Latest / AG Bull / Wiesemeyer's Perspectives | China Tariffs, Diesel Shock, And The Next Big USDA Reports

Transcript

Wiesemeyer's Perspectives | China Tariffs, Diesel Shock, And The Next Big USDA Reports · AG Bull

0:09
SPEAKER_01: Welcome to New Week, Tom Grossofi.
0:11
SPEAKER_01: Ag Bull Media, AgBull Trading.
0:13
SPEAKER_01: You're listening to Wees Meyer's Perspectives.
0:15
SPEAKER_01: Well, we have a great show for you.
0:17
SPEAKER_01: Matter of fact, we've had to rewrite it a few times.
0:19
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0:25
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1:20
SPEAKER_01: All right, everybody, get ready.
1:22
SPEAKER_01: Let's welcome him to the stage.
1:24
SPEAKER_01: He's got a fancy backdrop today coming to you live from the great Ada.
1:30
SPEAKER_01: Where are you?
1:34
SPEAKER_01: I hear you.
1:35
SPEAKER_01: You hear me?
1:35
SPEAKER_00: Yeah.
1:36
SPEAKER_01: Okay.
1:37
SPEAKER_01: We're live.
1:38
SPEAKER_01: You have a new virtual background.
1:40
SPEAKER_00: I'll bought that.
1:41
SPEAKER_00: That's fancy.
1:42
SPEAKER_00: I feel like I'm on a Vegas stage right now.
1:45
SPEAKER_01: A Vegas stage.
1:46
SPEAKER_01: All right.
1:46
SPEAKER_01: Everybody keep their clothes on.
1:47
SPEAKER_01: We got a great show for you.
1:49
SPEAKER_01: You'd like to start now with a little rundown of what we're going to talk about.
1:52
SPEAKER_01: You want to talk about what we're going to talk about?
1:54
SPEAKER_00: Absolutely.
1:55
SPEAKER_00: Well, we always start with markets, but we're going to add some perspective to it.
1:59
SPEAKER_00: Okay.
2:00
SPEAKER_00: But the big issues are going to be what we followed up with, the Trump G summit.
2:05
SPEAKER_00: We have some late breaking news, so get ready for that.
2:09
SPEAKER_00: Then we're going to get to an issue that's probably other than the China is the number one issue in ag right now is diesel prices.
2:17
SPEAKER_00: And what the White House is constantly mulling of how to deal with it.
2:23
SPEAKER_00: And it's already changed again today.
2:25
SPEAKER_00: I call it Trump's etch a sketch energy policy.
2:29
SPEAKER_00: Okay.
2:29
SPEAKER_00: Of course, we have to talk about U.S.
2:31
SPEAKER_00: Iran update.
2:32
SPEAKER_00: There's some you know developments there.
2:35
SPEAKER_00: We're going to give an increase in the tabulation of those feeder cattle coming across the border from Mexico because uh we had that uh other Santa Santa Teresa uh opened up at the port.
2:47
SPEAKER_00: Cattle, we had some ice kerfuffles in Kansas and Oklahoma and Texas.
2:52
SPEAKER_00: We'll put a market perspective on that.
2:55
SPEAKER_00: Of course, Russia, Ukraine, they're continue to battle each other.
2:59
SPEAKER_00: Then Trump's commented on that, by the way.
3:02
SPEAKER_00: What's the dollar interest rate and gold doing because they're all connected there?
3:07
SPEAKER_00: Then USDA issued a food price report this past week.
3:11
SPEAKER_00: We're gonna give bottom lines only.
3:13
SPEAKER_00: And we have some key USDA reports coming out on Wednesday, quarterly grain stock, small grain summary, and we're we're we're gonna have some you know bottom line from that.
3:23
SPEAKER_00: Then we're gonna end it with the Cook Political Report.
3:26
SPEAKER_00: Uh, one of my best friends works there, Dave Wasserman, and what they're saying in the latest uh prognostications on the House Senate, and what they're hearing from voters.
3:36
SPEAKER_00: So here we go.
