Market to Market - September 1, 2023

Market to Market | Episode
Sep 1, 2023 | 27 min

On this edition of Market to Market ... revised definitions again for WOTUS. Using AI to help battle food insecurity. As Congress returns to Washington, crop insurance comes back into focus. And market analysis with John Roach.


Coming up on Market to Market - Revised definitions again for WOTUS.

Using AI to help battle food insecurity. As Congress returns to Washington, crop insurance comes back into focus. And market analysis with John Roach, next.

What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because at Pioneer, our name is our mission.


Sukup Manufacturing. Celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at


Tomorrow. For over 100 years, we've 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, September 1 edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

Resiliency remains the word on job creation in the United States - despite factors like higher interest rates.

Friday’s employment report revealed 187,000 jobs were created in August - a moderate pace compared to the previous two years of growth.

The unemployment rate ticked higher to 3.8 percent, the highest level since February of 2022, but still historically low. Around 736,000 people began looking for work last month, the most since January.

The PCE index, the Federal Reserve’s preferred gauge of inflation, had a 0.2 percent growth - making for three consecutive months of moderate gains.


The Supreme Court may be out of session, but their rulings are still in-season and the ramifications are being navigated.

This week the EPA, again, released rules for their latest draft of WOTUS.

One word becomes key in the new direction set forth - navigable.

Peter Tubbs explains why.

Unpermitted development will be allowed in many wetland areas across the country under details released by the Environmental Protection Agency this week.

The new rule revises the Biden Administration’s Waters of the U.S., or WOTUS definition, which was struck down by the Supreme Court in May in Sackett vs EPA.

The previous rule had expanded Clean Water Act protections to wetlands and waterways. The new rule removes the “significant nexus” standard, which allowed protection to wetlands if there was a connection between a wetland and a waterway that allowed water to flow between the bodies of water.

The new language states wetlands protected by the Clean Water Act must have a continuous surface connection to a navigable waterway, in accordance with the Sackett ruling.

Proponents of limiting the reach of the Clean Water Act believe that the federal law doesn’t properly respect the rights of property owners.

Conservationists argue that the new rule will leave thousands of wetlands across the country vulnerable to pollution and removal without penalty.

While many wetlands will no longer be under the scope of the Clean Water Act, they may still be protected by state rules.  

For Market to Market, I’m Peter Tubbs.

The use of Artificial Intelligence is in our daily lives whether we like it or not.

Harnessing its powers for good and not evil will be the greatest challenge of our generation.

Another area where AI may have a use beyond enhancing television stories or college term papers is supply and demand.

David Miller explains. 

The problem of food insecurity may have another ally - Artificial Intelligence.

Professor Alex Psomas/Purdue University- Computer Science: 1:10-1:17 “So in these problems, these are matching problems, you're trying to match a donor with a recipient, right? So, there's many things you can think of this way.”

Once the issue of efficiency is solved then the problem of fairness in distribution comes into play. AI could also assist in making sure food is used and not wasted due to logistical constraints.

Professor Alex Psomas/Purdue University- Computer Science: 1:44-2:10 “The current system is a person is making these matching decisions, and we just want to automate it. And in doing so, we want to ensure that, you know, of course, we're doing the right decisions, like in the sense of like, people are not driving a lot, you know, the food is going to people who want the food and can use the food, but also at the same time, we are being fair.”

The technology could further be employed to make connections between the locations and amounts of surplus food by helping choose where that food is needed the most.

Professor Alex Psomas/Purdue University- Computer Science: 2:24-2:42 “The other thing is, now you can scale. Now, you can just like, you know, go beyond Indiana, you can even you know, include more food banks, you can, you know, include process donations a lot faster, because human doesn't have to sit around trying to call people on the phone and so on.”

For Market to Market, I’m David Miller.

The next Margin Protection Plan enrollment deadline is at the end of this month.

The current Farm Bill is set to expire at the end of the year. 

Crop insurance has become a tool for producers where government programs gap and has also been a big part of hearings for the next Farm Bill.

Tony Jesina has spent his career in the crop insurance industry with Farm Credit Services of America. His job is helping farmers and ranchers understand the relationship between crop insurance and the Farm Bill.

Our conversation is part of the next MtoM podcast and a portion of that chat is this week’s Cover Story.

Tony Jesina: Actually, a little bit of both. The Farm Bill has made, you know, enhancements. So, there's, for example, back in 2014, you know, that's when things like Supplemental Coverage Option came out or stacks for those that are kind of more on the south. Margin Protection was started as a pilot. And so those are some things that came as a result of legislation through the Farm Bill. but they also have a process called a five oh H process, which allows third parties to work with folks in the industry to create products that might fit that are may adopt. And so, we've seen as much usage of those types of third-party groups, the five wage submitters, if you will, do create products as well.

