Latest / Professional Ag Marketing Podcast / Election Hangover: Can Soybeans Recover?

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Election Hangover: Can Soybeans Recover? · Professional Ag Marketing Podcast

• 0:03
  SPEAKER_00: You're locked in to the Grain Market Talk Podcast.
• 0:07
  SPEAKER_00: Fast updates, market movers, and the grain news you need right now.
• 0:12
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:22
  SPEAKER_01: Today is November 6th.
• 0:24
  SPEAKER_01: I've got Lucas Peters here with us.
• 0:26
  SPEAKER_01: Let's talk about a few different things.
• 0:28
  SPEAKER_01: We're going to talk about the grand market first and foremost, but we'll talk about the election.
• 0:32
  SPEAKER_01: Um, election vibes kind of post-election.
• 0:35
  SPEAKER_01: We'll talk about the harvest wrap-up, and then we're gonna have some Ark and PLC conversation.
• 0:40
  SPEAKER_01: So, Lucas, how's it going today?
• 0:42
  SPEAKER_02: Well, Mike, it's great to be here.
• 0:44
  SPEAKER_02: It's a the sun is out, it's not raining, it's Friday afternoon.
• 0:48
  SPEAKER_02: I it can't get much better than that, can it?
• 0:51
  SPEAKER_01: Three probably inches would be most of us here the last week, it looks like when I look at it.
• 0:56
  SPEAKER_01: Yeah.
• 0:57
  SPEAKER_01: Yep.
• 0:57
  SPEAKER_01: One field left average, you think, for everybody?
• 1:00
  SPEAKER_02: Yeah, definitely.
• 1:01
  SPEAKER_02: I it's most guys, if it dries out, it's gonna be a two to five day wrap-up, uh, at least for harvest.
• 1:09
  SPEAKER_02: And then, of course, everybody is looking at either tillage or manure application, trying to get in.
• 1:14
  SPEAKER_02: And of course, this time of year, we are buying time against Mother Nature and the cold weather.
• 1:20
  SPEAKER_02: But I don't know, high's in the 60s here this weekend, and the ground's so wet it'll take a little while to freeze.
• 1:25
  SPEAKER_02: So we'll be good.
• 1:27
  SPEAKER_01: Well, the ambulance is gonna be stopping by Lucas Peters' house this weekend as he falls off his roof, trying to put his Christmas lights on.
• 1:34
  SPEAKER_01: Uh, in the meantime, let's talk about the election.
• 1:37
  SPEAKER_01: Uh, you know, it's uh maybe a few days overdue here, but I kind of like that we're doing it today because we got to watch a market reaction to the election the last couple days, and really it would have been premature to do a post-election podcast before yesterday.
• 1:53
  SPEAKER_02: Well, I you could have done it Wednesday and you would have had one reaction, and then you could have done it after the close yesterday.
• 1:59
  SPEAKER_02: You ain't the opposite reaction, and a big opposite reaction.
• 2:03
  SPEAKER_02: And so you're we talked a lot yesterday, and the high headlines were coming off of yesterday, the the steep drop.
• 2:09
  SPEAKER_02: And I know what's what's your your message on the Nasdaq?
• 2:13
  SPEAKER_02: It was the one of the biggest ones ever, right?
• 2:15
  SPEAKER_01: Yep, 1,421 point drop in the Nasdaq.
• 2:18
  SPEAKER_01: That's the biggest point drop in a single day ever on the Nasdaq.
• 2:22
  SPEAKER_01: Percentage-wise, it was down five and a half percent yesterday.
• 2:25
  SPEAKER_01: Uh, top 10 would have been anywhere between 8.5% to like 12.5%, would have been the hardest top 10 days ever.
• 2:32
  SPEAKER_01: Uh, pretty much what happened was Blue Wave came in, Blue Wave won.
• 2:36
  SPEAKER_01: With that being the case, 40 out of the 41 local ballot measures voted against AI data centers.
• 2:43
  SPEAKER_01: Uh, it looks like going forward, a lot of these data centers are gonna have delays, permitting's gonna be hard.
• 2:51
  SPEAKER_01: It's just gonna get a lot more expensive for them to build these things and a lot harder and drug out.
• 2:56
  SPEAKER_01: And with that being the case, that worried the Nasdaq and stock market yesterday specifically.
