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Grains: WASDE · 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_03: Good afternoon, everybody.
• 0:22
  SPEAKER_03: This is Lucas Peters filling in for Mike Minor on the Professional Ag Marketing Podcast.
• 0:28
  SPEAKER_03: Today is September 12th.
• 0:29
  SPEAKER_03: I got a couple of our guys in the podcast studios today.
• 0:33
  SPEAKER_03: We have Jordan Wrecker and Jaden Houslog joining me today.
• 0:37
  SPEAKER_03: And we're going to kick off the podcast.
• 0:39
  SPEAKER_03: You know, it's starting to be second week of September.
• 0:43
  SPEAKER_03: Obviously, we had a Wazday report today.
• 0:45
  SPEAKER_03: We'll get to here in a little bit.
• 0:47
  SPEAKER_03: But as we get into September, of course, we are getting a little closer to harvest season.
• 0:51
  SPEAKER_03: And had a locally, we've had a really nice stretch of weather to mature this crop out and start some early harvest.
• 0:58
  SPEAKER_03: I know there's a little rain in the forecast next week, but uh from a you know kind of a yield standpoint and crop condition standpoint, I know if you get on social media, uh that is a big hot topic right now on you know how this crop is coming to maturity and approaching harvest.
• 1:15
  SPEAKER_03: Seems like there's a lot of uh, especially into Iowa, uh, some maybe some disease pressure and things like that.
• 1:21
  SPEAKER_03: But uh Jordan, I mean, you farm locally and work with a lot of guys.
• 1:24
  SPEAKER_03: What do you think our crop's looking like coming to the end?
• 1:27
  SPEAKER_02: Yeah, so up here in the north, I think our crop is material materializing uh rather well.
• 1:33
  SPEAKER_02: Like you said, um, you know, the the little bit of cooler temps here as of recently is probably helping with fill on the corn, and you know, now we're starting to see some soybeans, you know, really starting to mature up.
• 1:45
  SPEAKER_02: And you know, as we kind of get into early next week, I think you're gonna start to see some guys poking around in some bean fields.
• 1:50
  SPEAKER_02: And by the end of the week, you know, we might kind of you know start to be kind of full harvest on the soybean side.
• 1:55
  SPEAKER_02: And from early reports, it it's looking looking lush.
• 1:59
  SPEAKER_03: Yeah, yep, that's generally uh, you know, I'm from the insurance side, uh, you know, we work with a little bit as well.
• 2:05
  SPEAKER_03: Of course, it's silage season, silage appraisals are coming in uh or kind of trickling in.
• 2:10
  SPEAKER_03: We're probably about 50% done with silage in in our area, eastern South Dakota, southwest Minnesota.
• 2:16
  SPEAKER_03: Uh some guys getting started on early just again, this crop is uh hitting black layer and maturing a little faster than maybe we thought.
• 2:24
  SPEAKER_03: But yields are generally good, right?
• 2:26
  SPEAKER_03: So uh from a silage appraisal standpoint, of course, those numbers are gonna be all over the board because you got customers with APHs and and yield uh uh goals of all over the board.
• 2:36
  SPEAKER_03: But generally, what I've seen so far is you know, if you look at a guy's APH, the appraisals are coming in five to fifteen bushels above APH as a general rule.
• 2:47
  SPEAKER_03: Um you know, on some of those silage appraisals.
• 2:50
  SPEAKER_03: So does that hold through harvest?
• 2:52
  SPEAKER_03: You know, who knows?
• 2:53
  SPEAKER_03: Uh some of the reports you're reading on guys combining, maybe a little disappointed in yields, but of course, uh, if you're gonna go combine a field in September, it's probably dead and something else went wrong in those fields, right?
• 3:06
  SPEAKER_03: So I it'll it'll be interesting now as we get a few more appraisals and get this thing going um where the yields actually come in and and very early results on soybeans see pretty positive.
• 3:17
  SPEAKER_03: But I agree, Jordan.
• 3:18
  SPEAKER_03: I think by end of next week uh we're gonna have a lot more uh reports uh going on there.
• 3:23
  SPEAKER_03: Jaden, you you were on the crop tour, and I know we did our crop tour quite a while ago.
