Market to Market - May 20, 2022

Market to Market | Episode
May 20, 2022 | 27 min

Iowa looks to throttle up ethanol sales. The tally for 2022 climate disasters keeps climbing. Working to repel rabies. Market analysis with Matthew Bennett.


Coming up on Market to Market -- Iowa looks to throttle up ethanol sales. The tally for 2022 climate disasters keeps climbing. Working to repel rabies. And market analysis with Matthew Bennett, next.


What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


Tomorrow. For over 100 years we have 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 20 edition of Market to Market. the Weekly Journal of Rural America.


Hello, I’m Paul Yeager.

Nuance and interpretation is in the eye of the office holder.

Retail sales as a whole were up 0.9 percent in April. Americans appeared to be spending more on cars, electronics and at restaurants. However, major retailers like Target, Kohls and Walmart reported lower earnings this week noting shoppers are, again, pivoting on their spending.  

Existing home sales fell for the third straight month with a 2.4 percent drop. Median prices set a record as limited inventory remains an issue.

Creighton University’s Rural Mainstreet Index stepped lower by almost four points but did remain above growth neutral for the 18th consecutive month with a reading of 57.7.   —

A major contributor to the RMI is the farm sector.

This week in Iowa, the governor greenlit an idea aimed at boosting farm income. 

Peter Tubbs reports. 

Iowa has become the first state in the nation to require most of its gas stations to install E15 pumps. 

Iowa produces almost 20 percent of the ethanol distilled in the United States along with 18 percent of the biodiesel created nationally. The industry believes that by increasing the availability of E15, consumers will put more ethanol into their vehicles.

Governor Kim Reynolds, R – Iowa: “This is not a mandate. It is not a mandate. They have to decide if they are going to put a higher blend pump, blender pump into their station.”

Fuel retailers that sell more than 300,000 gallons of fuel will have until January of 2026 to make E15 available to its customers. Smaller retailers can apply for a waiver of the E15 pump requirement which a year ago some vendors referred to as a mandate. Those stations that sell the higher blend will receive a 9 cent per gallon State of Iowa tax credit.

The new law is also expected to increase the sale of biodiesel. Retailers will receive a 4 cent per gallon state level tax credit for each gallon of B10, or diesel with 10 percent biodiesel.

Overall, the Iowa ethanol industry hopes increased sales of E15 will result in an additional 60 million gallons of ethanol sold each year, which would represent a 1.3% increase in production.

For Market to Market, I’m Peter Tubbs. 

The weekend forecast for parts of Colorado that south and west of Denver is heavy snow.

Any moisture is welcome in the parched areas of the Upper Plains. Farmers are looking for a break that will finally allow them to turn a wheel.

Josh Buettner looks at the stark contrasts in the weather at the start of Spring 2022.

Planters have started rolling at a faster pace than most of this wet spring season has allowed, but overall field efforts are still behind.  As of this week, only 49 percent of corn acres have been planted – trailing last year by more than 35 percent.

Soybean planting is lagging behind 2021 by nearly the same amount, with around 30 percent of the crop committed to the soil.

Rain soaked many of the same locations across the U.S. again this week, hampering farmers eager to get started.  Even Kansas rains couldn’t hold off worsening drought conditions which sank by nearly two points nationwide.

New Mexico’s Calf Canyon fire blazed across 298,000 acre mark - making it the largest wildfire in state history. Lightning sparked additional blazes, which consumed more homes and vegetation.  One hundred percent of the Land of Enchantment has been in some form of drought for the entirety of 2022.

Stuart Morris/Public Information Officer – Texas A&M Forest Service: “We are going to be on this for a while, unfortunately, and so the main thing is we are going to pace ourselves and get through this the best we can.” 

The Lone Star State is suffering under the same excessive heat and tinder-dry conditions.  Officials in Texas report efforts to contain a blaze near Abilene forced mandatory evacuations in and around the city of 125.000.  Authorities across the country are expected to burn through all of their emergency funds before the year is over.

Adam Smith, Applied Climatologist/NOAA:  “Some of these extremes lead to billion dollar disasters.”

E2 or Environmental Entrepreneurs launched an ad campaign this week aimed at raising awareness of the cost of climate change. The nonpartisan group of business leaders advocate for what they call good policy for both the economy and environment.

