Latest / AG Bull / AG Squawk with Davis Michaelsen | Randy Martinson | War and Weather Watch

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AG Squawk with Davis Michaelsen | Randy Martinson | War and Weather Watch · AG Bull

0:11
SPEAKER_00: Quiet markets over in the corn and soybeans and winter wheats, despite a rush higher in crude oil futures today, the cattles were mostly higher with lean hogs earning the effort award today.
0:24
SPEAKER_00: We'll look ahead of this week's upcoming reports and talk two big W's in the market.
0:41
SPEAKER_00: From behind the big blue, bodacious microphone of Ag Bull, your pal Davis Michelson here for Ag Squawk in the Afternoon.
0:49
SPEAKER_00: Glad to have you along with us on Monday, August 10.
0:53
SPEAKER_00: We're already almost halfway through August.
0:56
SPEAKER_00: We're bumping right up against the reports.
0:58
SPEAKER_00: They'll be out on Wednesday.
1:00
SPEAKER_00: Now we've got a little something special that we're gonna do.
1:03
SPEAKER_00: I'm gonna be talking LAN that day.
1:04
SPEAKER_00: I figure there's plenty of commentary out there on the reports, but for premium subscribers, I will have a discussion with Tommy Grasafi and perhaps some others from the AgSquawk squad on the reports specifically.
1:19
SPEAKER_00: So premium subscribers, you can you can get all the information that you want from us there.
1:24
SPEAKER_00: If you're not an AgBull subscriber, let me urge you to go over to AgBull.com, AgBull.com, check out all the info available there, agbull.com or call 855-737 Farm.
1:37
SPEAKER_00: Gosh, I'm glad you're here today.
1:38
SPEAKER_00: I got a new shirt going.
1:39
SPEAKER_00: I think Jed likes it.
1:41
SPEAKER_00: He's a Colorado boy.
1:41
SPEAKER_00: He probably thinks it's a Denver Broncos shirt.
1:44
SPEAKER_00: I was just sort of curious.
1:45
SPEAKER_00: It's actually flannel.
1:46
SPEAKER_00: And I know it's August 10.
1:48
SPEAKER_00: It's a little early for flannels, but I keep it like a meat locker down here in uh the ultimate man cave in Kansas City, USA.
1:54
SPEAKER_00: So, you know, a little little added warmth is is always welcome.
1:58
SPEAKER_00: So a new shirt today, let me know in the comments if you're on YouTube or whatever.
2:01
SPEAKER_00: Let me know what you think.
2:02
SPEAKER_00: You like it?
2:03
SPEAKER_00: I'm I'm pretty happy with it, I think.
2:05
SPEAKER_00: It fits good, it feels nice.
2:07
SPEAKER_00: Got a new shirt going.
2:08
SPEAKER_00: USDA daily export sale reported today.
2:11
SPEAKER_00: 105,000 metric tons of corn to unknown for 2526.
2:16
SPEAKER_00: We had uh export inspections as well.
2:19
SPEAKER_00: Decent corn and soybeans and corn and wheat, excuse me, both above year ago.
2:24
SPEAKER_00: Uh the soybean inspections were a little low compared to year ago, but did improve on the week.
2:30
SPEAKER_00: No real fireworks or surprises there, but uh you know, good to see good to see that corn and the wheat moving to export.
2:39
SPEAKER_00: The market's attention is fixed on Wednesday's USGA report.
2:43
SPEAKER_00: The reflex is to make it a yield guessing contest.
2:47
SPEAKER_00: This, according to Jim Weismeyer, I'm just gonna read a little bit of what he wrote this morning.
2:53
SPEAKER_00: He goes on, that misses the point, according to veteran analysts.
2:57
SPEAKER_00: The U.S.
2:58
SPEAKER_00: crop is the most important single variable, but the trade around this report will be shaped as much by factors that nobody can put a decimal point on geopolitics, logistics, and a demand ledger that keeps growing while the market debates supply.
3:16
SPEAKER_00: I'm going to talk with Randy Martinson about these items here as we go through our conversation today and get his thoughts on these.
3:23
SPEAKER_00: I don't know if he has any thoughts on the report or not.
3:26
SPEAKER_00: I I threw through a note in there in my notes when I was getting in touch with him earlier today.
3:30
SPEAKER_00: So we'll uh we'll obviously touch on it at least a little bit and find out what uh what he's thinking about it.
3:36
SPEAKER_00: Let's go to the tail of the tape in the markets.
3:38
SPEAKER_00: Corn futures were fractionally lower to start the day as soybeans firmed slightly.
3:43
SPEAKER_00: Wheat futures quickly gained a nickel and continued higher through mid-morning.
3:47
SPEAKER_00: On the livestock side, nearby feeder cattle struggled to move higher as deferred contracts firmed more than a dollar.
3:54
SPEAKER_00: Fat cattle and lean hogs both solidly higher to start the day.
3:59
SPEAKER_00: WTI crude futures were more than two bucks higher in early trade as uncertainty over talks with Iran persists and the Russia-Ukraine war rages on.
4:09
SPEAKER_00: By the way, spoiler alert, that's one of the W's that uh Randy has mentioned in getting ready for the show here.
4:15
SPEAKER_00: We talked about the two W's.
4:16
SPEAKER_00: I bet you can guess what the other one is.
4:18
SPEAKER_00: We'll get to it.
4:19
SPEAKER_00: Rounding out the lunch hour.
4:21
SPEAKER_00: Corn still tethered to unchanged.
4:23
SPEAKER_00: Soybeans up around three and a half cents.
4:25
SPEAKER_00: Winterweed futures gave back some early gains, but remained in positive territory.
4:29
SPEAKER_00: The livestock's maintained their previous course with nearby feeders under light pressure, with deferreds slightly higher.
4:37
SPEAKER_00: Fat cattle were moderately higher, and and at that point I called lean hogs sharply higher, and maybe that oversold it just a little bit, but you know, people are buying.
4:46
SPEAKER_00: People are buying the hogs.