• 3:02
  SPEAKER_01: That uncertainty.
• 3:04
  SPEAKER_01: You know, when you talk about election impacts, it's not even so much the policies that are like all of a sudden, boom, like this is gonna happen.
• 3:12
  SPEAKER_01: That's why fundamental will be pricing in more reaction post-elections or pre is just uncertainty.
• 3:18
  SPEAKER_02: Well, of course, like because they aren't going to pass policy right away.
• 3:22
  SPEAKER_02: No, at a at a federal level, yes, uh, like they aren't even gonna be in office till January, and then you're still going to have an a president that's been pretty vocal about nothing's gonna happen for basically two years.
• 3:33
  SPEAKER_01: That dude's gonna go golfing for two years, correct, and it's gonna be a dead stop on everything.
• 3:38
  SPEAKER_02: It'll be veto stamps and golf rounds for two years.
• 3:41
  SPEAKER_02: Uh, and then after that, who knows what happens because we're having another election cycle.
• 3:46
  SPEAKER_02: Now, you could say a few of these state elections, uh, like what Arizona's blue from Senator Raphouse, governor, uh, all the way through, which is like hardly ever happened.
• 4:00
  SPEAKER_02: And you see some of the results in Texas.
• 4:02
  SPEAKER_02: Again, probably every, I guess, the information I've read and the context we have in Texas, it's definitely a federal Democrat swing uh and a Democratic governor, but there is still a lot of red uh state offices uh uh in the Texas and a lot of these Midwest states that we that got a lot of attention because it was some of their first Democrats they've elected in a long time.
• 4:26
  SPEAKER_02: So if you are building a data center in Texas, which of course was one of the big reasons why uh why a lot of the Democrats won, you still have that state uh support.
• 4:37
  SPEAKER_02: I think now it's it's gonna be tough because you do have a opposing uh position governor.
• 4:43
  SPEAKER_02: But again, I think what you're you said is correct.
• 4:46
  SPEAKER_02: It's the overreaction right away that this is gonna take forever, we're gonna have more policies, we're gonna have uh permitting problems.
• 4:54
  SPEAKER_02: Um, is it worth worth it anymore?
• 4:57
  SPEAKER_02: Um should we just go build these in China or somewhere else?
• 5:00
  SPEAKER_02: And that's where I guess the market thought was gonna look at and sunk the thing yesterday.
• 5:06
  SPEAKER_01: Or the moon.
• 5:07
  SPEAKER_02: Yep, the moon.
• 5:08
  SPEAKER_01: We could be building these, and I say that ironically, I'm I'm not even lying.
• 5:13
  SPEAKER_01: Like, that's getting talked about as crazy as that is.
• 5:15
  SPEAKER_01: But I I do want to just touch on a couple other things with this election, like agricultural-wise, have you heard anything with policies, biofuels, um, farm programs?
• 5:27
  SPEAKER_01: Like, what's this mean for our businesses going forward?
• 5:30
  SPEAKER_02: It's a really good question.
• 5:32
  SPEAKER_02: Uh, so um Minnesota soybean had a a call.
• 5:36
  SPEAKER_02: Uh I'm on the governing board there, and just kind of some general thoughts, just in Minnesota, but this could apply everywhere.
• 5:43
  SPEAKER_02: Uh, and then whether you're soybean, corn, pork, beef, not going to matter.
• 5:48
  SPEAKER_02: What one of the challenges that you're gonna have in your states and at the federal level is you have a whole lot of new people in office.
• 5:57
  SPEAKER_02: Sometimes that's good, new ideas, new people to meet.
• 6:02
  SPEAKER_02: However, if you are trying to get policy support or or change the mindset, now you have a battle in front of you of just getting to know the candidate, know the person that's in office.
• 6:15
  SPEAKER_02: Um, and so we talked just in Minnesota of the big turnover at the state.
• 6:20
  SPEAKER_02: Um, it takes a while.
• 6:22
  SPEAKER_02: Like normally we do one state visit, we're probably gonna have to do three uh visits to the to the capitol just to get to know these people.
• 6:29
  SPEAKER_02: And so that like we know that's a problem or a hurdle, right?
• 6:33
  SPEAKER_02: And so all of your organizations will be pushing that and and getting in front of these people.
