Todd Gleason: 00:00

This is the February 13 edition of Commodity Week.

announcer: 00:09

Todd Gleason services are made available to WIL by University of Illinois Extension.

Todd Gleason: 00:14

Well, welcome to Commodity Week. I am Todd Gleeson. Our panelists for the day include Matt Bennett of agmarket.net. He's out of Windsor, Illinois. Arlen Suderman joins us from Stone Axe at stoneaxe.com in Kansas City, Missouri.

Todd Gleason: 00:27

And Mike Zuzlow is here from globalcalmresearch.com out of Atchison, Kansas. Komodo Week, of course, is a production of Illinois Public Media, public radio for the farming world online on demand anytime you'd like to listen to us at willag.0rg. That's willag.org, where today you can buy your tickets for the all day Ag Outlook. This is our thirty fifth annual event. We have a fantastic day planned with you.

announcer: 00:56

Many of our on air analysts, Sue Martin's coming in from Iowa, and of course, Mike Zuslow will come in from Kansas. So many more and the whole of the FarmDoc team too. In fact, I have a panel discussion set up with them in the afternoon. This is only the second time I've tried this with them. The first time was at a farm progress show a few years back.

Todd Gleason: 01:17

It's a lot of fun, and they'll be looking for a lot of questions from you all. Register today, the cost is just $40. Now let's get a list of items from our panelists that we should take up for the day. Matt Bennett is with agmarket.net. Matt, what's on your list?

Matt Bennett: 01:34

I'd, as we get into February here, you know, we've been setting crop insurance averages. Looks like we might be a shade above last year on corn. Clearly, quite a bit under on beans and getting out and talking. You know, I I'm definitely interested to hear what the other guys think on acreage. I'll, maybe let them throw a number first before I shock them with what I'm thinking.

Matt Bennett: 01:56

But I definitely want, you know, to take a break acreage, of course. And then I'm assuming we're gonna, of course, talk about some of the tariff stuff that we've got going on and what implications might be, whether we're talking, you know, Canada with the ethanol imports or, whatever it might be, of course, China. But, definitely wanna touch on those topics.

Todd Gleason: 02:14

Arlen Suderman from Stonex. Yeah. I think it's worthy of talking about the whole soybean demand picture, and I'd start with, and then, in fact, corn and other commodities as well. Whether what are the prospects of getting a trade agreement with China? Where are we in that in that process? And then looking at domestic demand, with so we've seen a significant slowdown in, the bio, biomass diesel production. Right now, it hasn't affected crush yet too much because we have, commitments on the products really lasting through this month. But as we get into March and April, it starts getting real shaky. And then I also was looking to talk about the acreage mix as well as we go into the 25 growing season.

Todd Gleason: 03:01

And Mike Zislow from globalcommresearch.com.

Mike Zuzolo: 03:04

Boy, not much to add there, Todd, other than, you know, wondering if the South American weather market is over now after the WASDE report, and then maybe could it be wheat's time to shine? You know, we gotta talk about wheat if it's, Kansas and Mike Zuzlow Commodity Week.

Todd Gleason: 03:17

Indeed. If it's Mike Zuzlow Commodity Week, we will have to talk about wheat. We'll get to that. But let's do take up the South American weather. I take it most of you saw what CONAB came out with in their numbers for the day.

Todd Gleason: 03:32

Not really any changes for the soybean production. However, they did raise corn production by 97,000,000 bushels. Mike, what do you think of those figures?

Mike Zuzolo: 03:43

You know, I I feel like that we still have some weather in this market because the corn especially can't be offset as easily with Brazil. And if you throw in top of on top of that CONAB report, what the Rosario exchange gave us early Thursday morning, Todd, it would seem to me between those two sets of numbers in the WASDE report, the trade is still shaky about wondering whether we can call it on the corn weather market in South America because Argentina could keep going down and we still are behind on the safrinha corn in Center West Brazil, likely to catch up, but still behind. I I think the trade's trying to put the canter market for soybeans. And what struck me so, strongly after the WASDE numbers came out and it really hasn't changed much since we are doing commodity week is the all time, you know, new lows and the bean corn ratio, November against December. And I think it, you know, works really well into what Matt was talking about with the acre base price that the trade definitely wants more corn acres right now.

