AG Bull
Tommy Grisafi is the main host and content creator for Ag Bull Media.
The Ag Bull Podcast showcases agriculture's top talents in a long-form video format. The Ag Bull Trading Podcast is a deeper discussion of trading with analysts and key players in agriculture nationwide.
Futures trading involves risk of loss and is not suitable for everyone.
AG Bull
Wiesemeyer's Perspectives | All eyes on OIL
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Futures and options trading involve risk and are not suited for everyone.
We take a hard look at why ag markets feel so stressed right now, from sharp moves in soybeans to how war headlines can hit fuel and fertilizer prices. We also pause to honor broadcasting legend Orion Samuelson and then move straight into what could actually change farm demand and farm margins next.
• remembering Orion Samuelson’s impact on agriculture and market commentary
• weekly price action across corn, soybeans, wheat, cotton, cattle, and hogs
• Why the Trump-Xi summit delay could lead to bigger agriculture deliverables
• What a more managed trade framework could mean for U.S. exports beyond soybeans
• new farmer aid prospects, likely size, and the fight over must-pass vehicles
• bridge aid progress through the USDA and what Congress may change next time
• White House ag event expectations and where the RFS fits
• Iran conflict spillover into crude oil, diesel, and fertilizer availability
• urea import seasonality and why spring timing matters for nitrogen
• Plains drought, Nebraska wildfires, and pressure on cattle rebuild
• year-round E15 delays and why refinery politics still block a vote
• JBS Greeley strike risks for meat supply and labor leverage
• USMCA review talks and what the midterm elections may change in Washington
I would love to see you on the premium side. $25 a month,$250 annually.
Nashville Update And Premium Invite
SPEAKER_01Welcome back to Ag Bull Podcast, AgBull Media. I'm in our new office in Nashville, and you can see there's not a lot here yet. We need to put some stuff on the walls. Actually, I'm in a friend's office. My office is over there, looking the over the whole city of Nashville. And uh if you ever make it down here, please look us up. Nesvik Trading, Ag Bull Trading, right next door to the Ryman. And I can't wait to meet you all. With that, we have uh Action Pack show. Mr. Jim Wiesemeyer built uh a doozy. It is Saturday morning, so we may, if you hear us talking about this week or next week, it's sunny. It looks like farmers are about ready to get started farming. I'll be traveling up to North Dakota this week. And with that, right as we get going, I would love to see you on the premium side. I can't tell you about all the changes going on in Agbow Media. I can just tell you, we'd love to have you as a premium subscriber.$25 a month,$250 annually. Of course, you'll always get the Wees Meyer video for free on Saturdays and Fridays, but we'd love to see on the premium side. We have a whole bunch of new contributors, and we're going to expand that team greatly. And I'll tell you, folks, with how active these markets are, I think for 75 cents a day you could afford it. So I hope a few more of you join, just like you have been every week. And let's get to the show. Now, a lot of stuff going on in the world. And it's, I will just tell you, as a friend and someone who you watch on the show, it's stressful. Even as a trader and a broker, when I see crude oil move every day like it does, it's stressful. Stay calm. We got just a man to figure it out. We'll see you in a few.
SPEAKER_00Thank goodness with all the line problems and some airports. So as we try to get through the funding levels there. And by the way, Elon Musk.
SPEAKER_01I'm just gonna say that.
SPEAKER_00Elon Musk today offered to pay all those salaries, but there's some legal hoops for that. I don't think that's going to happen.
SPEAKER_01But it's a ballsy move to write a check like that. We give him a weir and grisapi offered money out like that.
SPEAKER_00He probably thinks a billion here, a billion there.
SPEAKER_01All right, listen, we lost a legend this week, Jim. We lost an absolute legend. We have a Orion Samuelson, 1934 to 2026. I have a few stories. You have a few stories. I'll let you go first, and I think your story is going to trump mine.
SPEAKER_00Well, uh literally, he was decades as a uh at the the the voice of agriculture in in many ways, but significantly he was based out of WGN Chicago, so he helped the urban-rural divide, help narrow it with his not only his beautiful voice, but his understanding, and he was very fair-minded, very, very even Stephen. The story I have on him, it was a dinner I had with Orion in Denver. I think we were at a U.S. Meat Export Federation or some meeting in Denver, but that night he told me a fascinating story that during Barack Obama's first Senate race in Illinois, the then House Speaker, Dennis Hastard, wanted him to be a challenger to Obama. And he would have been a formidable candidate. So he could have changed the fate of history because I think had he run, he could have beat Obama, because of course he had the downstate vote with the uh rural farmers and and he wasn't a liberal. And upstate, he I think he would have garnered enough Chicago votes from Obama, but he had some heart problems, and his doctor at the time told him that a campaign would be detrimental to his health. So he told Dennis Haster, no, that's the the story that could have changed the fate of history.