2021 packed a wallop with wildfires, floods and tornadoes – adding to over four decades of grim climate disaster analysis unveiled at a virtual press event.

Adam Smith, Applied Climatologist/NOAA: (9:22 on clip) “You can see the bars are going up. That's a combination of increased exposure, more people more assets living in harm's way, increased vulnerability where we live, excuse me, where we build and how we build. And of course, climate change is certainly amplifying and supercharging.”

For Market to Market, I’m Josh Buettner.

Viruses carry a certain bit of known and unknown to them. Even after chemist Louis Pasteur’s discoveries in the areas of pasteurization, microbial fermentation and vaccination - some of the viruses he fought to remove from our lives remain. 

Rabies is still here albeit less than before and the fight to eradicate it continues.

Colleen Bradford Krantz reports in our Cover Story.

Betsy Haley is holding the line. Plotting where the enemy might next attempt to cross the mountains, she has just dispatched the fifth flight of the day.

The enemy she’s fighting?


A virus – fatal if left untreated - that has struck fear in humans for generations. In the United States, the rabies threat doesn’t look like it used to when it comes to the carrier animals.

It’s less this [growling dog] and more this [cute raccoon].

In the early part of the 1900s, dogs were the primary carriers in the U.S. But, between public awareness campaigns and the enactment of dog vaccination mandates in most states, that has changed.

Today, wildlife are more likely to carry rabies than the nation’s domestic animals. Foxes and bats have been a constant threat, but the bigger danger in recent decades came from skunks and raccoons.

Haley and others at USDA’s Wildlife Services have been working to help reduce the prevalence among raccoons and other wildlife.

Betsy Haley, National Rabies Management Program: “The focus is actually on raccoons and skunks because those are the animals that seem to encounter humans more. Especially raccoons. Raccoons seem to be that warm, fuzzy critter that everybody wants to get closer to or befriend.”

Since the 1990s, officials have been criss-crossing the countryside in planes and helicopters, dropping vaccine-filled bait packets covered with a sweet coating to attract the raccoons.

Betsy Haley, National Rabies Management Program: “Our work is to distribute oral rabies vaccine baits for raccoons, starting from Maine down to Alabama. …And helping to map the areas that we are going to distribute the baits in.”

When the raccoon-variant of rabies began moving north from Florida in the 1940s – and was accidentally accelerated by some trappers in the 1970s – federal officials took notice. And began a campaign to confine the disease.

Fortunately, the Appalachian Mountains offered a natural barrier that slowed the progression of the virus. An additional drag was placed on the migration of the disease by the development and distribution of rabies vaccines.

The battle isn’t over. Rabid raccoon attacks still happen today along the East Coast.

WCVB News Report: Laurie Rose said she spotted the raccoon when she heard her chicken, Alice, squawking Saturday evening. That’s when she came outside to put Alice in her pen. ‘It just charged me and I slipped and it grabbed ahold of my heel and it would not let go.”

The Boston-area woman, bitten in the summer of 2021, received the proper rabies treatment quickly, which is key to surviving exposure through a bite or scratch.

The command center for the raccoon rabies bait drop on this particular day in August was the airport near North Lima in eastern Ohio. Over four days, the team would distribute 700,000 bait packets.

Betsy Haley, National Rabies Management Program: This project itself is covering portions of eastern Ohio, western Pennsylvania and a little bit of northern West Virginia. … We chose this area because it is the western edge of the raccoon rabies front.”

In many states, although it can fluctuate, the number of rabies-infected wildlife appears to be declining over the past 15 years. That includes Ohio, where wildlife biologist Jeff Raines is based.

Jeff Raines, Wildlife Services, USDA: “At the height of the raccoon rabies positives in Ohio, we had over 20 positives in Ohio in a calendar year. And through the work of the Ohio rabies management program and the national rabies management program, there’s been a decline in the number of cases per year. In 2020, we only had one positive animal.”


Although 2021 ended with four raccoon cases, the overall numbers of all animals infected in Ohio still dipped.

The personnel on the flights drop the packets over woods and fields where raccoons are likely to live, avoiding a release over homes or populated areas.