Mike Zuzolo: 04:55

And I'm not so sure we're not gonna have enough demand for beans.

Todd Gleason: 04:59

Let let's do go through some of those acre acreage figures. And Matt wanted to shock you, so I'm gonna let everybody else go first. Arlen, do you have a set of numbers you're working with either, for the March figures or that you're looking through for the Ag Forum?

Arlan Suderman: 05:15

Well, I don't pay much attention to the Ag Forum. I don't remember the last time they ever came up with anything new that the industry didn't already know. But, as I look at the March 31 estimates, I'm currently working with a ninety three point five million acres of corn and, on soybeans, 85,000,000 acres. And the risk is to the upside on the corn and to the downside on soybeans. Certainly, there are some people in the seed industry who are giving anecdotal stories of much higher shifts into corn even in the core of the Midwest where we really hate to make those shifts.

Arlan Suderman: 05:54

I've heard those before over the last forty years, and sometimes they pan out, sometimes they don't. But I'm hearing enough of it this time that I have to respect the fact that, I may be on the low side, and so I've got an alternative in my balance sheet for, 95 and a half million acres.

Todd Gleason: 06:13

Mike Zuzlow, if we had more corn acres, some of them could come out of those great states like Kansas and Nebraska. That could make wheat shine. What kind of numbers are you working with for acreage?

Mike Zuzolo: 06:26

Yeah. I'm I'm sure Matt and Arlen have some feedback on this as well because they go everywhere. But what I'm hearing in my part of the country, and I I just gotten done doing a Zoom call with the fertilizer, spray company running out of Nebraska, Kansas. And, you know, they are the first thing is out of their mouths when we talked was, what what do you think is gonna happen with tariffs? Because potash what, 90% of our potash comes from Canada.

Mike Zuzolo: 06:56

And then they're worried about, obviously, what's gonna happen between The United States and China. And with the new news on the tariff Thursday afternoon, the president Trump may be delaying until April 1 any significant reciprocal tariffs. Does that lay the groundwork for more confidence to put in more corn acres? The second thing I'd say is a lot of the Nebraska clients and I'd say South Dakota clients as well, very nervous about their winter wheat if they've planted it and potentially looking at ripping it up if they can't get any more precip in the next thirty, forty five days. So I'm I'm right there with Arlen.

Mike Zuzolo: 07:33

I'm I'm 93. I could go to 94. It's hard for me to go to 2023, '20 '4 of of $94.9.9, 95,000,000, in today's world. But that's kinda where I'm at.

Todd Gleason: 07:48

And then, Matt, what kind of numbers are you using?

Matt Bennett: 07:51

You know, with, Mike bringing up two years ago I mean, essentially, two years ago in that high 94 range, I believe it ended up around $94.06. To me, I think that that's that's where I kinda start because in our part of the world in Central Illinois, we're even hearing about a few guys going a little heavier corn, but it's safe to assume a lot of your corn to beans, beans to corn guys last year, of course, were a little bit heavy beans with 87,000,000 acres of beans. So I feel pretty strongly that you're gonna be somewhere above the 94.6. And then you start getting into, for instance, areas, North Of I 80. You know, I talked to a lot of growers, you know, a couple meetings that I've been to and just asked them, what do you are you gonna plant more corn this year?

Matt Bennett: 08:35

And I think the overwhelming thing I keep hearing is that, you know, with $10 means, it just does not work very well. You know, and then as long as, you know, your liquidity isn't an issue and as long as you have access to to the capital that you need, you know, a lot of these growers are saying, hey. We can raise awfully good corn. We've got quite a bit of demand in our part of the world, and, you know, I'm gonna be talking about, of course, like, big chunks of Iowa into the Dakotas. You know, a lot of the growers are telling us, North Dakota that they're not planting any beans.

Matt Bennett: 09:06

Quite frankly, I think there will be beans planted up there, but there's a handful of growers that we deal with that just aren't gonna plant beans this year. So, you know, I think that you could make a run potentially at that old 96,000,000 acre deal. I'm not saying you'll be above it, but I wouldn't be shocked if we ended up at Arlin's other number, 95 and a half or greater. So at this stage of the game, you know, we're trying to run some math on, like Arlin's doing, you know, a couple three different scenarios. And, clearly, I think that, it starts to change things.

