Market to Market (October 23, 2020)

Oct 23, 2020  | 27 min  | Ep4610

Coming up on Market to Market -- Snow enters the complicated weather picture. Two different interests of the meat industry sit on the same side of the table. Monumental impacts on western stakeholders. And market analysis with Ted Seifried, next.


What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


Tomorrow. For over 100 years we have worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today.


This is the Friday, October 23 edition of Market to Market, the Weekly Journal of Rural America.

Hello, I’m Paul Yeager. The housing sector keeps hitting on red and the market has rewarded both sellers with higher prices and buyers with low interest rates.  ---

Single-family homebuilding continued to rocket in September with a 1.9 percent increase in new home starts in most of the U.S. - with the exception of the Midwest.

The existing home market hit a 14-year high – leaping 9.4 percent. However, inventory is having trouble keeping pace as demand rises, pushing prices higher.

Long-term mortgage rates declined again this week as the 30-year loan marked an all-time low of 2.80 percent. --

Consumers are behind the wheel as the housing sector drives the economy right now.

Grocery store options were limited early in the pandemic but keep expanding as new alternatives fight for shelf space and places in the grocery cart.

This week, two protein providers joined forces in an unlikely pairing to ask the government for clarity.

Peter Tubbs reports.

As cultured meats continue development in the lab, labels for the future products are being discussed.

This week, the North American Meat Institute and the Alliance for Meat, Poultry and Seafood Innovation, which represents stakeholders in the emerging cell-based and cultured meat industry, called on the USDA to develop mandatory labeling standards for future cell-based and cultured meat products.

The two groups are encouraging the development of labeling standards before products become commercially available to give certainty to the evolving business, and speed the rollout of products to consumers once the technical hurdles of lab-grown meat are cleared.

Lisa Keefe, Editor, “To put it very simply words matter what you call something matters. It matters both in terms of marketing, in terms of a general discourse, the consumer's understanding of what the words mean, and also from a legal point of view.” 

The regulatory requirements are complicated. The Food Safety and Inspection Division of the USDA and the FDA share oversight of the new industry. The FDA oversees cell banks, cell collection and cell growth and differentiation. The FSIS takes over compliance at cell harvest, and monitors production and labeling of food products that may one day be sold to consumers.

The regulatory complexity has brought advocates for both the emerging industry and the traditional meat industry to the table. Both sides hope that being involved in the process will lower hurdles in the future, as well as reducing consumer confusion once products hit store shelves.

Lisa Keefe, Editor, “And it's interesting to watch this develop because on the one hand, you're talking about companies that could be seen as being on opposite sides of the aisle, if you will. Uh, and yet they they've established this partnership very early on to present a, uh, a United food chain food supply chain front, uh, to, to regulators in particular who are forging into brand new territory.”

The regulatory groundwork is being laid for products that may not emerge from the lab for years. No cell-based or cultured meat products have been introduced for sale in the United States.

For Market to Market, I’m Peter Tubbs.

Elections have consequences.

Some are visible on day one, others take more time to sort.

For those in the middle of a generations-long cultural debate, the back and forth over western land use can be a monumental task.

Josh Buettner reports in our Cover Story.

On his way out of office, lame-duck President Barrack Obama proclaimed 1.35 million acres in southeastern Utah a national monument.  Bears Ears, named for distinctive twin buttes towering over San Juan County’s diverse high desert landscape, was the first monument created at the request of - and in collaboration with - a coalition of various Native American governments.

President Donald Trump: “Some people think that the natural resources of Utah should be controlled by a small handful of very distant bureaucrats located in Washington.  And guess what? They’re wrong.”

While Obama’s move was hailed by archaeologists and conservationists for protecting the region’s myriad cultural and natural sites, one year later President Trump shrank Bears Ears by 85 percent and split the monument into two non-contiguous sites – Shash Jaa and Indian Creek.  Critics warned former protected lands could be opened up for fossil fuel and mineral development.

President Donald Trump: “…modifying the Bears Ears National Monument.”

Trump’s action drew the ire of local tribal constituents who consider the area sacred.  A handful of various stakeholder lawsuits, alleging presidential overreach, spun up and were consolidated into one case by a federal judge. 

Shaun Chapoose/Ute Indian Tribe: “You want to make America great?  Then why aren’t you talking to the first Americans?  I’m here to tell you – if it’s a fight they want, it’s a fight they’re going to get.”