3:37
SPEAKER_01: Let's start with markets as we always do, my friend.
3:40
SPEAKER_00: Okay, you saw in the weekly winners and losers, feeder cattle gained 4.4 percent, cotton almost 2%, live cattle 1.4 percent, and soybeans eked out a 1.2 percent gain.
3:53
SPEAKER_00: Corn and hogs were nearly unchanged, and wheat fell anywhere from 1.5 to 3.7 percent.
4:00
SPEAKER_00: So wheat looks a little toppy, Tommy, on the charts to me, but that's the way it is.
4:05
SPEAKER_00: The key drivers, as we'll get into China trade hopes, because we we began, what was it, Friday, in an ugly, ugly you know, situation in the grains where people really got uh you know pessimistic on the on the trade talks.
4:21
SPEAKER_00: But then when both Trump and Jamison Greer, our U.S.
4:24
SPEAKER_00: trade rep, came out and said that there would be good news for farmers, then they rallied back, soybeans to positive and corn out unchanged.
4:33
SPEAKER_00: So we'll get into that as far as what we may hear tomorrow, because tomorrow's gonna be very important from the White House and Jamison Greer.
4:41
SPEAKER_00: Improved plains rain prospects pressured wheat.
4:45
SPEAKER_00: So it wasn't just uh uh other thing in charts, it was those improved rains.
4:49
SPEAKER_00: And I'm never going to complain about rain that's needed in the plains, and then December corn finished at uh 528 and a quarter, looks like November soybeans at$13 uh dollars and 19 cents.
5:02
SPEAKER_00: And I think we have our follow-up chart uh chart showing the percentages, the winners and losers.
5:08
SPEAKER_00: Look at that feeder cattle, cotton, as we just went through, and look at the dogs all in the all in the wheat, all in the wheat complex, Tommy.
5:16
SPEAKER_01: Yeah, corn eked out little traders perspective.
5:20
SPEAKER_01: When we came into the office, I was at Nesvik in Nashville.
5:23
SPEAKER_01: That day, Friday started ugly, and we were so close to breaking a key support in corn.
5:31
SPEAKER_01: Maybe we broke it a little, depending on what charts and lines you use, but corn eked out a nice rally.
5:37
SPEAKER_01: I was joking with one of the traders.
5:38
SPEAKER_01: What are you gonna do if corn and beans are up on the day?
5:41
SPEAKER_01: By 12 o'clock, I think they were up.
5:43
SPEAKER_01: I was listening to you and Chip on AgriTalk.
5:45
SPEAKER_01: You guys were still quoting the markets down, and we were moving on up.
5:49
SPEAKER_01: Impressive price action.
5:51
SPEAKER_01: Now, we do have late breaking news that may skew the grain open.
5:55
SPEAKER_01: By the time all you good folks are listening this later, we'll already be open.
5:58
SPEAKER_01: But full disclosure, this rep this show was recorded at six central.
6:03
SPEAKER_01: At best, all we have is that crude oil's up a dollar, stocks are down a little bit, gold and silver are down a little bit upon recording this.
6:09
SPEAKER_01: Let's move the next slide.
6:11
SPEAKER_00: Well, corn entered it's entering the Sunday night session with an improved, but I would call a fragile chart, Tommy.
6:19
SPEAKER_00: Corn, as you said, recovered it recovered from a four-week low Friday to finish a 528 and a quarter.
6:25
SPEAKER_00: That preserved that 525 initial support.
6:29
SPEAKER_00: That's the level, Tommy.
6:31
SPEAKER_00: A break beneath that area, the technicians tell me would bring Friday's low zone around 517 to 520 back into play.
6:40
SPEAKER_00: So those are going to need to push through that 530 to 530 area to confirm that the recover we saw Friday was more than short covering.
6:49
SPEAKER_00: Fundamentally, though, harvest pressure remains bearish.
6:52
SPEAKER_00: Repeated rain across the western corn belt has eased combines while the eastern belt has enjoyed a better harvest window.
7:00
SPEAKER_00: And soybeans retain the strongest demand story.
