. Now we are two and a half dollars off the highs. So, I mean, you know, for us to call it bottom, you know, maybe here at 1150, you know, possibly, but with the harvest pressure coming from Brazil, lower prices certainly shouldn't surprise anybody right now.

Paul Yeager: Ted Sifford sat there last week and said the concerns that he has about soybeans is China not buying even from Brazil, let alone the United States. Do you have that same concern?

Jeff French: Brazilian basis has fallen out of bed. I mean, it's right now the bean base is down. Brazil is at a five year low. And we watch those flash sales as analysts every day. You know, we follow those very closely. We haven't seen a bean flash sale for over two weeks. So, yes, the the big gorilla in the room has gone kind of silent here right now.

Jeff French:And they have been very quiet on the buying front.

Paul Yeager: Is it going to take them getting back in, the big gorilla getting back into the market to make any change?

Jeff French: I you know, from a demand side, yes. I mean, demand domestically here in the U.S. remains very strong for beans. But then we got to get into the growing season. We've got to be able to get this planted. You know, they're saying 87 and a half million acres. You know, I'll you know, I won't weigh on that quite yet, but we'll see come this spring because I could see maybe a little heavier bean.

Jeff French: She'll be a little heavier corn acres, maybe a little lower, be negative.

Paul Yeager: There was a thought about all of the the big three that we've just talked about, that very slow Monday, Tuesday, Wednesday, whether that was ahead of USDA news. But do you get the sense that we are going to be almost the same type of minimal trading between now and the next big USDA report at the end of March?

Jeff French: Well, unless it comes from the outside markets, but it's just been a grind lower. I mean, the volume is very subdued. I mean, we're running, you know, 60 to 70% of normal volume. And it's just kind of a trickle lower. And my fear now here, you got march corn at 415 for 16. You know, why don't they want to press this thing and maybe get a three in front of this?

Jeff French: That's what I'm saying. But next week we do have March option expiration. There are a lot of puts that are deep in the money so that market, you could see a rally on option expiration very easily next Friday. But overall the trend moving lower right now.

Paul Yeager:We'll get into some of those specific questions in our marketplace. We have a few good ones for you, but I want to start with one that came from Kennedy Farms in Oklahoma. Thank you for submitting that via Facebook. An X or formerly known as Twitter, we ask each week. But this is the question for you, Jeff. Is there enough beef in the country to give the corn growers an option to lock their car in the market?

Paul Yeager: Or are beef prices too high for even that to be an option?

Jeff French: Yeah, high cattle, cheap corn, I mean, it's usually it's, you know, cheap corn, cheap cattle and it's the exact opposite, you know, Are they able to walk the corn off? You know, certainly a little bit. I mean, but we are at the lowest herds since 1957. Now, the cattle, these days are twice as big as the cattle back then.

Jeff French: But yeah, it will help. But no, we we have a burdensome amount of corn here that we'd have need a lot more cattle to walk the corn off the farm.

Paul Yeager: Looking at that cattle chart as it does trend higher, there's always that temptation to say the high is in or is this just a pause to go higher? Earlier this week on our MT on podcast talked to Darrell Peele down at Oklahoma State. He thinks this thing has a whole lot more upside to it. Do you concur?

Jeff French:You know, if you would have talked to me earlier this week, it looked like we were kind of rolling over. And then we get into Friday and we you know, we hit up to three and a half, four month high. So the market is very strong right now. We've been here before and I've just had many conversations with my guys that, you know, when whenever we get closer to 70 feeders or 190 fat cattle, you know, put on some protection, is that LRP or is that put options sound some calls up here, you know, because this market can change fast.

Jeff French: And we've all been through the October-November time period where it just we didn't think it would ever find the bottom. So these are fantastic prices and the margins are so thin. I mean, this is big business now with these cattle prices. So you definitely need to be looking for some protection here.

Paul Yeager: I also asked Dr. Peele about feeders, and I said, Oh, did we miss the chance to buy, you know, buy at the top? You know, the worst thing possibly says no. He also sees feeder going higher because there's fewer of them. Again, do you concur? We have a cattle on feed coming next week. Any insight on where that might be headed?

Jeff French: The feeder cattle have been led by the cash market, and the cash market has been absolutely on fire. So I don't know if these guys that are buying these cattle, high priced calves, what they are seeing out in the future, but they're betting on higher prices for sure on the fat cattle side. So again, the market looks strong.

Jeff French: It can change for no reason. We've seen it before. We've lived it before not too long ago. You know, these are fantastic prices and a lot of risk on the table.

Paul Yeager: Lately. We've not been able to end on a positive note because we always end with hogs. This week was different. Why?

Jeff French: Absolute massive export sales, 71,000 metric tonnes per day. And perspective. That's 150% more than the same week last year. So I mean, 30,000 metric tonnes a week is really strong. To double that up this week was big time demand. The futures have reflected that. Now you look at the summer months up there, right, right below $100. If we can bust through that, I think this thing can run another probably $78.

Jeff French: But if, you know, the first couple of days next week, if we're not able to get through that hundred dollar mark, you know, that's not a real good sign because that's four or five, six days of not being able to get through that resistance 100.

Paul Yeager: So where that's a heck of a rally coming up here. I mean, do you think that.

Jeff French: The summer months. 

Paul Yeager: Okay. So why are we looking at the near.Sorry, I didn't have that one in my head as much. So I guess I'll quickly ask the question about the soybean issue. Is trying to come back into buy any hogs to to influence this as well.

Jeff French: They were the number two buyer this week. Mexico continues to be the very strong number one buyer, but China is there every week. They typically alternate, but this week they were number two. So that's definitely good to see.

Paul Yeager:In the final seconds. Is there one commodity that we have talked about tonight that you have optimism for in the next month?

Jeff French: Well, when you look at, you know, we're down here at four year lows on corn and wheat, so I'm not going out on too big of a limb to say that there definitely could be some upside. And they've just you know, everybody's bearish out there, you know, So, I mean, it's it's lean heavily to the one side. So we could definitely see short covering rally the wheat could be the most explosive, I think.

Paul Yeager: All right, Jeff, thank you very much. Jeff French, everybody. Thank you. Thanks for having me. All right. Hold on, because we're going to keep going with Jeff and and our analysis and continue our discussion in the market segment we call Market. Plus, you can find both analysis and plus on our website of market to market dot org. We are again approaching a milestone on our YouTube page and it is because of, you.

Thank you, Jeff.

Hold on here, 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.

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