Coming up on Market to Market.

Farmers and policy wonks look for clues in the pause of tariffs with a major trading partner.

A long running Midwest refugee center worries about the future and commodity market analysis with Don Roose.

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This is the Friday.

May 16th edition of Market to Market, the Weekly Journal of Rural America.

Hello, I'm Paul Yeager.

Congress is trying to put together a big budget bill, 1116 pages, incorporating the current projections of revenue and spending needed for campaign priorities.

Meanwhile, tariff policy, trade negotiations and price hikes are already in the shoppers cart before it heads down retail store aisles.

The inflation reading from consumer prices slowed for the third consecutive month, adding just 2/10 of a percent on the month and 2.3% on the year over year mark.

The producer price index dropped half a percent, the biggest move lower in five years.

The year over year reading was 2.4%.

Retailers added a 10th of a percent of sales last month for shoppers.

Look to navigate the wake from stop and go tariff policies and tariff impact could be felt in the next 2 to 3 months as businesses work through inventory they stockpiled at the beginning of 2025.

The largest retailer in the world, Walmart, said this week they expect to raise prices in stores because of tariffs.

The two countries involved in the biggest trade discussions paused their disagreement for 90 days, but have yet to ink anything permanent.

Peter Tubbs reports.

This week, the economy adjusted its economic expectations after President Trump retreated on his tariff strategy with China.

The U.S. and China reached a deal on Tuesday to cut tariffs for 90 days, while continuing negotiations on a long term trade pact.

So it may be the case where tariffs are just a lot less than they were initially, which both countries can can claim as a win.

President Trump can say we have higher tariffs than we did before he came to office.

China can say that we got President Trump and the United States to reduce tariffs significantly on Chinese goods sent to the United States.

Even with the reduction of tariffs with China, the average duty rates for goods imported to the U.S. are higher than any time since 1934, just after the height of the Great Depression.

One of the new things that may develop as a result of this is that the trade policies that the Trump administration is imposing on many countries around the world, I think, is actually going to be counterproductive with respect to our relationship with China.

A lot of countries now see China as a more reliable trade and investment partner than the United States is.

While American importers have welcomed the drop in tariff rates, the 90 day window is too short to return to the shipping volumes seen before the restarted tariff conflict.

Uncertainty has paused corners of the economy that are dependent on imports.

China, if you looked at it, probably got the best deal on these and then these negotiations in Switzerland, they got a lower tariff than had been imposed.

and as a result of that, they now know how President Trump is willing to play this game and how far he might be willing to negotiate.

So I think for China, this is probably more of a win for that country than for the United States.

According to USDA data, more than 43% of the 2023 soybean crop was exported to China, with an estimated value of $12.8 billion.

India's complicated American Soybean Association President Caleb Ragland told members of the Senate Finance Committee that American soybean farmers are under pressure.

Export in the phase one deal with China had wonderful opportunities.

If compliance and enforcement had taken place, but it didn't.

But we would like to see.

A minimum of those volumes return, and we need those desperately.

Our prices are similar to what they were pre trade war in 2018.

But our cost of production are so much higher.

The Trump administration is facing at least seven lawsuits over its trade practices.

Plaintiffs are arguing that Trump is asserting powers he does not have.

Tariffs are paid by the companies that are importing goods, and the costs are usually passed on to consumers from Market to Market, I'm Peter Tubbs.

Immigration policy reform was a big part of the Donald Trump for president campaign, and work to make those changes has carried over into his second term.

This week, the Supreme Court heard arguments on birthright citizenship.

Those here illegally have been the target of raids, but those here, because of turmoil in their home countries, have also been swept up in the conversation.

Programs that help with bringing refugees into the U.S. from war torn regions of the world have seen their government funding cut.

An agency in central Illinois is one of those groups facing an uncertain future.

Colleen Bradford Krantz has our cover story.

Lewis, Nguyen in a 2004 immigrant from Vietnam, still visits the refugee center in Champaign, Illinois, for occasional help with bureaucratic paperwork.

I love it here, and I help somebody do good.

And how somebody and some people, had the good life and understand anything.

The paperwork.

I love it here.

He heard great things about the refugee center upon his arrival.

What he didn't know then was that it was a fellow Vietnamese immigrant, Tam Wei, who helped establish the organization in 1980.

Now 99 and living in an Urbana assisted living facility, Tam Wei tries not to worry about the 45 year old center's future amid federal funding cuts threatening refugee services nationwide.

Refugees are a category of immigrants who are legally allowed in the United States when they are unable or unwilling to return to their homeland due to well-founded fears of persecution.

Born in French colonial Vietnam in 1926, Tam grew up near Hanoi.

During the 1946 French Indochina War.

She witnessed her husband's death as he treated a wounded soldier, making her a widow at age 20.

