Market Plus with Shawn Hackett

[Yeager] Welcome back to the table for the Friday, October 10th, 2025 installment of Market Plus. Joining us now with a refilled cup Shawn Hackett. I'm not going to tell you what happened during the show. I want you all to read the story that I will write when we are done here in the newsletter for Monday morning. How's that for a tease, Shawn?

[Hackett]It's great and it's a little further away. I think we're good for this.

​[Yeager] We'll be good. We covered quite a lot of ground in that program. I always appreciate how we can go back and forth, but there's a couple more questions that I think you might have some insight on. And we need to start. We didn't quite get as much into the livestock market, but let's start with Adam and Wisconsin. If we could, please. Adam wants to know what's the deal with the current dairy market doldrums.

 [Hackett] Last year we had avian flu, suppressed production. This year we don't have that. And we're getting a big rebound. 3 to 4% production growth at a time that we're seeing very weak demand domestically. When you put those two things together and it's happening outside of the country as well, we're getting prices under pressure.

[Yeager] So, we're not eating wheat, we're not eating dairy, we're not eating pork, I think am I catching the three food groups you've mentioned here just in your time.?

[Hackett]Eating less.

[Yeager] Eating less.

[Hackett] We're eating them, but just eating less. I mean, there's no question there's a consumer pullback in just about everything right now. Cars, homes I mean across the board. The consumer is pulling back. He's worried about his job and he's just not comfortable spending a lot of.

[Yeager] Who might be looking to cut down on the number of producing animals. And they sell. We saw it last year in the last year sell some of these steers on the dairy farm have been sold at pretty good prices. Do we see any sell off in animals?

[Hackett] Well, that is the big culling period for dairy is coming up here as we go into the first quarter. I expect heavy, heavy selling with the cattle market at this high price. Thank goodness for them. They can equities and they can cash sell those animals and offset what's now becoming a loss price for them.

[Yeager] Well Scott and Wisconsin remember the last time you came on or one of your last times where you came on and made a prediction. And we appreciate you doing that. But he just wants to find out what you think up here. When you were last on Shawn, you thought cattle would top out in the fall falls here. Are we topping out or taking a break from the bull?

[Hackett] The problem with predicting the market topping out now is we'd have to assume that either demand falls faster than it already is, and I don't think it will, or that we're going to get rid of the scrugham situation, which I don't think we are going to, and that we can be relied upon, that Lula and Trump are going to get rid of their tariff war, which I don't think we have any confidence in, given those three factors which are driving the cattle market going into the holiday season, very hard to predict that we're actually topping out. I'd have to back away from that forecast right now and say the way we traded this week, Paul, it almost looks like we might be ready for another run to the upside. Just the way we traded this week.

[Yeager] Well, there was a there was a sentiment in wheat that maybe oats was giving it a story on that because we have to look for any indication we have. But this one is Randy in Iowa. This one's a little different. I'm not sure I've ever heard this one. Can gold pull grains upward?

[Hackett] It depends why gold is going higher. If gold is going higher because of inflation, yes. If gold is going higher because of a lack of confidence in governments, where a lack of confidence in the global monetary system, then the answer is no. And I believe that precious metals, especially gold, are not going up because of inflation. The way we understand it, it's going up because governments are just totally losing the confidence by the consumer. And when we have all this unrest and tariff wars, it just allows for a flight to safety, which is what the gold market is. A flight to safety is not the corn market.

[Yeager] $4,000 is a pretty significant number. I mean, have we seen this before? Have history with it at this level?

[Hackett] Well, we're at record highs. But what I think if you think of what the gold market is, it's the global collateral that all governments then measure their debt against. So, we have gold, Europe has gold, China has gold. So, we revalue the gold higher than that collateral, that debt to equity improves. And that's what's going on now as the governments are revaluing the gold collateral against their debts to make the balance sheet look better. So that's more of the reason that I think gold is going higher, not due to inflation, but due to the fact that governments need to reset their balance sheets.

[Yeager] Well, we have some government resets happening between the U.S., India, China and that's our next question, Dan, in Nebraska, what are the consequences if India and China never buy corn or soybeans from U.S.?

[Hackett] I mean, the consequences are that we are going to have to find a new way to develop our ag market, meaning we've been an export driven ag market for a long time. And if we're not going to be selling to two of the most populous countries in the world, we're going to have to find another demand source, whether that's renewable diesel, whether that's ethanol, you know, whether that's just other ways that we can take. Think of this. The data centers are being built out. We need more electrical power grid. What if we just produced more fuels to fund to fuel the power grid? I mean, there's a lot of things I think we could do domestically that could help the demand side of the equation. If it looks like these trade deals or this demand is gone for the longer term.

