Todd Gleason: 00:00

This is the January 30 edition of Commodity Week. Todd Gleason services are made available to WILL by University of Illinois Extension. Welcome to Commodity Week. I am Todd Gleason, our panelist for the day, including Naomi Blohm. She's at Total Farm Marketing out of West Bend, Wisconsin.

Todd Gleason: 00:23

Chip Nellinger is here from Blue Reef Agri Marketing. He's in Morton, Illinois, and Sherman Newlin joins us too from Risk Management Commodities out of Hutsonville, Illinois. Commodity week is a production of Illinois Public Media. Find us online at willag.org or search us out in your favorite podcast applications. Let's begin with a list of items that we should discuss for the day.

Todd Gleason: 00:47

Sherman Newlin, what's on your mind this week?

Sherman Newlin: 00:50

Oh my gosh. There's all kind of things this week. Right? Just heard a while ago that Trump announced he was still gonna, put 25% tariffs on Canada and Mexico, so that should make things a little bit interesting. So yeah.

Sherman Newlin: 01:03

I mean, there's so many things going on. You know, we're we rallied quite a bit. I mean, what do farmers need to be doing up and through here, I think, you know, and, you know, why we're gonna end up with, acres for new crop.

Todd Gleason: 01:15

Chip Nellinger of BluRefagger marketing on your mind?

Chip Nellinger: 01:18

Yeah. I think, we've got, a full fledged weather market as well with, areas too dry, areas too wet in, Brazil and Argentina. And so, that's a big issue, on top of what, Sherm said about, you know, possible tariffs. This fund position in corn is getting pretty excessive too, probably north of 350,000 contracts. So are they gonna support this, this long side of the market going into the new month?

Todd Gleason: 01:43

And finally, Naomi Blohm. Anything that we haven't discussed yet?

Naomi Blohm: 01:47

Well, we definitely need to talk about all of those things. Absolutely. And add to it, we've got the big cattle inventory report tomorrow afternoon and cattle markets having, some price correction in the last couple days, position squaring heading into that report.

Todd Gleason: 02:01

Alright. So let's begin with the Trump tariffs because this is something that, we have seen for a while. I'm not sure, Sherman, what you heard in the last few hours here on Thursday afternoon. The last thing I had seen was that the president, was working through Canada, Mexico related to immigration and then the trade part of those tariffs he was holding off until April 1st. What have you been hearing, on this Thursday?

Sherman Newlin: 02:31

Todd, I literally just 5 minutes ago on CNBC, they announced that Trump was going to implement the tariffs on 25% tariffs on Canada and Mexico. I think we're all kinda open maybe that would not happen or, you know, I guess now we gotta wait and see, you know, what does it do to the markets. You know, will they react more negatively than they have today. I mean, we'd see it is the end of the month. Funds are along quite a bit.

Sherman Newlin: 02:56

We had some weakness today. So do they, you know, take some more positions off in the corn and soybeans because they are along a little bit of soybeans now, you know, and just prepare for what might take place until something a little more clear shakes out, how that you know, how it's all gonna happen.

Todd Gleason: 03:11

Anybody else have a comment on tariffs and the Trump administration and how to manage that kind of risk. I suppose you all have been thinking about it. Naomi Blum, I know farmers are asking you, what have you been telling them?

Naomi Blohm: 03:26

Well, we've just really focused on having a balanced approach. And so for those who are making cash sales here for corn and beans both, we talk about is it worthwhile to do any type of reownership strategy in case there's no trade war drama that occurs or in case the weather in South America stays poor or in case the U. S. Has a weather issue down the road. So looking at fixed risk strategies, primarily bull call spreads.

Naomi Blohm: 03:51

And on the flip side though, there are some who are saying, You know what, I'm not going to price my grain for whatever reason. And they are looking at some shorter term put option strategies to provide a price floor. You just can't discount the rally that we have had so far, unexpected, of course, for many thinking with that surprise from the USDA report from a couple of weeks ago. And now we're at the point where we've got $5 corn futures and we've had a nice bean rally. So for prices to go higher from here, we would really need some significant friendly news to show up quickly.

