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Grains: Bye Bye Trade Deal · 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 October 10th.
• 0:25
  SPEAKER_01: I've got Jaden here with us today.
• 0:26
  SPEAKER_01: How's it going, Jaden?
• 0:27
  SPEAKER_01: You know I've had better days, Mike, but we're doing pretty good.
• 0:30
  SPEAKER_01: I'll tell you what, it for uh the corn market not moving for quite some time.
• 0:35
  SPEAKER_01: It's been a boring harvest here recently.
• 0:38
  SPEAKER_01: Put it into perspective, we are missing things like crop progress reports to trade or exports.
• 0:44
  SPEAKER_01: We missed this week's WASD air report, which we were supposed to have.
• 0:48
  SPEAKER_01: We at least got the estimates on it.
• 0:49
  SPEAKER_01: 185 yield on corn.
• 0:51
  SPEAKER_01: What was it like 53 on soybeans they were thinking?
• 0:55
  SPEAKER_01: Yeah, just a slight cut on soybeans.
• 0:57
  SPEAKER_01: Slight cut.
• 0:58
  SPEAKER_01: But nonetheless, we got a few uh estimates out at least for the report.
• 1:02
  SPEAKER_01: However, it was boring, I'd say, market-wise, very tight range for quite a while until today, Jaden.
• 1:09
  SPEAKER_00: What happened?
• 1:10
  SPEAKER_00: Yeah, Mike, uh, you know, Donald Trump decided to come out with a truth social post basically saying how much uh frustrating China is to him, and you know, they're they're being very hostile from his own words, and he's he's saying they're sending letters to other countries urging them to impose export controls on every element related to rare earth production.
• 1:32
  SPEAKER_00: And, you know, f from the soybean side of things, this is really important because at the end of October we were all kind of um expecting a meeting between him and President G, and we were all waiting for a big China trade deal, and that's kind of the only reason soybeans were hanging up above ten dollars.
• 1:50
  SPEAKER_00: But after this tweet today, we we sold off 18 cents.
• 1:54
  SPEAKER_01: Expectations for a China trade deal basically just got swept off the table, Jaden.
• 2:00
  SPEAKER_01: That's what it sure looks like going into the end of the month, and profit taking was absolutely in full force.
• 2:07
  SPEAKER_01: Soybeans closed the day down 15.
• 2:09
  SPEAKER_01: Corn was only down five, kind of playing follow the leader there nonetheless.
• 2:14
  SPEAKER_01: Same with wheat, down about eight.
• 2:16
  SPEAKER_01: The equities, ouch, that was down 172 points on the SP here.
• 2:21
  SPEAKER_01: Last we're checking on it this afternoon on Friday.
• 2:24
  SPEAKER_01: 6,600 back on the SP here, so a really really big setback.
• 2:28
  SPEAKER_01: The energy market was already having a setback.
• 2:31
  SPEAKER_01: Jaden just fell below 60 bucks, down about another two and a half dollars today.
• 2:36
  SPEAKER_01: Some of that had to come from this fact that we were looking at a ceasefire between Israel and Gaza.
• 2:42
  SPEAKER_01: Uh that had impacted that market a little bit.
• 2:45
  SPEAKER_01: So nonetheless, it's been a massive profit-taking day across the board for equities, for the grain markets, uh, energy markets as well, taking some uh taking this thing a little bit lower.
• 2:58
  SPEAKER_01: The US dollar, that one's been an interesting one.
• 3:02
  SPEAKER_01: Uh, that was lower today, but it had quite the rally it put together until about today.
• 3:07
  SPEAKER_01: Uh, we climbed back over 99 points.
• 3:10
  SPEAKER_01: And then uh honestly going over to things like the metals, gold has been ripping higher.
• 3:16
  SPEAKER_01: Uh, that's been an absolutely outstanding market here.
• 3:20
  SPEAKER_01: Over 50 some percent, up year to date, up another 50 points today on the December there.
• 3:25
  SPEAKER_01: We're over 4,000 uh on the December gold, just ripped higher.
• 3:30
  SPEAKER_01: So quite the trades going on lately in this marketplace.
• 3:34
  SPEAKER_01: But on the soybean side, you and I both would likely agree, not to put words in your mouth, but I would say soybeans only being down 15 cents today was quite the win given the information that was provided to us.
• 3:47
  SPEAKER_00: Yeah, you would think, Mike, you know, the s SP being down 180 points, shouldn't soybeans be down like 50 cents?
• 3:54
  SPEAKER_00: I mean, China's a big deal for our balance sheet.
• 3:57
  SPEAKER_01: Yeah, and uh being the fact that they haven't made any purchases up until this point, uh uh clock's ticking.
• 4:04
  SPEAKER_01: Our soybean harvest is mostly wrapped up, at least locally here.
• 4:08
  SPEAKER_01: Uh clock is ticking, clock is ticking.
• 4:11
  SPEAKER_01: Uh exports typically really pick up from this time of the year, and uh now we've delayed uh very much so any trade progress with China for the time being.
• 4:21
  SPEAKER_01: So very disappointing for us to still be above 10 bucks is quite a surprise.
• 4:27
  SPEAKER_01: Now we rejected on November soybeans a pretty key area.