Jeff Raines, Wildlife Services, USDA: “Through complex calculations, the national rabies management staff determine how many baits need to go out in a certain area … So for this flight, we’ll have roughly 12,000 baits, and that can fluctuate from 10- to 20,000 baits depending on the area we are working…. We’ll have a total of 15 flights today.”

Anyone who finds a bait packet should put on gloves before picking it up and moving it to a wooded area. And, no matter what, to always avoid going near raccoons, particularly if they are stumbling around or acting strangely.

Betsy Haley, USDA National Rabies Management Program: “If you do get bitten by an animal…the best thing to do is clean and wash that infected area and then contact your local health department immediately.”

The number of humans dying from rabies has dropped over time and it is now rare in the U.S. Just a few years ago, however, a Delaware woman died of the disease. State officials said she may have been exposed to rabies through a scratch from a feral cat or one of her own. She was the state’s first confirmed rabies death in 77 years.

While eliminating all variants of rabies from the U.S. may be impossible because of the difficulty in delivering vaccine to bats, the variant carried by raccoons could actually be eliminated.

Betsy Haley, National Rabies Management Program. “The ultimate goal is to eradicate rabies from the Eastern U.S.”

For Market to Market, I’m Colleen Bradford Krantz.

Next, the Market to Market report.

The wheat crop tour and stubborn weather patterns helped push the direction of the trade. For the week, the nearby wheat contract fell 9 cents, while July corn lost 3 cents. More acres may switch back to soybeans as planting delays play out in northern regions. The nearby contract improved 59 cents. July meal added $20.60 per ton. July cotton decreased $2.93 per hundredweight. Over in the dairy parlor, June Class III milk futures gained by 31 cents. The livestock sector was mixed. June cattle cut 50 cents. August feeders shed $4.10. And the June lean hog contract expanded by $8.13. In the currency markets, the U.S. Dollar index declined by 146 ticks. June crude oil strengthened $2.35 per barrel. COMEX Gold increased $34.70 per ounce. And the Goldman Sachs Commodity Index went up more than six points to finish at 765.85.

Yeager: Joining us now to provide some insight is Matthew Bennett. Welcome back, Matt. I got distracted reading those numbers because I was thinking about the dollar and the dollar weakened. The crop tour said we're going to have a decent wheat crop. It rained but then it didn't rain. There was a whole lot of stuff going on in that wheat market. What is the biggest factor in your eyes?

Bennett: The interesting thing, the wheat market going into Wednesday's trade we were up over $2 for the month and then all of a sudden we kind of ran into a brick wall and head back the other way. In my opinion, the wheat numbers came in a little better than what some folks thought that they might. I think the verdict is still out though. We're certainly going to need good weather from this point on forward because you hear a lot of folks out there saying hey, no amount of rain is going to help us at this point. That's not everybody and we certainly hope that they see a decent wheat crop. But at the same time I'm not totally sold on it just yet, first of all. The dollar, the interesting thing about the dollar is a lot of folks are saying hey, when the dollar dropped back big time this week why didn't commodities rally? But if we remember, while the dollar was rallying, everything else was rallying along with it which isn't common. And so it's a very interesting dynamic that we've seen. So we can't just say just because the dollar breaks all commodities are going to rally, although I've got to think that will happen. There's no givens in this market right now.

Yeager: When you look at the different contracts of wheat, you look at the spring wheat versus the winter and again that stark contrast of things. Is there anything that one can glean from looking at the overall picture in trying to make a position? Let's talk about a deferred contract here.

Bennett: Well, I think whenever I look at for instance Minneapolis wheat, what is going to happen there in my opinion is there's some folks that might step in and plant more wheat. We're hearing that over the last couple of days that actually there's a lot of talk of well people are going to plant more soybeans in the Upper Midwest and I understand that but with the last couple of days I've heard some people say actually hold on, maybe there's going to be some spring wheat that is going to come back into the mix, maybe we're going to plant all the spring wheat we thought we were going to originally. Obviously the price has tried to incur that.

Yeager: So are you saying that in the Minneapolis wheat areas where they might switch?

Bennett: We've heard that in North Dakota and into Minnesota as well. So the bottom line for me is that I don't think that it's a conclusion yet that that spring wheat is going to be way down on acreage. I don't think that's going to be the case if what we're hearing over the last couple three days is correct.