Paul Yeager: I realized this is probably a couple of steps above you, but where is Farm Credit service as an industry that you're involved with? How close are you watching Farm Bill negotiations and offering suggestions of ways to make sure gaps are filled? Or improved?

Tony Jesina: Yes, Paul. You know, that's very timely, because we're going through that right now, the Farm Credit System, and Farm Credit Services America frontier Farm Credit, we watch it very, very closely, not only on a daily basis, but probably an hourly basis, we want to make sure we understand the parts of the farm bill that are being discussed that, you know, what are some ways to enhance it or improve it. So, we offer suggestions at the same time, there's a lot of things in there that are really great, we want to make sure that we work hard to protect those, for example, crop insurance is the only safety net we really have in the Farm Bill. So, we're going to make sure that we do all we can to protect this critical tool for risk management for producers. So, we want your very close,

Paul Yeager: do you find there still a political appetite for it?

Tony Jesina: Yes, there is. We'll see that it's the only bipartisan bill that really exists in Congress anymore, where you can get both sides of the aisle to agree on legislation, which that's getting you to become a short supply anymore, as far as one side want to work with the other. But the farm bill is one where you truly have bipartisan support.

Paul Yeager: And when you have hearings, field hearings are out there, I'm sure there's representatives of your industry as a whole that are paying attention. Are you hearing certain lines pages, things are going to be? Have any issue getting passed? I mean, are there any other sticking points? Are you part of a sticking point, do you think?

Tony Jesina: Yeah, you know, there's, there's a lot of different titles, obviously, to the farm bill. So there's, you know, there's a lot of discussion, as far as each title as far as what's working well, and, you know, ways to enhance it, but probably the things that you hear about the most I have to deal with, like the reference prices, you know, that determined, you know, for example, you look at ARC and PLC, kind of the two federal programs as part of the Farm Bill, you know, the reference prices, are those going to get adjusted or not? And so that's probably the biggest discussion right now, there's been a lot of discussion around some of the ad hoc disaster payments, and is there a way to make some tweaks to the safety net, whether it's crop insurance or other areas to maybe minimize some of that reliance on ad hoc programs and make something a little more reliable and more assurances for our producers?

Paul Yeager: Because the ad hoc items are the ones to me always seem the more political ones. Correct, than the bipartisan ones?

Tony Jesina: Yeah, that's, that is absolutely correct. When you look at just some of the recent ones, you have, you know, wildfires and hurricanes. And you know, those are very specific and tragic events that occur. But to get support for that, sometimes you've got to broaden the coalition and include maybe other elements or add things to the program, or to the cost of that disaster to get enough votes to get a pass. And that's where sometimes you get some challenges or, you know, just it's, it creates some challenges within the program to get things like that approved. And, and yet their safety nets that are there if people take advantage of like, for example, a good crop insurance program.

Paul Yeager: You mentioned those storms and hurricanes, wildfires, those are all hot topics in the insurance industry as a whole, where you have companies not writing certain policies in certain states. How does that drift over as a potential to farmers and ranchers?

Tony Jesina: Yeah, Paul, a great question. And, you know, a couple of those examples are Florida and California, where you are seeing on the property and casualty side, you're starting to see some, you know, draw back into reduction in coverage or companies completely getting out of those markets. And, and so the impact that that potentially could have had for crop insurance, we keep a close eye on just the impact it has on reinsurance. And so while the federal programs like multiple crop insurance are, are fine, but it can start to impact things like some of your private products like hail and wind, because if the cost of reinsurance goes up, that cost gets borne across a broader market, if it's not within if it can't be contained within say, the property and casualty market, the reinsurance might be looking at having to raise rates on all types of reinsurance. Just because it's, you know, it's that's where capital is moving. And that can have an impact on, again, some of the private product rating, if you will, or even availability.

The full discussion will be released Tuesday as part of the MtoM podcast.

Next, the Market to Market report.

Spec funds sales were too much to overcome in the trade this week as corn joined all three wheat markets suffering in more than just the heat. For the week, the nearby wheat contract lost 26 cents, while December corn subtracted seven cents. The soybean complex benefitted earlier in the week from hot and dry conditions while the crop faltered. The November contract sold off 19 cents on the week and December meal fell $15.40 per ton. December cotton expanded by $2.64 per hundredweight. Over in the dairy parlor, October Class Three milk futures added 27 cents. The livestock market was mixed. October cattle declined $1.03. October feeders gained 67 cents. And the October lean hog rallied by $3.22. In the currency markets, the US dollar index added 18 ticks. October crude oil improved 5.73 per barrel. COMEX gold expanded $26.40 per ounce. And the Goldman Sachs Commodity Index increased just over 14 points to settle at 597.70.

Yeager: Joining us now is senior market analyst, John Roach. Hey, John.

Roach: Thanks, Paul.