Naomi Blohm: 04:25

Otherwise, we might just see that correction lower. So you have to be ready for either scenario to unfold in the coming days.

Todd Gleason: 04:33

Just for confirmation sake, in the last 7 minutes, we started our program at about 5 after the hour of 3 o'clock. Bloomberg did report that the president would be following through on his threat with those 25% tariffs on both Canada and Mexico. So we'll see whether that holds overnight and what kinds of reactions we have from those 2 nations. Chip Nellinger, with that in your back pocket, what do you have to say? Yeah.

Chip Nellinger: 05:03

You know, I think, maybe you probably saw, on top of the end of the month coming, probably the the big reason why you saw some corrective action in corn and beans today. It doesn't seem to me like the market has, factored in much of a chance of these tariffs or that they're gonna mean much. And I think, with Mexico being as large a a buyer of US products, ag products, top to bottom, I think it's a risk that, can't be understated. Right? And, it's a big unknown.

Chip Nellinger: 05:37

I think it's been overshadowed a little bit by the bullish weather scenario you've had in South America, and, it could just increase the volatility. So there hasn't been much talk about China yet. I'm sure that's on the agenda. They're probably, taking some low hanging fruit first. Canada and and, Mexico obviously, you know, sharing borders with the United States, and that's probably, important.

Chip Nellinger: 06:01

But, I would guess that in short order, we're gonna have, something announced regarding Chinese tariffs as well. And, you know, I just don't know that the market has, you know, focused much on that. So this could be a little bit of a bearish shock, to the market, especially if the weather starts normalizing a little bit in some of these areas, of South America.

Todd Gleason: 06:25

Well, let's do talk a little about the weather in South America. The meteorologists are of a mind, I think, that next week, can be pivotable. Though I am not convinced, I think, Sherman, that the Argentine crop has been hurt as much as maybe the trade earlier on suspected. What are you hearing about it?

Sherman Newlin: 06:51

Yeah. I mean, the crop is hurt some. I mean, it's still early in the game that they would start to get some rain next week or the week after. I mean, I'm sure, some of that will come back. I mean, I think crop ratings were a little bit lower again there today, from Argentina, but, it is early, for them.

Sherman Newlin: 07:11

You know, if you get into the March timeframe and mid February, March timeframe and they haven't got a lot of rain, I think you're going to see some more reduction in some of their crop. The flip side of it is Brazil is going to have such a big crop of beans that they're going to probably make up probably whatever easily whatever Argentina is gonna lose. And that net, we're still gonna have a, you know, a bigger bean crop out of South America. But, you know, there there's also a lot of rain in Brazil. Right?

Sherman Newlin: 07:41

And that's hindering their their harvest right now. So that's something that's gonna have to be to be watched as well because that is a delay to a certain degree, you know, their second crop corn planting. So that's been, I think, some of the reason, you know, the corn has had a little bit of a more of a push to it, here as well besides the dryness in Argentina.

Todd Gleason: 08:02

Naomi, what are you hearing out of South America?

Naomi Blohm: 08:04

Well, pretty much what the gentleman had just said there, not not too much different. The concern, of course, being a slow harvest on that bean crop and and getting it then exported and then the slow pace of of the 2nd crop corn. But to his point, at the end of the day, it's going to be a big crop of soybeans out of Brazil. And they're pegged to grow about 169,000,000 metric tons and they export 105 of what they grow. So the world is ready to receive the cheaper South American soybeans, and I think it's going to be part of China's plan look going forward here.

Naomi Blohm: 08:44

I mean, they naturally switch over and buy beans from South America anyway. And so we'll just see how they tie that into trade and tariffs too.

Todd Gleason: 08:52

We probably ought to discuss what you think producers should do as it's related to old and new crop at this point. I don't know exactly how, to deal with news, from the president that he potentially or is putting on tariffs. And that may have changed by the time this program is airing. So, from your perspectives, where should producers be at this time? And I guess, Naomi, I'll start with you and just work my way through Chip and Sherman related to old crop.

