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Weather and Trump Talk · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_01: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_01: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:23
  SPEAKER_01: Today is April 25th.
• 0:25
  SPEAKER_01: I've got Lucas Peters here with us.
• 0:26
  SPEAKER_01: How's it going, Lucas?
• 0:28
  SPEAKER_00: Well, it's going pretty well.
• 0:29
  SPEAKER_00: How are you doing on this Friday, Mike?
• 0:31
  SPEAKER_01: We are doing very well.
• 0:32
  SPEAKER_01: It's a little bit wet outside, but that's what I want to talk to you today about.
• 0:36
  SPEAKER_01: I wanted to talk about planning progress here across the United States, weather forecasts, and uh a little bit about government payments and some of those things before I wrap today's show up, just talking about the market activities this week.
• 0:49
  SPEAKER_00: Well, that sounds like a pretty good plan.
• 0:51
  SPEAKER_00: So uh so yeah, I guess kicking it off, Mike, like what you said on planting progress, um, you know, this where we're at locally, uh, has been, you know, probably the earliest start and fastest pace to planting progress that I've seen maybe since probably 2012, I guess, was the year that comes to mind.
• 1:12
  SPEAKER_00: Um, I know that doesn't you know bring out a lot of fuzzy memories back for for some of our our listeners, but quite the year to compare to Lucas?
• 1:21
  SPEAKER_00: Yeah, exactly.
• 1:22
  SPEAKER_00: But uh in in reality, the way we kind of started there, I mean, uh uh locally around uh Laverne or I-90 and you know, pretty much most of that area, you know, once we hit about the 11th of April, we saw some field work, some planters going, and then kind of man, as soon as we got to Easter weekend last weekend and uh right after Easter is when boy it all all came shook loose, and we had planters going north-south, east to west.
• 1:53
  SPEAKER_00: Um, which I mean, if you're gonna go buy the book and look at soil temperatures and insurance plant dates and all that fun stuff, maybe some of it got pushed too early because uh if you know like like South Dakota, the initial plant date on beans is is today, and so I'm sure there'll be a lot of soybeans planted April uh 25th uh when it comes time to fill out paperwork.
• 2:16
  SPEAKER_00: But uh I'm guessing there's a lot of uh seed in the ground uh already.
• 2:20
  SPEAKER_00: And and when I look, you know, kind of just driving around this week, man, I would say uh, you know, corn uh locally is probably 50 to 80 percent wrapped up.
• 2:32
  SPEAKER_00: Uh beans are probably more like 50% wrapped up.
• 2:35
  SPEAKER_00: I don't know, Mike, if you would agree with that, but uh man, it's in started started early and kind of a frantic pace.
• 2:44
  SPEAKER_01: Yeah, I mean uh geography matters a little bit there.
• 2:47
  SPEAKER_01: I mean, if you go northwest, then it seems like most of the corn planting's wrapped up, but soybeans probably haven't been hit real hard yet.
• 2:54
  SPEAKER_01: Um but honestly, you just go south a little bit.
• 2:57
  SPEAKER_01: Had some warmer temps, warmer ground temps.
• 3:00
  SPEAKER_01: Uh it uh definitely made a difference, anyways.
• 3:02
  SPEAKER_01: It's funny you mentioned that about the crop insurance date because it it seems like we've been planting for quite a while.
• 3:08
  SPEAKER_01: But uh yeah, it's something uh interesting to just reference.
• 3:12
  SPEAKER_00: That that is an interesting uh note though, what you just said.
• 3:15
  SPEAKER_00: Like as you go north and west into the South Dakota from where we're at, the planting soybeans early is less popular than I would say it is locally going south and east of here.
• 3:25
  SPEAKER_00: Um, you know, a lot of people down in this area started on soybeans first this year.
• 3:29
  SPEAKER_00: Um, but you go into South Dakota and it's a little more traditional.
• 3:32
  SPEAKER_00: We're gonna start planting corn first.
• 3:34
  SPEAKER_00: And and then, you know, a lot of these guys do have two planters and they're rolling on both crops.
• 3:39
  SPEAKER_01: That's what I see more than anything now.
• 3:41
  SPEAKER_01: If you go south and east of here at all, it seems like you have two going at the same time, one on corn, one on soybeans.
• 3:47
  SPEAKER_01: That's getting very popular.
• 3:48
  SPEAKER_00: Yep.