7:03
SPEAKER_00: And we're going to get into the White House tariff announcement that's going to be so important.
7:09
SPEAKER_00: Outside markets, we'll talk about later later on, and President Trump on a host of reasons.
7:16
SPEAKER_00: And then we're going to end the show saying what to watch out for in Monday and in the week ahead.
7:23
SPEAKER_01: So very good.
7:25
SPEAKER_01: Number two, Trump summit.
7:28
SPEAKER_01: What do you think?
7:29
SPEAKER_00: Well, we had a uh late breaking story.
7:32
SPEAKER_00: I put out a special report, it's on Agbull uh.com.
7:38
SPEAKER_00: And I don't know.
7:40
SPEAKER_00: I'll let you.
7:41
SPEAKER_00: You're you're the trader.
7:42
SPEAKER_00: I'm I'm the I'm what do you want to know?
7:45
SPEAKER_00: I want to know after you hear this.
7:47
SPEAKER_00: Here's what uh Jamison Greer, our U.S.
7:49
SPEAKER_00: trade rep, was on Fox News today, Sunday.
7:52
SPEAKER_00: He's he urged China to accelerate U.S.
7:55
SPEAKER_00: agricultural purchases during the fall harvest.
7:59
SPEAKER_00: Now, he said China's past the halfway mark toward their 25 million metric ton commitment.
8:05
SPEAKER_00: They're about at the at the 16, I think about the 15 million ton level.
8:13
SPEAKER_00: But other farm purchases, non-soybean sales, he said total about five billion dollars.
8:19
SPEAKER_00: Now, earlier this past week, he said it was 4 billion.
8:23
SPEAKER_00: So, but the precise prorated 2026 target remains unspecified.
8:30
SPEAKER_00: So we still don't know how much more they have to buy and under what time frame, Tommy.
8:37
SPEAKER_00: The trade truce between US and China that was supposed to end November the 10th was extended through January the 10th, 2027.
8:47
SPEAKER_00: Now that gives Washington time to assess China's agricultural purchases and rare earth deliveries.
8:55
SPEAKER_00: Now, here's the one that could get a little negativity in markets to me.
9:01
SPEAKER_00: Greer cautioned that Monday's board of trade announcement would not deliver immediate tariff cuts.
9:08
SPEAKER_00: Now we'll see if they follow through with that.
9:11
SPEAKER_00: But that's what he said Sunday.
9:13
SPEAKER_00: That means, huh?
9:14
SPEAKER_00: I wonder why and and how long will it take.
9:18
SPEAKER_00: The trade coverage is proposed prefer the preferential treatment eventually, the tariff cuts will cover$30 billion in non-sensitive goods each way.
9:31
SPEAKER_00: China gets 30 billion and we get 30 billion.
9:34
SPEAKER_00: And now that's not all agricultural purchases, because there's there's a number of commodities that that we detail.
9:41
SPEAKER_00: It's wood products, forestry products, etc.
9:44
SPEAKER_00: And that can that can add up pretty much.
9:46
SPEAKER_00: Yeah.
9:47
SPEAKER_00: Yeah, that can chew it up.
9:48
SPEAKER_00: Now, a new agricultural working group is going to address barriers, but commodity-specific buying schedules are unclear.
9:56
SPEAKER_00: So we don't, you know, we're going to wait until this Monday additional fact sheet comes out to see whether or not they fill in the blanks.
10:03
SPEAKER_00: Rare earth minerals, the the you know, precious minerals are key from the U.S.
10:09
SPEAKER_00: perspective.
10:10
SPEAKER_00: The White House wants larger, more timely deliveries, and Green and Greer announced no specific penalty for miscommitments because he said they're behind.
10:20
SPEAKER_00: Now, what's the market implication?
10:22
SPEAKER_00: Faster Chinese buying could support harvest demand and local bids, but we need confirmed sales, shipments, and tariff details.
10:32
SPEAKER_00: That tariff rate cut.
10:34
SPEAKER_00: What's it going to be and when is it going to take effect?
10:37
SPEAKER_00: That's going to determine any benefits that we see, Tommy.
