Howell: This is the Friday, October 26, 2018
version of the Market Plus segment.
Joining us now is Naomi Blohm.
Naomi, welcome back.
Blohm: Thanks, Delaney.
Howell: Naomi, we got a lot of questions in this
week about soybeans, China, relationships,
etc. So I think that's where we've got to start.
We're going to kick it off here with Dave in Western
Illinois.
He said, at what point would a China trade deal
be too late for a decent bean rally price?
Blohm: January is the answer because then the
South American production is going to be coming
online.
So we need them to not only get the trade deal
done but we need a huge commitment and huge sale
immediately.
We've got to get those boats moving in December.
And then in the back of my mind I'm wondering if we
can get something negotiated so well with
China, does China turn around and maybe cancel
some of the Brazil sales that they had made at
higher prices and make it more back to an equal
marketplace?
And so that's something I'm curious about.
The Brazil presidential elections are this weekend
and the current President is Trump-like in his
thought process and he has started to take a little
bit more of an aggressive stance towards his trade
ideas with China as well and I don't know that he
wants to shoot himself in the foot with things and
be overly aggressive on how he's talking.
But it will be interesting to see how that election
comes to play and then of course our midterms as
well.
That will be the biggest tell going forward.
Howell: And I think that kind of leads into the
next social media question we got here from Shannon
in Northwest Iowa.
What is the best guess, even if China and the USA
get something worked out on a soybean trade, how
long will it take to repair that relationship?
Blohm: I think it's going to be something that is
ongoing.
If I'm China, just based on the historical context
of what I feel that I understand about that
country, they're not going to let something like this
happen again and they're going to be upset if they
have to really come and negotiate a lot with us.
And so I'm thinking okay, maybe we'll get something
in the short-term figured out, but does that really
upset them for the long-term and down the
road we have to come and deal with them again in
some capacity.
But I think with their economy starting to really
slow down as a result of all this trade drama maybe
they're going to be quick to fix things sooner than
later and we can get that trade deal going forward.
I'm optimistic for the end of November when the
Presidents meet and hopefully we can get
something going.
Howell: Yeah.
And with that being said, the trade relationship is
definitely a fine balance.
Do you see them coming to the U.S.
right away if we do get some sort of relationship
built back together because we have cheap
soybeans but Brazil has obviously been a big
trading partner for them and that cultural or
historical thing -- Blohm: I think it's going
to be either one or two things.
It's going to be kiss and make up and just get this
thing going again.
Or it's going to be just meandering back and forth
and trying to keep -- Howell: Like they're
dating almost.
Blohm: Right, right, something.
It's just going to be one or the other.
So I'm hoping for just quick negotiations and
let's just get everything going because our Middle
America needs it, we're starting to see our
economies of course here in the Midwest be
dramatically affected by it.
Howell: Absolutely.
Naomi, with all of that being said, we've got a
great question here from Glen in Bryon, Ohio and I
think one a lot of producers are asking
themselves at this point in time.
With the current status of the relationships we have
with all our global trading partners, should
producers proceed with a passive, cautious or
aggressive attitude to marketing 2019 crops?
Blohm: I would say most likely be aggressive in
terms of really understanding cost of
production, knowing where your profits lie, getting
the orders in place with your elevator so that way
they're triggered because the biggest thing is that
we have supply surplus right now in the United
States unless this soybean harvest shows us
otherwise, that the yields are much smaller that it
would take a bite out of those large ending stocks
or unless South America has horrible weather this
winter for their growing season.
Unless we can see something like that happen
it might be another year where we just have to
scratch and claw at every dime and quarter that we
can make.
So I would think be aggressive when you see
the opportunities there unless the supply
situation suddenly shifts.
Howell: Naomi, how closely are you watching South
American weather?
Are they setting themselves up for a
pattern of dry weather or wet weather this year?
Blohm: I haven't kept track of it enough to know
what January or February might bring.
but traditionally when there's any sort of a
weather implication in those months the futures
market responds quickly and that is part of the
seasonal rally and those are a lot of times your
best opportunities to get moving on sales for crops
in the bin or being thinking about forward
contracting for the next year to come.
Howell: All right.
Perfect.
That was a great answer, Naomi.
Let's take another question here from Bradley
in Upland, Nebraska.