Matt Bennett: 09:37

I think it changes for soybeans as well, and that might be one of the things that maybe you can kinda tip your hat to having some support on this soybean situation with a huge corn acreage number. You know, The US balance sheet might look just a little bit differently, especially on soybeans if you go from 87 down to, 82 or three.

Todd Gleason: 10:16

0 0 0 0 0 0 dollars 11 and if you're in Southern Illinois, Dollars 11 Point 5 6. Those numbers for corn on the break even is at 4.61 in Northern Illinois for cash rented land, $4.60 in the Central Park on high productivity property, and $4.66. So not much of a range there really, just, 5¢ across the whole of state as it's related as before breakeven. But of course, the projected cash price, going forward is not that high. USDA doesn't have one.

Todd Gleason: 10:54

The FarmDoc team is using $10.20 for soybeans and $4.30 for corn. So given those numbers, it would appear, Arlan, that farmers would be likely, as Mike alluded to, I think too, to go ahead and try to put more corn acreage in. When you put those into your own accounts and you look at the supply and demand figures, is that the right thing for them to do?

Arlan Suderman: 11:25

Well, the right thing for them to do depends on, obviously, the cash flow of their farm. I think when we look at those higher core numbers, we start pushing ending stocks for next year out closer to the 2,000,000,000 bushel mark, and that's certainly not bullish. I do think that the funds are gonna give us some pricing opportunities as they have and with the potential for weather risks in Argentina, Brazil's winter corn crop, and, of course, the Midwest this coming season, where risks tend to be elevated somewhat following a La Nina winter. And we should get selling opportunities, but I'd certainly say with these higher corn numbers, I'd caution against getting all bold up and thinking that the the sky's the limit on corn prices. Certainly, a weather scare could give us a good selling opportunity.

Arlan Suderman: 12:14

On soybeans, on the other hand, if we tighten up the acreage, that helps. I think there, the demand is a bigger question going forward. And even with a lower acreage, whether the demand is going to be solid enough, to support prices, and there's too many unknowns there to really fully answer that question.

Todd Gleason: 12:33

Mike, you talked a little bit about the corn soy ratio. Can you bring more of that into our conversation, please?

Mike Zuzolo: 12:39

Yeah. I mean, the big thing I think in in dovetailing with what the other guys talked about just now, Todd, is it seems to me that producers that are looking at more corn acres are doing so because they didn't do any better than 50 or 52 bushel yield beans. And that to me, this past year I should say, that to me is a little bit problematic because you're making your decisions on what last year's growing season was like instead of is this going to be more or less profitable or more or less in the whole. And the no bean, corn ratio has always been very violent and very volatile in price action and it wouldn't surprise me to see it whip back around in favor of the soybeans in the springtime but I'm very nervous that putting together the HPAI and other livestock demand issues, we are going to lose domestic demand and we're gonna have to rely upon ethanol to pick that up on the domestic side. And I'm very nervous that we're not going to be able to do that.

Mike Zuzolo: 13:46

And so I feel like that you don't want to dig yourself into a big hole just because you had better yields in the corn. That's kind of what I'm counseling my producers on. And one number that I'm looking at right now and and the leader to the downside because of HPAI has been the soy meal market. It has not been able to find support off of the Argentine weather, even though they're the top one or two exporter each year in in meal. But that 20 20 5 low is $2.87 80.

Mike Zuzolo: 14:14

The the meal low ultimately right now is $2.92 60 as we hit the airwaves. So we're we're less than $10 away from that. And my mindset is if we take those lows out, the soybeans could be right after it. So if you're going to plant more corn, I think you really got to be looking at the idea that the beans could lead the market down. And I just don't want to be stuck out on both commodities at this stage.

Mike Zuzolo: 14:40

I'm not answering your question on the bean corn ratio as well as I should, but I think it's more important to realize that at some point, if wheat doesn't take over and help support the corn and essentially the overall market, my opinion is the beans could lead the corn lower and it could be tough. And then it goes back to what am I losing less on as far as breakeven price and and what I'm putting in terms of inputs.

