Welcome back to the table for the Friday, February 21st, 2025 installment of Market Plus.

Dan Hueber still with us.

Dan, I'm looking through my notes here.

Yes, making sure I didn't miss anything one thing that I did miss kind of ran out of time.

Cotton.

Cotton has been very, very low.

There's this concern that cotton and rice acres are going to lose here very soon.

Do you agree?

I agree, I agree.

I mean, there's really when you look at the it doesn't matter if domestic or if you look at the global picture, there's just nothing that looks good in the cotton market.

So it and again why we continue as much as they push for natural products in this type of thing.

Why we continue to lose demand in the cotton is kind of beyond me.

But it, but at the same token, it's, I, there's no incentive to, to really if, you know, particularly versus what you can do with the bean crops and, and here, you know, soybeans are, you know, tremendous as far as looking at the new crop.

But it's got to be a better alternative to cotton, particularly since cotton is a very expensive crop to produce.

And soybeans, almost every person that has sat in that chair for the last month, months on months have not been real optimistic about soybeans.

I better change my tune.

Well, you're saying even more positive than cotton, right?

Well, I think than cotton, certainly.

You know, again, how much acreage are you going to shift.

I can't say.

And it's not that there is zero demand for cotton, but boy, as far as expanding acreage, you know, very little incentive that I would see to do that.

So do you see any scenario where beans can make a run and defend some acres, or is it really all going to, corn this year?

Well, I think I mean, they'll always be a, Well, I shouldn't say always be.

Yes.

I think there is some scenarios from the financial side.

We know it's a lot cheaper to produce an acre of soybeans.

So if you're already financially stressed and your bankers putting pressure on you to to make some changes, certainly, you know, why not plant soybeans instead of corn?

But I think if you have the wherewithal to plant the corn, particularly in the upper Midwest states, you know you're going to go to the corn at this point.

So.

Then let's get into some questions about corn.

Let's start with Mike in Iowa.

We're going to answer this, with corn on your mind, are we getting to the top for old crop and also for new crop?

I would say yes and yes.

How about soybeans?

Soybeans as well.

I mean, soybeans have really struggled, but new crop soybeans, don't forget.

I mean, we've actually pushed up to some, some, some nice levels on the new crop soybeans.

This is the highest we've been since probably October of last year.

So in both categories, all three categories, I should say yes.

I think you want to reward it.

And this is not to say that we get out in the summer months.

We could have some weather issues that give us another roundup.

We could have some, some demand resurgence, but, you know, wait for a first quarter rally, you know, and yes, a lot of times you think into March, you know, before we, you know, really start pulling the trigger too heavily.

Yeah.

I think it came a little bit earlier this year.

So I think it's time to to go ahead and reward it, and then we'll worry about it in the summer later.

We kick the can down the road.

We're always doing that.

Yeah.

Bradley in Nebraska has a pair of questions.

Let's start with the first one.

Why is there $0.15 of carry between the March and May corn contracts, but only $0.03 between May and July?

Well, you know, probably partially because of, what we're expecting as shipments over the, over the months here ahead.

I would think there's probably as much a transportation weather related, you know, we can't move as many things because of winter, winter obstacles as we can, you know, by the time we get into the spring.

So, I mean, it's, I would tend to think that will that will begin to narrow here at all of them pretty, pretty quickly.

So so we've talked carry let's talk basis now.

Sure.

Bradley has another question.

Our Mississippi river levels still low enough to increase freight costs and hurt river terminal basis levels.

Could this record cold hinder river traffic?

Well, temporarily, certainly it will hinder, hinder traffic.

I mean, of course, I came across in Mississippi today.

There was quite a bit of ice, still floating around on it.

So, but but here again, we're on the downhill slide of that one.

And I mean, if anything, we're going to be, you know, as we're looking to the temperatures here in the next week and beyond, you know, we're back above, well above freezing in most areas.

So that that should help free that up.

From where it's been, you know, it's still probably more a processor market than anything.

But, you know, when you look at the shipments of corn, I mean, and and granted, barge traffic is probably hindered that to a large extent.

And, you know, last week we had a record for the year, new record for the year, 1.6 million metric tons of corn, moved out of the Gulf.

So it's, you know, the demand should be there if we can get it down there.

But here again, it's, if you have freight restrictions in that type of thing, you know, that that that provides that hindrance into the basis levels.

Demand.

Who's interested in our corn right now?

I mean, because Mexico had been a really good customer.

They seem to be buying.

Still is.

Yeah.

Are there other, suitors, for our corn?

Recently, probably some of the best demand has been the Far East, Japan, South Korea, Colombia is consistently a good buyer of corn.

So, yeah, I mean, there's been there's been good demand for it, you know, and really, the only other alternative in the world right now is Ukraine.

