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Grains: Start Of Harvest · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:23
  SPEAKER_00: Today is September 26th.
• 0:25
  SPEAKER_00: I've got Jeff with us here today.
• 0:26
  SPEAKER_00: How's it going, Jeff?
• 0:28
  SPEAKER_00: It's going good, Mike.
• 0:29
  SPEAKER_00: How about yourself?
• 0:30
  SPEAKER_00: Not too bad.
• 0:31
  SPEAKER_00: It's a pretty good start to the week here.
• 0:34
  SPEAKER_00: It's Friday, and now we're gonna go into really our first true harvest weekend, I would say, Jeff.
• 0:40
  SPEAKER_01: Well, and I know it's uh just small talk, but I do think we have to start out by talking about the weather, Mike.
• 0:47
  SPEAKER_01: Yes, for sure.
• 0:48
  SPEAKER_01: We're almost looking perfect going forward over a pretty big portion of the Corn Belt, and we're starting to make some progress, especially here locally.
• 0:57
  SPEAKER_01: Um Further south, pretty getting pretty aggressive, but next week's gonna be a big week on harvest, isn't it?
• 1:03
  SPEAKER_00: Yeah, the next seven days for almost the entire Corn Belt is virtually rain-free.
• 1:07
  SPEAKER_00: I mean, it is picture perfect for harvest progress.
• 1:10
  SPEAKER_00: This weekend, including today, you're looking at anywhere between 80 to 85 degrees on highs, 10 mile an hour wind all weekend, even into the high 80s, early Monday next week here.
• 1:22
  SPEAKER_00: So very hot, very windy, very dry for the next seven days.
• 1:27
  SPEAKER_00: That's gonna speed up things very, very quickly.
• 1:30
  SPEAKER_00: Everyone, I would argue, kind of started locally around Wednesday.
• 1:34
  SPEAKER_00: Give or day a uh give or take a day locally for soybeans.
• 1:38
  SPEAKER_00: They started off 15% moisture, and now end of the day, you know, towards middle a lot of progress, a few hundred acres out for a lot of folks.
• 1:47
  SPEAKER_00: And uh what are you hearing so far, Jeff?
• 1:50
  SPEAKER_01: I think for the most part, um bean yields are coming in, you know, as expected, which those expectations have been pretty high.
• 1:59
  SPEAKER_01: Yep.
• 1:59
  SPEAKER_01: Um so I I think everybody is fairly well pleased with the beans that are coming out.
• 2:05
  SPEAKER_01: Uh what would your be what is your reaction to that comment?
• 2:09
  SPEAKER_00: The uh light ground has been overperforming.
• 2:13
  SPEAKER_00: The light ground, poor ground has been quite good so far for a lot of folks locally.
• 2:18
  SPEAKER_00: Uh let's say my worst field would normally do 50 bushel soybeans, and my best field would normally do 60.
• 2:24
  SPEAKER_00: Um the bad beans so far have been doing like 59 or 60.
• 2:28
  SPEAKER_00: And so far the best fields that folks have that uh it we haven't got into them real great yet, but they're doing just over 60.
• 2:36
  SPEAKER_00: So that spread between the two, between the bad field and the good field, has narrowed up a lot this year.
• 2:40
  SPEAKER_00: And it's mainly because of the poor field doing better this year.
• 2:43
  SPEAKER_00: Absolutely.
• 2:44
  SPEAKER_00: Yeah, I I'm curious to see if we can blow the doors off of some of these later soybeans, but it doesn't look like that's the case at this point.
• 2:52
  SPEAKER_01: How about on the corn side?
• 2:53
  SPEAKER_01: I know we haven't seen as much uh work done there, but we're definitely seeing some harvests being pulled, uh, some fields being pulled out of uh Iowa uh into southern Illinois.
• 3:03
  SPEAKER_00: Yes, and that's been disappointing.
• 3:06
  SPEAKER_00: In one word to give it really, it's been disappointing.