Todd Gleason: 09:27

Well, let's deal with old crop corn and soybean sales first, and what your expectations there as to how far along they should be and what can happen with those sales, things may fall apart in the overnight trade. It's it's just difficult to to ask you that question, but where where should they be?

Sherman Newlin: 09:48

Well, I

Naomi Blohm: 09:48

would say with this recent rally that we've had, it's been just a triumphant opportunity for producers for old crop sales. So to be 50% sold, I think some are closer to 70% sold. So again, for prices to go higher from here, you need just this perfect combination of no trade war drama. We need bad weather in South America. We need immediately friendly news on the biofuels front, regarding the mandates.

Naomi Blohm: 10:14

And then we would have to have poor weather in the United States this summer. Now if those four things happen, hey, you got a reason for prices to rally higher later on the summer, but you're kind of asking a lot to have those four things, occur in order to have higher prices from here. So I think if you are not pricing the grain at that 50% to 70%, then make sure you're looking at looking at some puts under the market to protect the value that's there, just in case we get the run pulled out from underneath us.

Todd Gleason: 10:43

Different versions of that, Chip, from you or from you, Sherman? And I'll start with Chip for old crop.

Chip Nellinger: 10:48

Yeah. When I get those questions from producers, Todd, I I think it goes back to an individual case by case basis. I always ask a follow-up question. When do you want cash? If if a producer's out here and they, have cash rent and a bunch of inputs due and they wanna turn their grain into cash by the 1st or 15th March, then I think you ought to be 80, 85% price with your finger on the trigger, to get to a 100%, maybe as soon as, tomorrow or the 1st part of next week.

Chip Nellinger: 11:20

If you want some ownership, do it with calls or call spreads. If you're a producer that says, no. I I typically hold, you know, 25, 30% of my crop out in the summer. I like to kinda see what's gonna happen with the weather out there. That's a different scenario.

Chip Nellinger: 11:35

I agree with Naomi. Get to 65, 70 percent price. Hold the rest of it. It doesn't matter what happens in the short run on the grain you wanna hold out in the summer and play a weather scare potential or see what happens with the South American second crop corn. That's fine.

Chip Nellinger: 11:51

But I think you ought to be a fair amount priced. And if you're not to that point, if you wanna, roll the dice and and play on the bullish side, I think, that I agree with Naomi. You ought to be thinking, seriously, maybe as soon as tomorrow, or overnight at getting some sort of foot strategy in place because you just can't predict the weather. You can't predict tariffs. You just don't know what's gonna happen in this uncertain environment.

Todd Gleason: 12:15

And, Sherman Nuland, you can round the horn to new crop if you'd like to, please.

Sherman Newlin: 12:20

Right. Yeah. Yeah. I mean, I don't disagree with anything. They they said, I mean, percentage wise, I mean, we've had a heck of a rally.

Sherman Newlin: 12:27

You know, I think a lot of people were surprised, you know, from the numbers that the government put out on the yields, I guess. We weren't overly surprised. I mean, being a farmer, I mean, I've shelled enough corn and cut enough beans and corn is testing 12% and beans are 9%, 8%, you're going to have fewer bushels. But it was good to see that they finally cut the production size of it. But, yeah, I think, it feels like we want to try and before the tariff news, it sure did feel like we wanted to go through March, that $5 mark in the March contract and maybe even tag 5 0 8.

Sherman Newlin: 13:03

I kind of think if we get would have got to 5 0 8, I'd really push a lot of old crop sales out the door because you probably can be getting $5 cash at that point. And if you wanted to stay in the market, you can buy some May or July corn calls that aren't overly expensive and, you know, not that far out of the money. So, yeah, pushing pushing these sales, you know, up and through here, I think, is a very, very good idea for producers. Soybeans, I I you know, if we can't get back up above, you know, that 10 74 mark we tried to hit the other day, that 200 day moving average, it kinda feels like we're on a slippery slope to the downside. In the soybeans, I think you guys need to be cleaning up most, if not all, of your old crop soybeans, that you have on hand.

