Market Plus with Don Roose

Paul Yeager: Welcome to the table for the Friday, August 8th, 2025 installment. This is Market Plus. Don Roose is with us. Don, you like to go to the State fair? I like to go to the State Fair. What do you think is going to be the biggest question you're going to be asked this year?

Don Roose: Probably, you know, how do we market the grain going forward from here when we  really at losses for our overall operation? I think that's probably going to be the biggest one. You know, like we were talking earlier. You know the producers kind of in survival mode. You know when you're sitting there with your crop and you're below the cost of production, you haven't got it sold. You know, what am I going to do? You know, it's pretty stressful.

Yeager: Well. I already told the control room I was going to go in order. We're going to reverse the order. Josh, let's start at the bottom. Because this is tied into what Don just said. Glenn in Iowa wants to know, Don, this is about fertilizer because inputs you mentioned it a little bit there. What are your thoughts on fertilizer prices? Most trouble is that going to be in this fall, or is it going to be a winter problem?

Roose: Well, I think it's a problem. You know, it's a long problem. You know, one of the things, you know, the tariffs are really not helping the input cost because, you know, we get a lot of fertilizer from outside of our own country. So it's you know, it's a bit of an issue. Prices are just too high. But I think when you look from an overall break even standpoint, but I think for people are going to be forced to try and purchase at these price levels. But you may see people waiting more towards the spring taking a chance on the spring versus the fall.

Yeager: You said on the TV show, talked a little bit about trade and some forward purchases. People where countries were buying some of our grain and, did I hear that right? And was that skewing some of these export numbers? And do you get a sense of when that might balance out? I mean, because you can't always forward price everything or forward buy everything, but you can. Corn and beans usually.

Roose: Yeah. You know, and I think the one we were talking about is the corn market. Our exports for new crop are very strong, but we expect those to slow down greatly. But a lot of that, we think, is if you look at the countries it's front end loaded soybeans are just the opposite. Our big clients, 60% of our beans go to China. And China is just basically non-existent for all the reasons, tariff reasons. And so we’re the lowest exports since 2021 for this time of year. So that needs to change, particularly as we move into the fall.

Yeager: Well let's talk and see if we can find some positivity in the soybean market. Don, Boyce in North Dakota wants to know, and it's really a technical question here: The September Soybean daily chart has a as a sort of a short term low for the calendar year at 969. And over the last several days it has dipped below that 969. But then mostly closed above it. Is that a positive sign? And does that mean that they are trying to put in a major seasonal low?

Roose: Yeah. You know, well, I think one, we'd rather talk positive, Paul than we would negative because that's the way we go forward. But, you know, from the soybean from a realistic standpoint, I think that's what we're really looking at is the soybeans have an anchor on them. We've got big competition from South America. It is true on a positive standpoint that as of today, we're about a dollar under Brazil for October/November. But it's hard to believe that Brazil's buying soybeans for that slot anyway. So last year we bottomed soybeans. 938 in September. So another 30, $0.40 down. And that was more like August 19th. So I think it's one of these markets that before we go up, we have to quit going down. Poor technical performance to end the week. We can't get over $10. So I'd say it's still buyer beware until we see something positive happen.

Yeager: If we're that much lower than Brazil, the Chinese are usually the one, I think you've even been the one that have told me this, that they always, they're good at trading. They're very good at buying low.This isn't about price. This sounds more like politics.

Roose: Oh, most definitely. I think that's the problem is they're saying, listen, you know, the prices are still low even for them. But you know, so they're buying security. I mean, when you have, you know, as many people as they are to feed, I mean, they've got to make sure that their food supply is secure first. And I think that's what they're doing. They're saying, well, we don't know how these talks are going to go, going forward. So they're buying security. But it's also risky for them when they're locked into one country, Brazil. If they have a big weather problem, you know, it's an issue.

Yeager: Or if something changes politically, they're they have some instability right now that's been going on. So yeah, that could change that dynamic. Always something. All right. Let's talk about basis here, shall we? James in Minnesota wants to know Don how wide will that basis be in October for corn and beans.

