Market Plus with Dan Hueber

[Yeager] Welcome back to the Friday, June 27th, 2025 installment of Market Plus. Dan Hueber is with us now. Dan, I I've told you this before and I mean it. I always enjoy reading your commentary because you give me lines to set you up and it's perfect.

[Hueber] Segways into things. Yes.

[Yeager] I didn't feel it was appropriate to do during the TV show, so I think it's a perfect opportunity to do it now. On Market Plus, you mentioned almost squirrel like reactions to the market right now. We but you then said during the show, there's so much items out there that should be driving us higher that that aren't. How is the squirrel mentality of oh, oh something over there, something over there? Not in jive with the negative nature of the market.

[Hueber] Keep it. Keep in mind that that squirrel mentality is a very short attention span, so it may react to something, but it's so quickly forgets about it, it just kind of goes back and we languish, I guess would be the best word, you know? And again, the corn market is the perfect example of this year. We will get excited every now and then, but it's almost always temporary and a lot of things you would expect to have generated a reaction in the corn market just really failed to do so this year. So I think, yes, it's tired. You know, we've been two and a half years lower, almost three years lower. So I think it's just a very worn out. Bulls have just been beaten, beaten beat. And they're finally giving up. And I think that that final give up, you know when you look at the large specs right now they are short a massive amount of corn. So I mean they're counting on this crop season just being perfect the rest of the year out. So if there's going to be an element of surprise, you know, it's probably not going to be in their favor.

[Yeager] Okay. Well maybe it's in the bean market.

[Hueber] Could be in the bean, yep.

[Yeager] Yeah, let's let's take a look at a couple of questions. Let's start with Boyce in North Dakota. He has two. First one the funds are net long beans, which usually means it's time to sell. But the futures chart does not look like a sell signal to me. What should we be doing with soybeans?

[Hueber] Well, keeping in mind that it's only been a week that they've been long beans. So, I mean, they were short a week ago. Two weeks ago. I didn't see the numbers here this afternoon. If they have eliminated that long position now, which could very well have been here with the performance in the last week. So it's you know, I think the bean market, if there's any that has a possibility of seeing some excitement really build in there. I mean, one, you've had oil been pretty responsive. And granted it's backed off here this week. But I mean, the change or the the the new guidelines on the renewable fuels gave that oil market a nice boost. So I mean, that element could help us out. The other is I think we tend to forget we're down 3 million acres on soybeans this year. So I mean, you've already kind of set the set the stage to where if there is an issue and again, if is a huge word in this category, but if there is an issue late July, August, you know, when you get into the critical months in the soybeans, you could still see a pretty good response in soybean market. So I'm not anxious to get terribly bearish just yet on soybeans.

[Yeager] And you hinted a little bit of another story that's going there. You mentioned 3 million acre change. But the stocks is the story that doesn't doesn't seem to be resonating.

[Hueber] Doesn’t resonate. You can say the same thing in corn less to a weed. Weed's the only one where it's you've actually seen ending stocks start to grow. But you know, 350, 380 million bushel of beans is by no means a panic, nor is 1,000,000,003 on on corn. But on the same token, they're not burdensome. So it really would not take much of a shift in, in yield to really tighten both of those down. So it's yeah, I think getting too complacent on boy is bearish. It's never going to be able to change leaves you in a bad position this year. Just because if surprises come they're not going to be bearish surprises.

[Yeager] So okay fair enough. Well this is a technical question boys had a follow up. Are the soybean charts putting in a pennant formation. And if you could define what the pennant formation means.

[Hueber] Well pennant formation of course is when your range just continues to narrow down and narrow down, you know, you can break out either higher or lower from a pennant formation. But usually if you have if you shot up, narrow down a range, you tend to shoot up a second time. I really think the overall pattern on soybeans, particularly if you look on a weekly chart, has been more of just a massive sideways trade. I don't see so much of the pennant formation there. But if you look at November beans only, we've got a huge triple top at the same place. You know, almost almost identical in distance from each each of those peaks that we hit. Just just here a week and a half ago on the November beans, we backed off. So the old adage is, if you hit that a fourth time, it will always go through. So again, I still think there is possibility that, you know, we'll take the and again, I'm not I'm not going to predict what the weather is. But if a surprise comes, it's it's going to be a bullish surprise. I don't think you get a bearish surprise at this point because we've already factored that in there.

[Yeager] So we had Eric Hunt from University of Nebraska in the main program, talking about whether his conversation will be released on Tuesday, talking about it still looks like to him as a forecaster, July and August can get hot. Okay. Is that I mean, we get through pollination. We're pretty good to get to pollination. So how much weather story can there still be then?

[Hueber] Well, the you of course hot is I mean, granted if you've got enough sample and enough moisture, you're probably not going to do much damage. But you want to define this hotter than we are today.