Sherman Newlin: 13:47

New crop corn, maybe a little bit in through here. I'm still not overly excited about where our cash price would be, but we are a lot higher than we were. Right? We are expected to plant quite a few more quite a few million more acres of corn. So we're kinda wait and see what that turns out to be.

Sherman Newlin: 14:10

But if it's, you know, if we do plant, what some are saying, what, 4, 5, 6,000,000 more acres, if that would happen, to me, that takes away from the soybean acres. Not one for 1 per se, but, you know, you take a lot of, product or acres off the soybeans. I think, new crop soybeans would have a chance at some point in time, maybe get it back up to that $11 mark. You know, a few new sales in through here, 10%, does not gonna hurt anybody on new crop beans. I like the new crop, November soybean chart.

Sherman Newlin: 14:41

You know, it's kinda looking like it was putting in a head and shoulders type bottom. You know, we're gonna need to see some follow through with that. So I'm kind of holding off on some new crop sales.

Todd Gleason: 14:52

Naomi Blum, your new crop position at this point and asking for a friend, should I sell 5% of my corn crop at 4.22? It's not a price that seems like something I like.

Naomi Blohm: 15:05

I would like selling new crop, 10% sales at least right now. With with, again, with corn, there's potential for the market, to go higher if all of those friendly things happen, but more acres are coming in the United States, so that's going to steal the thunder. On the soybean side of it, even though we're going to lose acres on the beans, the world has record global carryout, and that is just going to be burdensome for a while. So, you got to take a look at the big picture, not just what's happening in our backyard. And with, that November bean price at 10.53 today, you're probably in some places in the country, you're gonna get $10 cash.

Naomi Blohm: 15:47

And I think I would take advantage of that because it's gonna like I said, we need a huge amount of, continuous friendly headlines and stories to justify prices to go higher from here. And so I would I would just get something on the books.

Todd Gleason: 16:01

And, Chip Nellinger, your advice?

Chip Nellinger: 16:03

Yeah. I think, we've advised being 15% price on new crop corn and beans both, close to current levels. We probably started, in the low 4 fifties, 4 53 on, Decor, scaled up some more, in the low 4 sixties. 10 forties, we started a little bit early and and added to it north of 10 50 on November being futures. And then I think above and beyond that, I don't think it's out of the the realm of possibility or, you know, something that producers should really consider anyway is adding some additional, put strategies, you know, maybe another 30 to 40% of your production on top of that.

Chip Nellinger: 16:45

You know, I think it's early on. Right? Are we gonna plant less acres of beans, more corn? Doesn't matter what we plant. We still gotta raise it.

Chip Nellinger: 16:52

We still are are subject to weather issues. A lot of people saying we could be on the dry side from the weather community this summer, especially the western corn belt. So you gotta allow for that. But in the short run, I agree. This, I I think the bean market, the world beanstalks, this large, Brazilian bean crop that they're just starting to harvest could weigh on things.

Chip Nellinger: 17:14

I think the bean market is the weak link in the entire grain sector right now.

Todd Gleason: 17:18

Now Chip Dellinger, let's return to something that you wanted to talk about, and I think that certainly all of you have been following and may have some concerns about is the long position in the marketplace, particularly in corn that the funds have at this point. Will the trade talk from the Trump administration cause them to take their profits?

Chip Nellinger: 17:45

You know, I think that remains to be seen. I think it's coming at an interesting time where the funds, you know, 3, 4 months ago were short a 150,000 contracts. Now they're long, 350,000 contracts. You've got the end of the month coming, the start of a new month. They get paid on closed profits.

Chip Nellinger: 18:03

Right? Open profits don't matter to them. Fund managers get their bonuses and their incentive fees based on closed trades. I I think that's gonna be the question. I I again, I go back to what I said earlier.

Chip Nellinger: 18:15

I think the weak link in this whole thing is the bean market. I think until you're assured of a of a big second crop corn in Brazil, which is more of a of a May time frame, April, May type of a, of a time frame there, that, corn probably has a decent floor underneath of it. But, you know, you you never know. What the markets don't like is uncertainty. You don't know what's gonna happen with the retaliation or the reaction from Mexico especially.

