Market Analysis with Matt Bennett

Matt Bennett
Market to Market | Clip
Aug 1, 2025 |

Matt Bennett discusses the economic and commodity markets.

Transcript

Paul Yeager: For the week… The nearby wheat contract fell 22 cents and the September corn contract lost a dime. A lack of progress with China on a trade deal held back the soy complex.  

The September soybean contract dropped 33 cents, while September meal added $3.10 per ton. December cotton contracted $1.87 per hundredweight. Over in the dairy parlor, September Class Three milk futures declined 6 cents. The livestock market was mixed. October cattle found 53 cents. September feeders put on $1.73 and the October lean hog contract declined 55 cents. In the currency markets, the U.S. dollar index improved 147 ticks. September crude oil expanded by $2.13 per barrel. COMEX gold gained $4.90 per ounce, and the Goldman Sachs Commodity Index was down by more than a point to settle at 547 - 05. Joining us now to help us in our discussion, analyst Matt Bennett. Hello, sir.

Matt Bennett: Hello, Paul.

Yeager: You're not going to smile much today, I don't.

Bennett: Think we can smile some.

Yeager: We can. And it's not going to start with wheat though. This is going to be a common topic. Wheat needs what to rally. Is it a trade deal first?

Bennett: Oh, yeah. You would certainly need a trade deal. The tough thing with wheat, of course, you got big global supplies. You got big. U.S. Supplies. A lot bigger than a year ago. Around 100 million bushels. And so, you know, you've got harvest 80% along, which is is pretty much average. But, you know, whenever you've got harvest pressure like that, export sales are pretty good. But look around. What else is there? There's just not much right now. It's tough. Spring wheat isn't in fantastic shape. All right, 50% or so good to. Excellent. But for the most part, it's good enough considering all things, because we know we're going to have a big wheat crop overall. And bottom line is there's just too much wheat sitting around.

Yeager: It's also going to be a lot of corn. We'll get to the December contract a minute. I want to start with September. We still have a lot of old crop. You would think, if you believe the anecdotes online, is there.

Bennett: Yeah. There's less than last year. Okay. First of all. But there is still some corn around. So last week we actually saw some processors in our area push basis a little bit and said, hey, if you deliver next week, they were actually pushing from 18 over to 35 over. That lasted a few hours, you know, because there's a lot of guys that said, yes sir, I'll take that. And so, you know, of course that makes sense to someone who's kind of been sitting around waiting. If you look at it, Paul, I mean, we were pushing up around $4 at the time on September corn. So 435 corn. Take that versus what you saw in the middle of fall last year when basis was fairly wide. You know, you're a lot of guys were selling and gals were selling 3.50 across the scale. Now, I know you had to hold on to that for quite a while, but I think if it was in your possession, you can do that for $0.85.

Yeager: Well, let's discuss that thing that you're facing that's out there growing. I want to start with a question here. Let's go out of Ohio. Neal has the question for you, Matt. Will it be until the combine starts to roll that the too much rain thing will finally be acknowledged by the market? Or will it only be traded after the January report?

Bennett: You know, the thing is, is that we know from the thermal imaging, from NDVIi, I mean, the crop looks fantastic. Okay. As far as you know, what kind of organic matter or just leaf content, I mean, it's just beautiful. Chlorophyl filled, filled corn, not dead at all. I mean, there's really not a lot of dry spots out there. The thing is, though, Paul, too much rain can cause issues. We know a lot of guys sprayed fungicide, but are they going to have to spray the second time? You know, we've heard especially in the state of Ohio, I mean, you've had areas 10 to 15in of rain over the last month. I mean, that's that's quite a bit of moisture to have to deal with. And so we've heard folks say, well, I can't spend 40 bucks an acre on fungicide. I understand that corn at $4 on the board, it's pretty tough for you to say, hey, I'm going to spend ten, 12 bushels. But the bottom line is, Paul, if you get to our spot or you get southern rust, you could lose 50 or 60 bushels. So if you're in a well above APH situation, it would behoove you to protect that crop as good as possible. As far as the question goes, yes, there's areas that have had too much rain, but we've seen in the past it's a rare occurrence that too much rain ends up hurting a crop so much that you end up driving the market higher. Can it happen this year? Absolutely. Crops not in the bin yet, but it sure looks to me like the USDA at 181 might be a little bit low at least, versus this August number.

Yeager: Okay, so if I don't say I don't buy the 186 187, just say I buy 184 185 what does that mean on carryout? What does that mean for my decision making at at Harvest and beyond?

