“Coming up on Market to Market…

Heavy rains and flooding strike

fertile fields in the Midwest …

Fire scorches more acres across the

West…

A lucrative export commodity with

deep roots in rural America…

And market analysis with Darin

Newsom, Next!”

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1

produce it.

Hello, I’m Delaney Howell.

It’s a contrast of emotions for

American job holders. On one hand you

have what economists call “good job

growth”, on the other hand, wages are

struggling to keep up. --

Unemployment held steady at 3.9

percent as 201,000 jobs were created last

month.

Wages are 2.9 percent higher than a

year ago but inflation has eaten up the

increase.

The Creighton Mid-American Index

continued its seven-month rally. Bankers

remain worried about the strong downward

pull of tariffs on farm income.

Tariffs have had little impact on

reducing the trade gap as imports have

outrun exports so far this year. The

running total is a record $261.2 billion.

Large portions of the Golden State

2

are on fire. Property damage has topped

$1 billion.

Those living in the nation’s

midsection have seen the exact opposite

of California’s tinder dry conditions.

Paul Yeager kicks-off our coverage.

The Corn Belt could be renamed the

Rain Belt this week as inclement weather

settled in from Michigan to Kansas --

leaving behind nearly a foot of water

over a several day period.

Standing water was found easily in

Sunflower State fields. Soybeans were

already considered 77 percent fair to

good and the rain only helped the pods in

Kansas.

In Iowa, larger amounts of rain fell

across more acres. Corn and soybean

fields entering the home stretch of

maturity were flooded as reports of 12

inch weekly totals were common.

The nearly-8 inches of rain that

3

inundated in the northeastern Iowa town

of Waterloo is already the tenth highest

on record for the entire month.

Chicago experienced its rainiest

Labor Day since 1912.

This Intellicast weekly

precipitation map illustrates the area

affected. The darker green regions

translate as 4 inches of rainfall.

Similar amounts of precip were seen

in the Gulf Coast as Hurricane Gordon

made landfall midweek in Florida, Alabama

and Mississippi.

Thousands were without power from

the storm. As the hurricane weakens and

moves inland, more farm fields in

Louisiana, Arkansas and Missouri are

forecast to receive substantial rainfall.

Most of those same areas are currently in

drought.

August set a record for heat in Las

Vegas. The 94.4 degree average of highs

4

and lows are the highest since record

keeping began.

Farther west, explosive wildfires

shut down dozens of miles on Interstate 5

near the California/Oregon border. The

Delta Fire forced some drivers to abandon

their rigs as the flames roared up the

mountainsides.

Currently fire crews are working on

97 large blazes that have burned 1.9

million acres across 12 states. The

nationwide total for the year is just shy

of 7 million acres burned by 46,000 fires

in all of 2018.

For Market to Market, I’m Paul

Yeager.

Before the current trade war with

China, some sectors of agriculture were

already suffering tariff fatigue from the

Asian giant. This includes U.S. pork

exports which are operating under a 62

percent duty. According to the U.S. Meat

5

Export Federation, exports have declined

22 percent so far this year.

Another niche market with strong

roots in China was among those laboring

under existing trade tariffs.

Josh Buettner has more in our Cover

Story.

Will Hsu/Hsu’s Ginseng – Wausau,

Wisconsin: “History has shown times where

trade to China has been shut down…this

industry was dead. The demand, as income

levels rise in Asia, is really coming

from there. So to help farmers in Central

Wisconsin, the best thing we can have is

access to those export markets.”

Will Hsu is a second generation

ginseng producer near Wausau, Wisconsin.

According to USDA, over ninety-five

percent of the plant’s domestic

cultivated origin is sprinkled across the

Badger State – with Marathon County as

the hub. Wisconsin officials estimate

6

one million raw pounds are produced there

annually – with a yearly output valued at

over $50 million.

But 15 percent retaliatory tariffs

from President Trump’s trade war with

China have been tacked onto pre-existing

duties and value-added taxes ahead of

this year’s harvest. The move could leave

growers feeling a pinch on an export-

dependent, multi-year premium crop.

Will Hsu/Hsu’s Ginseng – Wausau,

Wisconsin: “Very similar to France and

Italy, which are known as the old world

regions for growing wine…the taste and

flavor of Wisconsin ginseng has been

ingrained in people for the last 100

years.”

Overharvested in China after use as

a pancea for millennia, a cousin root was

unearthed in North America three

centuries ago.

Will Hsu/Hsu’s Ginseng – Wausau,

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Wisconsin: “You don’t always find four

prongs.”