Yeager: All right, so in corn, I don't know how many pictures you've seen on Twitter of someone who hasn't turned a wheel this spring. The institution of higher learning not too terribly far from you, University of Illinois, has done some more research saying yeah, we're flipping off of corn. Is that the reason for a rally or a selloff this week?

Bennett: The corn market, first of all, as far as plantings are concerned we know that we got off to a late start but then once we got in the field here over the last week to two weeks I think planters have been rolling big guns, it's a big reason why this corn market has started to pump their brakes just a little bit. So what the university is putting out is really good information, there's no question that you get into May 20th and after, you get into the 1st of June and after, there's no doubt that historically you see a yield drag. Now, we are planting better genetics every year. That's no secret. 2019 though I think we severely overestimated what that crop was, a lot of folks said these genetics will be able to handle it. This is going to be an interesting year this year. But I do think, Paul, whenever you come in on Monday you're going to see good progress once again. Again, I think that is a big reason why this corn market has just kind of chopping right now and I think you'll see a little more chop to come. But I certainly don't think that it's going to drop to a large fashion. I think if you get Dec corn down in that $7 level I've got to think there’s a fair amount of folks that are going to be stepping in and buying it with both hands.

Yeager: We were over $8 -- I kind of skipped over the July contract, I'm sorry -- if you saw anything less did you miss your window to sell since we were over $8 earlier in the week?

Bennett: That's a very interesting question. We actually saw some $8.50 cash corn this week. I talked to a couple three producers, they could have delivered it direct into one of the big terminals, said well we're busy doing something right now, my dad was one of those, and so he said if I get a little bit less than this it's not the end of the world, it's still an awfully good price. And so there's still a lot of folks doing stuff. I think that's part of the reason why the cash market was so strong. Interestingly, you take the corn market down 20 cents and then all of a sudden the basis pops. And then here just yesterday a couple of these larger processors once again opened up June contracts. So don't tell me that they're not looking for corn. If we drop still more, it's always a possibility, I've got to think basis is going to stay fairly strong. Origination for corn, there's a lot of folks that are very concerned at this point and I've got to think that cash corn is still going to be a pretty good commodity. But I'm not so sure it's going to be as hot as what cash beans are going to be.

Yeager: Well, beans, okay they've been so tied to each other, a lot of the same factors at this time of year. Now, take out the word large processors, insert the word China is who kind of changed the market in soybeans later in the week, right?

Bennett: Yeah, whenever they come in and buy beans there's no question. And then you see exports, we've got more export sales than what we needed to keep pace with the USDA goal. But we typically end up rolling anywhere from 50, 60, 70 million bushels of beans into the next marketing year, we understand that. But we're going to get ourselves in a situation where we're going to go above and beyond that as well it sure appears. And so there's no doubt that the Chinese COVID concerns and what not, all of a sudden they're still buying soybeans, to me it's a really good indication. Crush margins are good. I think it's going to be really hard to come up with old crop beans over the next three months. And I tell you what, I think this cash market could be on fire.

Yeager: So what do I do to prepare for that?

Bennett: Well, do you have any beans? You talk to people and there's not very many beans out there. That's what I'm getting at. So I've had a lot of folks call me and say, I've got a bin full of beans. I'm like, congratulations, the first thing I say. But second of all, you stop and think about it, I want to go ahead and kind of see how this thing plays out. Here's the thing, if the market drops $2 you've still got $15 beans. Go back to two years and we were selling them for $8. And so you've got to keep things in perspective here. I'm okay with you kind of waiting around to see what might happen here. I say get down to gambling bushels. But quite frankly up here I'm okay with you rolling the dice but know what your give up point is if the market does start into some sort of a freefall because there is certainly concern that if this economy would collapse, and a lot of folks have talked about that here lately, that the ramifications could be quite large over a large variety of markets.

Yeager: Well, one of the factors is a question that we want to get into from Glen in Ohio. He asked you on Twitter, Matt, he said, will projected higher interest rates and a strong dollar be the catalyst the establishes clear resistance and support levels on the charts for all commodities until final production numbers are established after the harvest?