4:47
SPEAKER_00: WTI crude futures built on early gains, trading around 350 higher around the noon hour.
4:53
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4:57
SPEAKER_00: Me and my entire squad use plus 500 T4 software, plus 500 for real-time quotes, futures and options, a host of features at your fingertips, plus 500 choose, plus 500, and let's check our plus 500 right now.
5:13
SPEAKER_00: December corn was down just a quarter of a cent on the day, 461 and three quarters.
5:18
SPEAKER_00: Your Novi beans up three and a quarter at 1179 and one half.
5:24
SPEAKER_00: Meal was lower, oil was higher.
5:27
SPEAKER_00: That's uh soybean oil, by the way.
5:29
SPEAKER_00: Over to the winter wheats, I've got December Chicago wheat, 659 and a quarter, up a whole penny on the day, and the December KC wheat at 731 and a quarter, up just three quarters on the day.
5:42
SPEAKER_00: So the wheats are well off the highs by the time we got to settlements.
5:45
SPEAKER_00: Looked like maybe we were going to be six, seven, maybe eight cents higher early on, but no, we're we wound up very close to unchanged.
5:53
SPEAKER_00: And over to those livestocks.
5:55
SPEAKER_00: Here's your October feeder cattle at 335.87 and one half, 95 cents higher on the day.
6:02
SPEAKER_00: October fed cattle 226.90 at settlement down to or up a buck sixty-two and one half.
6:08
SPEAKER_00: That's higher, a buck sixty-two and a half on the October fat cattle.
6:12
SPEAKER_00: And look at them hogs go.
6:14
SPEAKER_00: The October contract at 83.67 and 12, up$1.45 on the day.
6:20
SPEAKER_00: Pretty decent day in the lean hogs.
6:22
SPEAKER_00: Really, the only pressure that we saw across this livestock complex was uh in the front month of the feeder cattle.
6:29
SPEAKER_00: And that, well, I guess the August was down 90 cents, but I don't know if we're looking at that or not.
6:34
SPEAKER_00: The 65 lower in the September feeder cattle.
6:37
SPEAKER_00: Other than that, pretty decent day for the cattle, and especially those lean hogs.
6:43
SPEAKER_00: And with that, how about we bring in Randy Martinson?
6:51
SPEAKER_00: Randy Martinson from Martinsonag, Martinsonag.com is where you can get more.
6:57
SPEAKER_00: Randy, it's great to have you here on Ag Squawk in the afternoon.
7:01
SPEAKER_00: How's it going?
7:02
SPEAKER_00: How's your day been so far, Randy?
7:04
SPEAKER_01: It's been pretty good.
7:05
SPEAKER_01: Thank you, Davis.
7:06
SPEAKER_01: No, it's it uh you know it's a beautiful day up here.
7:08
SPEAKER_01: You know, we the heat broke, we got some nice weather, and so yeah, it's it's actually been enjoyable to be outside doing stuff.
7:15
SPEAKER_00: Yeah, yeah, I like the sound of that.
7:17
SPEAKER_00: I uh I've I made an effort to get my lawn mode early on Saturday.
7:22
SPEAKER_00: We are hot down here in Kansas City, and I was glad that I got to it because uh yesterday the heat really, really rolled in.
7:29
SPEAKER_00: Now you've got offices with Martinson Ag up in North Dakota, one in the uh Fargo area and another one.
7:35
SPEAKER_00: Are you up in the Fargo area now?
7:38
SPEAKER_00: Where are you located presently?
7:39
SPEAKER_01: Yeah, I'm in Fargo right now.
7:41
SPEAKER_01: Yes.
7:41
SPEAKER_00: Okay, okay.
7:42
SPEAKER_00: How's it going up there this year?
7:43
SPEAKER_00: What's it like to grow crops around the the Fargo area?
7:46
SPEAKER_00: How are your what have your customers got to say?
7:48
SPEAKER_01: Boy, it's been a tough one.
7:49
SPEAKER_01: I mean, you know, we really haven't gotten much rain here this uh growing season.
7:53
SPEAKER_01: Uh you know, one big rain since I think June, the small one in July, and that's been about all we've been able to muster here.
8:00
SPEAKER_01: I just looked, I think for the month of uh July, beginning of August, we have had like 1,500ths of rain in Fargo for the total.
8:11
SPEAKER_01: So yeah, things are pretty dry.
8:12
SPEAKER_01: And it's uh, you know, if we it's a good thing that we moderated the heat a little bit here, that's gonna help a lot, but even with this, we're still seeing the crop going backwards pretty fast.
8:22
SPEAKER_02: Yeah, yeah.
8:23
SPEAKER_00: Are you far enough north?
8:24
SPEAKER_00: You gotta be bumping up the first frost, right?
8:26
SPEAKER_00: Are you are you coming up on that pretty quick here?
8:28
SPEAKER_01: You know, we'd be looking at, I mean, actually, you know, last week in southwest North Dakota, there was about six locations that did report frost, even after that big heat wave broke.
8:39
SPEAKER_01: But for the most part, our average date uh is uh the first week of September, the first 10 days of September.
8:45
SPEAKER_01: That's where we hit our first frost date.
8:47
SPEAKER_01: You have to be a little farther north to get us sooner than that.
8:49
SPEAKER_00: Okay, fair enough, fair enough.
8:51
SPEAKER_00: That's right around the corner, though, Randy.
8:54
SPEAKER_00: I was I was snooping your website just a little bit at martinsonag.com, and I noticed something very interesting on there.
9:03
SPEAKER_00: One of the things that we're very proud of here, and that we're we're observing, I guess maybe chronicling to some degree, is is the change in how people take in agriculture-related content.
9:16
SPEAKER_00: There, you know, it used to be you flip on the AM radio in the barn, you let her run 24-7, and that was a great source of news and still is, but more and more people are moving over to digital sources.
9:28
SPEAKER_00: One of the things that stuck out to me about your website is that it mentioned you offer an app.
9:34
SPEAKER_00: I'd like to know a little bit more about that.
9:36
SPEAKER_00: What are your customers?