And I tried to open his jacket and I think it almost works and I pass out.

I think he passed away right in front of me.

After discovering a passion for teaching at several schools in Vietnam, Tam went on to study education.

Earning a bachelor's degree by 1951.

With Communist threatening her Noncommunist family, she was eager to continue her education abroad, first in Geneva, then at the University of Illinois, earning a graduate degree in educational psychology.

There she met and married Lun Chin Wei, a scientist focused on soybean research, and they raised four children in Illinois.

By 1970, Tam Wei was working as a traveling school psychologist.

At the time, the U.S. was involved in the Vietnam War, and she worried about working in the rural United States.

However, she almost always found kindness and gratitude.

But it's very challenging because Vietnam was then going out and I'm a woman.

They may never see a Vietnamese woman, but in a way that, okay, I'm the one.

What the heat on challenge.

But you know, when you're very sincere and very rarely want to do something, fabricate it, go through.

As Southeast Asian refugees arrived in Champaign Urbana, Tam's memory of being a newcomer inspired her to action.

So what I should do?

I should do something.

That's the only thing ever.

And I have no idea about administration.

With friend Quint Nguyen, a former Vietnamese school administrator, Tam rallied local churches to sponsor refugees.

Their efforts culminated in the refugee center's 1980 opening in a small room in an Urbana church.

I first got involved, about 1978, 79.

I had just come to town to work as a director of an adult education program.

one of the courses we offered was English as a second language.

And through that I met, Tam Wei and also her co, director.

Quit Wen as they were helping, new arrivals.

Tam Wei is very persuasive.

So she said, oh, John, it would be good if you were on our board.

And so, that's how things started.

John Muirhead is proud of the help the center has given to a long list of refugees and other immigrants who have come to the area.

It's really amazing when you think back over the almost 45 years that, I've had the privilege of witnessing this.

But the refugee center faced a challenge earlier this year when President Trump cut refugee funding.

Within months, the federal government canceled contracts with groups overseeing refugee centers nationwide, including the U.S. Conference of Catholic Bishops.

The center's supervising partner, the cuts forced the center to reduce its budget by about 15%, though state support and private donations will sustain other immigrant services even as refugees assistance suffers.

Refugee resettlement is the gold standard of legal immigration.

People are vetted.

They are interviewed, they have support through either family that's already here or agencies like ours.

So I'm very sad to see that the Trump administration has decided to target refugee resettlement.

Tam's message of compassion, which she brought to other Midwesterners when establishing the center, remains as relevant today.

What they have, they have only their dignity.

If you are able to.

Give so.

Much, why don't you give them the amount and let them spend?

It is there to make them come and ask for that.

You need to think of the dignity the people for Market to Market.

I'm Colleen Bradford Krantz.

Next, the Market to market report.

This week was full of ups and downs from optimism over tariff suspensions, a bullish one and a possible break.

And the record runup in livestock prices for the week.

The nearby wheat contract gained $0.03 and the July corn contract lost $0.06.

Losses in soy oil melted much of the gains from earlier in the week as lower biofuel blending levels were released.

The July soybean contract is weaker by $0.02, while July meal dropped to 20 per ton.

July cotton shrank $1.83 per 100 weight.

Over in the dairy parlor June class three milk futures improved $0.83.

The livestock market was mixed.

June cattle sold off $2.45.

August, feeders cut $2.70, and the June lean hog contract added $2.75.

In the currency markets, the U.S. dollar index expanded by 88 ticks.

June crude oil increased by $1.51 per barrel.

Comex gold fell 157.10 per ounce, and the Goldman Sachs Commodity Index expanded more than two points to settle at 530.95.

Joining us now regular market analyst Don Roose.

Hi, Don.

Great to be back, Paul.

There's really just one topic we could cover all the time and that's trade.

But let's start with wheat because that is caught up into it.

But first from a technical perspective the bottom seems to be the easiest place to go.

Is that where we're going to stay?

Well, you know, I think when you look at the wheat market, actually, it had a key reversal.

Chicago wheat, Kansas City wheat, you know, as we got close to $5 in Kansas City in Chicago on July.

So, maybe that's the start of something where the cheapest wheat in the world.

You know, so we're at value.

We're also moved into a feed wheat, as harvest is going to start to pick up here as we get close to June.

Paul.

Speaking of the harvest, we had the wheat tour this week.

Any surprises from that?

Well, you know, there again, the wheat market just can't find a friend.

You know, from a fundamental standpoint.

It's, we were, ten bushels over the five year average in Kansas.

So, you know, that's, that's a lot.

and then the, the ending stocks that we had the beginning of the week went up for this next year also.

So, I think it's really, how low is low?

And maybe we've hit, a world value down here where demand buys, the value eventually pull in corn.

