Market to Market - May 2, 2025

[Paul Yeager] Coming up on Market to Market.

BRICS countries forced to pick sides in the global trade war. 

The father of wind energy takes exception to criticism. 

A mined product impacting the Corn Belt to the Rose Bowl.

And commodity market analysis with Arlan Suderman. Next.

[Announcer] 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.

Family owned and operated for more than 60 years. Sukup Manufacturing is a full service provider of grain handling, storage, and drying equipment, helping farmers feed the world. 

For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at Steinertractor.com or at (877) 559-7887.

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, May 2 edition of Market to Market, the weekly journal of Rural America.

Hello. I’m Paul Yeager.  

An economy has a complex makeup that can be boiled down to a widget. Who makes, sells and ships is one side, who buys is another and the ripple goes on and on. 

Let’s focus on the makers of items in the U.S. 

Employers added 177,000 jobs in April. Shifting policies on trade has created uncertainty. However, this report reveals some resilience as jobs were added in transportation and warehousing, but lost in factories. 

The unemployment rate remained historically low with a reading of 4.2 percent. That’s no change on the month.

The inflation gauge, the PCE, indicated growth slowed last month. The Commerce Department reported the reading on the index was flat. 

The core PCE, which removes food and energy prices, was even for the month and had 2.6 percent growth in the year-over-year reading. 

Now back to the widgets. 

Where they are made and shipped is a major discussion over the country’s policy on trade and tariffs.

This week, two of the biggest economies exchanged comments and left the door open to negotiations while trying to save their positions. 

China took their efforts to other emerging economies for positioning. 

Peter Tubbs reports. 

[Peter Tubbs] This week, the Trump Administration created a carve out on some auto parts to preserve auto production in plants in the United States.

[Jim Farley, CEO Ford Motor Company] “And we have to keep working on affordable parts to ensure that those supply chains promote domestic growth and affordable vehicles in our country. And getting all this right, between trade policy that promotes growth for the U.S. auto sector and a policy that limits U.S. production.”

Ford continues to import auto parts and finished vehicles from both Mexico and Canada, and the initial Trump tariff schedule had concerned the auto industry. 

General Motors expects to spend up to $5 billion dollars on tariff taxes to import parts and vehicles this year. 

Chinese diplomats are attempting to rally other members of the BRICS coalition to stand firm in the face of higher tariffs, calling the United States a bully that can’t be trusted.

But the group of emerging economies is struggling to arrive at a consensus. Many of the countries benefit from their partnerships with both the United States and China. 

BRICS members - which include Brazil, Russia, India, China and South Africa - represent about half of the world’s population and 40% percent of the world’s GDP.

President Trump also believes the benefits of the tariff tax plan have not hit the economy.

[President Donald Trump] “And now we're doing better than we've done in a long time. You know, we were losing four to five to even six billion dollars a day on trade with Biden. And now, we have it down to a very manageable number. And the tariffs, for the most part, haven't even kicked in yet. So, that's the way, stock markets to me are an indication. But the big indication is what's happening.”

Tariffs are paid by the companies that are importing goods, and the costs are usually passed on to consumers.

For Market to Market, I’m Peter Tubbs.

[Yeager] Following the request from seven governors, the Environmental Protection Agency issued an emergency waiver clearing the way for year-round sales of E-15.

The policy went into effect May 1 and will run until May 20, the maximum number of days allowed under the Clean Air Act. The EPA is expected to continue renewing the waiver through September 15.  

Another renewable energy program was talked about differently by the president this week. 

Wind energy was the target as David Miller tells us.  

[David Miller] This week, President Trump celebrated his first 100 days in office at a rally in Michigan. The speech included praise for his energy policy but not so much for green energy.

[President Donald Trump] “We've ended the radical left war on American energy. We've stopped their crusade on coal. Did you see what I did the other day? Clean, beautiful coal. I said, you're not allowed to use the word coal unless you say clean, beautiful coal. … And you know what? I don't give approval to those stupid windmills that go round and round and round.” 