Around the dawn of the 20th century,

the wild root moved from forest to farm

in Wisconsin, cementing trade

partnerships in Asia and earning a gold

standard reputation.

Paul Hsu/Founder - Hsu’s Ginseng –

Wausau, Wisconsin: “Well, I’m the farmer.

He’s the brains, so works out as a team

very good….Each notch is one year old.”

Originally from Taiwan, Will’s

father - Paul Hsu - founded the core of

the family business over 40 years ago

after discovering unmet demand for the

niche product in Asian-American

communities.

Enduring production challenges –

including five years from seed to harvest

and the need to secure new land for each

crop because the root can never be grown

twice in the same location - the Hsu’s

8

bought into the supply chain. Their

enterprise now includes several hundred

acres under production and nearly 1,000

employees across the globe.

Paul Hsu/Founder - Hsu’s Ginseng –

Wausau, Wisconsin: “Chinese…real warm.

It’s hot – yang, and American ginseng –

yin. So there’s two different functions.

Two species…”

Traditionally used in Asian cooking

and medicine, American ginseng has even

drawn accolades from the Mayo Clinic

where a 2012 study revealed high doses

can curb fatigue among cancer patients in

chemotherapy. And while farmed root has

averaged $30-55 per pound, wild ginseng

commands a much higher price.

Paul Hsu/Founder - Hsu’s Ginseng –

Wausau, Wisconsin: “Depending on what

location, how good they are – 500, 600,

700 dollars a pound.”

The older the root, the more

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ginsenosides – active compounds within

the plant that impart its elixir-like

prestige – the higher the price. By state

law, the original wild, woods-grown

ginseng must be at least 10-years old

before being extracted for sale.

Private landowners like the Hsu’s

recognize the importance of conservation

and have developed their own ‘wild

simulated’ strain, as part of the state’s

multi-pronged approach to viability.

Will Hsu/Hsu’s Ginseng – Wausau,

Wisconsin: “So this is kind of that in-

between space, not quite wild, not quite

farm-raised, that you see a lot of

agriculture moving into. So you can take

any patch of woods, if you take care of

it and do a good job of it, and turn it

into this. And in the wild, some of the

best roots are 15-30 years old.”

Paul Hsu says he’s been paying

diggers top dollar for over three decades

10

to break the soil at certain times and

only for certain root sizes.

Paul Hsu/Founder - Hsu’s Ginseng –

Wausau, Wisconsin: “Very seldom do you

have 60 year old roots, maybe on in 100

to 1,000.”

Over the years, the Hsus have worked

to vertically integrate and navigate

volatile market waters. But for smaller

producers laboring with razor-thin

margins, staring down the barrel of a

trade war can trigger a battle with

anxiety.

Bob Kaldunsky/President - Ginseng

Board of Wisconsin: “Eighty-five percent

of our market is China. So yeah, it’s

tied in. It’s hard-wired.”

Bob Kaldunsky heads up the state’s

ginseng board, a quasi-governmental

promotion group of active producers,

funded through shade assessment – a tax

on the farm structures that help mimic

11

woods-like conditions for the fickle

herb.

Despite strong demand, Kaldunsky

says the number of ginseng growers in

Wisconsin has declined over the past 20

years from over 1,000 to nearly 180.

Bob Kaldunsky/President - Ginseng

Board of Wisconsin: “There’s 5 producers

that produce 75 percent of the crop. And

the balance, then, that’s about 175,

produce the other 25 percent.”

As Ginseng growers weigh whether or

not to plant, harvest, or rent, some fear

ongoing trade tensions could lead buyers

to cheaper sources in Asia and Canada.

President Donald Trump: “It’s going

to be very hard for them to that. We’re

putting a lot of safeguards in.”

Trump’s announced $12 billion aid

program for farmers affected by tariffs

doesn’t sit well with producers like Will

Hsu…

12

Will Hsu/Hsu’s Ginseng – Wausau,

Wisconsin: “Especially for something so

valuable.”

…who say for the long term, free

trade is the right model. Value-added

products, infusing ginseng into all kinds

of food and drink combinations – which

are taxed and treated differently - could

be one future path for the industry.

There are no forward contracts or

futures markets for ginseng, and Hsu says

within the last year returns have neared

the cost of production.

President Donald Trump: “Family

farmers are the backbone of America.”

So as he and other growers adapt to

new rules brought on by the White House,

all must assess how long farmers who

export 90 percent of their crop to China

can weather the political storm.

For Market to Market, I’m Josh

Buettner.

13

Delaney Howell: President Trump has

yet to drop the hammer on nearly $500

billion dollars in tariffs. The commodity

markets chewed on this fact in private

harvest projections. For the week

December wheat plunged thirty four cents

while the nearby corn contract rose 2

cents. Private yield estimates helped

push the November soybean market lower

during the week only to return to the

starting line by the final session.

