Market Plus with Shawn Hackett

[Paul Yeager] Welcome to the table for Friday, February 20th, 2026 installment of Market Plus. Joining us now, Shawn Hackett. Shawn. It's a constant joke, but I mean it when I say I just want some good Midwest weather for you when you come to visit. If you would have come Monday, Tuesday, people were wearing shorts, you would have felt at home.

[Shawn Hackett] Well, I am glad to participate in what it means to be from Iowa, I really am. I feel whole now that I've had sleet, snow and had to take a foot of snow off my car. I really, really feel awesome about that.

[Yeager] I sure hope I get to see pictures of that here before the -- we'll put that in the Market Insider newsletter if they exist. But I want to start with the weather because Shawn, again, great questions. I said it during the TV show. Everybody was awesome. Let's go weather. First off, the top is a cycle drought still in play for the 26 growing season. Asks Dan in Oregon.

[Hackett] The only way you can have a cycle, which is a very serious drought, is you cannot have an El Nino arrive by July. As we said in the main show. 60% 60% chance that there's an El Nino by July. And as every month goes by, that's going to increase in probability. As it stands today, that's a pretty good probability that we're going to have El Nino type weather, which means cool, timely rains, which means Glassboro wouldn't be possible in this coming growing cycle.

[Yeager] Are there parts of the country that could be set up for a dry cycle?

[Hackett] Western corn belt, northern corn belt is where you would have the potential for drought, where the fires are. That area Texas for like where they grow cotton. That would be the area that if I was looking at a more severe drought, it's not the core I states, of course, but that's where I would be focusing on drought to be the case.

[Yeager] But as we found out from USDA, that corn belt kind of moving north, and if there is drought in the Dakotas and Minnesota, that does become a big.

[Hackett] Relative to last year's big yields that they had in those areas. For sure, that could be a a something that takes the top off the crop yields for being, you know, as high as they could be. It doesn't mean we're going to have poor crop yields, though. I think on a national average, it could still come out to be pretty darn good.

[Yeager] Let's keep going. On weather. We had a question about July and August weather, but I think you want to look a little further.

[Hackett] So okay, so even though this is a bearish thing for prices for the U.S., weather for El Nino, it's very positive for South American weather. Central northern Brazil can have really, really hot, dry weather for both the first half of the growing season for soybeans and the back half of the growing season for second crop corn. That's going to be a big story. In addition, India can have very, very hot, dry weather for their wheat crop, which would be another element to add if we have issues this spring, like we think, and geopolitics continues to be far afield. So there's reasons to be more optimistic about weather, influence on price, just not during our growing season.

[Yeager] Okay. And that's tied to then Glenn in Ohio's question, which is also very similar to what you talked about in the show. And if there is this good weather coming, act now, prices are going in a different direction. Glenn in Ohio wants to know, with an anticipated reduction of corn acres, expansion of bean acreage. Should a producer be more aggressive and hedging more of their production earlier in the year, the crop will be protected and heavily subsidized crop insurance products this year. So start with the first part.

[Hackett] I always believe if you expect a good crop year for weather, which I which we do, you're likely going to have lower prices in August and September than you do in the spring. I mean, that's just a fact of seasonality. And so if we're getting some momentum, we put some premium on wheat, we're putting some premium on soybeans. I think we can put some more premium on corn into the spring. You just need to take advantage. I can't predict trade deals. I can't predict geopolitics. They can come and they can go. I'm pretty good with the weather and ultimately the weather is going to be the driver of weather prices late in the summer or lower than the spring. I think they will be. And you need to be opportunistic, stay in the game, sell those prices on the higher side so that you can get to where the weather could be more constructive to price during the growing season in South America and in India.

[Yeager] Are you completely in the camp of new crop? We need to be making sales. Are we halfway home? By the time the planters roll on selling?

[Hackett] I would say, you know, right now I don't. The three year and five year moving average on corn is tended to be a very good marker to sell, make cash sales new crop that comes in at, I believe it comes in at 572. I'm sorry. 470 to 490 is your is the three year and a five year moving average. I would look at those targets. We're not that far off from it.

[Yeager] No we're not.

[Hackett] I would look at those targets at any time. We can push into those targets from now into the spring. I would definitely, certainly anything you cannot store. And certainly those bushels, you know, you need to sell to keep the farm going. You want to make sure those are buttoned up before the spring is done.

[Yeager] Are we done with all the old crop to are we holding any of that?

[Hackett] You can hold maybe 15 or 20% old crop just to catch up, you know, to catch some higher prices here in the spring. But I wouldn't have a whole lot of old crop left once I got out of May. I think you really an El Nino growing season is not going to be exciting for prices going into August or September, and you don't want to be that farmer that's selling the August September lows.

[Yeager] Well, okay, so Scott and Wisconsin's question if I could, this one's a little further. And I think it might tie into one of the things you just mentioned. But I want to make sure I have it right. Scott says with projected less acres of corn being planted in 26, are we setting ourselves up for a higher corn price in 27 and 28?

[Hackett] Then I want to be very clear. While I'm sort of negative, the grain prices for because of our summer growing season, I'm wildly optimistic prices are going to be much higher in 2027 into 2028 because remember, El Nino comes and El Nino goes talking about the cycle next year would not be an El Nino year. That's when we could have a much more caustic growing season for the U.S. And that's when we could potentially, with tighter supplies on corn and soybeans and better demand and geopolitics, we could really be looking at something much more exciting to the upside in 2020. It's just very hard to get excited about prices when you have a El Nino year coming up for the corn grain belt.