9:37
SPEAKER_00: Uh what's what's the story with the app?
9:39
SPEAKER_00: What's the idea, and how's it going?
9:42
SPEAKER_01: Well, you you're exactly right.
9:43
SPEAKER_01: I mean, that you know, we have to look at how the customer wants to get their information, and everybody is carrying a smartphone right now.
9:50
SPEAKER_01: So we uh, you know, a few years ago developed an app, you know, we updated it here the last couple of years, and we put most of our information goes out on the app.
9:59
SPEAKER_01: And it's not just, you know, we've got futures and options quotes, and we don't have weather, we figure most have their favorite weather place that they want to go to, so they'll go to that.
10:07
SPEAKER_01: But we do have the futures and options trading, uh, you know, the the quotes on there, but then we put out a lot of information about you know the what's the market's doing, what FSA is doing, what USDA's got for programs, you know, kind of tips on the on those.
10:22
SPEAKER_01: Plus, then we also put a lot of crop insurance information out there.
10:26
SPEAKER_00: Give us a give us an elevator speech on the the range of services that you offer at Martin Senag.
10:31
SPEAKER_00: Free commercial for you, Randy.
10:33
SPEAKER_00: Go.
10:33
SPEAKER_01: Well, I appreciate that.
10:34
SPEAKER_01: You know, we do our daily comments, you know.
10:36
SPEAKER_01: It's so we sell you know our commentary every day, we do a morning call and then an afternoon wrap-up.
10:42
SPEAKER_01: Then we also put together weekly comments.
10:44
SPEAKER_01: That's all as a package that goes out.
10:46
SPEAKER_01: Plus, then we do advisories when we have like three or four different levels of advisory depending on how much help they need from us to based on what the price of that is.
10:57
SPEAKER_01: And then we do the futures and options trading as well.
11:00
SPEAKER_00: And I would imagine that you you probably get a lot of wheat customers through the door, but like that can't be everybody.
11:07
SPEAKER_01: Well, no, you know, and and you know, it at one time we had a lot of customers, you know.
11:12
SPEAKER_01: I think it uh when Minneapolis was in its heyday, I think we had like 30% of the volume that was uh traded in the Minneapolis Exchange.
11:20
SPEAKER_01: So kind of shows that when we had a lot of wheat, but that was a few years back.
11:24
SPEAKER_01: Now, you know, it's I drove from Fargo to Bismarck in June doing I had to do a meeting in Bismarck, and I counted there was less than 20 wheat fields between here and Bismarck.
11:35
SPEAKER_01: So wheat has really taken a backseat to corn and to soybeans.
11:39
SPEAKER_00: Yeah, interesting.
11:41
SPEAKER_00: All right.
11:41
SPEAKER_00: Well, good.
11:42
SPEAKER_00: I appreciate you sharing a little bit with us and and talking about your app there.
11:45
SPEAKER_00: I'm always interested when technology kind of uh meets with agriculture, and so it's uh it's great to hear that that's going well for you.
11:55
SPEAKER_00: I didn't have this in the notes, the bullets that that we sent, but you mentioned it as we were getting ready to go to Showtime, and it might be a good place to start.
12:02
SPEAKER_00: I already mentioned one of the W's.
12:05
SPEAKER_00: You mentioned another one of the Ws, war and Weather.
12:10
SPEAKER_00: This is not the first time that I've had guests like yourself on the show talking about those two big W's.
12:18
SPEAKER_00: When we're talking about the war premium, it seems like we we take a war premium and then we give it back, and then we take it, and then we give it back.
12:25
SPEAKER_00: And it's it's been such an up and down roller coaster.
12:28
SPEAKER_00: And really, the weather is kind of getting to be almost we'll talk about the forecast in a bit, but a nice big swath of very heavy rain headed through the middle here in KC.
12:37
SPEAKER_00: We're not expected to get any up in Fargo.
12:40
SPEAKER_00: I think y'all are gonna miss it as well.
12:43
SPEAKER_00: Which of these which of these two W's is having the most impact on the market, or can you even say from one day to the next?
12:51
SPEAKER_01: Boy, it's actually really hard to say.
12:52
SPEAKER_01: And I think, you know, you're right.
12:53
SPEAKER_01: I mean, I think the market is watching the headlines, and whatever is capturing the attention that day is you know what gets the attention and and the direction.
13:02
SPEAKER_01: War, you know, we kind of thought that the war was dying down a little bit.
13:05
SPEAKER_01: Well, that kind of you know, resurfaced this weekend with you know, Iran coming with some demands uh, you know, before they're gonna open the Strait of Rumus, this is things that they want done.
13:16
SPEAKER_01: And of course, we continue to really see, I think the one that's causing the most disruption is the war between Russia and Ukraine, where you know, right now you Ukraine's basically saying, hey, we're gonna, we're not gonna export all our bushels that we thought we're gonna, we're gonna have space concerns and we can't move any grain right now.
13:32
SPEAKER_01: So I think that's maybe playing a bigger part in what US should be helping the wheat or well and corn for that matter.
13:39
SPEAKER_01: And then we got the demand side, it's uh it's kind of helping it for the soybeans.
13:43
SPEAKER_01: But weather is another big one, which you know, again, you know, forecast change twice a day.
13:49
SPEAKER_01: So that kind of waves the market around a little bit too.
13:52
SPEAKER_00: Yeah, and there are some uh some uh fairly notable crop tours going to kick off here in just a few weeks.
13:59
SPEAKER_00: Ag Resources got one going out, and of course the ProFarmer crop tour will be headed out into the fields.
14:04
SPEAKER_00: It sounds like they may be they may be knee deep in mud and probably find some ponding if the forecast verifies.
14:12
SPEAKER_00: Is is there any rain in your forecast at all up there in North Dakota?
14:17
SPEAKER_01: No, not right now.
14:18
SPEAKER_01: It looks like we're gonna be staying fairly dry for the next five days for sure.
14:22
SPEAKER_01: And then we've got a chance for next week.
14:24
SPEAKER_01: It's about a 50% chance on one day.