• 6:38
  SPEAKER_02: Um, the threat would be is if they come in with an agenda and try to get something pushed before they have time to get to know it's like how is this going to affect agriculture?
• 6:49
  SPEAKER_02: So so that'd be the first challenge.
• 6:51
  SPEAKER_02: From a policy standpoint or dollars and cents wise, uh a blue government, uh democratic government, generally should be supportive to biofuels.
• 7:03
  SPEAKER_02: Um, that all all of that uh language or or 45Z was brought up in the Biden administration.
• 7:09
  SPEAKER_02: It did continue with Trump and actually kind of got a little easier to qualify for, but we should not lose support for the biofuel and should see some expansion there, which is good.
• 7:20
  SPEAKER_02: Um, I think the sustainable aviation uh fuel actually gets back on the table in a bigger way.
• 7:26
  SPEAKER_02: E15 push could happen.
• 7:29
  SPEAKER_02: Uh so generally favorable for biofuels, and and I would say most policies are pretty favorable agriculture.
• 7:38
  SPEAKER_02: Uh now the exception will be some of the environmental regulations and expansion on a livestock side might get a little more difficult.
• 7:45
  SPEAKER_02: Of course, the bigger hurdle will be on the tax inheritance uh side of the equation, right?
• 7:54
  SPEAKER_02: Like those are the things that um a lot of times when you have a Democratic controlled uh Congress, um, those are the things that affect agriculture, not necessarily day-to-day, but at the end of the year, a little less favorable than what we have in place now.
• 8:12
  SPEAKER_02: So uh lots to come.
• 8:14
  SPEAKER_02: Uh, but those are a couple of the hurdles to watch out for right away.
• 8:17
  SPEAKER_02: First off, just getting to know the people, know the know the the new um members of Congress that'll be on, like the Senate A Committee, House A Committee, uh, that is is a pretty important step to protecting the uh items or protecting what we have in place now and also advancing the agenda forward.
• 8:38
  SPEAKER_01: So I was curious on what this setup looks like on average for the markets going forward with the S P 500, just overall uh pure stock market.
• 8:49
  SPEAKER_01: When you have a Republican president historically and a Democratic Congress, historically that's the worst returns in the stock market for the next two years you could have.
• 8:58
  SPEAKER_01: Only 4.9% return on the SP 500.
• 9:01
  SPEAKER_01: Your best returns typically happen with Democratic president and a split Congress.
• 9:07
  SPEAKER_01: That's 17% Democratic president with a Republican Congress is even 16.3.
• 9:13
  SPEAKER_01: So that just historically speaking, um, going back to 1953, that would be uh the setup for the stock market going forward.
• 9:21
  SPEAKER_01: So I found that interesting.
• 9:22
  SPEAKER_01: It's got talked about a little bit here over the past few days at least.
• 9:26
  SPEAKER_01: But the big movers and shakers, and these were the items that they ran on to write, would be that when the when the blue wave came through, a a big push for that was the Iran war basically was a huge part of it, just affordability and uh not following through on promises from the Republican side.
• 9:43
  SPEAKER_01: So we'll see what they do with the Iran war going forward and uh whatever future that holds for us here.
• 9:49
  SPEAKER_01: And the Strait of Hormuz and the Russia-Ukraine war, is there talk about peace talks?
• 9:53
  SPEAKER_01: All that'll be probably the some of the bigger movers and shakers still.
• 9:58
  SPEAKER_02: And I like on specifically on that front, I I think even Trump would recognize a little bit of well, this has become very not popular.
• 10:06
  SPEAKER_02: And what is the end game here?
• 10:09
  SPEAKER_02: It probably won't happen real soon, but it does feel like now we gotta push, like we gotta figure out we gotta get either pull out of here or let somebody else take care of this, which again, spinning it to agriculture, fuel prices should benefit everybody.
• 10:23
  SPEAKER_01: Yep, for sure.
• 10:24
  SPEAKER_01: When uh we look at a few of the other markets here, just it's been a rough go.
• 10:29
  SPEAKER_01: The January soybeans, now the technical front month for the soybean markets as November futures are in delivery, 41 cents lower at the close this week from last week.
• 10:40
  SPEAKER_01: So a really strong sell-off in the soybean markets throughout this week.
