Coming up on Market to Market, the House passes a budget in an overnight work session.

A healthy response to a government report.

Severe weather stretches over days and states causing massive destruction.

The many sides to a renewed water fight in South Texas.

And commodity market analysis with Sue Martin next.

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This is the Friday.

May 23rd edition of Market to Market, the Weekly Journal.

Of Rural America.

Hello, I'm Paul Yeager.

The House voted to approve a budget by one vote as the sun rose on Thursday following an overnight debate.

Inside.

The 1116 pages included tax cuts, reduction reductions and social programs.

Projections to raise the deficit by more than $3 trillion, along with assistance to rural America in boost to farmers safety net programs.

The Senate will now take up the measure, but it was 68 pages released Thursday that elicited a lot of response from the white House.

The president was flanked by Health and Human Services Secretary Robert F Kennedy Jr, along with USDA head Brooke Rollins and others as they unveiled the Make America Healthy Again report.

The report also comes out against ultra processed foods linked to a host of poor health outcomes.

Agricultural commodity groups pushed back at the claims pesticides used on farms are potential contributors to disease in children.

Glyphosate and atrazine were targeted, which are staples of corn and soybean production.

We have compiled many of those full comments and posted them on our website of market to markettomarket.org.

Now to a pair of economic reports.

Existing home sales fell again, this time by half a percent, according to the National Association of Realtors.

This was the slowest April since the wake of the housing crisis in 2009.

Home prices increased for the 22nd consecutive month, as the median price now is $414,000.

New home sales hit the highest level in three years on Friday, with a gain of 10.9%.

A week ago.

While taping this program, a weather system was erupting in Missouri and moved east, causing destruction.

Peter Tubbs looks at the damage from that storm and many others that spun up in the last seven days and left behind a lot of rain for a majority of the Grain Belt.

Severe weather started last weekend in Missouri, as officials estimated more than $1 billion in damages.

In Saint Louis alone from a storm.

This started a four day stretch when more than two dozen people were killed across multiple states.

In Chicago, a major dust storm swept across the city as part of the massive weather system.

Cleanup in Kentucky took most of the week from the same weekend system here in the central part of the state.

Residents had little warning to take shelter on the walls in the hallway.

Still there.

They stayed there.

And the rest of the outside.

Walls you know.

See them.

They fell in.

Most of them fell in That night.

Behind me is still.

Standing, but.

You can see it's in bad shape.

A round of storms came through middle Kansas on Monday, slamming the town of 11th.

Several homes were damaged here.

The roof and a pair of walls were peeled off this home.

Trees downed in several neighborhoods.

And even this farm machinery building was impacted with a combined covered in ceiling and support walls.

Then it was another system Tuesday in Alabama.

This funnel cloud in the northern community of Madison forced residents to take shelter.

The U.S. is on track to have its second busiest tornado year ever.

Widespread precipitation from the Rockies to the East coast resulted in at least one inch of rainfall, with some locations receiving as much as 6 to 10in.

Parts of Iowa were included in the Deluge, as a small band of four inch rains were reported in a 100 mile band.

Corn planting is nearly complete in Iowa at 91%.

Nationally, the pace is 78%, five points better than the five year average.

But rains will limit much of the state's progress toward the finish line.

The above normal totals helped alleviate some dry conditions in the weekly Drought Monitor, which hit its smallest level since July with 47% of the country in some form of drought.

Areas of the mountain time zone to the west missed on the big rains, and southern Texas, New Mexico and Arizona.

Stay locked in the most serious levels of drought in the data cutoff of Tuesday morning.

The 6 to 10 day forecast calls for below to normal temperatures in the most moisture laden areas, while the driest locations could experience at or above normal temperatures.

For market to market.

I'm Peter Tubbs.. Water has long been a topic of reporting on this program for over 50 seasons.

We've looked at too much and to little that fell from the sky and the ramifications from the precipitation levels.

Then there's been work in the West about policy on allotments and distribution that has now extended to new regions, not normally in the discussion.

Now the two come together in an international dispute.

As John Torpy reports in our cover story.

In the middle of the Rio Grande River, held back by the Anzalduas Retamal Dam.

Water is being diverted to Mexico's main irrigation canal.

The diversion is part of an agreement established in 1944 between the U.S. and Mexico.

The dictates how water from the Rio Grande, Colorado and Tijuana rivers is to be shared between the two countries.

Recently, the two countries have been at odds because of Mexico's failure to honor those water delivery mandates that help provide water to U.S. farmers in South Texas.