Though local leadership initially supported the Trump Administration, voter backlash over partisan gerrymandering gave way to the San Juan County Commission’s first ever Native American majority in 2018 – who promptly reversed course.

However, judicial backlog and coronavirus have litigants still awaiting their day in court. 

Former Vice-President Joe Biden:  “So many lives have been lost unnecessarily because this president cares more about the stock market…”

Some hope a Biden win in November could bend circumstances in their favor, but others warn of a breaking point.

Josh Ewing/Executive Director – Friends of Cedar Mesa: “This ping-pong back and forth between maybe a conservative president and a liberal president, and going back and forth…  That’s not good for the land.  You know, the land should not be political football.”

Josh Ewing is Executive Director of Friends of Cedar Mesa – a grassroots organization founded in 2010 to support regional public land use.  Based in Bluff, Utah, the group’s Bears Ears Education Center helps enlighten tourists drawn to a massive county larger than some states on the eastern seaboard combined.  Ewing also describes San Juan as the most archaeologically rich county in the U.S.

Josh Ewing/Executive Director – Friends of Cedar Mesa, Bluff, Utah: “People aren’t used to just walking up to a cliff dwelling, walking up to a 2000 year old pictograph.  They need to know how to behave in those sensitive areas.  Archeological sites are easily damaged and once they’re damaged, they can’t be recreated.”


Tyler Ivins/Blanding Utah: “So this is the edge of our permit. We run all the way up this canyon.”

Shawn Ivins/Blanding Utah: “Everything inside of these rims is part of the monument.”

The vastness of San Juan County is one reason ranchers Tyler and Shawn Ivins breathed a sigh of relief upon Trump’s rollback.  The brothers run 300 head of cattle on mountain and desert allotments within Obama’s previous proclamation area.

Tyler Ivins/Blanding Utah: “So these are Anasazi ruins.  They’re all over San Juan County.  There are thousands of them.  To put it into perspective, one acre is 210 feet by 210 feet square, which would more than protect that area or that site. And if there were 100,000 of them, that would be 100,000 acres.  And they wanted to take 13 times that, which is 1.3 million acres.  In our opinion, that’s overkill.  You know it takes in a lot of area that doesn’t have a lot of bearing on it.”

Over half of Utah’s iconic landscapes already fall under federal oversight, and the Ivins’ say adding to the management backlog is unsustainable.  Some locals have gotten to work developing the area to capture more tourist dollars.  Others hope recent bipartisan passage of the Great American Outdoors Act, with $3 billion in annual conservation and maintenance funds spread nationwide, also brings some relief.

Gary Torres/Field Manager/Bureau of Land Management/Monticello, Utah: “We have counters out there, trail counters, and we’ve seen an uptick in visitation.”

Over 20 million acres of Utah’s public lands fall under the purview of the U.S. Bureau of Land Management, which helps coordinate land use among various stakeholders, overseeing anything from motorized activities to hunting, hiking or administering grazing permits.

Gary Torres/Field Manager/Bureau of Land Management/Monticello, Utah: “I’m a big advocate of multiple use.  I think it’s a great principle for the American public.  It allows us to all play in the same sandbox essentially.”

Gary Torres is Field Manager for the BLM, based out of the agency’s local Monticello office.  He says while President Obama designated Bears Ears a national monument, there was never enough time for a formal management plan to be drawn up before the Trump Administration began calling the shots. 

Gary Torres/Field Manager/Bureau of Land Management/Monticello, Utah: “We had our marching orders, we know what we needed to do.  You know, BLM does this all the time – planning.  We plan for public lands.”

Whether Trump’s monument rollback in San Juan County is ultimately upheld or thrown out by the courts, Torres says great care was taken by BLM in public meetings with input from a diverse range of collaborators.

Gary Torres/Field Manager/Bureau of Land Management/Monticello, Utah: “We need to be respectful of each other’s activities and we need to manage those resources so they’re here for my grandchildren and great-grandchildren.  And I think that’s the beauty of multiple use and sustained yield is that we are trying to do things that make sense now, and for the future.”

For Market to Market, I’m Josh Buettner.

Next, the Market to Market report.