• 10:44
  SPEAKER_01: And then corn, we were down about six cents.
• 10:46
  SPEAKER_01: Uh I'll say not as big, but also at lows, right?
• 10:49
  SPEAKER_01: So I mean uh you're at contract lows almost on corn, uh, not too far from the old low at 425 on D's, for example.
• 10:56
  SPEAKER_01: So uh it's been a weak market, and I feel like the the election impacts, even right afterwards that night, when the SP popped at 1030 after the election, once the results came in, corn went right along with it.
• 11:09
  SPEAKER_01: And yesterday, I feel like it was just a the blue wave brought a red wave.
• 11:13
  SPEAKER_01: Like everything sold off yesterday.
• 11:15
  SPEAKER_01: Yeah, I mean, it was a stock market, it was corn, it was hogs, it was cattle, it was just red everywhere.
• 11:21
  SPEAKER_01: So um the market reaction to it from corn and soybeans perspective is one, we we had a Stonex report this week that showed massive yields in the U.S.
• 11:30
  SPEAKER_01: as well for corn and soybeans.
• 11:32
  SPEAKER_01: Fundamentally, it's not a great look.
• 11:34
  SPEAKER_01: Crude oil started selling off pretty hard now, too, in the low 90s, even got under 90.
• 11:39
  SPEAKER_01: Um, yeah, it really for these grain markets, they've just been under a lot of pressure.
• 11:43
  SPEAKER_01: And you're looking for a catalyst to really give us some support.
• 11:47
  SPEAKER_01: Otherwise, the funds have liquidated their long positions and they've slowed up some of the selling.
• 11:53
  SPEAKER_01: Soybeans, there's quite a few longs that could get bailed out still.
• 11:56
  SPEAKER_01: They're still long quite a bit.
• 11:57
  SPEAKER_01: So maybe there's some further pressure further downside.
• 12:00
  SPEAKER_01: That chart action, there's a lot bigger of a gap, I think, that you could try to take out here.
• 12:05
  SPEAKER_02: So and I think you're right, they're looking for a catalyst, but you're looking for a catalyst at some pretty hard times to find one, right?
• 12:12
  SPEAKER_02: Because the Stone X comes out and yields are even higher.
• 12:15
  SPEAKER_02: Um, I I would say the general trend, and we'll talk about harvest results here in a minute, but the general trend has been kind of better than I thought in a lot of areas for corn and and especially soybeans.
• 12:28
  SPEAKER_02: Um, so you you're you're put under pressure there.
• 12:30
  SPEAKER_02: Oil didn't fare very well after the election, which is going to pull down uh corn and beans too.
• 12:36
  SPEAKER_02: Um, like there's just a lot of things weighing on the market, and there's nothing really to turn it uh around.
• 12:42
  SPEAKER_02: And the election, uh, how is it affect corn and bean price?
• 12:46
  SPEAKER_02: Well, again, biofuels should offer some long-term support.
• 12:50
  SPEAKER_02: Exports, like we should.
• 12:51
  SPEAKER_02: I would think tariffs would be harder uh to get, it should come off the table more readily eventually, uh, with the election results.
• 13:00
  SPEAKER_02: So that should be supportive as well, but not enough of a catalyst immediately to start anything uh going the other way.
• 13:06
  SPEAKER_02: It's raining, like as we started off, it's raining all over the place.
• 13:10
  SPEAKER_02: The the drought monitor is getting better every single week.
• 13:14
  SPEAKER_02: And we always had this thought of the strong El Nino should be tough on Brazil and South America, and so far that hasn't really come true at all either.
• 13:24
  SPEAKER_02: So that like you said, Mike, that's trying to find a catalyst to spark something, and boy, it's been hard to find in the corn and soybean market.
• 13:33
  SPEAKER_01: So there's three big catalysts that the market is looking for today.
• 13:37
  SPEAKER_01: The the first one is the obvious inflation hedge, like if the Iran war is gonna stay around and they need to be long commodities, corn still has an okay balance sheet, global balance sheets are still tight, so the inflation plays still there.
• 13:49
  SPEAKER_01: That's what they're looking for and part of it.
• 13:51
  SPEAKER_01: The second thing would be China buying.
