Welcome back to the Friday, June 13th, 2025 installment of Market Plus.

Joining us now, Shawn Hackett.

Shawn, I think before, I'm not saying I've made fun.

I've made light of your hand gestures.

And you said something about a beach ball in the first discussion.

I almost said right at that exact moment, it looks like you are doing a beach ball bounce with some of the some of the points you were making.

What has amped you up the most this week, given all these headlines?

It's the renewable diesel mandate shift.

It's a major, major fundamental shift in the grain markets.

It's just on a short term shift.

It's a multiyear shift.

It's a shift that was supposed to happen several years ago when we backed away from the whole thing.

And it really just it kind of removes a lot of these headwinds from trade wars and Brazil take our market share, at least for a little while.

It really puts us in a much tighter spot, and it gives us a much better chance for economical prices.

And this could change the trade discussion, right?

Because all of a sudden, I mean, there's a clamoring for we don't need trade.

I'm guessing that's a partial negotiation ploy, but it also is let's take care of it ourselves in this country.

No question.

With what's been happening with China pulling back from our, demand from our exports and with Brazil continuing to go grow and gain market share and us losing that market share, I absolutely believe that taking care of ourselves, bringing more demand home, finding those useful ways to create more domestic demand jobs, creation and economics here in rural America is absolutely the right approach.

Doesn't mean we shouldn't sell to other people, doesn't mean that we won't sell to other people.

But it shouldn't be the bet all be all of of our ag policy going forward.

I think this week's change of affairs with the renewable diesel mandates is a step in the right direction in creating another source of income for our farmers.

Because, frankly, the market movement was muted on Monday, Tuesday, this framework between the US and China out of London, there were very few details.

And so the market, I think has grown numb to oh yeah, we have something, right?

Last time we went through this when he was president for the first time, until there was actual concrete evidence of how much for how long we didn't react to it anymore and we didn't get any for how much, for how long.

We got that we're getting along and we're starting to become friendly again.

We need how much and for how long.

I'm not saying that's not coming, but you get that.

Like we got from renewable diesel this week, the market will react.

Right now it's saying sounds good okay.

We're going to go to rare earth metals.

Probably you're going to get some extra corn exports and soybean exports.

We we haven't seen or anything for it yet.

Show us the money as they say.

Or show, show your work.

Show you work.

Show your homework.

Yeah.

All right.

Here's some homework for you.

Glenn in Iowa wants to know Shawn.

What will the final corn acres be?

You mentioned acres in cotton.

Because I want I want you to answer where those cotton acres are going.

And then what's the corn acre?

Well, I mean, I think it's there's a lot of people are suggesting that, the Deep South lost corn acres and that the central west, central north gained corn acres and the same thing for soybeans because of the really poor weather versus the good weather in the planting phase, I don't really think it's going to change that much.

I know it's probably not popular to say that, but, I mean, I think we could be 500,000 acres one way or the other, which is really, in my view, a statistical dead heat.

I don't think we're going to get much of a change based upon that bifurcated weather we had taking away and adding another place.

I really don't see that happening here.

I know it's really hard to do this, but play this what if game for me for a moment?

What if today's news about renewable volumes came a month ago or two months ago?

Would that have changed the picture.

100%.

We would be desperately trying to buy soybean acres back.

And that's what makes the situation in soybeans so delicate.

We didn't get the acres planted, even if we had a few extra acres here at the end of the month, we didn't get it planted.

And now we have this demand, and there's nothing you can do to change that until next planting season.

So yeah, it would have made a great deal of difference.

The timing of something like this.

But that's the way the that's the way the chips fell.

All right.

Let's stick if we could with weather and go Mike in Iowa.

I know I told the control room we were going to go in order and I'm already out of order.

Second question.

Surprise.

Without a weather scare and after this report, how low can we go on corn?

Well, if we don't have a weather scare and we and we have trendline yields or higher, and we start pushing those corn carry out to a 2 billion bushels or higher, and we start pushing soybean ending stocks to 400 million bushels or higher.

You know, I think you'd be looking at the lows that we had last year coming into it, coming into view again.

I think it was whatever, $3.85 December corn last year.

I'm thinking out loud, $9.50 November soybeans last year.

I mean, I think those are the numbers we roughly got to on.

Everybody got pretty negative last August.

That would be to me is where we would be going, or at least in the short run going.

But we didn't have renewable diesel mandates in place.

So I think if we do go down to those levels, it won't be a long lasting bottom.

And if we're correct about a very, very difficult harvest season with long drawn out harvest season and cold, wet weather, I think we could have a pretty exciting post-harvest rally to regain some of that price level and give farmers a chance to sell.

So we'll know in July if it's hot and dry.

Yeah, but we won't know in June or July, August until we get to September if it's this miserable harvest season.

So, let's go Kevin in Missouri then.

With a good crop of beans and corn, we're just going to hypothetically say we're going to get that.

Forget the drought.

Again, how low can we go?

Let's can you already kind of talk some low targets, but would the supply push us down?

The supply always pushes you down during harvest time if it's big for at least a little while.

But I would argue that because of the renewable diesel, we need more soybeans then we're going to be able to produce even if we have a good crop this year where I need more acres next year in order to produce the soybeans that we're going to be needing to crush to make the oil.