Todd Gleason: 15:03

Matt Bennett, because he mentioned H5N1 or high pathogenic avian influenza, HPAI, I'm wondering, because the price of eggs is so high, most people understand that there's an issue somewhere. Phlox have been decimated and they've been destroyed because this is such a detrimental disease to have within a flock that you really have to just get rid of the flock and start over. How much of an issue has this been, and Mike has outlined some of it for, soybeans, bean meal, corn for that matter, in the feed products going into the poultry flocks, which is the largest portion of the feed and residual number.

Matt Bennett: 15:48

Yeah. I mean, clearly, a lot of folks feel like, because cattle numbers are low, feed, is going to be hurt. But as you suggested, I don't think everyone understands poultry is actually consuming more, feed than anything. And so, we've certainly seen, you know, a pullback in feed demand. The thing is as far as corn's been concerned, not a whole lot of stays this corn market as far as what these funds have wanted to do establishing their long.

Matt Bennett: 16:17

I mean, it's been pretty dynamic to see over the course of time since last summer, you know, buying six six fifty, seven hundred thousand contracts of corn, and you only got a dollar rally. And I know that both Mike and Arlen have seen many times in the past when a much smaller fund movement, would precipitate a dollar rally or drop in the market, you know, on a go again, maybe a 200,000 contract move. But, essentially, you had so much old crop last year that waited around too long, so to speak. I understand why they waited. They were expecting maybe the weather market would finally develop, and it didn't.

Matt Bennett: 16:52

And then, of course, during the fall time frame, most growers sitting there looking at a 2,000,000,000 potential carry came in and said, hey. I'm just gonna go ahead and sell corn instead of paying the minimum to get out to Jan one, and I certainly understand why they did that. Going back to something that Mike said, I I couldn't agree with him more that I I think this ratio, whenever you get into, for instance, the acreage number, if the acreage number does come in as rich as what, some of us feel like it might, you could see a major major whipsaw as far as what the ratio looks like. And and I I think that that's something that we can't discount. And then the last thing, again, going back to something Mike said, hey.

Matt Bennett: 17:30

Last year, we saw a major major increase as far as demand was concerned. First quarter disappearance for corn, most that we've ever seen there in the first quarter. What happened there? Oh, the cheap corn did its job, and and we unsurfaced a significant amount of demand. So for a grower to think that, hey.

Matt Bennett: 17:50

You know, we're gonna plant all these acres, but demand is on an uphill swing. It's just gonna continue to grow. That's very problematic in my opinion to assume. So while I think that a lot of growers are gonna kinda chase after the shiny object and, go with corn acres, I'm completely on board, with what Mike said. Hey.

Matt Bennett: 18:09

Be very cautious and make an assumption that we're gonna move wildly higher here, just because the funds have established this long. And they can hold on to the long as long as what they want. They've done it for a long period of time in the past at times. But at the same time, whenever they do decide that this thing, can't get any more bullish and that they, have seen what they need to see, clearly, the door, is not gonna be wide enough for them to get out. So, my personal opinion is is to be very cautious in making too many assumptions here.

Matt Bennett: 18:39

If you're gonna plant the corn, make sure you at least cover your rear end because there's no doubt, that we could see a lot of this good fortune that we've seen over the last several weeks go away from us, rather rapidly.

Todd Gleason: 18:50

Arlen Suderman, have you been able to define a good fundamental reason that, the funds have wanted to and have stayed long in the marketplace? Is it an inflation play or something else?

Arlan Suderman: 19:04

Yeah. There really has been. There's a couple of things at play. First of all, the commodity sector as a whole did recover somewhat in 02/2024. The one sector that commodities that did not was the grain and oilseeds.

Arlan Suderman: 19:17

We saw grain and oilseeds lose 20 and a half percent of value in our STONEx tracker in 02/2023 and another 14 and a half percent in 02/2024 when the rest of the sectors were in positive territory. So we had two things happening around the turn of the calendar. One was we saw inflation expectations going up. If you look at the two year breakeven inflation rate, it went up. It's gone up almost one and three quarter percentage points here in in recent months.