Soybean meal went the opposite direction,

as the December contract gained $9.80 per

ton. December cotton shrank 23 cents per

hundred weight. Over in the dairy parlor,

October Class III milk futures lost 19

cents. The livestock market finished on

an upward note as the October cattle

contract rose a dollar 17. October

feeders put on three $3.82, and the

October lean hog contract added $5.22 on

news of further outbreaks of African

14

swine fever. In the currency markets, the

US dollar index bumped up to 25 ticks,

crude oil fell $2.05 per barrel, Comex

gold retracted 6:30 per ounce, and the

Goldman Sachs commodity index dropped

nearly eight points to settle at 460.85.

Joining us now to offer insight on these

and other trends is one of our regular

market analysts Darin Newsom. Darin,

welcome back.

Darin Newsom: Good to be back. Thank

you, Delaney.

Delaney Howell: Let's start off here

with some wheat discussion during- you're

a big wheat guy. Were you surprised this

week when Russia did not cut their wheat

exports?

Darin Newsom: Oh no, I mean, you

never know what's going to happen on the

global wheat market. You know, there's

all kinds of stories. Nothing surprises

me anymore, you know, the fact is world

15

still isn't looking, isn't still, isn't

knocking down the U.S door to buy wheat

and they're certainly not going to

anytime soon. Um, but you know, the more

interesting aspect of the wheat market to

me is probably as was talked about in the

piece earlier, the rain that we saw

across Kansas, I think that's going to

change the, you know, the possible. I

think that's going to add to the

likelihood that we see more acres planted

of hard red winter from the folks I've

been talking to. You know the price here

recently we saw, we saw July futures for

2019, rally over $6, get up to about

$6.40, something like that. There was

your opportunity to price, now you've got

the moisture. So they were planning on

putting more acres in, got the price that

they wanted. Now they've got the moisture

that they needed. I think they're going

to be there. It's going to be a very busy

16

fall for planting wheat.

Delaney Howell: How many more acres

are we talking about Darren? And my

second part of that question is where

will they pull those acres from?

Darin Newsom: Most likely looking at

the prices of the other markets you could

lose. You could lose some corn acres.

Most likely you're going to lose more

soybean acres. So particularly, you know,

if we move out of the southern plains

into the northern plains, uh, and we look

at the hard red spring wheat, I think

you're going to lose more soybean acres

because it's just soybean, soybean market

is a disaster up there. You can't move

anything to the PNW right now. Uh, you've

got basis just collapsing at this point

and harvest isn't even here yet. Um, so I

think you're going to lose some soybean

acres up north. You're going to lose a

mix of corn and soybean acres in the

17

southern plains.

Delaney Howell: Darren, final

question for you. Is Chicago December

closed below the 200 day moving average

since, uh, which was the first time since

July 18th I think. What's that signaling

to you for the December contract?

Darin Newsom: Absolutely nothing but

what it does, what the bigger picture of

the December Chicago contract tells me is

it wants to go lower. I mean, we're in a

down trend right now in the wheat market.

We had our, we had our spike top. We got

up into the upper percentages of its

price distribution for the last five, 10

years. Sellers hit it. It's got nowhere

to go. Still got bearish fundamentals,

you know, the market's going down.

Delaney Howell: Okay. Darin, rain is

also a big factor right now. When we look

at the corn crop, what do you think

that's going to do for this year's crop

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in particular?

Darin Newsom: $8? No, not really. I

don't think it's going to do anything.

It's going to be a little wet for awhile,

but I look at the spreads and right now

we've got a twenty six cent carry from

the December contract out through the

July and depending on what your full

commercial carry is for that time frame,

you're looking at almost at 66 percent of

full commercial carry out to over 70

percent full commercial carry, so it's

just. It's a bearish situation right now,

so I don't. I don't know what production

is going to be. I don't know what yield

is going to be. I don't know where we're

going, when we're going to get in the

fields.

Delaney Howell: No guesses on yield?

Darin Newsom: I don't care. That's

the thing I. I simply don't care and the

only thing I'm concerned about is “what

19

is the market's opinion.” Corn hasn't

been able to rally, as you mentioned it,

it moved two cents this week and that's

just what it wants to do. Seasonally, it

puts in a low in early October. Spreads

are bearish basis, relatively bearish. I

don't understand why people want to get

so excited. It rained, you know, unless

it completely washed the fields away and

the corn is just not there anymore, we're

going to get in and we're going to

harvest the corn at some point.

