Latest / AG Bull / Wiesemeyer's Perspectives | When Policy Becomes Price: The Quiet Levers Moving Corn, Soy, And Livestock

Transcript

Wiesemeyer's Perspectives | When Policy Becomes Price: The Quiet Levers Moving Corn, Soy, And Livestock · AG Bull

0:10
SPEAKER_01: Welcome back, everyone.
0:11
SPEAKER_01: I'm glad you're joining us.
0:12
SPEAKER_01: Tommy Grossofty, AgBull Media, Ag Bull Trading.
0:15
SPEAKER_01: We have an action-packed show.
0:17
SPEAKER_01: To say news is coming out and breaking news.
0:20
SPEAKER_01: Right when we're writing the show, we had to stop and add another line.
0:23
SPEAKER_01: Don't worry, we're going to cover it all.
0:25
SPEAKER_01: If you enjoy this content, of course, click like and subscribe and all that other good stuff.
0:28
SPEAKER_01: But if you'd like to see Jim and I in person, Farm Forward Conference, March 5th, Strom Family Farms, 8 a.m.
0:36
SPEAKER_01: to 2.
0:37
SPEAKER_01: Myself, Mr.
0:39
SPEAKER_01: Jim, we're talking markets, policy, trade, soil health, and more.
0:44
SPEAKER_01: It's an action pack show.
0:46
SPEAKER_01: You know, if you got great eyes, you can see there's a QR code.
0:48
SPEAKER_01: But I'm sure if you Google this information, you could find it.
0:51
SPEAKER_01: If you're having a hard time, you can call us at 185-737-Farm or send us a note, either myself or Jim, and we'll get right to that.
0:58
SPEAKER_01: All right.
0:59
SPEAKER_01: Before we get into the show, we gotta say congrats to American Hockey who got up early.
1:05
SPEAKER_01: I don't know where I got this picture.
1:06
SPEAKER_01: I don't even think that's one of the hockey players, but I like the picture.
1:09
SPEAKER_01: We did it.
1:10
SPEAKER_01: Congrats to the ladies in hockey.
1:12
SPEAKER_01: Congrats to the men.
1:14
SPEAKER_01: I believe it's been 46 years since we've won gold.
1:18
SPEAKER_01: Now, if you're like me, you've watched the movie Miracle by Disney.
1:21
SPEAKER_01: But head over to Netflix and there's a new documentary, Miracle, 46 years almost to the date, or maybe to the date the men's hockey takes it.
1:30
SPEAKER_01: And of course, men, women, and anyone representing the great flag of the United States deserves a win.
1:35
SPEAKER_01: Funny thing about the Olympics, the young man who scored the winning goal got his teeth knocked out.
1:40
SPEAKER_01: And during his interview, he's bleeding.
1:42
SPEAKER_01: The first thing he said was, I love America.
1:44
SPEAKER_01: And I know this guy loves America too.
1:46
SPEAKER_01: We got a damn good show, and I'm excited to be here.
2:40
SPEAKER_01: From now on, it's going to be over exaggerated with lots of love.
2:44
SPEAKER_01: Well, I love being here with you, and uh, we have a heck of a show.
2:48
SPEAKER_00: I did want to say I just came back earlier this week.
2:51
SPEAKER_00: I was in the Ozarks at Margaritaville, the Missouri Pork Producers Conference.
2:56
SPEAKER_00: They had uh very good attendance there, beautiful weather.
3:00
SPEAKER_00: It was 70 degrees the day I spoke, Tommy.
3:04
SPEAKER_00: And they were in a good mood because they've had pretty good hog prices, and at least in Missouri, they haven't had the disease problems that some of the hog sector frequently does.
3:16
SPEAKER_00: So they were in a good mood, and I love a meeting like that.
3:19
SPEAKER_01: That's awesome.
3:20
SPEAKER_01: They're probably in a good mood because you're there.
3:22
SPEAKER_01: Well, we were preparing the show, and this happened.
3:25
SPEAKER_01: Here comes the vocals.
3:29
SPEAKER_01: Breaking news.
3:30
SPEAKER_01: We can't make this stuff up.
3:31
SPEAKER_01: Boy, do we live in a wild world.
3:33
SPEAKER_01: Yes, President Trump is president, but not everyone likes that.
3:37
SPEAKER_01: Some people like that, but it makes for the most exciting news cycle in history.
3:41
SPEAKER_01: And with that, here is the breaking news.
3:44
SPEAKER_01: People are gonna have to Google what this means, but let's get your spin on it.
3:48
SPEAKER_00: Well, the Mexico's most wanted cartel boss, as we know it, was killed by Mexican security forces.
3:56
SPEAKER_00: Now, here's the impact on that.
3:58
SPEAKER_00: It will likely improve the Mexican government's relations with Washington because Trump has been pressuring Mexico to combat the cartels more forcefully.
4:09
SPEAKER_00: And if you could recall, he even threatened military strikes against the group if he wasn't satisfied with the results.
4:16
SPEAKER_00: Well, these are results here, and their president, Claudia Scheinbaum, firmly and repeatedly rejected Trump's proposal saying any U.S.
4:26
SPEAKER_00: strikes would follow would violate their sovereignty.
4:29
SPEAKER_00: But I think you're gonna have Trump mention that this Tuesday.
4:33
SPEAKER_00: We'll get into that later in the show during his State of the Union address.
4:37
SPEAKER_00: Good news for U.S.
4:38
SPEAKER_00: Mexico relations.
4:40
SPEAKER_00: They're going after the cartels, which they should.
4:42
SPEAKER_01: I have a breaking tweet.
4:44
SPEAKER_01: I'm just gonna read it.
4:45
SPEAKER_01: You stay there with your picture there so people don't see me uh looking through my trifocals here.
4:49
SPEAKER_01: Cartel killing triggers U.S.
4:51
SPEAKER_01: Alert in Mexico.
4:52
SPEAKER_01: The U.S.
4:53
SPEAKER_01: Department of State urged Americans to shelter in place in parts of Mexico after cartel leader.
4:59
SPEAKER_01: Boy, I don't want to pronounce that.
5:01
SPEAKER_01: And you think I butcher your last name.
5:03
SPEAKER_01: Don't even hear me do this.
5:04
SPEAKER_01: But nonetheless, he was killed.
5:05
SPEAKER_01: Uh, violence and roadblocks spread across the area, and airports are shut down.
