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2025 Recap · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_01: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_01: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:23
  SPEAKER_01: Today is January 2nd.
• 0:25
  SPEAKER_01: I've got Jaden Houselog with us today.
• 0:28
  SPEAKER_01: How's it going, Jaden?
• 0:29
  SPEAKER_00: It's going good, Mike.
• 0:30
  SPEAKER_00: How about yourself?
• 0:31
  SPEAKER_01: Not too bad.
• 0:32
  SPEAKER_01: What we're gonna do today is we're gonna do an entire recap of the egg commodities for 2025.
• 0:38
  SPEAKER_01: So I just want to go right down the list, talk about what some of the key items were, some of the key moves that we had in our markets, and just have a little bit of a recap to what last year brought us, Jaden.
• 0:50
  SPEAKER_01: So let's start with the grain market.
• 0:52
  SPEAKER_01: We'll get that one out of the way.
• 0:54
  SPEAKER_01: Um, we're gonna talk about corn first.
• 0:56
  SPEAKER_01: The most obvious thing we saw in 25 with corn market was our record corn acres planted 98.7, and we ended up uh at the high mark on that going through the year.
• 1:08
  SPEAKER_01: We will have a January WASD airport that will supposedly finalize most of this.
• 1:14
  SPEAKER_01: So some of that could be subject to change, but overall, record corn acres, record yield by seven bushel an acre as well.
• 1:21
  SPEAKER_01: So massive corn production record out of the United States that really made that situation just burdensome as the year went on.
• 1:28
  SPEAKER_01: And as the year went on, that increased on both of those accounts.
• 1:32
  SPEAKER_01: We started at a trendline yield of 181, and then we worked up acres from that 92 to 93 to 94, and then all the way up to where we're at today.
• 1:40
  SPEAKER_01: So both of those gradually increased.
• 1:42
  SPEAKER_01: The other thing that we did see in the corn market was demand, Jaden.
• 1:47
  SPEAKER_01: What can you tell me about demand for the corn market here this year?
• 1:50
  SPEAKER_00: Yeah, Mike, we saw a really, really strong demand um outlook for the corn market, and and looking forward here, uh we're actually subject to maybe raise that even more.
• 1:59
  SPEAKER_00: So yeah, the USD has you know broken in 3.2 billion bushels for for corn demand here, and ethanol grind has been strong as well at 5.6 billion bushels.
• 2:09
  SPEAKER_01: So not quite enough to offset the record supplies, but by any means not bad demand from the corn market.
• 2:15
  SPEAKER_01: And this usually makes sense.
• 2:17
  SPEAKER_01: You cure high prices or cure low prices with low prices, right?
• 2:22
  SPEAKER_01: So uh as the corn price got cheaper, we moved demand higher.
• 2:26
  SPEAKER_01: Um if I wanted to wrap up the corn segment, are there any other thoughts you had about price action this year, for example?
• 2:34
  SPEAKER_00: Yeah, I would say the most notable thing for the corn market in 2025 is we put our high in February.
• 2:40
  SPEAKER_00: So that that hasn't happened, you know, since 1982.
• 2:43
  SPEAKER_00: So for for people to get sold, you know, most of the time we're gonna sell our crop in the summer here off some, you know, weather scared, but we never had the chance to do that this year.
• 2:52
  SPEAKER_00: So that was pretty interesting.
• 2:53
  SPEAKER_01: We did not take out our February average on corn this year at 470, Jaden.
• 2:57
  SPEAKER_01: Oofta.
• 2:58
  SPEAKER_01: That was quite a doozy.
• 3:00
  SPEAKER_01: I know a lot of folks were hoping for over 470 plus, including a lot of our group as well.
• 3:05
  SPEAKER_01: So uh a little bit of disappointing trade there this year out of the corn market.
• 3:09
  SPEAKER_01: It was a steady climb, uh steady fall, I should say, that it just seemed like we couldn't get back to it.
