Market to Market - March 31, 2023

Market to Market | Episode
Mar 31, 2023 | 27 min

On this edition of Market to Market, the official estimates are in for this year’s acres. We also know which stocks are where - how that matters moving forward as spring field work begins. Panel analysis with Naomi Blohm, Ted Seifried and Matthew Bennett.


Coming up on Market to Market - the official estimates are in for this year’s acres. We also know which stocks are where and how that matters moving forward as spring field work begins. Panel analysis with Naomi Blohm, Ted Seifried and Matthew Bennett, 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, March 31st edition of Market to Market, the Weekly Journal of Rural America.

Hello. I’m Paul Yeager.

Inflation pressures weakened last month even with a three-tenths of a percent gain, half of what it was in the previous reading. The Federal Reserve’s preferred gauge, the PCE, still reveals the grip inflation has on the U.S. economy and on those who have the ability to move the levers and pulleys of fiscal policy.

From reports issued on Constitution Avenue at Commerce to USDA on Independence, the government plays a role in our program’s path this week.

USDA looked back at grain stocks and forward to planting intentions. Those two will be at the center of our panel discussion.

Naomi Blohm is Senior Market Advisor for Total Farm Marketing.

Ted Seifried is Chief Market Strategist at Zaner Ag Hedge.

Matthew Bennett is co-founder of

To the three of you, we'll get to you in just a moment. Hang tight.

First though, the numbers, more specifically, the closes for the week. The nearby wheat contract gained 4 cents, while the May corn contract added 18 cents. The soybean complex rallied Friday on the news of fewer acres. The May soybean contract rocketed 77 cents higher, while the May meal contract added $20.90 per ton. May cotton rose $6.24 per hundredweight. Over in the dairy parlor, April Class three milk futures lost 80 cents. The livestock market finished in the positive territory as the June cattle contract improved $5.53. May feeders put on $7.70. And the April lean hog contract added 20 cents. In the currency markets, the U.S. dollar index lost 60 ticks. May crude oil increased $6.24 per barrel. COMEX gold went down by $10.70 per ounce. And the Goldman Sachs Commodity Index gained more than 24 points to settle at 573.45.

Yeager: Ted, Matt, hello. We're going to start, though, with Naomi. Which was the bigger movement on the market today at the end of the week, stocks or acreage?

Blohm: Yeah, I really liked the stocks number that came out.

Yeager: Why?

Blohm: Because everything was a little bit lower than expectations and if you look back at where they were a year ago at this time, corn, beans and wheat are all lower than a year ago at this time. So, that just tells us the reality that those tight ending stocks are there, nothing got fixed last summer and then we're going to be in full blown weather markets this summer here in the United States no matter when or what we get planted. So, that's a friendly story and I think that was really supportive to the market today.

Yeager: You talk about a number of factors playing into a market, I think last year you hit a lot of that. So, we've got one taken care of then with lower stocks is what you're saying.

Blohm: Yes, absolutely, very much supportive.

Yeager: Ted, do you agree on the bigger market mover?

Seifried: Yeah, absolutely. So, you have to take planting intentions with a grain of salt. We intend to do things and whether we can do them or not, a lot of that is dictated by weather from here on out. And you look at the Northern Plains under multiple feet of snow pack and you wonder how those corn acres are going to get planted. So, I do think the market will start talking very soon about a potential shift of that 92 million acres, part of that coming back into soybeans and so that is going to still be a moving target until we're done with planting. But the stocks number I think is extremely interesting, below expectations. What are we going to see the USDA do with that on the next WASDE report? How much will the carryover drop? And then also, when you really dig into the stocks report and see who has it, on-farm stocks for soybeans aren't down all that much, it's the commercial down 21%. So, there's a lot of buying left to be done out there. So, that I think is one of the more interesting takeaways from that report.

Yeager: Matt, you said that just a couple of weeks ago when you were here about there's still a lot of buying to be done. Was there a surprise for you in stocks?