5:11
SPEAKER_01: They noticed a Costco was on fire.
5:13
SPEAKER_01: We got to keep an eye on Costco stock.
5:15
SPEAKER_01: Not that losing one Costco is uh it's a big deal if it's your Costco store, I'll tell you that.
5:19
SPEAKER_01: But what we don't like to see that Jim, it's 2026 and they're burning down parts of Mexico.
5:25
SPEAKER_01: There's people running through the airport.
5:27
SPEAKER_00: Well, there are some there's some big UFC companies that have ground around uh Puerta Vallarta for for seed.
5:36
SPEAKER_00: So I remember going to a at the time pioneer conference, Cartava now, and they they had uh I think they postponed it being in in uh uh Puerta Vallarta due to some nervousness.
5:49
SPEAKER_00: I don't know whether it was cartel related or not.
5:52
SPEAKER_00: So, but I know at least uh Cartava has a big uh research uh uh outlet there.
5:58
SPEAKER_00: So uh there's always an ag interest in in key areas of the of the world.
6:03
SPEAKER_01: Well, speaking of nervousness, you brought up that word.
6:05
SPEAKER_01: We don't have to be nervous about the Supreme Court because they just became the sheriff on tariffs.
6:11
SPEAKER_01: That it's final, they made the decision.
6:13
SPEAKER_00: We finally got the decision.
6:15
SPEAKER_00: Trump, of course, came out very emotional against at least the two conservative Supreme Court justices that he picked, by the way, who voted in favor of the majority who said that Trump's trade policy was unconstitutional.
6:32
SPEAKER_00: Well, okay, that there's a lot of complexity we can go into, but we're just gonna bottom line it.
6:38
SPEAKER_00: What happened?
6:39
SPEAKER_00: It was fairly uh more simple ruling, they just said it's unconstitutional.
6:44
SPEAKER_00: So now, if you if you recall, we have been mentioning this for months on the podcast here, Tommy, and they have a series of other trade policy tools that they've already announced.
6:56
SPEAKER_00: Trump initially uh said through section 122 of a 10 tariffs, and then Saturday, this is why I have to work a weekends with Trump.
7:06
SPEAKER_00: He he increased that at other five percentage points to 15.
7:11
SPEAKER_00: Now that'll take effect February 24th, but it's limited for 150 days.
7:18
SPEAKER_00: Now, because the next tool that they announced that they're going to use is accelerated what they call Section 301 investigations.
7:28
SPEAKER_00: Now that takes time, except uh I think they've been working on this, and that'll have more legal ump behind it, Section 301.
7:37
SPEAKER_00: In fact, Section 122 tariffs could be called into court uh action, you know, by the way.
7:43
SPEAKER_00: But by the time that went through the courts, they will have already kicked in Section 301.
7:48
SPEAKER_01: And I think you have a picture talking about that.
7:51
SPEAKER_01: Is this what I'm supposed to?
7:52
SPEAKER_00: Yes, that's it.
7:54
SPEAKER_00: So now on February 24th, that's when the Section 122 tariffs begin.
7:59
SPEAKER_00: That's the 15%.
8:01
SPEAKER_00: I could go and give even provide a market impact, limited disruption due to the exemptions.
8:07
SPEAKER_00: USMCA is exempted.
8:09
SPEAKER_00: So what USMCA was exempted before, they're gonna be exempted now, and agriculture has a number of commodities, fertilizer, beef, coffee, that are exempted from this 15% new tariffs.
8:23
SPEAKER_00: Now, the next tool, as I said, the next 60 to 120 days, it's gonna be accelerated Section 301 investigations.
8:31
SPEAKER_00: And that's the big program because we've used that before and it'll hold up in court, Tommy.
8:37
SPEAKER_00: But it brings rising uncertainty and premium to the marketplace because here's here's a potential conundrum here.
8:46
SPEAKER_00: Some countries may retaliate on the Section 301, so we're gonna have to see whether or not they do so, and then so that'll come out in about the middle of this year.
8:58
SPEAKER_00: We'll have the potential tariff findings and rollout from the U.S.
9:01
SPEAKER_00: trade representatives.
9:03
SPEAKER_00: And I've got high volatility risk because it depends on how the various countries react.
9:11
SPEAKER_00: And so the market is is increasingly going to look at any potential retaliation.
9:19
SPEAKER_00: You've got supply chain adjustments now, some maybe front loading of imports again to get around the coming 301, some currency responses.
9:28
SPEAKER_00: We're gonna see how this impacts.
9:31
SPEAKER_00: But the Supreme Court didn't say anything about the 175 billion dollars in these tariff funds, Tommy, and that made Trump upset.
9:40
SPEAKER_00: So, what's gonna happen to that?
9:42
SPEAKER_00: It's gonna go into the lower courts.
9:44
SPEAKER_00: And Trump has already said it's gonna take years before that issue unwinds itself, if it does, in the court system.
9:52
SPEAKER_00: So it's a big question mark relative to these tariff funds because individual companies, over a thousand, have to file cases against this.
10:01
SPEAKER_00: So we're talking later rather than sooner on this.
10:05
SPEAKER_01: Good time to be a lawyer.
10:07
SPEAKER_00: It's a lawyer employment act.
10:09
SPEAKER_00: That's listener.
10:10
SPEAKER_01: I got a mean tweet.
10:11
SPEAKER_01: Then President Trump put out a mean tweet on Saturday.
10:13
SPEAKER_01: I won't read the whole thing, but we'll just go.
10:16
SPEAKER_01: It's really in fine print, folks.
10:17
SPEAKER_01: But if you're watching this on YouTube, we appreciate it.
10:19
SPEAKER_01: But based on the thorough, detailed, and complete review of the ridiculous, poor written, and extremely anti-American decision on tariffs issued yesterday.
10:30
SPEAKER_01: And after many months of contemplation, all right, blah blah blah.
10:34
SPEAKER_01: The 10% that we went home thinking that's what it was on Friday, he raises it to 15%.
10:40
SPEAKER_01: And then there's some more uh mean tweet language in there, which uh yeah, that's all I could say.
10:45
SPEAKER_01: When Trump tweets, if you don't like it, it's a mean tweet and it hurts feelings.
10:48
SPEAKER_01: What uh what was in that mean tweet?
10:50
SPEAKER_00: Well, he came after the Supreme Court justices who didn't vote for him, and he said their their family should be ashamed, basically.
