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May 22 | Commodity Week · Commodity Week

• 0:00
  Todd Gleason: This is the May 22 edition of Commodity Week. Todd Gleason services are made available to WILL by University of Illinois Extension. Well, welcome to Commodity Week. I am Todd Gleason. Today we're coming to you from the Nutrien Ag Solutions Innovation Center just to the south of Champaign, Illinois.
• 0:23
  Our thanks go to one of our panelists, Eric Snodgrass with Nutrien Ag Solutions. We'll talk with him in just a minute along with Joe Jansen, the University of Illinois Agricultural Economist and Dave Chatterton at Strategic Farm Marketing also from Champaign, Illinois. Let's get an idea roughly from Joe and Dave what might be on their list of items they'd like to discuss for the day. We'll start with you, Dave.
• 0:50
  Dave Chatterton: Yeah, Todd. Think a little bit of an inflection point for the markets here. We've had a little bit of a rally. We've gotten past that that May WASDE report. We had the punishment in terms of price.
• 0:59
  Come off a little bit, but still not to a level I think that's enticing a lot of farmer movement or a lot of excitement in the marketplace. If you look at beans in particular, probably still under the cost of production, particularly for new crop. And in a pretty tough situation when it comes to new crop, we have a time horizon in front of us in the marketplace where the seasonals turn positive, particularly for corn, but the clock is definitely ticking. If we're not going to get that rally by the June, let's say, we're certainly starting to turn the the odds against us in terms of a price rally. So what happens here, I think, in the next three to four weeks in terms of the weather outlook, the trade deals are certainly part of that.
• 1:34
  The biofuel guidance and the and the and the current political process that gets that's going on in The US, all in the mix here in terms of price. But I think it's a time to really be paying attention and tweaking your numbers here a little bit and trying to get to a point where I hate to say it, but this may be a year where it's trying to just do the best I can on beans, break even, maybe lose a little, hopefully make a little, and then, you know, the the attention to be on corn where the margins are gonna be.
• 1:58
  Todd Gleason: And then Joe Jensen, from the University of Illinois, the things that you would like to discuss over the next twenty minutes or so.
• 2:04
  Joe Janzen: Yeah. I think we're all thinking about to what extent is the market building some kind of weather premium in or into price or not. So that's obviously gonna be a big story, and that's the seasonal story that happens at this time of year, May, June, July. The other part, sort of what's and then the policy uncertainty around both biofuels and international trade. I think those are the two things that sort of maybe we get some resolution on those things in the next few weeks, but probably those are ongoing issues that sort of persist throughout the rest of this marketing year.
• 2:33
  Todd Gleason: And we'll ask Eric Snodgrass some questions as well. That's why I left you for last, Eric. But to begin with, not a question about the weather for you, but about this Innovation Center and why Nutrien decided to site it here in Champaign County.
• 2:50
  Eric Snodgrass: Well, I think there's a lot of reasons. One, we're trying to just be at the epicenter of ag in the middle part of the country and Champaign accomplishes that. The second thing is, we wanted to have a farm at scale to do our trials and to do all of our testing on. We didn't want something small. We wanted it to be like what a lot of folks deal with.
• 3:05
  And so, you know, Champaign County has good ground, but we're on some of the, I guess, more marginal stuff for the county and that's good. It allows us to kind of test what a lot of our growers are gonna be seeing. So it's big, it's two eighty acres. We have interesting waterways, we have power lines that run through it. So therefore it kind of gives us a real world glimpse into kind of what we sell.
• 3:25
  Todd Gleason: And you have access to the University of Illinois and some really good potential employees.
• 3:30
  Eric Snodgrass: That's right. So the talent pipeline was huge. The biggest thing that they thought about when positioning this was that University of Illinois talent pipeline. If you go back into the main office and there there are several of us with degrees from Illinois, so we're pretty proud to be here.
• 3:43
  Todd Gleason: Let's ask you a few questions about the weather. Dave Chatterton, anything that you'd like to know?
• 3:49
  Dave Chatterton: Well, I I guess I'd like to know what we're gonna be looking at in the next three weeks here. You know, we're getting ready to go into that seasonal time period that Joe and I both mentioned. You know, we're we're maybe a little bit behind in terms of development as this cool weather moves in, but once we come out of that, we're we're gonna move towards that pollination reproductive window. And it's been a I guess, an interesting spring. We we got off to a very quick start.