SPEAKER_01Well, I can't trump that. All I can tell you is uh I had several times I was on this week in agribusiness over there with Angelo and my friends, and he would host, you know, he's partners with Max Armstrong forever and 45 years. Max is obviously upset, but you get to spend 45 high-quality years with someone. That's that's a hell of a run. And I was on the show, he's very kind. It it's uh it's someone who I'd heard his voice forever and watched him forever, but then actually we sit next to him. He's like, How are you, young man? I'm like, Yeah. But he I don't know how many people know this. A lot of people kind of know this, but his uh I believe his son traded in the weed options at the border trade, and his knowledge of markets was top notch, Jim. You want to talk about that a little bit?
SPEAKER_00Well, that yeah, he he was very market-oriented, and that's what I've seen in my career. Uh, if you know markets, it makes you such a better commentary, uh, commentator, and ability to ask questions that uh the ag sector wants to know rather than some frivolous type of questions. You go right to the meat of the marketplace. What does this mean to markets? And I think that was a significant advantage that he had. Plus, he built up the the respect over the decades. And so he could he could get anybody he wanted on his program or as a resource, and that's I think was the secret sauce that he had.
Weekly Grain And Livestock Check
SPEAKER_01Speaking of markets, uh again, we just say we'll sign off on big O. Big O, Orion Samuelson, 1934 to 2026, an absolute legend. I don't think there was ever anyone as big as him as an advocate nagg, and I don't ever think anyone will ever do and accomplish what he has done. But we all look up to him, and if we could just be a little better every day, then we're making progress. Speaking of getting better every day, let's talk markets, Jim. We're gonna try to talk markets a little bit every uh beginning of the show. Where should we start?
SPEAKER_00Yeah, well, let's look. I always like to look at weekly changes, and of course, the closing price in this case on Friday. Look at corn 465 and a half. Although they were down almost two cents for the week. We've got an overall uptrend going in that corn market that some people say we're on the way to five dollars and above. We'll see. Soybeans, look at that, although down 48 cents. We had a down limit day earlier this week, Tommy. As I think you'll recall, it's down 70 cents. So that was a blunt. And that was a result, I think, of an overreaction on a topic we'll get through uh later, on a resetting of the uh Trump Xi Jinping summit to mid-May from March 31 to April 2nd. But look at soybean meal take off up five dollars and 30 cents for the week, three$328. And uh oil had a downturn, 193 points. I think uh just uncertainty over what could come up on the renewable fuel standard program decisions, which later on we'll discuss that too. This is a good bridge to that to our program uh coming as soon as Friday, maybe at the White House level. Wheat has been somewhat of a leader the last few weeks, but they had a down week across the board: soft red, hard red, spring wheat down, as you can see, from 18 to it looks like 12 almost 24 cents in HRW and spring wheat down 17 cents. But we're still at pretty good levels for wheat. Look at those. Uh flirting, flirting, if not over that six dollar mark. And that's due to a combination of of factors, increasing dryness in key HRW states. That again, we'll we'll have a topic on that later on. Uh cotton, finally, the dead cat uh uh bounces uh in cotton 67 a little over 67 cents, up 146 points, okay, for the week. That's a good move for cotton. The perspective on cotton, though, is you need at least 88 cents for break-even. So they've got a ways to go, but I'm not gonna I'm not gonna complain about that rally for my uh cotton friends and cattle coming back somewhat, live cattle and feeder cattle. You can see the levels there. 234 for live cattle, almost$347 for feeder cattle. That means it's very expensive to increase that herd. Okay. And hogs had a down week, a little uh down over a little over$2, but still a pretty good uh level. We've been trending high for hogs, a little over$91.
SPEAKER_01Disease pressure, right?
SPEAKER_00It is. I think you you're gonna have the rally as we discussed last week. One of the things I picked up at the Stone X conference from a number of participants there was that this purse is is building, and of course, big time in North Carolina, but it's spreading. And I got several emails after our podcast uh lastly confirming that.
SPEAKER_01I want you to go like this. Do you know who has two thumbs and didn't shut off their phones?
SPEAKER_00I did, but it's still coming through, and I don't know why.
SPEAKER_01This guy and we don't edit, folks. What you're seeing, I don't edit this stuff, so this will not make the blooper real. This will make the real stream. It makes me laugh. Anytime someone's phone's ring, yeah.
SPEAKER_00But I had that off. I've got to go through my all nine and now I know what I didn't do. There's a there's another setting in the Apple phone that you get no signal, but you can have your best contacts still come in. So I didn't I didn't change the settings.
SPEAKER_01And by the way, uh speaking of Apple Enhancement Alert, you look so you look so clear. Tell us what new monitor you're using.
SPEAKER_00I've always wanted the the Apple Studio Monitor XDR. Now, if you look it up, uh don't faint. It's not a cheap monitor. Go ahead.
