Market Plus with Matt Bennett

Paul Yeager: This is the Friday, August 1st, 2025 version of the Market analysis segment from market to market. Welcome back to the table for the Friday, August 1st, 2025 installment of Market Plus. Matt Bennett is still with us here. Matt. You were here for a panel discussion in January. Let's go back for a minute to January. The discussion at that point was, should you be selling? Prices were higher then if you can talk to Matt Bennett of January of 2025, what are you telling them about corn? Should he have sold some at that point?

[Matt Bennett] Yeah. I mean, clearly hindsight's 2020. We know that. And we can figure that out pretty quickly when we get on social media. There's a lot of people saying, yeah, the farmers undersold. They should have known better. But the problem, Paul, is if you go back to January, just go back to the high. I believe 4.7975, 4.7975 take a normal basis off, you know, and you're looking at prices that at APH didn't work. Quite frankly, this didn't work. I mean, most of the growers with normal land costs were putting at least $1,000 an acre into this corn crop. And so you had to be assuming one heck of a yield, you know, at those prices. And so what could go wrong? Right. You get oversold and then all of a sudden, the forecasts, which we're showing that we were going to be warmer and drier in the West, you could be getting yourself in big trouble. So I do have an issue with people getting too hard on the grower because quite frankly, this has been one of the hardest years to market that I remember because we never had a chance to get ourselves into profitability. Now you say, well, if the market really dips, you know, you can lean on insurance. Well, if your APH is 220 and you raise 260, good luck with that. You know, because then that's going to lower your threshold on price that you can collect on. So this has been a tough year to market. That's all there is to it.

Paul Yeager: Well and let's go back to again January weather is going to be an issue here. Well the spring remember you, Matt Bennett, had problems planting. If we wouldn't have had some of those hiccups in places and planting, would this market be even lower?

Matt Bennett: I think it's possible if you would have had most of the corn planted in April, for instance. I mean, a lot of corn was planted in May, but the summer has really been conducive to even late planted stuff looking pretty good and coming along in good order. I mean, your growing degree days are fantastic. I mean, of course we've had more heat than what we really want, but at the same time we've had enough moisture, thank goodness, because if we wouldn't have had the moisture, the kind of heat that we've seen would have been just devastating on this crop. But overall, of course, we grew really well. Crop looks great. Yes, there's issues in it, but I think overall it's a pretty good crop.

Paul Yeager: Well, then you're going to have to do something with it. Glen in Ohio wants to know from you, Matt, with limited storage space available on the farm and considering the cost of commercial storage, what should a producer do if they have not sold enough new crop beans or corn? Basis will be weak for a long time. What gets the grain moving again?

Matt Bennett: Yeah. Great question Glen. I saw that on Twitter. It's one of the biggest questions we've had lately. So you got to ask yourself, if basis going into harvest is, say, 35 under and you're calling for a 183, 184 national yield. You know, if that's the case, and we know there's lots of counties in the Midwest that are going to post well above you know, all time records. Okay. So if that's the case, what basis is going to go to, you know, and so the unfortunate reality is that basis is likely to be pretty weak this fall. If you know you have cash needs and we all do. If you know, some bushels are going to have to come to town. It is a really, really bad time to make the decision on sell versus store. Then one of our local people said there's going to be a dump fee and then $0.04 a month thereafter. I mean, a lot of places it's going to take you at least $0.30 to get out to Jan 1. So if I'm a grower and I've got cash needs, I know interest costs are fairly high. Some of this corn and then reown it with a call strategy that is a half to a third of what storage would cost. And if we do get a rebound, which I think we will again, I think there'll be a paradigm shift in this corn market at some point when we start looking at all this demand we built in. Yes, we might end up with a 2 billion carry, but if we have all this demand in lower acreage, at some point there will be no weather premium in the market for 26. And I think you start to turn the tables a little bit.

Paul Yeager: But it gets so hard to think about it to, to tap into your optimism. Matt, to not want to hold it then. Yeah. I'm sorry to not sell but to hold longer and then you just might get yourself exposed into that scenario where you're going to lose that $0.30 when you drive it in?

Matt Bennett: Right. The problem, the only problem, and I was in the elevator business, of course, for a long time. You're going to pay for the storage whether the market goes up or down, you know. And so that's the reason why I feel like a grower. If they know they've got cash needs the decision to do something would be, in my opinion, a better one to make sooner rather than later. Okay. Because basis is not likely to get better once once combines start rolling. And like I told you before, God forbid you wait until we start putting corn on the ground because, yeah, I've put corn on the ground before and you got to pick it back up and it's a, it's a, it's a cumbersome process. And typically the basis just gets wider and wider once you run out of storage, because you've got to tell these growers, hey, pump the breaks. You know, we can only handle so much corn. And so you might get into a situation where the only way you can come dump is if you sell. And by the way, basis is 60 under..

Paul Yeager: Oh yeah. That's something to think about right. All right. Well let's talk basis a little bit, but in a different part of the country. Boyce in North Dakota wants to know. Normally it seems like the basis weakens during rallies, suggesting that the futures price is too high. However around here in the last several weeks, the soybean basis has been widening even as the futures have slid lower. Are soybeans really too expensive given the current ending stocks?

