Welcome back to the table for the Friday, May 2nd, 2025 installment of Market Plus Ireland.

Still with us.

Ireland.

China is a topic you kind of perked up when you saw we going to do a story about BRICs.

Why is that so important to us right now?

Well, BRICs has been the organization, the coalition that China has been trying to use to build its resistance against America and against the West.

obviously, Russia is a big part of that.

Brazil's a big part of that.

India.

and, now Saudi Arabia is a part of there's a number of other nations been allowed into it.

And the goal was originally to have their own banking system, because the US does sanctions through the Swift banking system, which is based on the dollar.

So they wanted to have an alternative banking system set up based on the yuan.

And the first signs of trouble was when last year when Moscow hosted their regular meeting, and they came out of that without an agreement and that made a flag perk up on my head.

Wait a minute.

There something going on here?

And then they had a meeting in Brazil here recently where they tried to get this common statement against the United States, and they could not agree to it.

And so, they're starting to see some of that friction within BRICs or China's finding itself more and more isolated and even BRICs isn't going along with it.

Okay.

So then let's talk about the war words.

I kind of alluded to it in the prompter to that story as it appears reading what you wrote this week, China and the US are both trying to save face because the one can't admit to the other one that we need to come to the table, because in a way, we do need each other.

Did I read between the lines right with what you're saying?

Yeah, basically.

So no, President XI Jinping is very popular in China right now because they control the message there versus we have freedom of speech and freedom of press here.

So both sides get reported in China.

One side gets reported.

What people have been told is America is the country that's had unfair of trade practices for years.

And they've been the bully in the world in season.

Ping is the only one willing to stand up to the bully, and America has declared war on them.

That's the words they use, and so they're willing to make the sacrifices.

XI Jinping is very popular right now.

So at this point he's set himself up popular.

So if he says, I want to negotiate, that makes him look weak.

And so therefore he'd lose some of that popularity.

And so what President Trump had to do is give him an out.

And so he's been saying there's been talks going on.

China has been saying there's no negotiations.

Both are right.

There's been talks at very low levels, not at the level you get a trade agreement though in those low levels it looks like it was communicating.

XI Jinping, you can say that we've been asking for negotiations and we've been wanting to negotiate that.

We've been asking you to please come negotiate.

He's giving him an out now to do that.

And we've seen now them also very quietly exempting products that they need to buy ethane airplane engines, medical equipment.

And they did this during Trump 1.0 when they needed soybeans.

And this is China doing this China.

They exempted it from the retaliatory tariffs.

So anything they need they exempted it.

They're not telling their people they're doing that.

But if you're a supplier, they'll quietly, communicate with you.

You're exempt.

Please go ahead and send your products.

And, and some of the buyers have been telling other suppliers, why don't you apply for an exemption?

You may very well get it type of thing, but keep it quiet.

And so that's going on as well.

We are seeing the factory start to close, unemployment go up and this is costing China a great deal.

This is kind of remember how Reagan kind of put it to the USSR, making them spend, spend, spend until they broke internally.

That's basically what Trump is doing to China right now.

How long does this go on?

How long do I ask you questions about these two and if anything changes?

well, I think it could very easily go on six months to a year, maybe even into the second year as well.

It took 13 face to face negotiations to reach the phase one trade agreement.

Now China quietly replaced the head negotiator who who was responsible for that agreement.

They replaced him with a more moderate, someone easier to negotiate with.

And so I think that was a positive sign as well.

That received very little attention.

Okay.

Again, we could talk about this for a long time.

Arlan I appreciate that.

I want to talk, though about other things that are impacting in this story as well.

We'll start with Samuel's question, why would a person not go all in selling December corn puts with all this volatility and it's the only thing not going down.

Well when you're looking at the marketplaces.

right now corn has strong demand.

And so you look at okay, we're going into the growing season when weather risk tend to be the highest.

And so I think for the next 60 to 90 days, unless we suddenly see a turn in the headlines and something shuts off Mexico buying corn, you would have to think that corn should be well supported until the market's no longer worried about whether at what point that will be.

One of your colleagues this week, though, wrote another little wrinkle that is new about fertilizer.

And there's some fertilizer issues.

What's that doing to the corn market right now?

I think it may it's not really having a big impact right now.

And one of the things that just happened was President Trump putting greater sanctions on any country that buys from buys crude oil or petrochemicals or anything related from Iran.

Well, China buys 90% of Iranian crude oil, at least a million barrels per day, but it also affects urea, all the fertilizer production that comes out of Iran.

So it further tightens up the global supply.

But everything for this growing season for the corn is basically in place now.