• 3:28
  SPEAKER_03: Um, but you know, just kind of what do you uh as you're talking to guys and and you're reading social media, you're doing your research, um, what do you think the overall crop conditions are uh look like across the country as from what you've seen and what you're talking to guys?
• 3:44
  SPEAKER_00: Yeah, Lucas, a lot of talk this week with guys, um especially out we out east in um central Iowa.
• 3:51
  SPEAKER_00: It seems like the consensus there is a lot of people are complaining about their finish with their corn crop and a lot of uh southern rust disease pressure out there, and it's just finishing their crop a lot a lot faster than they previously expected.
• 4:07
  SPEAKER_03: And of course, that's always a a little concern, right?
• 4:09
  SPEAKER_03: If this crop dies early, it doesn't probably reach full yield potential.
• 4:13
  SPEAKER_03: Um, and it'll be interesting to see what those diseases and things uh rear their ugly head uh come harvest.
• 4:19
  SPEAKER_03: But enough talk about uh what's going on out in the field.
• 4:21
  SPEAKER_03: How about what's going on in the markets today?
• 4:24
  SPEAKER_03: We had uh a WASDI report come out today um and kind of had some some interesting numbers in it.
• 4:30
  SPEAKER_03: I we'll talk about the market in a little bit, but uh Jordan, uh what are some of the things that stood out specifically on the corn side uh in the WASDI report?
• 4:39
  SPEAKER_02: Yeah, so like you said, kind of an exciting day.
• 4:41
  SPEAKER_02: You know, we had that September report.
• 4:43
  SPEAKER_02: Usually this is you know a report that doesn't uh show too much.
• 4:48
  SPEAKER_02: Um, you know, kind of looking at it in the past, um, you know, acres were are tend to be known, but uh, you know, this week uh, you know, this report, they kind of threw a little bit of a curveball at us and uh ended up uh raising acres uh 1.4 million, which is off by about uh 4% is uh you know what it kind of comes down to, which is biggest miss uh we've seen on acres um since 1980.
• 5:16
  SPEAKER_02: So uh big number there, 98.7, just short of 99 million acres.
• 5:22
  SPEAKER_02: On yield, they ended up uh taking that yield down two bushels, which uh par for the course, you know, that's kind of what the market was was thinking, maybe a little bit lower is is kind of what the marketplace had figured for a trade estimate, but you know, right on par, and you know, as we kind of work forward, I think we'll continue to pull that back a little bit, you know, just like Jaden said, you know, the to to finish this thing in the end in the east has been dry, you know, driest on record, um, and then a little bit of disease pressure kind of moving up from the south.
• 5:50
  SPEAKER_02: So, you know, when you kind of look at the state-by-state breakdown on on yield, you know, not a lot of change is what they kind of did in the east, um, kept Indiana the same at 205, Ohio, you know, up at 194 there.
• 6:03
  SPEAKER_02: So, you know, they got some big yields that probably need to be trimmed there a little bit in uh in the eastern corn belt, but you know, as we kind of um come to a close here before harvest, you know, you shouldn't really expect much more than you know a bushel to three bushel movement on yield now is where you're you're kind of uh pegged at.
• 6:21
  SPEAKER_02: So we got a we got a big crop out there, a record crop is is what it kind of looks like.
• 6:26
  SPEAKER_02: Now you cut kind of flip over to the supply side and um you know kind of threw a little bit of a curve at us there too, and ended up uh raising um usage up a hundred million bushels and and did that all in exports.
• 6:38
  SPEAKER_02: So last year we ended exports at uh 2.83 billion bushels.
• 6:44
  SPEAKER_02: Um coming into that August report, they actually had it jacked up to 2.875, and now leaving this report in September, we're at 2975.
• 6:51
  SPEAKER_02: So um, you know, we've gotten off to a great start on sales, um, almost 900 million bushels on the books already for sales, but they're gonna need to keep their foot on the gas and and keep uh you know exports uh rolling here to kind of meet these numbers.
• 7:05
  SPEAKER_02: So, you know, acres are set now, yield maybe needs to be trimmed just slightly, a couple more bushels or so, maybe.
• 7:13
  SPEAKER_02: Um, but we need to to uh you know hold on to the rest of this demand.