Bennett: Here's the thing, coming in looking at basis and spreads, that's what is going to make my mind up as far as what I think is going to happen as far as quarterly stocks go. The report actually made sense to me today and the March report doesn't always make sense, quite frankly. We'll come in with some sort of a surprise. Today was not one of those days. It was nice to see. I think whenever you look at, for instance, 92 million acres for corn, if you would have had a bearish stocks number it wouldn’t have been a very good day for the corn market by any means. But I'm with Ted, it's all about intentions. And whenever you throw 1.6 million acres more in North Dakota right now of all states that's probably the least of which I would say you're going to get an acreage increase to that magnitude whenever you look at all crops. But bottom line for me is the report was friendly based on stocks. What is carryout? I'm like Ted, you're probably seeing the highest number for corn, which is a nice thing to see because then your carry is going to be lower for your new crop balance sheet and that's a good thing.

Yeager: So, what do we do moving forward then with this information, not the acres, the stocks? What does a producer do with this info?

Blohm: Well, it's going to be your cornerstone for the whole spring as far as having a nice seasonal rally from here. And so producers need to just be aware of that because as they get busier in the fields this spring obviously those best marketing opportunities come when they are the most busy. But looking at what this report historically does, when you take the low price from today's report, and I looked back at 15 years worth of information, take the low from today to whatever the spring high is and the summer high, the average rally is 95 cents. So, corn historically has some opportunity there going forward. And 10 out of 15 years, this report is the spring low for the market until we get our seasonal rally. Soybeans have similar traits to it. The soybean rally has a tendency to be $1.73 going back the past 15 years from the low of this report to the late spring/summer high. So, there is opportunity there for guys to get caught up with cash sales and that is what you need to do with the information.

Yeager: Ted, I'm going to give you the first question that came in here from Ashley in North Dakota, the Grain Lady was asking. And it ties into what Naomi is saying. She's asking, what's everyone's thoughts as to why China is choosing now to enter the U.S. market after sales were reported this week given the current geopolitical climate? The reason I went after her question is, the Chinese always seem to know when to buy at a low. Given what Naomi just said, they must think that the low is in.

Seifried: First of all, hi Ashley. Second, Chinese can have different motivations for different things at different times. I think this is more sort of politically motivated. They are going over to Russia and Ukraine to try to -- or they have gone over to Russia and Ukraine trying to broker deals and things like that. We don't like that. But then here comes corn sales and that makes things a little bit better. You always wonder when China will be ready to invade Taiwan. You get the feeling that they want to own things, have as much stockpiles before they go in and do that. I think they're also looking at the late planting and that second season corn crop down in Brazil and figuring there's a little bit of risk there so we might as well get some coverage. And, again, I think they had been waiting for a bigger break in the market. We gave it to them. And then here comes that string of sales. So, lots of things going on with that. But going back to that stocks report, a conversation that I think is going to come up here fairly soon is what happens if we start to see a much bigger influx of imports going to the eastern seaboard of soybeans? We might have maybe just seen one of the most bullish things that we're going to see in soybeans until we get to the weather market in earnest. I worry less about corn because of the weather and the snow pack that we have, but what if we do start adding a million, 2 million acres of soybeans? And then the stocks or the carry into next year doesn't really, it's not as important. The other thing is we're not going to have the same export schedule for the second half of this marketing year because Brazil's first season soybean crop last year not great, this year biggest crop we've ever seen. So, there's a couple other dynamics that I think might be playing counter seasonal this year.

Bennett: Further on that point is that we've already had awfully good prices. And I know what the historics say, not exactly, you've got pretty good numbers and pretty good data and I'm glad that you do because that makes Ted and I look a little bit better. But I would say that whenever it gets right down to it you've already had awfully strong prices, first of all. Today my first though, corn acres highest we're going to see, bean acres lowest we're going to see. I do think that you're going to be able to pick up some soybean acres. I think whenever you look at the way this is all put together you look at the Chinese and they say, well hold on a second, it looks like this might not be an early spring, if we are going to step in and buy some corn it might be a decent time to do it. As far as the timing of when we heard about the purchases, they were bought before that. The last time the three of us were together, Paul, we were pretty bearish all three of us and markets fell quite a bit since then but a lot has changed. China comes in and buys 125 million bushels of corn. And I don't think that's maybe all that they're going to have purchased. And so, again, your balance sheet is going to look different in April. I think it's going to be interesting. And in May we get the new numbers. There's a lot that is going to happen coming up. And if you push this planting window back four, five weeks it's going to be really interesting.

