Cattle Market Questions Remain As Crop Size Guesses Shake Out

[PAUL YEAGER] Welcome to the table for the. Friday, August 28th, 2026 installment of Market Plus Brad Matthews. Back with us. I think the last time you were here, we talked about the time and how quickly things go that just happened in the TV show to you, didn't it?
[BRAD MATTHEWS] It did very fast.
[YEAGER] But you were so wrapped up in the numbers and the details, and I meant what I said about people having to go back. That's the beauty of the transcript. Beauty of going back. You've been throwing some serious numbers out and people have got serious number questions for you here. Are you ready?
[MATTHEWS] I'm ready.
[YEAGER] I won't say we're going to play rapid fire, but we're going to go close. Let's start with Birger in Nebraska. He asked on X corn prices have only gone up in August of 96, zero seven, ten and 20 each were followed with significant rallies. Your thoughts on 26?
[MATTHEWS] I would imagine it continues. I will say this we are due for a break and with the funds being as long as they are, I would imagine at some point you get a good break. And let's not forget the old saying about bull markets, death defying breaks. We are due. For one, there's been no real break. But in the long-term big picture, do I think we're going up over time? Yes, because we have to ration, at least in my opinion, 3 to 400 million bushels of corn. If the pro farmer number is right, 500 million bushels of corn needs to be rationed.
[YEAGER] Not trying to put cold water on the crop tour, but traditionally that has been a little lower than what USDA. And you could argue it's two different discussions. Is it USDA or is it the reality of it's just not a big enough sample size? Looking at crop tours, they go to a lot of places. They do cover a lot of fields. Are you in a camp for either of those putting water on?
[MATTHEWS] I would not be shocked if pro farmers close. And if they're not, let's just say that the couple bushels lower than USDA is what they say on average. Let's just say it's a 175. You still have, what, 500 million bushels coming off the carryout, taking you down to the one on ones? Yeah, that's a lot of bushels that we need to ration to add back.
[YEAGER] Well, so then Brad in Nebraska wants to know, has the corn market already put in that harvest low?
[MATTHEWS] The harvest low came on June 30th. The crop report day was the low. We are supposed to go up in June. We did nothing but go down every day in June. So that was your first kind of seasonal move. As I said, they're vicious. Right? So, you had the vicious kind of seasonal down. Now you're having the vicious kind of seasonal up our what typically happens in middle August to early September low. That was June 30th. That low should not get taken out for a long time.
[YEAGER] All right. So that's we've been talking a lot of fundamentals. This is a technical question here a little bit. Boyce in North Dakota wants to know. I see the December Corn daily chart left a gap on Monday. Are the funds going to be more concerned about going back down and filling that gap or continuing the rally?
[MATTHEWS] They're not going to be concerned about filling that gap. Not yet. That gap will get filled at some point in time, but they're not looking at that saying, oh, we got to just go down there and fill it. They tried to that day we were up 15.75 in that Sunday night overnight. That day, we went down and retested and got to only three higher before closing up seven and the next several days. Pop, pop, pop. We got within a penny and a half of filling that gap that was showing you the strength is because it tried and couldn't. Yeah, maybe six months, nine months from now it fills it, but it already tried to fill it. And they're not looking back trying to fill that gap right now.
[YEAGER] What causes rationing to happen? Is it price only?
[MATTHEWS] Well, it's yeah, mostly. I mean it's getting priced high enough to where they look for other things. It's too high to purchase. Or they're going to look for substitutes. Something different to fill in. Right. And the faster you go up, the quicker you can get to that rationing. If it's going to be a grind, it takes a longer period of time to ration that demand. But yes, price is the biggest factor in rationing.
[YEAGER] And it could come to two commodities. Yes. You mentioned I mean, it could be three. The big three that we talked about on this show could be, all right, let's do Dan in Nebraska if we could. How much of this pressure is driven by a fundamental crop size versus macro forces like the strong US dollar and the Godzilla, El Nino?