10:41
SPEAKER_00: So, how do you react to that updated news from Jamison Greer?
10:45
SPEAKER_01: Well, I drove home today from Nashville and reading the weekend headlines and some of the weather reports with the Western Belt still wet.
10:54
SPEAKER_01: Some folks were calling the markets higher based that China and America were going to get a deal.
10:58
SPEAKER_01: This seems like a sketchy deal.
11:00
SPEAKER_01: With I know we were going to tell you something Monday, but we don't quite have all the details.
11:05
SPEAKER_01: Oh, by the way, we understand you're a little behind on your first yes.
11:10
SPEAKER_01: Before we get the details on the second yes, we're not even sure what they are.
11:14
SPEAKER_01: So this could definitely temper the open.
11:16
SPEAKER_01: And Jim, after the that report from both you and what came out to the public, I wouldn't be so quick on the trigger to buy, buy, buy because we had a lot of that buying off the lows on Friday.
11:27
SPEAKER_01: So we could settle back here.
11:29
SPEAKER_01: We are going to have harvest pressure when the rains quit.
11:32
SPEAKER_01: I might just lay to the side on this and keep my powder dry, brother.
11:36
SPEAKER_00: Okay.
11:36
SPEAKER_00: Yeah, because uh the the market was expecting tariff rate cuts, you know, and they're coming.
11:43
SPEAKER_00: I I truly firmly believe they're coming, but maybe not as quick as we thought.
11:47
SPEAKER_00: Why are the tariff rate cuts so important?
11:50
SPEAKER_00: Well, right now soybean tariffs are 13%, the 10% uh fentanyl tariff plus the 3% most favored nation trading status.
11:59
SPEAKER_00: If you take that 10% off, we equal the tariffs with Brazil.
12:04
SPEAKER_00: So that's why that's important.
12:06
SPEAKER_00: And a host of other commodities, if if they get the 10% uh tariff uh you know reduction, uh sorghum, corn, uh, etc.
12:15
SPEAKER_00: But it also allows the private sector in China to purchase rather than to rely on all these purchases from coming from the state trading uh office, Kafko and and cino grain, Tommy.
12:29
SPEAKER_00: So that's a significant.
12:30
SPEAKER_00: Now we're gonna have to hear, we're gonna wait until tomorrow to see.
12:34
SPEAKER_00: Greer has promised more additional information.
12:37
SPEAKER_00: We're gonna see if they fill in the blanks, Tommy.
12:39
SPEAKER_01: Yeah, keep the powder dry, folks.
12:40
SPEAKER_01: Hey, I got some really uh pretty pictures that you sent of just positiveness of the meeting.
12:45
SPEAKER_01: Let's go over them.
12:46
SPEAKER_01: Uh, this is President Trump and his beautiful wife meeting the president of China.
12:51
SPEAKER_01: And this, what was this one?
12:53
SPEAKER_01: This picture with all the guards and band and stuff.
12:55
SPEAKER_00: That was right in front of the is that the Truman balcony side, I think it is.
13:01
SPEAKER_01: That sure looks formal.
13:03
SPEAKER_00: The front, yeah, it's pretty formal.
13:04
SPEAKER_00: Yeah, that's pretty formal.
13:05
SPEAKER_00: That could be the front of the White House.
13:08
unknown: Huh?
13:08
SPEAKER_00: Yeah, that that is.
13:09
SPEAKER_00: It I haven't seen it like that.
13:11
SPEAKER_00: That's the new helicopter, and he actually took uh Xi Jinping into the helicopter to to show him that.
13:18
SPEAKER_00: I mean, look how huge that helicopter is.
13:21
SPEAKER_01: They built a new helicopter pad right on the White House grounds, right?
13:25
SPEAKER_00: Yes, yes, yeah.
13:26
SPEAKER_00: It's uh quite impressive, and it was needed.
13:28
SPEAKER_00: There's the menu, which we could read it, but it looks pretty fancy to me.
13:32
SPEAKER_01: Yeah, yeah, some fancy cursive on that boy.