Yeager: You have to stay to the end to find out if they're bullish or bearish. Just stay with us on that. Let's go to another question, Naomi. Let's get to the acres discussion because that's one that is always fun to talk about but it's, as Ted said, just intentions. Let's go AJ in Protivin and he asked, we had a couple of these questions. And the first one he's asking is 4 million more acres of both corn and wheat and soybeans steady with 22. Where are the extra 8 million acres coming from?

Blohm: And I think it's what Ted responded on Twitter. As far as the thought is that right now we're not going to have a lot of prevent plant acres. And so, if you don't have those prevent plant acres those are where these acres are coming from and they'll be double crop of course with the wheat and the beans. So, that is where the acres come from. Now, as Ted already alluded to, North Dakota, South Dakota, Minnesota are still just blanketed under snow and it is cold. I talked to a client in South Dakota who was ice fishing, there's still 28 inches of ice on these lakes. So, there is a lot of thaw that has to happen and their forecast is not conducive for bringing spring on. So, there will be some acreage shifts and there could be some prevent plant acres, I think about the drought in the Plains yet as far as Kansas and parts of Texas and the wheat crop there is not doing well at all, really still suffering. So, that is going to be another thing to see is there going to be abandoned acres? So, this is definitely a moving target, lots of opportunities for the farmers with prices going forward, seasonally corn, beans and wheat all have a tendency to work higher from here.

Yeager: Ted, you responded on Twitter but I'll give you a chance to extend the 140 characters.

Seifried: Yeah, we have intentions and we don't always get to those intentions. Weather is going to be the biggest determinant of acreage every single year. Last year we had some issues so we didn't get to the intentions numbers. But if you look at the intentions numbers from today versus last year it's not, we're not gaining acres really. Yeah, high prices try to pull out as many acres as we can possibly get but we're not seeing a huge increase in acres, it's just we didn't get everything intended planted last year. It's probably going to be the same thing this year. Again, we'll see what happens over the course of the next two months in weather. And by the way, I was just in South Dakota for a while earlier this week, it was negative 13 one of the mornings when I woke up and they're expecting more snow. So, that is a mess and it will continue to be for a little while.

Yeager: Okay, give those in South Dakota then on south through the Wheat Belt something they should be looking at and making decisions on either their winter crop or their spring crop?

Seifried: I think all the conversations that I was having this entire week with the same guys was that we need to really consider are we going to be moving towards beans? And that’s kind of unfortunate because I think a lot of guys wanted to try to add more corn here this spring because you look at input costs, whoever booked input costs back in fall, October, you paid a lot more than where they are now. So, you figure, hey, you know, I like to average my prices, I like to make my balance sheet look better. If I could buy more inputs cheaper and add to my corn acres and really average that price out that puts me in a better position. But unfortunately, I don't think weather is going to allow for that, at least in the area that we're talking about. That I think might actually happen in other area though.

Bennett: One thing I'll point out is that if you're a large-scale producer, if you can take your own cargo of anhydrous, a tanker load of anhydrous or be able to pick up fertilizer at the river, absolutely. But the problem is with a lot of these ag chem retailers is they're sitting on some really high-priced inventory. So, a lot of the folks that I talked to, some of the folks that I actually work with talking $1200 to $1300 anhydrous still whereas the spot market is more like $850 to $900. And so I think that is going to play in, in that a couple of things are going to have to happen, either we're going to have to have wholesale change in the weather or you're going to have to get a pretty nice sized rally in the corn market to get someone to say shoot, I'm going to go ahead and push the envelope, so to speak, maybe plant in less than ideal conditions whenever I'm pushing corn acres. And that's a big reason I think 92 could end up being at least a million acres too high. Again, it comes back to Mother Nature, but the bottom line is input costs are still high for most of your average producers.

Yeager: Who is going to feel the effect of that? It always ends up being the end consumer or the end user of that.