Delaney Howell: So what should

producers be doing if they're sitting on

some old crop here, not getting excited

about now a new crop, what should they be

doing with that old crop that they're

holding onto?

Darin Newsom: If they're still

holding old crop, they probably, they

probably got a problem on your hands

because basis is going to continue to

20

weaken at least for the next 30, 40 days

as we presumably get started in harvest

and, and uh, you know, we still have some

decent exports going on. Seems like it

really isn't supporting basis all that

much. So I think there's going to be a

problem if rolling that old crop into new

crop, usually not a good thing. I don't

know that we're going to have a lot of

opportunities over the next, over the

first 30, 90 days in this, in this new

crop market. If they're still holding it,

they're probably waiting for something

bigger down the road,

Delaney Howell: Bigger such as-

Darin Newsom: Bigger rally. Uh, you

know, right now we've got the December

contract, say in the $3.40, $3.50 range,

if I recall, probably as cash somewhere

in the $3.10, $3.20, something like that.

Uh, I could be off on those, um, you

know, I wouldn't expect much of a rally.

21

Uh, you might be able to pull futures

back up close to $4. Not anytime soon,

maybe late winter. And then depending on

if we're able to build any export

business and keep demand underneath this

market, we might be able to tighten basis

up once we shut this. Once we shut the

bin doors tight, uh, in, uh, you know, at

the end of harvest.

Delaney Howell: Darin, we did test

$3.69 this week in the December contract.

If we break through that, what's your

next upside potential target?

Darin Newsom: I think the next upside

for me, I think we're somewhere between,

we got supported around $3.50 and

resistance at $3.90. It's really until we

break through that $3.90, I just, it

doesn't, doesn't tell me anything right

now. I mean just moving sideways is what

corn likes to do, so I think if we can

get up past that $3.88, $3.90 range on

22

the Dec corn contract, at that point it

would tell me it would indicate that

corns trying to move into the next wave

and the words wave three of the five wave

uptrend, which would actually look pretty

good right now because that would tell us

that, you know, maybe we finally start to

have some demand. Maybe we have some

investment buying coming back into the

market.

Delaney Howell: A little bit of

optimism there. Just maybe-

Darin Newsom: I hate to do that, but

yeah.

Delaney Howell: Darin, let's talk

about soybeans. Not so optimistic here.

We've got a good question coming in on,

on Facebook this weekend. Folks. Thank

you so much for your questions this week.

I'm going to take credit that it was

because of my birthday wish. Um, we've

got Richard in Bell Eagle, Tennessee. He

23

said if storage fills up and beans

remain, what is the best strategy with,

with balance?

Darin Newsom: Yeah, if I think we

could see storage fill up this year and

if we look at, if we look at the

structures of the market themselves,

again, we just talked about how the corn

spread is upper 60s to low 70 percent a

full commercial carry. If we look at the

soybeans and we've got it out in the mid

70s to maybe getting close to 80 percent

full commercial carry, at that point,

it's do you have it? Do you have it

hedged? If you don't have it hedged, you

probably just going to have to let go of

the the the extra bushels that you've got

of soybeans, guys, basis is going to be

bad. You know the market's telling you

that there's too many soybeans on hand

with both basis in the spreads and the

way the futures market's going. So if you

24

don't have room for your beans, most

likely it's going to force some sales

around harvest. Number one, it might help

find a location for some. Number two, you

just want to have to worry about them

anymore.

Delaney Howell: With all those

factors being said, do you think that the

USDA should continue cutting Chinese

demand?

Darin Newsom: I have no idea what

USDA can or will do. Ah, yes. I think

you. I think I think we're going to see

China's demand continued to get trimmed

back, but I think we're going to see

other demand in other areas pickup

because China's just going to simply buy

our soybeans from countries who is not in

a trade war with and so we're just going

to have more middlemen pop up that's not

necessarily going to help basis because

everybody's going to want their cut, but

25

it is going to keep us moving some of our

soybeans, so demand still going to be

there. I just don't see it supporting the

cash market that much.

Delaney Howell: Do you still see

$5.20, $5.30, $5.40 being a realistic

cash price here if, if trade negotiations

don't get resolved?

Darin Newsom: I think so.

Delaney Howell: And, and how soon do

you think we'd see those?

