Market Plus with Ted Seifried

[Paul Yeager] Welcome back here at our table for the Friday, June 18th, 2025 installment. Ted Seifried. Ted, first off, thank you for coming to LeClaire, Iowa with us.

[Ted Seifried] Oh yeah. 

[Paul Yeager] That was a good time.

[Ted Seifried] That was a really good time.

[Paul Yeager] Did you get stuck in the tornado like we did or tornado warning?

[Ted Seifried] It chased me. I was going the opposite way, so it chased me the whole way. But luckily for fast cars and quick driving. I avoided it and managed to get into a garage before the severe stuff happened.

[Paul Yeager] Good for you. I want to let you know in the in the newsletter this week we talked about the next event we're going to have, and it's the last event celebrating the 50th season. Subscribe to that Market Insider newsletter. We'll tell you the details of how to join us for this last one. It's a biggie. Speaking of big, we've had a nice little rally in hogs. Let's see if it can continue with this lead off question. Matthew wants to know, Ted, how long do you see the hog market staying up, and how do you see the year finishing?

[Ted Seifried] Yeah, I'd like to see I'd like to see the hogs go back up to those highs. Right. If you look at a chart right now, for the most part it looks like a correction in an otherwise bull market, especially because of where we've just held and that bounce that you've talked about kind of says, hey, that was just corrective in nature. The underlying fundamentals for hogs, I think are still fairly friendly. The big thing about that is that we're buying, like, you know, the American consumer is not afraid to spend. So, it's a little bit of a drawback on pork because, you know, it'd be great if people were to want to save a little bit money and go for the cheaper cuts of meat, i.e., look for pork, but at the same time, we're buying everything, right? So, I don't think it's mutually exclusive. And so yeah, I like the upside potential for pork. We are doing business with China and Mexico and our bigger pork buyers continue to be on that export sale sales sheet. So that's helpful. Yeah. No, I'd like to see us go back up and test those highs.

[Paul Yeager] We talked about live cattle. Let's talk about feeders. That was the one that was off this week.

[Ted Seifried] Yeah.

[Paul Yeager] What's going on there?

[Ted Seifried] Well I mean that was really because we were down sharply on Monday. But then we came back like gangbusters on Tuesday and Wednesday. And then kind of tried to go lower on Thursday and Friday. But both days bounced off the lows, especially Friday. We ended up closing $3 off the lows and it is just sitting right underneath. These highs actually did make a new high, but didn't make a new high. Close throughout the week. To me, that looks like a market that is kind of collecting itself, fixing the overbought condition of the Relative Strength Index and getting ready for more highs. You know, and that's all stemming from the fact that the American consumer's still their appetite for beef, despite high prices is still very, very strong.

[Paul Yeager] Let's discuss. Now back to the farmer who's looking at inputs. Because that would be everybody. Yeah, Ethan in Kansas wants to know inputs are high. Grains are cheap. Where's the light at the end of the tunnel.

[Ted Seifried] Hi, Ethan. Yeah, that is I mean, look, and you can you can talk about land values. You can talk about everything that everything that goes into the cost of production for corn is really high. And now we have low prices. I don't know, you know, a lot of global unrest has been part of the reason why input costs have been as high as they are. You know, Russia's part of it. The Black Sea area or the Red Sea area. Really, all the issues the global conflict has created problems for different input costs. And I don't know if that's going to change anytime soon. You know, markets do what markets do. Right. And that is if the market feels like we have sufficient or more production than necessary, than the low prices are a function to try to slow down production. And that might come in the form of not necessarily less acres, but less inputs applied. Right. And therefore, lower yields. And I do wonder if that might be a thing for next year if we're going to stay down in these lower prices for an extended period of time, or even continue lower, I hope not. So, I don't know. The markets do what they can to sort of fix themselves. I guess I'd like to see input costs come down, but I don't I don't really get the strong feeling that that's going to happen in the very near future.