Arlan Suderman: 19:47

And the funds don't like to be short to commodities when that happens, and they were heavily short in the grain and oilseeds. And and we did get some better fundamentals, overall, particularly led by corn and by wheat. Wheat was a little bit late getting on. I think wheat does is go back to what Mike said to have some more, some more fun maybe to see happening there. But the funds started coming in and said, a, the grain and oilseed sector was underpriced relative to the rest of the commodity sector and underperformed relative to the rest of the markets over the last two years.

Arlan Suderman: 20:22

Maybe now is the time to own them. That may or may not be right fundamentally, but that's what they were thinking. And the other thing is with those inflation expectations going up, they particularly were looking for something to buy. And I do think that that's helping support us. That's one of the reasons soybeans have seen this the scope of gains that they have.

Arlan Suderman: 20:41

But I'd also remind us that they did the same thing last April just as we expected they would in the second quarter of last year, And it took one headline basically from the Federal Reserve to change that attitude, and they went back to shorting again. So because it's there now doesn't mean it'll still be there down the road.

Todd Gleason: 21:01

Can you put tariffs, and the Trump administration into context as it's related to an inflation play if there is one, or it may be that you would prefer to put that in the prospects of a trade agreement with China?

Arlan Suderman: 21:17

Well, as we look at, tariffs, they're not as inflationary as what the headlines would suggest, although it can be. It depends on how they're applied. If we look at Trump one point o and the tariffs that we had back then, it added between one tenth and three tenths of a percentage point to inflation. So, yes, it adds to it, but that's that's not a significant factor. Now, certainly, I would suggest that Trump is talking about a lot more tariffs this time around than what he did then.

Arlan Suderman: 21:48

But I was encouraged by what came out earlier today, that the primary objective of the reciprocal tariffs is going to be to get countries to the to the negotiating table to reduce overall tariffs. It's regarding trade agreements. There's two reasons that he puts on tariffs. One is he he he he likes revenue, so he's looking for something to reduce the federal deficit, which is a problem. The second is, though, to get people to negotiating table.

Arlan Suderman: 22:20

We saw that with Colombia, how quickly it got them to to give in. It he did it with Canada and with Mexico. With China, I felt like this time around with China's economy is weaker, Xi Jinping is in a weaker negotiating position. Took several years to get a trade agreement during Trump one point o. I felt like it would be months to get this time instead of years.

Arlan Suderman: 22:45

Then we were seeing things move much quicker on the ground in China, and they were moving Xi Jinping and Trump are moving closer to each other at a faster pace. And I thought perhaps because of the economy, we would get an agreement quicker, and it was moving faster than what I thought, based on what we were hearing on the ground in China. But now that seems to have been cooled somewhat, and so I'm back thinking, okay. Maybe I had it right the first time. We're maybe talking about, five, six, seven, eight months, somewhere in there before we get some type of an agreement.

Arlan Suderman: 23:20

Whereas, they would agree to pay extra for The US commodities because of a currency exchange rate that significantly raises the cost of our commodities in order to get more favorable tariff treatment on the $450,000,000,000 worth of, consumer goods that they send to The United States each

Todd Gleason: 23:40

year. Okay. So Mike Zislow, I know you think about this in much in very broad terms as well. In the macroeconomic sense, corn, soybeans, wheat, and trade, how are all impacted?

Mike Zuzolo: 23:53

It's hard to improve upon what Arlen said. I I would say from from my mindset, politically and historically, president Trump wants to contain China. And to add to the Colombia and the other examples that Arlen gave, look at Panama. Panama, the first country to sign into the Belt and Road initiative in 2017. Secretary of state Rubio goes down there and says, we need help.

Mike Zuzolo: 24:18

Panama says, we're out of the BRI. President Trump is working with Russia now with peace in Ukraine, and and some are very unhappy with what he's opening up as far as even letting Russia back into the g seven. Again, I see that as a way for him to contain China. I think his policy is he realizes how far advanced China's become economically in trade with the BRI and also the strategic and geopolitical alliances he's got, they've got set up that he has to break all those apart or or weaken them substantially. So my going back to commodities, if that's my assumption, if he's talking about universal tariffs and then he's also talking about the external revenue service and tax cuts, You put those three together and all of a sudden you think, okay.