10:57
SPEAKER_00: So that was emotional.
10:59
SPEAKER_01: That goes down as a mean tweet.
11:00
SPEAKER_00: That's a mean, there's no doubt about it.
11:02
SPEAKER_00: It's a mean tweet.
11:03
SPEAKER_00: It's a just that's just it's not presidential, but that's Trump sometimes.
11:08
SPEAKER_00: He just gets uh upset and he lets his feelings show to to the uh public.
11:14
SPEAKER_00: But here's the other one: the big the big issue here for agriculture, Tommy, is what about all these trade agreements that we've had announced?
11:22
SPEAKER_00: Are they gonna hold?
11:23
SPEAKER_00: Well, U.S.
11:24
SPEAKER_00: trade representative Jameson Greer on a news program CBS today, Sunday, uh said uh yes, basically they better.
11:32
SPEAKER_00: And the EU is gonna have a meeting, European Union is gonna have a meeting Monday.
11:37
SPEAKER_00: They want to, they're seeking, uh they're gonna seek more clarification of these changes.
11:42
SPEAKER_00: But bottom line, I think the vast majority of countries are gonna stand packed.
11:47
SPEAKER_00: The these trade agreements were negotiated, and I think that they'll hold up.
11:52
SPEAKER_00: So there's some initial, I think errant speculation that this could uh impact uh the US-China relations.
12:01
SPEAKER_00: I just do not see it.
12:02
SPEAKER_00: We'll talk more about that later.
12:04
SPEAKER_00: And also, if you recall on the on the USDA farmer bridge aid payments, which start, by the way, tomorrow, Monday, February 23rd, which we thought we've been alerting for the last few weeks that they were going to come sooner rather than later.
12:20
SPEAKER_00: Well, remember when Trump had a round table and he said these aid payments were coming from the tariff funds?
12:28
SPEAKER_00: He was incorrect when he said that.
12:30
SPEAKER_00: They're coming from the commodity credit corporation.
12:34
SPEAKER_00: But since that was not corrected, some industry analysts who should know better but don't are saying, again, they're wrong.
12:43
SPEAKER_00: They're saying, oh, they wonder whether or not this farmer bridge funding of$11 billion for real crops and a billion dollars for specialty crops may be called into question.
12:53
SPEAKER_00: Absolutely not, because uh the funding came through USDA's Commodity Credit Corporation.
13:00
SPEAKER_00: But this is the reason why USDA Secretary Brooke Shields should have corrected Trump during that round table in a politic way, to saying, well, that it's coming from USDA's Commodity Credit Corporation, because it leads industry analysts who don't follow this as close as we do, Tommy, to errantly put out copy that says, oh, some of this funding may be up in the air right now.
13:26
SPEAKER_00: It's wrong.
13:27
SPEAKER_00: So don't believe those reports.
13:29
SPEAKER_01: In word of the day, we will say errant.
13:31
SPEAKER_01: I'm like, what does errant mean?
13:33
SPEAKER_01: I Googled errant, which you use so loosely, use it combines are and not for plural subjects in you.
13:41
SPEAKER_01: Word of the day, Jim Weismeyer, errant.
13:45
SPEAKER_00: And they were just wrong.
13:47
SPEAKER_00: It was wrong to say it to begin with, and it leads to other mistakes, as I said, industry analysts who don't follow uh geopolitical and foreign policy events as we have to.
13:59
SPEAKER_00: So again, the aid is gonna uh fund, and that's our next segment.
14:03
SPEAKER_00: These former bridge aid payments, yes, uh USDA announced uh this past week, they're gonna begin Monday, February the 23rd, and I think go into April.
14:11
SPEAKER_00: But here's an update a number of uh our podcast uh listeners and viewers emailed us and saying, you know, I'm having trouble getting in and filing the information or are checking on this.
14:27
SPEAKER_00: Well, I emailed top USD officials, they thanked us and they said that they were looking at each individual farmer complaint who said that they had a problem accessing this.
14:40
SPEAKER_00: And also, I would tell a farmer, and sometimes older farmers are not as computer uh uh uh savvy, savvy, yeah.
14:49
SPEAKER_00: I was gonna say literate, that might be too strong, but savvy is a better word.
14:54
SPEAKER_00: And I would say go to your crop insurance agent.
14:58
SPEAKER_00: I can't say that all of them will help you, but I know how good they are.
15:02
SPEAKER_00: And if you're having trouble checking on the farmer bridge aid uh payment, check your crop insurance agents because they're they're so good at what they do and they understand the process.
15:14
SPEAKER_00: So there's your plan B if you're having trouble on this one.
15:18
SPEAKER_00: But the money's gonna start flowing for sure, beginning Monday.
15:22
SPEAKER_00: And if not Monday, the next few days after that, but it'll be before.
15:27
SPEAKER_00: Remember, when they first announced this program, they said by February the 28th, I'll applaud USDA.
15:33
SPEAKER_00: They got it done because it's kind of a simple type of a program, it's not complex, so they didn't have much to do, and most of the FSA personnel should have been trained the last few days on this program.
15:49
SPEAKER_00: Now, I know I'll probably get emails saying some of their FSA offices were not trained.
15:54
SPEAKER_00: Well, it's gonna come very soon, at least based on USDA people in Washington.
15:59
SPEAKER_01: Well, let's stick with the money.
16:00
SPEAKER_01: USDA announces sugar aid came out, I believe, late Friday.
16:03
SPEAKER_01: You were all over it.
16:04
SPEAKER_01: Talk about it.
16:05
SPEAKER_00: Yeah,$150 million in market disruption support.
16:08
SPEAKER_00: That's the that's the economic aid.
16:10
SPEAKER_00: And just a little over$89 million in 2024 disaster relief for sugar beet growers.
16:16
SPEAKER_00: That was due to the extreme heat in 2024.
16:19
SPEAKER_00: And all those the two programs is aimed at stabilizing beet and cane growers, and that's a good thing because I'm telling you, the North Dakota sugar beet growers, uh, the cane growers, they're hurting as much as other real crop producers.
16:35
SPEAKER_00: And this aid certainly will help at least going into the 2026 season.
16:41
SPEAKER_00: So that's a good thing.
16:42
SPEAKER_01: Absolutely.
16:43
SPEAKER_01: Big week in Washington last week.
16:44
SPEAKER_01: We had the USDA ag forum.
