Market Analysis with Don Roose

Paul Yeager: The USDA report left no change in balance sheets and the market returned to tariff and weather watch. 

For the week… 

The nearby wheat contract added 6 cents and the May corn contract fell 11 cents. 

The soy complex is dealing with some pressures from EU tariffs and vegetable oils. 

The May soybean contract lost 9 cents while May meal added $1.50 per ton.

May cotton expanded $1.30 per hundredweight. 

Over in the dairy parlor, April Class Three milk futures added a quarter.

The livestock market was mixed. April cattle put on $2.90. April feeders improved $3.05 and the April lean hog contract cut 72 cents. 

In the currency markets, the US dollar index shed 19 ticks. 

April crude oil found 9 cents per barrel. 

COMEX gold gained $81.70 per ounce, and the Goldman Sachs Commodity Index subtracted more than 3 points to settle at 549 - 75.

Paul Yeager: Joining us now is regular market analyst Don Roose. How are you doing Don.

Don Roose: Doing great. Thanks for having me back Paul.

Paul Yeager: When we started the week. Well, we start any week. It seems to be by the time we get to Friday, the story changes dramatically. Wheat is the one that was probably the most impacted by the USDA report, but that wasn't the biggest impact on the on the commodity. What was the biggest mover for you and wheat this week?

Don Roose: Well, you know, I think number one, I think the wheat market, it's the wrong time of year to be overly bearish when you're starting to worry about the weather, particularly when the funds are, short, a big short in the market and we have some dry weather concerns around. So, you know, the wheat market, I think it just bouncing back, showed his true colors reacting not that negative to, negative report.

Paul Yeager: But it was influenced a little bit by corn this week too, right?

Don Roose: Well, you know, I think some of it goes back to the last spreading going on. The trade has been really heavily long the, corn market, heavily short, the, wheat market. And I think to end the week with the concerns is kind of people scrambling back to home base. And, you know, you can't say enough about with the tariffs going on. Paul, I think you have to kind of think of it and trade it kind of like a mini weather market.

Paul Yeager: Do you trade corn like a mini weather market too?

Don Roose: Yeah. I think, you know, if you look at a weather market, you know, you don't know what the next weather forecast towards the next move is going to be. So you just have to kind of prepare yourself accordingly. You know, technically. And I think that's what's going on. I think that's the way you look at these tariffs. You know, treat it like you're in a weather market and that said we got the weather ahead of us. So no short of volatility ahead as.

Paul Yeager: We record this. We're about to have a little system that could cause some moisture in the plains. Some snow in other places. We're getting to that spring planting season where we're watching. But let's talk specifically about corn. I'm very curious, are we at a point right now where technicals have taken over from fundamentals in determining corn?

Don Roose: Well, I think when you look at the technicals, really give you the price direction where you're really at. It'll add and subtract premium pretty fast. The fundamentals I think we know on the corn market or for the most part kind of positive. And that's why we went up to 5.21 and one half on corn. You know, we just kept marching to the upside. And then we ran into a lot of tariff headaches and we had the liquidation. But no doubt the funds wanted to be long. The positive one on the green, corn and on cattle. So I think that's what you're looking at.

Paul Yeager: We'll talk about the funds because I'm curious about them and soybeans as well. But when it comes to new crop corn, I'm sorry, old crop corn, if you have an empty the bin. Have you missed that opportunity, do you think?

Don Roose: Well, I think when you look at it from a marketing standpoint, you know, opportunities come and go. And, you know, we did have a pretty big run, to the upside. 5.21 and a half. Those are only numbers you could have dreamt up in the fall when we were talking about. So hopefully we get another run. That was, one big one, you know? So you got to take advantage of your opportunities when they're there. Now we're on a big pullback. And, you know, the bottom line is you ran into a tariff problem and pushed us down.

Paul Yeager: Well, let's talk tariffs. If we could Phil in Ontario Canada who we've been watching the discussion a lot with what's going on with Canada and Mexico. He asks on X: Tariffs and talk of tariffs. Plus good South American weather have dimmed what look now to be a good grain marketing opportunity. Do we now rely on traditional seasonality in late spring for the next good marketing opportunity?

Don Roose: Well I always look at marketing is kind of like a card game. You know, you have to, you know, as the cards come out, you'll know what you're going to do. And I would say, on the positive side, you're probably down to some weather skiers that we usually get. We usually add risk premium into the May timeframe.

Don Roose: So, I would anticipate we're going to get, weather, premium added back. It's just a matter from what level. But right now, we right now we have a spike bottom in the July corn at 4.51 and a quarter. So at least you have a tradable bottom. If we can get the right card to come out of the deck and push is to sum up signals.

Paul Yeager: What is the deck telling you about the soybean trade?