• 13:53
  SPEAKER_01: I think this is a big one this week and next week.
• 13:55
  SPEAKER_01: This week, what we saw was China has been sniffing around wheat.
• 14:00
  SPEAKER_01: They came out here and they said now they are agreeing to a$600 million purchase in wheat and sorghum.
• 14:07
  SPEAKER_01: The market was expecting it, but they were expecting, I think, flash sales.
• 14:11
  SPEAKER_01: And we didn't get the flash sales.
• 14:13
  SPEAKER_01: So I feel like today, other than Russia-Ukraine peace talks advancing, that hurt the wheat market.
• 14:20
  SPEAKER_01: But I think they're also a little disappointed that, like, ah, the we heard rumblings China was gonna buy wheat.
• 14:25
  SPEAKER_01: I was hoping for some actual sales.
• 14:27
  SPEAKER_01: And you just kind of agreed to a purchase agreement.
• 14:29
  SPEAKER_01: It's like, what about the 10 billion other dollars worth of egg products you said you were gonna buy that you haven't yet for this year?
• 14:35
  SPEAKER_01: And kind of running out of time on that, too.
• 14:37
  SPEAKER_01: Sure.
• 14:38
  SPEAKER_01: The third thing's just Waz Day next week, Tuesday.
• 14:40
  SPEAKER_01: Who knows?
• 14:41
  SPEAKER_01: We're expecting bigger yields.
• 14:43
  SPEAKER_01: Uh, demand's been pretty good for the most part here still across most of these egg commodities on the corn and soybean sides, biofuel.
• 14:52
  SPEAKER_01: So we'll see if something there could get spiced up.
• 14:54
  SPEAKER_01: The X factor, kind of the like uh honorable mention in this, I would feel like, other than those three, would be the one you brought up with South America weather, just Brazil.
• 15:03
  SPEAKER_01: We're in their weather time frame here in December, January, and we should see something there.
• 15:07
  SPEAKER_02: So yeah, you're gonna have to see something on the South American weather in the next two months, or yeah, we're not gonna get it.
• 15:13
  SPEAKER_01: When we talk about the harvest wrap-up quick, just on progress there, what can you tell me about just overall input on what you've heard across the corn belt?
• 15:22
  SPEAKER_02: Yep.
• 15:22
  SPEAKER_02: So, you know, talking to a lot of customers this week, uh, you know, we set the harvest price on our crop insurance here the the beginning of the week, 475 on corn, uh 1263 on soybeans.
• 15:33
  SPEAKER_02: And so a lot of guys have been reporting production in.
• 15:36
  SPEAKER_02: And I would say the general trend, Mike, is our little pocket where we sit in Laverne, uh, and kind of the circle of counties around us uh had a tough year, but it was it's a little bit of well, I don't know where this corn came from because we only had nine inches of rain.
• 15:54
  SPEAKER_02: Yields are okay.
• 15:55
  SPEAKER_02: Um, and soybeans was the same way.
• 15:58
  SPEAKER_02: You get outside of that, and Southeast South Dakota's got some areas that are struggling and actually struggling to get the crop out.
• 16:06
  SPEAKER_02: There's a pretty good pocket down south of Sioux Falls where uh there's quite a bit of crop standing and some wet soils.
• 16:13
  SPEAKER_02: But as we talked earlier, for the most part, everybody's kind of that 15% left uh of the crop if they aren't wrapped up already.
• 16:21
  SPEAKER_02: And so you get out of that area, the yields were a lot better, right?
• 16:24
  SPEAKER_02: You go north in Minnesota, uh yields are crazy.
• 16:27
  SPEAKER_02: A lot of people saying record yields, um, you know, working with some customers, Marshall area uh north and and east of there towards Redwood Falls, uh, record yields, uh, corn and soybeans.
• 16:39
  SPEAKER_02: Um, you know, northern, northeast South Dakota, same thing.
• 16:43
  SPEAKER_02: Uh record yields, uh, kind of that Brookings area north.
• 16:47
  SPEAKER_02: Um, it real surprising.
• 16:49
  SPEAKER_02: Then you go south of here, Iowa's again pretty good.
• 16:52
  SPEAKER_02: I would say Iowa uh might not be as good as what they thought on the corn yields.
• 16:58
  SPEAKER_02: Um, just a few customers.