16:46
SPEAKER_00: Yeah, and the top economist, USDA's top economist, gave the general outlook.
16:52
SPEAKER_00: And we've got the crop prices in acres, there are modest shifts, not dramatic changes.
16:56
SPEAKER_00: I didn't think it did, you know, surprise the industry much at all.
17:00
SPEAKER_00: But they we've got corn, they've got season average prices of 420 a bushel.
17:05
SPEAKER_00: That's farm gate now.
17:06
SPEAKER_00: Soybean.
17:07
SPEAKER_01: I have that picture.
17:08
SPEAKER_01: And yeah, Mr.
17:08
SPEAKER_01: Newton's picture.
17:09
SPEAKER_01: Where would you like that one?
17:11
SPEAKER_00: No, that comes later.
17:12
SPEAKER_00: That comes pretty soon.
17:13
SPEAKER_00: Soybeans at$10.30, wheat at$5 a bushel, season average, cotton 63 cents.
17:19
SPEAKER_00: Now, cotton needs about 92 cents for break-even, so you can see they're still in a world to hurt, and rice$14.30 a hundred weight.
17:28
SPEAKER_00: Bottom line, prices are expected to only improve marginally from year-ago levels, about 10 cents when you look at the major crops.
17:37
SPEAKER_00: Now, the key dynamic, USDA said, is the soybean to corn price ratio, and that favors additional soybean planting.
17:45
SPEAKER_00: So, where are they at on acreage?
17:47
SPEAKER_00: They've got corn acreage down to 94 million acres, Tommy, about 4.8 million acres lower than 2025.
17:56
SPEAKER_00: Soybeans are up to 85 million acres, that's up to 3.8 million.
18:00
SPEAKER_00: Wheat is somewhat lower at 45 million acres, and cotton and rice are mostly steady.
18:06
SPEAKER_00: So this points toward a more soybean-heavy planting mix in the 26-27 crop year.
18:14
SPEAKER_01: Yeah, and we have more charts here.
18:16
SPEAKER_01: Farm income and federal support remain critical, or more pointers here.
18:20
SPEAKER_00: All then that's when we can go to the Newton break-even tape.
18:24
SPEAKER_00: You want that chart?
18:25
SPEAKER_00: Let's do that one right before.
18:28
SPEAKER_00: John Newton does great graphics, and this one is a key one because what he did is he used USDA's uh ag outlook for him, AOF, farm price and break-even prices above total cost.
18:42
SPEAKER_00: And you can see look at soybeans still below break-even, 16% below, wheat is still 37% below break-even using USDA's season average farm price.
18:56
SPEAKER_00: Corn is 16% below break-even.
18:59
SPEAKER_00: And look at cotton, 44% below break-even.
19:04
SPEAKER_00: Though, so that clearly shows you that farmer bridge aid payments are needed, and perhaps an additional dose of farmer aid later this year as Congress at least debates a potential supplemental spending bill.
19:18
SPEAKER_00: And that gets us into the farm income and federal support remain critical because USDA's top economist said he stressed the continued role of the federal support mechanism, direct government payments, crop insurance indemnities, income stabilization programs, and they have played a very important role in smoothing volatility as commodity prices declined from the pandemic era highs.
19:46
SPEAKER_00: And the top economist had a good quote.
19:49
SPEAKER_00: He said, The the these uh farmer bridge payments are are are a way to get you to the to the fall Title I payments, but it's not a destination itself, that has to come from demand, and that's when he went into the things we've been talking about for months for corn, it's gotta be year-round E15 to increase demand for corn.
20:14
SPEAKER_00: It's gotta be the renewable fuel standard program mandates for corn, biodiesel, renewable diesel, etc.
20:24
SPEAKER_00: Then he went into the livestock.
20:26
SPEAKER_00: I think we have one on livestock.
20:27
SPEAKER_00: Yeah, tighter.
20:28
SPEAKER_00: Uh, we all know this.
20:30
SPEAKER_00: Tighter cattle supplies is supporting prices, cattle inventories remain historically low, high beef cutout values, uh, fed and feeder cattle prices by USDA are projected to rise again in 2026.
20:43
SPEAKER_00: I think that's an understatement.
20:45
SPEAKER_00: Dairy production is expected to increase modestly while milk product prices normalize.
20:51
SPEAKER_00: Egg prices are forecast to decline sharply after the recent spikes.
20:56
SPEAKER_00: And Bloomberg had a story this week of how significant drop that has occurred in egg prices.
21:03
SPEAKER_00: And now there's almost an oversupply of eggs at grocery stores at grocery stores.
21:09
SPEAKER_00: So what a change in that outlook, huh?
21:12
SPEAKER_00: Yeah.
21:12
SPEAKER_01: Yeah.
21:12
SPEAKER_00: The bottom line on livestock, the USGA projects most livestock prices are going to move moderately higher year over year, and that's tight supplies and resilient protein demand.
21:25
SPEAKER_00: That protein demand is just staying there.
21:28
SPEAKER_00: So, what do they see for 2026?
21:30
SPEAKER_00: Transition year, they called it.
21:32
SPEAKER_00: Input costs are going to ease, but they're still high.
21:35
SPEAKER_00: Commodity prices stabilizing, but at lower ranges.
21:39
SPEAKER_00: Livestock will continue to outperform the crop sectors.
21:43
SPEAKER_00: Biofuels are supporting oil seed demand as we crush for oil.
21:48
SPEAKER_00: Global competitors are gaining market share, and the trade deficit is widening despite export opportunities.
21:56
SPEAKER_00: So that US ag trade deficit is still going to be a drain on the balance sheet.
22:03
SPEAKER_00: And USDA's message to me is one of cautious stability, Tommy, not a crisis.
22:09
SPEAKER_00: But not a return to the boom conditions we saw earlier this decade.
22:13
SPEAKER_00: The path forward depends, USDA said, heavily on trade access, weather outcomes, and how quickly demand growth can absorb the expanding global supplies.
22:25
SPEAKER_00: And that's fairly succinct analysis, and I think it's spot on, Tommy.
22:29
SPEAKER_01: Yeah, absolutely.
22:30
SPEAKER_01: Let's uh have you take a break.
22:32
SPEAKER_01: I'm gonna mute your microphone.
22:33
SPEAKER_01: Folks, I'd love for you to join us on the premium side.
22:36
SPEAKER_01: We now have premium content.