13:35
SPEAKER_01: How about the head of NVIDIA and the former chairman and CEO of uh Apple Cleveland, yeah, right there.
13:41
SPEAKER_00: They're toasting away, yeah.
13:43
SPEAKER_00: And there, yeah, Elon Musk to the left, yeah, and the left there, yeah, and that there's a flask.
13:50
SPEAKER_00: If you see right in front of Xi Jinping, a black thing, that's a flask.
13:55
SPEAKER_00: He and his wife brought their own, but it wasn't their own alcohol in it.
13:59
SPEAKER_00: It's a it's a it's a tradition in China, and it's when you see Chinese visitors in the United States bring their flask over here.
14:08
SPEAKER_00: It's for warm water, Tommy.
14:10
SPEAKER_00: They love to drink warm water.
14:13
SPEAKER_01: I didn't know that.
14:14
SPEAKER_00: And that's learning that's that's a little tidbit for you.
14:17
SPEAKER_01: Then that formal picture.
14:18
SPEAKER_00: That's an informal picture.
14:20
SPEAKER_00: And I just I just like that.
14:22
SPEAKER_00: I know Trump has been criticized by his far white right supporters for uh closing up to China, but I always like when countries who really don't get along on on a lot of things still get together and talk.
14:41
SPEAKER_00: Reagan did it, Nixon did it, etc.
14:44
SPEAKER_00: What's wrong with that?
14:45
SPEAKER_00: Obama did it, Obama had uh had had had had Xi Jinping at the White House.
14:50
SPEAKER_00: So, no, whenever you talk to your competitor, I think, and and adversary in some defense areas, I don't think that's a negative thing.
15:00
SPEAKER_00: I think that's a good thing.
15:01
SPEAKER_01: Very good.
15:01
SPEAKER_01: We're gonna fly through the show, folks.
15:03
SPEAKER_01: We're going to number three.
15:04
SPEAKER_01: It's gonna be a quick show because Jim's got some nice tight bullet points.
15:07
SPEAKER_01: Diesel prices and policy changes mold.
15:10
SPEAKER_00: Oh, I'm telling you.
15:12
SPEAKER_00: We we Trump came out.
15:15
SPEAKER_00: I'm trying to do today.
15:16
SPEAKER_00: Let me see where I'm at.
15:18
SPEAKER_00: I've got so many notes here.
15:21
SPEAKER_00: Well, I'll just go to what I I remember, Tommy.
15:25
SPEAKER_00: Trump has what I call an etch-asketch energy policy, especially when it comes to what they're going to do to the diesel.
15:34
SPEAKER_00: If you talk to farmers and truckers, the number one issue is diesel prices because you know with these big farms out there how much diesel that they use.
15:45
SPEAKER_00: And it's really cutting into already thin margins.
15:48
SPEAKER_00: Now, this past week we've gone up and down on what options that the White House may announce as soon as tomorrow.
15:57
SPEAKER_00: But it keeps changing.
15:59
SPEAKER_00: First, Trump initially came out and said he favors a diesel export ban.
16:04
SPEAKER_00: Then the energy secretary Wright, you know, you know, Chris Wright poo-pooted saying, well, there's a lot of problems with with a uh outright diesel the export ban.
16:16
SPEAKER_00: So, no, we could have a selective one or we're going to have a negotiated one.
16:21
SPEAKER_00: Then today Trump came out and he renewed the possibility of banning U.S.
16:26
SPEAKER_00: diesel exports.
16:28
SPEAKER_00: He said in an interview that he was considering the move, quote, very seriously.
16:33
SPEAKER_00: Now, so there's your on-again, off-again situation within the White House, with the president repeatedly entertaining restrictions, while some of his other officials warned they could backfire.
16:45
SPEAKER_00: And they could backfire because of uh uh what Wright had said earlier, it could block, uh, it could raise gasoline and jet fuel prices in the short term.
16:56
SPEAKER_00: And Senator Ted Cruz, Republican from Texas, told the refining industry reps lobbyist a Friday that he had received White House assurances, I'm not quite sure that was Trump, that diesel exports would not be banned.