Mike Zuzolo: 25:09

He may be allowing us to have to deal with higher prices for a longer period of time, but he's gonna sell that, I think, in terms of trying to give us a tax cut and saying, I'm helping you. And he's gonna help the agriculture side through ethanol, and he's gonna help the agriculture side probably through some other types of reciprocal tariffs, like not allowing wheat to come in from Europe and as an example, or meal come in to Wilmington bulk, stuff like that. But, you know, what the trade has told us this last two months has been pretty simple, pretty direct. Tariff fears increase the dollar is a safe haven. Gold's a safe haven, but the dollar is too.

Mike Zuzolo: 25:50

And we saw it this week. We're we're almost taking out last month's lows now in the US dollar after the trade is bring breathing a sigh of relief on the reciprocity issue, Todd. And so if tariff fears decrease, the dollar is no longer a safe haven, it's a sell. And at the same time, we've seen the Russian ruble hit an eight month high against the US dollar. Why?

Mike Zuzolo: 26:11

Because of potential peace in Ukraine and also because of this, this potential tariff easing. And and so that's why I think the focus needs to come back to the wheat market again.

Todd Gleason: 26:21

We'll come back to that in just a second. I wanna go to the Canadian border. Matt, you spent some time up north. I know that farmers in that part of the world are particularly worried. There are a couple of things.

Todd Gleason: 26:32

Part of it is potash. The other part is that Canada is the number one destination for US ethanol exports. They have many export many ethanol production facilities in the Northwestern Corn Belt. How worried are they and should they be about the potential trade implications with Canada?

Matt Bennett: 26:55

Well, clearly, what we've seen happen, and these guys have covered the tariff situation very adequately, or or just way better than that. Just really, really good stuff so far. But I think, ultimately, what I think we all need to learn here, of course, Trump likes to negotiate. He he, I've said all along, Todd, that the threat of tariffs and the implementation of tariffs are two completely different things. And so, clearly, he's thrown some stuff out there just to kinda see, hey.

Matt Bennett: 27:24

What do these guys wanna do? Do they wanna play ball here? Do they want to, make the adjustments that we'd like to see happen? And so there's no doubt, Todd, that people are gonna be very concerned. There's no question that if we do get into a big enough spat with with Canada that the two things that are gonna be of most concern, of course, is gonna be ethanol and then as Rose referenced before, potash.

Matt Bennett: 27:46

And so both of those, if we get into a situation, are going to be an adverse effect to The US Grower and and quite concerning to me. But as far as how ethanol plants feel about it, you know, ethanol numbers have been running along really pretty good. A couple of weeks ago, we took a big step back, but overall, our grind has been fantastic. Now I don't necessarily see a lot of upside from where we've been. It's not that margins are overwhelmingly good, but at the same time, a lot of corn was bought off the farmer's hands, farther out.

Matt Bennett: 28:19

Typically, an ethanol plant does a really good job of, locking margins in. That's, been the case here this year, and I do think that their profitability is gonna look a little bit better right now than what it does on the spot market. Because if you look at the spot market, you've gotta look pretty hard to try to find profitability. So, there's no doubt they'll be concerned. I think when they start running out of a lot of the grain that they've walked previously, I think that you could see a bit of a slowdown there.

Matt Bennett: 28:46

And that's why I'm concerned, that increased ethanol, Brian, might be a tough thing to come by.

Todd Gleason: 28:52

Two final subjects to take up, both of which, you all listed. I'll come to you in just a moment, Arlen, about biomass and diesel production, the impact on crush and maybe March and April. But first, Mike Suslow, can wheat manage to make a move higher?

Mike Zuzolo: 29:09

If it doesn't, it's missing a huge opportunity. I mean, we just made a new four month high last week, a new twenty twenty five high last week. And we've had a lot of supportive news this week, including the USDA taking the stocks to use levels down below twenty fourteen now. And so we're adding another year, eleven, twelve years almost that we've not been this low if you add demand to it. And because we're running out of time, I I just think that the weekly export sales, the The Middle East coming into markets, this week and and this the issue of the Russia, the way they fed their war was through a guns and butter policy, selling oil, selling wheat.

Mike Zuzolo: 29:50

They had plentiful cheap supplies of both. That's changed. So I wanna see if the fund together here and change as well, especially with the Russian wheat export price, at an eight month high now and and making many other countries competitive. And, one last thing, what Matt made me think of with this great comment was a practical thing to do right now as related to Canada is, for me, I I just recommended all my clients get their spring diesel needs locked in. We're relatively low in price.