Darin Newsom: Probably buy within the

next 90 days and I know we're sitting in

$7, $7 something, $7.60, $7.70 range on

the average cash price. You know, on the

soybean chart looks similar on the

soybean futures chart, it looks similar

to what we saw in corn where it's still

holding, its previous low on its weekly

chart, but on the cash we actually went

to a new low here so far in September. So

that would indicate that it wants to

26

continue to go down. So can we quickly

blow through the $6? Yeah. In fact we're

hearing some stories up in the northern

plains where cash is already in that, you

know, already in the $5 range in the

upper $5. So could the market in general

go there? Yeah. If we have a 4.5 (billion

bushel) crop and we're staring at, you

know, the possibility of 5 billion

bushels of totals supplies and we don't

know where it's going. I think we've got

more room to the downside over the next

90 days.

Delaney Howell: Darin, I want to

continue soybeans and on Argentinian and

South American production during market

plus, but we're going to move on here

until the live cattle markets maybe a

little bit more of a bright spot. Um,

when you look at markets overall, does

the stronger US dollar make you nervous

about beef demand moving forward?

27

Darin Newsom: You know, we're

entering that time of year where beef

demand starts to slow down any way. You

know domestic demand starts to slow down,

you know, export demand could stay firm

dollar is certainly going to come into

play. I'm not, I'm not overly impressed

with the charts right now. We've had a

nice little short term bump. I'm not, we

haven't broken out of anything yet so it

still looks like we're trying to roll

over and go lower long term. So you know,

this could be a problem. We've still got

supplies. Every time we see a, every time

we see a cattle on feed report it's still

five percent larger than the previous

year and so on and so forth. So the

supplies are still out there and I think

that's going to- when domestic demand

starts to slow down here over the fall

and winter, I think that's going to start

putting some pressure on the cash market.

28

Again.

Delaney Howell: What should

producers be looking to do then in the

wake of that pressure?

Darin Newsom: If we get some bounce,

if we get some bounces in here and you

know we've had some weeks where we've

seen some rallies, you know by all means

get some October, gets some December,

maybe I'm going out to the Feb and start

to get some of those locked in on the

idea that we're going to see some

seasonal pressure in this and we still

have ample supplies of beef around.

Delaney Howell: The last thing I

wanted to touch on here, and we talked

about, you alluded to it just a little

bit there, but fourth quarter we've got a

huge supply. We're still sitting on, I

think the USDA projected a drop of 550,

million pounds heading into first

quarter, which is a huge drop. I think

29

maybe the largest on record. Has this

already been factored into the market?

Darin Newsom: If it has, it didn't do

much because the monthly chart still

hasn't moved. Again, the monthly chart

looks like it's still rolling over and

may want to go down for a bit. So if this

has been built in, if anyone believes

that at all, then it really didn't have

much of an impact on the market.

Delaney Howell: Okay. Let's move on

here quickly to feeders. Reversal higher

on Tuesday. Can we follow through and

test new highs?

Darin Newsom: Oh, we certainly can,

but mostly no, but much like the live

cattle market that just doesn't have. It

just doesn't have any longterm support in

this. I mean feeders are kind of goofy

and that they'll post a lot of the post,

a lot of short term signals on daily

charts and so on, but they don't really.

30

A lot of times they don't amount to much

because it's a very thinly traded market

so we'll see if we can get some follow

through over the next couple of weeks,

but I'm not looking for any huge bullish

break at this point. Now, what could help

support the feeder matter market is if

corn breaks down, instead of going up

through $3.90, if corn actually breaks

down, cash, corn breaks down, that could

provide some support to the feeder

market.

Delaney Howell: Makes those input

costs a little cheaper. Darin, your

thoughts on the African swine fever, are

they going to have an impact on the US

prices?

Darin Newsom: You know, they could,

but which way? It could be argued either

way. Number one, you know it's going to

reduce some of the supplies of Chinese

pork, so naturally you'd think, hey,

31

they're going to buy from the US. Well,

we're in a trade war with them so they

may not buy more from the US. So if all

of a sudden the supplies of their pork

are going down and they're having to kill

some of their herd, the soybeans that

we're shipping to other places, that is

then finding its way to China may not

happen. So while it could be argued it's

going to be bullish, it could also be

argued it's going to be bearish and right

now being me, I'm going to take the

bearish side.

Delaney Howell: Of course, of

course. Our Darin Newsom. Thank you so

much. Always a pleasure.

Darin Newsom: Thanks Delaney.

Delaney Howell: That wraps up the

broadcast portion of Market to Market,

but we will keep the conversation going

on Market Plus where we'll answer more of

your questions. You can find it on our

32

website at IPTV.org/mtom. Check out our

youtube channel. Tell everyone you've

clicked, subscribe at

Youtube.com/markettomarket. Join us again

next week when we'll explore how the

battle plans being made to fight the

opioid crisis in rural America. So until

then, thanks for watching. I'm Delaney

Howell. Have a great week.

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