17:10
SPEAKER_00: That was according to Bloomberg reporting.
17:13
SPEAKER_00: So that takes on greater significance after the president's Sunday remarks.
17:18
SPEAKER_00: The conflicting messages to me suggest the administration has yet to settle on a durable policy position.
17:27
SPEAKER_00: But I'll tell you, their internal polls for the elections, Tommy, tell me that in the heart of the farm belt states, they're seeing very negative reaction as a result of these diesel fuel prices.
17:42
SPEAKER_00: Now, how could they not?
17:43
SPEAKER_00: Yes, Trump placed the blame on diesel shortages on Ukraine, on Ukrainians' attacks against Russian refiners.
17:52
SPEAKER_00: Now that is true up to a point.
17:53
SPEAKER_00: And he said he had urged Ukraine's president uh uh Zelensky to ease those strikes, and he said that's going to be taken care of, whatever that meant.
18:03
SPEAKER_00: But the supply squeeze extends beyond Russia.
18:08
SPEAKER_00: The U.S.
18:08
SPEAKER_00: Energy Information Agency attributed eight or tight global diesel supplies to reduce refining activity in Russia, China, and the Middle East.
18:20
SPEAKER_00: And then that has increased both demand for U.S.
18:23
SPEAKER_00: exports and the cost of imported diesel.
18:27
SPEAKER_00: So I can understand farmers' frustration, but you get a lot of unintended consequences when you usually have a government get into the marketplace too too much.
18:38
SPEAKER_00: That's that's one.
18:39
SPEAKER_01: I saw a headline come out about red diesel too.
18:42
SPEAKER_01: I mean, isn't red diesel just that's on farm diesel?
18:45
SPEAKER_01: That's why other diesel that they may try to find a way to discount that, right?
18:49
SPEAKER_00: Well, they want to increase the the supply of red diesel outside the farm level.
18:55
SPEAKER_00: Oh now, okay.
18:56
SPEAKER_00: If they do that, okay, in our special report on Friday, we said that that would be detrimental to the renewable fuel standard program and bile-based biodiesel because you would use less of it, Tommy.
19:11
SPEAKER_01: So there it's that could be negative on soybean oil, didn't it?
19:15
SPEAKER_00: Absolutely.
19:16
SPEAKER_00: So this thing is it's complex, let me just tell you.
19:21
SPEAKER_00: So Sunday's development just renews the at least the possibility of fuel cost relief, but offers no assurance about its timing or size.
19:33
SPEAKER_00: Okay.
19:34
SPEAKER_00: So we're gonna have to see the next development.
19:37
SPEAKER_00: Well, will they ever announce a official decision?
19:41
SPEAKER_00: Remember, USDA Secretary uh Brooke Rollins said last week that there would be news coming out that farmers would like in the next week or so.
19:51
SPEAKER_00: Well, the clock is ticking, Tommy.
19:53
SPEAKER_01: Yeah, and Trump released that too on Friday.
19:56
SPEAKER_01: He said that uh there'd be some great news for farmers and they'll be happy.
20:00
SPEAKER_01: Number four, U.S.
20:01
SPEAKER_01: Iran update, which ties into everything we're talking about here.
20:05
SPEAKER_00: It does, the connecting the dots big time here.
20:08
SPEAKER_00: Iran offered a as only Iran could do their cease seven-day ceasefire proposal, and they wanted everything but the kitchen sink for the U.S.
20:19
SPEAKER_00: to get rid of their blockade, to release the funds to Iran, etc.
20:23
SPEAKER_00: Trump confirmed Saturday that he rejected Iran's proposed seven-day process to reopen the Strait of Hermuz and halt regional fighting.
20:32
SPEAKER_00: And as far as farm cost implications, no reopening timetable has been agreed upon.
20:39
SPEAKER_00: And that leaves diesel, fertilizer, and freight costs vulnerable to the continued disruption called the Strait of Hermuz and the Red Sea area with the Houthis.
20:49
SPEAKER_00: So, bottom line on U.S.