• 7:17
  SPEAKER_02: So, you know, coming coming out of the support, probably a little bit more bearish um than bullish is is the way it kind of feels.
• 7:25
  SPEAKER_02: Now, with that, um, you know, we did see yield or sorry, we did see uh price uh move a little bit higher today, up up 10 cents.
• 7:34
  SPEAKER_02: So, you know, we have a really, really nice looking uh chart there, Lucas.
• 7:37
  SPEAKER_03: Yeah, so so before we move on to to kind of some of the charts and and the price action, uh, you know, that acre number was the big surprise, right?
• 7:45
  SPEAKER_03: Like it wasn't a surprise that they took yield down.
• 7:47
  SPEAKER_03: Maybe it was a surprise they only took it down a couple bushels, but uh generally the USDA isn't gonna drop it that much in a September report when they just jumped it up a lot come August.
• 7:57
  SPEAKER_03: Um But you know, planting ninety-nine million acres of corn, of course, you know, they they're looking at the FSA numbers, the the crop of the RA, the crop insurance numbers, so you have to tend to believe that those acres are correct.
• 8:12
  SPEAKER_03: Um and it was just you know super surprising, right?
• 8:16
  SPEAKER_03: Like what's the what the most acres we've ever planted before in the US was what?
• 8:21
  SPEAKER_02: Just over 97.
• 8:22
  SPEAKER_02: So I mean you're almost a couple a couple million acres more, isn't it?
• 8:30
  SPEAKER_03: To your point, I I know you just mentioned how uh it's the biggest change since 1980.
• 8:37
  SPEAKER_03: Like it it and in this world of technology and reporting and everything's going up and it took us this long to figure that out.
• 8:44
  SPEAKER_03: Seems a little curious, right?
• 8:46
  SPEAKER_03: Uh it nothing you can do about it.
• 8:48
  SPEAKER_03: It is what it is, and it's probably right, because we all buy or we most of us buy crop insurance and report acres to FSA, so they they gotta have the number right.
• 8:56
  SPEAKER_03: So that's that's what's just interesting.
• 8:58
  SPEAKER_03: It seems like we've built in a lot of of uh you know extra acres, uh extra um demand, especially on the exports and and uh things going forward, so you know a yield drop probably seems a little less uh maybe likely, right?
• 9:14
  SPEAKER_03: Like I I think we all think this crop's getting a little smaller, but probably not gonna affect uh um the bottom line much anymore.
• 9:22
  SPEAKER_03: There they can move some other numbers around to make that happen.
• 9:25
  SPEAKER_03: I I was a little surprised on the soybean side.
• 9:28
  SPEAKER_03: You know, they added some acres there as well.
• 9:31
  SPEAKER_03: Um but I I thought they would take the the yield down a little bit myself.
• 9:36
  SPEAKER_03: Uh maybe maybe I was expecting a little too much because August has been pretty dry, especially out east.
• 9:44
  SPEAKER_03: And when we talk soybeans, of course, we talk August rains make the beans, and and we really haven't had that.
• 9:50
  SPEAKER_03: So that'll be something interesting to watch, I I think, in my uh opinion.
• 9:54
  SPEAKER_03: I mean, anything on the beans you want to add or through.
• 9:57
  SPEAKER_02: No, I think you're spot on there.
• 9:58
  SPEAKER_02: I mean, uh we ended up raising acres after you know that's what kind of stuck out to me is you know, we were raising acres on corn up to ninety-nine million, and then we end up raising soybeans with it.
• 10:09
  SPEAKER_02: Um so a lot of planted acres, right?
• 10:11
  SPEAKER_02: 81.1 on uh um soybeans up uh um 200,000 there.
• 10:16
  SPEAKER_02: And then to go along with that, like you said, uh yield ended up coming in just slightly less than what they had in August at uh 53.5 down from 53.6.
• 10:25
  SPEAKER_02: So, you know, production numbers um, you know, actually uh going up about uh uh 10 million bushels.
• 10:33
  SPEAKER_02: So little little surprising there.
• 10:35
  SPEAKER_02: We did raise crush, so we took crush from uh 254 up to 255, um, but kept uh ending stocks uh you know right around 300 million.
• 10:44
  SPEAKER_02: So um, you know, overall not much of a change there, just kind of surprising there wasn't much of a change, right?