[Miller] Iowa Senator Charles Grassley, a Republican and father of the Wind Energy Tax Credit, was not concerned about any potential cuts to the policy,

[Sen. Charles Grassley, R- Iowa] “I’ve been listening to that for 8 years so it’s not a surprise. I like to tell him that when he talks about wind energy killing birds, there’s more birds that fly into the glass towers in Washington, D.C., including his, that kill more birds than wind energy does.”

[Miller] Grassley believes there is a place for discussion about the Wind Energy Tax Credit in the bill that will extend Trump era tax cuts.

Sen. Charles Grassley, R- Iowa: “You could leave it the same or I suppose you could be phasing it out.”

Grassley negotiated a sunset to the credit in 2015 but the policy, now known as 45Y, was extended to 2033 under the Biden Administrations Inflation Reduction Act.

For Market to Market, I’m David Miller.

[Yeager] Having patience is one thing, waiting 75 million years is another. 

Organic material that has built up for that long was discovered by a Utah company and found to offer improvements to soil health and nitrogen efficiency. Live Earth Products ships globally and impacts corn fields and iconic stadiums. Russell Taylor’s father discovered the deposit and now serves as the company’s vice president. Our cover story is some of the highlights from our recent MtoM podcast discussion. 

[Russell Taylor] I'm at our mine here in Emery, Utah. We mine and manufacture humates. So this backdrop here is just a picture of the mine humates.

[Yeager] What's that? 

[Taylor] So we might have mineral deposit. That is. Think of it as an ancient forest floor. So 75 million years ago, what you see behind me was a tropical forest like the Amazon. And through the thousands and thousands of years that organic matter stacked up and is now trapped underneath the sandstone layer you see behind me, the, humic shale is used in different industries dietary supplements, cosmetics, animal feeds and fertilizers. So it's a nice agricultural input.

[Yeager] How long has that mine been operational, though? 

[Taylor] My father opened the mine in the early 80s. It's kind of a sad story to begin with, but, it resulted from a coal mine fire that my father was in. 27 people died in that fire. And, my father decided to leave the coal mine and use his mining knowledge elsewhere. They were searching the desert out here, looking for, tar sands , oil shales, part of the 80s Superfund money. And they found this deposit here, and they said, well, it's not what we're looking for. It might make a good fertilizer or something. And the group moved on. So my father decided to place the claim and, took $50, went to the states that would like to mine this property. And actually, you know, started from ground zero. I was nine years old at the time.

[Yeager] And did he, I mean, yes, it sounded like he had a little bit of experience in mining, but does everybody just have that experience there, when they're around mines and mountains? [Taylor] Okay. No, no, no, it's he had some mining knowledge, but yeah, the uses of the product for humic shale were still a little bit nascent. And so developing the industry that we're into now, I mean, we sell into multiple industries agriculture, dietary supplements, cosmetics, animal feeds and fertilizers. So what created this was just a lot of hard work, you know, take a dollar, put it on the table. Make two would do that for the last 35 years. So, you know, I got all kinds of fun stories about driving heavy equipment as a young kid, helping my father prepare the mining supplies. you can't make this stuff up. It's the real American dream. And do you still have an active role in it? 

[Taylor] Yeah, yeah. So I'm vice president of the company. I do a lot of outside sales. I'm also our lead agronomist, so I do a lot of, in the field work with the farmers and growers and distributors. So. Yeah. Actively involved. I get less day to day, handling explosives, which is a huge downside. But, it's a lot of fun. What we do, you know, we're helping to improve lives, both, human nutrition and soil nutrition.

[Yeager] Help me out here, because I don't quite get the line between a mine and an agronomist and why that's needed. I mean, you've said what products come out of that, so I. I can kind of draw the line, but I need you to do that for me, Russell.