[MATTHEWS] I feel like we have everything really going on. You had strong demand before the supply issue. So, demand in corn is basically at a record. It's fantastic. Then you go ahead and throw a supply issue at it. And then the macro issues, the geopolitical issues, which is the Russia, Ukraine and the Iran-us war. All of those things are on the friendly side. If the El Nino really plays out, that's just another factor because a huge contributor for soybeans to China, for corn, for the export market, if they don't have the production that they need to have out of South America, things can get really interesting. We're a ways away from knowing anything about that, so we can't really talk about that yet. But that is just one more thing that could be part of the perfect storm in this bull market.
[YEAGER] Yeah, the South America side of this story, we haven't really discussed. I mean, that wasn't it was a good crop, very good crop. But they're going to have to do really good to contribute to this global pile that we need. Yes. And is the El Nino down there is different than the El Nino is here in the United States.
[MATTHEWS] Yeah.
[YEAGER] What is the headline that I need to watch in South America? If I'm a North American producer?
[MATTHEWS] El Nino typically is not great weather for a big portion of Brazil. La Nina is typically bad weather for southern Brazil and Argentina, which we've seen in the past couple of years, and it has dinged their yields a little bit, but very good for the rest of Brazil. El Nino is the opposite. So, if it's a very strong El Nino, they're at risk of a big portion of the growing area of soybeans and corn in Brazil, of having risk for production, depending on how that actually plays out. We are a ways away from that right now. But that is, as a farmer that you're watching is to see what type of weather pattern they're calling for. And if they have that hot, dry one, China's not going to stop buying from us. And then when people talk about the risk of canceling purchases, if they have a problem over there, all these purchases are going to look dirt cheap. There's going to be nothing to cancel.
[YEAGER] Which is a move we've seen before. So, Gary in Wisconsin has the wary eye and a take on a classic statement here. Brad, if this is up on the escalator, how hard is the down on the elevator going to be?
[MATTHEWS] Well, they say you take the stairs up, elevator down, and that day will come. We're a ways away from that because if you were to take the elevator down right now, you're not fixing the number one problem, which is we got to ration demand until you start to ration demand. I don't see how anything changes. So, we to me have time. Yes. There's going to be liquidation at points in time and breaks in this market at times because the funds are very long. When that day comes is most likely when we've gotten up quite a bit in price. We've seen rationing taking place. We're building back into the carryout. Then you tell me we're planting 98, 99 or 100 million acres of spring, and if you don't have a weather problem, then it is absolutely look out. Funds have mass liquidation to take place. But I think we got a ways to go before we're there. But that day will come.
[YEAGER] I don't have a 27 specific question to ask, but I guess we're to that time of year when you're looking at prices at 27 going, well, that's more profitable than I was a year ago. Where are you at on 27 purchases right now?
[MATTHEWS] I still believe or plan, I should say I still believe 27 has got to go up. I mean, with where inputs are, the fertilizer prices and what we're talking about, we haven't really seen rationing take place yet. I'm slow to be too aggressive. It's hard to sit there and tell somebody if they're profitable not to sell 5 or 10%, right? You can't sit there and say, don't sell anything. But to say, I want to get the 50 or 60% in 2027, to me, you're just starting the bull move. You're just starting a big change in market environment. We had 3 or 4 years of nothing but bearish, bearish, bearish. Everything has started to flip onto the other side. And I think you get a little bit longer in this cycle. So, I'm a little slow to get too aggressive yet.
[YEAGER] Well one market that's had a good run has been the cattle market. And that is Scott. And Iowa wants to know is there any hope for that cattle market or should we just expect to lose $600 a head on fat cattle that are ready to go within the next 30 to 90 days?
[MATTHEWS] I don't have a ton of hope. I think we're due for a correction in the market because it's been so much down, and I think we can get a rally. I mentioned that 225 in October, but I'm not going to get bullish. Bullish. You know, I can think you can get a short covering rally. But I think you got to take advantage of it. Absolutely.
[YEAGER] I asked you about diesel and I teased that we were going to do fertilizer. So, let's do that question now because I do want to get into that topic. If we could Stephen Nebraska wants to know how high will fertilizer get with this little rally?