Don Roose: Well, the soybean market, you know, is the, the best of the worst. You know, it's holding, $10. it's dialed in a lot of negative news. A big soybean crop in Brazil. fairly big crop in Argentina. But we have the acre battle ahead of us. And I think the March 31st, probably going to show that big down acres on new crop corn, and vice versa on the, on soybeans and corn, big, acres there. 

So I think the soybean market certainly has, a lot of downside potential if the wrong thing happens. you know, could you go at or under nine is very possible with the fundamentals. Remember China is our big buyer, and we're having some, pretty tough, talks with them.

Paul Yeager: So is it still the case that tariffs are influencing the soybean trade? The most of the three commodities we talk about?

Don Roose: All the commodities, I think is corn and soybeans are the most have the most negative influence on. So the wheat market to a lesser degree. So yeah, I think soybeans, you know, when you have the big crop coming out of Brazil, when you have, that's the supply side, the demand side is very shaky in a 380 million carryout is, not really a positive. So. But you can shrink those chemicals pretty fast with weather, Paul.

Paul Yeager: Let's talk about weather in South America then, because in Argentina and Brazil, a couple of different stories about the weather differences there. How's that influencing us here?

Don Roose: Well, I think when you look at Argentina, they basically, I think they have the wet, dry weather behind them. It's improved greatly. The Rosario Exchange took the production down. Probably doesn't go down anymore. Probably goes up from here. So I think when you look at it, remember Argentina sells about exports about 1.4 billion bushels of corn. You know, their harvest is going on right now pretty aggressive. So that's coming at us. Interesting though I think a lot of that corn goes into Brazil, Brazil this week. Drop their import tariff to zero. And so they must want Argentine corn waiting for the second corn crop. So I think it tells us that there's a little bit of world demand in South America.

Paul Yeager: For the cattle market. The dollar helped it early. But what helped it late this week to rally.

Don Roose: Well, you know, quite a surprise. I mean, it looked like we had cattle going to trade. You know, 198. And at the end of the week it was, a ratchet up trading cattle as high as 206 late, you know, big move in the, in the cattle that pushed the futures market up. Still have a key reversal in October. Cattle on back and live cattle and feeder cattle key reversal. So next week is going to be a big jump ball. Does a technical lead us to the downside or can we gather to the upside on the fundamentals?

Paul Yeager: Well, the fundamentals of the feeder market were about tariffs and there was the amount of what we we're not it's going to cost too much to import cattle into this country. Is that going to override what you're talking about.

Don Roose: Well I think this is something I think the bottom line, when you look at all this, you can go back and forth on some of these things, Paul, but you know, the bottom line is, is going to be the demand. We've talked about the supply tight for a long time gets tighter for this reason. But there comes a point at the upside at what what price do does a consumer just, resists the purchasing? And, you know, I think there's a real fear that we could go into a recession.

Paul Yeager: And there's talk, late this week about some of the budget stores that, lower income, I think it's under 40,000 have pulled back their spending. Is that the class? the income that's going to influence maybe some of this livestock market?

Don Roose: I think that's exactly right. I mean, the top tier of people can only eat so much beef, you know, so that is left for the rest of the people. So I think it's, you know, watch it close because there's certainly other proteins that are, cheaper, you know, and, and stuff, well, you know, what goes up does come down eventually. We know that. I mean, look at the price of eggs.

Paul Yeager: All right. Well, exactly. And the we had a sell off in hog market there, recently, but is that a I think I read something about that. Maybe that's a risk off situation there. Is that what's going on with the hogs?

Don Roose: Well, the hog market I think is most influenced by the export. 25% of our pork is exported. So you know, and Mexico is our biggest buyer. So that's the concern. And I think no doubt when we had the big tariff fight March 4th, hogs were pasted down over $4. You know, that's the same day corn put in a spike bottom hogs put it in its spiked bottom. Then things kind of, you know, normalized, if you will call it normalization. So, yeah, the hog market on its own, I think was shaky up over 100, 105. And I don't need any more help on the negative side.

Paul Yeager: All right. Well, I hate to leave it on that, but we have to thank you, Don.

Don Roose: Thank you. Paul.

Paul Yeager: Alright, Don Roose, everyone. And we are going to pause the analysis, continue our discussion about these markets in our Market plus segment, you can find both analysis and plus on our website of markettomarket.org. Finally, a thank you to all who've made pledges of support to this and other public TV stations. We have spent the last few weeks asking for your support and many of you have done that. If you've held out until now, we ask that if you value this program, please call or make contact with your public TV station to offer your support. You are the key in our continued coverage of rural America. Next week, we are taking an experiment in cover crops to the next level. Thank you so much for watching. Have a great week!

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