fifth installment of Market Plus. Joining us now, Shawn Hackett. Shawn, I think before, I'm not saying I've made fun. I've made light of your hand gestures and you said something about a beach ball in the first discussion. I almost said right at that exact moment, it looks like you are doing a beach ball bounce with some of the points you were making. What has amped you up the most this week given all these headlines?
It's the renewable diesel mandate shift. It's a major, major fundamental shift in the grain markets. That's just not a short-term shift. It's a multi-year shift. It's a shift that was supposed to happen several years ago when we backed away from the whole thing. And it really just kind of removes a lot of these headwinds from trade wars and Brazil taking our market share, at least for a little while. It really puts us into a much tighter spot and it gives us a much better chance for economical prices.
And this could change the trade discussion, right? Because all of a sudden, I mean, there's a clamoring for we don't need trade. I'm guessing that's a partial negotiation ploy, but it also is let's take care of it ourselves in this country.
No question. With what's been happening with China pulling back from our demand, from our exports, and with Brazil continuing to grow and gain market share, and us losing that market share, I absolutely believe that taking care of ourselves, bringing more demand home, finding those useful ways to create more domestic demand, job creation, and economics here in rural America, it's absolutely the right approach. Doesn't mean we shouldn't sell other people, doesn't mean that we won't sell other people, but it shouldn't be the be-all, end-all of a policy going forward. And I think this week's change of affairs with the renewable diesel mandates is a step in the right direction in creating another source of income for our farmers, because frankly the market movement was muted on Monday, Tuesday. This framework between the US and China out of London, there were very few details, and so the market I think has grown numb to, oh yeah, yeah, we have something, right? Last time we went through this when he was president for the first time, until there was actual concrete evidence of how much for how long, we didn't react to it anymore. And we didn't get any for how much for how long. We got that we're getting along and we're starting to become friendly again. We need how much and for how long. I'm not saying that's not coming, but you get that like we got from renewable diesel this week, the market will react. Right now it's, sounds good. Okay, we're going to get our rare earth metals, but are we going to get some extra corn exports and soybean exports? We haven't heard a thing for it yet. Show us the money, as they say.
Show your homework. Yeah.
All right. Here's some homework for you. Glenn in Iowa wants to know, Shawn, what will the final corn acres be? You mentioned acres in cotton because I want you to answer where those cotton acres are going and then what's the corn acre?
Well, I mean, I think there's a lot of people are suggesting that the Deep South lost corn acres and that the central west, central north gained corn acres and the same thing for soybeans because of the really poor weather versus the good weather in the planting pace. I don't really think it's going to change that much. I know it's probably not popular to say that, but I mean, I think we could be 500,000 acres one way or the other, which is really, in my view, a statistical dead heat. I don't think we're going to get much of a change based upon the bifurcated weather we had taking away and adding it another place. I really don't see that happening here.
I know it's really hard to do this, but play this what-if game for me for a moment. What if today's news about renewable volumes came a month ago or two months ago? Would that have changed the picture?
100%. We would be desperately trying to buy soybean acres back. And that's what makes the situation in soybeans so delicate. We didn't get the acres planted. Even if we add a few extra acres here at the end of the month, we didn't get it planted. And now we have this demand. And there's nothing you can do to change that until next planting season. So yeah, it would have made a great deal of difference, the timing of something like this. But that's the way the chips fell.
All right, let's stick if we could with weather and go Mike in Iowa. I know I told the control room we were going to go in order and I'm already out of order. Second question, surprise. Without a weather scare and after this report, how low can we go on corn?
Well, if we don't have a weather scare and we have trendline yields or higher and we start pushing those corn carryouts to two billion bushels or higher and we start pushing soybean ending stocks to 400 million bushels or higher, you know, I think you'd be looking at the lows that we had last year coming into view again. I think it was whatever, 385 December corn last year. I'm thinking out loud, 9 and a half November soybeans last year. I mean, I think those are the numbers we roughly got to when everybody got pretty negative last August. That would be to me is where we would be going, or at least in the short run going, but we didn't have renewable diesel mandates in place. So, I think if we do go down to those levels, it won't be a long-lasting bottom. And if we're correct about a very, very difficult harvest season with long, drawn-out harvest season and cold, wet weather, I think we could have a pretty exciting post-harvest rally to regain some of that price level and give farmers a chance to sell.
So we'll know in July if it's hot and dry.
But we won't know in June or July, August until we get to September if it's this miserable harvest season. So let's go Kevin in Missouri then with a good crop of beans and corn. We're just going to hypothetically say we're going to get that. Forget the drought again. How low can we go? Can you already kind of talked some low targets, but would the supply push us down?
The supply always pushes you down during harvest time if it's big for at least a little while. But I would argue that because of the renewable diesel, we need more soybeans than we're going to be able to produce. Even if we have a good crop this year, we're going to need more acres next year in order to produce the soybeans that we're going to be needing to crush to make the oil. So, that's why I'm saying this is such an important fundamental that even with a large crop, if it's the first large crop or a trendline yield above crop in six years, it still would not in my opinion allow for the kind of negative fundamentals we were talking about last August. Meaning, I don't think we can get ourselves back to that. I still feel last August we traded the largest supplies we're going to trade for quite some time to come.
