[PAUL YEAGER] Welcome to the table for the Friday, June 26th, 2026 installment of Market Plus Shawn Hackett with us.

Sean.

We flew through that segment, covered a lot of ground.

We have a whole lot more questions to get to.

Let's start right off the bat with Barry and Iowa, if we could, because this sets the table for a lot of things.

We didn't get a chance to talk about the USDA report, but you can discuss it here if you could.

Is there much is there a bottom in this corn market?

What's it going to take to get this thing headed back in the right direction?

[SHAWN HACKETT] I mean, if weather's going to be good, as we talked about on the main show for July, it usually you don't expect the market and corn prices to really bottom and turn around until August.

So, can you get a short covering rally on heat wave next week?

You know, I mean, there can be some reasons to get a short term, a short-term short covering rally, but I don't see a sustainable turn higher until we get to August.

[YEAGER] Because July is usually that month where people are going, oh, I got to clean the bins.

You always hear about.

It's tough.

I've done it.

It's you get stuck and you just sell.

Yeah.

Do traders know that and factor that in?

[HACKETT] The seasonal pattern tells you that seasonal pattern says that we go straight down from, you know, late May into August because it's a seasonal pattern of I got to clear the bins, I got to sell, I got to pay bills.

Yes, they know that and they take full advantage of it.

So long, as you know, July weather does not look ominous, which, as I said, a super El Nino.

There's never been an example of that happening.

And I don't see this year being any different.

[YEAGER] Okay.

We've talked about before, when a story ends up in the national press that comes from our sector of the world.

Yeah, that means the rally is over.

Whatever.

But Super El Nino is a little different, right?

Why?

[HACKETT] Well, it's not like it's one week or it's two weeks.

It's a 6-to-9-month affair is an El Nino, right?

It develops, it strengthens, and it builds.

And it's just not the you know, we're looking all over.

So, when we get past this summer and we look out to the fall, what is a super El Nino mean?

It means a very, very wet harvest season, which of course, producers don't want to hear about slow harvest wet corn, but it also means extremely hot, dry central northern Brazil, where 70% of the soybeans are grown.

In the first half of the growing season.

That could be the big weather trigger to get the grain markets back on a different track than the one they're on right now.

[YEAGER] So yay, North America!

Not so good.

South America, correct.

[HACKETT] 2023 the last El Nino we had, soybean yields were down 10% below trend that year.

That was the largest decline in 50 years.

And this El Nino is much stronger in the deforestation drying out effects of the Amazon monsoon is further along.

We're very, very concerned that we could have a very unusual and rare crop problem for soybeans in the first half of the growing season in Brazil, and that's something to really watch.

[YEAGER] Their first half of their growing season.

So then are we going to change?

Is this a huge disruption coming?

[HACKETT] Well, 70% of the soybeans are grown in the first half.

70% of the corn is grown in the second half.

And the El Nino is going to continue to proliferate into the second half before it ebbs.

So, second crop corn would also be significantly hurt.

The last time we had El Nino, I think we were down 20% below trend.

So, we're looking at really, really tough Brazilian crops.

And what happens in Brazil because they so dominate.

Now the global trade does not stay in Brazil.

If one wants to look for weather in excitement in U.S.

Grain prices, I would look to the fall into next year.

That's going to me going to be the big, big story of El Nino.

Not this summer growing season.

[YEAGER] Okay.

Always something with you to write down to make sure I put in the note.

That's a big one right there.

Mark in Minnesota.

Let's go next here because this is another market we've struggled with.

How much more downside do you see with the wheat futures market.

Anything coming there to offer support.

This was an email that came to us.

[HACKETT] We had record high dry temperatures in Europe last week.

Over the last couple of weeks.

That kind of got some short covering in wheat.

Maybe you're going to get these short covering rallies, but the problem is Russia has a big crop, 88, 90 million metric tons.

They're about ready to harvest it.

The U.S.

Winter wheat crop harvest is going on.

When you're harvesting, Paul, it's very, very hard to excite the market because weather can't be involved too much when you're harvesting it.

And so, I really don't think wheat is going to be able to get off the, you know, the tarmac here until we get further along and we get enough of the harvest put away and you get that post-harvest rally, shall we say, that's not going to be at least until we get to the latter part of July.