Bennett: Yeah, absolutely, I think one thing that you've got to consider is let's say that you end up drawing acres down maybe 90, 91, whatever it might be and you start paring back your balance sheet, if you will. So, maybe you go back down to one and a quarter and if that's the case and that is your carry in all of a sudden we've extended our chance to actually have decent profit margins in this corn situation. Again, 45 days ago the three of us were all in total agreement whenever we were in South Dakota. And to be honest, the market moved the way that we all thought it would move from then to now. This is a different game we're playing today. And so, it's not -- it's a good thing, it's a good thing. It has given us some life. I'm not saying we're going to rally through the roof --

Seifried: See everything we've talked about today is all supply, quarterly grain stocks and acreage, that's the supply side of the balance sheet. There is a demand side of the balance sheet, which we were all talking about, that's still there. We do still have a fair amount of demand destruction. Look at corn exports over the last two years have dropped 900 million bushels. That's 33%. You've got ethanol where stocks are at the second peak, the ethanol sector the second highest they've ever been and that highest one was the same week that we were selling crude oil at negative prices or I guess buying crude oil, giving people money to take crude oil. And so, you've got ethanol that you're starting to worry about a little bit. And then feed you've got just you don't have the same animals out there. So, high prices are the cure for high prices. We try to fix the supply side. But again, Mother Nature has a big play in that. But the demand side always kind of fixes itself. So, that is the other thing that you've got to keep in mind too.

Bennett: Absolutely, that's part of why I said I don't think we're going to rally through the roof. I feel like we're extending our opportunity to make decent money again this year potentially. But at the same time, you get a run back to $6 or a little bit more on Dec corn, personally I think you better be latching onto that thing with both fists.

Blohm: Yeah, and I think that the producers are going to get that opportunity, I really feel that we're going to see that. And with soybean prices 13 out of 15 years the November contract high will exceed what the high was during the month of March. And so, our high was $13.86 for those November beans. So, I think you're going to see new crop beans get on up to $14 if not higher. I think that the threat of what is happening with Argentina with as small as their crop is and now they're trying to do their peso program again and push it, with Ted's point of there's always that risk that we're going to be bringing in South America beans here. But Argentina also needs to be importing Brazil's soybeans. So there still is a lot of moving parts. I feel that China is opportunistic of course as far as when they're buying and I think that we're going to see them continue to be buying a little more wheat from us. I think we're going to see some more sorghum. I think we'll see a little bit more of a corn sale because they are weather watchers. They have the satellite imagery. They're keeping an eye on what is happening in Brazil. They're watching what is happening here in the United States. And so, they do need to I think continue to import a little bit more because they did not have a perfect crop last year either. So, again, for the producers watching we have good news for you today. You're going to get one more shot to market this crop this spring when we see our high and you've got to be on the ball to hit it because it's not going to be there for too long.

Yeager: So, Matt mentioned 45 days, is my window in the next 45 days to hit what you're talking about?

Blohm: So, most recently the highs for corn and beans both were new crop prices. It's either mid-May to mid-June. That's usually it, those late summer peaks, that was kind of way before like a decade ago. So right now the more the seasonal highs come a little bit earlier because, again, we've got satellite imagery that helps us know what is happening and we're a little bit more abreast with the information as far as it is at our fingertips with Twitter, we don't have to wait weeks to find out what happened, we have the news in front of us. So, I'm thinking more of an earlier rally this year and an earlier high.

Yeager: Okay, which is interesting to think about, Ted, because I know wheat, you talked about wheat, we've talked about corn, we've talked about soybeans but I need to quickly, either you or Matt, explain this cotton rally to me and what that matters to what you're saying, or Naomi, anybody can answer. But explain to me why that is significant this week.

Seifried: We lost a lot of acres, right?

Bennett: Yeah, we lost, what, 20% from last year. It's a pretty big drop in acreage and I think that is your sole reason. Who knows, maybe you get a little bit of a rally and somewhere in the world you plant a few more acres. But the thing is, you're running out of time in cotton country. These folks -- and you look, for instance, in the Delta and the few folks that may plant a little bit of cotton there, look at the weather there, it hasn't been worth a darn and that is a big reason why you're seeing this thing rally. It is so dry in West Texas.

Yeager: Which is also a livestock issue. Let's move to live cattle for a minute, Ted. The weather, the economy, I mentioned deflation off the top. PC does not include, they usually take out the food side of things. What's the consumer's influence on this June cattle market right now?