14:26
SPEAKER_01: But again, you know, that's like six days out, and that's gonna change 12 times before it becomes reality.
14:33
SPEAKER_01: So, you know, who knows if that's gonna happen.
14:35
SPEAKER_01: But what's interesting is kind of like what you said, you know, the corn belt picked up, you know, when you look at it from you know, southern Minnesota, Iowa, all the way over, up, you know, four or five inches over the weekend in some areas.
14:47
SPEAKER_01: They're expected to get another four to five inches.
14:50
SPEAKER_01: Pretty soon, you know, it gets to be as you know, when does too much rain get to be a good, you know, it's not a good thing.
14:56
SPEAKER_01: So that's some I think that's something that they're gonna be looking at.
14:59
SPEAKER_01: Like you said, they're gonna be walking in mud next week or when they're looking at doing a crop tour.
15:03
SPEAKER_00: Yep, that's exactly right.
15:05
SPEAKER_00: Well, and then over to the other W, the war.
15:07
SPEAKER_00: And you rightly so brought up the Russia-Ukraine conflict.
15:11
SPEAKER_00: And Randy, you know, you know, I I was on a radio program before this when the war actually started, and then there was a period of time when we were pretty convinced that uh that all of the war premium, all the headline risk, all of that, the trade wasn't really paying attention to the Russian Ukraine war anymore.
15:33
SPEAKER_00: And that may or may not have been true.
15:36
SPEAKER_00: Uh I'm pretty sure I was right, but having said that, if the if that was the case, it's really snuck back into the headlines almost through the side door unexpectedly here now, because they're they're bombing infrastructure.
15:51
SPEAKER_00: That impacts the crude oil market on one side, they're bombing port infrastructure, and and various uh, you know, vessels and things even are involved here.
15:59
SPEAKER_00: It does seem like the Russia-Ukraine thing has become a pretty big deal all of a sudden.
16:04
SPEAKER_01: Yeah, there for a while, you know, right after it broke, you know, there was about six months we saw the market react to it, and then pretty soon it just faded away, like you mentioned.
16:11
SPEAKER_01: And, you know, there was no weather war premium in the market, and it just kind of died down, and we didn't hear anything.
16:16
SPEAKER_01: Well, now all of a sudden it's kind of they, I think the Russia and Ukraine feel left out because Iran took too many of the attention or too much of the headline.
16:25
SPEAKER_01: So they started to build the war back up again, and they started to hit some pretty important facilities, especially when you were looking at a lot of the elevator sites along the rivers, and then of course the low the export facilities, not just you know, Ukraine, but also in Russia.
16:40
SPEAKER_01: You know, Russia suspended exports out of a couple different places.
16:44
SPEAKER_01: So, you know, it that really started to take note in the wheat market and really helped to bring the wheat market back around.
16:50
SPEAKER_00: Russia-Ukraine kind of said, Hold my vodka, watch this, I think is what happened.
16:54
SPEAKER_00: And the the heck of it is, Randy, maybe you know something that I don't.
16:58
SPEAKER_00: I don't see an end in sight for the Iranian situation, and I don't see an end in sight for Russia-Ukraine either.
17:04
SPEAKER_00: In fact, both of them, if I was gonna handicap it, feel like they're pointed toward escalation.
17:10
SPEAKER_00: Your thoughts.
17:11
SPEAKER_01: No, I think you're right on.
17:13
SPEAKER_01: I I really don't see anything ending here in a short period of time because every time it looks like we got an agreement, something comes in and changes that.
17:21
unknown: Yep.
17:22
SPEAKER_01: Yep.
17:23
SPEAKER_00: Well, we'll uh we'll have to keep an eye on that.
17:25
SPEAKER_00: I don't think we have any choice, but to keep an eye on that, it'll it keeps popping up on my news feeds and on on my uh TV screen.
17:32
SPEAKER_00: So that W will certainly be with us for a little bit.
17:36
SPEAKER_00: Let's move on to uh some more domestic produ pursuits here.
17:40
SPEAKER_00: Crop conditions according to USGA have been holding up pretty well, although based on the uh the heat that we had in July conditions that you're talking about up in the northern plains areas there, it almost feels like we we could be set up for just a little bit of a surprise in crop conditions.
18:00
SPEAKER_00: Is am I looking at that right?
18:02
SPEAKER_01: No, I think you're right.
18:03
SPEAKER_01: I mean, you know, I know a lot of the crop conditions are done at uh you know 60 mile an hour driving by or you know by using a drone flying over.
18:12
SPEAKER_01: So I mean a lot of them are you know they're kind of subject to you know the person doing them.
18:18
SPEAKER_01: Not to talk bad, but I'd hate to do that every Sunday either.
18:21
SPEAKER_01: But it does mean that you know, when you're driving by, not walking out in the fields, you're really not seeing what's out there.
18:28
SPEAKER_01: And I know that you know, up here we have a little bit of a pollination problem.
18:32
SPEAKER_01: A lot of the corn didn't pollinate very well.
18:34
SPEAKER_01: You know, the soybeans right now that are setting pods are setting two bean pods instead of three or four.
18:40
SPEAKER_01: So the crop looks good when you drive by it, and and from the road, you can see you're starting to see a little bit more of the shallow soils, a little bit more.
18:48
SPEAKER_01: That's the crop is starting to deteriorate.
18:51
SPEAKER_01: But until you walk out in it, that's when you really see where some of the damage has been done.
18:55
SPEAKER_00: How much potential do you think?
18:57
SPEAKER_00: And by the way, I should mention this before I ask this question Ag Squawk in the afternoon is a backyard itis approved zone.
19:04
SPEAKER_00: So I just want to know what you've seen with your own eyes, what you've heard from your own contacts there.
19:10
SPEAKER_00: If you're talking about two bean pods, brother, you got to make that up in swelled up beans, don't you?
19:16
SPEAKER_01: You do, and you know, for the most part, a lot of guys are expecting to see about a 50% cut or 30% cut in their bean yields right now, you know, in the worst hit areas.