[Yeager] Okay, so maybe this isn't all about weather, Brian, and Iowa is not quite on a weather thing, but this is some of the other factors that are in his eyes for beans with an inverted market, do you hedge to arrive November 26th and roll if basis remains wide at harvest? And should we be a third sold prior to planting with no carry in the markets? I think we've answered that second one a little bit, but let's let's talk about that basis because we haven't quite yet.

[Hackett] Well, look, I think the basis is going to improve. We're talking about the EPA improving domestic demand. If we have a more certain demand from China coming from this April meeting between XI Jinping and President Trump, I think the demand side of the equation for us soybeans is going to create a better local cash basis than we currently have. And so you want to do everything you can to wait for an opportunity to set the basis while setting a higher futures price. So at this point, with a wide basis and a fairly attractive futures price compared to what we've seen, that's what you're supposed to do. You're supposed to lock in the futures price and look to lock in the bases at a later date when it comes together, and that's what I would be doing.

[Yeager] That's a lot of grain stuff to, to, to go through, Shawn. So thank you. But I need to step away to livestock for a minute. I told you, we're going to talk about dairy and I need to do that now because Stephen, Wisconsin. Just simple. What's with this milk price.?

[Hackett] Class four prices have gone from 14 to 19 in the last month and a half. Class three prices have gone from like 14 to 1718. What's been going on are two things. The U.S. has announced that they're doing. Another food box program like they did during Covid, not as big, but nonetheless domestic demand to help people who can't feed themselves. That got the market excited. Secondly, China in the last auction, these are cash auctions that go globally. They bought a they had the largest purchases of milk powder we've seen in many, many years. In fact, the milk powder price went up to the highest ever from one auction to the next. Also exciting the domestic dairy price. Those two things combined have really taken the sting off what was supposed to be an oversupplied market here into the spring. And from what I'm looking at it, things are only going to get tighter as we get into the latter part of the season. So to me, the worst part of the dairy story is behind us in terms of the low prices. And we're looking at now much more attractive prices.

[Yeager] But haven't we also been discussing this? When you say production, that usually means fewer animals because we have seen some of these dairy heifers go to the other side of the pasture and they're not going to the parlor. Is that still the case? Is that part of this discussion?

[Hackett] Well, it's kind of a weird situation because we're retaining more animals on the dairy because of the high cow price to sell into the beef market. They've been retaining these animals longer than they normally would, which has been increasing production a little more than they normally would, and fattening them up more than they normally would, and then getting rid of them. So this is what's been causing some of this indigestion of extra supply. But between Chinese demand and the U.S., demand for domestic food box program, that demand, combined demand has popped up. This extra supply and things only get tighter as we get into the back half of the year. So I really feel comfortable that we've likely made important lows and that dairy producers can be looking at a better economic time ahead for their prices.

[Yeager] Well, let's talk livestock. One more thing age. And then I want to get back into something else that we talked about on. Plus Joel in Oklahoma with no significant signs of large scale heifer retention and the average age of the American cattlemen nearing 60 are the current numbers for U.S. beef cattle herd. The new normal.

[Hackett] It is the new normal because we're not responding like we have in the past. Paul, we're not responding. And, you know, even if we were responding today, it would be two years away before we'd see the actual response coming in. So we are nowhere near doing anything to increase domestic supply, which means we're going to have to find ways to bring it in and be a, I hate to say it, a net importer, right, of beef. It almost seems to me like that's what has to eventually happen, or else we're just going to continue to erode the market share of beef protein, to chicken protein and to pork protein and that sort of thing.

[Yeager] Let's go back to the protein thing, because I cut you off. We were talking about the hog market, and we had a MtoM podcast about chicken and protein. I did not understand anything about this GLP-1 drug and the impact that it's having on demand for protein so dramatically that everybody like you is starting to go, hey, this is this is a thing. Explain this a little bit more to me.

[Hackett] 15 to 20% is a reduction in caloric intake from taking these GLP-1 second. And but that's mainly comes from reducing your consumption of salty sweet snack foods, alcohol, that sort of thing. But when you lose weight, you also been losing muscle, which is not good. So in order to not lose the muscle and just lose the fat, you have to ingest greater amount of protein so that you keep the muscles healthy and the body desires more protein. And of course, your best. One of your best sources for protein is beef, pork, chicken, and fish. And so we just got approval of a pill form of these GLP-1 before you had to inject yourself $1,500 a month. It was only for a certain segment of the population. Now that you can take. Just covering a good portion of it, the adoption rates are going up parabolically, which means the demand for protein in general, and especially meat protein is just out of sight. So we're very optimistic about the demand side for proteins going forward. And you know what they need more corn feed more meal feed I mean so it's a really good story when you think it through about what it means for corn, for grain demand and for meat protein demand.

[Yeager] I wish you liked what you did, Shawn. I mean, you just have no passion, no energy and anything at all. Great to see you.

[Hackett] Thanks, Paul.

[Yeager] Shawn Hackett everybody. Thank you so much. And next week we are going to talk about the increasing dominance of two row crops in the U.S. and the commodity market analysis of someone else who really likes what she does. Sue Martin, thanks for joining us. Have a great week.

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