20:51
SPEAKER_00: Iran and update, I would tell you a good thing.
20:54
SPEAKER_00: I don't believe either side right now.
20:56
SPEAKER_00: I don't believe, I don't believe Trump.
20:59
SPEAKER_00: I hate to say that, but I don't believe what he says on Iran, especially if they're negotiating with Iranian officials, because the best people I contact, they say we're negotiating with the wrong people.
21:10
SPEAKER_00: And can you trust Iran to follow through on any agreement?
21:15
SPEAKER_00: No.
21:16
SPEAKER_00: So I just I just think you waste a lot of your time if you try to count too much on what's happening in US Iran.
21:24
SPEAKER_00: Let's just hope that we'll eventually get to a solution.
21:27
SPEAKER_00: Okay.
21:27
SPEAKER_01: Yeah, number five, Mexican feeder cattle coming across the border.
21:31
SPEAKER_00: We've got a graphic here for those who are not seeing it.
21:34
SPEAKER_00: We had a big pickup this past week because we had the second port, Santa Teresa, New Mexico, joining uh the Douglas, Arizona port.
21:44
SPEAKER_00: And so the week through Friday, September the 25th, saw 5,300 feeder cattle coming across in the Douglas, Arizona port and 1,100 Santa Teresa.
21:58
SPEAKER_00: So the that that was the the week through Friday.
22:03
SPEAKER_00: I should have said Douglas was 5,300 and Santa Teresa 1,100.
22:08
SPEAKER_00: So that was 6,400 feeder cattle, but that's going to grow.
22:12
SPEAKER_00: The month to date, September was four, you know, 14,600.
22:17
SPEAKER_00: That was 18 reporting days.
22:19
SPEAKER_00: And the year to date, 17,200, because we've only had 24 report days.
22:25
SPEAKER_00: What's the bottom line?
22:26
SPEAKER_00: The I think the I know the Santa Teresa will keep on increasing because prior to the over-year shutdown of the US Mexico border, we got about a little over 40% of our feeder cattle that we get from Mexico.
22:43
SPEAKER_00: That was a little over a million million head, Tommy, from the uh Santa Teresa port.
22:49
SPEAKER_00: So that's gonna grow.
22:51
SPEAKER_00: That's gonna grow.
22:52
SPEAKER_01: Yeah, let's impressive rally in feeder cattle with that uh port opening.
22:57
SPEAKER_01: This ties into feeder cattle number six to live cattle and feeder cattle, cattle ice and cattle labor.
23:02
SPEAKER_01: Do tell.
23:03
SPEAKER_00: Yeah, well, our ice group, cattle groups in Kansas, Oklahoma, and Texas reported workforce disruption and delayed shipments of thousands of Fed cattle as a result of, I think, primarily fear, Tommy, that ice was was coming to different operations there.
23:21
SPEAKER_00: So they said the fear extended to legal, legally authorized workers across the packing plants.
23:27
SPEAKER_00: In other words, they didn't come in.
23:29
SPEAKER_00: Uh, feed yards, dairies, and transportation.
23:32
SPEAKER_00: Now, the White House says they did not give the directive on this one, but boy, there's a lot of farm groups in those uh states that said otherwise.
23:42
SPEAKER_00: So that's one that we're gonna have to update Monday to see what if it's cleared up or not, Tommy.
23:48
SPEAKER_01: Yeah, absolutely.
23:49
SPEAKER_01: We're halfway through the show.
23:50
SPEAKER_01: Jim, I'm gonna mute your mic and uh give you a little break, folks.
23:53
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24:00
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24:34
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24:37
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24:41
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24:54
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25:03
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25:05
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25:19
SPEAKER_01: I will unmute Mr.
25:20
SPEAKER_01: Jim.
25:21
SPEAKER_01: Okay, Mr.
25:22
SPEAKER_01: Jim, I don't know if you were talking, but I I saw your hands moving.
25:25
SPEAKER_01: Were you saying something?
25:26
SPEAKER_00: I was just agreeing with you.