• 3:14
  SPEAKER_01: We had one chance, I believe, was it April, where we got to 469 or something like that?
• 3:18
  SPEAKER_01: So we we tried one time, but that was about it.
• 3:21
  SPEAKER_01: The soybean market, pretty similar, but more steady throughout the year.
• 3:26
  SPEAKER_01: Um so I'm gonna talk about the soybeans now.
• 3:28
  SPEAKER_01: You had a high early on in the year, which I'll have you uh elaborate on more uh here after I'm wrapped up.
• 3:34
  SPEAKER_01: You had a pretty tight range most of the year, and then all of a sudden we wrap up harvest, everyone's done combining.
• 3:41
  SPEAKER_01: Uh pretty poor beans, it seemed like for yield in the Western Corn Belt.
• 3:45
  SPEAKER_01: It was pretty disappointing relative to corn yields.
• 3:47
  SPEAKER_01: And then all of a sudden, right after we all got done combining, Brazil or China, we get a trade deal done, and beans rally a buck and a half.
• 3:56
  SPEAKER_01: So the uh from a seasonal time frame, very odd, just a climb bounce through$10 range, and then at the very, very end, we got that bump we were all looking for.
• 4:08
  SPEAKER_01: And then over the past couple months here, we never got that Brazil weather rally that we normally look for at this time of the year to try to get a start on next year's soybeans or wrap up this year's.
• 4:18
  SPEAKER_01: And that's been a major story as well lately.
• 4:22
  SPEAKER_01: Obviously, we can elaborate more on the Chinese buying pace as well.
• 4:26
  SPEAKER_01: We're over half sold now for that 12 million metric tons target that they had come out with, uh, just not living up to the fast paced buying that they needed to have to hit those goals.
• 4:38
  SPEAKER_01: So we'll see where we sit a month from today, which was supposed the imaginary timeline that that it seems like this administration has given us, but it doesn't seem like they're gonna get there at this time, especially going back Wednesday, I believe, this week, uh Brazil wrapped up the year by selling five uh cargo loads to China, uh none from the United States here, so a little bit disappointing development towards the end of the year, even after a massive sell-off, Jaden.
• 5:04
  SPEAKER_01: But what can you tell us about the price action here on soybeans in 2025?
• 5:08
  SPEAKER_00: Yeah, Mike, so we were pretty range-bound, you know, until we got that China news.
• 5:13
  SPEAKER_00: So it seemed like, you know, like corn, we we kind of put a high there in February until that China news came out.
• 5:19
  SPEAKER_00: But our high there was around 1075 on the NOVE 25 contract, and we we just stuck around, you know, anywhere higher above 975.
• 5:28
  SPEAKER_00: So just kind of playing that range until you know the news came out with China buying, you know, 12 million metric tons this year and then getting back to their normal, their normal sales here for the next three years at 25 million metric tons.
• 5:40
  SPEAKER_01: Yeah, so uh uh an odd year from the perspective it just took so long to get above that 1075 towards the end of the year.
• 5:48
  SPEAKER_01: Uh never spent any time above it really going through the summer months.
• 5:52
  SPEAKER_01: It was a quite interesting process there.
• 5:54
  SPEAKER_01: Um Alright, let's get on to cattle.
• 5:57
  SPEAKER_01: Let's let's talk about that a little bit.
• 5:59
  SPEAKER_01: Because cattle had a very, very interesting year.
• 6:01
  SPEAKER_01: You know, you look at the tight supply situation we have, Jaden, and it nothing seemed to change there.
• 6:07
  SPEAKER_01: Our cattle herd just continually shrinks in the United States, and it it seems like our average producer's age is getting older and they're phasing out now, and uh no one can really take over that cow cow herd for them, so it seems like liquidation has been the easiest route, especially at a record price, so it's come quite easy.
• 6:27
  SPEAKER_01: And along with that tight supply, price has held really high as well.
