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Transcript

WASDE · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_02: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_02: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_02: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_02: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_02: This is your host, Mike Minor.
• 0:22
  SPEAKER_02: Let's get started.
• 0:24
  SPEAKER_02: Today is March 8th.
• 0:25
  SPEAKER_02: I've got Luke with us here today.
• 0:26
  SPEAKER_02: How's it going, Luke?
• 0:27
  SPEAKER_02: Very good.
• 0:27
  SPEAKER_02: Good afternoon, Mike.
• 0:29
  SPEAKER_02: Good afternoon.
• 0:30
  SPEAKER_02: It is Friday.
• 0:30
  SPEAKER_02: We had a fun day today.
• 0:32
  SPEAKER_02: We had quite a few reports come out.
• 0:34
  SPEAKER_02: Where do you want to get started, Luke?
• 0:36
  SPEAKER_00: Well, let's uh let's talk about that WASDI report.
• 0:39
  SPEAKER_00: How about that, bud?
• 0:40
  SPEAKER_02: Awesome.
• 0:40
  SPEAKER_02: Well, the WASDIA report, to put it simply, if I had to choose one word to describe it, it was probably uneventful, Luke.
• 0:47
  SPEAKER_02: But the market reaction was really anything but uh uneventful here.
• 0:51
  SPEAKER_02: We had a a really nice reaction through a lot of commodities, uh, whether it was wheat finding some legs under it today, or soybeans kind of gyrating back and forth throughout the day, ending on a good note.
• 1:03
  SPEAKER_02: And then we had the uh corn market as well, somehow found a way to try to end the day positive.
• 1:08
  SPEAKER_02: So uh you had a lot of uh uh different balls up in the air.
• 1:12
  SPEAKER_02: It was a rough start to the beginning of the day, Luke.
• 1:14
  SPEAKER_02: There's a lot of red across main uh mainly these grain commodities, and then by the end of the day, even without any uh fantastic bullish news, any positive news, it still ended up uh a pretty green day across the board here.
• 1:28
  SPEAKER_02: So let's talk about kind of the the easy ones to start with.
• 1:32
  SPEAKER_02: The U.S.
• 1:32
  SPEAKER_02: corn and soybean balance sheets unchanged completely across the board.
• 1:37
  SPEAKER_02: There was not a single change on corn or soybean balance sheets, month over month, very boring, um, which is typical from the March report, uh I guess.
• 1:46
  SPEAKER_02: There's no real changes.
• 1:47
  SPEAKER_02: The the US balance sheets, I would say the most exciting topic was actually the wheat market.
• 1:53
  SPEAKER_02: Really, the only change there even being just a decrease of 15 million bushels on exports.
• 2:00
  SPEAKER_02: Uh to break that down a little bit more, um uh, you know, you look at SRW winter wheat exports dropped 10 million, and then the HRW, they fell about five.
• 2:10
  SPEAKER_02: So a split between those two.
• 2:12
  SPEAKER_02: Uh otherwise, they did drop the average prices a little bit for a couple of commodities, but nonetheless, uh global stocks, they're forecasted to drop uh just a smidge on corn and wheat uh compared to expectations.
• 2:26
  SPEAKER_02: Soybeans right on the mark for global ending stocks.
• 2:30
  SPEAKER_02: So very very boring report.
• 2:32
  SPEAKER_02: Now, if we dive into the uh South American numbers here a little bit, uh, you know, the Brazil soybean number, kind of the number we've all been focused on, they only dropped that 1 million metric tons in production, Luke, so not enough to really excite the markets at all.
• 2:47
  SPEAKER_02: Uh 155 million metric tons just isn't enough to to really get the market too excited.
• 2:53
  SPEAKER_02: Anything below 150 would have been probably exciting, uh, but we didn't even uh get to play in that area at all.
• 2:59
  SPEAKER_02: So uh the markets ended the day on a really positive note.
• 3:04
  SPEAKER_02: They climbed aggressively after uh about the 12 o'clock time frame.
• 3:09
  SPEAKER_02: They kind of set back a little bit right after the report, and then through the day after they got past that report, you just kind of gained steam across corn, wheat, and soybeans here through the day.
• 3:20
  SPEAKER_02: And you know, yesterday was a pretty poor poor day for a lot of these grains.
• 3:26
  SPEAKER_02: Um you saw the f uh a couple of things kind of happen now to just give you a pick back up in uh in some of these prices on the grain side.
• 3:36
  SPEAKER_02: And uh otherwise, Luke, there hasn't been a lot of other trades, I guess.
• 3:39
  SPEAKER_02: Do you got any added input uh on anything here?
• 3:42
  SPEAKER_00: No, I think you covered a lot of good things.
• 3:45
  SPEAKER_00: I uh, you know, also though, I mean, you know, it it was you know, didn't we start the day out with some yesterday and today with some weak cancellations from from China to boot, kind of and fought through that pretty decently too?
• 3:56
  SPEAKER_02: Yeah, we did.
• 3:57
  SPEAKER_02: We've uh they were smaller cancellations, they probably could have been a little bit bigger.
• 4:01
  SPEAKER_02: When I went back through them anyways, they didn't add up to be too many.