Matt Bennett: If you look at us ending stocks, it doesn't make sense. I would agree. But the problem is you got to look at world stocks. And I touched on it briefly. But world stocks are growing. Brazil just harvested a huge soybean crop. They're going to plant more beans again this year. I mean it's an annual thing for them. That's what they do every year. They plant more beans. And so the unfortunate reality is they've still got a lot of beans to put out there on the world market. And we have no export sales. There's just none as far as New Crop's concerned. And so with that being the case, you got to ask yourself why wouldn't beans move lower? You know, I don't like it. I look at old crop balance sheet, I look at new crop balance sheet. They both look tight. But what if we lose two, 300 million bushels off a new crop? Exports? You know, you could take the yield down three bushel and still have more beans than what they're currently forecasting. And so it's not a fun situation to talk about where I can have a little more optimism. It would be with corn. The problem once again with soybeans is that you raise more than what you're using. Whereas with corn, we're not raising enough corn for what our demand is. And so you're looking at two completely different markets there.

Paul Yeager: And I had another thing flash in my head. I don't know if I'm brave enough to ask you about this yet. Let's stick with questions that are on the sheet. Dan in Nebraska wanted to know: Cotton prices have gone nowhere, China is not producing. How long before they start buying soybeans and pork?

Matt Bennett: We need to get a trade deal. I mean, that's the thing is, is we're going to do this truce, right? And so we're not going to increase tariffs like this is supposed to be some sort of good news. The problem, Paul, is that the good news needs to be we have a trade deal in place and this is what we're going to export them. These are the quotas that they're going to have to stick to. If we got something like that, we could have some reason for optimism. The problem is that by all intentions right now, it looks like China is going to source their beans from South America, unless they absolutely have to come to us. Now, as we were sitting here a year ago in the summer, we hadn't sold very many beans to China. But the problem is that the tension in this trade war situation is escalated. We have a new president, of course, and they are going head to head here. I'm concerned that we're not going to see this flush of export sales on the weekly that we saw a year ago. And if that's the case, you know, I don't think that it spells anything good for the soybean market from a price standpoint.

Paul Yeager: So we need more than a tweet. We need a 52 page detailed report. A framework is not enough, right?

Matt Bennett: With quotas, we need to know some details. I mean, we've heard about trade deals that, hey, we've come to an agreement with South Korea, Vietnam, you name it, right? There's been trade deals, but we don't know what the specifics are and we don't know what the quotas are. And until we know those facts, I don't think the trade has enough ammo to sit here and feel good about the direction of our ag commodities. Right now.

Paul Yeager: Let's go to livestock then, if we could, as we take a look at the November soybean contract here on the video side of this podcast, if you ever do want to go back, I know some of you listen to it, but we do a video version of this and there's things that get rolled in. I want to go. Matt in Ohio, if we could close here, Matt. This one's about livestock. A little bit. And other things. That's Mike's question. We'll do that. Mike W. first, with the expected bin buster crop out, there is $3 corn and $8 beans to be expected. Will we ever get back to five and 12?

Matt Bennett: We will get back to five and 12. But should we expect a three in front of corn prices? That's where we've got. That's what we've got right now. Should we expect an eight in parts of the country? I think we're pushing on it right now. I mean, bases on beans is over a dollar under in North Dakota, which is where we were just talking. And that's not much fun to talk about. November being settled the week under $10 this week. Clearly it doesn't take much of a basis or a move on the board. You know, if you come in here in August with a 53 bushel yield, potentially and yes, I'm afraid you're going to be looking at a lot of cash prices there. Now, what does it take to get back to five and 12? I think you get back to five quicker than you get back to 12. The way things are right now, because I think there's an opportunity here over the next several months. If we don't plant 90 million acres. And quite frankly, Paul, I don't know that we're going to plant 90 million acres of corn next year. And if we don't, with 15.5 billion bushels of demand, all of a sudden at some point we're going to realize, yes, the grower got pushed into the situation where they just couldn't afford to plant the corn, right? Yeah. In mass quantity. What if we have a weather issue next year? I mean, we haven't had anything to trade the last two years in the summer. It's just been a doldrums market where we really haven't had a big rally. We could see a rip-your-face-off type rally. If we don't plant the acres because we've got massive demand built in.

Paul Yeager: That sounds like a lot of what ifs.

Matt Bennett: It does, but you asked for optimism.

Paul Yeager: I know.

Matt Bennett: I'm trying to come up with something.

Paul Yeager: Ripping your face off isn't exactly the optimism I was going for.

Matt Bennett: Well, it's rip your face off rally, it's better than..

Paul Yeager: The other alternative. All right, last question, Matt. In Ohio, poultry producer Pilgrim's Pride posted record earnings this week. Is this a sign that the cattle market has reached the top?

Matt Bennett: I mean, here's the thing. There's substitution for sure. You know, someone could come in and say, hey, I can eat chicken a heck of a lot cheaper than what I can steak. But there are also some people that say, I don't care, I'm going to eat steak as long as I can. And the consumer has been very resilient here. We've seen demand stay very strong. Is that a sign that there's a top in the market? I don't know that that is the sign, but it clearly shows you that there's a lot of demand for chicken. And so some of the beef demand may have backed off a little bit. Once again, I will tell you the top in the cattle market is going to happen probably when no one expects it. And when fundamentals still look excessively good. I don't think it's going to happen. Whenever we're all sitting here expecting it.

Paul Yeager: Good to see you, Matt.

Matt Bennett: Good to see you.

Paul Yeager: Thank you for making the trip. Always a pleasure. Yeah. Matt Bennett, everybody. And I do want to remind everyone you can get signed up for that Market to Market Insider newsletter. You would have known Matt was coming if you signed up for free. It's at Markettomarket.org. That's where you enter in all your information, next week we're going to talk about the fight over busting the swamp to farm just a few more acres. And we'll also have Don Roose with us. He'll talk the commodity markets. Thank you so much for joining us and have a great week. 

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