[Taylor] Yeah. So let's connect the dots here. Nutrients is the, and result of decomposition. So when you put compost or manure or those kind of things on the ground through microbial degradation, you take those act organic matter and you turn them into stable organic matter, which ends up being humic acid, folic acid and human. Those components of your stable organic matter contribute to things like water conservation, nutrient retention, improving soil texture and structure. So by applying that with your fertilizers, farmers are able to improve their fields and improve their nutrient utilization. So it's kind of a way of, speeding up the process instead of putting compost or manure down, you're putting something that is already degraded and fully ready to be able to contribute to that soil vitality. 

[Yeager] As an agronomist. Then how, where are the farmers? What are the farmers growing and how close are they to where you're at? 

[Taylor] So we ship products internationally. So our products were used in Japan, Malaysia, South Africa, Poland. The neat thing about the products we mine is they contribute to your soil organic matter. So anywhere where you've got low soil organic matter, you can use these products used by cannabis growers. They're used by turf growers. Live Earth Products has been a proud corporate partner with the Rose Bowl stadium since 2006. So it's not just, you know, one crop. You know, there are plenty of people that are growing corn that use our humic acid, and there's definitely an application for it. But yeah, it's anything with roots is where our products will be used and use well. 

[Yeager] You're going to have to help me on the definitions because is your product considered then a natural product? 

[Taylor] Yes. So certified organic, it's just all plant material. What these organic products are is just fully degraded, ancient plant material that has gone down to a very stable, sequestered carbon, which they call humic and full acid. So, yes, natural certified organic. And what's in there is actually three components. You have the organic acids, you have a little bit of occurring natural acidity and then also the trace minerals. So a lot of times we're isolating the minerals for certain applications. And sometimes we're just selling the organic acids. Typically those are used in nutrient stabilization and soil aggregate formation.

The full MtoM is available now. 

[Announcer] Next, the Market to Market report.

Weather seems to be only constant moving the market. 

For the week, the nearby wheat contract fell 2 cents and the July corn contract sold off 17 cents. 

Bean oil’s influence ran out of favor in the soy complex as the U.S. still appears to be China’s source of last resort. 

The July soybean contract shed a penny while July meal dropped $1.60 per ton.

July cotton shrank 44 cents per hundredweight. 

Over in the dairy parlor, June Class Three milk futures lost 77 cents.

The livestock market was mixed. June cattle added $2.85. August feeders put on $2.60 and the June lean hog contract decreased $1.80. 

In the currency markets, the U.S. dollar index expanded by 44 ticks. 

June crude oil weakened $4.74 per barrel. 

COMEX gold dropped $68.90 per ounce, and the Goldman Sachs Commodity Index declined by almost 15 points to settle at 521 - 40.

[Yeager] Joining us now is regular market analyst Arlan Suderman.  Welcome.

[Arlan Suderman] Good to be back with you.

[Yeager] So let's start with wheat like we do. There's been a frequent saying lately in the wheat market. New contract low, new contract low. It keeps going. When is that record going to stop playing?

[Suderman] Yeah. End users are letting the market come to them and it's working for them at this point. It stops when they have a reason to change their strategy. The funds have been making money shorting the wheat market. That stops when we have a reason to. There's plenty of reasons that could emerge. We're still on the dry side in Russia. The, we got past a close call with a freeze this past week. That could have been a significant story. They still have the dryness risks. There, but really the Black Sea sets the price. So what's the size of the Russian crop going to be? Is it going to be another small one? I see world stocks continuing to shrink this next year, particularly among the major exporters. But that doesn't matter until it matters. And when it matters is when the cash market in the Black Sea starts rising.

[Yeager] Domestically, though, let's look at Oklahoma. You can't take much more rain than they've had in the last two weeks. It's not seeming to do anything to the market either. Why?