• 3:49
  SPEAKER_00: And and one of the things that I I know I've told told some of the guys I used to work with, and uh, you know, on the agronomy side, um it's one thing to plant early if your conditions are marginal.
• 4:00
  SPEAKER_00: Like then then it's a classic, well, geez, dude, should maybe we should wait.
• 4:04
  SPEAKER_00: This year, I mean, planting early so far has been the right decision because the the ground was fit, uh, we were dry on top, a little moisture underneath.
• 4:14
  SPEAKER_00: Uh, now we are getting a little bit of timely rain.
• 4:17
  SPEAKER_00: You know, we just had a little over an inch of rain here in Laverne, a pretty widespread uh half inch across a lot of uh uh our listeners' area.
• 4:25
  SPEAKER_00: Um so if you did plant and it was a little dry, boy, what what a perfect way to activate your pre-emergence and and get uh emergence off to a favorable start.
• 4:35
  SPEAKER_00: I know cold weather is always a concern when we plant this early.
• 4:39
  SPEAKER_00: Um I mean we we've had some low temps into the 20s and 30s, but generally we're we're warm, right?
• 4:46
  SPEAKER_00: Our our high temperatures for the afternoon uh are still in the 60s and forecasts, 60s, 70s.
• 4:53
  SPEAKER_00: Uh it's it just seems like everything aligned to planet early, conditions were good, forecast was good, and I think we'll see corn out of the ground here reasonably soon.
• 5:05
  SPEAKER_01: Those cold temps came before, I mean, we had any huge 80-degree days, corn comes out of the ground, and then we had like a 20-degree day.
• 5:12
  SPEAKER_01: We haven't had that opportunity yet anywhere.
• 5:14
  SPEAKER_00: So exactly.
• 5:16
  SPEAKER_00: And and so, you know, generally for as we look towards emergence on on some of the stuff that's been planted early, corn, it takes about 120, 125 heat units to emerge.
• 5:27
  SPEAKER_00: And in you know, in southwest Minnesota, northwest Iowa, eastern South Dakota, we are running ahead of heat units, uh considerably so, uh, about to you know 25 to 30 heat units uh ahead of normal for a lot of our areas.
• 5:41
  SPEAKER_00: So uh, you know, if you planted corn April 12th, uh I think the math or or one of the websites we did checked yesterday, if you planted April 12th, uh you're probably about 90 heat units uh accumulated so far if you planted in in Rock County.
• 5:58
  SPEAKER_00: So you really only have uh about 30 to go um uh to get that corn uh to start to emerge.
• 6:05
  SPEAKER_00: As you look forward to next week, I definitely think we'll see some corn out of the ground uh probably that first weekend in May.
• 6:13
  SPEAKER_00: Uh, we'll be able to start seeing some of that spike through.
• 6:16
  SPEAKER_00: Soybeans take a little more heat units, soybeans are in a little over 130 heat units to get them to emerge.
• 6:22
  SPEAKER_00: Uh so we'll probably if you planted soybeans uh early April, uh it's gonna be another week or two before you start seeing them crack through.
• 6:30
  SPEAKER_01: So, this is more of a local topic so far in this podcast.
• 6:34
  SPEAKER_01: What about more nationally?
• 6:36
  SPEAKER_01: You know, this uh going into this planning season, the talk was that the western corn belt was gonna be kind of dry at the beginning of the year, eastern corn belt was gonna be more wet, and that's really lived up to expectations so far.
• 6:49
  SPEAKER_01: Planning pace off to a really nice start in the western corn belt.
• 6:52
  SPEAKER_01: But how about the east?
• 6:54
  SPEAKER_00: Yep, and and I think we saw that in the planning pace information, right?
• 6:57
  SPEAKER_00: So on Monday.
• 6:58
  SPEAKER_00: As we go east, they just that's where the winter storms set up.
• 7:02
  SPEAKER_00: Uh, that's where some of the early spring storms have set up, and obviously we've seen some of the flooding and things uh in certain areas, but generally.
• 7:11
  SPEAKER_00: Yeah, like like Missouri is a good good example of that, how they've just kind of been caught in a in a stretch of of wet weather, and we've all been through it.
• 7:19
  SPEAKER_00: We know how once it seems like that sets up, that pattern sets up, all of a sudden you're in it and it's gonna delay things.
• 7:26
  SPEAKER_00: And so I I think exactly what you said, Mike, we've seen an incredibly fast start in the west.