SPEAKER_01You could bring it up.
SPEAKER_00Oh, it's a little over 3,000. However, what did it used to be? It used to wait over$6,000. Now, no way, yeah, no way would I pay$6,000 for a monitor. But when they cut it 50%, and again, I've dreamed of the studio monitor XDR for Apple, and so I made the bit. But it's a tool.
SPEAKER_01My daughters do that to me, my wife. We bought these shoes, they were half off. I said they were half off, something overpriced, for God's sake. What's the matter with you?
SPEAKER_00It was overpriced, but it's a dream come true, and and it's a tool, it's a tool, and I'm at the everyday, and now I have two big monitors. I've really honestly never had two monitors at the same time. That may surprise people, but now I've got a Sony monitor on the left, and of course, Apple monitor, and it's so clear, it's backlit. It's like a TV, it's better than a TV. Backlit, back lit. So, well, it better be at that price.
SPEAKER_01Yeah. And real quick, I see you're wearing the Eggbowl Media jacket. Give people a little sneak peek what the future looks like in the next few months. What uh what us old guys here, you and I, combined ages of uh I'm doing the math, we got 130 something going between us, you know. Yeah, um, what's the future look like with the Eggbowl and what we're doing?
SPEAKER_00Increasingly, I've told my best sources and friends that I'm going to increasingly partner with the guy called Tommy Krasafi. And I think you're gonna see some announcements coming up here. That's gonna be good news. Uh, we're gonna have a flashpoint where you'd be able to go one-stop shop for my stuff. Archives, uh, internet side in the making, but I don't want to give away too much. But some positive developments, and that's thanks to you, Tommy. I'll tip my hat to you. I I think you energized me even more, and you have the passion that I have, and you put two passions together, you have upward progress.
Trump Xi Reset And Trade Targets
SPEAKER_01And we got to give credit to our team. We got a whole team behind us. We got Jed, Joe Gersafi, Lindsay, the whole Nesvik team loves you, and you yeah, yeah, we got a whole group here uh that's kicking ass, taking names. And you know what? We're allowed to say that because this is our show, right? Ain't no bleep of reels here. All right, let's get in the show, and I'm super excited. Let's uh do full screen on you, and and I'm using my dollar camera and my laptop, and you got uh studio settings on 1080. Yeah, 1080. You know, Jim, you have a pimple on your uh 1080 shows everything. Let's go, brother.
SPEAKER_00Okay, okay, Trump and G uh Jinping rescheduled, reset. Now, initially, as we talked before, the soybean traders see they had built in anticipation of a deliverable, what we've called a deliverable positive for agriculture out of that summit, Tommy. But when they didn't get it, they have to pull back. And of course, you had your Debbie Downers in the ag sector who will remain unnamed. Go ahead. Go ahead. Come on. No, no, no, no. I never unless they really have it coming from them. But uh they assumed the worst. They they said, Oh, well, now maybe there won't be a summit, or maybe there won't be an agreement. That's all balderdash to use a Reagan.
SPEAKER_01It's clickbait, Jim. We call it clickbait these days. It's it is pure clickbait bait BS. Yeah, yeah.
SPEAKER_00But I wrote a special report uh Yeah, you did Friday. It was late Friday, and it's on your uh it's it's it's on your uh internet site, Tommy. Uh and I'm telling you, it uh uh it shows I'm going here to it. Uh yeah, go ahead. I'll uh it shows uh I'm just going to the right thing. I've got to go.
SPEAKER_01I'll go full screen on me so people don't have to. Did you find it?
SPEAKER_00Yes, I found it. And but so we effectively the White House has not announced an exact date, but they're signaling President Trump signaled he's reset it to mid-May. Now recall again, it was originally slated for late March, early April. So four to six week delay. That's actually a positive for agriculture, I've been told. Yeah, because that's gonna mean whenever they do meet, we're gonna have a more developed deliverable, especially for agriculture. How I would how I wrote it is this is shifting from a photo op summit that would have been in Beijing to a deliverables-driven summit, and agriculture is clearly gonna be at the center, and it's gonna be broader than soybeans, and that's exactly what USDA Deputy Secretary Stephen Vaden alerted to us. Now, soybeans remain at baseline, but they've they've already committed to around 25 million tons annually of U.S. soybeans under the 2025 trade truce, if you recall. Now, remember Trump a few uh maybe a month ago now suggested to Beijing that they increase uh this season's purchases by an additional eight million tons above those 12 million metric tons. Remember that they bought by the end of February. Now, China's signaling openness to increase, but we may not get that full eight million tons. But what other ag commodities are could be up for this deliverable? Poultry is gonna be one beef. I they're going to certify a number of U.S. beef plants that need to be certified, but the kicker is other non-soybean crops. Now, what can we do? Like rice, cotton, skull, corn, corn, uh, sorghum, etc. And they could have a linkage to LNG, liquefied natural gas. That's new to me.