Bennett: Well, there's a lot going on with that question, first of all, and it is projected higher interest rates and can we actually go up the way some of these folks have said the fed has indicated that they might go up. With the kind of debt that we have at this stage of the game I think it would be very hard to go up rapidly like we saw for instance in the 80s. But the other part of that question, it's after harvest. Once you figure out what the crop size is and unfortunately that's not always the case. That would be a beautiful thing if that's what we could bank on but quite frankly the market is a futures market and there's a lot of folks that are going to be out here trying to figure out where are we going to be later on. Now, let's say we plant 92 million acres of beans, Paul. If we do and the bean crop looks really good and I do think that some of the early ratings for both corn and beans are going to come out pretty strong. A lot of folks are saying hey, things actually look pretty good. We popped out of the ground just like that, right? So when that's the case most of your producers are going to tell you the same thing I'll tell you, I would much rather have my corn go in the ground a couple of weeks later and pop right out of the ground than wait for three weeks to see it come up. And so I do think your ratings will be good. If your ratings are good with 92 million acres of beans potentially then all of a sudden people are going to start saying, well maybe I need to back off just a little bit on my huge projections.

Yeager: We'll discuss your windshield tour in Market Plus, so stay tuned for that after this. Let’s flip to livestock. Cattle on feed came out this afternoon before we taped. You had a good word for the -- you can say it on television I think.

Bennett: I don't remember which one it was. It's a bad deal in my opinion. Obviously the thing about this cattle situation, we didn't need bad news today. It's been rough here. But the thing is that demand is still pretty strong and so some of these folks have been buying fats in the mid-140s, you don't see that on the board. You've been hearing about feeders being sold for $200 in some places and you don't see that on the board by any means. And so the cash market is still pretty strong but you've got to think that 99% placements are not going to be friendly to the market, at least to start the week. Are we going to find some sort of a bottom in here? My thought process is that we will. But I am more friendly when you get farther out into the year. Fourth quarter, especially into the first quarter of next year I do think that your numbers are going to be low enough because we pulled a lot of these cattle forward, I've got to think that you're going to see much higher prices for fats whenever you get six to nine months away from here.

Yeager: You mentioned 99% placed in April, marketed in April was 98 but the on-feed was 102%. where are they coming from?

Bennett: That's a really good question. The thing is I think that you're feeding a lot of animals, you're feeding some cows, there's a lot of folks that are trying to figure out how am I going to be able to get some of these off of feed here pretty soon because you're running out of corn that you've already had on hand, if you're going to be buying $8 corn I think you'll be okay marketing at $13.50 instead of pushing to 1500 with some of these guys. I know I heard about some folks selling some for 14 weight cattle this week and got $142 earlier in the week. That's a pretty good price yet. But they typically feed them to an even higher weight than that. So what are they going to do? I think that they're going to go ahead and get them off hand as quickly as they can just because the cost of feeding them is so high.

Yeager: Hog market up almost, more than $8 this week. Talk about a market with a bunch of lives.

Bennett: The hog market was sold off absolutely with reckless abandon. The funds dumped hogs. We went under all support levels and basically a V bottom come flying back out of it this week and then you run back up $108, $107, $109 levels. To me it's a pretty healthy rally. But are we going to get back to the $120 level? Personal opinion is no. Anything is possible and I would tell you that if I tried to make a living trading hogs I probably wouldn't do so hot. But bottom line for me is that when we were at $120 last time we were here I think a couple of us both agreed it's too rich and we didn't want to buy them at that level. I think you hang out here, maybe get into the low 1-teens, that's about as far as I would take this hog market right now.

Yeager: All right, Mr. Bennett, thank you sir, appreciate it.

Bennett: Absolutely.

Yeager: We will keep talking to Matt. We have a whole line of your questions that have come in via Facebook and Twitter. But that is going to do it right now for this installment of Market to Market. We're going to keep going in Market Plus so join us there. Find that free on our website of Podcasts make the perfect companion in the cab, vehicle or at chore time. Download and go with any of our three offerings including the M-to-M. Check where you get podcasts to also download our Market Analysis, which we just finished, or Market Plus, which we're just about to do. Next week, we look at the costs after the flood is gone. Thank you for watching. Have a great week.



Trading in futures and options involves substantial risk. No warranty is given or implied by Iowa PBS or the analysts who appear on Market to Market. Past performance is not necessarily indicative of future results.

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

What's the most complex industry on Earth? It's not genetics, or meteorology, or logistics. It's a business that involves them all. It's farming. Thank you, farmers, from Pioneer.  


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