Market Plus with Jeff French and Ross Baldwin

[Yeager] Welcome back to the table for the Friday, September 12th, 2025 installment of Market Plus. That's Ross Baldwin. That's Jeff French. Glad to have you back here. You know, we totally were going to have this plan to really just talk only to Ross this week. And then we had Friday's report. I asked you on the show what was your biggest highlight? September is normally not a big headline maker. What changed?

[French] Well, I think it was the certification of the FSA planted acres. They're getting that report in quicker. Typically, we get them in October this year it changed and it was a you know it impacted the market. But the price action certainly didn't go I mean for corn to be up $0.10 on Friday with the most planted corn that we've had since 1936. I mean, you just you wouldn't think that ever.

[Yeager] That gives you optimism? Question mark?

[French] Yeah. Again, I think, you know, you got to see some follow through. You know, two more closes above 427 above that 100 day. I think. Absolutely. Because when you have a yield reduction from August into September, they've done it. You know, the last 20 years, they've done it nine times, six out of the next nine times. They go on to lower it in the October report. So that could have been factored into the price action. But you know, we haven't done above 178 or 179 and change nationally ever. So, we're making a big jump here. But we'll just have to see what the once the combines roll.

[Yeager] Well let's maybe put some water on the optimism and let's talk trade specifically with China. We're going to start with Scott in Illinois we hear current exports. Both corn and beans are above last year's and trend levels. With China absent. Wouldn't that make these current levels supportive if not, is that why we say we need China buying again? Could those could these higher export levels without China's participation be discouraging China's participation?

[French] Well, you look at current exports right now. I got corn and wheat above the averages. Beans are still below from my calculations. And, you know, we have the opinion that China has the September, October and most of November needs are already booked. So, you're already talking about a quarter of the year that they bought all their beans from Brazil. So, if you take, you know, let's just say 20% lower exports of the U.S. soybeans, you're potentially adding 2 to 300 million bushels back into the carryout. If we average 53 national average, which again, we're going to see that's a big number, especially for how dry we are. But the tariffs are hurting. There's no question I mean they put a 20% retaliatory tariff. When you add in all the other duties and VAT taxes that we're at a 34% tariff on U.S. soybeans into China. So absolutely, that's having an effect on the market.

[Yeager] Is what's the China are they buying anything meat related, protein related

[Baldwin] On the pork side? Yes. But on the beef side, no. And the beef side China, they haven't been buying any U.S. beef since this past March, which actually stems from an anti-dumping investigation that they opened into their country. Their producers were losing money and they wanted them to look at that and look at beef imports. And so that's largely what what's driving that. But there is also you're starting to see an impact from the Brazilian tariffs of Brazil beef not flowing into the U.S. because that is flowing into China now. It's always flowing into China. But they're sent a lot more beef into China now.

[Yeager] Okay. Help put that into perspective. We know what the soybean story has done with Brazil. What would that do for beef?

[Baldwin] I think it's a concern. It is a long-term concern that I have right now with Brazil seeking other markets, as they're not able to export beef into the U.S. because they are sending a lot more beef into China, and now they're sending a lot of beef into Mexico, a lot more beef. I believe Mexico was Brazil's number two largest customer this last month when we got the export data. And they're looking to get other regions in Japan to start taking Brazilian beef. So, it is a concern that I have down the road.

[Yeager] And you mentioned on the TV show about the lack of cattle, maybe almost a million head not coming to the U.S. Where are they going?

[Baldwin] They're staying in Mexico. And those cattle we do import beef. The U.S. does from Mexico. So those cattle, they will come into the U.S. via imported beef at some point. Now is it all 1.2 million head? I don't know I don't think it's that much. But you will see the imports increase from Mexico into the U.S.

[Yeager] Let’s talk James in Oklahoma. His question if we could for Jeff. With big crops, huge stockpiles and terrible prices, what crop and how many acres should people plant for next year? James says it almost looks hopeless.

[French] Well, it doesn't when you pencil it out with the inputs. I mean, it's an expensive crop and you're looking out at 26. You got corn below for 60. I mean, you got to have nearly a record crop to just break even. So yeah, I mean, I've been doing this 18 years and I mean, the public opinion right now is just especially with the grain guys. I mean, naturally, I mean, it's just I mean, thankfully we're going to have the yields this year in most places. But, you know, acres are going to shift next year. There's going to be big time. And just from a natural rotation, if you keep a 5050 rotation, it'll be heavier beans next year.

[Yeager] But we get back to the whole there's a lot of beans and nobody's buying them. Doesn't that make this problem worse next year?

[French] Well, I mean hopefully we get a trade deal done with China. I mean, here in the next 60 days. I mean, that can change the outlook drastically with a signature of a pen. So, you know, we'll cross that bridge when we have to. But you know, right now. Yeah, it's depressing right now, especially with the cost of inputs.

[Yeager] Well, Mike in Iowa is talking a little bit about what you're indicating with this large crop. Is this corn market at the bottom. And basis is not good. Could get worse. What though, Jeff, do we do with the corn that we can't store?