• 6:31
  SPEAKER_01: The question has been when are we going to expand again and and retain some heifers, which really hasn't happened yet or seen any sign of um in in enough of a manner to say yes, we are rebuilding our herd.
• 6:44
  SPEAKER_01: Um, and then two, record imports as well.
• 6:48
  SPEAKER_01: So we've actually been trying to import enough to keep beef available to consumers near a level we were at.
• 6:54
  SPEAKER_01: And then obviously political headwinds that we've had and headlines with Trump wanting cheap beef in the United States, trying to fix some inflation problems and coming out uh openly against high beef prices, and then we've wrapped up the year, just kind of scratching our head, wondering when this border is going to get reopened because of screw worm, Jaden, which also happened this year.
• 7:16
  SPEAKER_01: So, you know, last November, just over a year ago, we closed that border the first time because of screw worm down in Mexico.
• 7:23
  SPEAKER_01: And at this point, just besides that one short little reopening stint, we haven't done that.
• 7:27
  SPEAKER_01: So uh that continues to be a massive topic that we're waiting on to see.
• 7:32
  SPEAKER_01: Hey, are we gonna open this border back up and try to crash these prices a little bit more?
• 7:36
  SPEAKER_01: Because we all of a sudden rallied really hard into the end of the year again as we look like we're trying to go back to some old high levels.
• 7:44
  SPEAKER_01: So if I looked at the uh at the consumer side, we're just standing here waiting for people to stop paying what you would call stupid high beef prices, not because they're stupid high, but just because sometimes going to buy a steak at the grocery store for$50 makes you feel stupid, Jaden.
• 8:00
  SPEAKER_01: But at this point, people are still buying the beef.
• 8:03
  SPEAKER_01: We're at the bottom range or trend of this cutout.
• 8:06
  SPEAKER_01: We had choice in the year at$347, significantly off their highs, but uh choice it's still higher year over year.
• 8:13
  SPEAKER_01: That was only at$324 a year ago.
• 8:15
  SPEAKER_01: What can you tell me about cattle that caught your eye uh in this 2025 year?
• 8:20
  SPEAKER_00: Yeah, I guess something that would catch my eye really is the political driven market that it has been, you know, for a time there.
• 8:26
  SPEAKER_00: It was about, you know, around that end of October timeframe.
• 8:29
  SPEAKER_00: We it seems like all we were doing is trading whatever came out of Trump's mouth or Rollins' mouth.
• 8:35
  SPEAKER_00: So I I thought that was pretty interesting, and that's what it took, you know, to drip, you know, drive down this big bull market.
• 8:42
  SPEAKER_01: That there's been two things I should probably end on here, which it has a very high correlation with cattle price, and that is one supply.
• 8:49
  SPEAKER_01: Supply has a 93 or so percent correlation to price over the years.
• 8:53
  SPEAKER_01: So massive impact obviously on prices, just the supply side, which is still tight.
• 8:59
  SPEAKER_01: The the the second part of all this I'd say is the outside markets have been quite strong.
• 9:04
  SPEAKER_01: We're ending the year at highs, um, near 7,000 on the SP 500, and cattle have traded very closely with that.
• 9:11
  SPEAKER_01: Over the past few years, we ran the math, about a 63% correlation on cattle.
• 9:16
  SPEAKER_01: What was it, last five years, Jaden, with the SP 500?
• 9:19
  SPEAKER_01: Correct.
• 9:20
  SPEAKER_01: So that that one's traded very closely together, and it seems like we really haven't hit that outside market headwind, maybe like we could have.
• 9:27
  SPEAKER_01: Uh consumer confidence is struggling, but hey, uh consumer sentiment is struggling, but hey, people are still spending money uh that we do not have Jaden.
• 9:36
  SPEAKER_01: So let's talk about the hog market a little bit.
• 9:39
  SPEAKER_01: When I look at the hog market, it seemed like a little bit more steady eddy compared to maybe the grain markets or the cattle markets.
• 9:46
  SPEAKER_01: Uh hogs seem to benefit finely maybe from some higher beef prices.