• 3:09
  SPEAKER_00: Nothing locally here, like you said, really, but whether you go central Iowa, Illinois, eastern Iowa, uh, we're seeing a lot of southern rust pressure, which essentially just stopped the crop in the middle of August, essentially.
• 3:22
  SPEAKER_00: Now, a lot of folks, even locally, we have southern rust, you know, and the the question is how early did you get it?
• 3:30
  SPEAKER_00: Because if you got it late enough and it wasn't bad enough and you planted the right hybrid and you sprayed fungicide, it it isn't reacting a ton to it.
• 3:38
  SPEAKER_00: Now, if you didn't plant the right hybrid and you didn't spray fungicide and you got it early enough, you're getting killed on yields, for example.
• 3:46
  SPEAKER_00: So, you know, 30 off APH type levels on some of those fields, from what we're hearing.
• 3:51
  SPEAKER_00: How widespread is this?
• 3:53
  SPEAKER_00: Well, the rust is everywhere in Iowa, parts of Minnesota and South Dakota.
• 3:57
  SPEAKER_00: How much of it did it completely stop growth and really deteriorate yield?
• 4:01
  SPEAKER_00: That's unknown at this point.
• 4:02
  SPEAKER_00: It's going to be very difficult to know how widespread it is until we're probably done with soybeans at this point up in this part of the world and really get into the corn.
• 4:10
  SPEAKER_00: However, at this point, the southern rust has made an impact to national corn yield, in my opinion, Jeff.
• 4:16
  SPEAKER_00: Now, from what I hear, that's probably two bushels to the acre for almost the entire U.S., probably.
• 4:21
  SPEAKER_00: As crazy as that sounds, from what I'm hearing, it's a very valid, valid story, I think.
• 4:27
  SPEAKER_01: Yeah, and this one too, I wonder if there's a little bit of uh the early harvest might be your worst news, Mike.
• 4:34
  SPEAKER_01: It should.
• 4:35
  SPEAKER_01: Uh yeah.
• 4:35
  SPEAKER_01: I mean, you get the combination, like you talked on the beans, you got some of the lighter ground, that's always gonna go first, of course.
• 4:41
  SPEAKER_01: Yep.
• 4:41
  SPEAKER_01: But then this situation, those fields affected the most by disease pressure and the way that shut the plant down, also gonna be the ones you're gonna go after first.
• 4:50
  SPEAKER_01: They dry down fast.
• 4:51
  SPEAKER_01: They dry down fast, and I think people are a little bit worried about uh how well and how long they're gonna stand out there.
• 4:56
  SPEAKER_00: And the other part that you could say from an actual analytical perspective, what's actually hurting it looks like is a lot of test weight.
• 5:04
  SPEAKER_00: I am getting a lot of complaints on corn about just lighter test weight, something we haven't had a problem with the last couple years, I think, that helped make yields bigger than they probably could have or should have been, Jeff.
• 5:14
  SPEAKER_01: Yep.
• 5:15
  SPEAKER_01: I mean, we won't have to guess for long.
• 5:17
  SPEAKER_01: Um I don't think any of this is new news either, as you flip over and think about the corn market, Mike.
• 5:24
  SPEAKER_01: Um, I mean, we talked about this uh with the WASD report last week, of course, and and a couple three weeks ago started talking more and more about the disease issues that we're experiencing through Iowa for sure.
• 5:37
  SPEAKER_01: Um so you know, the the storyline continues to be the same, right?
• 5:42
  SPEAKER_01: We can lose some yield here.
• 5:44
  SPEAKER_01: Um demand has the capability of flexing with that uh decrease in projected uh production.
• 5:52
  SPEAKER_01: I don't think anything's changed as from our thoughts on that kind of week over week.
• 5:57
  SPEAKER_01: You've really got to probably take this yield down into the very low 180s before you talk about a significant story.
• 6:06
  SPEAKER_01: Um that's all that's all been true.
• 6:10
  SPEAKER_01: Um how did what do you think as far as the market itself, Mike, as the week went on here?
• 6:16
  SPEAKER_01: I know it's been a pretty calm week, but how are we setting up from a technical standpoint, from a trend standpoint in your mind?