• 17:00
  SPEAKER_02: Beans were really good, corn's good, right?
• 17:03
  SPEAKER_02: And but good corn in Iowa is is really high yields anyway.
• 17:07
  SPEAKER_02: So uh yeah, generally yields are probably better than what we originally thought.
• 17:12
  SPEAKER_02: Uh we are in a little pocket of a lower area, but for the most part, uh a lot of our customer base had some pretty good corn soybean yields this year.
• 17:20
  SPEAKER_01: Regardless of what I think the national corn yield is, I really like to talk about what the market's pricing in today.
• 17:28
  SPEAKER_01: And I would argue fundamentally when we look at stocks to use ratio versus price today, I think they're at least pricing in a 182 or higher.
• 17:37
  SPEAKER_01: The corn market is right now, using the futures price, where they're at, the way they've acted, the stone ox number.
• 17:44
  SPEAKER_01: I think the I know the average trade guess is supposed to drop on Tuesday actually in yield.
• 17:49
  SPEAKER_01: I feel like the market's using a 182 or higher today on price.
• 17:53
  SPEAKER_01: So that I think will be interesting.
• 17:55
  SPEAKER_01: You probably don't, even at like a 178 national corn yield.
• 17:59
  SPEAKER_01: I mean, that usually suggests like a$5 corn price on March futures.
• 18:03
  SPEAKER_01: So that's a window I've been talking about with people, like five and a half to five bucks here, kind of any given yield scenario, depending on how we play out here.
• 18:11
  SPEAKER_01: And I think you could make a case, a fantastic case, anywhere for yield to end up somewhere between those two numbers.
• 18:18
  SPEAKER_02: Sure.
• 18:18
  SPEAKER_01: And I uh I don't I have a hard time believing the USDA is gonna move too much more from where they're at.
• 18:24
  SPEAKER_02: I think you're right.
• 18:24
  SPEAKER_02: Like I and and as we get you know further into harvest and get these some of these numbers in, uh going down much just doesn't seem no seem like it's gonna happen.
• 18:35
  SPEAKER_02: I I mean I I know there's tough areas, other places of the country, but boy, we thought we were in a pretty tough area, and that area is pretty big, and it's kind of proven us wrong.
• 18:44
  SPEAKER_01: Today alone, I think I got asked a lot about ARC PLC.
• 18:49
  SPEAKER_01: What opinions do you have?
• 18:51
  SPEAKER_01: Let's uh let's give our listeners a quick recap of the things they should be focused on.
• 18:55
  SPEAKER_02: Yep.
• 18:56
  SPEAKER_02: All right, so uh been getting that question a lot too, Mike.
• 18:59
  SPEAKER_02: So you have till December 11th uh to sign out that that's the deadline to sign up for 2026 ARC PLC decisions.
• 19:07
  SPEAKER_02: Okay, so we're just going reviewing the timeline a little bit here.
• 19:11
  SPEAKER_02: Uh, most farmers uh about the end of October got a deposit from USDA for their 2025 uh ARC PLC decision.
• 19:21
  SPEAKER_01: Nice little bonus for the Christmas fund.
• 19:23
  SPEAKER_02: Correct.
• 19:24
  SPEAKER_02: And most people got paid uh on PLC.
• 19:27
  SPEAKER_02: Some counties did get paid ARC, but that money you saw show up in October was from 2025.
• 19:33
  SPEAKER_02: Now we are signing up for 2026, which of course is the crop you just harvested or are harvesting uh currently.
• 19:41
  SPEAKER_02: When we're harvesting a crop, uh that really helps our decision, right?
• 19:45
  SPEAKER_02: So um one thing that I would uh uh I guess looking at, we'll split it out by crop a little bit.
• 19:52
  SPEAKER_02: Uh soybeans is an easy one.
• 19:54
  SPEAKER_02: Art County is the clear winner on on what you should sign up for.
• 19:59
  SPEAKER_01: Is this still true?
• 19:59
  SPEAKER_01: PLC is never paid on soybeans.
• 20:02
  SPEAKER_02: Yep, and the reason for that is so like soybeans, uh the the price was 1071.
• 20:08
  SPEAKER_02: That is the reference price uh for PLC to pay.