• 4:11
  Now we're kinda bogging down. The wet areas have stayed wet, we've got, by our count, around 7,000,000 acres still to plant in Southern Illinois, Indiana, Ohio. You throw in a little bit more in Kentucky and Tennessee. Starting adding those numbers up, they don't necessarily change the narrative, in a big way in terms of the balance sheet, but they can start to to do that. And in the meantime, the USDA, you know, we've got this 2,000,000,000 bushel new crop carryout projected, but it's at a one eighty one yield.
• 4:37
  Mhmm. A record yield, a yield that we've never been able to achieve in The US. And so I guess my main question is is whether they're gonna cooperate in a way based on where we're at today that allows us to hit that one eighty one? Or what are the odds of that? Maybe that's a better way to say that.
• 4:49
  Eric Snodgrass: I think the odds of that are small, only because to get to one eighty one, I think I'd have to replicate for you 02/2009. That was about as perfect a weather as you could ever ask for, for growing a crop here in this part of the country. And I don't see that in the cards. Those areas you talked about, so the Mid South, Southern Illinois, Indiana, Ohio, that Ohio Valley, we're actually probably going to see quite a bit of prevent plant acres down there because the timing of the rain has been such that they were flooded out early, then they couldn't get a chance to get in and get it fixed. Know, I mean, Matt Bennett, we all know Matt, like still talking to him just about how far delayed folks are around his area, and they're normally done weeks ago.
• 5:31
  We're all wearing jackets today, right? I mean, it's pretty chilly, so this crop is just sitting there. Maybe it's gonna get 40 GDDs over the next seven days, just including yesterday too. But this is, so this isn't the start where the crop just jumps out of the ground and gets going, which then makes you wonder how will these next three weeks play out and if we do have some sort of risk going forward. In other words, is it gonna be a continual narrative of rainfall disparity, right?
• 6:00
  So we've had mega flooding in places and then, I mean, you go to the northern part of the state, the rain they just got was like the first they'd had in a long time. Is that gonna be the story going forward? And then the question I get asked, which I think is most important, is if you do wanna build a weather premium into this, something's gotta really get out there and scare folks. And that's either, it's one of two things, right? It's either too much water or not enough.
• 6:23
  But I would tell you there's a third part to this, and that's the heat. We should definitely talk about that.
• 6:27
  Todd Gleason: We will. Joe Jansen, you have a question?
• 6:30
  Joe Janzen: I think, yeah, it's that that heat side and what you know, where we really might build some premium is in if we start baking up this, like, crop that's maybe starting off in you know, on a shakier foot, if you will. So let's yeah. Let's talk
• 6:44
  Eric Snodgrass: about that. Alright. So we have a couple of strikes against us. I wish we had a third one. Now when I say I wish, I'm telling you this in the perspective of if you would like to have a big market rally and you would like to base it on weather and you want to base it on drought and heat, we're missing one critical thing right now.
• 7:04
  Actually, maybe we could say two. So here they are. We've got cold water off the coast of California. That's one thing that normally points toward a hotter drier summer. It's only there because since winter we've not had a subtropical jet of any substance.
• 7:18
  The polar jet has already started its northward shift, but we've not yet seen cold water emerge due to its lack of speed in the winds. We've not yet seen that cold water emerge. If that starts showing up the next, well you said about 40, then that tells me that the ocean is telling me that the atmosphere's lost it. And then we're gonna ridge out in the midsection of the country and it will get hot and dry. But the other piece that's working against it is exactly what we brought up a moment ago.
• 7:47
  It's very wet, Oklahoma Texas, Arkansas, Louisiana, you know, parts of Kentucky, Tennessee, Missouri. Every major major drop that we've had in the Midwest has started in the Mid South. And that's kind of your sink, right? In other words, if you're going to get Gulf moisture here in summer, you can't have it be dry to our south. It'll steal the moisture first.
• 8:10
  So to tell you that we're gonna have an 88 or 12 type situation, that's off the table at this point because the Mid South's too wet. Now that doesn't mean we can't have flash drought scenario going forward, and I'll just tell you, Mitad, we've been saying it. We're in the middle of this forty five day assignment. Right? Watch the Gulf Of Alaska.