SPEAKER_01Talk to me about that. Tell me about that LNG.
SPEAKER_00They need they need energy. I mean, they're they're already seeing they get, although Trump says 90% of their uh oil from Iran. I think the figure is closer to 60%.
SPEAKER_01But is that right?
SPEAKER_00Yeah, the bottom line on this for agriculture is going to be a more managed trade model. And Scott Bessant and you know Jamison Greer, our U.S. trade rep, when they were in Paris, they discussed what they called a formal mechanism. They called it a US-China Board of Trade. It'll set targets for what China buys. And I think we're gonna have stability. It's effectively a phase one style system, but more institutionalized, but not grand tonnage levels that we saw in the phase one under Trump 1.0. So there'll be more incremental purchase commitments beyond soybeans, beef, poultry, corn, sorghum, possibly ethanol and DDGs. And it could be an a multi-year purchase framework. So some wheat and sorghum to signal goodwill, they could lead up to the some actual summit date, you'll probably see China give us some goodwill buys. And so that probably will come in wheat and sorghum, I was told. That's in my my story that was out Friday. So they want to stabilize the relationship, and agriculture is gonna be a big deliverable. We don't know what China's gonna get, but they want something for this. But as far as I'm concerned, this is gonna be good for US agriculture when we have that summit. But Trump wants most of the US Israel war with Iran over with by the time he goes to Beijing. He doesn't want that clouded by any lingering big-time issues. So I that was the real reason. Plus, he wanted to be home to to focus on the next steps under the uh war with Iran.
New Farm Aid And Funding Questions
SPEAKER_01Next talking point. New farmer aid prospects.
SPEAKER_00Yeah, the farm groups got together a coalition of more than 60 ag groups, and they sent a letter to uh Trump and they want targeted farm relief. They didn't put a specific number in there, but that March 19th letter, it included Farm Bureau, National Carn Growers, American Soybean Association, National Farmers Union, that they outlined a multi-promed uh you know uh relief package, Tommy. Uh uh direct market relief to recent losses for specialty crops, sugar, alfalfa producers, farmers who sold commodities at depressed price levels due to trade uncertainty. That means soybeans primarily, disaster assistance for producers impacted by winter storms, drought and those wildfires that we're going to talk about later. Livestock disruptions, year-round. They also want Congress to have a support year-round E-15 uh for corn. And we've got uh we've got an update on that later. Expansion of 45Z. They had a whole shopping list. Now, from a Congress perspective, uh John Bozeman, Senate Ag Committee Chairman, Republican from Arkansas, has talked about a$15 billion program. Now, GT Thompson, House Ag Committee uh chairman, is saying of that$15 billion, uh$10 billion could be for specialty crops. Now, I didn't hear Bozeman say that. So I think that that level could go higher if they when they eventually announce this as an initiative. But what's it gonna be attached to? How are they gonna get it? It won't be announced by the administration. No way. They want this as part of a coming supplemental war spending bill for Iran. Now, the White House signaled uh this week that they want up to 200 billion additional dollars. That's gonna be controversial, especially in the Senate. And I don't know whether the votes are there, Tommy. So we could we're gonna have to have either a downturn in that additional funding request, or we're gonna have a different, maybe a standalone disaster bill that uh considers uh some of those things that we've already talked about. What uh wildfire disaster aid, other disaster aid, and an additional farmer aid package. I do think it's coming. I just don't know the must-passed vehicle in Congress that they're gonna attach it to. That's the bottom line on that.
SPEAKER_01All right, I'm gonna ask you a question. I'm gonna mute your microphone so you can get a drink and stuff and go full screen at me. I'm gonna mute your microphone. You do whatever you gotta do. Cough, hack, whatever. This is a uh a break. But Jim, you can hear me still, right? And I think Jim and I have like spring allergies or something, but that's not your problem, that's our problem. Here's my question. This is a very serious question. All right. We're gonna go long on this episode, I could tell, but it's very serious stuff that's going on. Where the hell does all this money come from? From and I know that could be a whole podcast itself. You throw around billions like I throw around five dollar bars at uh five dollar bills at a valet parking lot. Like, where does this money come from? How does Congress get money? Do they have to ask the treasury? I mean, how does all this work in a year like what the question? That's a doggone book. I mean, where does the money come from? I'm serious.
SPEAKER_00That's a good one. That's a good question. We're gonna make a reporter out of we're gonna make a reporter out of you yet, Tommy. That's a good question.
SPEAKER_01I at least tell Don Wick, someday I'll be a real news guy.
SPEAKER_00You will, you will.
SPEAKER_01I do a lot of people.
SPEAKER_00He's a good trainer for you. Bottom line, GT Thompson has talked about a budget neutral farmer aid package. That means they've got proposed proposed cuts. So they haven't detailed where those cuts will come from. So they can tell the naysayers in Congress, wait a minute, this is paid for. It may cost$15 to$17 billion, but here's our cuts to pay for it. Look for that in the future where the cuts are going to come from, Tommy. So good question. And that's the best response I can give you.