22:37
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22:41
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22:41
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22:55
SPEAKER_01: We're about halfway through the show.
22:57
SPEAKER_01: Of course, I want to remind you one more time Jim and I will be in Illinois, Farm Ford Conference, March 5th, 2026, 8 a.m.
23:05
SPEAKER_01: to 2.
23:06
SPEAKER_01: They have an action pack group, markets, policy, trade, soil health, and more.
23:11
SPEAKER_01: I have never met Jim personally, so I will be picking him up from the airport.
23:16
SPEAKER_01: I will be holding up a sign.
23:18
SPEAKER_01: I'll yell his name out, pronouncing it the best I can in the airport, and we will get back to the show.
23:23
SPEAKER_01: I know he's giggling down there.
23:25
SPEAKER_01: I can see him.
23:26
SPEAKER_01: But boy, I can't thank you all enough.
23:28
SPEAKER_01: The crowd that's been joining the show, liking, clicking, subscribe.
23:31
SPEAKER_01: This is free, folks.
23:32
SPEAKER_01: Send this show to friends, family, anyone involved in agriculture.
23:36
SPEAKER_01: There's no doubt you can't watch this show or listen to this show and listen.
23:40
SPEAKER_01: All right, he's got his coughing done.
23:42
SPEAKER_01: He's getting better.
23:43
SPEAKER_01: He's got something to drink, and he's all wound up with lots more stuff.
23:48
SPEAKER_00: And by the way, I think the Strom Family Farm event is near Peoria, right?
23:52
SPEAKER_00: It's near Peoria.
23:53
SPEAKER_01: Yeah, yeah.
23:53
SPEAKER_01: Very, very successful farm there.
23:55
SPEAKER_01: I'll be picking you up at the airport.
23:57
SPEAKER_01: And uh there may be bourbon involved somewhere.
24:00
SPEAKER_00: Uh now the next one we got some good news from an agribusiness company, John Deere.
24:04
SPEAKER_01: Amazing news, amazing news.
24:06
SPEAKER_01: Let's get back to the show full screen on you.
24:09
SPEAKER_00: Yeah, they lifted their profit forecast and they're good at cost controls.
24:13
SPEAKER_00: And boy, they did it again.
24:14
SPEAKER_00: And that helped stabilize their earnings.
24:17
SPEAKER_00: And despite a weak large equipment demand from U.S.
24:21
SPEAKER_00: and Canada in the farm sector, but the management there signaled that the ag machinery cycle may be nearing a bottom.
24:30
SPEAKER_00: Now, as John Deere goes, so goes U.S.
24:33
SPEAKER_00: agriculture.
24:34
SPEAKER_00: There's okay, there's a moniker that I've learned to count on.
24:39
SPEAKER_00: And though farmers are remaining cautious, Tommy, amid low crop margins.
24:43
SPEAKER_00: So maybe they might uh still be surprised on the downturn in big uh equipment sales, but their CEO, and I think we've got his quote right here.
24:53
SPEAKER_00: Yeah, yeah, yeah.
24:55
SPEAKER_00: You want to read it?
24:56
SPEAKER_01: Yes, sir.
24:56
SPEAKER_01: I will.
24:57
SPEAKER_01: Uh look at I just love all these logos we popped up, all the John Deere logos since the beginning of time.
25:01
SPEAKER_01: Here we go.
25:02
SPEAKER_01: CEO John May said the company is seeing early signs of stabilization, particularly in construction equipment and smaller agricultural machinery, even as the large ag segment remains under pressure.
25:15
SPEAKER_01: Jim, the stock spiked up 14% and closed at 666.60 that day for you spooky people out there.
25:25
SPEAKER_00: And I've always said in my speeches, for farmers who get upset at John Deere prices, don't get mad, get even, buy their stock.
25:33
SPEAKER_01: Buy the stock.
25:34
SPEAKER_00: That's a hedge.
25:35
SPEAKER_00: And John May, the CEO, described 2026 as likely marking, quote, the bottom of the current cycle.
25:43
SPEAKER_00: And so that suggested at least Deer believes demand conditions may begin improving from here.
25:50
SPEAKER_00: He said, while the global large ag industry continues to experience challenges, we're encouraged by the ongoing recovery in demand within both the construction and small ag segments.
26:03
SPEAKER_00: And so that was a good bottom line, at least from John Deere's uh CEO, John May.
26:09
SPEAKER_00: And I hope it works out for them and for the ag industry.
26:12
SPEAKER_01: Yeah, like in that movie, I think at the movie Stodgeball or something, they're like, that's a bold move, Cotton.
26:18
SPEAKER_01: I mean, to go and say this, right?
26:20
SPEAKER_00: Yeah, nobody calls the lows or the highs, but I think he just did.
26:24
SPEAKER_01: Nobody puts baby in the corner, especially John Deere.
26:27
SPEAKER_01: And that's these folks who trade these stocks, these are big, big money people buying that stock.
26:33
SPEAKER_01: So a lot of optimism.
26:34
SPEAKER_01: Speaking of optimism, Trump to visit China.
26:37
SPEAKER_00: Oh, yeah.
26:38
SPEAKER_00: Now, Trump in his State of the Union address Tuesday, we're gonna get to that.
26:42
SPEAKER_00: He's gonna mention his upcoming trip March the 31st to April the 2nd.
26:48
SPEAKER_00: And he he's gonna get a grand uh thank you and visit uh by his friend Xi Jinping.
26:57
SPEAKER_00: So the market's gonna look at are there any, did the US lose any leverage?
27:03
SPEAKER_00: Trump's favorite word in dealing with China relative to the Supreme Court ruling.
27:08
SPEAKER_00: Some people think so.
27:09
SPEAKER_00: I think they're wrong.
27:10
SPEAKER_00: I don't think that he's lost any leverage on that.
27:14
SPEAKER_00: Agriculture is gonna listen whether or not there's any more updates to Trump's previous suggestion to Xi Jinping that China buy 8 million more metric tons of soybeans above the 12 million metric tons of soybeans that they that they committed to purchase and they did by the end of February.
27:35
SPEAKER_00: So, and whether or not they're gonna fulfill their 25 million metric tons on a marketing year basis for the following two years at least.
27:44
SPEAKER_00: That's what's gonna come uh out about this.
27:46
SPEAKER_00: Now, of course, Taiwan is always a sensitive issue, and that could always be the fly in the ointment on on any meeting.