• 10:50
  SPEAKER_02: Yep.
• 10:50
  SPEAKER_02: And yeah, August weather makes beans and um driest on record out out east.
• 10:56
  SPEAKER_03: Okay, and Jordan, you hit on it.
• 10:57
  SPEAKER_03: I mean, if if you were gonna say uh, okay, we in 2025, the United States is gonna plant 99 million acres of corn, and it's gonna yield 186 bushels an acre.
• 11:10
  SPEAKER_03: Um do you think corn price would be where it's at?
• 11:14
  SPEAKER_03: Then alone on the day the report comes out, it's up 10, right?
• 11:17
  SPEAKER_03: So what what was kind of maybe some of the background on the price action today?
• 11:21
  SPEAKER_02: Yeah, so I think you know that's exactly right.
• 11:25
  SPEAKER_02: You know, you you you tell us a couple months ago that we're gonna be sitting here with 99 million acres of corn and 186, 187 yield, and you know, you think uh the the bottom fell out of the corn market, right?
• 11:36
  SPEAKER_02: But we've had demand kind of brewing, you know, for a couple, you know, six months here and and really building up, and that's what's kind of held us in here.
• 11:44
  SPEAKER_02: Um but you know, today being up 10, I mean, we push this market much more, and you know, we're gonna cut demand back a little bit.
• 11:52
  SPEAKER_02: So um, you know, that's what we're kind of watching here.
• 11:55
  SPEAKER_02: Um, you know, Jaden, you said it multiple times that you know we got a gap in the chart here at uh 432.
• 12:01
  SPEAKER_02: Um it sure seems like the market has kind of broke out of the this trend line and kind of moving higher, you know, just on a chart pattern is what it looks like to kind of go back and fill that fill that gap there.
• 12:11
  SPEAKER_02: Um I believe 50% retracement from our February high is you know kind of right in that same area.
• 12:17
  SPEAKER_02: So to me, this is um you know, the market's kind of feeling itself out, says we s thinks we need to trim a few bushels off of that, and the chart looks good.
• 12:26
  SPEAKER_02: So, you know, we're gonna put tack a few uh tack a few pennies on this thing, but you know, kind of kind of watch yourself because you know as the price uh moves higher, usually that uh tends to cut a little bit of demand in.
• 12:37
  SPEAKER_02: You know, we need all the demand we can get right now um to kind of chew through this crop.
• 12:42
  SPEAKER_02: So yeah.
• 12:43
  SPEAKER_03: We're gonna have a lot of bushels hitting uh hitting the elevators and hitting town here over the next few months, and uh, we're gonna need all the demand we can get uh from all sources to make sure we chew through it.
• 12:55
  SPEAKER_02: Yeah, so you know what I like to point out here, kind of going home, is you know, start looking at this market, you know, if you're a grain producer and start looking out into the deferred out into 2026.
• 13:05
  SPEAKER_02: I mean, March today closed at 447, May at uh 457.
• 13:10
  SPEAKER_02: We push this market up, you know, um five, ten more cents, and um, you know, you start talking about May 460, 465.
• 13:18
  SPEAKER_02: That's some really nice carry in the market for you know, a lot of corn going in the bin this fall.
• 13:23
  SPEAKER_02: You know, start thinking about making some sales at these levels because you know, we hold on to this corn a little bit and get a little bit of basis appreciation and um you know with these solid yields, um, we're back to the positive side.
• 13:34
  SPEAKER_03: Yep, I think that's great advice.
• 13:35
  SPEAKER_03: And of course, here at Professional Egg Marketing, we got the tools to help you out on that, whether it's with traditional products on the CME or uh our uh Pro Egg Hedging uh products uh available to you as well for some HTAs for you to take advantage of.
• 13:49
  SPEAKER_03: So uh with that, anything to add, Jordan?
• 13:53
  SPEAKER_03: No, I think uh I think you got it there, Lucas.
• 13:56
  SPEAKER_03: Alright, well have a good weekend and uh a safe beginning to your harvest.
• 13:59
  SPEAKER_01: Please reach out to us at professional eggmarketing.com.
• 14:03
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 14:08
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 14:14
  SPEAKER_01: See you next time.