SPEAKER_01All right. We're gonna keep you around. You're doing okay. All right. Around$8.3 billion paid out via bridge aid program.
SPEAKER_00Yeah. Remember, it's$11 billion for row crops and$1 billion for uh specialty crops and sugar. And that's a meager amount, and that's why Congress is gonna put a supercharged uh level of additional payments in in their separate uh uh aid package. But the$8.3 billion, that's as of uh March the 19th. I confirmed that number with a top USD official. That's a really good, that's well over 50%, I think 70%, I guess, of the$11 billion. And and I applaud USDA FSA offices primarily for getting this executed in a much needed cash flow for farmers. And I'm not getting the complaints about the delivery mechanism of this program. And Congress has noted this, Tommy, and they want they want any future disaster aid, uh disaster and farmer aid package to be operated the same way with some elements of changes in in the future. And the big change would be this program, the uh bridge aid program, I think negatively has a just a gross income test of 900,000. And that hasn't gone well in the larger producers. So I think Congress will make sure that that's not part of their new farmer aid package, that there won't be an AGI test. So all producers can contribute, especially those who produce most of the of the production. Top up payments. We have more money coming out. The SDRP more, as they say.
SPEAKER_01Come on now.
White House Ag Event And RFS
SPEAKER_00Special disaster relief program stage one. That was the stage one was a farmer-friendly implementation. Stage two is one of the worst USDA implemented programs, and it doesn't isn't helping that many producers, but there was a lofty level for both of those programs set up, which means that either May or June this year, farmers that were eligible for those stage one payments, and you know who you are if if you're listening or watching, it looks like now this is subject to change. This is only you're only as good as your sources, Tommy, but they're telling me about another 30% will come out as a result of the top-up payment because there's a lot of money left in that. You'll recall there was a 35% payout to begin with. So that's a fairly significant uh pop-up payment. It can't come before May because the sign-up program for stage two ends at the end of April, and that was controversial in and of itself. But they've had data problems with stage two and other implementation problems. Primarily, they couldn't judge how to make some specialty crop payments. And USA is asking for congressional help on how to value you know specialty crops, and I think that's needed for the future. So we've got more cash flow coming uh late spring, early, early summer.
SPEAKER_01Ag event Friday at White House, RFS or not?
SPEAKER_00I'm telling you, this uh National Ag Day, I think is Tuesday. So you'll have all sorts of celebrations, which there should be, celebrating the might of uh agriculture. As Senator Chuck Grassley, Republican from Iowa, always says, the 2% of Americans who produce food for the other 98% of Americans. Now, but there's an ag event to Friday. White House has been calling all this past week, farm groups and and to get of holders as many farmers as they can to come to the White House, the South Lawn. And I think they're gonna have at least 800, if not a thousand, farmers on the South Lawn. I've had a few emails from my farmer contacts saying they're on the way up here this coming week to attend that White House event. It's gonna be a pro-agriculture event. In fact, I told those farmers to call me once they get there if they get any good scoopy news. So maybe I'll have some. Now, the the conflict on information, earlier in the week, Tommy, there were reports that the renewable fuel standard issues, what are the mandate levels for corn, bio-based, biodiesel, what's the reallocation factor rumored to be 70% or so, and other aspects of the renewable fuel standard program that are coming by the end of this month from the EPA, Lee Zeldon. But later on, CBS ran a report, and some other people ran a report that said, no, this is not going to be part of the White House event. I think what Trump is going to detail is uh with a midterm election spin, all the positive things that Trump, his second administration has done for the U.S. ag sector. Maybe they'll have some news on fertilizer, what aspects they've done that we'll get into in a minute, but we're gonna see. I'm still not ruling out an RFS announcement this week, maybe separately, maybe even before that, Tommy, so they can say that it's a very farmer-friendly approach to the renewal fuel standard program. So it's an important week from a policy perspective coming up for the ag sector. That's the bottom line.
Iran Conflict And Fertilizer Shock
SPEAKER_01Very good. Fertilizer issue in the war with Iran, White House and Congress.
SPEAKER_00Yes. I'll have an uh update today coming up that will be on your site, Tommy, uh, giving the most uh uh up-to-date information I have, and I'm going through it. Let me just see. I've got so much, but I can remember what I wrote. But these are just some of the headlines. Uh this is U.S. signals progress in Iran conflict while Trump floats a drawdown. Now we're here in mixed messages because as the military pressure continues, oil markets are surging, and there's risk of escalation persist on the part of Iran, but then the war is expanding beyond the battlefield as Iran targets the global economy. So it hasn't been as quote, easy, I think, as the White House thought it would be. And that means the Strait of Harmuz. The disruptions there and the energy attacks by Iran across the Mideast, that steepens the pressure on the U.S. and Israel and Gulf states to escalate and better define their objectives. The war shock is rippling through the global economy as costs mount and alliances shift. It even got into the Federal Reserve FOMC meeting this past week as the the outgoing Fed chairman, Jerome J. Powell, kept on mentioning uh more uncertainty uh relative to the uh war with Iran. American consumers are feeling it at the gas pump.