27:54
SPEAKER_00: But I think Trump knows the importance of having a good uh takeaways, you know, deliverables as we call it in Washington, in during his meeting with Xi Jinping.
28:04
SPEAKER_00: March 31, April 2nd, it will be very market competitive.
28:09
SPEAKER_00: And as we said, I think last week, Tommy, watch this 10% ethanol tariff.
28:16
SPEAKER_00: If that comes off from both China and the U.S., bottom line, that makes us as competitive to Brazil soybeans as we've been in years.
28:27
SPEAKER_00: So let's hope that's the case eventually.
28:29
SPEAKER_00: We're gonna have to listen to see whether or not they give a timeline or whether or not they they announce that those tariffs are off because that'll make U.S.
28:38
SPEAKER_00: foreign products very competitive to Brazil.
28:41
SPEAKER_00: So that's the China G.
28:43
SPEAKER_01: Fentanyl.
28:44
SPEAKER_01: Let's go back to a lot of episodes, something you've talked about.
28:47
SPEAKER_01: Fentanyl.
28:47
SPEAKER_01: There's a tariff that we're we're saying, hey, you got to stop this fentanyl.
28:51
SPEAKER_01: So you said ethanol.
28:52
SPEAKER_01: Talk about fentanyl.
28:53
SPEAKER_01: They may announce that too, right?
28:54
SPEAKER_00: They they announced that.
28:55
SPEAKER_00: That's that 10% that we have.
28:57
SPEAKER_00: China put one on, and so did we.
29:00
SPEAKER_00: So that is a remaining thorn in the side of U.S.
29:04
SPEAKER_00: soybeans competitive because we're about what, a buck 20 or so still higher on the price of uh soybeans to br uh to uh China than Brazil.
29:14
SPEAKER_00: But boy, that while it may not wipe all of it out, it wipes a big chunk of the price differential.
29:20
SPEAKER_00: So that'll be constructive news if that happens, or if they get give a glide path to the future of when that tariff will come off.
29:29
SPEAKER_00: So listen closely to that one.
29:31
SPEAKER_00: It's okay to say the Trump train is coming to soybeans because we've seen we've already seen it come and it can train is involved, it may be going down uphill and then downhill again because we're gonna get, I think we'll get some good news out of this summit.
29:48
SPEAKER_01: You know, it's interesting because if you depending on if you're an optimist or pessimist, you'd say all the things are going wrong.
29:54
SPEAKER_01: But like our friend Paul Neefer teaches us, you know, we see what we know now, but when you do ag accounting, you you grow the crop, you sell the crop, but then sometimes, like now, this money comes in after, or a price rally comes in after.
30:08
SPEAKER_01: And the thing that makes markets so complex is not the things we know, everyone knows what we know, it's the things we don't know, and that's what'll happen at that meeting, Jim.
30:17
SPEAKER_00: Absolutely, and that the market doesn't know how to gauge it because it's geopolitics, and that's where most ag industry analysts get a failing grade, they just don't understand the process, and that's kind of what we're here for, Tommy.
30:32
SPEAKER_00: To to to go before the signals and the noise.
30:35
SPEAKER_00: And I think we're gonna get more signals than noise out of this uh Beijing summit.
30:40
SPEAKER_00: So be tuned on that.
30:41
SPEAKER_01: Yeah, we have some noise going on on the House Ag panel.
30:44
SPEAKER_01: Postpones, postpones markup on Farm Bill 2.0.
30:48
SPEAKER_00: Weather.
30:49
SPEAKER_00: Weather is coming.
30:50
SPEAKER_00: We're gonna get anywhere from three to seven inches.
30:53
SPEAKER_00: At least that's the latest reading in DC.
30:55
SPEAKER_00: And we fall apart in DC with one inch of snow, by the way.
31:00
SPEAKER_00: This is not Iowa or Minnesota or North Dakota here at all.
31:04
SPEAKER_00: So they just came out a couple of hours ago and postponed the markup to sometime in early March.
31:10
SPEAKER_00: Let's just say they'll they'll they'll uh put another advisory out.
31:14
SPEAKER_00: But we were gonna have a series, I think they were gonna take two to three days in the in the uh actual markup this week, but that's uh postponed until early March.
31:24
SPEAKER_00: And uh I've got in my coming week ahead that will be on your site, Tommy.
31:30
SPEAKER_00: I go through some of the issues the Prop 12 issue, the pesticide issues, farm credit issues, food and nutrition, conservation program, equip funding, a little more reduction than people thought of.
31:43
SPEAKER_00: All those are issues that's going to be cussed and discussed in the markup that's now postponed until early March.
31:49
SPEAKER_00: That's your bottom line on the Farm Bill 2.0.
31:52
SPEAKER_01: Moving along, we're about three-fourth from the end.
31:54
SPEAKER_01: Update on year-round E15.
31:56
SPEAKER_00: If you recall, they had a council that was set up to come up with legislation on year-round E-15.
32:05
SPEAKER_00: And February 25th was the deadline to have that.
32:09
SPEAKER_00: I think they were almost done trying to work with all of the small refiners who over the past week were giving negative signals saying, no, they don't like some of the things they're hearing on this year-round E-15.
32:24
SPEAKER_00: But I still think when the when the when the final uh uh bell rings on this one, that they'll eventually get, the industry will eventually get year-round E-15.
32:35
SPEAKER_00: They're gonna have to maybe give a little bit more to some small refiners.
32:39
SPEAKER_00: But bottom line, I think Secretary Rollins during the Outlook conference, she encouraged Congress to go the next step and codify year-round D-15.
32:50
SPEAKER_00: And she'll probably mention this during her speech at the Commodity Classic in San Antonio.
32:56
SPEAKER_00: I think it begins Wednesday, but she's going to speak Thursday, and she may have some other news because Secretary Rollins likes to give news when she comes out with a speech, especially at the Commodity Classic.
33:08
SPEAKER_00: So stay tuned for that on Thursday.
33:11
SPEAKER_01: Absolutely.
33:11
SPEAKER_01: And there you go.
33:12
SPEAKER_01: Commodity classic this week is in San Antonio, Brooke Rollins to speak on Thursday.
33:17
SPEAKER_01: I think you just covered that.
33:17
SPEAKER_01: I mean, you want to add any more color?
33:19
SPEAKER_00: We did.