[Paul Yeager] This one's very specific. Louise in Kansas wanted to know about inputs on the break, even on wheat, she says right now it's at 720 a bushel making a 54-bushel yield. According to the K-State economist Dan O'Brien. Where are we going with that cash price now at 450? And how long can we last?

[Ted Seifried] Yeah. How long can we last indeed? And again, a function of the market when you look at the USDA's balance sheet and domestically, we're talking about almost a billion bushel carryover in wheat. This is the market screaming hey, we want to produce. We want you guys to produce less wheat. So, when you have that break even in the negative by as much as it is, again, that's the market asking for something. And I guess, you know, when that changes is when the fundamentals change. If there is like we talked about in the main program, if we were to see a significant increase in exports above and beyond the increase that the USDA just made Tuesdays ago, then we can start talking about a tighter balance sheet, then we can start talking about, hey, the demand is there. It's going to offset some of this big supply. And we should start talking about higher prices. But until then, this is a market that wants less supply because a billion bushel carryover or near a billion bushel carryover domestically. The market is saying that's way too much.

[Paul Yeager] Well, let's talk about those that are in long and short positions. Phil wants to know from you what do we think it's going to take for traders to get out and start getting out of their short positions?

[Ted Seifried] Well, hey Phil, I mean, depends on what the who the trader is, right? If you're if we're talking about funds, which I'm suspecting, that's what it is or what Phil's question is, is I mean, they're mostly technical traders. So, you do things to break technical resistance levels, and all of a sudden you have short covering happening. And, you know, corn was working on that actually pretty hard this week with that almost textbook. Key reversal that we had on Monday. Now I say almost because the qualification for a key reversal would have been that we had to close over Friday's high or yeah, close over Friday's high on Monday, we closed directly on top of it. So, we were one tick away from having a true textbook reversal. Either way, that it was impressive day and that got the attention. We saw some follow through short covering throughout the week, but by the end of the week we ran into the upward end of this downward trending channel and we didn't break it. So, for now, I think that funds probably are going to be done covering their short positions unless we come in Sunday night into Monday with another threatening forecast and the market starts higher or gaps higher and breaks that technical resistance level, then you can see this next round of short covering. But if that doesn't happen, I don't know. You wonder if that might have been the extent of it. Now as far as short covering from producers, farmers, hedgers well, I don't know. That's a different mentality, right? That's not necessarily a technical thing. That's a does my crop look bad? Do I really believe the Twitter pollination issues, you know, things like that?

[Paul Yeager] I have questions that match up with what you're saying. Can I give them to you? 

[Ted Seifried] Sure.

[Paul Yeager] All right. He reads ahead. He's very smart. Ted. Always studies. All right. I have two, Mikes in Iowa. They're two different people. Trust me. One's from eastern Iowa. One's from western Iowa, Mike. And eastern Iowa wants to know. Corn crop looks great. I'm hearing some having. I'm hearing that some are having three ears. Are we on the brink of dropping off the cliff? And then Mike in western Iowa says, how serious does the pollination issues have to become for funds to take notice? How soon till it matters? August or post-harvest. So, you have these two things out here, Ted, playing in two different parts of the country. Two parts of Iowa, Iowa. What do you make of that?