Chip Nellinger: 18:47

Will they try to get, you know, all their core needs out of, Brazil and Argentina and bypass us? That's easier said than done. So I think the uncertainty certainly could cause some profit taking. Do they flip right back out of and sell 350,000 contracts and get flat? Probably not.

Chip Nellinger: 19:04

But if they took a third of that off the table, it would probably produce a a 30¢ correction in the corn market.

Todd Gleason: 19:10

Sherman, I know you talked about this earlier, but can you look back at the slow march higher that corn made from the October lows until recently and why that took place and that the market I don't know about missed it, but was not paying that much attention to it.

Sherman Newlin: 19:32

You know, some of it was what I said earlier. You know, they they know that or they think they, you know, that the dryness of the crop was going to come in a lot, you know, bring the crop in smaller. Right? Because we as producers sure didn't know it. The trade sure hone in on it, but, we we sure, you know, thought it would be that way.

Sherman Newlin: 19:51

You know? And exports have been good. Right? They've been above, you know, expectations. I mean, we're above pace what we need to to be at, for, you know, to meet USDA's exports.

Sherman Newlin: 20:05

So I I think the funds we just push the market so low. Right? And then maybe with the expectation, you know, once Trump got in office, it maybe him working out. Maybe. Doesn't look that way at the moment.

Sherman Newlin: 20:18

Some sort of a trade deal with with some of these other countries to help everything has been very supportive. But, yeah, they they have gone from, you know, very short to very long, for some good reason, and and it just kinda you know, the bullish factors kinda pile on maybe, you know, a week or a month later. You know, and now it seems to be the weather in Argentina, the weather in Brazil, like, just kinda keeps boosting everything. And, you know, I think the algos have been going with headlines, and and the market has just kinda kept, running up on itself.

Todd Gleason: 20:52

On the tariff side, Naomi Blum, when you look back over time, and the president has referenced this, that there was a point where the bulk of the income, that came into the United States government came from tariffs. That changed once the United States became a real world leader after World War 2. I'm wondering if you have concern that the president will follow through on the idea that tariffs are a way to fund the government and believe them in place regardless.

Naomi Blohm: 21:28

Well, I think he's gonna take a swipe at it. I think that I mean, he said that right in his inauguration address. It was, like, high priority. So I think he'll give it a shot and see if it sticks and see how it holds. And it it's just gonna be touch and go as far as how the other countries respond to it.

Naomi Blohm: 21:49

I also think, though, that the market kind of knows in a sense what to expect now with tariffs. So if we see a sell off, I'm not sure that it's quite as dramatic as it was the first go around because now we know what to expect. And I also think other countries have been studying Trump a little bit better, and they know maybe more how to negotiate back with him in order to just endgame, get the deals done. That's Trump's endgame. He just wants to get the deals done.

Naomi Blohm: 22:18

So it is a unique time in our democracy, to see how it is being led with all of these initiatives. I'll just leave it at that.

Todd Gleason: 22:30

The Federal Reserve Chip Nellinger this week did not lower interest rates again, and it indicated that was just because it was waiting and unclear what impact the the policies from the Trump administration would have on the marketplace, particularly inflation. Are you concerned? And if so, why?

Chip Nellinger: 22:54

I think they were right to pause. I I I think that the, your brain immediately goes to, tariffs or inflationary, and they probably are by themselves. So I think the Federal Reserve was probably right to say, hey. We've we've ratcheted things back. Inflation has slowed just a tick.

Chip Nellinger: 23:12

If we keep going lower, that could kinda reignite inflation in its own right. Let's let's wait a little bit. But I think as far as the the tariff thing goes, you know, the second go around here to add on to what Naomi said, you know, the the first go around, the first administration of Trump, he he didn't do much or wasn't allowed to do much more than the tariffs. And I think this time, just reading between the lines and what some of his advisers have said, it's a it's a, holistic approach, meaning they're gonna try to cut a couple $1,000,000,000,000 of fat out of the budget of the government. They're gonna try to lower, taxes.

