Pro Farmer Podcast: Episode 19

Summary

The Pro-Farmer Podcast, hosted by Davis Michaelelsson, delves into current agricultural market trends and forecasts. This episode, featuring insights from Hillary Mason and Lane Acre, discusses the impacts of weather conditions, supply dynamics, and disease on corn and soybean crops. The conversation covers topics such as fluctuating commodity prices, the effects of tight cattle supplies, and the role of trade deals in shaping markets. With concerns over crop yields and input costs, experts urge farmers to stay engaged and prepared for market shifts. A blend of cautious optimism and practical advice for navigating the volatile agricultural landscape.

Takeaways

• 😀 The corn market has stabilized, but there are still concerns about weather patterns, with traders weighing the impact of heat on yields.
• 😀 The soybean market is influenced by weather, with current hot conditions in August being critical for the crop's development.
• 😀 Export demand for soybeans remains a concern, particularly in relation to China, with no new crop purchases from them so far.
• 😀 The corn yield projections are high, but there are uncertainties due to factors like tight tassel wraps and high overnight temperatures affecting crop health.
• 😀 Just because a crop looks good from the road, it doesn't mean it's in ideal condition; other issues like diseases and aphids are present in fields.
• 😀 There are emerging concerns over soybean diseases, particularly due to the hot and humid conditions, which create an ideal environment for disease spread.
• 😀 Tight cattle supplies are maintaining support for the cattle market despite a decline in boxed beef prices.
• 😀 Trade deals with Japan and South Korea are contributing to optimism in the cattle market, and trade talks with China could impact market dynamics.
• 😀 The Federal Reserve's upcoming meeting and market reaction to interest rates could influence agricultural markets, alongside the release of crush reports.
• 😀 Corn market prices are currently below the cost of production, making it difficult for farmers to justify investing in inputs for the fall season.
• 😀 There is uncertainty in the market, as historical patterns suggest potential summer rallies, but so far, rallies have been delayed or absent.
• 😀 The corn crop is facing heat stress, with some areas experiencing extremely high overnight temperatures, which could result in lower test weights and crop performance issues.

Q & A

What was the general market trend for commodities like wheat, corn, beans, and cotton last Friday?

Last Friday, wheat contracts were down, except for the March corn contracts which remained stable. Beans and cotton were also lower, while cattle prices were higher. The hog market showed mixed signals, with the August contract higher and the October contract lower.

What is Hillary Mason's outlook on the corn market?

Hillary Mason is cautiously optimistic about the corn market, mentioning that it has stabilized a bit, indicating that a bottom may have been found. She also highlights that USDA crop condition ratings have been strong so far this season, which supports the positive outlook.

How is the weather affecting soybean markets?

The weather, particularly the hot conditions recently, is causing concern for soybean markets. However, a cooling trend is expected. August is a critical month for soybeans, so the market is weighing the potential impact of this weather on crop yields.

Why are there concerns regarding soybean export demand?

There are concerns regarding soybean export demand due to ongoing trade talks with China. No new crop purchases from China have been reported so far, which is raising doubts about the strength of the export program.

What is the uncertainty regarding corn yields this season?

The uncertainty regarding corn yields comes from the high expectations for the crop, despite some issues such as tight tassel wraps and high overnight temperatures, which may impact yield. There are also concerns about other factors like diseases and aphids, which could affect the final yield.

How is the appearance of the corn crop from the road potentially misleading?

Local agronomists have stated that just because the corn looks green and healthy from the road, it doesn't necessarily mean the crop is in good condition. Issues like aphids and diseases, as well as the tight tassel wrap, are concerns that need to be addressed by walking the fields.

What diseases are affecting soybeans, and how serious are they?

Soybean diseases such as Sudden Death Syndrome (SDS) and white mold are becoming a concern, especially in hot and humid conditions. While the severity is not yet fully known, these diseases are expected to spread as the growing season progresses.

What are the key factors supporting the cattle market despite falling boxed beef values?

The cattle market is being supported by tight cattle supplies, despite a drop in choice graded box beef values. The long-term nature of cattle production and the difficulty of expanding the herd quickly are factors keeping the market firm.

How are recent trade deals influencing the agricultural markets?

Recent trade deals, particularly with Japan and South Korea, have positively impacted the market by driving demand for U.S. supplies. Additionally, China's tariff pause has been extended, and trade talks are expected to resume, which will be a key factor for market movement in the coming weeks.

How does the U.S. corn market compare to global corn stocks and demand?

Global corn stocks have tightened compared to last year, and U.S. corn supplies are slightly tighter than anticipated. U.S. demand has been extremely robust, with the export market driving strong demand for U.S. corn, despite Brazil's record production and increasing domestic use for biofuels.