Latest / AG Bull / Trading Turbulence: Navigating Grain, Cattle, and Tariff Tensions

Transcript

Trading Turbulence: Navigating Grain, Cattle, and Tariff Tensions · AG Bull

• 0:20
  Speaker 1: happy friday everyone.
• 0:21
  Speaker 1: Tom grisafi, here with the egg bowl podcast.
• 0:23
  Speaker 1: We're doing egg bowl trading.
• 0:25
  Speaker 1: We're talking markets.
• 0:25
  Speaker 1: We're talking politics.
• 0:26
  Speaker 1: We got the only the one and only mr don wick.
• 0:29
  Speaker 1: I am sitting in my studio in beautiful Mayville, North Dakota.
• 0:34
  Speaker 1: Here we got a little map of that.
• 0:35
  Speaker 1: Bing, bam, boom, Mayville, North Dakota.
• 0:37
  Speaker 1: Mr Don Wick is in Grand Forks.
• 0:39
  Speaker 1: Let's not waste any time.
• 0:41
  Speaker 1: Mr Wick, good looking, handsome and smart, there he is.
• 0:45
  Speaker 2: Hey what did we learn?
• 0:45
  Speaker 2: You're just down the road from me today.
• 0:47
  Speaker 2: It's good to have you in North.
• 0:48
  Speaker 1: Dakota, thank you.
• 0:49
  Speaker 1: What we learned today was do not wear a black shirt if you have black backdrop.
• 0:53
  Speaker 1: All you see is my head, but that's what we're working with.
• 0:56
  Speaker 1: It's a tough crowd, too funny.
• 0:59
  Speaker 1: Speaking of tough crowds, I heard that some private forecasters, some well-respected firms, raised their corn yield and there's some anger out on the Twittersphere.
• 1:10
  Speaker 1: What are you hearing, my friend?
• 1:18
  Speaker 2: It certainly got a lot of people buzzing ahead of those reports and of course the numbers came out this morning from USDA and right there in line with trade expectations.
• 1:22
  Speaker 2: So there wasn't a lot of market reaction, obviously, but still a lot of talk after the fact.
• 1:29
  Speaker 1: Yeah, big, big, nothing burger on those numbers.
• 1:31
  Speaker 1: Friday I am in Mayville, north Dakota.
• 1:34
  Speaker 1: We have a lot of smoke here.
• 1:36
  Speaker 1: I guess the Canadian wildfires are back.
• 1:38
  Speaker 1: I want to thank our Canadian friends, but it looked like it was going to rain, but I thought it was a smoke.
• 1:43
  Speaker 1: Now it's pouring rain here.
• 1:45
  Speaker 1: The crops here look beautiful.
• 1:47
  Speaker 1: Send me your hate mail, drop me a comment, I don't care.
• 1:50
  Speaker 1: In Trail County, north Dakotaota, outside of the debris still in your field from the derecho when mayville, north dakota actually made that national news, things look good here, don.
• 2:00
  Speaker 1: How are they up your way?
• 2:02
  Speaker 2: beautiful again.
• 2:03
  Speaker 2: I'm in the same neighborhood.
• 2:04
  Speaker 2: I was in iowa this week for uh corteva had a media day event.
• 2:08
  Speaker 2: Uh, just got back early this morning actually and uh, beautiful crops.
• 2:14
  Speaker 2: As I went along the way Saw some corn tasseling as I got into South Dakota and on into Iowa.
• 2:19
  Speaker 2: But there was a lot of areas that had standing water and I drove through a lot of rain yesterday afternoon on my way back from Iowa and up through Sioux City and Sioux Falls.
• 2:28
  Speaker 2: There were some pretty heavy showers.
• 2:29
  Speaker 2: So those areas that had standing water in southeast South Dakota, I'm guessing they're seeing a little more ponding here by this afternoon.
• 2:37
  Speaker 1: Yeah, and I noticed that too.
• 2:39
  Speaker 1: I drove from Indiana, northern Indiana, northern Illinois, wisconsin, minnesota, and if I did see anything it was a little bit of standing water.
• 2:47
  Speaker 1: Everything was luscious green, but that green came from moisture and sometimes we had a little too much yeah and you see, some of those humid conditions that we have here in a month of july.
• 2:59
  Speaker 2: It feels a little cool here in grand forks this morning or this afternoon, but uh, some of those wet conditions and humid conditions that's prime for for disease issues in some of these corn soybean wheat crops.
• 3:09
  Speaker 1: So that's something our growers have to be alert to as well yeah and uh, there's uh, that's why folks pay for good uh, agronomy and uh, stay up on the latest technology, correct, exactly, we got some of the best right here.