19:26
SPEAKER_01: And right now, if we don't get rain, that's gonna be almost the entire state, uh as far as the bean crop is concerned.
19:32
SPEAKER_01: So we could probably looking at you uh, you know, an average yield for North Dakota, western Minnesota, somewhere in the area of 30, 35 bushels an acre, I think would be, I mean, that 30 would be, I think, pretty good the way things are going.
19:46
SPEAKER_01: For corn, I think we could lose a good 30 percent, you know, instead of us being 150 to 160 average, I think we'd be looking closer to a 120 to a 130.
19:58
SPEAKER_00: Oh wow.
19:59
SPEAKER_00: So is that about roughly by percentage?
20:02
SPEAKER_00: Uh you mentioned that potential to wind up at a 30 or 35 in North Dakota and parts of Minnesota.
20:08
SPEAKER_00: Would that be about a 30% decline as well from from the statewide trend line?
20:12
SPEAKER_01: 30 to 40 percent.
20:14
SPEAKER_01: Oh wow.
20:15
SPEAKER_00: That's a that's a pretty significant decline in an economic environment where fellas want to leave want to yield their way out of trouble.
20:23
SPEAKER_01: Which, yeah, this is a year where you know North Dakota just is not going to be able to do that.
20:28
SPEAKER_01: And you know, surprisingly, you know, the wheat, you know, is coming in good, but then that heat came after the wheat had pretty much you know pollinated and you know, flowered.
20:37
SPEAKER_01: And so the wheat crop isn't that bad, although you know, we've got really good test, really good test weights, which is surprised me, but we also have really high protein, and we're starting to hear a lot of elevators starting to discount for the quality because they've got too much of high protein wheat now.
20:53
SPEAKER_01: They need to bring in lower protein to blend with it to be able to get a product that they can move out and sell.
21:00
SPEAKER_00: Well, let's move on.
21:01
SPEAKER_00: Since we've established that it's difficult to ascertain crop conditions from the road and without actually going out into the fields, let's move on to USDA's report coming up on on Wednesday, the big August 12 report.
21:14
SPEAKER_00: Everyone's been so excited since the last report.
21:16
SPEAKER_00: They said, uh, wait till wait till August 12, then then then we'll know.
21:21
SPEAKER_00: Lot of expectation for acreage increases in soybeans and to a greater extent in in the corn acreage.
21:31
SPEAKER_00: I I kind of feel like the the corn and soybean export number is going to be jockeyed with a little bit too if they move acreages around.
21:40
SPEAKER_00: Do you have an opinion on on what we might expect in the uh reports on Wednesday?
21:46
SPEAKER_01: Yeah, I mean, I right now I don't know if they'll change acres much.
21:50
SPEAKER_01: You know, I know that you know fertilizer costs and the tough spring we had up here, you know, speaking of backyard itis, you know, we hadn't we didn't see as much corn get planted as we anticipated.
22:02
SPEAKER_01: You know, corn has been good up here, so a lot of guys were leaning towards corn, but any new land that got picked up, anybody that had quit farming.
22:09
SPEAKER_01: A new land that came into the operation, guys weren't going out to buy the fertilizer to put the corn on it.
22:14
SPEAKER_01: So I think that went to a lot of soybeans, sunflowers, some you know, the the later season crops that didn't take as much of an input.
22:21
SPEAKER_01: So I think you know that kind of raised our soybean or raised the soybean and the sunflower acreage.
22:28
SPEAKER_01: For the yield side of things, I expect that, you know, I wouldn't be surprised if USDA kicks the can down the road and doesn't change them on this report just because of the questions we're seeing with the weather and whether it'd be dry up here, whether it'd be too wet or through the corn belt with disease problems.
22:44
SPEAKER_01: But I think they're going to kick the can and wait till they actually start to go in field.
22:49
SPEAKER_01: NVVI isn't going to be as accurate on this one because I think you know the the crop again, you know, from up above looks good until you get out in it.
22:57
SPEAKER_01: Yeah.
22:58
SPEAKER_00: So you're telling me we have to continue to wait before we before we know what's actually going on out there.
23:03
SPEAKER_01: Well, I think USDA is going to do what they do best, and that is kick the can down the road.
23:07
SPEAKER_00: Okay.
23:08
SPEAKER_00: In in that scenario, because a lot of people are are hinging their expectations of the post-report market performance on the acreage there.
23:20
SPEAKER_00: If we get uh steady to fractionally unchanged on on acreage, on yield, if they go ahead and kick the can down the road, do we expect basically more of the same in in the markets moving forward until we get until further notice?
23:38
SPEAKER_01: Well, I would think uh you know, until we can get into mid-September, we would look at that.
23:42
SPEAKER_01: Now, September they actually do, you know, you know, the cob counts, and and that gets to be a little bit more of an accurate count of what the yield potential is going to be.
23:50
SPEAKER_01: But I think this one will focus a little bit on where demand is too, because USDA's got to do something with old crop corn exports.
23:56
SPEAKER_01: You know, we're 100 million above USDA's projections now.
24:00
SPEAKER_01: You know, I think we're 10 million in soybeans.
24:02
SPEAKER_01: I wouldn't be surprised if they only raised soybeans about 5 million bushels, because we could still see some cancellations and stuff in the last three weeks of the marketing year.
24:12
SPEAKER_01: But for corn, you know, they have to increase it.
24:14
SPEAKER_01: And I think that's got to be at least 75 million.
24:16
SPEAKER_01: Well, that's going to pull stocks down.
24:18
SPEAKER_01: And I know there's an argument about feed demand, but I can actually justify the high feed demand because we're feeding the cattle longer, we're putting that much more weight on, and you know, the consumption of corn increases dramatically as the heavier the animal gets.
24:34
SPEAKER_01: They just take that much more.
24:36
SPEAKER_01: Uh, so you know, you can almost justify a majority of the increase in the feed demand side of things.
24:42
SPEAKER_01: But I think, you know, for the most part, I think that the demand will be the one that kind of helps us more in this report than what the supply will.
24:51
SPEAKER_01: I might be surprised by what USDA does come out and say, but that's kind of what I'm thinking.