There is talk of the U.S.
losing 9 million acres of soybean to Brazil
permanently due to Chinese tariffs.
What will those acres be planted in, in 2019 and
beyond?
And then additionally, will most of those acres
being in the Dakotas?
And will land go back to pasture?
Blohm: That's an awesome question and one that I've
been wondering as well.
Years ago when we would call to the Dakotas to
talk to producers we would hear lots of canola, we
would hear sunflowers, we would hear sugar beets and
so I wonder if we start to hear some of those types
of things.
In Wisconsin and our Central Sands we had more
veggie crops that were grown.
And so maybe we see a little bit more diversity
that way.
It could be.
I don't know is the answer but it will really be
something to watch.
Howell: All right.
Let's take another question here, another
Chinese question, Naomi, I hope you're not getting
tired of them.
We've got Jason.
He wants to know, if the Chinese need less meal
because of the swine fever, will that affect
the meal market in the U.S.? Blohm: It
absolutely could.
And the other part to that as well is that China this
week said to India we are going to allow you to
bring in your rapeseed meal to China again and so
China is doing everything that they can to open
doors little bits here and there to make sure that if
they really want to dig their heels into the
United States that they're able to do so until the
early harvested South American beans come into
production.
So it is something to watch every week, it's so
important right now.
Howell: We saw the meal market drop, I don't
remember off the top of my head, I think it was $5.80
or something like that, week over week.
Is that because of Chinese demand?
Blohm: I think that's a big part of it, yeah, very
much so, very much so and so something to again keep
watching going forward.
Howell: And how much of that is pulling the
soybean markets down with it because usually when we
have a meal rally it pulls the soy complex up with
it.
Is it also pulling soybeans down?
Blohm: Absolutely, definitely tied to it, the
demand there.
So the soybean meal exports are something to
watch and just the demand here as well.
So they are absolutely tied and without a doubt
that is part of the reason that the soybean market
has been sliding, had been sliding lower as well.
Howell: Turning back to the African swine fever
here, Jim in Worthington, Minnesota would like to
know, will the African swine virus or fever cause
the hog market to run like it did with PED?
Blohm: It could because the African swine fever is
different where it can affect any pig of any age
and so then you're actually seeing something
where the breeding stock and the sows can really be
affected and then it takes years to come back
essentially where PED was only affecting just the
piglets, just the babies.
And so it could be something very different.
But of course it's China, you don't know for sure
the full story.
I think the answer will come in the form of do we
see our export market pick up and ae we exporting
more overseas towards China either towards South
Korea or maybe even to China direct because China
has always said that they're going to make sure
that they're feeding their people and the hog and the
pork is their big staple.
That is their thing and they have already been
very vocal about making sure that they have that
food to provide to their people.
So I'm hoping that it will lead to more exports for
the United States farmer.
Time will tell.
This winter could get really exciting.
And like we were saying on the show, the hog market
is up against resistance on charts, on the futures
charts, and if it can get through those resistance
levels I think you'll see spec buying come in, I
think you see just that marketplace start to work
higher as well and we'll keep an eye on the cash
market.
Howell: Naomi, I've had this question I want to
ask you.
It's a difficult question, I ask it to a lot of
different analysts.
But 433 million hogs, give or take, that's what
China's hog herd is.
They have culled, I don't know, different reports
quote different things, let's say 200,000 head.
How many hogs are they going to have to cull
before it's like okay, now it's a problem, we need to
start bringing in pork from the U.S.
or wherever?
Blohm: I don't know.
I wouldn't even know how to quite go about
answering it unless I sat down to just really try to
figure it out.
And again, with China we'd never know for sure what's
the truth, what is coming, what's not and so I think
maybe we'll start to hear more of those answers once
these elections are done and once we have the two
Presidents meet at the end of November, maybe we'll
see a little bit more transparency when it comes
to that question.
Howell: All right.
Naomi Blohm, thank you so much.
Blohm: Yeah, thanks Delaney.
Howell: Join us again next week when we'll explore
the next steps for a young couple that moved from the
city back to the farm and Don Roose will join me at
the Market to Market table.
Until then, thanks for watching, listening or
reading.
I'm Delaney Howell.
Have a great week!
For more infomation >> Plus belle la vie : Babeth s'en prend à Anne - Duration: 1:39. 


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