Tensions reached a boiling point last month, as President Trump used the threat of increased tariffs to force Mexico to start delivering water to rights holders in the United States.

For Texas farmers who are requesting water.

There will be an immediate delivery of a certain number of millions of cubic meters that could be provided according to the water availability in the Rio Grande.

I will get the.

Wording in what is now known as the Water Treaty of 1944 stipulates Mexico must deliver 350,000 acre feet of water to the United States annually over a five year cycle.

The allotment is 1.75 million acre feet of water.

Deliveries are made via two international reservoirs on the Rio Grande River, Amistad and Falcon, after delivery.

The state of Texas owns the water and grants usage to an agglomeration of agencies that distribute the precious resource to end users and water rights holders.

According to data from the International Boundary and Water Commission, the governing body in charge of accounting for the water deliveries, Mexico has fallen short on delivery of promised supplies for the current cycle that ends in October of 2025.

In May of 2025, IBWC data shows Mexico has delivered just over 600,000 acre feet of water, about 1.15 million acre feet under the amount mandated by the treaty to meet agreement guidelines.

Mexico must deliver an additional 1.15 million acre feet of water by the end of the five year treaty cycle in October of 2025.

They're not paying, paying up.

They still oversees over a million acre feet of water.

Those farmers don't go for five crops because they pretty much grow year round because of the climate.

This year, they thought they had enough water to grow one one crop.

You can't stay in business doing that.

This this crucial getting the water treaty fixed with Mexico.

So we got a real problem, and it's time we get on top of that.

USDA officials announced last March a $280 million grant agreement with the Texas Department of Agriculture to help offset economic losses by South Texas farmers who incurred a water allotment shortfall in April of this year.

Mexican President Claudia Sheinbaum announced new water deliveries to meet treaty agreements.

However, Sheinbaum points to the absence of rainfall in the Rio Grande River basin as the reason she is hampered from making good on delivering the water.

Technical proposals are being sought that will allow the treaty to be complied with, because what is happening is that there is less water in the Rio Grande, especially because we have experienced almost four years of drought.

So there is less water.

In the fall of 2024.

U.S. and Mexican officials agreed to an amendment to the 1944 treaty, allowing Mexico to utilize water from other Mexican tributaries to pay its debt.

Some South Texas farmers and irrigation officials are unsure if Mexican officials will make good on the deal.

Anthony Stambaugh is the general manager for the Hidalgo County Irrigation District Number two, headquartered in San Juan, Texas.

His district's serves both cities and agriculture in South Texas, where roughly 30,000 acres and the Rio Grande Valley receives a portion of the water allotment.

When it comes to some of the provisions that then Mexico has put on that water, they have the right to turn the light switch off at any time.

Okay.

So because of that, farmers cannot plan with that water.

You know, why would you invest thousands, tens of thousands, hundreds of thousands of dollars to prep a field by seed, go plant it, and then all of a sudden the wat Growing a variety of commodities in South Texas helps producers keep their operations profitable without knowing if they have a reliable amount of water to irrigate their fields.

Farmers face the challenge of deciding what crops to grow.

Here's the problem if all of South Texas is only growing 2 or 3 commodities, now, you've oversupplied the market.

And even worse, you've depressed the market because there's so much supply.

Now you're not getting that return.

So that's why crop mix is so important, and that's why it's so devastating to South Texas farmers when we can't do a crop mix.

Some producers have the advantage of being near where the water is available.

Tony Martinez is a managing member of Primo Trading Services, a fresh produce brokerage.

Martinez farms in both the U.S. and Mexico, and acknowledges farming in both countries helps his operations navigate water supply struggles.

We have not farmed Texas watermelons in the valley in the last four years because we had to move that to Mexico.

Why?

Because our allocations of water have been less.

The issue with water is something that's not going to go away, unfortunately.

Of course we're going to do our best to continue to advocate, be diligent in how we use it.

You know, I feel growers have to do their part too.

You know, we have to we have to evolve with the times.

We have to be more efficient in farming.

But the unfortunately, I strongly believe that this water issue will continue to be an issue, but I don't see it going away anytime soon.

From market to market, I'm John Torpy.

Next, the Market to Market Report.

Weather issues globally and domestically played in the grains as the weather window remained open to keep some premium on the table for the week.

The nearby wheat contract gained $0.18 and the July corn contract found $0.16.

Soy meal tried to stabilize the soy complex as tax credit futures lingered overhead.