[MATTHEWS] I don't know the answer to that. I say how high fertilizer. It feels like it's probably got a little bit more upside, but some of the Iran US situation is going to impact that too, right? I know that there's talks again, I don't know what to believe out of that situation. If the straight gets opened up fertilizer prices, when we saw that straight could open up the last time we saw that dip down a little bit, got a little bit better, a little bit more competitive in price. So, it depends on what happens there. And I don't know that I know the answer to that.
[YEAGER] Well, then it becomes an issue with fertilizer not on a supply side, but becomes a demand side. Because if we're going to increase corn acres and we're going to lean into a rally or a bull run that we're on that you've been talking about, then that creates the other economic pull on this market. And it's not a supply. Then it just -- are we going to say that the headlines of March and April of 2026 were nothing compared to what could happen? I on fertilizer.
[MATTHEWS] I guess that's a great question. I mean, you bring up a very valid point. That is, if you get prices high enough to where they can afford and not cut back on fertilizer, they're going to want to pay because they can afford to pay it. So yes, I think that's something to pay attention to.
[YEAGER] And then we're back. We're back to where we were. I mean, what what's old is new again and vice versa. I mean, here it is. We're I can't believe we're even discussing about that. All right. Another market, at least the market that led us this week was the wheat market. And Jake in North Dakota wants to know what will it take for wheat prices to stall. Is it only up from here based on what's happening in the Black Sea?
[MATTHEWS] I mean, what did we see a couple times? There's this peace talks or we're going to we're not going to attack each other. We sent a letter over to Ukraine. We sent a letter over to Russia so that we can let ships move. And you have these breaks in the market. But then, no, we're still attacking each other. So, it is very much headline driven. That is the most headline driven market we have right now. If there's some type of cease fire, the highs in for a while, right? Or if there's even talk that they're going to meet again about a potential cease fire, we will pause the market. We'll have a break. It'll go sideways until we learn more. If they continue to attack at the rate that they are right now and with no slowing down, yes, we will continue to go up. Now, you do have to remember at some point in time though, just kind of like, you know, back four and a half years ago, we probably saw the market got numb to it, right? We went up, we went up, we went up. And then two days later, there's still more bombing, still more attacks. And the market's actually going down. It will price itself in. It will get numb to it at some point. But we're not quite there yet.
[YEAGER] Because what did change? Why is this different this time?
[MATTHEWS] Not a lot has changed.
[YEAGER] Because it appears to be the same headline, same targets, same type of targets. That hasn't been a change. Russia still produces this. Ukraine still produces this. It's still the impact on the market. They had a good year. They just can't get it to the ports. Is it because of Europe's drought situation? Is that what this big change is about?
[MATTHEWS] That doesn't help, but I think it has more to do. When you talk about the ports, people are starting to finally realize the amount of damage done to the ports. Did not being able to ship it before it was just attacking, you know, different things. They can't ship it. And now Ukraine, from my understanding, was trying to be able to move it more by rail. And Russia is starting to attack some of those bridges to make that more difficult. So, it's not that they don't have the crop, but if they can't get the crop out, and then how long does it take to change that infrastructure to get the crop out at some point in time. And we're probably a little ways away from that. So that's the biggest issue.
[YEAGER] We're going to close with this of corn, wheat, soybeans. Which one are you protecting the quickest come Monday morning?
[MATTHEWS] Price wise? 
[YEAGER] Yeah. Protect. 
[MATTHEWS] I'd probably be quickest to protect wheat to be honest with you. Even though you can make the case to have it be the most explosive. It doesn't have the fundamentals outside of the war there. So, if there was a change there, that's your black swan. If for some reason, which I don't foresee happening. But if for some reason Russia and Ukraine come to some peace deal and the war is over, that market's over.
[YEAGER] Yeah, yeah. And then the others, because the others have other factors. Not just relying on one.
[MATTHEWS] They have actual supply and demand driven markets.
[YEAGER] Very good, Brad, good to see you again.
[MATTHEWS] You too.
[YEAGER] Thanks for making the trip. Always kind of fun. Brad Matthews, everybody. Next week we are going to talk about beating the heat, the growing danger of extreme temperatures in the west, and Ted Seifried is going to sit right over there. Thanks for joining us. Have a great week.

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