• 8:27
  It will be the kind of the the litmus test on whether or not the atmosphere is capable of giving problems in midsummer. And it's kind of the last piece to fall.
• 8:34
  Todd Gleason: The hurricane season is about to start. Do we have any new information that gives you information about what happens in the Gulf Of Mexico and how that impacts the growing regions in The United States, maybe those Southwestern areas.
• 8:48
  Eric Snodgrass: Yeah, so right now ocean temperatures in the Atlantic where these things are born, they're about two, two and a half degrees cooler than they were a year ago. So yes, last year was hot. Doesn't mean it's not warm enough to make hurricanes, but it's starting to give us a little pause on maybe the thought process that this upcoming season is gonna be huge. Now that's a hard that's a hard thing to define because you get one major hurricane that hits, that and it's a huge it's a huge event. Right?
• 9:13
  And So that's still on the table. But right now, the National Hurricane Center is watching the potential for tropical development in the East Pacific. And that feels a bit early, right? It's May, but sure enough, we can do it any time of year. If we start seeing them crank over there, that's gonna be an interesting play against this whole drought story we've got.
• 9:29
  Todd Gleason: I would be remiss if we did not ask you about the dry conditions and the very warm hot temperatures in China in the last week and what impact you believe that may have had or is having on their growing crops. Soybeans, rice, probably more impacted, I think, than corn. Maybe you can give me an idea there too.
• 9:53
  Eric Snodgrass: Well, I mean, it's kind of like here. We can get hot in May and June and not care, right? I mean, if the crop's young enough, it can take on the heat and it'll be okay. When I look at the NDVI data over the Manchurian plane and the North China plane, it looks fine. Most of where they grow corn and soybeans right now, you would not look down from space and be like, Oh man, they're in trouble early.
• 10:12
  Things are not looking in good shape. And then I see the upcoming forecast, and there's this frontal boundary. We call it the Mayu front. Actually, they call it the Mayu front, and it sits right on the Yangtze, and it's got tons of rain coming in on it. So I I'm I'm looking for a problem there.
• 10:26
  I'll be honest with you, I think if we need to find another problem globally, you may have to look around the Black Sea come mid summer, because some of our longer range models are trying to hit them with pretty dry hot conditions as well.
• 10:36
  Todd Gleason: Tell me about that, and then we probably should check-in on the maize growing areas of Mexico. Had been extremely dry. That would be in year two, maybe three for them. Give me an update.
• 10:49
  Eric Snodgrass: Yeah. So look at the like three month drought monitor in parts of Mexico and that the closer you get to The US border, we're just getting drier and drier and drier. That bleeds then into parts of New Mexico, Arizona, and Southern California where they're deep into drought. You know, but this is kinda how Mexico runs. This is hot and dry, tropical, subtropical climate, so I don't even I don't know how to pin it up against the worry that these guys brought up at the beginning, is really over what is The US crop gonna do going forward.
• 11:18
  So we'll need to watch it carefully, but if honestly, if the Central US goes into really hot, dry summer conditions, Mexico's not. They'll end up having a strong monsoonal flow, it'll storm every day, it'll come all the way up in Arizona, New Mexico, Colorado, Utah, and so they'll end up getting rain mid season on that crop while we're quite dry.
• 11:38
  Todd Gleason: I do want to ask a little bit more about Mexico, the number one importer of US corn. Their planting season runs for another two months at this point in Mexico, according to the numbers or the maps that I see from USDA. So they've got a lot of time to get a corn crop in. How much have they been importing from The US at this time? And what does that tell you about the potential exports for the crop we are putting in the ground now?
• 12:10
  Dave Chatterton: Yeah. I think, you know, they've they're the the number one buyer of US corn and have been for a number of years now. And their purchases this year well above where they were a year ago, which tells us that they are suffering from drought in the old crop or last year's crop, and they're trying to supplement their own supplies. When I look at the drought monitors and some of the things that Eric mentions, it looks like the corn areas, the corn growing areas continue to run dry. As you mentioned, time can change that.
• 12:35
  But for right now, the demand, I think, profile or projection for Mexico continues to look good, as does corn in general, Todd. Mean, we have weekly exports today that slowed down a little bit, but they haven't taken the seasonal kind of break that we would normally expect, and we continue to see them, I guess, over perform. Think year to date, marketing year to date, we're 28% above where we were a year ago. USDA is 12 or 13% above. So we're on pace to see the pattern that's been in place.