• 4:31
  SPEAKER_01: We had a relief uh rally here up to about 61% on November soybeans to about 1030.
• 4:39
  SPEAKER_01: We failed to close above it, so that's been some technical negative trade.
• 4:43
  SPEAKER_01: Today we blew that back down to the bottom end of this range we've been in, kind of looking at this November soybean market around that 990 to$10 range is some support levels, very close to that those old low levels that we had there.
• 4:56
  SPEAKER_01: This most recent one, like 993, for example, the one prior to that being closer to uh the lower 980s, 981.
• 5:05
  SPEAKER_01: Keep an eye on some of those areas just for supports going forward.
• 5:08
  SPEAKER_01: I know the marketplace is gonna be keeping an eye on them at least, Jaden.
• 5:12
  SPEAKER_01: But that honestly, that really controlled the news towards the end of this week.
• 5:17
  SPEAKER_01: I figured with the port fees going on next week on October 14th, there would be some talks about uh maybe not coming to the table at the end of the month, but this definitely escalated things today, didn't it?
• 5:29
  SPEAKER_00: Yeah, and it with Trump, you know, talks of giving, you know, the US uh farmer a big bailout payment.
• 5:36
  SPEAKER_00: You would think, you know, he says he's gonna make a trade deal with China, but why would he do both?
• 5:40
  SPEAKER_00: If he's gonna give us a payment, I feel like it's gotta be one or the other, and I think we kind of found out today which one it's gonna be.
• 5:47
  SPEAKER_01: Yep, definitely.
• 5:48
  SPEAKER_01: I think uh he would not be doing that if uh he was gonna do both.
• 5:52
  SPEAKER_01: So very wise uh remarks regarding bailouts and uh any trade progress with China there.
• 5:58
  SPEAKER_01: This crop, I would argue, it's it's been getting harvested quite fast.
• 6:03
  SPEAKER_01: Um I know just looking at the soybean progress here locally, it's pretty hard to find a soybean field out and about driving around.
• 6:10
  SPEAKER_01: Um that that progress is gonna be immense.
• 6:13
  SPEAKER_01: It's been very dry.
• 6:14
  SPEAKER_01: Maybe we'll have a little rain this weekend here on Sunday.
• 6:17
  SPEAKER_01: Uh we'll have to keep an eye on that, but I think that'd be welcomed in a lot of cases here.
• 6:22
  SPEAKER_01: So the soybeans have got dry.
• 6:23
  SPEAKER_01: Corn is getting dry, hearing a lot of 12-13% in some areas here.
• 6:28
  SPEAKER_01: Uh at this point, I've heard very average top uh top tier yields on soybeans, uh, locally at least in this northwest corn belt.
• 6:39
  SPEAKER_01: When you hear corn, I've heard some outstanding, fantastic, very, very high yield uh yield areas on corn.
• 6:46
  SPEAKER_01: You know, if I had to break it down northwest Iowa, pretty average, but very all over the board type yields, maybe just below the last few years, especially.
• 6:54
  SPEAKER_01: Um when you work your way into northeast Nebraska, it was fantastic crops, records.
• 7:00
  SPEAKER_01: Uh when you go into South Dakota, a lot of records through South Dakota before you get up to about like Aberdeen and it was too wet up there.
• 7:08
  SPEAKER_01: Um Laverne here, fantastic.
• 7:10
  SPEAKER_01: You go east a little bit, even all the way to Jackson type area, it's been fantastic.
• 7:15
  SPEAKER_01: Um but a lot of Iowa there still the the struggles with just their crop, uh the southern rust really hit them.
• 7:21
  SPEAKER_01: Very hybrid specific, things like that.
• 7:23
  SPEAKER_01: But nonetheless, that crop could have finished better in that eastern Iowa for sure.
• 7:27
  SPEAKER_01: And that kind of trickles into Illinois as well.
• 7:30
  SPEAKER_01: But just as a crop update, it seems like I'd say most folks are wrapped up with soybeans and quarter done on corn.
• 7:36
  SPEAKER_01: I'd say at least locally, especially.
• 7:38
  SPEAKER_01: So uh that's kind of what we got this week.
• 7:40
  SPEAKER_01: Any final remarks from you, Jaden?
• 7:42
  SPEAKER_00: No, I no, Mike.
• 7:43
  SPEAKER_00: I just would say to guys, you know, that are harvesting corn, maybe maybe refigure your math a little bit on what you can store and and look at some basis opportunities in the southwest Minnesota, eastern South Dakota area as basis is weakening day by day, and I would just I would look out there and see if there's any opportunity because a lot of guys uh the problems they've been having, it's a good problem to have, but they're overproducing than what they can store.
• 8:08
  SPEAKER_01: Yeah, and watch out for those local elevators that you're relying on having storage availability for you.
• 8:13
  SPEAKER_01: Make sure you get that hauled in before they potentially get full.
• 8:17
  SPEAKER_01: Uh that could be a logistical nightmare for some farmers, but nonetheless, harvest is happening quite quickly.
• 8:22
  SPEAKER_01: Thank you for your time today.
• 8:24
  SPEAKER_01: Have a good weekend, stay safe out there.
• 8:25
  SPEAKER_01: We appreciate it.