Roose: Well I think that's a good question. I think, number one, if the price goes too low, the producer I think is just not going to sell it. I mean, no doubt. And so I think that could make the basis more positive than you think. You know, we saw locations for people that really wanted corn went from in different areas out east from 350 on new crop to five under just in quick order just because they were trying to secure some supplies. But I think it's going to be more of an issue on the basis if the corn market would rally, because then I think you'd see supplies move into the pipeline. The lower we go. I think it's going to be tough when you for the basis to widen out a lot, probably some, but not huge because when you have a carry, Paul, from July 30th $0.05, $0.05 a month for seven months, the producer and the job of the market is to distribute those bushels over time, from now till next June. And I think that'll be the job of the market.

Yeager: Okay. This one's for the landowner audience that might not be involved in active daily farming. And those who depend on that, it's the rents. Ronald in Iowa talks about inputs. Why aren't those rents falling?

Roose: Well, and that's a good question. I think part of the reason the rents aren't falling, because the price of the ground is too expensive. So the ground has to come down first. I mean, let's just say that you take Iowa at $11,000 an acre, you know, farm value rents to get a rate of return. That has to be something higher. So I think it starts with the two. Land is too high. Probably if you look at the rents.

Yeager: That there's a study. I'm trying to think of it exactly to get the right number here on you. But we are seeing some in Iowa, some of the sales are a little lower. The Dakotas, wherever there is cattle grazing that is going up higher, is that going to have to be more of that to change this, this story about sales and rent prices?

Roose: Well, you know, I think that's probably going to be part of it. You know, and I think just competition, when you look at South America, they can raise two crops. I think we have to, you know, of course, Europe, you know, that's who we seem to compete with from a land price. There's a substantially higher, South America, is cheaper. But, you know, I think part of it is going to be in the interest rates. You know, if interest rates stay high or would move up for some odd reason, we'll call it inflation. That would probably bring the land values down. But kind of consequently, if interest rates go back down, people kind of look at the land values, kind of like gold. Well, at least you're getting a rate of return on the land. So that's part of the problem.

Yeager: All right. Let's go. A couple cattle questions here. And Dan in Nebraska wants to know with two years to build back the cattle herd, prices will only go higher. What do you think is the break even price 300 or 350. 

Roose: 350 on live cattle? Well, let's just back off and look at what the from a more number that is more widely looked at the USDA has cash in and could be too high 229 for all of next year. 228 for the fourth quarter. So I would say it's going to be more from a competition standpoint. Paul, a lot of things can change if you get a larger beef herd in the world as Brazil, if things would straighten out on tariffs, could we import a lot of beef and substitute, you know, more than you think. Could we run into more competition from pork and poultry so things can change? I mean, the economy right now, let's just say it's okay. But it could get worse too. And then people really look at the food dollar. Beef looks pretty high, just like eggs look pretty high. Great for the cow calf guy. He does a lot of the work. You know he's getting some good returns now. So I'd like to see that keep up. But I would say this cycle is, you're building the herd back right now. Just a matter of how much.

Yeager: Right. That's that was a big part of those last reports. All right. So Shane in Nebraska, he has a question. A little more on the technical side. Does old resistance create new support for grain markets?

Roose: Well, it does, you know, but I think when you're looking at let's just take you know, what he's asking squarely, you know, the support on corn right now is $4. It gets under $4. And it popped back over it. So that's I think let's just take December corn. Probably if it gets back under $4 again right now that's support right now. But if it gets back under $4 again, that's going to be tough resistance to get over again. But so $4 support now we'll see what happens after this report. But then resistance if it gets back under that.

Yeager: And you didn't even mention psychological in this factor that seems to be out the window this week. The four and the ten.

Speaker: Well, kind of we couldn't get over $10 on soybeans this week. So like you say, psychological does come into play. Paul, you've been studying.

Yeager: I've been listening to you. I'm not going to make you sit on the couch and do a psychological study, but that's just what it's going on. Don, good to see you. Thank you for the insight.

Roose: Appreciate it. Thank you, Paul. Glad to be back.

Speaker: All right, Don Roose, everyone. Thank you. And I do want to remind everybody to sign up for that Market to Market Insider newsletter. It's free. It's at Markettomarket.org where you fill in all the tabs and say, send that to me every Monday morning. Next week we look back at the most recent decade of this program. We'll also have the commodity market analysis with Mark Gold. Thanks for joining us. Have a great week. 

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