Mike Zuzolo: 30:23

We're below just below the five year IA numbers, and we just use so much crude oil here in the Midwest because it's the heavy stuff for our for our refineries. I just think it's a great risk management. You just start there. And regardless what happens with the tariffs, just take that first step and then say, okay, I'm being proactive. I'm doing something about this.

Todd Gleason: 30:48

And finally, Arlen Suderman, it's not clear how the Trump administration will manage bio based fuels, particularly as it relates to renewable diesel, and probably the the dollar 25 splash as well. I'm wondering what you're thinking about biomass diesel production, whether that be renewable or fame, and what the impact on crush in March and April might be.

Arlan Suderman: 31:19

Yeah. As as we look at, the uncertainty that we have because, we don't know where the Trump administration stands. And they have such a full agenda. We don't know when we'll get around or they'll get around to telling us where they stand in implementing that policy. And so the plants, yeah, you might say the the payments will be retroactive when it happens, but they can't make those decisions to lock in a profit or loss when they don't know what they're locking in.

Arlan Suderman: 31:51

And so right now, we estimate that, biomass diesel production is been shut down to about 40% below what it would have been. So we've lost 40% of that production. Most of that's biodiesel production right now. The crush is maintained, and we think it's running about 90% of capacity right now because the plants did a good job of finding homes for the product they were producing through February, maybe into a little bit into March. But we anticipate if nothing changes as Argentine supplies start coming on as we get into March and April, that we're gonna start seeing a big negative impact on crush if we don't get more clarity, from the Trump administration on what those, subsidies are going to be.

Arlan Suderman: 32:40

And so that's that's a big hit on domestic demand for soybeans if we don't get that at a time when short of a trade agreement with China, we're gonna see a big hit on export demand as well.

Todd Gleason: 32:52

Let's get a final word now from each of you. Mike Zuzela, global commerce search dot com out of Atchison, Kansas. I'll start with you today.

Mike Zuzolo: 33:00

I appreciate being on with the other guys. I I respect them immensely, and you do a great job, Todd. I'm gonna leave it at that and, see how we go here this next week or two.

Todd Gleason: 33:08

Harlan Suderman from stonex.com.

Arlan Suderman: 33:11

Yeah. I I would say that, I am more positive about agriculture than what, you know, was six or eight months ago, certainly, and I think that we do have some opportunities here. But I wanna keep that in perspective. I've seen many cycles in the markets over the last forty plus years, and I still say that we're in a cycle of oversupply in general. And so that means stay defensive.

Arlan Suderman: 33:36

Don't be going for the fences with your marketing. Keep disciplined. And I think farmers have been doing a much better job of doing that this time around. We talk about the positives that can happen. Don't just let yourself get all bold up.

Arlan Suderman: 33:50

Those are more meant to be take advantage of the opportunities that we see coming when they are offered.

Todd Gleason: 33:57

And Matt Bennett from agmarket.net out of Windsor, Illinois.

Matt Bennett: 34:00

I just, would echo what Arlen said. I think one thing I've tried to encourage growers to think about is, you know, how we all felt in that late October, early November time frame. I mean, clearly, there was a lot of concern about not only 24 income, but 25 income. You gotta keep perspective in this market if you're gonna do a better job marketing because, typically, what we usually, will do is we'll just we'll get bullish as the market goes up. And, unfortunately, we haven't been able to see the forest for the trees in some cases.

Matt Bennett: 34:32

I know a lot of corn has been sold here over the last few, weeks. I think the grower is down to a much smaller level than, for instance, what they said they had as of December 1 and that January quarterly stocks report. But bottom line is whether you're talking old, foreign, or new, let's look at what we've gained over the last, three or four months and, you know, be willing to do something about it.

Todd Gleason: 34:54

Commodity Week is a production of Illinois Public Media. It is public radio for the farming world online on demand at willag.org or in your favorite podcast applications. Our thanks go to our panelists this week, including Matt Bennett, Arlen Sutterman, and Mike Susilo. I'm the Illinois Extension's Todd Gleason.