Market Plus with Matt Bennett

Paul Yeager: Welcome back to the table for the Friday, June 6th, 2025 installment of Market Plus. Matt Bennett is still with us. Matt, I don't think I've ever had it where I've had to cut myself off on a question because I couldn't think of something short. I thought I had more time. What we were talking about was livestock. We'll get to that in a minute. But I also want to get back into weather because we talked about your situation and, friend of the show, a new friend of the show who we featured in a farmer discussion. We'll have it for you after the 4th of July. It's a farmer in Ohio. Said they just planted, finished planting for the first time everything on Wednesday night. You've had a similar situation to the points east of you. What happens to a market? State of Illinois, Chicago is what it's what happens in the news. When they see half the state's dry, half the state's wet. Does it matter to the market?

Matt Bennett: Ultimately, it always matters. But it's only to a point. When you look at the northern part of the state, some of those, some of those guys this week saw that front coming across said, we need rain desperately. Guys to the south of me saying if it freaking rains again I'm going to be so mad right? And so we've got such a dynamic divergence. If you just look at, soil moisture indicator, you know, it's unbelievable that you've got surplus whenever you get to around 70 and south. 70 and north, you don't go far north of 70 and you're basically looking at, working on a drought. And so it's crazy. Yes. It matters. Absolutely. It matters. But at the same, same point, I don't think at this point in the calendar it matters as much as what it will four weeks from now.

Paul Yeager: Well, we have a couple of weather questions. Let's get to those. Let's start with Bradley in Nebraska, where they did have a little bit of rain this week. Was the spring corn crop insurance price high enough to make it profitable to take prevent plant in excessively wet parts of the country?

Matt Bennett: That's a great question. The first thing I would ask, though, of course, is it all depends upon the growers situation. If someone has not put on anhydrous yet or a nitrogen source probably makes a whole lot more sense to do prevent plant. It depends on what is their percentage level, right, that they're actually insured at. Because if you're 85%, you're going to get a better payout than if you're 75%. But it all depends on the grower. Is there going to be some prevent plant? I'm sure that there is. Is there going to be as much as normal? I don't believe so.

Paul Yeager: Well, Jim in North Iowa then has the follow up to that a little bit about aren't the markets telling farmers to use prevent plant?

Matt Bennett: I don't know that the market's telling the farmer to use prevent plant. I mean in all honesty I think, you know, you look at $4.70 is what your spring insurance price was. Right now you're closing this week pushing $4.50. I mean, in all honesty, I don't I think that if the market had fallen precipitously lower than that, you could maybe make that argument. I don't know that at these price levels, the market's necessarily suggesting that's what you should do.

Paul Yeager: Do you get the sense that the replant of the replant is going to be that weather story that takes over before the drought takes over?

Matt Bennett: You know, if I'm looking at the weather story and I look at replant and I look at, you know, how late some of this is, I do think at some point you're going to have to ask yourself, what kind of yields are we looking at? Right? Especially soybeans. I mean, we know that planning beans earlier typically gives you a better chance to yield better. We want to plant all of our beans in April, Paul. In fact, when we started in April, that's what we planted because we were expecting all this rain. And I wish we would have been planting corn and beans, to be totally honest with you, because the corn that was playing in April in my part of the world, very small amount, it looks absolutely fantastic, but you're going to have to get into that discussion at some point. Is the lateness of the crop what's going to happen? Now, Mother Nature, if she turns off and gets her nose out of joint, like a lot of these forecasts are kind of calling for, then some of that late planted stuff might really be in a tough way if you end the summer with July, August, September being fairly dry, which is what a lot of people are calling for.

Paul Yeager: Last week Naomi was here and she talked about Iowa was going to probably have to carry some of the Corn Belt because of conditions like you mentioned, Iowa and or Illinois, Indiana points east. We talked about it during the program. I didn't quite finish my thought of my question of, you know, how did Iowa look compared to Illinois? You said a certain part of Illinois looks good. Iowa needs to catch up. Do you get -

Matt Bennett: The eastern.