• 7:32
  SPEAKER_00: Uh, it's been pretty uh, I would say more normal in the east, although it seems like we're gonna get behind normal now that we go forward, right?
• 7:39
  SPEAKER_00: If if they don't get drying weather here this week, now is what historically when they really hit the field and start planting.
• 7:46
  SPEAKER_00: If they're a little slowed up because of the wet weather, uh now you're gonna start seeing that pace fall behind.
• 7:52
  SPEAKER_00: As we look, you know, kind of pushing that forward uh towards a national yield.
• 7:56
  SPEAKER_00: I know that's one thing that we've talked about before on podcast is uh, you know, probably July weather is the number one factor on where is the national yield gonna come in at because of moisture and heat and all those things during critical times of the year.
• 8:10
  SPEAKER_00: But late planting is one of the top factors that affects are we gonna stay uh on the higher end of a national yield toward trend yield or not.
• 8:20
  SPEAKER_01: And you get to trade that earlier as well.
• 8:22
  SPEAKER_01: I mean, as early as the May Waz Day.
• 8:24
  SPEAKER_00: Exactly.
• 8:25
  SPEAKER_00: So I I think uh, you know, if depending on what happens, again, uh out east, if they kind of avoid some of these storms that are going through, because this this last rain event really was pushed west.
• 8:38
  SPEAKER_00: Um so if they can get in the field and get started with the amount of progress, uh progress the West has made, I don't think we're gonna have a uh late planting scenario that we're really gonna have to worry about.
• 8:51
  SPEAKER_00: Um and the last time we were planted uh this or most years, I guess when we're this far planted uh in our area, it tends to correlate to pretty high yield years, with the exception of 2012.
• 9:05
  SPEAKER_00: The uh in you know, kind of on that same topic, looking at weather a little bit, and I know before we got started, we were just talking.
• 9:13
  SPEAKER_00: Um, you know, we've been really dry in our area, uh, and we just kind of talked where the moisture has been in the east, uh, really reflected in the drought map.
• 9:21
  SPEAKER_00: Like you were saying, only 26% of the corn production areas in uh and affected by drought.
• 9:27
  SPEAKER_00: Uh that's pretty low, um, which this time of year is always going to be a little lower, but uh historically that's pretty low, and when you're starting out that low in the spring, that's a pretty good uh trend.
• 9:38
  SPEAKER_00: Um but in our area it has been dry, and we have been in probably the worst or you know, part of the worst or uh worsening areas, I should say, uh as we go as we will go into the summer.
• 9:51
  SPEAKER_00: But what was interesting is this last rain, uh it just kind of kept building, right?
• 9:56
  SPEAKER_00: So this is really the first storm we've had that where it, you know, two days before it was supposed to rain, we were forecasting get a tenth, maybe two tenths, and a lot of people ended up pushing above that into a half inch or or an inch type area, which is a good trend to be on.
• 10:12
  SPEAKER_00: Uh, of course, maybe this was just one storm, one situation, but it the more moisture we can see coming in, of course, that breeds more storms and and moisture going forward.
• 10:22
  SPEAKER_00: And if you look south uh into like the Texas area, uh that area had been uh you know one of the worst areas on the drought map, really missing a lot of the moisture.
• 10:32
  SPEAKER_00: And that area got a lot of rain here this past week.
• 10:35
  SPEAKER_01: The winter wheat prices have uh reflected that.
• 10:38
  SPEAKER_00: Exactly, right?
• 10:38
  SPEAKER_00: So those areas that were dry, concerned in the winter wheat, now they're getting rain.
• 10:43
  SPEAKER_00: And when you farm up in South Dakota, Iowa, Minnesota, uh you do have to kind of look south to see what's coming.
• 10:50
  SPEAKER_00: So the more rain they get south, the better our prospects are, uh, I feel, uh, towards getting us some more favorable weather now that we're getting most of the seed in the ground.
• 11:00
  SPEAKER_01: What else do you got for us today other than planning progress and weather?
• 11:04
  SPEAKER_00: Yeah, so one of the things that kicked off right before planting was the um the economic assistance program payment.
• 11:11
  SPEAKER_00: Show me the money.
• 11:12
  SPEAKER_00: Yep.
• 11:13
  SPEAKER_00: So every the producers uh if you planted a crop in 2024, you got a letter from FSA with the acres that you certified at FSA, you have signed your form, gave it back, probably got your money deposited already.
• 11:28
  SPEAKER_00: Uh, so kind of a a little bit of a change on that program versus when it first scrolled out.