24:55
SPEAKER_00: Well, the cattle countries dry too.
24:57
SPEAKER_00: Wouldn't I know?
24:59
SPEAKER_00: I don't know anything about raising cows, but it it seems to me if the pastures are all dried up, we'd probably lean a little harder into feed.
25:06
SPEAKER_00: Is that right?
25:07
SPEAKER_01: That's exactly right.
25:08
SPEAKER_01: And there are guys starting to pull cow, you know, cows and cows and calves are coming off the pastures now up here because of how dry we are, and they're coming in and being dry lotted.
25:18
SPEAKER_01: So the feed demand is going to increase, and that's going to shorten the you know, the supply of feed up here because you know, our hay situation is short, and so we're we're kind of up against the the eight ball here on a couple of different uh variables right now.
25:35
SPEAKER_00: It sounds to me like you could use a uh a and I don't wish this on you necessarily, but it sounds like you needed just a ton of snow this coming winter, and that would that would fix a whole lot of things up in your area.
25:47
SPEAKER_01: Yeah, that snow would certainly help because that's indiscriminate, that covers everything, and then when it melts, you know, it can soak it in.
25:54
SPEAKER_01: So it yeah, unfortunately, you're probably right.
25:57
SPEAKER_01: I mean, it might be a year to move south.
26:02
SPEAKER_00: I just saw a forecast that says they weren't expecting much snow at all here in Kansas City because of the Super El Nino.
26:09
SPEAKER_00: I'm I'm trying to get a weather guy on to talk about the Super El Nino and just see what makes it so super.
26:14
SPEAKER_00: I saw a headline that called it a Godzilla El Nino.
26:18
SPEAKER_00: That uh I don't I don't know how I feel about that.
26:21
SPEAKER_00: It maybe over overselling it just a bit.
26:24
SPEAKER_00: All right, so let's get back to the reports quick because I want to make sure that that we get your thoughts covered.
26:29
SPEAKER_00: Have we have we hit the high points as far as you're concerned on the reports there?
26:34
SPEAKER_00: What are you telling your folks to watch out for, if anything?
26:37
SPEAKER_01: Well, I'm I'm telling them to you know look out to see, you know, corn yield is gonna be the big one that comes out that's gonna d dictate what happens is with corn.
26:46
SPEAKER_01: I think wheat production's got to be lowered, whether it be the winter wheat, whether but spring wheat as well.
26:50
SPEAKER_01: USD's got North Dakota's yield at 58.
26:53
SPEAKER_01: Well, there's no way we've got a 58 average.
26:55
SPEAKER_01: So I do expect that we'll see spring wheat yields dropped probably by three bushels in this next report.
27:02
SPEAKER_01: So I look for a friendly report as far as wheat is concerned on the on the production side.
27:07
SPEAKER_01: But then when you look at it for corn, you know, I think the demand is gonna be the one that kind of is the brighter spot.
27:13
SPEAKER_01: So I means I don't think we're gonna quite throw in all the demand yet because we're still worried whether China will come through and buy the full 25.
27:21
SPEAKER_01: But that outlook, you know, when you look at what crush has been doing and the potential with what uh China's gonna buy, that that bean market looks like it could be a really tight ending stocks estimate by the end of the year.
27:33
SPEAKER_02: Yeah.
27:33
SPEAKER_00: I've been talking with Jim Wiesmeier about the Chinese auctions of their their state-owned reserves there and what that means.
27:41
SPEAKER_00: And I I sort of came to the point where uh it sounds an awful lot to me like they're sweeping out the bins, trying to make some room, and Chinese demand has been very good.
27:51
SPEAKER_00: People are are putting a lot of faith in in the idea that China is going to continue to buy.
27:56
SPEAKER_00: Are you in that camp?
27:57
SPEAKER_01: Yeah, I'm in that camp.
27:59
SPEAKER_01: I think they'll follow through.
28:00
SPEAKER_01: You know, I I mean you look at the big picture and and what's more important to China, whether they spend a dollar more for soybeans, which if they buy 400 million bushels from us, that's 400 million dollars.
28:11
SPEAKER_01: Well, what what do we what do we import from China?
28:15
SPEAKER_01: It's like five billion.
28:16
SPEAKER_01: So I mean, the trade-off makes sense to to buy spend a little bit more on soybeans when you're gonna be moving so much other product back to the U.S.
28:25
SPEAKER_02: Yeah, yeah.
28:26
SPEAKER_00: Say I just I just thought of a conversation that I had.
28:30
SPEAKER_00: You you talking about how dry it's been up in the Fargo area and North Dakota, sort of in general.
28:37
SPEAKER_00: I was talking with Zach Hefty last week, and he's in southeast South Dakota.
28:44
SPEAKER_00: But he had talked about how dry it was, and I said, Well, what are you doing out on the farm these days?
28:48
SPEAKER_00: He's out spraying fungicide.
28:50
SPEAKER_00: And I said, Well, what is what is the deal with that?
28:53
SPEAKER_00: If you're if you're telling me it's been dry, you're gonna go out and spray fungicide.
28:57
SPEAKER_00: I thought that was only when they were when they were too wet, and there's so much that I don't know about this you could fill a book.
29:03
SPEAKER_00: But I I wonder, you know, with the economics that are going on in farm country right now, and you're talking about, well, you know, some some fields didn't get planted to corn because they didn't want to buy the fertilizer.
29:16
SPEAKER_00: That's absolutely fair.
29:17
SPEAKER_00: I'm curious if you're seeing any of these late season fungicide applications up there, if you're seeing late season money going into these crops, I guess is my question.
29:28
SPEAKER_01: You know, right now we're we're not, you know, because we're on the back side of things enough.
29:33
SPEAKER_01: I do know there was a bunch of guys, you know, when the wheat was in flowering, that's when you know some of the heat was going on, the high humidity.
29:39
SPEAKER_01: A lot of guys put fungicide on the wheat just to try to keep the scab away.
