Market Plus: Sue Martin

Sep 17, 2021  | 12 min  | Ep4705 | Podcast

Podcast

Paul Yeager:

Welcome into the Friday, September 17th, 2021 market plus ladies and gentlemen, I present to you Sue Martin. So you made a drive down. I did a little drive yesterday. Did you see anybody in the field? No. You expect to see them soon. And I,

Sue Martin:

I think this next week, even, even maybe starting tomorrow on Saturday and on into Friday, we or Sunday. I mean, we should be starting to see a lot of combines rolling, especially in soybeans, but farmers have been trying to get the corn to one because of stock quality, but especially to take care of those basis bids that are so premium to the futures right now at ethanol plants and end-users

Paul Yeager:

And yes, that's what I've heard. And users are making some ridiculous bids that normally they wouldn't make this time. What's the mood of the farmer that you've talked to right now?

Sue Martin:

I think so far they seem pleasantly surprised that the crops a little better than they thought. Now, keep in mind, that's in a bad, maybe more vulnerable, poor area. But the other kicker was, and we seen it help corn respond to it was out of Illinois who, you know, everybody's thought Illinois was such a stellar state this year. And truthfully, I'm wondering if it isn't going to end up being Indiana, but

Paul Yeager:

That performs better you mean?

Sue Martin:

But what we're hearing out of Illinois was disa-, still good yields, just not what the farmers were thinking they were going to have. And light test weights. And we'll see some of that in Iowa.

Paul Yeager:

Yeah.

Sue Martin:

The kicker in Iowa, we have to go back to last year and what helped that yield in Iowa go down. It was the derecho. And unlike beans, the derecho didn't hurt the beans hardly at all, unless you had hail, but the corn it did. And so there was many empty fields or fields that couldn't be salvaged. So therefore the poor yields and to the north, which yields were okay, they were good. Just not as good as the year before they didn't have any help. Now this year that anything poor is going to be compensated with the derecho areas, which by the way, happens to be the same path that all the rains kind of followed this year.

Paul Yeager:

Right. And in some of those fields, you do see the volunteer Corn and that they weren't able to knock out. There's plenty of that and those bean fields. So they're going to be a mess there. Are we in a mess in the feeder market right now? Or is there optimism in feeders?

Sue Martin:

I would have to say there's optimism, because you look at the sales and they're hanging in there. Pretty good. In fact, it was sort of surprising to see the feeder market break like it did when you had corn breaking. Now that said you didn't see corn feeders break a whole lot more while the corn market took off off of supply demand report. So I think that at the end of the day, we look at feeder cattle and I think there's such optimism for next year's markets that I think that's kind of creating a demand for the feeder market. I look at wave counts and on November feeders, we're not super far from some major wave counts, but I wouldn't be surprised if this market, especially in fats, tries to work its way back down into October. And there we could strike a major low, and then the the burden of proof will be on the December contract. If it can come out of there and start flying, you might see the December contract go to new highs. We just it's. I just don't see the bottom in here just yet.

Paul Yeager:

Okay. You mentioned a couple things and I want to reflect back to the beginning of the broadcast show. Uh, reading a little deeper on the consumer price index report and the retail sales retail sales was a major rise on online. Less people are going out to eat. Less people are, they're taking meals to go. They're back to cooking more back at home. What is going to be the impact long-term on protein. Whether it is in the live cattle market, if it's going to be in the hog market. Is it too early to tell?

Sue Martin:

I think the long-term effect, one thing that came out of COVID last year was in the cities, people were used to stopping at the local locker and buying what they needed and fixing it at home. Now they have freezers. And so they're going to fill those freezers. They're going to leave them sit empty and they got used to that. And they're going to kind of like that. Being able to go and get out of their freezer, what they need. I think underneath that, that's a subtle support factor for the meat markets, especially beef and of course pork. But the other thing is, look at all the immigration we've got coming. We have huge immigration and you know, the, you don't see very many countries that you can import or immigrate in illegally and stay, but we have it. And these are meat eaters and they like pork. They like chicken, but they love beef.

Paul Yeager:

Well. And you know, we're fighting several parts on that story. And I guess I haven't seen everything about, you know, who's coming. I mean, there's population shifts and changes happening in many parts of the country. In the Southern part of the United States quickly on cotton. Do you see dramatic movement? We've been stuck kind of in a range we haven't been able to break through. Is that lid ever going to be lifted or are we done

Sue Martin:

Well? I think if you look at December cotton first off, I think the weather has played a hand in that with all these storms that have come through in cotton country. And I think that you have to worry about quality to the cotton bowls and what have you. But when I look for example, like December cotton, $96.70 has been our high con you know, move contract, I think, and there is resistance around that $97 area. If you get through that, the next tough resistance is $103, $103.40, something like that. I would be pushing some hedges here because I do think cotton acres are going to go up next year.