• 9:51
  SPEAKER_01: It seemed like the the the hog demand has been superb.
• 9:55
  SPEAKER_01: Supply hasn't really gone anywhere year over year.
• 9:58
  SPEAKER_01: We've had some health problems that have kicked on very, very late in 2025, I would argue, which has mainly made the ice wine prices probably higher than it could have.
• 10:08
  SPEAKER_01: But hey, at this point we've seen a cutout that seems like it's been driven solely by demand, and uh that was really the the big standout topic I saw for hogs this year was just consumer demand was spectacular.
• 10:22
  SPEAKER_01: Exports to Mexico were spectacular, and uh port cutout this year we ended at 93 bucks.
• 10:27
  SPEAKER_01: It was actually 20 uh it was actually 90 the a year prior.
• 10:31
  SPEAKER_01: So hey, it a little bit higher, but it I'd argue that if we can continue to hold this uh type of level, get some normal seasonal uh bounces ahead, we're gonna have another nice year.
• 10:42
  SPEAKER_01: Now, this was a good bounce back year for the hog market, I would argue.
• 10:46
  SPEAKER_01: After a couple of really strong headwind years where we really uh really had some tight, awful negative margins in this hog market.
• 10:55
  SPEAKER_01: We finally had a good bounce back year to try to build capital back up a little bit.
• 10:59
  SPEAKER_01: The problem is inflation's still prevalent.
• 11:02
  SPEAKER_01: Uh, we are not expanding at all, really, in that industry.
• 11:05
  SPEAKER_01: Maybe a few more sows uh year over year we'll have here this next year, but nonetheless, uh the finishing space is very tight.
• 11:13
  SPEAKER_01: It's expensive to build barns, uh, and at this point it seems like not much is changing there.
• 11:19
  SPEAKER_01: So I'm looking forward to uh at this point, looking forward the next 12 months, another good year in the hog market if you looked at the numbers today.
• 11:26
  SPEAKER_01: But uh let's see if we can hold that and get some normal seasonal rallies here coming forward and try to keep these things healthy.
• 11:32
  SPEAKER_01: How about outside markets, Jaden?
• 11:34
  SPEAKER_01: What caught your eye this year with the SP 500 closing the year out 12 or so percent higher, so modest year?
• 11:40
  SPEAKER_01: But there was a little bit of volatility in the mix there throughout the year, uh, specifically Liberation Day, which was uh announced in April there, uh just caused some massive volatility in this market.
• 11:53
  SPEAKER_01: And uh, I know a few people, including myself, we got taken for some rides on that, didn't we, Jaden?
• 11:58
  SPEAKER_00: Yeah, Mike, uh that that caused maybe some outside money to get scared away during the that liberation day, and maybe in all markets, not just the outside markets there, but we really did, you know, end the year on a pretty good note.
• 12:10
  SPEAKER_00: Um, looking into 2026, though, you know, the Fed maybe there is a little uncertainty of how many rate cuts they're gonna do there.
• 12:16
  SPEAKER_00: So I think that's something looking at the outside markets, we're probably gonna watch pretty closely.
• 12:21
  SPEAKER_01: The other thing outside markets worth watching, you know, if I look at the top of the list with top year-to-date performances for 2025, the ones that really stick out on the list are anything debasement trade-wise, silver, platinum, gold, palladium, uh, those metal markets, anything to do with debasement basically was taken advantage of this year just because of that dollar weakness.
• 12:46
  SPEAKER_01: We've printed a lot of money.
• 12:48
  SPEAKER_01: It is a weakening, uh, weakening investment choice going forward.
• 12:52
  SPEAKER_01: We're still the the best of the worst situation, probably.
• 12:55
  SPEAKER_01: I don't know how to say that properly, Jaden, but uh people continue to hold on to the US dollar here, just thinking that uh maybe NMT or something along those lines.