Chip Nellinger: 23:54

They're gonna try to stimulate the economy. And so if all 3 or 4 of those things hit,

Sherman Newlin: 24:01

it

Chip Nellinger: 24:01

it doesn't necessarily have to be wildly inflationary. And I think it's a little bit of experiment. I don't know that there's anything, we can go back in history and say, we can relate to or compare it to. And so I think we're just gonna have to wait and see, and I think that's the Federal Reserve's approach, probably rightfully so, is to let's give this a quarter maybe, maybe 2 quarters, and see what, is gonna be put in place, what's gonna happen. And, you know, again, to Naomi's point, we saw it with Colombia.

Chip Nellinger: 24:31

Right? Maybe the market isn't concerned because it assumes we're gonna get a lot of agreements and and deals done instead of, you know, 4 years of tariffs. So, I think it's gonna be interesting to see what happens the next several months.

Todd Gleason: 24:44

And, Sherman, anything else to add on this topic?

Sherman Newlin: 24:47

No. I mean, I I agree. I mean, with with what Chip's saying, and I think the trades, you know, thinking that maybe Trump can end up making some sort of deal, like like, again, like Chip said with Colombia, and maybe things will come out alright. I mean, we we sure don't wanna lose Mexico. I mean, they've been, one of our, you know, our biggest importer of corn right now, and, I think that would hopefully continue.

Sherman Newlin: 25:08

But, you know, we need the demand to to stay there and and hopefully, again, maybe they can work something out with China. I know China hadn't bought any corn for a long time for a couple of years, but any, you know, kind of agreement there or something would soothe the nerves of the trade and maybe would, add to the some bullishness.

Todd Gleason: 25:25

Naomi, you mentioned the cattle inventory report that's due out Friday afternoon. What are you watching in this report? And I I believe it was July that was not released last year. Is that correct?

Naomi Blohm: 25:37

That is my recollection. We haven't had a report for a year. So, a year ago, the USDA forecast for all cattle and calves inventory was at 87,200,000 head, which was the lowest inventory since 1952. Going into the report tomorrow, traders think that that number could potentially be smaller than 87,200,000 head like it was a year ago, because of a larger drop off in calves. And so again, we're going to be having now the lowest cattle potentially inventory and lowest calf inventory since the 1940s.

Naomi Blohm: 26:18

So the market is I haven't seen any pre report estimates for this report, so this is really challenging. We're going in blind, it feels like to me, to know exactly where we stand. So we're going to be balancing the report. We're going to be balancing watching tariff and trade with Mexico and Canada, of course, very large trading partners in the livestock

Sherman Newlin: 26:42

industry, along with keeping

Naomi Blohm: 26:42

tabs on the cash market and keeping tabs on what the funds are doing as they're record long right now in cattle and feeder cattle, and we've already seen some profit taking heading into this report and into the end of the month, which triggered some technical selling. So there's a lot of moving parts in the cattle complex right now. Tomorrow's report, is gonna be though the springboard and a cornerstone for the February trade.

Todd Gleason: 27:09

And related to the livestock side, avian influenza has reared its head again, and there are flocks in Illinois, Indiana, Missouri that have been reported to have this. Of course, those flocks will not be in the marketplace, Chip Nellungar. Are you concerned that between a smaller poultry flock in the United States, because potentially because of the avian influenza, and, the smaller herd size for cattle, that the feed numbers will be off in the future?

Chip Nellinger: 27:45

Well, there's always two sides to that story, Todd, when you when you talk like that. I mean, initially, yes. I don't think that lower numbers of cattle is anything new or surprising. We've known that's been the issue since the drought, 3 or 4 years ago in the in the plains and the western corn belt. So there's always two sides to it, especially when talking about pork and poultry because they can repopulate so quickly, and they will have to.