• 6:23
  SPEAKER_00: The soybeans we took a lot off this week.
• 6:26
  SPEAKER_00: The bottom end of the range here, we could potentially go down another 20 cents, I'd call it, to that trend line where it's real strong.
• 6:33
  SPEAKER_00: We're seeing some nice support right where we're at, but I'd say another 20 cents of risk.
• 6:38
  SPEAKER_00: The corn market, we're right at it.
• 6:40
  SPEAKER_00: I mean, anywhere between 420 D's to 415 Ds, there's uh you you name it, there's the trend line, there's the moving averages.
• 6:48
  SPEAKER_00: Uh there is a lot of stuff converging right there where we speak.
• 6:52
  SPEAKER_00: Um, at this point, it should be pretty supported.
• 6:54
  SPEAKER_00: Well, you're shrinking the corn crop.
• 6:56
  SPEAKER_00: The spreads have been narrowing quite aggressively, if that's trying to tell us anything as well.
• 7:00
  SPEAKER_00: Um rumors about the crop getting smaller.
• 7:03
  SPEAKER_00: Uh demand has been great.
• 7:05
  SPEAKER_00: We had, I think, over five flash shipments sales or flash sales here over the past week on corn.
• 7:12
  SPEAKER_00: So I uh from those perspectives, I think there's decent support here on the corn, and we're holding a really nice uptrend, Jeff.
• 7:18
  SPEAKER_00: And so far, any news we're getting out of corn is quite probably friendly to the market as of late.
• 7:25
  SPEAKER_00: It's just more than normal, I'd argue there's more uncertainty about this crop than there normally is.
• 7:31
  SPEAKER_00: Normally we have a very good idea of we have a huge crop, it's a big yield, you know, it's only going up, or blah, blah, blah.
• 7:36
  SPEAKER_00: Uh, we know a lot about it by this point.
• 7:38
  SPEAKER_00: Right now, we don't know what's going to happen with trade in China, and we don't know how big or big, not big this crop is in the field that's standing out there.
• 7:47
  SPEAKER_00: So I feel like on corn specifically, um, we there's a lot of balls up in the air that probably normally aren't at the end of September, Jeff.
• 7:55
  SPEAKER_01: And the the biggest thing affecting the soybean market this week was go back to last week's discussion around the um talks with between Trump and the Chinese, and the market was a bit disappointed in the way that uh those talks ended or didn't end.
• 8:13
  SPEAKER_01: I guess lack of progress is probably a better way to say that.
• 8:16
  SPEAKER_00: And not just lack of progress.
• 8:17
  SPEAKER_00: They totally told the market, like, hey, we're not gonna meet till October 31st.
• 8:23
  SPEAKER_00: And we may not even we're going to China the beginning of 26, and then they're coming here.
• 8:27
  SPEAKER_00: Like, that's telling the market, if you want to sell it today, you're cool.
• 8:29
  SPEAKER_00: We're not gonna sign a trade deal for the next couple weeks, go for it.
• 8:32
  SPEAKER_00: And the market took that and ran with it pretty hard at the end of last week and Monday.
• 8:36
  SPEAKER_00: And then to build right off of that, then all of a sudden, Argentina takes our export tax off.
• 8:41
  SPEAKER_00: They sold 96 million bushels of soybeans over a few days this week, Jeff, to China.
• 8:47
  SPEAKER_00: It was like 40 cargo loads of soybeans.
• 8:50
  SPEAKER_00: Now, I want it I want to paint this picture for everyone.
• 8:52
  SPEAKER_00: Could you imagine if the United States would have sold 40 cargo loads of soybeans to China this week?
• 8:58
  SPEAKER_00: We would have gone crazy.
• 8:59
  SPEAKER_00: These markets would have been crazy.
• 9:01
  SPEAKER_00: So that was incredibly disappointing to see that move by Argentina and do over seven billion dollars worth of ag products in 24 hours to China alone so quick that they hit their max and had to put the export uh tax right back on.
• 9:16
  SPEAKER_01: Wow.