The July soybean contract added a dime, while July meal put on $4.30 per ton.

July cotton expanded $1.22 per 100 weight over the dairy parlor.

June class three milk futures improved $0.19.

The livestock market was mixed.

June cattle strengthened.

$3.57 August feeders put on $2.78, and the June lean hog contract fell $2.03.

In the currency markets, U.S. Dollar Index lost 203 ticks.

July crude oil decreased by $0.44 per barrel.

Comex gold added $177.20 per ounce, and the Goldman Sachs Commodity Index found almost three points to settle at 533.70 Joining us now regular market analyst Sue Martin.

Hello, Sue.

Hi there Paul.

Wheat has gone and put together two winning weeks in a row.

How do they get to three?

By moving higher.

Well, that's the easy answer.

Yeah, I did give that too easy.

I think that, when I look at the wheat market, the funds, I haven't seen Friday's, you know, commitment of traders, but I think we've seen some short covering.

But on the same token, the commitment of traders in the past few weeks have shown record short position in Kansas City wheat and then in Chicago wheat.

Very large, short position, but not record.

And I think that when you look around the world and you look at whether China's weather's very concerning and, you know, just this last week they had temps of 104 and, Okanagan and some of the surrounding provinces, and they account for at least 20% of the wheat produced.

And now, if China's going to be importing wheat, they tend a lot of times go to Australia.

But Australia is having some dry weather concerns too.

And so, you know those two now there's Russia and Russia's been on the drier side and more arid here of late after we've had some frost freezes here in May.

This almost feels like a year where Mother Nature could gratify Russia with a frost freeze in June.

And a lot of times when you get a violent move higher in June, it's coming off of something that's happened in Russia.

Saudi Khan said that they're, they raised their estimate by 1.2 million metric tons for Russian production and took it to 81.2.

That's still is not what you call really burdensome.

And then you've got, of Rostov, the, province there or state and the governor there is calling for state of emergency.

So that's a lot of factors that are being thrown into this.

Yes.

And then U.S.. And the U.S., you've got those quickly on we are you holding right now?

Are you thinking you're going to make a sale right now?

No, I would not sell yet.

let's counter seasonal a little bit.

but if we can hold that counter seasonal, we could rally into June.

I think that $5.35 $5.40 is just too cheap.

you might get a chance closer towards $6.

Weather has also become a story.

And corn.

Let's talk old crop first, though.

Is there any big reason to see that come to the market right now at this rally this week?

Well, when I look at old crop corn, 85% of it's been sold.

And so the commercial doesn't have any need to have to push bids to get the farmer to sell.

So when I look at old crop corn, yes, we can still go higher.

But for now, I think the concern is about new crop and the lack of farmer sales.

Farmer sales are about the lowest they've been in 20 years for like by the 1st of May.

Is that a little bit because the farmer is hesitant?

Because of the uncertainty of maybe not so much weather, but trade is causing pause or what do you chalk?

I think it's a little bit of both.

I think that the uncertainty with politics is maybe got them on hold for a minute.

Price levels aren't high enough.

That attracts them.

the other thing is, is that we keep hearing talk, weather forecast, talking hot June and July, possibly first half of August.

If that is the case, those farmers aren't going to sell.

They're going to hold.

Especially if you're in the East where you haven't planted anything.

Yet.

That's exactly right.

So you have this weather big change in the east and the west.

And you've had four years of beautiful, everybody, we thought we were in a drought and stuff, but we never had triple digits, and yields were pretty decent this year.

Maybe a little different.

let's move to beans, because that's the one that has been weaker for quite a while.

And all of a sudden, here comes spring and here comes some optimism.

Do you buy into that?

I do.

I think the bean market still has room to go.

I think new crop beans will trade over $11.

What's sad is that doesn't sound like much when you're trading at, what, $10.50 or something like that or $10.59?

That's certainly not asking the world.

but it's going to take.

we'd like an oil, you know, a policy by the EPA, a decision of what they're going to do with the Renewable Fuel Standard, the 45Z.

We've had rumors, but we haven't got anything substantial.

And the Senate now with the big tax bill, the beautiful big tax bill.

that 1st May be a little more of a struggle because in the House, it only passed by one extra vote.

And so I think that, but we keep hearing we're going to have something by June 1st.

So that means I got to get busy this next week.

And you have there's rumors out there about all these tax credits and what could happen for renewable fuels.

Renewable energy in general has seen that is less optimistic about future there.

So if I'm a wheat corn soybean producer right now Sue what's my optimism meter?