Bennett: Well, there's some moving parts. So at a 181, you know, at a 166, which is what the current forecast is, you got to ask yourself how much export business might we lose to the Brazilians? You probably lose a couple hundred there. So maybe you're starting out at like a 185. And then you tick that up. Let's say you go three bushel, and now all of a sudden you're adding 250 million bushels. So you could be a little bit above $2 billion. That certainly feels like a pretty big number. But Paul and the trade right now, in my opinion, is probably trading 185 plus. It sure seems like it to me. And I would say a lot of people agree with that. But moving forward, Paul, I think you could shift the paradigm a little bit on corn, corn fertilizer ratio is not good. It's a second worst we've ever seen. Back to zero eight. If you look at what phosphate prices are, if you look at the farmers liquidity position, I think that you're going to find this fall the application rates of dry fertilizer are going to be probably a multi-year low. That's my opinion. And I think some alarm bells could sound when some of these guys start talking about tonnages. And I got to think at some point the funds are going to say, okay, the law of diminishing returns has hit us. We're going to have to start lifting these. I don't think they lift yet because commercial traders, they really haven't bought, you know, they're on the commitment of trade. You don't see a whole lot of sales there. They haven't bought much off the farmer. I think the funds are going to stick around and see that farmer sell.

Yeager: A lot applies to the soybean crop as well. Do we have as much still left to sell of old crop?

Bennett: No, there's not a whole lot of beans.

Yeager: So if you have it, do you hold it right now? Since we're where we're at price wise?

Bennett: Well, if that was our mentality 2 or 3 weeks ago, it sure didn't pay off. And I'm not I'm not making fun. It's this has been a tough year to market, Paul. Let's just be honest about it. And so if you've got old beans now the problem is we're coming up on harvest. You know, in the Delta, they're going to start picking corn here before too long. We're going to see some beans harvested as well. To me, holding on to old crop beans, you've got to you've got to hope for a regional issue where someone really needs some beans to crush quickly. If you don't get in that scenario, I'm afraid that holding on to them is going to be a tough game. Unless Mother Nature throws something at us. Now, these forecasts over the last several months, they kept forecasting dryness in the Western Corn Belt. The models were incorrect. The models right now are saying that August is going to be a little bit on the drier bias for Illinois and Iowa. If the heat comes back in and you get some dryness, maybe you get a pop in this bean market. But if you do, I think we ought to know what to do with it.

Yeager: New crop side on the November contract again. Still, I would think it sounds like the same scenario that you just talked about. Matt, for corn.

Bennett: Yeah. I mean, the thing is, is that I can see holding on to corn is paying off for someone. I've got to think that when you get into a scenario that people are talking lower acreage, we don't know if Brazil's going to have a big crop this next year or not. And quite frankly, world supplies are shrinking whenever it comes to corn. World supplies are not shrinking when it comes to beans. So essentially, when you look at that world balance sheet, we're producing more than what we're consuming. And that's not necessarily something that I want to store. And so in all honesty, I have a hard time storing beans in here. Now, if you do to me, you've got to do so. Maybe if you can do so at home. But most guys don't like corn beans at home. It's just traditionally not something we do.

Yeager: Let's move to livestock quickly because October live cattle. Another all time high. Then what happened?

Bennett: Yeah. And then we just sold off a huge sell off there on Thursday. Tried to gain back a little bit Friday, but it really wasn't anything to get too excited about. The thing is, the cash trade is still incredible, you know, high two 40s. You've got to think that that had something to do with maybe a little bit of this rebound on Friday. But I've got to think the funds are sitting here looking at how much money they've made being long. The cattle market fundamentally it looks fantastic. Still, people keep asking, when's the top going to be? The top is going to be before anyone thinks I don't know when it is Paul.

Yeager: I've asked it probably 15 times.

Bennett: The thing is, is that a person that has a lot of exposure just has to understand that a day like Thursday could be followed up, since feeders went down the limit by a $12 lower move on Friday, it could have happened. It didn't happen. Thank God, but that type of a move is what is going to be. What happens when the funds say, hey, you know what, we're tired of this long. We're going to move out of it.

Yeager: Hogs have had a rally then. We are now back down to about that 100 day moving average. What does that mean?

Bennett: I mean, all honesty, you know, demand has been good. Exports have been fairly good. The thing with hogs though is they've kind of followed cattle along. And I don't think hogs would be near where they're at if you would if you weren't seeing these really big cattle prices. All time highs three out of four days at one point this week, I wouldn't want to be real long hogs, especially if you see a cattle sell off.

Yeager: It is interesting times there's been. There's no doubt about that one. Matt. So we have more. I do have a question about poultry tied to livestock that I'll ask you in Market Plus. Okay.

Bennett: Yep. Absolutely.

Yeager: That's your warning. Thanks, Matt. Matt Bennett everybody. And you have been watching the analysis segment, and in a moment we will continue our discussion in our online only segment, search Market Plus with Matt Bennett. Wherever you get your podcasts to hear that conversation. Or you can also go to our website at Markettomarket.org. We've been on Facebook for years and many of you have been loyal to us on that platform. So give us a follow. If you're not there with us, or hop back into our conversations at Facebook.com slash Market to Market. That's the account MarkettoMarketshow. Next week we are going to talk about that fight over busting the swamp to farm. Just a few more acres. Thank you so much for watching. Have a great week.

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