• 3:23
  Speaker 1: Yeah, uh, wild week in markets, not so much on the grain side but on the cattle side.
• 3:28
  Speaker 1: Huge moves, um, I don't even know where to start.
• 3:31
  Speaker 1: I say the word tariff and we can go for a half hour, but this is usually a 10 to 12 minute show.
• 3:35
  Speaker 1: Speaking of 10 to 12 minute show, today is 7 11.
• 3:38
  Speaker 1: If you're near 7 11, free slurpee day, don.
• 3:41
  Speaker 1: That's the best news I have of the day.
• 3:42
  Speaker 1: Very good, I did not know that.
• 3:44
  Speaker 2: So now you know, yeah, this cattle thing.
• 3:47
  Speaker 2: Of course all the news.
• 3:48
  Speaker 2: Monday was the first.
• 3:50
  Speaker 2: You know they have the phased inin opening of the border, the first port in Arizona.
• 3:57
  Speaker 2: I believe that they had opened I think the first day like some 900 had moved through that marketplace and by midweek that border shut down again because they saw war cases in Mexico that were, I believe, some 300 miles south of the US border.
• 4:17
  Speaker 1: So it was not open very long.
• 4:19
  Speaker 1: Yeah, that was.
• 4:21
  Speaker 1: You know.
• 4:21
  Speaker 1: We know we can't just make screwworm go away, so we're going to open everything up and then close it two, three days later.
• 4:24
  Speaker 1: That wasn't a good look, was it?
• 4:26
  Speaker 2: Not really.
• 4:27
  Speaker 2: There's some pretty stringent protocols for any cattle that come through, both on the Mexican side and the US side.
• 4:33
  Speaker 2: So even with a phased-in rollout like they were planning, it was going to take some time before we'd ever see some significant numbers coming north of the border.
• 4:44
  Speaker 2: So it had to be pretty frustrating for the administration folks to have this new case, but they were proactive and shut the border down right away again.
• 4:53
  Speaker 1: Yeah, speaking of frustrating, we got some breaking news.
• 4:55
  Speaker 1: Now, the breaking news wasn't today, but we got that announcement of that border closing.
• 4:59
  Speaker 1: And then we had the old bring it onto the show 50% tariffs for Brazil.
• 5:03
  Speaker 1: What do you know about that, mr Wick?
• 5:05
  Speaker 2: Well, it's what's making the headlines, I think, is the former president from Brazil in some legal trouble and Trump wants to show some support for the former Brazilian president.
• 5:21
  Speaker 2: So throwing out those 50 percent tariffs as a way to do that, these tariffs?
• 5:28
  Speaker 2: Certainly there's a lot of ways of getting it done.
• 5:30
  Speaker 2: Certainly there's a lot of ways of getting it done, but in this particular case it's a little tit for tat because of one.
• 5:37
  Speaker 2: What's happening with the current president versus the former president?
• 5:43
  Speaker 2: It's a kind of unique situation in Brazil.
• 5:46
  Speaker 1: Yeah, so much news, so many things to talk about.
• 5:48
  Speaker 1: 50% tariff on copper.
• 5:50
  Speaker 1: Copper had its largest move in history.
• 5:53
  Speaker 1: I lost a lot of money on that.
• 5:54
  Speaker 1: Personally, I'm not complaining.
• 5:56
  Speaker 1: I'm a big boy.
• 5:57
  Speaker 1: There's times I make good money on things.
• 5:58
  Speaker 1: I don't come out and say it, but I'll tell you.
• 6:00
  Speaker 1: On this one, Copper moved up 13% in 10 minutes.
• 6:03
  Speaker 1: Moved up 13%.
• 6:11
  Speaker 1: I can't even figure out what that would be.
• 6:12
  Speaker 1: I have to take off my shoes and be get a calculator.
• 6:13
  Speaker 1: But a $4 corn times 10 would be 40 cents.
• 6:16
  Speaker 1: He had some more.
• 6:17
  Speaker 1: We'd be looking at a 50, 60 cent moving corn and that's what copper did in five minutes.
• 6:23
  Speaker 1: Wow.
• 6:25
  Speaker 2: And, of course, we were supposed to have the tariff situation by what what?
• 6:32
  Speaker 2: Thursday.
• 6:33
  Speaker 2: I think everything was going to take place and they backed it up again now that they'll be implemented as of August 1.
• 6:39
  Speaker 2: So there's India, south Korea, taiwan.
• 6:43
  Speaker 2: There's a lot of countries that are meeting with the United States as we speak trying to get something wrapped up and get a deal in place before we get that August 1st deadline.