Weather and demand again drove the trade train higher this week. For the week, December wheat increased 8 cents while the nearby corn contract jumped 17 cents. Strong export news helped push the soy complex to a 51-month high at one point this week. The November soybean contract gained 34 cents. December soybean meal improved $18.90 per ton. December cotton expanded $1.37 per hundredweight. Over in the dairy parlor, November Class III milk futures added $1.27. A down week in the livestock sector. December cattle shed $5.05. November feeders dropped $5.38. And the December lean hog contract sold off $2.77. In the currency markets, the U.S. Dollar index declined 91 ticks. December crude oil fell $1.27 cents per barrel. COMEX Gold lost a dollar per ounce. And the Goldman Sachs Commodity Index improved a point to finish at 361.55.

Yeager: Joining us now to give us some insight is regular market analyst, Ted Seifried. Ted, good to see you.

Seifried: Really happy to be here, Paul.

Yeager: I know you are. And thank you for making the trip. As you drive I want to ask you about what you saw in the fields. But we need to start with wheat because for the majority of the week that was the big story. But it's not making sense why when you look at a fundamental sense. So why is that market rising?

Seifried: Well, almost why not? We've got production concerns in a number of areas, here, Black Sea area, that is an issue, although at the end of the week we saw a little bit of wetter weather forecast for the Plains. So why this strength on Friday? We were seeing some news stories that Algeria, which is one of the largest importers, isn't having a good relationship with Russia right now about quality, Algeria wants lower prices -- Algeria wants better quality, Russia wants better prices and so maybe we start to see a little bit more come our way. And the fact, like you pointed out, the dollar was down almost 1000 points over the week. So we’re getting more competitive on the global scale. Now, we haven’t yet seen our wheat exports take off but there is optimism about that. The chart looks good. Overall rising tide in the grains and it was just wheat's week to kind of lead the way higher I suppose.

Yeager: So there's also the drought conditions in the area you talked about, Russia, but there's also dry conditions in the United States. Is the weather going to giveth and taketh in this market?

Seifried: I'm not exactly sure what you mean by that, Paul.

Yeager: Well, because if we get rain this weekend, which there is a big amount of moisture coming to the United States, there's also rain, that's more in beans when we talk about South America, but weather -- that's where I'm going.

Seifried: I see what you're saying. What's interesting is, like I said, there on Friday we saw that weather forecast, yet we were still trading higher. So to me that is suggesting that this is more than just a Plains issue, this is also what's going on in the Black Sea area, and also again that lower dollar is a really big factor for wheat and that is something that people kind of sleep on. Commodities as a whole, I was seeing some pretty savvy, these are Wall Street sort of guys or whatever, talking about commodities being up 30% over the next year because of the weakness in the dollar and I'm sitting here as a grains trader and livestock trader saying, okay we've already done that. But it's just, the fact that that lower dollar is now bringing the attention of a lot of other investors now wanting to look at commodities, saying hey, this is an inflationary type thing, that is a wonderful environment to be throwing on top of what are already some fundamentals that are either bullish or turning more bullish depending on which of the grains we're talking about.

Yeager: Goldman Sachs is who made that statement that you're saying. Real quick on wheat, are you selling or are you holding for a little higher right now?

Seifried: Hmm, chart looks good. I really like the idea of owning puts in the wheat, just having that floor underneath, because we are at some really nice levels. It is fairly simple and not terrible expensive to come in and own some puts at decent levels to have that protection, but I'd like to leave the upside open as much as possible because I really do like the wheat chart right now. And again, the way that all the fundamentals for the grains as a whole are kind of turning more and more positive I think there's more upside.

Yeager: Was corn being pulled by wheat? Or is that export news that was driving that train/

Seifried: Corn is an interesting story. You've got a lot of bears out there that just want to point to almost a 2 billion bushel carryover projection and say, we've got all the corn we need, we shouldn't be rallying in corn. But what they're missing is that this is actually a demand driven market, this isn't a supply side thing. If China is willing to come in and pay, and not just China, we're seeing unknown destinations and Mexico come in on a daily basis buying corn, if they're willing to pay for it let's see if they're willing to pay higher prices. And it is a much for friendly story than what we had been seeing. And also in keeping with the corn and soybean ratio it' splaying a little bit of catch up here. So I like the way corn looks. It's getting very over bought right now. I think that you might want to look at making more cash sales in corn right now. Depending on where you're at I think the idea of making cash sales here and keeping basis open might work out really well for you over the course of the next few weeks to few months. But I think corn can stay strong maybe through mid-December or so. I worry that when we get to the January report and we see the final production number for corn that that yield might actually go higher. I know people will want to argue with me or be mad at me for saying that. But listen, we're hearing a lot of really strong test weights on really dry corn. It has been the opposite the last couple of years and we've seen production reductions. This is a year where I think we can say, well coming across the monitor it wasn't that great, but when we're going across the scale it's a lot better. Because of that test weight I wonder if we're at a 179, 179.5 for corn. But that's not something we're going to have to be terrible concerned about the USDA revising until we get to January.