Yeager: Wheat, all three, tough, tough times. If I keep looking at these lows and this trend, eventually we have to hit bottom, right? When is that going to happen?

Roach: Well, eventually we will, for sure we will. We've had a buy signal on wheat I think we're up to 18 days now. So, we've already gone down into the technical support area where the market should find buyers. But what we're finding instead is speculative funds willing to sell and very few over on the buy side really willing to buy very much. Keep in mind that what we have going on in Ukraine and Russia, the biggest exporters of the world are right now really having a difficult time being able to make any exports. Russia is restricted by most all of the peace-loving nations and Ukraine has shipping problems. So, if anybody buys from Russia or Ukraine, they're buying at a discount. And that is holding the whole world price level at a discount, in my opinion. And my hope is that we get past that. But at the moment we don't have that on the horizon at all.

Yeager: And those people that are buying from Russia are big buyers.

Roach: Oh, of course, but it's Iran and China and others in the world that are willing to do business with whomever regardless of what the U.S. says.

Yeager: All right, let's talk domestic producers who are looking at a down market, looking at dry conditions in their fields. Are you thinking changing any crop planting in the wheat belt in the United States right now for next year?

Roach: Perhaps, we may well see some people shift back away from wheat. We had some movement back into wheat this year. We could maybe see it move back out a little bit. We certainly did better in the hard red winter wheat area with some of the corn plantings than we did with the wheat. And so, there's sure a possibility of that. But at the moment I wouldn't look for any real big change in acreage.

Yeager: Do you have a price target down?

Roach: No, I really don't. I never know. The market -- funds will continue to sell and follow the trend. It's the old adage the trend is your friend, and we say that, but they literally do that. If the market is trending down they're going to continue to sell until the buying overwhelms their selling. And I don't think that's very far away. And so, we think this is a market to be buying. As I said, we've had a buy signal on for coming up on 20 days. So, these are places where you make purchases. But understand we don't really have a reason to turn and go higher tomorrow.

Yeager: So, we don't have a reason for people to go from one end of the boat to the other yet?

Roach: The farmers are in the boat that they're holding onto inventory right now. And I think you just have to stay in that boat if that's your position as a wheat farmer.

Yeager: Spec funds also controlling corn right now, weather be darned. Is that right?

Roach: Yeah, the corn market has another couple of things going on. First of all, the open interest is not as big as normal. And so, with a smaller open interest you have to look at the players. And the users are not anxious to go out and buy a substantial amount of inventory until we get into harvest and they see a crop that is coming on. And so, they're reluctant to buy. Farmers are in a position where they don't really want to sell anything. And those who have bought have already been stung with margin calls enough that they're not really coming in. And so, the spec funds, even though they're not trading in huge volumes, it's enough to just put pressure on the market and hold it under pressure. And it's going to continue that way until the trend turns higher. Now, you ask about wheat, are we making a bottom in wheat? I think we are making the bottom in corn. We had the Farm Progress Show in Illinois this week and we've made the bottom several times during that timeframe because that is when the August 31st deferred pricing contracts, or delayed pricing contracts, many of them got priced through this week because they came to their deadlines. And so, that is about as big of a wash of inventory moving into the market that you're going to have until we finally get into harvest and harvest is still a couple of weeks away. So, I think the corn market is bottoming here.

Yeager: Well, okay, corn harvest about to start. In your area where you were at with the Farm Progress Show, that is an area we've heard is drier and harvest is starting. Did you see many machines in the field down there?

Roach: I didn't see any other than at the Farm Progress and it was reported to me the field that they harvested right next to this at 195 bushels an acre. I talked to the farmer that farm he was on and he expected 200 when he went to the field and I think it was 87-day corn. So, really those numbers are not as frightening as some we've heard from other people. A lot of variability in the crop.

Yeager: Well, you mentioned DP, I want to get a little detailed question. Bradley in Nebraska submitted this one this week. Always like to hear what Bradley has to say. He asks you, John, how much of this week's corn selloff was managed money? And how much of it was commercial hedging as farmers are forced to price DP contracts and have terms expiring at the end of August? Pretty much what you just said, right?

Roach: That's exactly right. I'm not sure what percentage falls in each camp, but if you add the two of those two percentages together that is going to be, I think, 90% of what got sold this week.

Yeager: I want to go back to the harvest low possibly that's in, or the low. We've seen in the last 10 years rallies anywhere from what, 30 cents to $1.30 after the harvest low comes in? Do you expect that to follow a pattern somewhere in there?

Roach: I think the market will have some rally once we finally get the crop put away. But right now, what we're all waiting for are the first combines that go in the field, as you said it's going to start, because we want to see what their combine monitor says. We want to see what are those yields? And I talked with one farmer at Farm Progress who said, I think the needle is going to bounce from the far left to the far right on this farm. There's that much variability. And so, we want to hear some numbers and then once we hear some numbers, okay now we'll be able to start looking out forward. There's a possibility we've heard enough of this crop that we've changed the fundamentals. That's the possibility. Is it real? I don't know. I'll know when I see combine monitors.