• 6:53
  Speaker 1: Yeah, upon recording this, I had a pop-up come on, a news thing, and it did say Indiana, not Indiana, india wanting to come and talk about buying grains.
• 7:02
  Speaker 1: It seems like a logical thing.
• 7:03
  Speaker 1: Hey, we're a foreign country, we have people, let's go appease America.
• 7:07
  Speaker 1: Let's go buy some grain Easy enough.
• 7:09
  Speaker 1: Ball, let's go appease america, let's go buy some grain easy enough.
• 7:10
  Speaker 1: Um, they're probably not going to run over here and buy cattle.
• 7:12
  Speaker 1: I'll tell you, we're using all that we can.
• 7:14
  Speaker 1: I mean tariffs on more tariffs.
• 7:16
  Speaker 1: Last night in canada, I'm losing track.
• 7:18
  Speaker 1: I feel like I'm playing a bad video game and I'm not winning here.
• 7:21
  Speaker 2: Don well, it's, uh, quite a list and uh, there's different numbers for every country.
• 7:26
  Speaker 2: So it is.
• 7:27
  Speaker 2: You really do need quite the scorecard to keep ahead of what's going on here, and it seems like it changes every day too.
• 7:33
  Speaker 1: Speaking of fast moving and pace, let's talk about the big, beautiful bill.
• 7:36
  Speaker 1: I hear there's some good yummies in there for farmers.
• 7:39
  Speaker 2: There's a lot of things.
• 7:40
  Speaker 2: First of all, the tax benefits.
• 7:42
  Speaker 2: We continue the 2017 tax cuts that were put in place.
• 7:47
  Speaker 2: A lot of those are going to stay.
• 7:48
  Speaker 2: They made some other enhancements that go along with the tax program and many of the provisions you'd see in a farm bill reference prices, the adjustments with ARC and PLC they were included in the so-called big beautiful bill.
• 8:02
  Speaker 2: Now Congress is looking at some of the things that did not make it, some things that didn't have a dollar associated with it.
• 8:08
  Speaker 2: So maybe he changes to that Prop 12 provision.
• 8:12
  Speaker 2: In California or Iowa, senator Grassley wants to go after farm payment limits.
• 8:20
  Speaker 2: Those kind of things would come up in another piece of legislation, maybe what we'd call our traditional farm bill.
• 8:26
  Speaker 2: The DC folks are terming it a skinny farm bill and they would hope to have it done by the end of September when all the other Farm Bill provisions expire, or else they'd have to extend those provisions another year, like they've done the last couple of years.
• 8:42
  Speaker 1: So we talked about grains.
• 8:43
  Speaker 1: Grains are trending down, cattle extreme volatility.
• 8:45
  Speaker 1: We had that bullish news of the screwworm and more bullish news on top of that of the tariffs on Brazil.
• 8:52
  Speaker 1: We import a ton of cuts from Brazil.
• 8:55
  Speaker 1: I did check out the hamburger stocks yesterday because I heard we import so much ground beef from Brazil in different ways.
• 9:01
  Speaker 1: And McDonald's was up, wendy's was up.
• 9:03
  Speaker 1: They don't seem to be worried about it.
• 9:05
  Speaker 1: I don't know how they're dealing with that.
• 9:07
  Speaker 1: That is by far one of their greatest input costs.
• 9:10
  Speaker 1: I did see something on Twitter.
• 9:11
  Speaker 1: It's totally a little different from what you and I normally talk about.
• 9:14
  Speaker 1: It was a friend who sells crop insurance and he said hey, just because I sell insurance doesn't mean I get a discount on my insurance.
• 9:21
  Speaker 1: This is how much my insurance went up on my house versus where it was a year ago, versus where it was a few years ago.
• 9:27
  Speaker 1: Nobody's getting a break on any of these insurances and I really feel between I guess maybe this is just a statement, not a question but between elevated, higher interest rates, not only in the ag community but out in America, elevated insurances, it's a pretty big tax on all of us, don Well think of all the disasters we've had that's impacted this insurance industry, whether it's fires in California or floods in Texas, or hurricanes going on in the East Coast.
• 9:53
  Speaker 2: All that adds up and it's got to hit that insurance industry as a whole and it all trickles down to our bill at the end of the month.
• 10:02
  Speaker 1: Yeah, it's tough Now.
• 10:03
  Speaker 1: Someone said we don't quite have a new farm bill, but this big beautiful bill did include a lot of things for farmers.
• 10:08
  Speaker 1: I mean, are we ever going to get a new farm bill?