Paul Yeager: Yeah, the eastern part. Do you get the sense Iowa is strong enough that can, that had it in and has the root structure that can withstand a dry situation?

Matt Bennett: I know a lot of folks this week that caught the rain in Iowa said, we're golden. We're in really, really good shape. And then I -

Paul Yeager: Better knock on wood for that.

Matt Bennett: I know some folks that are, you know, maybe like around that Waterloo area that said, they were supposed to get an inch and a half of rain and they got a 1/10 and they were not happy with that. And they say, we're getting uncomfortably dry here. It's all going to depend on Mother Nature. But the bottom line is, overall, the crop went in the ground really good in Iowa. And when you get a good start, a good uniform start, it gives you a really good opportunity. And so the problem I've got though, Paul, is that you, again, you've got convergence with several different weather models. I'm no weatherman. I mean I have a hard enough time with the markets. But if you get all this convergence, you've got to ask yourself, what's going on here is there something more to this? And I, I think that if you trend the second half of June drier, which is what most people are saying, you could go into pollination with some stress. And if you get on past that and you stay hot and dry. Paul, I think that most people are saying western half of Iowa, western half of Minnesota into the Dakotas and Nebraska. That's where most of this has converged on. It could be tough for Iowa to carry anybody if that's the case.

Paul Yeager: Well, there's always the story of spreads, too. We have, we had a couple, Justin in Illinois and Glen in Ohio. Both wanted to know what's up with the spread action in the corn market.

Matt Bennett: It's an interesting dynamic, I can tell you. Okay. In, in my career, whenever I've seen basis improving, whenever I've seen tight stocks, one thing that I could tell you is that you would be bull spreading the market at this time of year. I mean, it's just it's something that has always occurred. You look at stocks versus a year ago and we're looking at around 700 million bushels less corn. But a year ago where you did have some bull spreading, going nothing like that this year. And so what's going on with spreads? I think a couple things. Big Brazilian crop, first of all. And so they know that our exports are probably going to start to trickle off somewhat. We're at 99% of where we need to be. So we're probably going to see USDA tighten the balance sheet up yet again. My, my thoughts are that they will increase exports maybe up to 75 but drop back feed usage 25. But I can see somewhere in that $13.50, $13.60 range that's tight. That's not bear spreading time. Right. That's one thing. The other thing is, is big acres, in my opinion, are kind of, hanging over the market and they're saying, hey, you know what? I think we're going to have enough to get out to harvest. Brazil's going to help us bridge any gap, and then we've got a big crop coming, is what the trade saying. So they just don't see the need to get too excited about running out of corn.

Paul Yeager: At this point.

Matt Bennett: That's that's the way that they've traded. Yeah. You saw little life on Friday. A little bit of bull spreading going on. One time it was about $.05 you took that July Dec spread down to like negative ten. Boom. And then you took back off higher. Are you going to see that continue next week? A lot of it in my opinion, is going to depend on a couple things going to feed on weather, first of all. And second of all, Pre-Positioning report unwinding of that spread, just to take some risk off the table is another thing that could support the spread.

Paul Yeager: I also kind of shortchanged beans a little bit. My apologies to those who really wanted bean news. So let's go with the question now about the soybeans. Joe in Illinois wants to know Matt. My gut feeling is beans are too cheap. What are your thoughts?