29:43
SPEAKER_01: As far as soybeans, you know, we've kind of there are there have been some guys that have been spraying, you know, to take care of white mold or try to control white mold from the heavy dews on the soybeans, but not a much as far as corn is concerned.
29:57
SPEAKER_01: That that seems to be one that uh they haven't been doing much with.
30:00
SPEAKER_00: Yeah, yeah.
30:01
SPEAKER_00: Maybe you can help me out here with the profitability question.
30:05
SPEAKER_00: I'm not sure what basis is in your area.
30:07
SPEAKER_00: I would I would handicap it somewhere around 40 or 50 cents under.
30:12
SPEAKER_00: And maybe you can correct me on that.
30:14
SPEAKER_00: But I'm looking at let's go to the September spring wheat at 670 today, the D at 695.
30:22
SPEAKER_00: Can a farmer make a buck on that?
30:24
SPEAKER_00: Where does that lie in relation to the cost of production?
30:27
SPEAKER_01: You know, not really.
30:28
SPEAKER_01: I mean, it you know, our basis levels for wheat are right now are going to be somewhere around that 65 under in the futures.
30:35
SPEAKER_01: You might be able to get some in that 40, depending on if there's a train or something or some demand source that's that's close.
30:42
SPEAKER_01: But on average, you'd be looking at like a 65 under.
30:45
SPEAKER_01: Uh for the most part, you know, and the cost for raise wheat, you know, when you look at the fertilizer, are almost the same as what they are for corn.
30:53
SPEAKER_01: So it's tough to be able to make uh make that dime on wheat right now.
30:58
SPEAKER_01: And that's why there's been so many acres switching out of wheat and going into corn, because you know, corn is corn, soybeans are soybeans, and we have a couple of end users close by that have been taking, you know, the ethanol plants and the crush plants that we've the two new crush plants we've got up here have really made it uh easy to be able to switch to corn and soybeans.
31:18
SPEAKER_01: Yeah, yeah.
31:19
SPEAKER_00: Ethanol's been a pretty bright spot lately, hasn't it?
31:21
SPEAKER_01: Ethanol has been really good.
31:23
SPEAKER_01: It's a good demand source of both uh, you know, one of our plant ethanol plants up here is doubling in their size this next year.
31:30
SPEAKER_01: That's going to really help uh chew up through some bushels down in the southeast corner of the state.
31:36
SPEAKER_01: And you know, the same we're looking at for on the crush side.
31:41
SPEAKER_01: We've got one at Spiritwood that is increasing its capacity.
31:46
SPEAKER_01: So that's going to take a lot more soybeans as well.
31:48
SPEAKER_01: So I mean, we do have that uh advantage to help with those two markets.
31:53
SPEAKER_00: Absolutely.
31:54
SPEAKER_00: All right.
31:54
SPEAKER_00: Well, let's let's move on just to to another topic quick here that I picked up when I I viewed your website, and that's crop insurance.
32:03
SPEAKER_00: I I wanna I want to give you a chance to say what you think needs to be said on on crop insurance.
32:09
SPEAKER_00: We've we've got some harvest pressure on on spring wheat here as we're talking, but there's a deadline for spring wheat coming up, as I understand it, Randy.
32:16
SPEAKER_01: Yeah, the right now we're setting the harvest price for the the for uh spring wheat.
32:22
SPEAKER_01: That gets set for this month.
32:24
SPEAKER_01: So yeah, it's kind of disheartening to see the sell-off that we saw today.
32:28
SPEAKER_01: It'd be nice to keep that price up.
32:29
SPEAKER_01: Right now it is tracking a little bit above what we saw from the base price that was set in in uh February.
32:36
SPEAKER_01: So we are seeing a little bit better outage as far as that goes, but we're also you know likely going to see some claims coming into place, especially from the western part of the state uh where the production wasn't as good.
32:48
SPEAKER_01: We're hearing that from also from uh you know up in the northeast corner.
32:51
SPEAKER_01: There's a little bit of likelihood there'll be some uh claims that come in from that region as well.
32:57
SPEAKER_00: All right, very good.
32:58
SPEAKER_00: Well, with that, we've sort of talked about the weather.
33:01
SPEAKER_00: What what sort of temperature are you looking at outside your window today, right now, presently?
33:06
SPEAKER_01: Right right now, believe it or not, we're sitting at about uh 76 to you know 80 in that area is supposed to be our high today.
33:14
SPEAKER_01: Well, that sounds nice.
33:15
SPEAKER_01: That sounds real nice.
33:16
SPEAKER_01: That sounds like back porch sitting weather.
33:18
SPEAKER_01: It is beautiful weather.
33:20
SPEAKER_01: I mean, this I mean, you know, when it was you know that two weeks of 95 and 160 percent humidity, boy, we didn't go outside much.
33:29
SPEAKER_00: Yeah, no, I don't blame you.
33:31
SPEAKER_00: I uh I may not go outside until this heat breaks down here.
33:34
SPEAKER_00: I'll just I'll just stay down here in my my new flannel shirt.
33:37
SPEAKER_00: The National Weather Service says severe thunderstorms and heavy rainfall are possible in the Midwest into the central Appalachians and the desert southwest early this week.
33:46
SPEAKER_00: Storms are also expected in parts of the northern plains today.
33:50
SPEAKER_00: Fire weather and air quality concerns will persist across portions of the west.
33:55
SPEAKER_00: Midsummer heat will continue across much of the uh midsection of the week, especially in the south-central high plains.
34:04
SPEAKER_00: Guillermo flip me over.
34:05
SPEAKER_00: This is the precip map here, and we can see that that shot of purple coming down the middle.
34:10
SPEAKER_00: But man, there's a lot less red on the screen here, especially through the gut slot of uh corn and soybean growing country.
34:17
SPEAKER_00: And uh that's uh that's certainly a welcome site.
34:21
SPEAKER_00: Randy Martinson from uh Martinson Ag, Martinsonag.com.
34:27
SPEAKER_00: Before I let you go, I'd like to bore you just a little bit with some items of mild interest.
34:32
SPEAKER_00: Can I can I bring you in on some items of mild interest before we before we disperse?