33:19
SPEAKER_00: No, no, but I do want to comment on RFS issues.
33:22
SPEAKER_00: The renewable fuel standard issue.
33:25
SPEAKER_01: I skipped one to me in line.
33:27
SPEAKER_00: I'll I mentioned uh, you know, the uh you know commodity classic, but RFPA uh either did just about, yes.
33:37
SPEAKER_00: They're just about to send over their determinations on these RFS issues, what the mandates are gonna be for corn and and biodiesel, renewable diesel for 2026 and 2027, how they're gonna deal with the SRE reallocations and the rent relative to uh countries outside of the US, Canada, and Mexico.
34:00
SPEAKER_00: Well, how much are they gonna be eligible for rents?
34:03
SPEAKER_00: All those are gonna come out in an eventual EPA announcement.
34:08
SPEAKER_00: Now, once it officially gets over to the Office of Management and Budget, it's uh usually sits there not that long, maybe a week or so.
34:18
SPEAKER_00: So that's why most people say by the end of March we should have an announcement.
34:24
SPEAKER_00: Let's hopefully before the end of March, we're gonna get an EPA announcement on these critical issues.
34:30
SPEAKER_00: Because how do you assess demand of both 2026 and 2027 until we have these decisions announced?
34:39
SPEAKER_00: So I don't know whether Rollins uh will kind of signal anything on this issue because it's really an EPA issue.
34:47
SPEAKER_00: I don't know whether she'll mention anything at the commodity classic on this, but it would be a good thing if she did.
34:53
SPEAKER_00: Maybe Lee Zeldon will show up by surprise.
34:55
SPEAKER_00: Who knows?
34:56
SPEAKER_01: Okay, well, crazier things have happened, yes, sir.
34:59
SPEAKER_01: All right, as we start to end the show, and then I have a little bit more color to add on just a couple odd things that happened, my trader's perspective of uh things you need to be watching under this administration.
35:09
SPEAKER_01: But this is big.
35:10
SPEAKER_01: Trump's Day of the Union address Tuesday, February 24th.
35:15
SPEAKER_01: This is gonna be big.
35:16
SPEAKER_00: Oh, it's got we're gonna say which Trump are we gonna get?
35:19
SPEAKER_00: Are we gonna get the Trump says that says he already won the affordability uh issue, which I think he probably will say that, but he hasn't yet.
35:28
SPEAKER_00: We still have sticky, you know, food inflation.
35:31
SPEAKER_00: We're gonna get a USDA uh uh food uh price update later this week as well, Tommy.
35:37
SPEAKER_00: But he's gonna mention the economy, he always does.
35:40
SPEAKER_00: You can almost know the quotes that he's gonna say.
35:42
SPEAKER_00: We got the best economy, GDP, gross domestic product you could write for him.
35:46
SPEAKER_01: You could, yeah.
35:47
SPEAKER_00: We we all know what he's gonna say here.
35:49
SPEAKER_00: However, we're gonna see what what any new nuances relative to the Supreme Court ruling on trade that that came out, because we'll see if he's mellowed a little bit on that, or and we'll see what spin he puts on that.
36:06
SPEAKER_00: So I think trade and that Supreme Court decision is gonna be one of the key elements that's gonna be a part of the State of the Union address.
36:15
SPEAKER_00: But he's gonna gear, should gear his speech to these coming elections because the their internal polls show that it looks like the Democrats could regain control of the House, not the Senate.
36:28
SPEAKER_00: So it's gonna be interesting to see how he cast a positive spin on the U.S.
36:33
SPEAKER_00: economy.
36:34
SPEAKER_00: They're reducing inflation, and they are.
36:37
SPEAKER_00: And the economy could be better than the market ever realizes, in his judgment.
36:43
SPEAKER_00: And I think he's probably right there.
36:45
SPEAKER_00: Of course, the trade policy and the the labor situation, the border he'll mentioned, whether or not he'll mention any changes in the deportation relative to Minnesota and other states.
36:58
SPEAKER_00: All that this is gonna, he's gonna lay the picture out for the year, a critical year ahead going into these midterm elections.
37:06
SPEAKER_00: All that's gonna be as a result of the State of the Union address that I don't think will be canceled due to the weather because that's just lawmakers can get to town by Tuesday uh evening, and that's where we're gonna have it.
37:18
SPEAKER_00: So we're gonna see how the how the which way he goes and how the different analysts spin what they think the president said.
37:25
SPEAKER_00: All that, and we'll have analysis on on your website as well.
37:30
SPEAKER_01: You want to go live on Tuesday night about 10 o'clock?
37:33
SPEAKER_00: I'll try I probably will if there's any meat to it, which I think there's with Trump, there always is.
37:43
SPEAKER_01: Okay, real quick, just a little something I noticed this week.
37:46
SPEAKER_01: Um, I'm always watching X, and that seems to be where news comes out.
37:49
SPEAKER_01: I found this interesting.
37:50
SPEAKER_01: This is probably hard for you to see.
37:52
SPEAKER_01: This was just a tweet, but I'll I'll I'll read it.
37:54
SPEAKER_01: Uh, this represents 40 to 50 percent of the deployable US air power in the world.
37:59
SPEAKER_01: Keep an eye on Iran.
38:01
SPEAKER_01: There's I don't even want to speculate what's going to go on on over there, but what I can tell you factually is if we're playing the game of uh risk or battleship, we got a ton of uh tin over there, don't we, my friend?
38:11
SPEAKER_00: Oh my goodness, I we haven't seen this arsenal.
38:14
SPEAKER_00: If if if Iran doesn't see this signal, frankly, the administration is surprised that they haven't compromised already.
38:22
SPEAKER_00: And the word is that Iran any day now could offer a proposal, and we're gonna see if that hits all the elements, the red lines that uh Trump has has put in on this Iran.
38:35
SPEAKER_00: So he's not gonna be appeasing to Iran.
38:38
SPEAKER_00: So I think this is a critical week on how Iran reacts to some of the intern uh of the external talks that various Trump administration officials have had with Iran.
38:50
SPEAKER_00: But we're ready to go either way, whether it's this strategic uh uh strike on Iran, the concern is that if it's a major strike, then you open up a can of worms relative to the Mideast.
39:03
SPEAKER_00: It could really have a domino impact, and your energy prices are already signaling they're nervous over the shipping uh areas and and other aspects.
39:14
SPEAKER_00: So this is a high focus topic every day this week, but especially near the end of the week.
