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Grains: Farmcon 2026 · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_00: Today is January 9th.
• 0:25
  SPEAKER_00: I've got Pat with us here today.
• 0:26
  SPEAKER_00: How's it going, Pat?
• 0:28
  SPEAKER_01: It's going well.
• 0:28
  SPEAKER_01: How are you, Mike?
• 0:29
  SPEAKER_00: Oh, we're doing really good.
• 0:31
  SPEAKER_00: All recuperated after FarmCon this week with Lucas Peters.
• 0:35
  SPEAKER_00: So we are back in the office and back to a normal schedule, Pat.
• 0:38
  SPEAKER_01: Well, give us some of the highlights.
• 0:39
  SPEAKER_01: Uh talk to us about uh what event that you attended there and uh give us some details, please.
• 0:44
  SPEAKER_00: Yeah, it was a farm con in Kansas City, so I think there's like a thousand or so people, and I'd say it's like fifty percent farmers, fifty percent allied industry, something like that.
• 0:53
  SPEAKER_00: A lot of different meetings, conferences, keynote speakers that that came in.
• 0:58
  SPEAKER_00: Uh different topics included things like interest rates or you know how to build and scale a business, wealth management, the guy that owns a ro Kansas City Royals that you that you like spoke uh Pat, a billionaire, and just Did he tell us where the stadium's gonna go?
• 1:12
  SPEAKER_00: No, I I missed it.
• 1:14
  SPEAKER_00: No insight information.
• 1:15
  SPEAKER_00: No insight information there for you, Pat.
• 1:17
  SPEAKER_01: But it's you know the Chiefs are moving to Kansas, did you know that?
• 1:20
  SPEAKER_00: It it which yes.
• 1:22
  SPEAKER_00: They Arrowhead is no longer after what year?
• 1:26
  SPEAKER_00: 2031.
• 1:26
  SPEAKER_00: 2031.
• 1:27
  SPEAKER_00: Okay, so it uh a little interesting stuff there, but it it um it was all connected to egg one way or another.
• 1:34
  SPEAKER_00: And uh like the Barstool Sports lady was pretty entertaining, the old CEO, uh pretty colored, let's put it that way, Pat.
• 1:41
  SPEAKER_00: But um some of the other speakers, you know, whether it was a guy that helped write Chat GPT in in the AI world or or people who help control uh global economic scale type, you know, food logistics into war-torn countries.
• 1:55
  SPEAKER_00: And the dude wrote uh a way how to shut off the power to Venezuela.
• 2:00
  SPEAKER_00: He was on the board, you know, that was one of his projects.
• 2:03
  SPEAKER_00: So like uh when they invaded the country here recently.
• 2:06
  SPEAKER_00: Just weird things like that.
• 2:08
  SPEAKER_00: And then just more practical things like whether it be Holganics that you know, uh different programs with carbon that you can do with your uh business to help improve.
• 2:17
  SPEAKER_00: But it was a it was a great conference, kind of short and sweet, but uh a lot of different people to talk to there.
• 2:22
  SPEAKER_01: Sounds like a good opportunity to take a step back and step up and just uh uh have the opportunity to to think and look and discuss uh uh a nice perspective on agriculture and and uh producers' business.
• 2:34
  SPEAKER_00: Yeah, definitely from different views too, rather than just within agriculture.
• 2:38
  SPEAKER_00: So it was pretty fun.
• 2:39
  SPEAKER_00: Um speaking of that, I mean a lot of things have been pushing around these grain markets here lately that don't necessarily have to do with the grain market themselves, Pat.
• 2:48
  SPEAKER_00: So just uh walk me through some of the things you're seeing ahead of next Monday's WASD Airport, I guess, when it comes to corn and soybeans.
• 2:54
  SPEAKER_01: Well, January 12th is a big one, right?
• 2:56
  SPEAKER_01: Uh the the final crop report for the supply side uh uh being released on Monday.
• 3:02
  SPEAKER_01: Um we spend an awful lot of time um for an extended period of time talking about crop size, acres, yield, all of those things, and the numbers that uh that'll get printed on on Monday will be in the in the books permanently, right?
• 3:20
  SPEAKER_01: And and so more or less likely, right?
• 3:23
  SPEAKER_01: So it's a big report, it's a volatile one.
• 3:26
  SPEAKER_01: It has has certainly the tendency to uh um to to move this market um uh relatively aggressively.
• 3:36
  SPEAKER_01: Um and maybe just the the the price of poker is up just a little bit even more this year.
• 3:44
  SPEAKER_01: And I say that from two different perspectives, Mike's and and and Mike, and they're and they're a little bit related.
• 3:50
  SPEAKER_01: The first one is is is we're sort of scrunched in and we've we've really consolidated trading ranges here for a while, right?
• 3:58
  SPEAKER_01: Like the corn market hasn't done much, and that's not new news to anybody, right?
• 4:02
  SPEAKER_01: But but we we've been fairly stagnant here.