SPEAKER_01Oh, yeah, they are.
SPEAKER_00Yeah, and I think we're gonna probably get close to four dollars any any day now. Gasoline prices have risen by a dollar per gallon since the conflict began. The cost of the conflict is rapidly escalating. As we said before, the White House is gonna request for for around$200 billion or more in additional war funding signals. And so United Airlines today.
SPEAKER_02Oh, yeah, yes.
SPEAKER_00Their CEO, Scott Kirby, signaled contingency planning for$175 oil, Tommy. That's a scenario. Yeah, that'll be they don't think it's gonna go there, but he says they have to plan on what they're gonna do if it does go there. Raise ticket prices to offset much higher jet fuel uh cost, reduce capacity or adjust flight schedules, that's all we need, particularly on less profitable routes, and that's uh rural sector, by the way, and accelerate fuel hedging and efficiency strategies, including fleet modernization. That's what he said either yesterday or today. And Iran's war economic fallout has extended beyond the battlefield, and that's where we get into fertilizer. Natural gas shortages are directly impacting the fertilizer production. Roughly a third of seaborne fertilizer around the world, and nearly half of urea. There's the kick right there. Nearly half of urea trade moves through that harmoose, and that's leaving supply stranded.
SPEAKER_01So what time frame it flows through? Uh a huge percentage of it flows through March, April, and May. I mean, there could not be a worse time. My friend wrote a story on this, and we'll do a podcast, and that'll be for the subscribers.
SPEAKER_00But is that Zachary?
SPEAKER_01No, it's our friend from Lafayette, Indiana, Mr. David Whidmer, who you've been on the speaking tour with. He's a contributor, and he put out some fascinating charts on that. And I retweeted it. I might go find that tweet, but go ahead and keep talking.
SPEAKER_00Farmers who didn't purchase pre-purchase fertilizer, many farmers did, by the way, but not all. They're gonna face input shortages during spring planting, and that raises the risk of lower yields, higher food prices into 2027, and could get into some acreage changes. That's the current debate in the corn soybean market. Some people say those corn plantings are still gonna hold higher than most people think below last year, but still not as significant of a downturn as some of these announcements by SP Global Energy and others are saying, while others are saying uh this price is gonna impact uh corn plantings and maybe another million to a million and a half acres below what the market had been expecting. So it's a market significant issue. And then I would be remiss if I didn't say diesel prices, they're compounding the pressure on farm operations and broader inflation. And I'll have a whole section on on this in my weekend updates, but there's another element here that I want to talk about. Those Moroccan fertilizer duties. Now, U.S. farm groups, uh, American Farm Bureau Federation, and others, corn growers, they're urging the White House to suspend those duties on Moroccan phosphate imports to ease supply pressure. However, this is reality. The the president cannot have that he doesn't have emergency powers in this regard. Those duties are governed by U.S. trade law, they can't simply be waived by a presidential executive order. Now there is a process, and in our interview with Steven Vaden, Deputy Secretary of USBA, he mentioned that we're now in a five-year review. But he said uh he kind of signaled that they will be taken off, but that review is probably gonna not be include uh uh finished until early late summer to early fall. So while I think the duties are gonna come off, uh they're there it's gonna take a few months, and I think it's not gonna help you know fertilizer prices. That's my bottom line on that one.
SPEAKER_01Very good. And I did go look up that tweet from my friend David Whidmer. Folks, if you don't know David Whidmer, he's with AEI. Oh, excellent culture economic insights, and he's a premium contributor here on the uh premium paid site. But anyway, I'll give you this little tidbit, and for the full video, you'll need to subscribe to premium.
SPEAKER_00Yes.
SPEAKER_01Sorry, I had to plug there, but that's how this stuff works. 44%.
SPEAKER_00It's called cross cell, Mark.
SPEAKER_01It's it's called sometimes freeze too expensive. Subscribe. 44% of urea imports happen between March and May. Also relevant, around one-third of U.S. urea is imported. Urea accounts for 25% of U.S. fertilizer usage. He has the uh whole whole thing there on Agriculture Economic Insight three days ago, a tweet. How do NHA3 urea and UAN imports shift through the year? Our charts show the seasonality of U.S. nitrogen imports, crucial amid current market risk. Dive into the data. You you guys want to check that out. He'll be on next week talking all that download.