Am I half up?

Half down with my optimism of how things can go higher?

I think we're still in a half up.

Okay.

I just don't think we're done yet in this rally.

but you got to keep in mind, July 9th, those 90 days are done for the pause.

And that could come into play psychologically here at.

Or like what happened Friday morning.

The president said to Europe, you're not negotiating fast enough.

I might raise the tariff by 50%.

We could see the same thing happen with China.

Oh, right.

Yes.

Yeah.

we have to realize in the last go around when they agreed to a phase one.

And I think ultimately that's where we'll end up.

It might have a little bit of a different feel, but, it took from 2018 to 2020 for them to finally come around.

And so this time around, is it going to be that quick?

Maybe not.

Trade is a big thing in the livestock industry too.

Cattle Mexico, the screw worm.

What is that doing to prices right now?

Well, first off, you know, we, we were going to look, cattle come in from Mexico.

And of course, in today's cattle on feed report, as would expect, Texas, you know, placements are down quite a bit.

I would have to say the concern now is that this and then, Secretary Rawlins banned cattle from coming in from Mexico because they wanted the border to the south, maybe more constrictive because they feel that that screw worms coming across that border.

However, there is some fear that by the 1st of July, this screw worm could be in, Texas and possibly by the end of the summer, maybe to Canada.

That's a big concern, because if that screw worm, when it first off ivermectin works quite well and maybe putting it in feed, I don't know.

But, they're going to have to start producing more of it just in case.

And the concern is if it comes into the U.S., then do they open the borders to cattle coming from Mexico?

But the bigger one I'm concerned about is the health issue for people use the eating beef, because if the animal has been infected, it gets into their bloodstream.

Yeah, it feeds on tissue, but if it's in the bloodstream, it's in the meat.

How will the USDA look at that?

I'm not sure.

And how will the average consumer look at that?

Well, all you have to do is give them a little fear.

But then you're very tight supply on cattle right now anyway.

Prices are extremely high.

it could be one of the catalysts that sends us market right back south.

Well, you mentioned cattle on feed.

It was 98% on feed, 97 placed in 97.

Fed.

What of those three numbers stood out to you and feeders?

Well, first off, the numbers are right in line with the trade guess.

So it'd be called neutral on Tuesday.

but in the end, looking at who's placing cattle.

I would it was Oklahoma and Kansas that placed more cattle, but on weights, heavyweights 800 pounds and on up 900 pounds.

It over.

it was, Nebraska that placed a lot more of those.

And I think it's because of just how dry they have been.

Cattle are moving off of pastures in Nebraska.

They just haven't had enough moisture since the first of the year.

The conversation, obviously, with many people at grilling time this weekend over a holiday is going to be about the price of beef.

And given what you just said about what could happen.

is that the type of discussion that can maybe spook these markets, lower that they've had enough?

It could.

for one thing, when I look at we have indicators we're using and they're all into sell mode.

one of them very long term indicator.

In fact, it's been flatlined at 99% since July of 23.

And it's still there, but it takes proof.

I mean, you have to get a break started and then have it end up that it confirms that at the end of the time frame.

I think that when I look at my indicators, if the most optimistic thought process could happen in feeder cattle, it might be they could go to 320.

They could, but in the scheme of things where prices are, that's not astronomically higher.

And I look at fats.

And one thing this past week here, we did have, a small earlier than the week before, negotiated cattle, which means coming on next week.

We could have a very low kill for that week, and that could stimulate the market.

And we are out of time.

Thank you Sue.

Appreciate it.

Thank you.

For that.

We're going to pause this analysis, continue our discussion about these markets in our Market Plus you can find both analysis and plus on our website of Markettomarket.org.

This is also the place to register for our next live event June 3rd in LeClaire, Iowa.

Information about the gathering is on our website.

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Next week I'll look at building an agriculture program that's feeding a changing local community.

Thank you so much for watching.

Have a great week.

Market to market is a production of Iowa PBS, which is solely.

Responsible for its content.

What's next?

Doesn't happen by chance.

It happens when researchers and farmers work together to solve tomorrow's agronomic challenges.

We're committed to creating what's next because a pioneer our name is our mission.

Family owned and operated for more than 60 years.

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

Tomorrow.

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

Trust in tomorrow.

Information is available from a Grinnell Mutual agent today.

This week on market to market.

Building an agriculture program that's feeding a changing local community and commodity market analysis with Naomi Bloom.

Market to market.

The Weekly journal of Rural America.