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January 31, 2025

TLDR: Discussed commodities markets with Curt Kimmel from Ag Markets JSA and tariffs with Ed Ussler from University of Minnesota on a farmers' podcast in Illinois.

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In this insightful episode of the Back Roads of Illinois podcast, hosts discuss crucial updates and dynamics affecting farmers and ranchers in the Midwest with experts Curt Kimmel from Ag Markets and Ed Usset from the University of Minnesota. This episode dives deep into the current state of the agricultural commodities market, particularly focusing on grains and livestock, and how global trade factors are influencing these sectors. Here’s a breakdown of key themes and insights from the episode.

Key Highlights

Current Market Conditions for Grains

  • Grain Prices: The podcast starts with updates on grain market prices, noting a slight decrease in corn futures by 5 to 10 cents, with beans and wheat also experiencing declines during the week.
  • Tariff Implications: A significant topic is the upcoming tariffs on agricultural products from trading partners Canada and Mexico, scheduled to take effect soon. This leads to discussions regarding potential impacts on grain prices and demand.
  • Brazil’s Harvest: Brazil is reported to have a promising start to its soybean harvest, with early yields appearing solid. However, concerns about weather conditions persist, affecting supply predictions.

Focus on Soybeans

  • Southern Hemisphere Dynamics: The discussion shifts to the U.S. soybean market, where demand is transitioning towards the Southern Hemisphere as Brazil begins its harvest. Early reports suggest a 4% completion rate, highlighting transport issues following a fire at a key terminal.
  • Quality Control: Notable challenges arise from China rejecting some South American products, potentially indicating a quality concern in Brazilian beans.
  • National News Impact: The episode addresses the effect of avian flu on poultry, which is a substantial consumer of soybean meal, emphasizing the intertwined nature of different agricultural markets.

Insights on Livestock Markets

  • Cattle Market Trends: Curt Kimmel elaborates on the cattle market, signaling an increase in prices driven by high domestic consumption and limited supply. The strong demand reflects positively despite tight margins.
  • Feed Grain Costs: Concerns arise about the impact of high feed costs on livestock profitability, emphasizing the need for affordable grain inputs to maintain healthy returns in ranching.
  • Balancing Supplies: Despite the surge in beef prices, the podcast indicates a potential risk if grain prices rise too high, which could affect overall market stability.

Discussions on Corn Production

  • Brazil’s Corn Estimates: The episode features insights into Brazil’s corn production forecasts, predicting a slight increase in yield from the previous year but still compounded by varying weather conditions.
  • U.S. Corn Carryout: Kimmel points to significant changes in U.S. corn carryout projections, dropping from 2.2 billion bushels to 1.5 billion. This situation heightens the attention on market reactions as the next planting season approaches.
  • Planning Intentions Outlook: As the planting intentions report approaches, there’s speculation about farmers shifting more acreage from soybeans to corn due to greater confidence in corn yields amid current pricing conditions.

Price Volatility and Future Outlook

  • Market Dynamics: The experts agree that farmers should prepare for increased volatility in the markets as trade situations evolve. Each shift in tariffs could bring substantial price changes.
  • Strategic Selling: A strategy discussed is to look for temporary rallies to sell grain, particularly for corn and soybeans, especially given the tighter supply forecasts.
  • Consumer Demand Resilience: Despite fluctuations, consumer demand for beef, grains, and soy continues to show resilience, which may help stabilize prices in challenging conditions.

Conclusion

The Back Roads of Illinois podcast episode provides valuable insight into the complexities of the agricultural market, factoring in tariffs, weather patterns, and global trade dynamics. Both Ed Usset and Curt Kimmel offer actionable insights beneficial for farmers and ranchers, emphasizing the need for vigilance and strategic planning amidst unpredictable market conditions. As agricultural professionals navigate these turbulent waters, staying updated on market trends and being prepared for shift adjustments will be key to sustaining profitability in their operations.

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