• 13:02
  I think maybe that is something that we should talk about. If we're not going get weather, we're going have to rely on the USDA to tighten that balance sheet in order to get price to react. We're in a very similar situation with that balance sheet this year overall. With the USDA, think last year, they started at a 2,100,000,000 bushel new crop carryout. This year, we're at 2,000,000,000.
• 13:18
  We're moving know, we've moved down to this 1.4, one point five area. So Mexico is a big part of that. If Mexico has a better supply of corn domestically and import less, we have issues because ethanol is not growing, political, you know, tailwinds elsewhere in terms of Canada, the Far East, and certainly China in terms of if they would import corn are all, you know, a little bit questionable. We need we need our big star in the game. And, I hate to say the drier they are, the better for us, but that's that's the long and the short of it.
• 13:50
  Joe Janzen: Absolutely. Mexico is is a hugely important customer. We have a tremendous advantage sitting right next to them with, you know, all the rail access and movement, you know, ability to move corn in that direction. The thing I would be a little bit cautious about is that, you know, when USDA came out with their May WASDE report, I think they built in some reasonably healthy demand into that balance sheet with particularly with their corn export number. So I think some of that is already baked in, the idea that we would move significant amounts of corn, for export next year, kind of, you know, carrying over on what's happening this year.
• 14:21
  I mean, everyone has sort of been surprised to the upside, then we kept doing that, you know, month after month. We were surprised back in December, January, and we continue to kinda get these periodic sort of surprises in exports. So I think some of that is baked into USDA's current projections.
• 14:35
  Todd Gleason: USDA putting that at 2,675,000,000 bushels. They also put out a season's average cash price still of $4.20. The two must be related, I suppose, because fairly cheap for corn, moving a lot of it into the marketplace. Are the global supplies and I know The United States is just the largest supplier on the planet, but the global supplies enough to move that much into the export market at that price.
• 15:06
  Joe Janzen: Yeah. Think part of the story here is is low prices spurring some additional demand. Right? We know that at at when things get cheaper, people buy more. And that's part of the story.
• 15:16
  I think that's the the one thing about that too, though, I'll say, and I think this is especially true on soybeans, is the as well as the idea that, you know, I don't think anyone's gonna be motivated to make a lot of early purchases. We're not gonna see new crop export sales really showing up in any significant way even though this is sort of about the time of year where we'd start to see that kind of activity. We haven't seen a lot of it yet. We haven't seen, for example, China buy any new crop soybeans, for next year in in any meaningful way. And part of this is when prices are low, no one's really motivated to make sort of precautionary forward purchases.
• 15:49
  Todd Gleason: One more Aggie con kinds of question on in this area with that that large export picture that USDA is talking about and a carry out at the end of the twenty five-twenty six season, not being particularly large. I'm wondering how much flex there is in the price of futures over time and how quickly that makes it move. Is it is it tight enough? This is what farmers will be thinking or are already thinking that we have a tight balance sheet. From your perspective, I guess the question
• 16:27
  Joe Janzen: really is, do we have a tight balance sheet? On new crop, the answer is we're not really there. I mean, we're well over that 10% stocks to use number on new crop that I would sort of say is kind of maybe the the knife edge, if you will, where we can start to start to get some movement. I don't think we're quite there. Part of that is, yeah, it's a one eighty one yield number.
• 16:48
  And so when you put that number down on the balance sheet, you get pretty significant production. It fills up the balance sheet pretty quick.
• 16:54
  Dave Chatterton: Yeah, Todd. I mean, the balance sheet is not the new crop balance sheet in particular is not tight. Now it's close enough to a situation where with some problems in yield or significant problems of yield, if we got a, you know, 5%, seven %, ten % drop in national yield, we'd have a different story. The the exportable stocks or the stocks to use among the global exporters of corn, if you take China out of the picture, are still relatively tight. And it doesn't take a lot to get that situation into an exponential reaction in terms of marketing price.
• 17:25
  But I think what I would tell you is if you go back to the and what the USDA did in terms of their demand, we talked about exports. They're projecting corn exports next year. I think it's 75,000,000 bushels above where they were this year, so an increase again. And I think the trade would have believed, for lack of a better term, those demand numbers, Todd, without a much more bearish reaction to the market. I I think that you know, our bullish reaction to the market.