39:21
SPEAKER_00: What it'll grow in importance, Tommy, as an issue.
39:24
SPEAKER_01: Let me add a little color.
39:25
SPEAKER_01: Late on Friday, gold prices exploded.
39:27
SPEAKER_01: They were up big, just based on probably the Supreme Court.
39:30
SPEAKER_01: Gold when I got done trading at four o'clock was up$130 an ounce, well above$5,000, approaching$5,100.
39:38
SPEAKER_01: Silver was up six to seven dollars an ounce, well above$85, approaching$8687.
39:44
SPEAKER_01: Now, with this president, the trader in me, I have to.
39:47
SPEAKER_01: If you're gonna get a tidbit, I know you get all these tidbits from Jim.
39:51
SPEAKER_01: The one tidbit I can watch is I have a true social account, I only follow one account, and it's President Trump.
39:57
SPEAKER_01: And this is why he did a no-no.
39:59
SPEAKER_01: And if it was anyone else, they'd lose their job for this, but he won't.
40:03
SPEAKER_01: Now, this is what he did right before the GDP number.
40:06
SPEAKER_01: Trump leaked the GDP number 40 minutes before the data release.
40:10
SPEAKER_01: The way he did that was the Democrat he said, I quote, the Democrat shutdown cost the USA at least two points in GDP.
40:18
SPEAKER_01: That's why they are doing it in a mini form.
40:22
SPEAKER_01: Again, no shutdowns.
40:23
SPEAKER_01: Also, low interest rates.
40:26
SPEAKER_01: Too late, Paul is the worst president J.
40:29
SPEAKER_01: Trump.
40:29
SPEAKER_01: Well, he tweets this before GDP.
40:32
SPEAKER_01: Lo and behold, Jim, what did GDP say?
40:35
SPEAKER_00: It came out much lower than expected due to this uh number that Trump said that the shutdown 43-day, if you recall the record number of days shut down, but he put a number out before the report came out.
40:48
SPEAKER_00: It's hard to put a clamp on on him on the on the sensitive uh document.
40:52
SPEAKER_00: And I think you're absolutely right.
40:54
SPEAKER_00: You've got to monitor Truth Social like a hawk.
40:57
SPEAKER_01: Has an X account and will use it.
40:59
SPEAKER_01: All right, let's end the show.
41:01
SPEAKER_01: The only way we know how Mr.
41:02
SPEAKER_01: Jim Wiesmeyer leaves us so optimistic and just gets us all pumped up about not only the USA winning hockey, but the USA just winning.
41:11
SPEAKER_01: Take it home, brother.
41:12
SPEAKER_00: It's always big D demand.
41:14
SPEAKER_00: Secretary Rollins earlier this week announced$263 million in food purchases.
41:22
SPEAKER_00: Now, that may not sound like a lot, but it is.
41:25
SPEAKER_00: That's section 32 purchases, butter, 75 million, cheddar cheese and cheese products, Swiss cheese, fresh fluid milk, 20.5 million, high temperature milk, 10 million, chickpeas, dry beans, lentils.
41:39
SPEAKER_00: I'm telling you, all those specialty crop growers in North Dakota were very happy on this announcement.
41:46
SPEAKER_00: Pecans,$10 million, lentils,$14 million, split peas,$24 million, walnuts,$15 million.
41:53
SPEAKER_00: USDA was a little late in announcing these programs, but now they're starting to come.
41:58
SPEAKER_00: And for a sensitive market like specialty crops, Tommy, this is very good news because this is solid demand.
42:06
SPEAKER_00: And that's coupled with let's bridge to the things that we've already talked about, but tie them together.
42:13
SPEAKER_00: As USDA said in their outlook, we have to kick up the demand with growing carryover, especially for corn.
42:22
SPEAKER_00: That's where these trade agreements, which I think are going to hold.
42:26
SPEAKER_00: We've had some pretty good trade agreements announced over the last week to 10 days, especially for meats.
42:31
SPEAKER_00: Indonesia, U.S.
42:33
SPEAKER_00: Meat Export Federation said how significant that was for potential U.S.
42:38
SPEAKER_00: pork products sales to Indonesia.
42:40
SPEAKER_00: They've been working on that for years.
42:42
SPEAKER_00: So I think most of these trade agreements will continue to be implemented.
42:49
SPEAKER_00: I don't see them going by the wayside.
42:52
SPEAKER_00: The EU always huffs and puffs with this meeting Monday, but I think that they'll have a meeting of the minds with U.S.
42:59
SPEAKER_00: uh officials once they settle down.
43:02
SPEAKER_00: But they're huffing and puffing until they have this meeting on Monday.
43:07
SPEAKER_00: And as we said, relative to soybeans, you've got what?
43:11
SPEAKER_00: We had marketing year highs in prices this past week.
43:15
SPEAKER_00: I mean, look at that.
43:16
SPEAKER_00: Yeah, that's finally very good news for the bean complex and not just raw soybeans.
43:22
SPEAKER_00: Uh, soybean oil had a very good week.
43:24
SPEAKER_00: And the China Trump G meetings coming up at the end of this month could be the other gear up that maybe getting that uh twelve dollar price for the summer futures and soybeans a possibility.
43:38
SPEAKER_00: Boy, that would be uh far different than what we had what late last year, remember when we were down in the dumps on soybeans.
43:45
SPEAKER_01: You want to that's why they say you want to buy dips, sell rips, brother.
43:50
SPEAKER_00: So we've got some demand flowing now.
43:53
SPEAKER_00: This is a time we've got South American crops are are gonna come on stream sooner rather than later.
43:59
SPEAKER_00: But look at the weed market, it's been a relatively leader, and it caught a number of traders.
44:04
SPEAKER_00: This fire in Texas, Oklahoma cancel caught a lot.
44:09
SPEAKER_00: of traders off guard and usda even mentioned that in in in some of their outlook outlook material comment Tommy and Texas announced over the late Friday a special aid program for their livestock for the livestock producers uh they announced white wildfire relief for the panhandle ranchers so the this is all all factored into the uh uh uh uh wheat uh market run up that we've seen over the past uh few weeks where wheat has been a leader and boy was up 33 cents last week yeah you don't usually you don't usually see that so you can't go bankrupt making money and uh wheat's starting to look pretty good sounds good jim i may see you tuesday night but if not we'll see you next week absolutely