Welcome to the table for the Friday, March 7th, 2025 installment of Market Plus.

And joining us back for more is Shawn Hackett.

Thanks, Shawn.

Thanks.

We had some good discussions during the program, but we have a few more questions and I'll start with some of our viewers.

This is Phil in Ontario, and he's wondering about $5 corn.

It seemed like a mirage.

He said, was it talk of tariffs or did the funds just get spooked and will some acres shift back to soybeans?

Well, whenever you have, speculators, as nose bleed long as they were, they're always susceptible to taking profits at a moment's notice.

You never know what the triggers exactly are going to be, but it does appear that the tariff escalation caught them off guard.

And it wasn't just grains, it was all commodities getting hit, even the stock market getting hit.

No doubt they got spooked.

Start to liquidate.

And you know, once they start liquidating it's becomes a self-fulfilling prophecy.

But that was no question what happened there for corn.

So Dan in Oregon is wondering how will spring planting weather affect corn and soybean acres?

Will we have more beans, less corn?

If our forecast is correct about a wintry spring late for spring frost, this would promote less corn acres, delayed planting on corn, cold soils, lower emergence on corn.

It would promote more soybean acres.

So while the planting intentions report might say the exact opposite, once we get that out of the way, it's all about the weather.

And I do believe we're going to be planting more soybean acres than that, planting intentions report suggests, which would obviously be a net bearish view on soybean and a net bullish view on corn, especially if we get late emergence in the corn crop.

And we push that pollination out into the month of July and even into August, when things are usually the hottest and the driest of the season.

All right.

Wayne in Iowa is wondering, will there be a rally in both corn and soybeans this May or June?

Well, certainly, if we're correct about this wintry spring, delayed planting.

And remember post dormancy wheat last year caught a big frost from Russia, Ukraine and the wheat market put over $2 on the market and dragged the corn market up, was one of the best cash selling opportunities of the year.

Winter wheat could have a really, really significant rise on our cold spring forecast.

And you know, if if soybeans I mean, if wheat goes up and we have delay playing in corn, you would have to believe that we would get a weather premium that would have to be put into the, grain markets.

And even though that wouldn't be net bullish for soybeans, if corn and wheat go higher, it still has a contagion.

It still will drag soybeans up by its bootstraps even though it really shouldn't.

All right.

So Mike in Iowa is asking where are you looking for a bottom in old crop.

And also a new new crop corn to own.

We've had a target on old crop corn that we defined by July corn.

We had a 450 target which we actually I think we came within a couple of ticks this week from hitting.

It's based on moving averages and some trend lines and some technical analysis that we follow.

That's an, in our view is a great opportunity for the end user.

We talked about on the beginning part of the show to get themselves further along in their cash, cash purchases of corn, ethanol producers, getting some more corn purchased.

That's the place where we feel, we're at and and that, of course, we did bounce off of that a little bit.

But any further corrections into that 450 zone based on the July and basis, whatever that means for December, we think that's going to be a pretty good spot for the buy side of the equation.

Okay.

Petroleum prices have been dropping.

Is it a good time to lock in our spring needs?

Well, the crude oil thing is very, very complicated.

Is Trump going to buy the put the strategic petroleum reserve back into vogue?

Is he going to buy oil and oil back like I said he is going to do?

I saw that Saudi Arabia is going to be increasing their production.

The economy's not looking so good.

You know, it's crude oil is a tough one to say.

Why we would need to go higher at this point.

I mean, obviously everyone has to look at their at the cost benefit now.

I'm much more worried about natural gas locking in natural gas prices.

We've had a very cold winter.

Inventories are way, way down.

Production is down because of the low prices we had over the last year.

Export of LNG is going through the roof, more capacity coming online and all that power that's being consumed by artificial intelligence needs more and more electrical power.

If I was just looking at where I think the exposure would be to the upside price risks, natural gas, nitrogen based fertilizer, propane, anything that derives itself from natural gas, I would be looking there to button up physical purchases.

Okay.

What about the dollar?

It took a beating.

What do you think's going to happen?

We've been very constructive that the dollar would see a very significant decline during Trump's presidency.

It did the last time.

Think of it this way.

Trump is hurting trade.

No matter how you want to slice and dice it, trade is being reduced.

It's being hurt.

And the demand for U.S. dollars is strong when there's strong global trade.

Deglobalization goes against strong demand for dollars because it means less trade amongst countries which is bearish dollar.

And even though that doesn't sound like a good idea for the grains.

A weaker dollar makes us more competitive.

It makes our price here more inflationary relative to farm prices.

So I think net net, when you work this through, a weaker dollar that we expect to continue to happen would be a net positive despite lower trade.

Okay.

With that said then what is your favorite commodity right now for the next 90 days?

I'd have to say, given our weather forecast.

I think the most interesting market would be winter wheat, probably KC HRW wheat, because if you think about a hard freeze, potentially, you know, in the center west, which is where you normally get those kind of freezes with Russia, Ukraine inventories very, very low from last year's poor crop and another poor crop coming.

I would think that that's a market that would have the potential, like it did last year, to have the most significant need to increase weather premium once again, if our weather forecast is correct.

Okay.

With wheat and the other commodities, have we seen them bottom yet?

Overall, commodities as defined by the Goldman Sachs Commodity Index actually bottomed last September.

And we've had this kind of grinding move higher.

We've had kind of a little bit of a dip here.

But overall we feel September of 2024 was the low in overall commodities.

And we're beginning a multiyear trend higher doesn't mean every group goes up at the same time, but it does mean that the overall view for commodities is a more of an inflationary cycle.

And really that weaker dollar is one of the reasons on top of the weather, to be expecting that to continue.

Okay.

I want to ask you about you've been talking about, delayed planting because we could see, a stormy, very cold spring.

Right?

Yes.

So tell us a little bit about why you think that.

Well, there's a lot of variables, but one variable that's really, really important right now is something called a sudden stratospheric warming event.

I know it sounds really fancy, but what it means is over the North Pole in the stratosphere, it's normally super cold, but there are times that the atmosphere gets super hot, the air up there gets really, really hot.

That's what's happening right now.

In fact, if the models are correct, it will be the strongest SSW event we've had since 1950.

There's only been five of these of this kind since 1950, and they are highly, highly correlated to a very cold, wintry spring when they occur.

So that is one thing that's really pushed me into being far more concerned about this spring than looking at some of the other variables that are in place.

And so to me, there's a delay.

There's a 30 to 45 delay from when that happens to when the atmosphere delivers the cold is a pretty reliable phase shift.

And so you work the numbers through mid April to mid May is the bullseye.

If this is going to happen that's when it would happen.

In Russia, Ukraine would also be in the mix from this and this potentially happening as well.

Okay.

Last question.

Do you have a pick for the week?

A commodity pick for the week.

Oh, wow.

I don't know.

I mean, I just I think I'm going to stick with winter wheat, you know, I mean.

Winter wheat put on $0.90.

It gave it all back on this big break in the grains.

And now we're starting to, you know, bounce off.

This is a two year base in the wheat market.

I just think that's a market that funds are heavily, heavily short.

They'd be vulnerable to needing or being caught to buying back into the marketplace.

Remember, a weaker dollar is most impactful to the wheat market because it's grown in so many more places in the world than corn and soybeans.

So a weaker dollar has a significantly amplified effect on wheat prices should it continue.

You covered a lot of ground.

Thank you, Shawn.

Thank you so much, Brooke.

All right.

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Next week.

Getting help from a small insect to battle a big problem in corn country and commodity market analysis with Don Roose.

Thanks for joining us and have a great week.