• 17:50
  Excuse me. I think that the trade is a little bit jaded in terms of where the USDA has demand. That's probably balanced out by where the USDA has yield. And so as we unfold this whole package, as you said, the timing of that from a farmer's perspective, very frustrating because we're not gonna really know until we get out until late summer and early fall.
• 18:07
  Todd Gleason: So let's go with USDA is right because the supply and demand table at the end of the year is what USDA says it is. So we're going to work with that. But I do have some questions because what they have laid out to me tells me that weather is the driving force at this point. And so we need to know, no, there aren't any problems in Brazil. We need to know what's happening in Ukraine and the Black Sea, roughly speaking, some for corn, a lot more for wheat, with Russia thrown in it too.
• 18:39
  And we've talked about China so far. So what does the planet look like at this point for the growing regions?
• 18:47
  Eric Snodgrass: It's kind of funny. So what I hear is you guys need a supply side shock, and you want it to come from me. So I I, you know, I so
• 18:56
  Dave Chatterton: Actually, Eric, I want you to convince China just buy a couple of blue corn. Okay?
• 19:01
  Eric Snodgrass: I'll get on the phone. Yeah.
• 19:02
  Dave Chatterton: Yeah. Be a problem.
• 19:04
  Eric Snodgrass: So so alright. So so this is why I think there might be something brewing. Okay? We are we're two years kinda removed from an El Nino event. And after El Nino events, what the atmosphere tends to do is just kinda give up a lot of its momentum compared to how it spins.
• 19:23
  That's when we tend to build up into big, big long wave troughs and ridges. So what's that mean? Well, means what we're dealing with right now, right? We're getting these extended periods of the same type of weather. Now, if that carries into the middle of summer, if you get on the wrong side of it, you're on the wrong side of it, all of a sudden it's hot and dry at the wrong time, and that is a possibility.
• 19:45
  I would say this, I don't know if this is just what people do just to me, but I've not had a farmer call me yet and say, Man, things are going great. Just keep it going. Right? It's everybody. I don't care if you're from Nebraska, if you're from Northern Illinois, Southern Illinois.
• 19:58
  No one has called me and said, I'm in the garden spot. And sometimes, you know, people will tell us, Hey, things are off to a good start. We're doing all right. I don't even know where it is, and I've been to most of the Corn Belt in the last couple of months. So I think all eyes are gonna be on The United States.
• 20:14
  Now over in the Black Sea, they started off with a massive cold outbreak that just finished, now they're hot again, so their temperatures have been fluctuating like ours have. NDVI wise, look at from satellite, things don't look crazy off from normal. So you can't look over there from space and go, holy cow, there's a problem, but it's so early. We can't do that yet. Right now, the Indian monsoon is going to start early, which more than likely means much of Southeast Asia is going to be wet.
• 20:38
  So maybe this bleeds over into discussion on things like palm oil and all that and throughout Malaysia and Indonesia. I think they're going be very, very wet for the coming several months. But Todd, you mentioned it. Brazil came off on their second crop without problems. We thought we could find some, but we just couldn't.
• 20:55
  And as a result, you know, it looks pretty darn good right now. There is a big cold wave coming into Argentina, but I mean, who cares? It's fall, right? I mean, it is time to get cold. I don't think they have much of their crop they're gonna be vulnerable to a frost.
• 21:09
  I mean, and they may touch a frost in Cordoba. So it comes back to the same thing we started with. I think the world is watching The United States knowing that we've had major precipitation disparity problems. We've had, I mean, drought monitor was really, really amped up on drought to start the season, double what it was a year ago. And the seasonal drought outlooks are really not good if you're in the Western Corn Belt.
• 21:32
  And that's where all the models continue to put down the risk of there being problems, but it's still, you know, it's July and August. And what's funny is when we get to July and August, all this May stuff we're talking about will be a distant memory. So it comes back to where we started, which is this discussion on time. There's about four or five weeks over which weather is either going to create a problem or it's going to ruin the prospect of where these prices could go. And I think everyone right now is waiting on a weather narrative.
• 22:01
  So what I think is gonna happen, Todd, is people are gonna craft that narrative, whether it's in reality or not. This is the time of year where snake oil salesmen come out of the woodwork to tell you what they think is gonna happen. And I'm just gonna tell you from years of experience, we do not know. It's there's no clear picture right now as to exactly how this is gonna shake down in July, but there's risk on the table.