34:37
SPEAKER_00: Most definitely.
34:38
SPEAKER_00: I'm always interested in that.
34:40
SPEAKER_00: Outstanding.
34:41
SPEAKER_00: All right.
34:41
SPEAKER_00: Well, in 1928, the it's the birthday of Jimmy Dean, who apparently was a singer and an actor and a businessman, founder of the Jimmy Dean Food Company.
34:52
SPEAKER_00: I didn't know he was a singer and all that stuff before he uh started making delicious breakfast sausage.
34:57
SPEAKER_00: I uh I can always go for a little Jimmy Dean.
35:00
SPEAKER_00: 1960, the birthday of Antonio Banderas, the Spanish actor.
35:06
SPEAKER_00: In 1966.
35:07
SPEAKER_00: Maybe you can offer me some some insight on this.
35:10
SPEAKER_00: The U.S.
35:11
SPEAKER_00: Treasury Department discontinued printing the two dollar bill due to lack of demand.
35:17
SPEAKER_00: They must have started again because you know, Randy, sometimes I play I play music, and for some reason, I get tips every now and again.
35:26
SPEAKER_00: You know, a watched clock is right twice a day, or a stopped clock is right twice a day.
35:31
SPEAKER_00: You know, I and somebody tipped me a two-dollar bill about two years ago, and I haven't I haven't been able to spend it because you never see them anymore.
35:39
SPEAKER_00: But this one says it was uh it was minted in 2013.
35:43
SPEAKER_00: So apparently they uh they started making two dollar bills again.
35:47
SPEAKER_00: And finally, this might be before your time, Randy, but in 1984, Red Dawn, starring Patrick Swayze and Charlie Sheen, became the first ever PG 13 movie to be released in theaters.
36:04
SPEAKER_00: And there's just just one more little thing, Randy.
36:06
SPEAKER_00: I like to commit an injustice.
36:09
SPEAKER_00: We call it the Egg Bull injustice.
36:11
SPEAKER_02: Your honor, I object.
36:13
SPEAKER_00: And the idea is that I I put my guest on the spot and absolutely exploit them with a question that I would not have been able to answer had I not found it on the interwebs earlier this morning when I was drinking my coffee, thinking this would be a good idea.
36:29
SPEAKER_00: But I would I would love to exploit you with today's Egg Bowl injustice, if you wouldn't mind.
36:35
SPEAKER_00: I'm hoping that you can answer the following question.
36:37
SPEAKER_00: Are you in, Randy?
36:39
SPEAKER_00: Oh, I'll I'll give it a shot.
36:41
SPEAKER_00: You might know this one.
36:42
SPEAKER_00: People might know this one.
36:43
SPEAKER_00: Okay.
36:44
SPEAKER_00: A group of crows is called a murder, a group of flies is called a business, a group of giraffes is called a tower.
36:55
SPEAKER_00: Do you know what a group of cockroaches is called?
37:01
SPEAKER_00: A group of cockroaches.
37:04
SPEAKER_00: Any idea?
37:05
SPEAKER_00: Oh trouble?
37:09
SPEAKER_00: Well, you're close.
37:10
SPEAKER_00: You you might say that they intrude on people's homes.
37:16
SPEAKER_00: A group of cockroaches is called an intrusion.
37:20
SPEAKER_00: I wouldn't have gotten that, and I didn't, I don't I wouldn't expect that that you would have either, but that is today's Agbol injustice.
37:27
SPEAKER_00: Yeah, and I object.
37:30
SPEAKER_01: One of the nice things about that is that you know we don't see a lot of cockroaches up here, so we don't I bet not.
37:35
SPEAKER_01: I bet not.
37:36
SPEAKER_01: No, the uh the winter kills them off, I suppose.
37:39
SPEAKER_01: Winter kills them off.
37:40
SPEAKER_01: Yep.
37:40
SPEAKER_01: There is some good in cold temperatures.
37:43
SPEAKER_00: Absolutely, absolutely there is.
37:44
SPEAKER_00: Well, and you get all cozy around Christmas time, you know.
37:48
SPEAKER_00: It's nice, it's nice.
37:50
SPEAKER_00: Thick, heavy socks, it's really good.
37:52
SPEAKER_00: And flannel shirts.
37:54
SPEAKER_00: And flannel shirts.
37:55
SPEAKER_00: Thank you very much, Randy.
37:57
SPEAKER_00: You are not wrong, sir.
37:58
SPEAKER_00: Randy Martinson from Martinson Ag.
38:01
SPEAKER_00: I've been saying Martinsonag.com through most of this program, Randy.
38:05
SPEAKER_00: That's the correct website to get more from y'all, isn't it?
38:08
SPEAKER_01: It is the correct website.
38:10
SPEAKER_00: Martinsonag.com.
38:12
SPEAKER_00: Well, thanks, Randy.
38:13
SPEAKER_00: We appreciate your time today.
38:14
SPEAKER_00: I hope you'll come on again sometime soon.
38:16
SPEAKER_00: Yes, thank you.
38:17
SPEAKER_00: Appreciate it.
38:18
SPEAKER_00: Well, and also thanks to TradeTheNews for the view behind the quotes.
38:22
SPEAKER_00: Look to trade the news, actual news that you can really use.
38:27
SPEAKER_00: Trade the news.
38:28
SPEAKER_00: That's trade the news.
38:29
SPEAKER_00: And I'd like to direct you once more to agbull.com.
38:32
SPEAKER_00: Dig deeper with AgBull Intel.
38:35
SPEAKER_00: Take the markets by the horns with AgBull.
38:37
SPEAKER_00: Visit AgBull.com or call 855737 Farm for the details.
38:44
SPEAKER_00: Thanks so much for watching, everybody.
38:45
SPEAKER_00: Happy Monday to us all.
38:47
SPEAKER_00: Jen will be back first thing in the morning to start your Tuesday, and then I'll be talking with Maxi Field about farm labor.
38:53
SPEAKER_00: I'll see you tomorrow afternoon for more Ag Squawks.