Market Plus with Kristi Van Ahn-Kjeseth

Paul Yeager: Welcome back to the table for the Friday, April 4, 2025 installment of Market Plus. Kristi Van Ahn-Kjeseth is with us again, just like the show of all the weeks to be here right?

Kristi Van Ahn-Kjeseth: Yeah, it was very much as I was driving down, I was like, wow, what a week. Where do you even want to go? Like where do you even start talking about. Because there has been so much that has happened and there are some hot opinions on everything floating around. Right.

Paul Yeager: There are some people, clearly, one way or another way. Yes. I guess we'll start with Tim in Minnesota. His question, I think, sums up what we're going to do. Now what do we do?

Kristi Van Ahn-Kjeseth: So I think that you can just relax. I like you at this point. If you're really going to bury these markets, there has been great options on crop insurance, ECO SEO. I just think that you have to relax, and there's a lot of time left in these marketing years. This is a crop that you haven't even planted yet. It is very easy to feel doom and gloom and that everything is going to fall apart. And just rely on some technical targets, some support lines that you have. And at the end of the day, if it is really keeping you up at night, there are tools you could use to put a floor underneath you. That's not something I'm interested in at this point. But you know, options are actually pretty cheap right now.

Paul Yeager: So why was Friday such a surprise Thursday night? Such was the price. You had to expect that China was going to retaliate in some form. And you have to expect during all of this, the U.S. is going to retaliate. So protection wise, how much protection do I do? You mentioned crop insurance, but what am I placing on the board here so I can sleep at night.

Kristi Van Ahn-Kjeseth: Yeah. You know, like I said, I think you had some great marketing opportunities very early in the season. And then since then I almost feel like especially for the bean market it has lulled you to sleep, you really just you've kind of been like, everything's going easy peasy. We're not breaking down. We're not rallying. Let's just give it some time. And I also think there was this sentiment coming in that you heard tariff, tariff, tariff, tariff, tariff. And at some point when you keep hearing so much about it, it's not as shocking as you think it's going to be. You get used to the conversation and then you're like, it'll be fine. There was also a broad based sentiment coming into these tariffs that they weren't going to be that bad. I think part of that was from the fact that Trump had put on tariffs a couple different times and then rolled them back, and so I think it caught the market off guard that they were as broad based as they were. And so you really had shocked the market to a degree. But then everything held up so well. And I think it was that old logic of like, how many times do you hit something before it? You know, like they break the ice game with your kids, that how many times do you hit that before everything just kind of completely falls apart. And I think that is what you saw in soybeans is that it was just pounded, pounded, pounded, and finally you gave way. And I think you had a lot of people that are like, I don't want to play this long game against China, so I'm going to either step aside or I don't want to be long.

Paul Yeager: Fair in many ways. And Gary, his question is, I think, been answered a tiny bit today already, but what timeline can we expect a reciprocal tariff from countries responding to this? I mean, we've already seen China, on Friday. How soon before others do the same?

Kristi Van Ahn-Kjeseth: Yeah. I think you'll hear responses pretty quick now that you saw two examples of how to respond. You know, Vietnam's example and China's example. So I think really at this point, the market wants to probably hear what the EU has to say. And then from there, I think the market just is going to kind of decipher from there. I think there were some concerns earlier in the week or a week ago when there were some rumors that you could see Japan, South Korea and China come together for, a response to the US. We did not see that. So I take that as a win because Japan, huge trade partner of ours. So that's really nice that we didn't see that. I think you also have that breath of fresh air that we didn't see additional ones come on in Mexico and Canada that you have those those solid trade partners still okay to a degree. Now everything can change. But you're starting to hear those. And I would say that the responses probably come quick. It's going to take a really long time to solve these issues though.

Paul Yeager: Naomi sat about six inches from where you were last week and said, look at the fine print of the Mexico and Canada 6%, not 10. 12 versus 24. I mean, there are already some signals of what is important and what is just maybe I'll use the word that we used in the show bravado and show.

Kristi Van Ahn-Kjeseth: Right? Yeah, I think that's exactly it. You know, some of these tariffs, when you look at them, you question how they even got computed. Right. Like, you know, how much activity do we really do with that country? Does that really matter? I think those are the questions. So you really need to narrow it out. And I think the biggest thing is to take these tariffs and really look at them and say that these are one of the issues that can be affecting these markets. But there's a lot of other ones. And I do think that eventually your weather stories, your demand stories will be more important than that, because you price in all this scary information. And at some point, how much scarier can we get?

Paul Yeager: I'd like to hold that to be true. Right. I'll be calling you next week if it does get scarier. Let's take Cody in Wisconsin. Here, let's talk about some feeding things. How much wheat Milo in the cattle ration is the old crop corn carry out growing?

Kristi Van Ahn-Kjeseth: Yeah. So I think the big difference there is that, you know, maybe you are seeing that, right. Like maybe you are seeing less corn usage for feed use. I think that if you did see that, you would see an increase in ethanol or exports, that you're not really changing the corn carryout. All to say, I feel like USDA has gotten a comfortable value with their old crop carryout. They slash slash slash, I wouldn't be surprised if they coasted for a while. And you don't see that. Demand is extremely hot for the exports. We're running well ahead of pace, and if it weren't for tariffs, I do think USDA would have already acknowledged that. But I think USDA wants to just not get the horse right. The buggy in front of the horse, is that what it is?

Paul Yeager: Cart in front of the horse? Yeah.

Kristi Van Ahn-Kjeseth: And so I think that they're trying to be a little bit patient here. But exports really are very strong and they're very strong with Mexico, which isn't in this battle at the time. And so I just think that if you lost in feed use, you could make it up in exports.