And, you know, we know all the problems that we have getting corn out of, out of there and of course limited crop.

So it's I mean, for the time being, we're the only game in town, at least until the South American corn becomes available and that, you know, and thats still weeks ahead.

So.

Yeah.

And there werent, since that's not as large of a crop as the main, as the first crop that's not as big of a balance sheet on the world stage.

Right.

And especially if it's delayed the South American.

You talking about Brazil, Brazil in particular.

Right?

I mean, Argentina, you know, you're still looking at 46, 47 million metric ton crop there.

And of course they they tend to, to want to export that maybe a lot would go back into Brazil for that matter.

But but the Brazilian crop.

Yes.

The, the planting of the second crop is significantly behind where it was a year ago.

That window of opportunity closes pretty rapidly as you move into March.

Not not that if they don't have the financial incentive to do it, they'll they'll kind of push the border on that, you know, which is of course, the other part of the equation with the dollar.

You know, the dollar's been backing off in relationship to most currencies.

And of course, a strong dollar, a strong dollar is great for the Brazilian farmers.

A weak dollar, not so much.

So yes, they have even less incentive to to try to really squeeze that second crop in.

So again, I mean, that's a benefit for us, but not necessarily immediately because it's it's still all about the immediacy of when the product hits the world market.

And everybody knows, you know, for the the U.S. can be the storehouse for everyone else, which we've kind of tended to be that role.

Well, we haven't talked about wheat.

Still have one question, Phil in Ontario wants to know.

Sure.

Wheat is quietly gained in price from last summer's post harvest lows.

Yeah.

The unusual extreme cold weather surely had to affect the U.S. wheat country.

Is it time to price wheat now or should we wait?

Partially considering the ongoing geopolitics in the Black Sea region?

Well, the, first, I mean, first and foremost, yes, I think you should reward the rally.

You know, again, what I sell 100% out there probably probably not the, the damage, you know, as we even spoke about in the earlier part of the, of the, show that, we really won't know that until we, to move out, a little bit further domestically, we have a very comfortable supply of wheat.

I think we were we were back over 900 million, maybe on that last estimate, you know, not not a billion bushel carryout, but still a very comfortable supply of wheat.

Yeah.

If if there is a, and again, I mean, everything's in flux, of course, with what's going to happen with Russia, Ukraine at this point in time, you know, not to mention even what the weather situation is in those in those countries.

So yes, there could be some opportunities down the road, but I think this is a case if you have one in the hand versus two in the bush, you know, take the one in the hand.

So okay, let's talk Russia, Ukraine for a minute.

Sure.

Because if this story changes, which it looks like it did this week, that there is more, U.S. support for Russia than Ukraine.

Sure.

What does that do for the global grain picture, if not saying the U.S. picks a winner, but it appears that Russia gets more of what they were after, then what does that change anything?

You know, it's certainly not enough to make a major shift in the world markets.

You theoretically would maybe make shipping a little bit more affordable, coming out of the Black Sea, a little a little less treacherous than it is right now.

But thats probably more insurance rates and some freight rates than anything else.

It doesn't change the production pictured, you know, right now.

Yeah.

Yes.

If, if, if well, I mean we're kind of behind the eight ball on that one anyway.

I mean the winter wheat crop is going to emerge.

I guess there could be some spring wheat in there.

Boy, you know, to affect things this calendar year would seem pretty unlikely.

Okay.

And then the other thing that I put my pin in, I got to pull it out because it's due, back at the library desk.

Let's talk about demand for U.S corn.

There's the push again for some states, some federal E15 year round where there's.

Is that enough generation of new demand for U.S corn that can impact the market or be a market changer?

A game changer.

I you know, it's a nicety.

You know, it's nice to see that.

Yes.

The the demand could be a little more steady on a year round basis.

I don't think it would be a rise to the the equation of being a, game changer.

You know, it's just it's just a nice positive.

It helps.

Yeah.

It helps.

Is there anything.

And you're and I think you said the main show, let me see if I get this right.

We haven't had any fundamental, major change in any of these grains right now to make a significant...

Correct.

But things can happen and change.

Well, but they happen over years.

You know, when you look at the ethanol situation, which was really the last major fundamental shift in U.S. agriculture, you know, from 2000 to 2008?

Yeah, we went from maybe 200 million, ethanol corn used for ethanol to 3 billion.

That's the kind of change it's going to take to really move us into that next super cycle.

And I don't see where that is on the horizon here at this point in time.

You know what I do see?

What that is that?

Is the end of our time.

Why that's too bad.

It goes fast.

Yes it does, it does.

Dan good to see you.

Likewise.

Thank you.

Very good.

Dan Hueber everyone.

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Next week we are going to take a look back at the 90s in the early aughts for this program.

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We'll also have the commodity market analysis from Sue Martin.

Thanks for joining us.

Have a great week.