• 11:33
  SPEAKER_00: You know, this is you know, just shy of$43 an acre payment on corn, uh, just shy of$30 on soybeans.
• 11:39
  SPEAKER_00: Um they did uh limit payment, the first payment to$85% of the total.
• 11:46
  SPEAKER_00: Okay, and the fit thought process is we're gonna pay out all the farmers uh with the August 15th deadline, the 85%, and then if there's money left over, that then you'll get your other 15%.
• 11:59
  SPEAKER_00: If you do the math, and uh uh I didn't do the math, but reading some other people that have, it definitely seems like that other 15% will be coming.
• 12:07
  SPEAKER_00: Uh, I mean, it's pretty clear what acres were planted last year, and you can do the math figurative.
• 12:12
  SPEAKER_01: It doesn't look like they're gonna run out of money, which is the reason for saving the 15%.
• 12:16
  SPEAKER_00: Exactly.
• 12:16
  SPEAKER_00: Shouldn't run out of money.
• 12:18
  SPEAKER_00: Uh, but um so far it's been like six point four billion dollars out of the ten billion allocated, has been paid out, which we kind of expected.
• 12:27
  SPEAKER_00: It was gonna go fast, furious right away.
• 12:29
  SPEAKER_00: Um, they do have an August 15th deadline, so I do not expect to get that other 15% until we've passed the deadline.
• 12:37
  SPEAKER_00: But to the bigger point, is I do think you'll get that last 15%.
• 12:41
  SPEAKER_01: So have you heard of anything additionally beyond that?
• 12:44
  SPEAKER_00: Just again, probably more speculation, Mike, of um, you know, depending on how uh the tariff situation goes and moving forward with China and some of our other key export partners, if there will be more programs uh released.
• 12:59
  SPEAKER_00: Of course, Trump likes to tweet his support for farmers.
• 13:02
  SPEAKER_00: Sometimes it'd be better to see some actions more than just tweets.
• 13:06
  SPEAKER_00: Uh, but of course, right now is probably the right time to have a trade war if you're in American agriculture, at least from the grain side, because this is the time of year we're not uh we lose a lot of exports to Brazil anyway, especially on the soybeans.
• 13:19
  SPEAKER_00: Um, so it's it's the right time of the year for us.
• 13:23
  SPEAKER_00: But uh uh we never we never want to be in a trade war anyway, right, Mike?
• 13:28
  SPEAKER_01: Yeah, the big thing right now is just any umbrella or lid that that trade war would put on versus uh potential rallies off weather and things like that at a key time of the marketing year, but that's about it.
• 13:40
  SPEAKER_01: You're right.
• 13:40
  SPEAKER_01: From a logistical standpoint, perfect time of the year to have a trade war.
• 13:44
  SPEAKER_00: Yep.
• 13:44
  SPEAKER_00: What's else is going on in the markets this week, Mike?
• 13:46
  SPEAKER_01: This week, uh on uh Trump's weekly uh update here, it seems like lately.
• 13:51
  SPEAKER_01: Uh last week it really sounded like China came out and they said, hey guys, we're willing to talk, whatever, just be respectful in the talks, and uh we want to talk about Taiwan and some other items.
• 14:02
  SPEAKER_01: Um just basically let us know.
• 14:04
  SPEAKER_01: And uh Trump came out earlier this week and said, Hey, I'm I'm gonna be very nice, was the two words he used, which seemed like a very direct response to them saying, be respectful.
• 14:14
  SPEAKER_01: And uh it seemed like that was uh uh attempted by the right fellow there to say that.
• 14:19
  SPEAKER_01: And uh he just said, you know, they're really high tariffs right now at these levels at 145%.
• 14:25
  SPEAKER_01: That's too high, we admit, um, but we'll drop it to the unilateral 10%, just like everybody else's, if trade talks go right.
• 14:33
  SPEAKER_01: And uh China can't which was good news, that seemed like he backed off, uh, which seems like a recurring theme here with him, and same as what you'd see in his book, Art of the Deal Ask for Way Too Much at first, and then negotiated a lower settlement, anyways.
• 14:48
  SPEAKER_01: Um now China came back and said, you know what, 10% still too high, we want zero.
• 14:54
  SPEAKER_01: Um we aren't talking yet at all, by the way.
• 14:57
  SPEAKER_01: And uh that was perceived as a negative thing.