[YEAGER] Kind of alluded to this in the main program.

But the next question, Matt, in Ohio circles back because I want to focus in here.

Can we get a Chinese demand lead rally in the face of another national record yield for corn and beans?

[HACKETT] I never believed that this agreement was for China to go run the market higher.

I've always felt it was for the Chinese to time their purchases when it's most suitable for them.

They're not stupid.

I think they know what El Nino means for U.S.

Production.

I would expect them to look for large.

It would be a large buyer in the month of August, when there's the pressure and the speculators are hitting the market and we're farmers are selling because they have to.

I think they're going to bide their time and look for some really, really good.

The bases will widen out.

So, they're going to do it.

They might limit how much downside there is, but I don't see them taking the market off the lows.

I don't believe that's the game this time around.

It was the game the last time around when Trump was president and they signed the first deal.

That's not the game this time.

They're the shock absorber, not the price maker to the upside.

[YEAGER] Okay, Justin in Iowa, I asked your question in the main program, talking about the weather and the markets.

So, I want to go to Phil in Ontario.

And that kind of ties in.

There's Justin's question.

I talked about yellow spots in eastern Iowa, and Phil's question is, I should have done it a couple of minutes ago.

Sorry, Sean.

French corn prices have risen significantly, partly because of the heat dome there in Europe.

Will it start to affect the corn futures here, or do we need our own heat dome in the Midwest?

Now, I know the first answer, the first part of the answer is it needs to keep going.

But I want to talk about that French story when it relates to the wheat.

But now also the corn market.

[HACKETT] Look, Europe is going to have a recurring drought, upper air flow pattern.

We fully expect that we're going to see a regeneration of this extremely record hot, dry temperatures to come back in mid late July.

Exactly when pollination is going to be kicking in.

Is that enough to create a short covering rally in corn?

I think it is.

Is it enough to like create a permanent loan corn?

I don't think it is, but I think there could be an opportunity in mid late July on EU drought and corn pollination problems to catch a short covering rally that you can get those cash sales made clear, those bins, get those things off the books, at least a level that might be better than what we're seeing right now.

But I don't think it's enough to counteract a big U.S.

Crop unless the USDA reports next week are going to show 4 million less corn acres or something like that, which we don't anticipate.

[YEAGER] I would say.

Do you anticipate that?

[HACKETT] No.

[YEAGER] So which is I kind of ran through that during the program to why do we see major changes on Tuesday in the acreage?

[HACKETT] I don't really think so.

I mean, our back checks and all and some of the pretty good estimates out there are calling for like a 1-million-acre reduction in corn acres.

I think that's fair.

Maybe a 5 or 700,000 acre increase in soybean acres.

I don't think either one of those changes, the dynamics of the corn or soybean market much.

I think what could be a bigger driver would be the quarterly grain stocks.

We've had this long held belief that the U.S.

Yield on corn last year was overestimated.

They took 180 million bushels off in the March quarterly grains.

They have a habit in history when they're wrong about yield, to take even more off in the June quarterly grain stocks.

If I was looking for a market moving event or a catalyst, I look for quarterly grain stocks.

I don't think acres are going to give it to us.

[YEAGER] And the stock story has been that one that's in the background.

But this one you're saying could be the star of the show, not the understudy.

[HACKETT] I do, because I think if they were to take a couple hundred million more bushels off the top than they did in March, and we lose a million acres of corn, which I think we will, and you start running, you know, trend line yields, you know, we're backing off.

We're starting to tighten up the U.S.

Balance sheet just a little bit.

[YEAGER] Run me through the week, because Monday we're going to continue this positioning ahead of Tuesday.

Tuesday we're going to parse.

Wednesday, we're going to respond Thursday.

We're making our way in the middle of the heat ahead of the July 4th.

There's no trading on Friday next week.

Boom.

Fireworks before the fourth.

[HACKETT] Only if the weather models are showing that the ridge or that the temporary ridge that's coming next week is going to elongate further out into the middle of July.

[YEAGER] So if we see a Wednesday weather report that says the 90s, now we're going to get to the upper 90s, goes to say, July 10th.

That story changes.

[HACKETT] Absolutely.

If the models stay the way they are, which is a brief hit.