All right.

Let's go back to one of the other topics livestock.

We could have discussed that one for quite a while.

And Mike in Iowa wants to know how long can these fat cattle markets keep going.

Well, you know, I've been wrong to this point.

but it basically comes down to, how far can the consumer go?

And I've been impressed with how willing the consumer has been to pay up for the stakes, even as high as prices are, considering what consumer confidence is.

And if we see a more rapid erosion of the economy and the consumer, then we're probably close to the peak.

And that's what the board is starting to say right now.

But if we see things turn around, we start getting trade agreements announced and consumer confidence comes back up, then I think the consumer will pay it and we could go higher.

So that would mean there might be a little more of a bull market coming in the cattle market.

There could be, but we are in a position.

We're seeing feeders be very aggressive in hedging when we get these rallies.

Okay.

it is fascinating to think about what the feeder market is doing.

You talked about during the program, maybe an indication, I think it's May 23rd is the next cattle on feed report.

Will we see already signs on that report that maybe some of that retention is happening?

We saw it in the last one that came in April.

It was very small.

And I anticipate we'll see a little bit more in the May report.

All right.

Let's do one more corn question.

And you kind of talked about this Bradley in Nebraska.

Ireland wanted to know does USDA need to revisit the corn export sales number in the current balance sheet.

And when you finish with corn, then I want you to talk about beans, too.

In that same question.

Of both corn and beans are going well above what the seasonal pace is now to hit USDA target.

USDA seems to be afraid that maybe they've been front loaded, and that you could probably make that argument with beans a little bit more, because you look at the seasonality beans.

The historically sales went up in July and August because Brazil was running out of beans, but that hasn't been the case in recent years.

And so we could see us fall behind in those final months.

Right now, we're about 100 million bushels above the seasonal pace needed on shipments.

Actual shipments.

but I wouldn't be surprised by 25 million increase.

But on corn right now, actual shipments are 180 million bushels above the seasonal pace needed at USDA target.

That's still growing, even though USDA has made a big increase in their export target already.

And seasonally, corn shipments start turning lower here after about the second week of May, we start seeing that weekly pace because Argentine corn is on the world market and Argentina is growing a big crop.

So I'm expecting that we will see shipments go down.

But the seasonal pace goes down too.

So you maintain that lead and I think it's justified to go up another 100 million bushels.

You talked about Mexico being a big destination.

Who are they buying from before?

What changed.

Oh they've been buying from us.

It's just increasingly more and more, pork is the desired meat in Mexico, and they can only produce about half of what they do, what they produce.

So that's why the number one pork importer.

But they don't can't grow enough corn for what they, produce in pork there.

They have to buy it.

And they just keep growing every year.

And they've had a couple droughts as well, which has reduced their ability to buy corn.

And so that's a been a concern for them.

And I do think that will slow down if they have a normal growing season.

All right I want to sneak in a little maybe the opposite side if we could.

Gary in Wisconsin if we could.

There.

Julie.

Gary's asking, with planting being so early and quick, there will be little chance of many prevent plant acres.

Could we be at 96 million acres of corn at 182 bushel yield and sub 380 price this fall?

Yeah, a lot of what ifs and.

That's that's possible.

Yeah.

That is still one of my possibilities.

I've got worked in, particularly with the rapid planting pace that I think we're seeing.

What's is there a number or a progress.

Is is the weather story not going to be about getting it into the ground?

It's going to be the next phase.

For it's going to be the next phase at this point.

And with corn, even with all the acres we have, a 5% reduction in yield still makes us tight and requires rationing with price.

Soybeans.

Same thing.

It's easier to get there though, with fewer acres.

Okay, let's go to beans for a minute.

One last thing.

Bearish wise, there's been a lot of bearish headlines and the market has stayed I don't know if strong, but not I mean it was only off a couple of sense this week.

Do you buy that.

That's an optimistic look for beans I.

Think the market is holding on to optimism on the biofuel story.

And I think we need to get that announcement by Memorial Day.

We think it will come by Memorial Day.

If it doesn't get that and the weather's not threatening.

Beans could face more downside risk.

But the market is expecting it and we're expecting it to be a positive story.

And we're always expecting a good conversation when you come and see us.

Arlan, thank you so much.

Thank you.

I appreciate it.

Arlan Suderman, everyone, and a reminder to get signed up for that market to Market Insider newsletter.

It's free.

Sign up at Market to market.org.

It comes in your mail every Monday morning.

Next week we look at an operation growing their own grains and markets.

And we'll also have the commodity market analysis.

Mark Gold, thanks for joining us.

Have a great week.