Yeager: All right. On the drive, did you see much in the fields still?

Seifried: Lots of signs, lots of political signs.

Yeager: They're not going to get harvested for another two weeks.

Seifried: That's correct. That was my joke, Paul.

Yeager: It was? Did I steal your joke?

Seifried: You're good though. It was good, it was a good joke. Okay, hardly any beans out there anymore. This bean crop is, for the most part, in I think. And in Northern Illinois and through Iowa I saw hardly any beans at all. There's still some corn out there as to be expected. Look, we're not, it's early still. But yeah, wow we were rolling on harvest. And I've got to say, usually when we get to 40% to 60% done on harvest for corn or beans it's usually when we say okay, harvest pressure is for the most part behind us. I really feel like that is the case at this point. We really don't have a whole lot of harvest and the way soybeans found some strength on the end of the day on a Friday, that's really telling you that harvest pressure is maybe behind us at this point.

Yeager: That opened lower and I was getting ready to do the figures and say, well, maybe only a dime. But we ended up putting a quarter on. Harvest highs are such a weird thing to say, but are we going higher?

Seifried: Yes, that's a great question. And when we were talking about this back in February my answer to that question was absolutely. I was very, very bullish and here we are. It's a lot easier to be bullish at $8.30 than it is at $10.80 for example. And you look at the price action that we saw in soybeans this week, it's a very reluctant price action, kind of tired, acts like they wanted to try to push it lower. Now, they weren't really able to do that, which I think it why we got a fair amount of that strength at the end of the day on Friday, that was impressive. I feel like we are going higher in the near-term. But there is a big contingency of the trade that wants to look at South America, wants to look at that weather forecast and wants to say that Chinese buying is going to slow down at the very least, if not we're going to see some cancellations. So that part of the market is going to continue to try to sell soybeans on rallies. But when all is said and done I don't think China is buying out of fears of South America. That might have been part of it but I think that have other motivations as well. I really think that there is a clear path to running out of soybeans this year and if we keep seeing these export sales on a daily and weekly basis in the big numbers that we have been seeing we have more work to do to price soybeans. I really do think at some point $11.47 is now my next major target to the upside. Obviously the psychological $11 but there's not a whole lot there. $11.47 and then we start talking about the $12 number.

Yeager: I seem to think somebody was on the show a couple of weeks ago talking about, ranting about beans going higher, but I'm foggy on it. Sorry, I forget.

Seifried: I might remember that too.

Yeager: You might remember that a little bit. I have a question about protecting yourself that came in via Twitter. Merrill in Iowa was asking, he said, you were talking about these gains but he's like, what is the plan to protect yourself as these bull rallies never end well?

Seifried: And they don't. And there are so many potential black swans out there. This trade deal could go south at any moment, election, COVID, so many things. So I really don't mind making cash sales here if you haven't been aggressive on that already. If you have, then you don't have much to protect. But if you do have cash sales to make go ahead and do some of that. Now, look for pullbacks and reown with calls, things like that. Don't worry about missing out on too much opportunity. Yes, it would be nice to sell the highs, always nice to sell the high. But you're really very profitable a $10.80 beans on the board. Go ahead and make cash sales. Same thing for corn, we talked about that. $4.18 corn, oh boy, nobody thought we'd be there. I really don't mind making cash sales. And even looking into next year we can start talking about using put protection or HTA's or using the board to sell 10% to 15% of next year. I like doing that. You need to be aggressive on your marketing, you need to take advantage of this. Even if you're super bullish, like some of us are, you still need to be making those sales.