It doesn't seem to be helping wheat, but corn specifically in the old crop sector say, hey, does anybody have any money left after Monday's report?

Well, you know, I think when you look at the corn market, actually, the reports on Monday were actually, positive.

We just didn't have a pause or reaction to them, which is negative.

But the market, very much like the wheat market, is trying to put in a technical bottom.

we're down at a level that I don't think the producer is going to sell.

And we're also, you know, we're about 8/10 off of contract lows in the DEC. And on a negative, we went into contract lows on September, so we haven't been this low over the life of the contract in September.

Paul.

Well, let's finish up for a moment on the old crop.

You're hearing that nobody's really selling right now.

They're holding.

Are they holding out for a certain price?

Well, I think there was pretty aggressive sales during the winter.

You know, when we were up around $5.21 over $5 in July.

So, you know, when you're talking to carry out that is close to 1.4 billion probably going to tighten up on the next report.

I think from a producer standpoint, at these price levels, I think you're waiting to see once what the weather looks like going forward.

Paul.

Well, that's what I want to talk about on the December corn we're showing right now that five year ahead of the five year average.

But it is such a strange line of the haves and have nots when it comes to rain.

The haves don't want it anymore.

The have nots are begging for something.

What's that doing to the market?

Well, you know, rain makes green.

I mean, I think that's the big overall view.

And the wet areas down the southeast, not enough acres to make a big change.

You know, it's too wet up in the far north again.

But I think the guts a lot of the corn belt is, favorable.

for the most part.

And I think that's taking one of the risk premiums out of the market.

And that's if we're going to get the crop planted, we probably think, Sunday night, 80% of the corn planted, 65% of the beans.

And, you know, basically we're going to, go forward without problems, prevent plant acres could be less too.

So that's another issue for more acres.

Do the tighter stocks equal more susceptibility to weather?

Well, exactly I think you know let's look at the corn on new crop.

We're at a 1.8 billion carryout.

You know when you look at the yield at 181 bushels is what the government's saying.

If you start to move that yield around, you know, does it go up a lot?

You know, it's going to be tough, you know.

but if it goes down, you could easily go back to a carry out of 1.3 billion, something like that, of course, with a expanded yield.

You could go up to, over 2 billion again.

So there's a lot of information to go forward yet.

And it's a foot race now.

We're going to see once what the weather does as we go forward.

But remember usually we see weather pattern changes or looks around the 4th of July, but that's always ahead.

Oh yeah, we haven't even hit Memorial Day.

So we have a long way to go to that.

But let's get into a question.

If we could.

Chris in Illinois, I had posted this.

Okay.

I admit it's our friend Chris Robinson.

He put it headline of his newsletter today was this is this a base or a trap door on new crop corn and beans?

Well, it's the wrong time of year to sell from a producer standpoint.

I mean, we've got a concerning weather going forward.

Noah came out with a 90 day forecast.

They want a little bit drier, a little bit hotter for the summer.

So anything can happen.

I still remember 83 when it was perfect.

And after the 4th of July it just quit raining and it got hot.

Well, you mentioned 1983.

There's also the discussion of comparisons to 2012.

Do you buy into that?

Yeah, I mean, it's possible.

And you have people talking about the 89 year drought cycle.

So, you know, it's this time of year where you, you know, you try and get scared on the weather.

And usually we lose the crop 1 or 2 times, three times during the crop year.

Also, you know, buyer, seller beware is what I would say right now.

Same thing in soybeans.

again, tight stocks and weather is that are those are the two things they're moving.

Yeah I think that's it.

You know, of course we have a lot of trade, out here that is very uncertain with the tariffs.

you know, it looks like I mean, we're going to produce so many soybeans in the world, and we're going to consume so many.

And I think from a tariff perspective, yeah, maybe China doesn't buy as many, but maybe Vietnam, some of these other countries buy more.

So I think it's just a shuffleboard going on over there.

But again, it's going to be just think it if you drop soybean yield two bushels an acre, there's 170, 70 million bushels just like that.

You're down to 120 million carryout.

So it's just too early to, have a knockout punch on the grains.

Paul.

I got three things we have to talk about with soybeans.

Let's start with renewable fuels.

And the RVOs were lower.

But as was pointed out to counter that, we've overused the what the mandate has been.

Is that enough of a market mover?

Well, you're right, I mean, it was, you know, we were going to have a larger, you know, usage on the biofuel and then it, went the other way.

Soybean oil did go limit down on Thursday.

due to the uncertainty.

I think it was still sorting that one out.

Paul, I don't think we have a clear picture on, what the usage is really going to be going forward, to be honest.

Do we have a clear picture on the size of the Brazilian crop then, and what it impacts us in the trade here as we look at November?

Well, that's another good point.

both, Brazil, Conab and Argentina, Buenos Aires exchange, both of them put the soybean crop higher, 117 million bushels in Argentina in about, 20 million larger in Brazil.