[Yeager] Well, that's the thing. Exactly. I mean, any any time you have grain over growing over 95 degrees, that's stress on the crop, right?

[Hueber] Right. Yeah. So and as long as you have moisture accompanying that, it can handle that stress. But yeah, if, if the weather if the, if the moisture turns off and then you really continue with that hot pattern, it still could still could tend to excite things a little bit.

[Yeager] So all right well let's talk about some records because Jim in North Iowa wants to know Dan let's talk about them. Rainfall yellowing and fields lost nitrogen lower prices and eventually income. If there's a record crop what does that mean for farmers.

[Hueber] Well I mean it's certainly not a not a pretty picture. Now granted, record crop also means that, you know, you've got more bushels to sell. I mean, which there's an old adage you can yield your way out of a problem. I. Good story. I don't know if that necessarily always going to be the case, but but it just prolongs the agony, you know. And again, it really sets you up for next year at that point. Is that going to translate into another bad year. But you know, again, like I say after after 2 to 3 years of down prices, you're probably going to make some adjustments on on a worldwide basis. I mean, South America will probably have less incentive, particularly with the dollar under pressure. South America is going to have less incentive to increase acreage this fall. So, yeah, you know, 12 months from now. Yeah, I think we're looking at a different story. But, you know, we've still got to make it through this crop year.

[Yeager] So do we really think Brazil is going to lower acreage.

[Hueber] Well I wouldn't say lower. They're not going to expand as much.

[Yeager] Well, but didn't you say something about this week. There's a story. The soy moratorium. There was kind of a loophole that they found in the Amazon, which let me see if I get this right. The acres that hadn't been used. You can't plow up New forest to grow.

[Hueber] New rainforest.

[Yeager] New rainforest.

[Hueber] Right.

[Yeager] So then what does that mean?

[Hueber] But rainforest that had been previously cleared but has sat idle for a few years. So there are some trees regrowing on it. Those type of things that can be cleared and used again and would not fall into the category. You can't buy. And again, this is the grain companies policies. They would not buy soybeans that originated from clearcut rainforest. So you want again that's probably that just adds into the pile. Now granted maybe may or may not be economically viable to do that at these price levels, on a global on a global stance, probably the bigger risk of expansion down there is in what they call permanent pasture. You know, I think there is something 40, 50 million acres yet that could come into production. So I mean, those are very long term things at this point in time, but still Brazilian price to the Brazilian farmers is partially based on it's in relationship to the U.S. Dollar. And as the dollar continues to go cheaper, that makes it really just a less incentive for the Brazilians to to want to take the risk of increasing production or increasing acreage.

[Yeager] Well, let's stay positive, shall we? We've got two more negative questions here for you. If I could, Dan, Derek in South Dakota asked corn, how low can it go? But I want to go with Ronald's question in Iowa because he too is talking about corn. He says there's some saying about trying to catch a falling knife. Is that what's going on with this corn market right now?

[Hueber] People staying away from it? Certainly. I mean, that's just one of the old the old rules of trading is you never want to try to grab a falling knife, so you want to let markets let prices kind of settle out on their own. And then if you want to you do it from there. You know, here when you when you look at new crop corn, let's say, for example, I really think this 420 level December corn is a critical level of support. If we start breaking below 420, you know, boy, it's I'm underestimating just how bearish this is. But I think if you start to see prices stabilize around this 420 level here in the next week, you know the worst of it's behind us for at least for this between now and harvest time.

[Yeager] Can't believe I'm actually going to say this but is sub four possible? And what would the scenario be?

[Hueber] No other problem. Sub four certainly would be possible. So it it you know and again we're only talking about $0.20. $0.25.

[Yeager] Right. We're not that far.

[Hueber] So you know that's half or 5% you know. So yeah 5% drop would not be. But I think you would have to look at the rest of this growing season, look good and have a pretty rapid harvest. And certainly we could have a sub $4 corn this fall.

[Yeager] And we talked about beans a little bit that I mean, they were going they were looking close to going below $10 not that long ago. And they've been able to withstand. So does that give you confidence that corn maybe can withstand that other psychological barrier? The $4 barrier.

[Hueber] Oh, it's you know, certainly I mean psychologically, yeah, it's it's going to be challenging for now to take corn under $4 at least until we have the next crop in the bin.

[Yeager] Yeah. So fair enough. Thanks to Darren, thanks to Derek, Phil the rest of you who submitted questions. Always like to have you there. And thanks to you, Dan Hueber. Good.

[Hueber] My pleasure, my pleasure. It's great to see you as well.

[Yeager] All right. Dan Hueber, everyone and I do want to remind you to get signed up for the Market to Market Insider newsletter. It's free. Sign up at Markettomarket.org. Help us hit one of the key thresholds we're trying to hit their internally. Next week, they're going to have a conversation on the rural economy. Ernie Goss and Chris Robinson will be here. Thanks for joining us. Have a great week.

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