• 4:06
  SPEAKER_01: And part of the reason why we've been stagnant is this inter and we've talked a lot about this on these podcasts over the last six months, like this interesting play that um USDA has been using with adjusting yield and and adjusting feed-in residual and and and keep solving for, you know, a two billion bushel projected carryout.
• 4:31
  SPEAKER_01: And like we've said all along, it just should be said again prior to this report on Monday, is that um it might be right, it probably is, and we probably do fast forward to next September or um that that uh that quarterly stocks report, and we do carry in two billion bushels into next year's harvest, right?
• 4:52
  SPEAKER_01: That's probably how the story ends, and we can just stay in this tight little trading range.
• 4:56
  SPEAKER_01: But, you know, even when I say that, I'm not, you know, say that out loud, I'm not sure how much I believe it, right?
• 5:02
  SPEAKER_01: There is also some chance, right?
• 5:05
  SPEAKER_01: And it might start on Monday, but there is also some chance that you can't just keep solving for two billion, right?
• 5:12
  SPEAKER_01: Yeah, it's possible, and this could be the beginning.
• 5:15
  SPEAKER_01: This Monday's report could be the beginning of those two worlds starting to starting to diverge, right?
• 5:23
  SPEAKER_01: Maybe yield does move more aggressively than the average trade guess, which is uh down a couple bushels, right?
• 5:30
  SPEAKER_01: Maybe um the USDA is forced to start to adjust what we believe is a bloated feed and residual category.
• 5:40
  SPEAKER_01: Maybe at some point in this process, the USDA needs to address um a very robust corn export program that uh a larger percentage than normal of that's going into the Mexico market that's feeding cattle that normally are in Texas, right?
• 5:59
  SPEAKER_01: Maybe at some point you can't continue to elevate the export number and hold the feed and residual number at at elevated and record levels.
• 6:09
  SPEAKER_01: And so, anyway, maybe Monday is the beginning of the start of that volatility.
• 6:16
  SPEAKER_01: And so we're not making any predictions here about what the market's gonna do because that'd be silly because we don't actually know what the market's going to do.
• 6:23
  SPEAKER_01: But um let's just think about that, especially going into Monday's report about again the possibility that this could be the beginning of a changing story.
• 6:33
  SPEAKER_01: Now, um, if or when or if that isn't the case, right, then we just absorb these numbers.
• 6:42
  SPEAKER_01: The USDA again solves for two billion, and we go back to talking about South American weather, which is kind of boring and kind of good, right?
• 6:49
  SPEAKER_01: Um, but but sooner or later, this discussion, right, as it relates to uh this current crop years balance sheet, feeding residual against production, and again, most logical scenarios we can solve for two billion, but if we get into a situation at some point in this process, I suspect that we're gonna start to feel differently about that.
• 7:11
  SPEAKER_00: Monday should hopefully set us up to a little bit of direction going forward because we don't have a whole lot else to really trade after that until what Outlook in February and then acres and South American weather, yeah, yeah, that's exactly right.
• 7:23
  SPEAKER_01: And again, just for whatever it's worth, up until this point, the USDA has had the ability and they have executed on adjusting supply and adjusting usage at the same time to solve for$2 billion.
• 7:35
  SPEAKER_01: Well, that gets fixed on Monday, the supply side does, right?
• 7:39
  SPEAKER_01: So now they're going to on at least on the reports going forward, they're only going to have one lever to pull on the old crop balance sheet, and that's going to be, I say demand, but specifically that feed and residual category, right?
• 7:52
  SPEAKER_01: Because exports and ethanol um dis disappearance are very well known.
• 7:56
  SPEAKER_00: Well, this is a volatile report most uh years on average.
• 8:00
  SPEAKER_00: Corn moves about seven cents either direction in Monday's report, and soybeans about 14 cents.
• 8:05
  SPEAKER_00: So hopefully we get a little bit of a break out of one of these ranges uh here soon.
• 8:09
  SPEAKER_00: Soybeans on the bottom end of the trading range, so we'll find out if we can keep kind of holding that uptrend since even last December.
• 8:15
  SPEAKER_00: Uh that's been getting stretched uh here a little bit as well.
• 8:19
  SPEAKER_01: Here's a little pro tip uh um uh for for our listeners for Monday.
• 8:24
  SPEAKER_01: Uh Mike, I uh um if seven cents is the average move, um there's some possibility of that.
• 8:30
  SPEAKER_01: That's the average move, right?
• 8:32
  SPEAKER_01: You could get a bigger move than that pretty easy, right?
• 8:33
  SPEAKER_01: At least half the time you would.
• 8:35
  SPEAKER_01: And and so uh um whether you're an end user or a row crop uh uh producer, uh, you know, getting some some uh some orders working on the outside uh areas of this range uh prior to uh 11 a.m., it's not the dumbest idea.
• 8:49
  SPEAKER_00: That it isn't.
• 8:50
  SPEAKER_00: We also had some other news coming out of Washington this week, Pat, about the more protein side of our markets.