• 13:05
  SPEAKER_01: But uh at this point, really the debasement trade, silver, gold, some of those metal markets and safe havens really got bought up this year.
• 13:12
  SPEAKER_01: Silver was up 127% this year, uh, somewhere in that area.
• 13:16
  SPEAKER_01: Gold, uh a nice steady 53%.
• 13:19
  SPEAKER_01: So hey, uh some of those really, really took off this year versus what like the SP did uh or some other factors as well.
• 13:27
  SPEAKER_01: Let's talk about 26 because I just want to end the podcast today talking about a few of the key items that I'm really looking forward to.
• 13:34
  SPEAKER_01: So we'll start back at the grains.
• 13:36
  SPEAKER_01: I'm looking for acres.
• 13:37
  SPEAKER_01: That's gonna be a huge discussion this year, starting specifically on corn.
• 13:42
  SPEAKER_01: I think soybeans, just because we still don't have a favorable uh profitability outlook, you're probably not buying any acres at this point, Jaden.
• 13:50
  SPEAKER_01: So uh no real changes there.
• 13:52
  SPEAKER_01: I think it could stay a little tight actually on soybeans as long as China somewhat stays with it, which is an entirely other um situation to talk about in 26, but uh acres are gonna be at the top of my mind.
• 14:05
  SPEAKER_01: And then crush expansion.
• 14:06
  SPEAKER_01: It looks like we are still expanding crush capacity in the United States for soybeans this next year.
• 14:12
  SPEAKER_01: That looks like it could continue even out to 28, and then it should really slow down.
• 14:16
  SPEAKER_01: So another big year for 26 and 27 for soybeans, just moving more of that demand away from China to domestic U.S.
• 14:25
  SPEAKER_01: consumption, which is a definite bonus here.
• 14:28
  SPEAKER_01: What do you got for acres, you think, on corn for I guess this next year, Jaden?
• 14:31
  SPEAKER_00: Yeah, my I you know a lot of people have been saying 95 million, but I'm kind of leaning maybe a little heavier than that, 96, 97 million, with the like we like you said, the way prices look for next year, corn's looking a lot more profitable than soybeans.
• 14:46
  SPEAKER_01: Soybeans left a bad taste in a lot of people's mouths this year, whether it be trying to trade them or whether trying to just grow them with some disappointing yields in the West for sure, especially relative to uh what we got for corn yields out here.
• 14:59
  SPEAKER_01: And and that's those fringe areas is where a lot of those acres can really, really flip.
• 15:04
  SPEAKER_01: Wheat on very, very low levels.
• 15:07
  SPEAKER_01: I mean, we just have had the crap kicked out of wheat all year as well, so that is probably not gonna help out uh wheat acres, which could take away from corn or soybeans, so in this kind of fringe area.
• 15:18
  SPEAKER_01: So I'm looking for more corn acres next year as well, Jaden.
• 15:22
  SPEAKER_01: So 95 plus.
• 15:23
  SPEAKER_01: Uh, we'll see what the USDA starts with, but uh, I I think they'll at least post 95 here in May or I should say March.
• 15:31
  SPEAKER_01: All right, cattle, border rebuild.
• 15:34
  SPEAKER_01: I I think uh the the big thing is when is that border gonna get reopened and allow those feeder cattle across a border?
• 15:40
  SPEAKER_01: That's gonna be the first big thing, I think.
• 15:42
  SPEAKER_01: We see that by sometime in Q1, I would assume.
• 15:45
  SPEAKER_01: And then obviously any any rebuild.
• 15:47
  SPEAKER_01: Are we retaining heifers at some point, uh clearly through 2026?
• 15:52
  SPEAKER_01: And then just consumer demand.
• 15:54
  SPEAKER_01: The equity markets are on highs, but it sure seems shaky.
• 15:57
  SPEAKER_01: Uh consumer sentiment is poor.
• 15:59
  SPEAKER_01: Are we gonna continue to uh spend too much money on on beef relative?
• 16:05
  SPEAKER_01: Uh and it'll be a very interesting situation there.