• 10:10
  Speaker 1: But this big beautiful bill did include a lot of things for farmers.
• 10:11
  Speaker 1: I mean, are we ever going to get a new farm bill?
• 10:12
  Speaker 2: Like I said, they're working on the skinny farm bill.
• 10:16
  Speaker 2: It might be a tough road to hoe to get that done because usually you have that dynamic of the nutrition programs getting the support, say, from the more Democratic members of Congress.
• 10:31
  Speaker 2: That was done away with because of so many cuts that came through in that one big, beautiful bill.
• 10:37
  Speaker 2: It may be hard to get the Democrats at the table to work on a more traditional farm bill, the issues that are remaining yet in this farm bill that they have to do before the end of the year, end of September.
• 10:52
  Speaker 1: Yeah, absolutely Okay.
• 10:53
  Speaker 1: Before we wrap it up, I just want to advise folks that we are a lot closer to growing a big crop than ruining a crop.
• 10:59
  Speaker 1: We are now officially in the middle of July.
• 11:02
  Speaker 1: August days are going to start.
• 11:04
  Speaker 1: You're going to start hearing about silage being cut in various parts of the country.
• 11:07
  Speaker 1: What are we going to do with all these bushels?
• 11:09
  Speaker 1: We have a storage problem in North Dakota.
• 11:11
  Speaker 1: Have you heard anything more about the storage?
• 11:13
  Speaker 2: Just that the governor put together a pretty big program for some incentives for Helping farmers get through the whole process.
• 11:20
  Speaker 2: Arthur Companies in North Dakota also announced they've got some rather major projects hopefully to help cushion that storage situation for on-farm storage this fall as well.
• 11:32
  Speaker 1: Yeah, arthur, a big buyer of grain here in the mid-southern Red River Valley, a big player.
• 11:37
  Speaker 1: They have the trains and everything else, so a lot of clients sell into them and it's a partnership, don, trains and everything else, so a lot of clients sell into them and it's a partnership, don.
• 11:45
  Speaker 1: You know, when all of a sudden one of your partners drops out, it's a problem, but it looks like they're really doing things to help accommodate correct?
• 11:49
  Speaker 1: Yeah, no doubt about it.
• 11:50
  Speaker 1: Great people, very good, let's talk about you.
• 11:53
  Speaker 1: Enough about me.
• 11:54
  Speaker 1: My friend, how do people get your newsletter on Monday, your Red River Farm Network newsletter?
• 11:59
  Speaker 2: We call it FarmNet News.
• 12:00
  Speaker 2: It comes out every Monday.
• 12:01
  Speaker 2: It's a snapshot of what's going on in the world of agriculture all our farm news.
• 12:11
  Speaker 2: You go to our website, rrfncom, or you can drop me an email.
• 12:12
  Speaker 2: You can find that email address online as well on our website, so I'd sure love to have you subscribe.
• 12:15
  Speaker 2: It's a great publication.
• 12:18
  Speaker 1: Absolutely, I get it in my inbox and I believe this video will be in there if I get it boxed up and sent back to you just in time.
• 12:23
  Speaker 1: But with that folks, if you need to get ahold of me, of course there's my number one.
• 12:27
  Speaker 1: Eight five, five, seven, three seven.
• 12:28
  Speaker 1: Farm commodity broker I, uh Agble trading is a DBA of uh Nesvik trading group doing business as folks there, and you know, don, earlier in the year a lot of folks said they're not going to sell grain below their cost reduction.
• 12:44
  Speaker 1: I guarantee you and we're never supposed to guarantee because we're futures and options brokers I guarantee you people are going to sell a lot of grain below the cost production.
• 12:53
  Speaker 1: Final thoughts on that statement, sir.
• 12:56
  Speaker 2: I think the banker might get involved in that as well.
• 12:58
  Speaker 2: They're going to have to sell something to keep things rolling here.
• 13:04
  Speaker 1: I'm thinking, yes, sounds like a plan.
• 13:04
  Speaker 1: Well, the good news is it's raining in Mayville, North Dakota.
• 13:06
  Speaker 1: I hope it's raining where you are.
• 13:07
  Speaker 1: Let's get some heat units.
• 13:08
  Speaker 1: Let's grow some big bushels.
• 13:09
  Speaker 1: With those big bushels maybe we'll create demand.
• 13:12
  Speaker 1: Maybe we'll have a demand bull market in the next few years.
• 13:15
  Speaker 1: Thank you, my friend.
• 13:15
  Speaker 1: Thank you, Tommy.
• 13:16
  Speaker 1: Take care Music.