• 22:23
  Todd Gleason: Speaking of that risk, we should switch supply and demand tables to soybeans. Tell me about that s and d table, what you think of it from USDA, and how it works with what you've been looking at at the University of Illinois along with the FarmDoc team.
• 22:40
  Joe Janzen: Yeah. I think on this on the bean side, I mean, we're obviously in a much more fragile state because we have so many fewer acres, than we have than we had last year, you know, we're sort of below typical. So that changes the the narrative completely. I mean, USDA is projecting a very low level of stocks to use, and and low level stocks by the end of the 2526 marketing year. The key picture there, though, is trade and what happens with the combination of trade and biofuels policy.
• 23:08
  We've seen a number of sort of, you know, kind of like flash drops in bean oil prices, one last Friday, one, last night into this morning where, yeah, that bean that bean oil market has just kind of dropped off on a bunch of news about how, you know, biofuels policy is gonna impact the the demand for soybean oil. And there are a lot just, I think, a lot more uncertainty, and that and coupled with, you know, relatively tight balance sheet means there could be some room for that market to run at some point.
• 23:37
  Todd Gleason: So we're still working through the RVOs. There have been paperwork shuffled around, but it's not clear exactly what's coming for soybean oil, renewable diesel in particular, maybe SAF as well. When you think about soybeans and what farmers ought to do, do you think of it as a tight supply, as as something that can move with just a little push along or does it take more?
• 24:10
  Dave Chatterton: It's going to take a little bit more, Todd. I think think the trade is very, uneasy about the trade front that Joe mentioned and just the the whole political side of where the particularly the bean oil demand goes. And bean oil has been the bullish stalwart of the the soy complex really up to this point. We had a limit down move last week, as Joe said. Had another strong move down today based on the House reconciliation bill.
• 24:30
  Now it goes to the Senate. I'm sure it'll get changed. It'll come back. It'll go back and forth. So really, really hard to handicap where that's going to go.
• 24:37
  In the meantime, we've got this terror or trade situation with China that's out there brewing. Based on the carryout that the USDA printed and a decline year over year, I think the market, as I said earlier, would have reacted much stronger if they bought into that. I think it's very much a wait and see attitude. The funds are along a little bit of a few beans here as we sit today, but not in a big way. Doesn't just like corn, doesn't take a huge weather event to start affecting that yield, but that timing on that is more of July and August for soybeans.
• 25:09
  It's a little bit of a hands off situation right now. Really kind of going back to Eric's comments about China, I think when you look at the biggest vulnerability in trade right now in the CBT or at least in the paper trade, it's the short in wheat. And you've got a record short in Kansas City wheat. You've got a very large short in in Chicago wheat. You've got a Matif wheat that's very short.
• 25:29
  And when you take that fund aggregate together, basically, they're a record short in wheat right now. And if China's wheat crop China's, I think, domestic wheat stocks have been drawn down to the order of almost 50,000,000 metric tons, or 50, yeah, 50,000,000 metric tons here over the last two and a half years, they're they're tight on their domestic wheat stocks. If they have to import wheat from someone and and we get to be in that mix, wheat might be the canary in the coal mine here that kinda saves the the the row crop complex or, you know, brings some life to the row crop complex.
• 26:00
  Todd Gleason: I always thought it was oat nose, but maybe it will be wheat nose in the very near future. I want to stay with soybeans for just a second. The export market, the numbers that USDA printed, where where do you think those numbers should be at this point? What do you want to use in your supply and demand tables?
• 26:19
  Joe Janzen: I there USDA is calling for, I think, it's 1,600,000 bushels or billion bushels of, soybean exports next year. That's down a little bit, and I think that's probably a a a pretty good number given sort of what we've seen in the the tremendous amount of trade uncertainty. I mean, China's not buying a lot of US beans, and I don't expect them to really move into that market in any significant way given the amount of supply that's coming out of South America that was harvested, and in in the last few months, there's not a huge need to to source beans from The United States. So we're gonna have to we're gonna have to wait a little bit to get some confirmation on what new crop soybean export demand looks like.
• 27:00
  Todd Gleason: China has also been behind on sourcing soybeans from Brazil. Is that concerning? Yeah.