[French] Well, you're going to have to, you know, raise some funds. So, I mean, you sell it and you look to reown it out to March, May, July of next year on paper and volatility. Right now, you know, I think it's trading at eight nine-month lows. I mean it might have had a little uptick there Friday. But call options right now are relatively cheap for the length of time that you can buy them back. So, get some exposure on paper.

[Yeager] A couple more questions about the topic that you've been asked about a lot there, Ross. And Greg's question is for you. What a freeze in America help eliminate these Screwworm fly or increase likelihood of opening the southern border.

[Baldwin] I don't think a freeze completely eliminates it. The screwworm it's a fly like we all deal with flies. The up here in the northern region, it's less. It has less time to spread up here because the expansion of the screwworm up here would be spring, summer, fall. But through our winter, the flies are going to die. The as far as reopening the border, I think the biggest struggle gets to be is the entry point, entry points or ports down there where feeder cattle across the border. Most of those places, they average just right around 32 degrees, right around freezing temperatures just during their winter for a few months. So, you don't stay that cold there. But the biggest problem right now is in Mexico, not in the U.S. And so that's where I struggle. I think we've got to see to get that border reopened. I think we've got to see a lot more progress made in Mexico. And just from what I read into it, I think the USDA and Rollins, I'm not trying to put words in their mouth, but from what you see from them, they want to see this thing get pushed back down to the Darien Gap. And that's where these sterile fly production facilities that they're investing so much money into come into play. And how long that could take. But I think the as far as a freeze here, I think the bigger thing is just the risk that's in Mexico and not here, because we don't have it here yet.

[Yeager] Go after more of the source than where it's been spilling into.

[Baldwin] Correct. And that's where it was pushed down for so many years, was down on that southern border of Mexico.

[Yeager] All right, Scott and Wisconsin, Ross wants to know. Beef looks toppy to me. Do you agree?

[Baldwin] I mean, there's no question that these prices that we should all be concerned. I think if you're a producer, you need to have some form of protection underneath of your production. We all know these are historic prices. They're all-time records. They're not the new norm. These prices 370 feeders and $2.45 fat cattle is not the long-term norm, is it, toppy? I think short term. Yeah. It certainly looks like that for the last couple of weeks. But I think the thing that gives me a little pause is, as we know, there's tighter numbers coming. Keep in mind the end of June, live cattle sold off $13 and feeders sold off 20 before they went on some massive rallies.

[Yeager] Okay, one last thing, and this is part of our discussion earlier in the week. Did we not go high enough in this market?

[Baldwin] We potentially -- 

[Yeager] Could we go higher?

[Baldwin] Absolutely. We could go higher. Have we went high enough for right now? Yeah, it seems like it. But like I was saying at the end of June, live cattle sold off 10 to $12, feeder cattle sold off 13 to $15, live cattle rallied $35. Following that sell off between July and August, and feeders rallied $70. July and August. So, what it feels like today is very similar to what it felt like at the end of June. After that sell off, we've actually had a little bit of a deeper correction here over the last couple weeks than we did at the end of June, so we are at some critical support levels, I think, for nearby feeder cattle watch. 348 on the nearby level, if we would start to close below that, I think you could continue to see some aggressive selling, but there's some major support levels. October fat cattle held 229 their Tuesday low. I mean, there is some technical indicators on these nearby contracts that are important to watch here. Next week.

[French] Every break for ten months has been a buying opportunity. And why? Why does it stop now? I mean, I just I think it's got to be something, a headline type deal. I just I don't see with the economy right now the way it is, I just don't see why we'd put a high in right now.

[Baldwin] One point just to back up what Jeff's saying, it seems like it's going to take something fundamentally to shift this thing. On Tuesday, when feeders were down limit, live cattle were down 6 to $7. They didn't go down there limit of 7.25. But fat cattle started trading that day at 238 up here in the north. We rallied. Then Wednesday, Thursday, fats on Thursday were trading back up to 240. Now that's not anything crazy, but it just shows you the numbers are still tight enough that some knee jerk reactions happen. But cash is still strong.

[Yeager] Who's the most optimistic at this table right now about the grains or the livestock? Are you Jeff, you didn't sound very optimistic a couple of minutes ago.

[French] Well, I mean, let's get through, you know, 30% of harvest. You know, we are just starting this thing very, very, you know, in the small stage here. But we'll see here.

[Baldwin] I think the grain markets got some building blocks. I'm with Jeff. There's reason to be more optimistic today than what we've been for the last several months in grains low $4. Seems like it wants to hold on. Corn below $10 on beans, but I don't know how optimistic you can get for incredibly higher prices as we're heading right into harvest.

[Yeager] Good to see you guys. Thanks, Jeff.

[French] Thank you.

[Yeager] Thank you Ross. 

[Baldwin] Thanks, Paul. 

[Yeager] Ross Baldwin and Jeff French. Thank you very much. Next week we are going to look at the job of encouraging more women to step into leadership roles on the farm. And Arlan Suderman is going to be here to break down the markets. Thank you so much for joining us and 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.