So big crops are getting bigger.

And along that line on corn, they put the corn crop up 160 million bushels.

But interesting, next year on the world ending stocks, you know, shake it up all the way around.

Down 400 million for next year.

So, versus this year.

So world stocks on corn are getting tighter.

U.S. corn stocks, I'd call them not burdensome.

And we'll see where we go from here.

Especially with the intentions to plant more, is what you're saying.

Yeah.

I mean, even with the acres that we have, big acre expansion, we still end up with a carry out of 1.8 and you take a yield down, it can get tight pretty fast, but I mean, that's not a positive either yet, Paul, because we have adequate supplies.

And but my bet is on this next crop report that we get in June that the, exports go up 50 to 100 million again.

And being exports go up tightening again.

Is that because we've had some agreement with China.

Is that why you're hedging it on that.

No.

That's just the old crop demand okay.

Oh crap.

Oh crop.

Oh but that is a good point.

When you go to new crop actually the government put, exports on beans up 75 million for next year on beans.

And they left corn pretty much the same.

So with all these tariffs, that was our first look.

They're not really saying we're going to lose export pace.

But how much before the market needs to see.

As I said something in Inc versus I just said I had a deal.

Well, you know, I think proof is you know, we need certainty to see once what we have going forward.

I mean, it's, it's a whole new era from that standpoint.

But, I don't think we're going to lose a lot of demand on the export front, but I do think it'll shuffle around.

Paul.

Let's get to a live cattle, because you mentioned the tough day in soy oil on Thursday.

Cattle kind of Wednesday, Thursday pretty tough Friday stabled a little bit.

But I guess the big question everybody wants to know is this finally the end of this bull run?

If you're a technical trader, you would say that we just put in our multi-year top this last year because this last week, because you had a key reversal, in the cattle market close.

We've had four of those so far this year, but we moved further into the cycle.

so I think you have to be very careful.

The only thing that's holding this up technically is cash.

Cattle traded again, steady towards the end of the week.

Here's one box beef hit an all time record, on Friday, 353.

The highest record we ever had before was 343.

The highest cattle market we've ever had in history before.

This year was 2014, just over 191, June.

Cattle this week went to $218.62, did have an $8 slide on the front month, but bounced back a little bit Friday but shaky up here.

The consumer really starts to balk when box beef gets to that point.

They will see that affect.

Will that be enough to maybe end this run?

Well that's the key.

I mean when does a you know the Packer doesn't know who's going to buy next.

You know the weekend and it just doesn't clear.

So beef last week was 8% higher than a year ago.

the ground beef is 12% higher pork 2% higher in chicken, 1.5% higher than a year ago.

So, yeah, it's standing up here pretty high from that standpoint.

Are you hearing anything about feedlots and pastures empty and some cattle keep producing areas for feeders?

No, I think the problem that's happened, and this is how the cattle market tops out.

Paul, is the packer, so far less.

Look at it.

He's lost, this week, about $180 a head.

The feedlots are making about 280 cow calf guys making about $670 a head.

But how a cattle market tops out is the, he pushes the beef up high enough to confuse consumer stalls, and then you start to back up the, cattle in the feedlot, big weights, and eventually that starts to pull the market back.

And by the way, I mean, we're coming into a time frame where the seasonal demand, Memorial Day buying is probably behind us.

So you've got these big holidays, in the rearview mirror.

And you had a nice run up in hogs to this week.

Yeah, the hog market, well, seasonally on hog market usually does start to go up this time of year.

BLT season, gets in actually, you know, when you look at it, bellies usually go up about 40% into the summer.

And that drags the hog market up.

And the technicals, on June hogs are about $5, up $105.17.

There's a gap.

Gaps usually get filled.

So that seems like that's, a target maybe.

Are you hearing people making sales right now?

Yes or no.

In the hogs and hogs?

Well, I think when you look at the hog market, when you get over $100, you start to get a little bit cautious.

So yeah, you're seeing some catch up sales.

All right.

Don good to see you.

Thank you so much.

Thank you Paul.

Don Roose everyone we're going to pause our analysis continue our discussion about these markets.

We'll talk about BLTs In our Market Plus segment.

You can find both analysis and plus on our website of Markettomarket.org.

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Whats next?

Doesnt happen by chance.

It happens when researchers and farmers who work together to solve tomorrows agronomic challenges.

Were committed to creating whats next because at Pioneer our name is our mission.

Family owned and operated for more than 60 years.

Sukup Manufacturing is a full service provider of grain handling, storage, and drying equipment, helping farmers feed and feel the world.

Tomorrow.

For over 100 years, we've worked to help our customers be ready for tomorrow.

Trust in tomorrow.

Information is available from a Grinnell Mutual agent today.