With agriculture today, here's Tony St. James.

It is our bigger markets that are usually, you know, they're stepping in.

Iowa State economist Dr. Chad Hart.

Japan, South Korea.

Colombia is one that I know I've highlighted over the past year, that there's a market that is relatively new to the scene when you're looking at our big markets, but they have been really consistent in buying corn for the past few years.

So we are seeing those international sales really starting to heat up here as we prepare for harvest, and that's usually what happens because if you think about it, when do we tend to see our lowest prices in the market? It's right around harvest, and that tends to bring in a lot of international, um, let's call it consideration of US crops because they're looking for those, uh, good pricing opportunities to capture our commodities.

So as we're looking at where the markets currently stand, we did see a, let's call it a very positive push right after a report.

We saw some profit taking the day after.

You're listening to Agriculture Today.

USDA has provided its first real update when we're looking at potential yields across the country and how that's sort of shaping things as we begin to think about harvest season.

Iowa State Grain Economist, Dr. Chad Hart.

Within those numbers, we had some, let's call it some interesting changes going on as when we look at where we're at right now, we saw some significant adjustments in both acreage and yield, but When you come around to production, we stayed about the same spot where we once were.

So let's start with the corn market.

When we're looking here, what we saw USDA do is give us significant updates as we're looking at the 2026 crop.

Now, here in August is when they begin to massage in data from the Farm Service Agency in terms of that acreage.

Now, it's not a complete set yet, but they're bringing in what data they can find there up to this point.

I mean, you think about... that side of the equation and all that unknown does that make it tougher for producers right now to plan and look at their break-evens and more because things could wildly change in a matter of a week or two it seems right now um

it makes it a little tougher but i would argue it's the same basic challenge that we have every year we never know what's going to happen with those input costs as you bring up we have two major wars going on across the planet that are having significant impacts on markets and in this case in both directions as we have really seen as we've closed out the end of July here, where, you know, the market sales higher when those conflicts escalate and then drops back down again quickly when we seem to be headed towards a ceasefire.

So it's not something that farmers can necessarily plan for, you know, pick that perfect price.

But what you can do is figure out what you can control.

Are there opportunities there to maybe lock in those input costs a little bit earlier if you think if you're worried about prices continuing to rise on the cost side? In doing that, what you're also doing is you're establishing what your cost of production for next year is going to be and therefore should be giving you a little more, let's call it confidence.

in maybe pre-harvest marketing some of next year's crop ahead of time as well, because you can see both the cost that you know you've locked in and the price that you're capturing to basically pay that.

It feels like the dynamics are a little bit different here now that we're getting set to reopen the border.

Oh, I have no doubt that they are different.

This feels like the dynamics, [clears throat] excuse me, feels like the dynamics are a little bit different here now that we're getting set to reopen the border.

Oh, I, I have no doubt that they are different.

I mean, if for those that were expecting an immediate snapback to where we were a few years back, no, that's not going to happen here.

This is gonna take a fair amount of time to sort out.

As you mentioned, Jesse, the idea is as we're looking at, you know, the dynamics even within Mexico, they have now spent the last couple of years feeding out more of their animals than ever before.

They're likely gonna continue to do some of that as we look forward.

So we're likely gonna see a tighter feeder cattle market coming out of Mexico than we're used to seeing.

What's your take on the hog complex, Chad?

So, so tell me about, um, impact of war, uh, and depending on where it is and how that has influenced our summer rallies.

Sure.

A- as we're looking here, and, and the thing that we've gotta recognize is, yeah, war does tend to drive up prices because it constrains how supplies can move around, not only the countryside, but the globe.

And, and right now, we're looking at two major wars across the globe.

For us in the US, we've mainly concentrated on the US-Iran conflict there, but we've also gotta remin- remind ourselves of the Russia-Ukraine war.

And in this case, these two wars are centered on two major, let's call it trade flow areas.

And we've been spending a heck of a lot of time this summer talking about the Strait of Hormuz, but we've also gotta remember that the Black Sea region moves a heck of a lot of agricultural product.

Is that in your tally card?

And even if you don't get all of the China soybean business that they're talking about, the 25 million metric tons, even if you got part of it, we're going to be pretty tight, aren't we?

Well, yeah, but we've been tight for the past several years.

You know, I could argue that you look back over the past five years and our ending stocks have basically fluctuated between 250 to 400 million bushels each and every year by the time we're done.

So we're always tight.

In this case, I think it's more that matter of, okay, will the acreage increase sort of match what we believe demand is already built up to do? As you mentioned on the crush side with the biofuels, that has been providing tremendous support over the past, especially, you know, four or five months here.

We have seen a real surge there on the soybean oil side.

And now we're looking at, okay, how will China play this year? And it's been the case for the past five years.

Do you think we're going to see any easing in 2027, or is this high input price thing going to continue through the next year?

What have you been thinking about this marketplace?

Well, I think as you look at the marketplace and what we've been through over the past six months, we're basically grabbing the latest news story wherever it might be.

writing it to its illogical conclusion and then coming back, you know, the other way again.

And so when we look, the fundamentals have been sort of ignored for a while.

And so we have to agree, yeah, we need to settle back in again here.

As we're looking now, you know, the idea is, you know, the war in the Middle East looks like it is settling.

We're still worried about what that means for the long term for the energy market.

How far along do you think they ought to be?

Wheat where we are the last resort, corn where we are the first resort.

Yep.

And, you know, when we're looking here, I think we're used to thinking of us like in the corn market, where we are the dominant market.

When you think about global supplies of corn, we are basically the biggest producer, but we're pretty much the biggest user as well.

And so therefore, whatever's really happening in our market sort of chains its way through the rest of the global corn market.

Flip that on its head when you're talking about wheat, and I would argue we're making that change in soybeans as well, where we're not the dominant market.

We are sort of a, we're a big player, but we're by n- by no means the biggest player.

Um, should producers think that way?

Chad Hart is an agricultural economist at Iowa State University.

Whenever we see that decline, it tends to also mean that, you know, farmers tighten their belts.

Hart has his eye on Deere's year-over-year sales as a reflection of farmers' optimism, or lack thereof.

You're talking about, you know, large tractors, combines that can cost hundreds of thousands of dollars.

And so when incomes are, are dropping, it's hard to justify that large expense.