Matt Bennett: He sounds like a farmer to me. Yeah. I mean, here's the thing. We are competitive on the export market out into later summer, into the EU, talking about different markets that we might actually be somewhat competitive. And so exports have actually held on way better than anybody thought they would. Yes. We haven't had big export sales, but they've been positive. We haven't seen net cancellations like we thought that we were going to see. Your bean balance sheet both old crop and new crop looks significantly better than what we thought it would look six months ago. Now, the question, for your, the person that's asking this is, are we going to have export sales to China in this new crop balance sheet of a large portion? Well, a year ago we were in the same boat we're in now, hardly any sales were made. And so I don't want to sound the alarm bells, but clearly we're in negotiations right now. We're talking, at least, a phone call that was made this week. Yes, it was a big phone call. But, bottom line is we've got to get something in place where they're buying some beans off of us. Obviously, we've lost exports here every year, so the balance sheet looks razor thin right now with 83.5. But that's making some awfully bold assumptions on exports. So I don't know that I would say they're too cheap. I'm not bearish here. But I would be very cautious as to get too bold up until we learn more about the trade situation.

Paul Yeager: There is one thing that could assist the bean market, and we've yet to see the policy action to happen.

Matt Bennett: Yeah.

Paul Yeager: RVO’s still waiting. There's always this whisper of exemptions. There are these phone calls with China. Do any of those give you confidence that something will be resolved sooner than later that will impact beans?

Matt Bennett: I would say whenever I look at this RVO renewable fuel situation, we'll get whispers of something good happening. I mean, I heard this week that maybe there will be no imported, use cooking oil like it part of the legislation. That would be good news right? We don't know what volumes are, though. That's part of the problem. And I would say, Paul, people are very, anxious to find out what's going to be the policy here, because the bottom line is we are losing export volume every single year, the last few years with soybeans. Clearly, corn export sales were fantastic this year. But Brazil continues to grow. We have to understand it's very unlikely that we're going to see our exports grow out of the US, and if we don't have solid domestic consumption, we're in big trouble, in my opinion. And so this administration has been touting themselves as farmer friendly. This is a wonderful opportunity for them to prove that. And I think that if they if they disappoint on RVO’s and on waivers for ethanol, that is going to be very much problematic in farm country.

Paul Yeager: If you're the White House, can you hedge and go half in on both or some? I mean, there's scenarios that could be really good or really bad or you might just take the middle.

Matt Bennett: I would say domestic consumption has to be one of the biggest things that we really push for, because we are losing global share, especially when I'm talking soybeans. And to me, that would be my number one message if I had the ear of one of them. We have to push for domestic consumption.

Paul Yeager: Got any sunshine to close with?

Matt Bennett: Oh, you know what? The markets actually were up on the week.

Paul Yeager: They were. And a lot of things.

Matt Bennett: Dec corn was up. Soybeans were up. I mean, it's a nice thing to see. And we do have a big report this week. Let's, let's hope that, you know, we get a little bit, a little bit of excitement going. Last thing I'll say is, don't underestimate these markets that have been held down by the funds like wheat, corn. If you do get into a weather issue, you could see some pretty dynamic markets. But don't get married to being bullish. Reward it when it goes higher.

Paul Yeager: Well, then, that almost sounds like you should reward the wheat market then.

Matt Bennett: Yeah. As I would, I would reward it incrementally. Yeah. Because I still think I mean you've still got some, some short positions to, to, to shed. And I think if they decide that they want to go wheat, long wheat for some reason, Paul, that's something that you'd want to have some bushels to sell for.

Paul Yeager: See, that was good. Yeah. Sunshine. Right?

Matt Bennett: Yeah, we got sunshine.

Paul Yeager: I like that, Matt. Good to see you.

Matt Bennett: Good to see you.

Paul Yeager: I appreciate your time. Matt Bennett everyone. And I want to say thank you to all of you who came out to LeClaire for our event. And many of you heard about it in our Market to Market Insider Newsletter. That crowd, I can't say what I said to them until next Tuesday, a week from this Tuesday about a special event. But guess what? It's also going to pop up in the Market to Market Insider. One more event to celebrate our 50th season. It's free! Sign up at Market to market.org today. Next week we are going to take a look at the more recent history of the program. We'll also have Shawn Hackett here. He'll break down the commodity markets for us. Thanks for joining us. Have a great week.

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