• 4:05
  SPEAKER_02: So it was almost like when they heard that we were canceling uh uh when they uh when China was gonna cancel a couple of shipments, it wasn't as bad as it probably could have been.
• 4:14
  SPEAKER_02: So I feel like once we got through that news, then it's like, okay, now we can not worry about it quite as much because it wasn't quite as bad.
• 4:21
  SPEAKER_02: And it makes sense you're seeing that because like SRW uh for the US, it's like$230, and uh Russia's only at$190.
• 4:29
  SPEAKER_02: So they're still way more competitive than us in the export space, and Russia's really been exporting a lot of cheap products.
• 4:37
  SPEAKER_02: They've uh uh tried to use that to gain favor as trade partners, and then also they've had fantastic wheat crops for like 12 straight years, so they've got plenty of uh excess uh to go around anyways.
• 4:48
  SPEAKER_02: So really at this point I think uh now we kind of bounce into the the back half of the month, which is gonna be things like uh prospective plannings and uh and then we start to talk more about this next year's crop rather than kind of what's already been completed.
• 5:05
  SPEAKER_02: And uh we're just not quite there yet.
• 5:08
  SPEAKER_02: The um the new balance sheet won't come out till May, so we've got a little time to really uh talk about this crap before then yet.
• 5:16
  SPEAKER_02: The other thing that happened today was uh we did have some interesting things come out with the job report, Luke.
• 5:22
  SPEAKER_02: And uh I think that's important when we start looking at uh what happened with the US dollar and the little sell-off that we've had there.
• 5:29
  SPEAKER_02: But uh, when I talk about the um uh you know, US employment rate, that jumped to a two-year high uh in today's report.
• 5:39
  SPEAKER_02: Um so it's US jobless rate climbed to a two-year high in February, even as hirings really remained pretty healthy.
• 5:48
  SPEAKER_02: Um non-farm payrolls advanced a little bit higher uh uh than what was expected.
• 5:55
  SPEAKER_02: Um unemployment that put that at like 3.9% right now.
• 6:00
  SPEAKER_02: Uh so that is going up a little bit.
• 6:02
  SPEAKER_02: But the what we're experiencing right now is it gives a com it gives a little room for the Fed to maybe lower interest rates this year.
• 6:13
  SPEAKER_02: And if I break this down a little bit, um we've shown non-farm payroll prints start to cool a little bit this spring.
• 6:22
  SPEAKER_02: And that that we would expect the Fed, the Federal Reserve to balance some of the risks a little bit more evenly weighted now.
• 6:32
  SPEAKER_02: So you're gonna be looking at maybe a rate cut in like May, is kind of how that makes this look after you start to kind of weigh everything out.
• 6:40
  SPEAKER_02: Um the February jobs report that we got today wasn't necessarily recessionary, uh, but it does suggest that the Fed is probably getting closer to their goal of the soft landing that they looked to accomplish.
• 6:53
  SPEAKER_02: Um some of the worries that they've had was you know the hot job market was leading to or contributing to a higher inflation, and we don't have to worry about that quite as much.
• 7:04
  SPEAKER_02: So uh looking forward here, we'll see what they do uh with rate cuts potentially in May.
• 7:09
  SPEAKER_02: Um, but nonetheless, they've uh maybe somehow uh landed a soft landing uh out of all this chaos that we've had over the past uh few months and years, really, Lucas.
• 7:21
  SPEAKER_01: Interesting, Mike.
• 7:22
  SPEAKER_01: Interesting.
• 7:22
  SPEAKER_02: Thank you.
• 7:23
  SPEAKER_02: Well, uh wrap up the podcast today.
• 7:26
  SPEAKER_02: Uh we're gonna do a little quick uh quick one here.
• 7:29
  SPEAKER_02: Uh no other major changes across many of these grains.
• 7:32
  SPEAKER_02: I know we've started to see a little bit of a rally in this grain market.
• 7:35
  SPEAKER_02: Uh May corn, for example, made a low at the end of February at 408, closed the week just under 440.
• 7:42
  SPEAKER_02: So we put on 30 cents in this corn and soybeans market here in about 10 trading sessions or so.
• 7:48
  SPEAKER_02: And you know, this could be that start of that spring rally that we usually talk about uh at this time of the year.
• 7:54
  SPEAKER_02: I'll see.
• 7:55
  SPEAKER_02: We did have a couple significant trading sessions above that 20-day moving average and closes here, Luke, uh, on the corn market.
• 8:02
  SPEAKER_02: So a pretty good chart development here.
• 8:04
  SPEAKER_02: We'll see if that continues, but nonetheless, I think uh it's imp imperative at this time of the year to uh really watch these grain rallies and and try to assess uh your risk tolerance and and what you're looking at.
• 8:17
  SPEAKER_02: So give us a call.
• 8:18
  SPEAKER_02: Uh, we can go through a couple things here heading into this new crop marketing year, and uh, we look forward to chatting with you.
• 8:24
  SPEAKER_02: Thanks for your time.
• 8:25
  SPEAKER_02: And thank you to all our listeners.
• 8:27
  SPEAKER_02: Please reach out to us at professionaleggmarketing.com.
• 8:30
  SPEAKER_02: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 8:36
  SPEAKER_02: Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
• 8:42
  SPEAKER_02: See you next time.