Seifried: Absolutely, demand is a big portion of any market. But the demand seems to be there, cash is on fire and keeps going higher and higher, packer's margins obviously have been good enough to sustain that. I think there's still more upside potential. We're buying beef, we're paying for the beef, we're not really slowing down our spending habits all that much, or at least not as much as the Fed wants us to. So, we know there's less animals out there, we know that that supply will continue to shrink between now and the end of the third quarter minimally. So yeah, I think there's new highs in store for the cattle market. We had a correction and we needed a correction, markets always need to correct, we went right down to the 100-day moving average, turned around and bounced off of it and now we're sniffing out looking for new highs. It's a good looking mid-maturity bull market.

Yeager: Matt, how high?

Bennett: Yeah, well, I think that $175, $180 fats in this calendar year are something that we're going to see. We corrected, like Ted said, you correct and the nice thing to see is there's a risk off event, a lot of commodities were correcting and it's something you would kind of expect in a healthy market has to correct. And so, you go down there, you hit some support and all of a sudden you make new highs in your nearby. So, I think moving forward you're going to get into a very tight situation. Some of these packers are really going to be hunting cattle and I've got to think that it is a futures market so some of these $175, $180 as far as somewhere on the board are going to probably happen sooner than what some people think.

Blohm: Yeah, and second quarter production for beef is supposed to be down like 200 million pounds from first quarter and that does not happen that often. So, of course we knew the lower production was coming. But it still is a supportive story. And I'm friendly to the cattle market unless we start seeing the middle class see job cuts. Then I'm going to get bearish pretty darn quick. But right now the middle class we haven't seen any job cuts there, it's been mostly West Coast with the tech industry. So, that's something I'm watching for, I do agree one more push higher with this cattle complex then we'll start to see what the weather is here in the United States and how pasture conditions are and things like that too.

Yeager: Feeders, they keep going up. How does that play into this? I get your job story, I totally do. But it's pretty expensive to --

Blohm: Here's what I keep hearing from clients, they just keep saying there ain't none out there. That is the exact words that I hear. So, we saw the feeder market this week take out some new highs and until the animals become available it's just a story that continues to be supportive.

Seifried: I think that could be limited by corn prices if they continue to go higher here in the short to mid-term.

Blohm: That's a good point.

Bennett: It's possible but I do think a lot of these cattle folks are going to be wanting to go ahead and sell and turn some of these -- heifers, people talked about retaining heifers, I think a lot of them are actually going to be letting loose of them. They're worth a ton of money. And so, it gets them in an even better situation where they can heal up a little bit more.

Yeager: It's not often you can take advantage of a rally like that so quickly and here it is, the opportunity is there. The hog market is there as well.

Blohm: Yeah, hogs had a hogs and pigs report this week and it was a neutral report with inventory the numbers coming out at right at 100%. So not a lot of big news there. The thing with the hog market going forward, our exports have been actually down a little bit from years prior and what we're going to be watching is our cash markets, that's going to be the driver going forward. I expect a lot of volatility. Second quarter production for hogs is going to be down about 400 million pounds from first quarter. But we are seeing already the June summer contracts, they're already pricing that in. So, I think hogs are going to be volatile and it's going to be day-to-day headlines that make that market move.

Yeager: You get the final few seconds on dairy. It seems to rally in the weeks you're not here, fall in the weeks you're here. Explain that one to me, what's going on?

Blohm: It has had some friendly cheese news. So, we've had stronger cash cheese and that made the market go higher along with the California flooding. There was 70,000 head that had been displaced. So, that got the milk market up to $20. Then we had cash markets kind of fall back for the cheese prices and so that is what we had the market come back down lower. $18 is pretty good support. Milk production continues to increase every month, up 0.8% this last month. Plenty of milk in Wisconsin. We're doing just fine there. But out west is where the concern is going to be. So, I'm looking for more of a sideways pattern for milk right now just because we're kind of equally balanced between demand and what the milk supply is.

Yeager: Plenty of snow up there too. That's Naomi Blohm, thank you so very much. Ted Seifried, thank you for your input. Matt Bennett, next time we'll let you talk a little more. How about that?

Bennett: Sounds good.

Yeager: You did good. All right, appreciate all three of you. Thank you so much. We're going to pause this analysis and continue our discussion about these markets in our Market Plus segment. Find those segments on our website of Both of these resources are free. Our Facebook page is free as well and it's another gathering place for our stories. And we also want you to contribute to the program. Give our page a like @MarkettoMarketShow. Next week, we look at the advances in satellite data to determine weather stress. 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.