But then we're going back to kind of a more tempered temperature and some timely rains.

Then I think it'll be very, very you know, I think most people know after the Fourth of July weekend, the market makes up its mind if the crop is going to be good or not.

And if it's and if it's good, it's down after the Fourth of July weekend.

So that's your typically your demarcation line between is it or is it not?

[YEAGER] They all get together for those barbecues.

[HACKETT] That's right.

[YEAGER] Which is a beef story.

And that's the transition to the next question.

Aaron, in Iowa, Sean, you kind of alluded to this as well on the program with Mexico moving toward processing steers and country instead of moving them across the border.

This is the part that's interesting to me.

Will we see increased corn exports to them?

[HACKETT] Well, does that mean that their animal numbers are going to go up?

Because if instead of exporting the animals, they just keep them and process them instead of us processing them?

Does that really mean that the animals are going to be going up in Mexico?

It doesn't necessarily mean that it could mean that if we if this high price environment stays for a while, I'm not so sure that it means more corn right away.

I think it's going to take time for them to figure out whether they want to maintain the current herd that they have, or they want to grow it.

And obviously, the current price level and how long it endures will be a clear way to dictate that to them.

[YEAGER] Okay, Robbie in Kansas, not going to ask your question, but Robbie, we did ask your question a little bit about these packers and live cattle.

But I want to I want to finish with Stan in Iowa, if we could, because Stan is bringing up something that Naomi has talked about on this program before.

And it's is the beef on dairy fueling expansion.

[HACKETT] It is fueling expansion.

And the reason is fueling expansion is because you're keeping those animals on the farm much longer than you normally would, because they have such a high economic value.

And I mean, it's a lifeline for these dairy producers.

They have these beef cows and they're just.

Yes, it's now what it is also doing.

It's aging the dairy herd.

So, your milk per cow efficiency is starting to falter.

So, it's a delicate balance between, you know, keeping the herd large and selling those animals into the beef market, but then losing too much milk per cow efficiency.

Sooner or later it will catch up to the industry.

It hasn't happened yet.

[YEAGER] Didn't ask you about cotton, but we've been hanging around 100 day moving average.

There was a question I didn't put it in.

The list was about, again, China returning.

Is that the story there too?

[HACKETT] We desperately need China to buy cotton.

I'm not sure that's going to be seen until August.

I think August is when they're going to be wanting to buy us ag products of, for the most part.

And we lost the polyester differential, you know, when the oil took off and we had the polyester trading at a huge premium.

And the demand did come in for cotton for a while, it's over.

And so, it's going to be very, very hard for the cotton market to get off of that unless we have U.S.

Or foreign weather to worry the market.

And I don't think we're going to get any of that until at the earliest, maybe late July, August, maybe in India, maybe in China.

But it's going to be a while.

I don't see any weather catalyst for cotton to overcome this loss differential to polyester.

[YEAGER] Last things on crude oil.

We've seen these 1110 9% moves one way or the other.

Friday printed the number below $70.

What's the significance of that?

[HACKETT] Well, we have completely erased the entire move from when the Iraq war, Iran war started.

If you can believe that.

What does it say?

It says to me, you know, that the market, when it goes to one extreme, it inevitably reverses the other extreme.

I do not believe the long-term picture for crude is over.

I do not believe that the Middle East has been solved.

And I believe once we get past the midterm elections, I believe the UN unfinished business there is going to erupt again.

And I think we could see crude oil come right back, because what did we do during this entire time?

We drew down global inventories dramatically.

So, we put the genie in a bottle, but we have no room for error the next time this happens again.

And that's why I'd be looking out for look for opportunities to buy fuel and energy on the cheap.

Like, like last time.

I think you're going to be glad you did.

[YEAGER] We're glad you're here too, Shawn.

Great to see you.

[HACKETT] Good to see you too, Paul.

[YEAGER] Happy Fourth of July.

[HACKETT] Happy Fourth.

[YEAGER] All right Shawn Hackett everybody, next week we are going to put another chair at the table here and have a mid-year review of the economic picture in rural, rural America.

So that means our July 4th tradition.

Chris Robinson and Ernie Goss.

Never a dull moment with those two.

We'll see you next time.

Thanks for watching here on Market Plus and have a great week.