SPEAKER_00Excellent analysis. And the White House is gonna, and they've they've heard it, they know the fertilizer issues, a portfolio of the fertilizer is a key issue in farm country. And you're gonna hear more than a few statements Friday at the White House, if not before. You've heard this past week the White House announced a 60-day Jones Act freeze, and that's just a short-term low uh logistics uh valve, if you will, but it's not a fundamental fertilizer market fix. Now, it it'll make it easier, this Jones Act waiver and cheaper to move fertilizer already in or entering the U.S. from one U.S. port to another by letting foreign flagships participate, Tommy. But the practical assessment, a 60-day freeze is meaningfully positive at the margin, especially for the timing, regional availability, and freight cost during planting season, because our ships cost a lot. So there'll be some, but it's not big enough to reverse the broader inflationary pressure on fertilizer prices. Let me put it in plain terms. It will help farmers find product and pay a bit less to move it domestically, but it's unlikely to bring fertilizer prices back to whatever normal is on its own.
Plains Drought And Nebraska Wildfires
SPEAKER_01That's about uh we got about four or five more things. Let's do speed round here. Dryness in plains, HRW, but the old saying, plant the dust, the bins of bust. What's going on, Jim?
SPEAKER_00My goodness. Worsening drought conditions across U.S. plain states, and that's been upward momentum to Chicago and other wheat futures. The hardest-hit areas are Kansas, Oklahoma, Texas, and Nebraska, Tommy. And that's critical for hard-bred winter wheat. Now, I've learned over the decades that wheat's a weed, basically. So it takes a lot to kill that crop. So although it's got into the you know, you know, weather market and market, commodity market, recent weather trends have reinforced those concerns. So above normal temperatures are expected to persist, and that's what's got it into the marketplace. And that increases evaporation rates, further stressing crops. That's the that's the bottom line on that because the fear it'll lower yield potentials, depleted soil moisture, it's probably going to reduce harvested acreage, especially in those marginal fields, and tighter U.S. exportable supplies. So, especially for high protein wheat. And then we have the other one on a lightning round, Tommy, the Nebraska wildfires. Oh my goodness, that's right here.
SPEAKER_01Yeah.
SPEAKER_00Across wildfires across Nebraska have scorched almost 800,000 acres of land. That's roughly the size of Rhode Island. And that's been a major setback to cattle producers already struggling to rebuild the national herd. So, and Nebraska's the second largest cattle producing state. So roughly 70% of U.S. cattle are already located in regions experiencing dryness or drought or these fires. So that's limiting available grazing supplies. So I'm trying to get the fair it is. The fires have wiped out, Tommy, critical grazing areas capable of supporting roughly 40,000 head of cattle. Wow. That's why, that's why the drought coupled with this has fueled uh wheat prices and and cattle. I think that's why cattle came back.
SPEAKER_01Cattle had a nice bit, yeah.
SPEAKER_00Yes, and then we got the next one. Is the next one Greeley JBS plant strike?
SPEAKER_01Yeah, hold on. You're I'm clicking, you're talking. Who's running this show here? Hold on.
SPEAKER_00Now we know we have year-round E15. Come on now. I'm sorry.
SPEAKER_01It's hard to find good help. Go ahead.
SPEAKER_00Listeners and viewers will recall that we said last week it's a parlor game now in Congress, is when the farm state lawmakers are gonna ever introduce the much promised year-round E-15 legislation. Remember that one, the energy console that they created as a result of not getting the year-round E-15 in a spending bill. Well, that was supposed to be introduced no later than February 25th this year. We still do not have it. So farmers should be frustrated. You can't vote on something that's not introduced. So Representative Feenstra, uh Iowa, who's running for governor, by the way, keeps saying, and that's the parlor game, today, this week, and it never happens. Time to get it done. Do the battles with the smaller refiners. There's your problem, Tommy. They have to get not the larger refiners, they have to get the smaller refiners on board, and they're gonna have to probably give a little bit more. That's the bottom line on that one.
SPEAKER_01Greeley, JBS plant strikes, sir.
SPEAKER_00Yeah. I think the the uh the union people are saying it's probably gonna last two weeks. Uh remember it began uh this past uh Monday. Thousands of meatpacker workers in Greeley uh have have have started the process. And the dispute is over wages and and safety uh cost. And however long the strike persists, the greater the risk of the supply strain that we're seeing. So unless JBS improves its offer, I guess, to the unions, they're gonna hold out. Here's the perspective I wanted listeners to hear. The last meat packer strike was 1985 at a Harmel plant in Austin, Minnesota. That saw Harmel eventually replace the striking workers with non-union workers. So I don't know whether that's JBS's plan to get rid of those union workers and have and replace them with non-UK union workers, but I hear that from some people. That's the latest update I have on the JBS situation.
SPEAKER_01That's interesting. Didn't Reagan do that with the uh airline folks in the uh flight tower?
SPEAKER_00Absolutely. He fired them all and then hired all all new ones. And that's the follow-through you need on a very effective president.