So this is that's why I'm saying this is such an important fundamental that even with a large crop, if it's the first large crop or a trend line yield above crop in six years, it still would not, in my opinion, allow for the kind of negative fundamentals we were talking about last August.

I mean, I don't think we can get ourselves back to that.

I still feel last August we traded the largest supplies we're willing to trade for quite some time to come.

Really?

Yes.

Like two years.

Three years.

I would say I'm thinking at least three years, if not longer, that we've traded or traded the largest supplies we're going to trade for the foreseeable future, meaning 3 to 5 years.

All right, well, let's stick Bradley in Nebraskas question then, right at that with what you just said there, because that follows up perfectly.

He said, “Beans are currently up $0.23, but the cash price is $0.13 lower than Tuesday because processors roll to the November.

Does the industry think the crop is already in the bin?

Are old crop supplies more abundant and the USDA balance sheet?

Are soy oil stocks burdensome?

Bradley wants to know, what gives?

Soy oil stocks are not burdensome with the news we have today.

We don't have enough of it.

In terms of soybeans, whenever you going to the new crop month, when you have a good start, they're going to be projecting a great crop.

Why not?

So they have the ability to create any reality they wish, because no one can tell them that they're wrong about a big crop coming because it's off to a good start.

And, and until such time that we have a reason to believe otherwise, they're going to trade the basis as if a big crop is coming in.

Minute you add weather problems or it does, things start to come up that's an issue.

Then that basis can turn around on a dime, especially with this renewable diesel demand for cash coming in.

So for now that's what they're doing.

But I don't think it's sustainable.

We haven't even talked about sustainable aviation fuel in this factor.

I mean that's also ethanol on the corn side.

Do we expect other news maybe coming on either of those fronts?

I think the, the, the, the Trump administration is clearly looking for ways to support U.S. agriculture through non subsidy means economic ways, market ways to put more money in the farmer economy in the U.S. without trying to send more money from the government, when at a time that they're trying to cut costs and manage the budget.

So I think they will look for other ways that makes sense to do that.

And what you mentioned with sustainable oil, aviation fuel and ethanol and such makes perfectly good sense that they would want to push that envelope even further, creating greater demand and allowing the farmer to benefit from the market, not from payments.

I know every farmer I ever talked to, they'll take the payments in bad times, but they prefer the market to give it to them.

Let them not answer the phone when someone calls to say to sell.

But okay, again, I'm another what if.

Let's just.

I mean, part of today's discussion is using more stocks that are grown domestically.

Some of these companies were using lower imported stocks.

What happens if corn and beans and wheat all goes higher and a processor, a blender, a crusher just says, I'm sorry, my bottom line, I got to go somewhere else.

Well, I mean, clearly, you know, you're not going to have $100 soil price and be able to make this thing work.

I mean, what we're trying to do is are trying to sop up excess supply and give the market the signal to start planting more soybeans and take care of the problem through greater production domestically.

Obviously we don't want prices to go to all time record high prices and ruin the economics.

And I don't think we're doing it at a time where we're at risk of doing that.

All we're saying is we've had a long extended period where prices don't make sense, and we're trying to find a way to get them to make more sense, where it makes sense for the farmer, and it makes sense for the processor.

And we have enough time for the market to produce more domestically to keep it going.

And I think they can do it.

Lastly, then, is we need to figure out one more thing, and that's Gary in Wisconsin's question.

Most farmers are undersold a lot because of so much drought talk and lower prices.

Is it time to get aggressive on sales and catch up?

Or is the drought still ahead?

If you haven't sold a lot of old crop and get some old crop sold on any rally, you see, because your timing is short.

We made recommendations early in the year at the highest to get 50 to 75% of old crop grain sold to our customers.

I'm talking about new crop.

I would not be in a hurry to sell a new crop right now.

I believe that we're getting an initial first move higher after a long period of negativity from the highs that we had earlier in the year.

And I think between renewable diesel, between geopolitics, and I'm very confident about at least a weather worry in the month of July that the farmer can get a better price for his new crop soybeans, corn and spring wheat to get a better penciled out price.

I would not be a rush, but if you're sitting with a lot of old crop corn and a lot of old crop soybeans, you don't have time to make a mistake and say, well, I can wait a little longer.

You need to get it sold so I will not mess around with old crop supplies, get it done.

You wouldn't even hold just for a little bit.

I didn't say hold for a little bit, but if you if you have a lot to sell, you're not going to try to sell it all at the top.

You just start feeding the market, feeding the market.

Because we're coming into that point where we're emptying out bins June, July because, you know, it's a nice, temperature to do it.

All right.

I, I love to tell you, I pick the top perfect topic exactly when the weather is going to turn.

All that sort of thing.

I do a pretty good job.

No one's perfect, but you have to scale in old crop sales.

If you need to clean out the bins, you need to get yourself priced out.

Don't wait till the last minute, because the minute we're we're going the other way and you're trying to sell into a hole very, very difficult to get a good price.

I just needed you to say it for the people in the back one more time.

Thanks, Shawn.

Thanks, Paul.

Good to see you.

Shawn Hackett everybody.

And I do want to remind everyone to get signed up for the Market to Market Insider newsletter.

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Next week we are going to have an extended look at livestock and commodity markets as pollination approaches.

We'll talk about this weather market.

We'll have Jeff French and Ross Baldwin.

Thanks for joining us.

Have a great week.