[Yeager] There's always a push for trying to find new uses. I mean, that's been going on for agriculture. You mentioned culling of the livestock, and I kind of tiptoed around it a little bit in the main show about less acres is the American farmer going to plant a lot less of everything next year? And can they even afford to do that?

[Hackett] Can they afford to do that? I mean, like the money has to come from somewhere, you know, the ag banks, you know, they're going to lend money out if they think they can get a reasonable return back. And if we're at these prices or lower and we have no trade deals in place, and we have having this economy that's continuing to look very suspect, and crude oil is in the 50s, they're not going to they're not going to fund. Yes, the very, very high-end acres, the high yielding acres, the money will always be there for that. But are they going to fund those fringe acres, those acres that never quite make that big, big yield? I don't think they're going to do it, Paul. I think they're going to force feed lower acres across the board unless something dramatically changes with the current situation.

[Yeager] What's the change in the situation?

[Hackett] You cut trade deals that give you a bolstering up. You get weather problems. Obviously we don't want weather problems here necessarily, but weather problems elsewhere that drive the market up. You get the fed lowering rates, printing money to create the inflationary side of the equation that we had post COVID. You know, you need some of these factors to come in to get the price of grains. You know, a final the corn market would be fine. One and a half $12 soybean market would be fine. It just can't be, you know, low fours and low tens.

[Yeager] Well, there's back and forth with producers and other national outlets discussing with farmers who are talking about they're losing $2 a bushel on beans. And then there's the critics of those farmers saying, well, what kind of management operation are you doing that you're losing? That? Is that a realistic story that there are producers losing a dollar on corn, $2 on beans? And how is that even happening?

[Hackett] Well, you know, I think when you have very high prices and anything works, no matter how you run your business, you're going to make money when you have $8 corn or you have $15 soybeans. It's hard not to make them make a profit. But you do find that when the tide goes out, you find out who's naked, as they say. And what we're finding out. A lot of farmers weren't running their operations well, didn't have their costs really buttoned up, and are now going to have to seriously take a look of how do I rationalize, how do I use ag tech to my advantage? How do I use fertilizer where I only need it, not just throw it across the board? And that's going to be the hard decisions that are going to have to be made in an environment like this, for the good farmers to survive and grow bigger. And for those that can't do that, to go by the wayside.

[Yeager] You mentioned weather and we have another question, Adam in Wisconsin tied a little bit here. Weather could be a story somewhere. How about in other places? Angular momentum in the atmosphere is ticking up and La Nina looks to be happening. What's the big picture view for the upcoming winter and spring?

[Hackett] Well, for La Nina is likely to be in place. Weak line is likely to be in place with a negative global angular momentum. Like you mentioned through the end of this year. So that's a factor for South American weather for into the end of the year. And that means typically a very dry southern Brazil and very dry Argentina. And a very productive central northern Brazil. The problem is this half the soybeans are grown in the north, half the soybeans are grown in the south. And in Argentina. So, one has a one has big production, one takes it away. When you put the two together, it means production sort of offsets each other. And the best we've been able to get is a short-term rally on weather, but not a long-term change in the supply demand equation. That's the problem. Northern Brazil grows so much grain now that they never used to. That's very hard to get a material decline in South American production. If it's just Argentina and southern Brazil. But that could be at least a short-term catalyst to create some speculative short covering later on in the year.

[Yeager] Well, Bradley in Nebraska did want your weather report for Argentina and Brazil. What's their long-range outlook right now?

[Hackett] Well, the first half as I mean into the end of the year is dry, but we are going to be moving into more of an El Nino pattern in the second half of the growing season where they grow second crop corn in Brazil. And that flips. So now where it was dry in Argentina and southern Brazil, it turns wet. And where it was dry, northern Brazil, it turns dry. So, this would be more problematic for second crop corn, which is really the key crop for driving supply demand down in South America. So, if I was looking for a weather-related significant supply demand change in the market, I'd be looking at second crop corn in northern Brazil with a switch to more of an El Nino type pattern. I don't think soybeans get into trouble.

[Yeager] We're going to be in trouble for spilling water.

[Hackett] Fortunately, I think I did a good job recovering from that.

[Yeager] You did great. You did great in all aspects. Shawn. Great to see you again.

[Hackett] Thanks, Paul.

[Yeager] Appreciate it. Shawn Hackett everybody read more about his water adventure on our Market Insider newsletter, which is available every Monday. Sign up at Markettomarket.org. Next week on the TV show. We're going to crack that code for hazelnut production. We're going to have the market analysis of Dan Huber. Thanks for joining us. Have a great week.

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