Yeager: All right, what has been good for corn and soybeans has not been good for the livestock sector. We need to get to cattle. Consumers, we were just talking before you got here with some folks in the control room about prices. How come I don't see a lower beef price in the store yet, especially when we've fallen out $8, $9, $10 over a two week period? How long does that matter? And what is that tied to the consumer and what the December cattle is doing right now? It has fallen off the cliff.

Seifried: Yes. First of all, seasonally -- it has been a very steep decline. But I think it was, I think it took a little time, longer setting up than I thought it would have. I kind of thought we'd start to see a slower decline maybe three weeks before we did. You saw boxed beef prices coming down. I thought cash would weaken sooner than it did. But when it did it came down quickly and the futures responded to that as well. I think we're getting close to a bottom in cattle. Domestic demand I think it really very good despite the fact that prices haven't really come down at the store. There was a fair amount of packer risk with COVID and concern. I don't agree with the higher prices. I kind of understand it. I don't love it. I don't think that really hurts demand though. I think demand for the most part is going to stay really rather strong and especially as we get into the holiday season I see a big rebound in cattle. We just saw a cattle on feed report which was really quite bearish. We saw the highest number of cattle on feed that we've seen since the beginning of the reporting, it's a big number. But we were expecting that, we knew it, it was maybe a little bit worse than what we were expecting. But the marketings number was good too. So that means that we do have that good demand out there. Again, 101, 102 was kind of where I was projecting the December live cattle to get down to and then see a nice little bounce and maybe a resumption of the uptrend from there. That is still what I'm hoping for. We're getting into these value price levels now at this point. So I'm looking more at being a buyer at this point. I'm not terribly worried about more downside.

Yeager: We need to quickly mention feeders. They're having problems on the inputs with that corn going higher, looking for other rations. What are your options right now for your feeder?

Seifried: Well, rock and a hard place. You've got dryness in the Plains so pasture and range conditions continue to deteriorate and then you've got corn prices which are almost every day it feels like, which corn is very overbought so hopefully there will be a correction there at some point for cattle feeders. There too though I think we really have put a lot of pressure on feeders. We've come down to areas where I think we should be fairly well supported. I'm looking for the cattle complex as a whole to find some good footing at this point and start to try to come back. It might be a little early, but over the course of the next week or two I think we'll probably have our lows in and we'll start to turn this around a little bit more.

Yeager: Conversely, hogs have been higher and now they just started to pull back. Is that a reaction to cattle or is there something else there?

Seifried: There's a number of things going with hogs. For one, we were really getting very optimistic that China was going to come in and buy more of our pork. We thought okay, their stocks are getting really tight, they need more. And three weeks ago we saw them come in for almost 30,000 metric tons and we got really excited about that, we were hoping to see that follow up in the coming weeks, it didn't happen the last few weeks. They were on the board but barely. So that has been a bit of a letdown. But you had a bull market that got overbought, just like we were talking about in corn, we're due for a correction. Thursday we had a big down day but we hit right where our trendline was, we held it, we had a bounce back on Friday, if we can continue that strength into early next week I think we go back and get near or at least test those highs that we saw, get into the 72 range for December hogs, which by the way is where I've been talking about. When hogs were down at 52 to 54 I was saying before expiration of December I think we'll get somewhere between 72 and 74. We've done that. I don't know if we need to go much higher than that. But that was sort of a value range and I think we can kind of trade sideways here for a while.

Yeager: I always have to cut you off. I'm sorry. But guess what, we're going to keep talking.

Seifried: Perfect.

Yeager: Thanks, Ted.

Seifried: Thank you.

Yeager: That will do it for this installment of Market to Market. We will talk more in Market Plus because Ted and I have a lot to cover, so join us there. You can find it on our website at Now, the harvest pictures were replaced by snow ones this week, but they were pretty neat to see in our Instagram feed. You can tag us @MarketToMarketShow and we may feature some of your content for others to see. Next week we'll learn more about the amount of damage weather has had on the U.S. in 2020. Until then, thanks for watching. Have a great week.



Trading in futures and options involves substantial risk. No warranty is given or implied by Iowa PBS or the analysts who appear on Market to Market. Past performance is not necessarily indicative of future results.

Market to Market is a production of Iowa PBS which is solely responsible for its content.

What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


Tomorrow. For over 100 years we have worked to help our customers be ready for tomorrow. Trust in tomorrow. Information is available from a Grinnell Mutual agent today.


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