• 20:11
  SPEAKER_02: Uh currently, uh I think the market year average price is averaging$12.
• 20:16
  SPEAKER_02: Now that'll come down because that's been moved up a lot, wasn't it like low nines before this?
• 20:21
  SPEAKER_02: Well, yeah, going back to last year, yes.
• 20:24
  SPEAKER_02: Yeah, yeah.
• 20:24
  SPEAKER_02: Or yeah, before that it was down at$840 before it was changed.
• 20:28
  SPEAKER_02: So uh 1071 is a lot better, but currently we are a lot higher than that.
• 20:33
  SPEAKER_02: So definitely want to go to Arc County, uh, where we carry a higher guaranteed or a higher price, but we also have it's a county revenue coverage, it's yield and price.
• 20:45
  SPEAKER_02: And so if you are in a county like in southwest Minnesota, southeast South Dakota, where yields are somewhat variable, uh, great option because our Arc County benchmark yields are pretty high.
• 20:56
  SPEAKER_02: Uh, you're gonna want to sign up for Arc County.
• 20:59
  SPEAKER_02: Corn, uh, I think Arc County is kind of the default choice for corn as well.
• 21:04
  SPEAKER_02: Again, if you're in this part of the of Minnesota, South Dakota, you're gonna want to sign up for our county because yields uh are could be lower than our benchmark, so that you're gonna benefit from that within our county.
• 21:15
  SPEAKER_02: Um PLC reference price is 442.
• 21:19
  SPEAKER_02: We're currently tracking at 470.
• 21:21
  SPEAKER_02: Again, that will come down.
• 21:22
  SPEAKER_02: We know that.
• 21:23
  SPEAKER_01: But you got an average of that the whole year, correct.
• 21:25
  SPEAKER_02: And and that'll go through uh August.
• 21:28
  SPEAKER_02: So we we have a long tail on this price action.
• 21:31
  SPEAKER_02: Yet uh I just I have to make a decision by December 11th.
• 21:35
  SPEAKER_02: The thing I know is our yields were were okay to good, and my price is above 442.
• 21:43
  SPEAKER_02: With those two things, I'm signing up for our county.
• 21:45
  SPEAKER_02: If you do have wheat, wheat is the one I'd probably sign up for PLC.
• 21:49
  SPEAKER_02: Uh wheat yields were pretty good.
• 21:51
  SPEAKER_02: Uh, I mean, talking mainly west and north of here, and the price isn't great.
• 21:56
  SPEAKER_02: So that's where uh plc has a reference price of$635.
• 22:01
  SPEAKER_02: Um, so that's where I would sign up for PLC if I did have any wheat base acres.
• 22:06
  SPEAKER_02: The last item I didn't want to talk about on this though is uh ARC individual coverage.
• 22:12
  SPEAKER_01: Okay, so if you have maybe you're in one of these areas that were really crappy, sandy piece on its own in a county or something.
• 22:21
  SPEAKER_02: And that's the main thing, right?
• 22:22
  SPEAKER_02: So so low yields, probably like 50% of APH type low yields, and that farm, you only had one crop on it, and it was a standalone farm number, meaning so when you go sign up for these, you sign up by farm number at FSA.
• 22:37
  SPEAKER_02: If that was the only piece in that farm number and you had it on one crop, uh ARC individual would be a good option for you.
• 22:45
  SPEAKER_02: For most of our producers, they are not in that situation.
• 22:49
  SPEAKER_02: Arc County is going to be the best choice for our corn and beans, PLC on the wheat.
• 22:54
  SPEAKER_02: Having said all that, what are we looking at for payments?
• 22:56
  SPEAKER_02: If yields are kind of average in your area and prices stay, you know, where they're at or slightly lower, we're not looking at as large of payments as we saw last year.
• 23:06
  SPEAKER_02: Uh okay, potentially uh looking at a five to twenty dollar an acre payment.
• 23:11
  SPEAKER_02: Now, if you're in a county with some pretty tough yields, that's what you could bump it up to 50, 60 bucks.
• 23:17
  SPEAKER_02: But we'll figure all of that out uh in June of next year.
• 23:21
  SPEAKER_01: All right.
• 23:21
  SPEAKER_01: Well, thank you for your time today.
• 23:22
  SPEAKER_01: I appreciate it, Lucas.
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