[Suderman] Yeah. One of our customers got 15in of rain in the last ten days, and they got more rain coming. They went from drought to floods in a hurry. And, that's not good either. Does the market care? I think that may be actually part of the supporting factors to close out the week a little bit in the market, but overall rain makes grain until it doesn't. And that's what the market's going to assume in corn.

[Yeager] The old crop still seems to be in demand. It's had a pretty good run. How much more of a run does old crop have here?

[Suderman] Well, I think as we get into June, an old crop starts becoming a focus on new crop because it's obvious we're going to have enough to get to the end of the year. my ending stocks estimate is now below 1.4 billion bushels, a little bit below that. But that's still enough to get us in the year. So as we get into June, the focus becomes new crop and that becomes the weather story. And we've got a lot of climatologists out there saying we're going to have problems with hot, dry conditions in central and western Midwest. Some disagree. Which way will it go? I'm watching the sea surface temperatures in the Gulf of Alaska. That's the strongest correlation that we have. If they're cool, then we tend to be hot and dry in the Midwest. If they're warm, we tend to be mild and wet. Right now they're warm, but that's not a good indicator. Now what they'll be in June. So what happens in June/July is what makes a difference. And with the dry sub soils, even though we've had some rains lately, we are vulnerable and now that May is starting to dry out in the forecast wise. If that dryness holds, it won't take long to flip the switch back over to hot dry.

[Yeager] So is that a little bit of an indication there's a potential for some weather? Is that what you're trying to tell me? Yeah, I think I need it there.

[Suderman] I think very much so. I thought coming into this year we had probably two chances of a weather rally for farmers to sell. The first would be the potential for planning delays. We thought we were going to get that. And then the forecast flipped in late April. became more favorable for planting. but now, does that favorable planting weather become a dry story? That'll be the potential next story.

[Yeager] Okay, so we talked a little bit about old crop and the new crop in the ground. But let's talk about demand if we could for a moment on corn. Who wants U.S. corn?

[Suderman] Mexico, Mexico and all this livestock industry doing well. We're feeding cattle and hogs to heavier carcass weights all the time. We're leaving them on feed longer. Ethanol demand is good. So domestic demand is solid. Exports. We need to raise the export target. I think we'll see that here in the May crop report on the 12th. probably another 50 to 100 million bushels. I know one reason I think we'll do it now is I think USDA want to solve for a new crop ending stocks estimate below 2 billion. and, raising exports to lower the old crop. Ending stocks will help them get there.

[Yeager] What's the story you feel is the biggest one in the soybean complex right now?

[Suderman] Biofuels. When are we going to get the biomass diesel production mandate from EPA? It's at 3.35 billion gallons right now. The industry has asked for 5.25 billion gallons if they follow their old formula, they would come out with 4.25 billion, which would be a big increase. but we're hearing things out of the Trump administration indicate that he really wants to help the industry. And with the trade war, this is one way he can do it is support biofuels. We even heard it at the cabinet meeting this past week. Secretary Rollins of USDA brought up biofuels. so we're anticipating maybe 4.75, maybe closer to 5 billion gallons if it's above 5 billion gallons, that's really big. so I think that's the biggest thing. And then permanent E15 and I think that's eventually coming.

[Yeager] But let's go back to crude oil, though for a minute. We finished below $60. That's a major mark in this. What does that do to this discussion?

[Suderman] What we're doing is we're shifting crude oil market share from United States to back to OPEC. We had been stealing market share from them. Our cost of production is higher than theirs. The shale oil fields are $60 to $62 break even. So we are shutting down production. And then that shifts to OPEC, which is increasing output this month.

[Yeager] All right. Let's, take a question here. If we could, I want Jim in North Iowa to ask you this question Arlan. “World demand of or for grain and oils seeds seeds hasn't changed. Why can't we find markets other than China for our goods?”