[Ted Seifried] Well, hi, Mike, and hi, Mike. Hi, Mike's. Yeah. You know, and I think the market's trying to figure out what to make of that as well. The three year thing. Hey, look. And Rose, I've seen it too I bet you go I bet you if you go, you know, 30 paces into the field, it's you're going to see a little bit of a different story. But I do think we're going to have some viable second years this year. At least. That's my feeling at the moment. I'd like to get out there and look for myself a little bit more, which I will do fairly soon. But yeah, I mean, if, you know, I don't want to give a whole lot of credence to like, these big yield numbers that we've been hearing from some private analysts. But if we are headed into that neighborhood, I think it's too early to say. But if we are headed into the upper one 80s for a national average yield, then yeah, we do have quite a bit more downside work to do for that corn market. I would say. But on the other hand, if these pollination issues are much more rampant than what we've seen in the past. You know, and all of a sudden we're talking about a 176 177 national average yield. Well, that's a really good reason to go higher. So, I don't know. I've been really, really struggling with what to make of the whole pollination issue and the wrap being too tight. And you know, it would seem to me that that might be, you know, one genetic specific, but it seems like that isn't what's being talked about. So, I don't know, you know, I mean, part of me wants to say, like, look, we find problems with the crop every year, and this is just like the absolute nitpicking of it's the last thing I can find. It makes me wonder how many of these years that we're seeing pollination issues are, are second years, you know, and so I don't know, I again, I'd like to go out and see it for myself. But when the market will figure that out is really after we get out there and combine, you know, I don't think the market's going to really buy into the story of pollination issues until much later in the season. If it is actually a thing. And the other thing, and I said it during the main program, it's funny to me to watch social media, social media, talk about pollination issues that, you know, here, look at this. But at the same time, talk about, you know, weather for pollination two weeks from now, right? I mean, pollination issues. Well, you can't go out in central Iowa and look for pollination issues right now because it is pollinating right now.

[Paul Yeager] But you could I think what some people are saying who are east of where you are at is that that crop is delayed. The Indiana, Ohio, Pennsylvania area is delayed. And maybe that's what's impacting it. I mean, do you is that a plausible explanation?

[Ted Seifried] So I was in Indiana two weeks ago, and I'd say 30 or at least every third was, you know, in through Lafayette, every third cornfield I saw was pollinating at that point, I would say they're there now. I don't know about Ohio. Yeah, I don't know. I just I really get the feeling that the, the areas that I think will be most concerned about will be past pollination by the time the really big hot and dry forecast that we were looking at on Friday comes into play. But, you know, look, it doesn't have to just be during pollination, hot and dry can have a lot of effect on crops. It can still do damage after pollination. We saw that last year. So, as I said earlier, you know, this is the most threatening short-term forecast that we've seen so far during the growing season. It's going to get a response from the market. Yeah, we had some long-term forecasts at the beginning of the growing season. You know, April May time frame that were calling for, you know, potentially the worst drought that we've seen since 2012. Well, those never really came to fruition at least the first half of the growing season was not that way. So, there's not a whole lot of trust in the long-term forecasts. There is trust in the short term. And so that's what it's what's getting the attention. And by the way, Paul, I know, I know, we've never successfully predicted a drought correctly in April or May. So, I guess looking back that shouldn't be a shock.

[Paul Yeager] So Boyce, he just answered your question because he was talking about long term weather outlook.

[Ted Seifried] Sorry,

[Paul Yeager] You just answered that one. So real quick if you could.

[Ted Seifried] Yeah.

[Paul Yeager] Ethanol. Do you feel that that has a little upside as oil continues to stay below 70? And there's this low price right now.

[Ted Seifried] Well it's nice I mean if we're if we're going to continue on with a 50% tariff on Brazilian imports, that means more domestic demand for our own ethanol. I like that. And I, you know, with consumers habits on summer driving season and everything like that. No, I think ethanol looks pretty good. I think the whole demand side of the corn equation looks pretty good, I will say, because you asked me to be quick. That part of me wonders if that was because of the quality of this past crop, and I do wonder if some of that that demand will stick around for next year. That dry finish for corn did cut into production, but it made for a very, very productive crop. Great ethanol margins, good feed margins, great travel ability, great storage ability. That's why I think one of the reasons why the export market was a lot hotter than what we had originally been expecting. I do wonder if that carries over into next year or not, but we'll see.

[Paul Yeager] You left off one great. It's great to see you.

[Ted Seifried] Great to see you too, Paul. Always a pleasure.

[Paul Yeager] All right, Ted Seifried everybody. Thank you. A reminder, as I said at the beginning of this, to get signed up for that Market to Market Insider, make sure you open it when it comes, because we have all sorts of great things in there. Sign up at Markettomarket.org. Next week we take a look at a simple strategy to lower temperatures and open up miles of new habitat, and the commodity market analysis with Naomi Bloom. Thanks for joining us and have a great week.

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