Paul Yeager: Is ethanol in trouble given low crude oil? And already this hesitancy on exports with ethanol.

Kristi Van Ahn-Kjeseth: Yeah, I do think, you know low crude oil prices I said earlier are not a friend of the corn market. And so we need to be very aware of that. It was a concern once you heard those comments like drill, baby, drill. And so I understand that if you want low crude oil prices here for the economy. But what does that mean on the side for ethanol? And so they really don't go hand in hand. It is concerning to me. Luckily, once again come back to exports that are remaining strong. We had a great start to some ethanol profitability earlier on that I'm hoping that can carry through that we kind of found our number. We're going to stick with that for the time being. New crop could be a different situation.

Paul Yeager: Let's talk numbers and soybeans. Bradley in Nebraska asked you on X. Why have soybean futures volume risen from 180,000 on March 25 to 360 on March 31st, yet open interest has remained flat at 870,000 contracts?

Kristi Van Ahn-Kjeseth: I think that's just coming into the end of the month, coming into a very important crop report on the 31st and a lot of in and out action throughout the day, that you have a lot of trades occurring, but overall you're not holding new positions. So it can be kind of confusing. But overall, I think that's probably the trend you saw.

Paul Yeager: Are we going to see a lot of analysis for some of these traders over the weekend, are going to try to find where there's opportunity to either be a haven or a profit opportunity. I mean, were there people buying, you know, the phrase of, you know, try to catch a falling knife was thrown around today. I mean, I'm assuming there's going to be people over the weekend trying to figure out where that opportunity is, right?

Kristi Van Ahn-Kjeseth: Yeah. The whisper, the whisper word this week, whisper number from the crop report and a falling knife. I've heard those more this week than I have heard in a very long time. And so I do think that that is a conversation to be had. And I will be honest, that we really would, you know, whether you love or hate them, are going to most likely be looking at courage calls for corn market, because we do feel like you have a good ability to get back to that spring price. And it is always so tricky because usually that opportunity comes when you are in the field. You're not being able to get planted. Things don't look great. You're just not sure, and it just gives you a little bit more confidence to be able to. We might never get to that opportunity. You might buy that call and then we never rally. And now you didn't make a sale and you're out those options. So there are risks on the table of that. But we do feel like just the given dynamic of the corn market. And if we can bottom out support here at these lines, we will be looking at those.

Paul Yeager: A week from today. We're going to sit here and say crop insurance plant date in Iowa and points south has started, therefore here comes the field. But the forecast between now and then there's maybe a day over 60. The soil is not going to warm up. At what point does the weather window premium discussion open fully.

Kristi Van Ahn-Kjeseth: I think Easter, right? I think especially that long holiday you'll have Good Friday off which is April 18th. So I think that weekend you're going to be looking at that next forecast and really being like, wow, if we can't get in, this is going to start to be a concern. And I think that right now everyone is banking on the Eastern Corn Belt, being able to produce this good crop. You've had people really start to talk about a drought occurring this summer, and a 60% chance of this drought, and that it would start in the West, and it would work its way through. But they've been they haven't been talking about that for the Eastern Corn Belt. So if you said I still feel like there's going to be problems in the West into Minnesota, and now all of a sudden you're like a less than ideal start for the Eastern Corn Belt. I think that's where those two stories could come together and gain the markets attention. And like I had stated earlier, this is going to be a good opportunity that managed money had the ability to shut off some of its longs before then, because there was one point that this market, had been kind of hitting $5, hitting $5. And I was like, where are we going to find that next push higher when manage money is almost near long holding, who's going to be that buyer? And now we have an opportunity that they've been able to get, you know, probably closer to neutral if not short at this point. We'll find out this afternoon and see if they can push.

Paul Yeager: Last thing. Let's finish with livestock like we would on the show. Let's go to Kansas. Schutz asked me, are these historically high beef prices causing demand destruction, which will ultimately cause the cattle market to crash and stay low for a long time?

Kristi Van Ahn-Kjeseth: I think there are some of those concerns. I think that the word you need to watch for is, you know, that stagflation, like, do you do you see that happen? And Powell came out and he said that these tariffs were more broad based and more aggressive than they anticipated. And there are some concerns that you could see this lead to inflation and see the GDP, the GDP growth backing off, which is worst case scenario. So when you talk about recession, when you talk about those things, I think it's very real. And I think it was a wake up call to the cattle markets. When you start to hear that, you're also going to have this really hot battle now between President Trump and Powell talking about interest rates. Powell talked about the the fear of inflation. And you had President Trump make some hot tweets today or truth posts, right. Saying, hey, Powell, this is your chance. Lower interest rates. And all of a sudden you're starting to hear that conversation happen.

Paul Yeager: Because there's a theory that that's what part of this game is. I'm sorry. This is a game to lower and a chance to lower interest rates. But Powell had kind of said, I just don't see it yet.

Kristi Van Ahn-Kjeseth: Yeah. And you know, but you made that push from President Trump today that that is what he wants. And so there are a lot of conspiracy theories out there, right. Like how how this went about was it for this was it for this, was it really for the trade surplus when everything shakes out, you know, no one's going to know what these tariffs were truly put on for. No one's going to know what these numbers truly came from. No one's going to know truly what these numbers are going to do to the market. Are we going to see more demand? Are we not? No one knows that. So you focus on what you do know right now and try and kind of like quiet the noise around you.

Paul Yeager: And what we do now is we say goodbye. Goodbye, Kristi. Goodbye, Paul. Thank you so much. Appreciate your time. A reminder to get signed up for the Market to Market Insider newsletter. It's free! Sign up at Market to market.org. Next week, a look at CRP compliance across the US and commodity market analysis with Chris Robinson. Thanks for watching. We'll see you next week.

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