Yeager: Will you know in beans that if this late heat has done damage to the bean crop?

Roach: In two or three weeks, same story, because we just don't know. And when I would try to pin a farmer down and I'd say, well what do you think is really out there, they really just don't know. This is such an unusual growing season for so many people. And so, it makes it really dicey. And the possibility here is we could change the fundamentals enough that we could have a much bigger market than we think we have with the current fundamentals. But, bear in mind, again, where are you at in the canoe? And if you're a corn producer now is not a time to sell. You've got crop insurance that you're protected, if it goes on down your crop insurance will protect you, if it goes up your crop insurance will shrink but you'll end up basically the same number of dollars. The problem happens if you do something and you sell your crop and then the price goes up and the insurance, if the price goes up it's not a problem, if -- let me start over here -- if you sell your crop and then the price goes up and then your insurance payment is less it doesn't cover. So, the only thing you can do right now if you're a farmer with corn is be patient and wait a little bit.

Yeager: With respect to beans, you had a sell signal on --

Roach: We had a sell signal on beans, yeah.

Yeager: But do you see that there's -- what is going to get that signal back?

Roach: The sell signal?

Yeager: Yeah.

Roach: We lost it. We're going to have to have some kind of concern on the supply side or a continuation of better than expected demand to change the big numbers. IF you look at the last USDA report, the world ending stocks on beans are the biggest they've ever been and it's a huge big increase compared to where we've been. Now, that's going to change according to the U.S. crop, it's going to change according to world usage, but at the moment the forecast is big surpluses of beans coming. And so, we've been relatively willing sellers on beans. Our recommendation has been to get half sold of your new crop. We started some time ago but we made more sales again this week.

Yeager: In the livestock sector, there's some technical things that are flashing. In cattle specifically, it looks like there may be a bear trend starting to set in. Do you buy that?

Roach: We have sell signals. We're selling into it. We don't think really that the market is ready to fall apart. I can't point to things in the cattle market, the cash market, that are so frightening that I think we're ready to give up and start to go down. But, we certainly have a difficult time moving much higher. We're in a sideways kind of a pattern here and we're at very high price levels and this could sure be the top at any time. But, we really don't yet have those fundamentals put together. The cattle are very profitable coming out of the feedlot right now. People aren't holding them any longer, they just move them as quickly as they can get to those profit levels and that keeps your supply under control. Our economy continues to kind of percolate along, so the high-priced steak restaurants are still full. But that could have a change out ahead too depending on economic conditions. So, there's some things out there to be concerned about, but we're not really saying that it's over yet. Be cautious if you're on the buy side of this thing and keep your hedge protection in if you're putting cattle in a feedlot.

Yeager: Yeah, the feeder then, that looked like maybe we've gone, who knows how much longer that rally should have lasted. Just when you thought it was over it rallied again.

Roach: Did it again.

Yeager: Where is that steam coming from in the feeder market then?

Roach: Well, it's called availability. And when a cattle feeder takes cattle out of the feedlot, they make $200 or $300 a head it's awful hard not to put more cattle into the feedlot, particularly if you think this is going to be one of the peak markets, you just want to have cattle if that's the business that you're in. And so, it's hard to not buy the feeders.

Yeager: Hog wise, what are you seeing there, because, again, it looks on a chart that the bear might be lurking?

Roach: Maybe. But the pork prices are too cheap, in my opinion. Hog prices compared to beef prices compared to pork prices, there's too great of a variance there. And so, we think the demand will start to pick back up, particularly if the economy starts to struggle a little bit in here. And remember, we still have a lot of people out there that are on the lower side of the economic scale and beef is out of their budget completely and pork is very competitive.

Yeager: Always something to talk about with you. And we'll get your thoughts on cotton in Market Plus, so hold tight, John. Thank you.

Roach: Thanks, Paul.

Yeager: Good to see you. We will keep John here for a minute because we're going to pause our analysis, we'll continue our discussion about these markets in our Market Plus segment. I have a number of questions ready from all of you. You can find both analysis and Plus on our website of We do enjoy hearing from you and here is how you can do that. Send an email to That inbox is available around the clock. Next week, we are going to look at how duck producers are hitting economic curveballs. Thank you so much for watching. Have a great week.





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

What's next doesn't happen by chance. It happens when researchers and farmers work together to solve tomorrow's agronomic challenges. We're committed to creating what's next because at Pioneer, our name is our mission.


Sukup Manufacturing. Celebrating 60 years of innovation as a family owned and operated manufacturer of grain storage, drying and handling equipment out of Sheffield, Iowa. Learn more at


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