[Suderman] Yeah. I've been saying we need to look elsewhere from China for years because currency exchange rates, it's cheaper for China to go elsewhere. And when Brazil's currency collapsed, it broke, whatever you want to say, 15 years ago or so, 14 years ago, that's when they really started expanding production and started expanding sales. So if they have corn and soybeans to produce, they're going to be cheaper. But anyway, Mexico is our number one customer, if not number one. They're number two, depending on the product, probably our top ten commodities. Most of those commodities are going to be 1 or 2. Mexico's a huge customer and I think they're going to continue to be. But we need to be looking elsewhere while also developing the domestic demand.

[Yeager] All right. We did get a question. Also, I'm not going to have you put it up on the graphic, but just about your carry out. You mentioned the carry out for corn. What's your ‘24, ‘25 carryout for beans then?

[Suderman] It's about, it's just below 340 million bushels, around 335, 340 million bushels. I forget the exact number, but it's right in there 338 or something like that.

[Yeager] All right, so soybean trader didn't think I'd ask you that question, but I did. Let's go to livestock because of the cash in the futures have been a major story for sure this week. Cash continues to be king, causing problems for futures. There's stories out there starting to form Arlan about cattle and the packer being possibly short? Do you buy into that?

[Suderman] Well, when you look at the fact that they're slowing down the slaughter schedule, the week before last we had 555,000 head harvested. That was the slowest non-holiday week in many years. and then a similar week this past week of slaughter. And, and yet they're having to pay up for the cattle and yes, the feeder is putting more weight on because it's economical to do so. And that's giving us the beef. But the Packers are having to pay up even though they're slowing the chain speed down. And that's an indication of the slows, now our last reports are starting to show the beginning signs of rebuilding the breeding herd.

[Yeager] So holding back some.

[Suderman] Holding back some heifers. It's the very early signs of it. But that's, we're seeing the early evidence of what we've been expecting the last half of this year. Of the numbers not being there now, ironically, beef supplies are as high as they've ever been because of the big carcass weights and because of the record imports, but still, paying up for those cattle to keep that thing flowing is really pushing those prices higher. Another $5 to $9 higher this past week.

[Yeager] Do you see any change or correlation between cash and futures anytime soon?

[Suderman] The question is and the board is skeptical now how long we can sustain the strong strength in the cash. It's going to come down to consumer. But what they buy from us this week is going to take a little while to get to the consumer, and then we'll get a gauge what the consumer is going to do. Now, consumer sentiment has been very poor over the last couple of months, really for the last quarter it's been very poor. But yet they’ve been paying up for those steaks. When you look at where choice cuts are at right now, it's really impressive that the consumer has been paying up for that. How long will that go? And a lot of that's going to go back to where does this trade war go? Because the consumer says I'm okay now, but I'm worried about the future. If you take away the worries about the future, then the cattle industry may be okay. If you don't, the cattle industry may have problems.

[Yeager] What about the hog industry in that same scenario?

[Suderman] You know, the hog industry losing China as a customer was banking on getting the value chain decline from beef customers coming down to pork, and that hasn't happened as much as they expected. So demand has been a little bit softer. And what they anticipated we're still up there around $100. but we need to see a little stronger demand to replace that lost China business.

[Yeager] All right Arlan, thank you. As always, appreciate your time.

[Suderman] You bet. All right.

[Yeager] Arlan Suderman, we're going to pause our analysis, continue our discussion about these markets. In our Market Plus segment. You can find both analysis and Plus on our website of markettomarket.org. Join our YouTube family to keep up on all of our video offerings from stories, shows and special videos. Subscribe at youtube.com/markettomarket. Next week, a look at an operation growing their own grains and markets. Thank you so much for watching. Have a great week.

[Announcer] 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.

Family owned and operated for more than 60 years. Sukup Manufacturing is a full service provider of grain handling, storage, and drying equipment, helping farmers feed the world. 

For over 45 years, Steiner Tractor Parts has shared your love of antique tractors. New parts for old tractors. Learn more at steinertractor.com or at (877) 559-7887. 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.

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.

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