SPEAKER_01I wasn't born back then, but I'm sure you remember.
SPEAKER_00I was a White House correspondent. Yes.
SPEAKER_01Together, we're almost done. U.S. MCA, let's get it going, brother.
SPEAKER_00The the meet there is U.S. met with uh uh Mexico advancing the US MCA review talks that really, really take place July 1. The the news story there is Canada was not involved in those talks, but USTR Jamison Greer said that parallel U.S.-Canada discussions are ongoing, but they're lagging behind progress with Mexico. We have a North American trade environment, it will remain that way. But the white uh Trump administration is going to use these talks as leverage. We just got to go through months of of hurdles, but eventually it'll continue, Tommy. Last subject is coming up.
SPEAKER_01Wasserman on midterm elections. Folks, if if you don't know who this gentleman is, he's he's one to watch.
SPEAKER_00Yes, David Wasserman, I can say, is a personal friend of mine. And he they gave uh he gave a webinar this year. And of course, I I'm I'm a subscriber to the Cook Political Report. So I just want to go through some of the meat of what he said on the House races, he went through them. And that I think that that's on your site, Tommy. Yes.
SPEAKER_01Okay.
Market Upside And Closing Thoughts
SPEAKER_00He gives about almost an 80% chance, 70 to 80% chance that the uh Democrats are going to regain control of the House. Now he flipped the question rather than the Democrats going to win because they're strongly favored, he flipped the question, interestingly, to how do Republicans hold it? And he said those med mid-decade redistricting gains, you've seen a number of states redistrict, are unlikely because they've been offset by Democratic uh challengers in other states. I want to update. He gave 75 to 80 percent chance of winning the House. He said the core driver of the House races are GOP held districts where Trump approval is below 44%. And on the Senate, he really didn't give odds, but he said the path for re uh for Democrats in the Senate are in core battleground states that he listed Maine, North Carolina, Michigan, and Georgia. So watch those states. He said Maine, that's where Republican is Susan Collins. She's difficult despite polling. Okay, she's a formidable candidate. Iowa and Ohio races are more plausible for the Democrat takeover. And Texas and Alaska are tougher. Texas are only competitive if the Democrat candidate, if they don't if the Republican candidate against the Democrat is Ken Paxton. So interestingly, so a poll just came out an hour ago saying Paxton is ahead of John Cornyn. So if that's the case, some of these prognosticators could say that could be a seat, surprisingly so, that the Democrats could take over. But watch who the candidate is on the Republican side. David's bottom line on the Senate races, it's possible the Democrats could regain control, but it requires, quote, near perfect execution, end of quote. So I think he's doubtful. I think he's signaling that the Republicans will retain control of the Senate. That's the bottom line. And as far as upbeat news for agriculture, we've had a we're getting there.
SPEAKER_01We're getting there. You ready to take us home, brother?
SPEAKER_00Thank you all. We have had a pretty good rally across the board lately. Have you sold some crops? I think a lot of corn producers sold on this recent rally, thank goodness. And uh and and soybeans as well, as we headed to$12 before that 70 cent down the limit break. Uh wheat has been just a trendsetter. Uh, that doesn't usually happen. Cattle and hogs are holding their own, but uh some people think that we've seen the highs in cattle. We'll see. But the news coming up this week should be good news at the White House. You know, Trump, he doesn't usually have negative news when he holds when he holds uh confabs, okay? Especially for the farm sector. But the biggest news is going to come out in mid-May once we get those deliverables for agriculture that we talked about relative to the US and China trade, not just limited to soybeans. I'm not going to forget soybeans. Soybeans uh they have to fulfill what they've already committed on the 25 million metric tons of soybeans for the next few barter years, marketing years, and maybe we'll get to five to six million metric tons more purchases yet this season. But the other uh crops that have been mentioned corn, sorghum, cotton to a degree, haven't heard much details on cotton, beef and poultry. And I don't know what better news I can say. We've got help coming on the supply, on the on the demand, both domestically coming up with the RFS and final future if for the sustainable aviation fuel program 45Z. Uh we're getting some better trade relations impact. Those exports uh continue to show progress, U.S. foreign exports, and now we're gonna get it on the on the Chinese side as well. Could take about six weeks to do it, but those are all positives, Tommy.
SPEAKER_01All right, Jim. Great show. Uh we got it wrapped up in 50 minutes, and your travels are late this week, correct?
SPEAKER_00Yes, and I need that because of my therapy on my neck. I'm actually looking up a little bit more because my therapist, who's very good, really put me through the loops in three therapy sessions this week. So he asked me if it hurt, and I said, Well, it hurts, but the harder is uh following the Trump administration. So I come here, I come here for respite. He laughed.
SPEAKER_01Uh Jim, I'll see you next week. Great job, brother.
SPEAKER_00Thank you.
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