• 9:16
  SPEAKER_01: Yeah, they definitely seen an opportunity there.
• 9:18
  SPEAKER_01: And that's to me, that's some of the issue is not only are we talking about okay, you guys have a clear runway here to sell a bean market because we're not gonna do a deal for a while, but we're also supposed to be shipping beans to China like as we speak.
• 9:32
  SPEAKER_01: Yep.
• 9:32
  SPEAKER_01: So we are actively losing out from a seasonal perspective.
• 9:37
  SPEAKER_01: Now, can we send some soybeans to China when Brazil's harvesting next spring?
• 9:43
  SPEAKER_01: I guess.
• 9:43
  SPEAKER_01: I guess that's exactly it's not gonna be nearly as easy as it would have been to do this in October.
• 9:50
  SPEAKER_00: And somehow out of all this, Jeff, I don't know what I feel about this right now, but we're above 10 bucks somehow in November soybeans still.
• 9:59
  SPEAKER_00: I don't know why.
• 10:00
  SPEAKER_00: And that's not me saying I'm Uber bearish today, because at some point I've got to tell myself that they they're we're still above ten bucks and we've priced in the worst news, which is they haven't bought soybeans yet.
• 10:12
  SPEAKER_00: Um, so I guess that's good news, but at the same time it's like they haven't bought any soybeans yet.
• 10:18
  SPEAKER_00: I don't know where this can go besides down.
• 10:20
  SPEAKER_00: So I'm really at a crossroads with myself on that at the moment, Jeff.
• 10:24
  SPEAKER_01: Yeah, I think you know one of the other factors that are hope that are holding it up is uh, you know, sales to other destinations have been pretty decent.
• 10:33
  SPEAKER_01: So there's maybe a little bit of backfilling in uh, you know, whoever was gonna buy the Argentina beans that went to China.
• 10:40
  SPEAKER_01: But that's I'd like to think of that as like uh half as good as sending them straight to China.
• 10:44
  SPEAKER_01: Exactly, right?
• 10:45
  SPEAKER_01: I mean you're gonna get half the goodie out of that deal or something.
• 10:48
  SPEAKER_01: Um so I think that's that's maybe part of it.
• 10:51
  SPEAKER_01: And you've reduced the acres quite a bit.
• 10:53
  SPEAKER_01: Um now I'm going way back in history to earlier this summer, of course.
• 10:58
  SPEAKER_01: But it's not like we're sitting on huge acres of soybeans.
• 11:02
  SPEAKER_01: We are gonna probably pull off some pretty decent yields.
• 11:04
  SPEAKER_01: Um, but you know, that's the one key difference between corn and beans right now is the the baseline acreage.
• 11:10
  SPEAKER_00: Now, this is uh 9% harvested as of Sunday last week.
• 11:14
  SPEAKER_00: It's gonna be a lot more than that.
• 11:15
  SPEAKER_00: This week, I don't have an estimate quite yet based on how the weekend goes here, but a lot of harvest progress.
• 11:20
  SPEAKER_00: Uh fluctuations in price here.
• 11:22
  SPEAKER_00: I'm gonna be keeping an eye on this corn market, uh, very near trend line levels here.
• 11:27
  SPEAKER_00: Soybeans, we just took a lot off.
• 11:29
  SPEAKER_00: We'll see what happens with any trade news going forward there.
• 11:31
  SPEAKER_00: So everyone, happy harvesting.
• 11:33
  SPEAKER_00: Uh, thank you for listening in today.
• 11:35
  SPEAKER_00: Please, if you have anything you want us to talk about, uh whether it be uh the corn market or soybeans or hogs or cattle, hopefully we have it all here for you.
• 11:43
  SPEAKER_00: Uh we've got some other things that are kind of fun down the pipeline too, like Bitcoin and some other things that we want to talk to some experts about.
• 11:50
  SPEAKER_00: So we're really looking forward to it.
• 11:52
  SPEAKER_00: Thank you for listening today, and I hope you have a good weekend.
• 11:56
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• 12:03
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