• 27:07
  Joe Janzen: I think so. I mean, in the sense that it just sort of pushes back everything and kind of perpetuates the uncertainty. Absolutely.
• 27:14
  Todd Gleason: What are your thoughts on this issue?
• 27:16
  Dave Chatterton: Yeah. You know, the Chinese Chinese soybean imports have definitely been lacking. They've been slowing down their ports a little bit, but I think that's gonna be picking up, Todd. It looks like there's a record amount of, you know, beans that are going on the water from Brazil in particular heading to China, that they're going to continue to build their stocks, build their reserves. Their crush numbers are getting healthier and getting a little bit better along the way here.
• 27:37
  So I don't think it's a situation where China is going to have to come back to The US hat in hand for soybeans. To me, one of the bigger wild cards we talked about the policy and how it relates to soybean oil and the bean crush, but really the stroke of the pen risk is the other, I guess, I'll call it bullish risk out here in the marketplace. We've certainly been on the defensive side of that, but if you go on the maybe the the glass is half full side of that equation, and the Trump administration is able to ink a deal that gets China to buy US soybeans, you know, acquiescing for access to our capital markets or imports or however you want to put that. We have a much different situation. That bean balance sheet that Joe was discussing all of a sudden gets a lot tighter, lot quicker, or potentially does.
• 28:20
  Todd Gleason: Let's get a final word from each of you. I'm going to ask Eric what your final word will be. And about June 7 I believe, is the latest date. But we'll start with Joe Jansen, ag economist at the U of I. Final word about marketing or what farmers should be considering at this time of the year?
• 28:39
  Joe Janzen: Oh, I think looking for rallies because this is a time of year when we typically see some seasonal rallies in new crop pricing, and taking advantage of them is is the name of the game. And that's true that's true year in and year out. And I think this this year is setting up to be, you know, that story will play out here in the next few weeks.
• 28:58
  Todd Gleason: Dave Chatterton of Strategic Farm Marketing, your final word?
• 29:01
  Dave Chatterton: Yeah, Todd, I think Joe's got it pegged. You know, seasonally, you need to be paying attention to your marketing right now, and these opportunities have some offers out ahead of the market. Rally's are your friends here. Unfortunately, you know, in the whole barometer of how we're marketing right now, we still have to play a little bit of defense, you know, more so on beans than on corn. But you have to be looking for those opportunities and ready to take them.
• 29:21
  I don't think we wanna get to the end of the summer or or deep into the summer and have that situation that Eric talked about where all of a sudden a weather, you know, event has not been conjured up or has not developed, and we don't have that lift. And all of a sudden, the sellers are starting to come out into our marketplace. So trying to stay ahead of the the process a little bit, I think, is your best defense right now. And I know we're not we're not excited about prices where they're at. We didn't talk about the government program side of this and what may be coming down the road in an MFP or other types of programs.
• 29:51
  I'll save that for another discussion because that's a that's a whole another can of worms. But, you know, keep in mind that that that particular point is out there as well to kinda supplement your bottom line at the end of the year.
• 30:02
  Todd Gleason: Eric, if you could conjure up an issue someplace, that would be good. Otherwise, what is your final word for the day?
• 30:08
  Eric Snodgrass: You know, I would just say this. I think we all feel as though the atmosphere has been in a bit of a cadence, and it's like to get stuck in certain configurations and that's a wild card. Regular movement of the atmosphere where things are changing more rapidly is better. The fact that we keep drawing out these long stretches of continuous types of weather, either it's severe weather, maybe it's the drought that built in Nebraska, or even the stuff in Northern Illinois, we can't seem to break away from it. If that kind of cadence continues, then you will begin to have larger areas where there are regional disparities in rainfall, and that will start to peel away at the chance that we could even come close to 181 crop.
• 30:52
  I don't think it's in the cards right now. But you mentioned earlier, are we down can we go down or someone did down 10%. Knocking 20 bushels off of this, I don't see
• 31:00
  Todd Gleason: that yet either. Commodity Week, of course, is a production of Illinois Public Media. You may hear and listen to the whole of the program anytime you'd like on our website at wilag.org, w I l l a g 0 r g, or search us out in your favorite podcast applications. Our thanks go to our panelists this week including Eric Snodgrass, Dave Chatterton, and Joe Jansen. I'm University of Illinois Extension's Todd Gleis.
• 31:29
  Hi.