Paul Yeager:

Okay. being anchors, we talked a little bit about beans. I do have a Facebook question or a Twitter question, Matt in Amherst, Wisconsin. Thank you everybody for all these questions. I'm just not going to get them all in this week. I'm going to do it me at bet. My best. Matt asked, "What's the bean price going to be with 200 million acres of soybeans next year?" Again, we're on a little bit of an assumption you have to, A, do you buy the 200 million acres next year?

Sue Martin:

I don't know

Paul Yeager:

When will we know this? Well, this winter?

New Speaker:

I think we'll have a better idea. I think everybody wants to focus on our acres as the driving price for beans. I think what we have to do, and it might be this way on corn too, but on beans, especially we have to go back and start looking at Brazil. 50 er two thirds of that country's crop area is below normal moisture in soil. 50 percent of it is in drought status and October is their rainy season. So if they've had some showers this year, this fall or start of this fall, it's their spring. But they've had some showers where last year they didn't have them, but the, they haven't amounted to much. But when they get into October, if they remain dry, you're going to see this market become a little bit more enthusiastic because we are tight supplied very tight stocks. And in the meantime use there, they've had a bad year, but their beans wasn't so bad. It was the corn that, that production that suffered. So if they turn around and all of a sudden they start turning dry again, and they're now into the timeframe that they should be planting or starting to plant. You're going to have this market sit up and take attention.

Paul Yeager:

Okay. That brings up a good point that Gary's asking. You're asking Gary and Wilton Iowa, how much of my 20, 22 crop should I be selling this fall? Prices Look good now? Given what you just said about south America,

Sue Martin:

I wouldn't do it. I would not sell, remember I'm the girl that back in February kind of open my mouth at all, but out came what I think. And it's all how you get there, but I would not be selling crops in 20 ahead in 2022. It's too early. If my weather sources are right and we're dryer next year. Oh my goodness. You know, we had cool nights and dewy mornings, which was very good for the beans and probably a good for the corn too, but good for the beans. What if we don't have that next year? And if, depending on how this, I would be more interested in, in south America, because I really don't think this next year is going to bode well for the U S farmer as far as production. So therefore I would not put myself into that spot just yet.

Paul Yeager:

All right. We've talked about Brazil. Let's talk about China with our last question. Phil in Dresden, Ontario, "U.S. Crop is huge corn crop. That really means we need Chinese corn demand back. However, is it coming back or have the Chinese replace corn and feed have they replaced corn with feed wheat? Sorry, is the 26 million metric, tons of corn slated to be exported to China from last week's WASDE, wishful thinking?

Sue Martin:

No, I think China will be in for the corn. Again, I go back to their FA fuzzy math of, of how they produce and remember all the flooding. Some of it was off of them releasing waters out of reservoirs, dams that, and most of them are all built in the countryside. But they were doing it to save the dams because of so much rain, but then they flooded out acres. They have a lot of poor quality wheat feed wheat, which is being interfused are, are interchanged with corn feed, but I don't think that's the total wherewithal. Remember China has a larger poultry production and nobody talks about that, you know, and that started in 2019 when coal or African swine fever became very well known. They got with the program and ramped up production, and they're not going to reel that back down. They're going to keep it very aggressive. In the meantime, their pork production is coming back and you've got course, you've got the Dominican Republic having issues and we're exporting pork to them, but you've got Germany with a real bad problem. And so China's, and most of Asia is not going to import German pork, but in the meantime there, they are expanding their numbers. And that's going to be, I think you're going to see, remember they talked about back in June, maybe it was? That they weren't going to be feeding as much soy meal. Right. And I thought, yeah. Right. You know, so here we go. I think there'll be importing corn. I think they need most everything. And here's the thing. What, is there a storage facilities like where all that flooding was? You know, these were major producing provinces and I think they're going to, I think China needs everything again, just like they did last year.

Paul Yeager:

Sounds familiar. All right. Appreciate the time, Sue. Thank you so much. Good to see you. Thank you. Alright, that'll do it for Market Plus that's Sue Martin, by the way. Sorry. I'm Paul. Next week we look at pushing past the pitfalls of urban farming and Ted Seifert will be in that chair and he'll join us to analyze the markets. Thank you so much for watching or listening or reading this podcast. We'll see you next time. Have a great week.

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