Chip Nellinger: 28:11

So in the back end of it, initially, you you know, when with lower numbers, yes, your feed demand goes down, your meal demand, your corn demand. But then as you rebuild, that can ramp back up. So it doesn't always have to be as, dramatic or or decimating to feed demand, as what you would expect, assuming they build back those flocks and, you know, wherever the the issue might be in in pork and poultry, especially, they can do it really quickly. In general, though, you know, I think it's something that says on the cattle side, which is a big driver of corn demand, obviously, that, you know, hopefully, over the next 6 to 12 months, we can start seeing, some rebuilding, of that bird and stabilizing or maybe expanding the feed demand. But it is a real question going forward.

Chip Nellinger: 28:59

And then, you know, the other question too, not to open too many cans of worms with one one of your lines of question here, Todd, is, you know, are we at a high enough level that you're starting to kill demand, on beef? Because if that's the case, especially at a time where we may expand just a little bit, although I don't think you're gonna show much on this inventory report, that's the kiss of death. When you kill demand and, increase supply, things get, really dicey at that point. So, you know, supply is one part of it, demand is the other. I think pork and poultry have got a big boost from the high priced beef demand, but you have to ask yourself, are we starting to choke back some of that, beef demand big

Todd Gleason: 29:43

Sherman Newland, time to wrap up for the day. Let's begin with you at risk management commodities out of Hudsonville, Illinois. Your final word.

Sherman Newlin: 29:52

I mean, let's not forget. I think there's been a lot of farmers selling, you know, going on on this rally and and right after the 1st of the year, because producers, you know, run a little bit tighter on cash, so they sold more. So we don't have that hanging over our heads quite like we did last year. You know, Todd, last year, you know, farmers were holding on and holding on, and everybody was saying, well, that second harvest is coming because producers are holding on so much. But I think a lot of that corn is coming getting out of the producers' hands, you know, and that's probably a good sign to help the market rally some more.

Sherman Newlin: 30:23

But, you know, we'll have to see what happens with these tariffs, you know, how does the market react here in the next day, and then what happens next week, and with the weather in South America. But I think you you gotta take a look at these prices, for corn and soybeans both and, you know, be be quick on the trigger and and get some sales put on the books.

Todd Gleason: 30:41

Naomi Blum from Total Farm Marketing at West Bend, Wisconsin. Your final word?

Naomi Blohm: 30:46

Just be ready for anything to unfold, and you've got to get back to marketing basics and understanding option strategies on reownership or protecting unpriced bushels, what it can mean to your bottom line, putting it into your total cost production to your net results if we see a market reaction higher or lower and what those strategies can mean for you. There's just so much uncertainty now and we are at just a critical juncture here for these grain markets and with everything happening in the world and with weather that there's going to just be so much uncertainty going forward that you truly, truly, truly need to be ready for anything to unfold, but do reward the market with the value that's in front of you and make some cash sales and and just really focus on the value that's in front of you right now.

Todd Gleason: 31:32

And Chip Nellinger of Blue Reef Agri Marketing out of Morton, Illinois.

Chip Nellinger: 31:36

Yeah. I think, I think both those comments were spot on. I would add to it From old crop perspective, get a plan of attack, figure out starting point when you want that cash. If you typically, you know, need that cash and, that gain generated into cash flow, for March, payments, cash rent, input, stuff like that, realize you only have 30 days left, and we've got a heck of a rally. If you hold it in the summer regardless, you've got some more time on it.

Chip Nellinger: 32:04

From a new crop perspective, as as you look at what average yields are and what the input costs are, there's nothing to jump up and down and get excited about. In fact, it may be barely break even, but that doesn't mean there are not some things to do by making a few sales initially, maybe looking at some put coverage because there's tremendous amount of downside risk here, and we don't know the full size of the South American crop yet. And if things go on without a hitch with planting and the harvest of that second crop corn in Brazil, that's really gonna be a cap on the corn market, by mid spring as well.

Todd Gleason: 32:37

Commodity week is a production of Illinois Public Media. It is public radio for the farming world. Find us online. Listen to the whole of the program anytime you'd like at willag.org. Our thanks again go to our panelists, including Naomi Blum, Chip Nellinger, and Sherman Nuland.

Todd Gleason: 32:55

I'm University of Illinois Extensions, Todd Gleeson.