• 16:08
  SPEAKER_01: And then last but not least, let's finish up with the hog market, maybe a little expansion going into next year, maybe just a few more sales.
• 16:16
  SPEAKER_01: Um I I'm not looking for anything too crazy there.
• 16:19
  SPEAKER_01: If we build up some more capital, maybe by the end of next year we could start to see some more expansion, but that'll be something to watch for.
• 16:26
  SPEAKER_01: Otherwise, I'm really focused on two things.
• 16:29
  SPEAKER_01: That the next thing up front would be health.
• 16:32
  SPEAKER_01: Uh can we keep these things healthy, especially in Iowa here at the start of 2026?
• 16:36
  SPEAKER_01: It's starting to be a little rough here in the last month or so, and then demand and seasonals.
• 16:42
  SPEAKER_01: Uh you know, demand was really the big winner in 25.
• 16:45
  SPEAKER_01: Are we going to continue to retain that into 26 and be the big winner there?
• 16:49
  SPEAKER_01: So if if consumers are feeling a little bit more poor, let's see if they can dip down into the poor category more and eat some cheaper meat.
• 16:56
  SPEAKER_01: So that'll be something to watch for.
• 16:58
  SPEAKER_01: But outside markets, a couple big things.
• 17:01
  SPEAKER_01: Obviously, anything geopolitically, uh, we are watching for some shakiness.
• 17:05
  SPEAKER_01: I won't be surprised if we try to have a 10% plus pullback at some point in these equities through 2026.
• 17:11
  SPEAKER_01: Just it seems like we're due, and uh that we're very shaky, whether you're talking about the AI bubble that we've had this year or some of the other odd weighted things.
• 17:21
  SPEAKER_01: I mean, if you look at what the SP 500 is made up of in the broader stock market, it's in the Meg 7, and that's very technology focused, very AI driven.
• 17:31
  SPEAKER_01: So, with that being so heavily in that bubble, uh, it's probably going to be a little bit more volatile as we go forward as we have some growing pains in that in that sector.
• 17:40
  SPEAKER_01: And then that would likely tip in, kind of drag the cattle market into it as well, and trade along with that.
• 17:48
  SPEAKER_01: And then uh kind of my last thing, I guess, looking for 26 from a financial perspective is interest rates.
• 17:54
  SPEAKER_01: We we finally had some rate cuts this year.
• 17:57
  SPEAKER_01: It was a very interesting year from that perspective.
• 17:59
  SPEAKER_01: Uh, we're ending the year probably about right, it feels like.
• 18:03
  SPEAKER_01: Maybe we're gonna make one cut, maybe two, it looks like, is what the market's expecting next year, but not really any rate hikes.
• 18:11
  SPEAKER_01: So if we get another cut or two this next year, it'll be a gift, I think, from the way it looks uh starting out, Jaden.
• 18:17
  SPEAKER_01: The other thing with that is probably whoever is gonna be the head of the Fed, uh, they're gonna try to uh abide by Trump's wishes uh right away, I would assume.
• 18:27
  SPEAKER_01: They'll make a big rate cut at first, and then they're independent, I'd say, from that point on.
• 18:34
  SPEAKER_01: So the first decision or two probably won't be an independent move, I would assume, whoever Trump picks.
• 18:39
  SPEAKER_01: After that, I would assume they'd gain their independence back for the Fed.
• 18:43
  SPEAKER_01: So thank you for having uh the time to chat with me today.
• 18:46
  SPEAKER_01: Jade and I had a fantastic time going through 2025, which was your first full uh full experience through the summer here with us as well.
• 18:54
  SPEAKER_01: So look forward to working with you more in the future here alongside and this wonderful team at Professional Ag Marketing.
• 19:01
  SPEAKER_01: Thank you all for listening through the year.
• 19:03
  SPEAKER_01: Uh, it was a fantastic one.
• 19:05
  SPEAKER_01: Thanks.