• 15:00
  SPEAKER_01: And then immediately after that, a couple hours later, Trump comes out, said he had very good meetings with China that morning.
• 15:06
  SPEAKER_01: Wouldn't say who was all involved in that.
• 15:08
  SPEAKER_01: So it was a little bit of back and forth again here over the past week of trade.
• 15:13
  SPEAKER_01: Uh this week, Monday through Friday, we've been open on the markets, but last Friday we had uh the holiday not trade, so a long weekend.
• 15:21
  SPEAKER_01: Uh very interesting headlines.
• 15:23
  SPEAKER_01: Vance was in India this week as well, working on some uh trade.
• 15:28
  SPEAKER_01: It sounded like Japan as well.
• 15:30
  SPEAKER_01: Uh they had some good trade talks go there.
• 15:32
  SPEAKER_01: So a lot of activity here.
• 15:35
  SPEAKER_01: Market at the beginning of the week seemed like they've been disappointed in the lack of just sign deals.
• 15:40
  SPEAKER_01: The the market right now, as we get on here, they just want to see progress and something get done.
• 15:46
  SPEAKER_01: Uh other than saying there's a hundred countries lined up waiting to talk to us.
• 15:50
  SPEAKER_01: Okay, we'll start talking and sign a deal.
• 15:52
  SPEAKER_01: And we haven't really seen that yet, and the market's maybe growing a little bit weary because of that.
• 15:57
  SPEAKER_01: But the choppiness continues.
• 15:59
  SPEAKER_01: It seems like there's no price direction.
• 16:01
  SPEAKER_01: It's up one day, down more the next day, and then back up again.
• 16:05
  SPEAKER_01: So it it seems like we're in a choppy sideways trend in a lot of these markets.
• 16:09
  SPEAKER_01: The one thing that seems certain is uncertainty here still going forward.
• 16:14
  SPEAKER_01: Uh the interest rate talk has been very important as well.
• 16:18
  SPEAKER_01: Uh Trump at the end of last week said he wanted to fire Powell, and then this week he said, yeah, I'm not gonna fire Powell.
• 16:24
  SPEAKER_01: So it after uh after some of that news went through as well, uh maybe the markets are calming down a little bit into this weekend, but I would just say, Lucas, uh those things all impact our markets, impact our operations each and every day.
• 16:40
  SPEAKER_01: Interest rates have pretty much impact everybody.
• 16:42
  SPEAKER_01: So I uh it's definitely um you need to keep up on it, at least, but not necessarily let it impact your marketing decisions.
• 16:51
  SPEAKER_01: Uh the one thing I will say is that the markets have held up incredibly well.
• 16:55
  SPEAKER_01: I thought on the egg side, uh, through all of this turmoil and speculation, I mean, for soybeans to not be down more than they are is incredible.
• 17:05
  SPEAKER_01: Uh we realized in the first administration that uh tariffs are not bullish soybeans.
• 17:11
  SPEAKER_01: So uh uh just a few things, little update there.
• 17:13
  SPEAKER_01: We'll start to talk more about planning progress and uh and things like that and crop conditions.
• 17:18
  SPEAKER_01: You're two weeks away from a WASD airport.
• 17:21
  SPEAKER_01: Uh we'll get some fundamentals to trade there.
• 17:23
  SPEAKER_01: It seemed like it wanted to a little bit, at least, Lucas.
• 17:26
  SPEAKER_00: Yeah, yeah, I think that's uh a good way to phrase that.
• 17:29
  SPEAKER_00: It's been choppiness, but it does seem like maybe they've uh calmed down a little bit, of course, until the next tweet, but and that's gonna continue until we get a good fundamental story to trade outside of it.
• 17:40
  SPEAKER_01: Yeah, we've got very close to crop insurance uh levels, uh 469 and about what half or three quarters there.
• 17:46
  SPEAKER_01: A couple days, 468, 469.
• 17:48
  SPEAKER_01: So very, very close to the crop insurance spring average price.
• 17:51
  SPEAKER_01: Something to keep an eye on there.
• 17:53
  SPEAKER_00: Well, that sounds like a good plan, Mike.
• 17:55
  SPEAKER_01: All right.
• 17:55
  SPEAKER_01: Thank you, Lucas.
• 17:56
  SPEAKER_01: And thank you to all our listeners.
• 17:58
  SPEAKER_01: Please reach out to us at professionaleggmarketing.com.
• 18:01
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 18:07
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 18:13
  SPEAKER_01: See you next time.