• 8:57
  SPEAKER_00: We took the food pyramid and we flipped it upside down.
• 9:00
  SPEAKER_00: And, you know, going into this, I would have argued uh when we first heard about RFK coming into this administration, it was a little bit worrisome, you know, talking about uh all of the uh the practices that could hinder our our production growth in the United States.
• 9:16
  SPEAKER_00: And up until this point, no one's really talked about the idea that, hey, we just flipped the food pyramid upside down, and beef and pork happen to be right at the top of it, Pat.
• 9:26
  SPEAKER_00: So I want you to elaborate a little bit more just about how good of an uh of uh of a change this this could be for agriculture, actually.
• 9:35
  SPEAKER_01: Yeah, it's pretty I mean I like for me.
• 9:37
  SPEAKER_01: I mean the the you know uh uh uh working towards the uh the the uh the the middle of my career, been around for a little little while.
• 9:47
  SPEAKER_01: I I think about just uh you know a farm boy from the hills of Western Iowa and growing up on uh you know roast and the crock pot and and uh um and sloppy joes and and all of that, right?
• 9:59
  SPEAKER_01: It it's uh it's it's it's uh uh it's it's a it's just a fun thing to think about as it relates to sort of getting back to to a you know a generation or two ago in terms of of of of our nutrition uh needs requirements and and and how those are satisfied.
• 10:15
  SPEAKER_01: And so so that that just in of itself is is sort of an idealistic, sort of a neat little thing, and in and all of that.
• 10:21
  SPEAKER_01: But but you know, the the reality is is these are recommendations, like whether or not you know you are able to work through this process to make it have any meaningful impact is a whole nother discussion and question that that that we all should have.
• 10:36
  SPEAKER_01: But just generally, Mike, I yes, good for agriculture, good uh to uh um you know get back to the basics in terms of recommendations and and saying some things that we've all known for a long, long time, right?
• 10:49
  SPEAKER_01: That that uh you know whole um you know whole whole meat uh you know full full all of those things that the you know less processed the better sort of a thing.
• 11:00
  SPEAKER_01: All of those things are things that that that we all know are are are good, viable, healthy alternatives in in our in our diets and and a good thing for for the for the U.S.
• 11:10
  SPEAKER_01: citizens or children, all of those things.
• 11:12
  SPEAKER_01: So I mean I again just on a couple levels, it's it's uh certainly encouraging um and certainly uh supportive from from our industry and and uh and hopefully it gains some momentum.
• 11:22
  SPEAKER_00: And uh, you know, on the row crop producer side, sure, we may lose a little bit of corn demand on the high fructose corn shru syrup side.
• 11:30
  SPEAKER_00: Uh 770 million bushels a year uh out of our demand goes towards that and like glucose uh etc.
• 11:37
  SPEAKER_00: But however, you'd more than make up for it by putting it back into the animal instead.
• 11:42
  SPEAKER_00: I mean, that's a much more efficient process anyway.
• 11:44
  SPEAKER_00: So uh I I think what you lose there, you gain back so much more uh uh out of that uh give or take, anyway.
• 11:50
  SPEAKER_00: So that was kind of exciting.
• 11:52
  SPEAKER_00: I feel like not a lot of people have talked about it from that perspective yet.
• 11:55
  SPEAKER_00: Agreed.
• 11:55
  SPEAKER_00: And uh I think that's something that at least the livestock producers really should be letting everybody know about that, like, hey, it our administration thinks it's cool to eat beef.
• 12:04
  SPEAKER_01: So exactly right.
• 12:05
  SPEAKER_00: Any other final thoughts for our listeners here this week, Pat, as we kick off Q1?
• 12:10
  SPEAKER_01: Yeah, uh, thanks for that, Mike, and thanks for the opportunity to visit with you again on on uh on your podcast here.
• 12:15
  SPEAKER_01: I I just uh um you know, as just reflecting as you guys come back from FarmCon this week and and uh and and and the the the worthwhile experience that that was for for you guys, I just I'm reminded that um this is a great time of year to to sit down, um not only reflect, but also uh um work diligently on developing a good solid plan for next year, a good risk management plan.
• 12:43
  SPEAKER_01: There are some real um real good opportunities on the livestock side of things, and there's some really um good opportunities on the rook crop side of things as well.
• 12:54
  SPEAKER_01: And I I I tried to frame all that up on purpose when we were talking about the the potential for some added volatility starting on Monday, especially in this corn complex year.
• 13:05
  SPEAKER_01: Um, and so I would just encourage everyone to take this time in January, uh into February as we start to approach, you know, spring pricing and and uh uh you know crop insurance sub uh decisions and all of those things that need to be made.
• 13:20
  SPEAKER_01: This is the time of year to be thoughtful about all of those things.
• 13:23
  SPEAKER_01: And and uh, you know, our whole team at ProAg here is is really looking for that opportunity to to sit down and visit and and really and really start to to dive into what's the best decisions for your business.
• 13:34
  SPEAKER_00: All right.