25:28
SPEAKER_00: Oh my god, we'll do well.
25:30
SPEAKER_01: Someone unmute that man.
25:33
SPEAKER_00: And we are getting ready at my end through your uh excellent help, Tommy, to that we go and and I move all my stuff over to AgBull.com.
25:44
SPEAKER_00: And you can see we're getting a little fancy in the background stuff.
25:47
SPEAKER_00: We're we're I debuted a a market dashboard over the weekend, and we've already got good feedback on that.
25:55
SPEAKER_00: Ideas for suggestions for adding onto that dashboard.
26:00
SPEAKER_00: This is the stuff you're going to see with the premium service.
26:03
SPEAKER_01: Yeah, and I think folks will like getting text.
26:05
SPEAKER_01: I mean, from what you put out an hour ago, that something changed.
26:08
SPEAKER_01: If we could text them and say, alert, log on to agbal.com and get your version because we want to help people.
26:15
SPEAKER_01: You know, we've been around for a long time, we've made a lot of mistakes.
26:19
SPEAKER_01: We can't, you know, we got to stop people from making simple mistakes.
26:22
SPEAKER_01: And one of the ways people make a mistake is they're not informed properly.
26:26
SPEAKER_01: And you're not going to see this on traditional media, they're not even covering these stories.
26:31
SPEAKER_01: You'll see the stuff you're putting out in a day or two, or other people who steal it and copy and paste it and make it their own.
26:37
SPEAKER_01: So that shit's gonna stop, or they're gonna have to pay for it to steal it.
26:41
SPEAKER_01: Number six, we did number seven, Russia-Ukraine.
26:44
SPEAKER_01: Every week we talked about these guys.
26:46
SPEAKER_00: Energy attacks continue.
26:48
SPEAKER_00: A drone strike temporarily halted Russia's export-oriented big refinery Friday, Tommy, despite discussions of a so-called energy truce.
26:58
SPEAKER_00: Does that sound familiar between the U.S.
26:59
SPEAKER_00: and the United States?
27:00
SPEAKER_01: Yeah, every week you and I talk about that.
27:02
SPEAKER_00: Yeah, and and now Russia is redirecting grain through the Baltic and Arctic ports as Black Sea shipping problems uh persist, and but that's keeping freight and export availability in focus.
27:14
SPEAKER_00: Now, Reuters had an item.
27:16
SPEAKER_00: Let me get to it because it could be important if there's any truth to it.
27:21
SPEAKER_00: Russia said it could quickly restart up to 80% of its grain terminal capacity in the Black Sea and Sea of Azov if diplomatic efforts to halt mutual attacks by Russia and Ukraine result in a ceasefire.
27:38
SPEAKER_00: That's a Reuters analysis of industry data showed on late Friday.
27:44
SPEAKER_00: But three terminals accounting for around 20% of Russia's grain export infrastructure in the area have suffered heavy damage.
27:52
SPEAKER_00: And it would very likely take months to repair.
27:57
SPEAKER_00: But that was new.
27:58
SPEAKER_00: So it'll depend on what the market focuses on.
28:01
SPEAKER_00: If if they were bearish, they'll they'll they'll hype on on this news, Tommy.
28:06
SPEAKER_01: Okay.
28:06
SPEAKER_01: Did we cover everything you wanted to talk about with Russia and Ukraine?
28:09
SPEAKER_00: I did.
28:09
SPEAKER_00: I just said, yeah, watch your uh uh Trump is putting pressure on not on Putin, he's putting pressure on Ukraine to work a deal out.
28:18
SPEAKER_00: Yeah, because he knows the impact on diesel prices.
28:20
SPEAKER_00: So I would watch this.
28:22
SPEAKER_00: I'm not predicting any ceasefire record because Putin thinks that he's winning again now.
28:28
SPEAKER_00: So I I think he's gonna extract something more from uh Ukraine, but uh watch it because we've seen how volatile that uh Black Sea grain conflict is to uh the wheat market.
28:39
SPEAKER_01: Yeah, here we go.
28:40
SPEAKER_01: US dollar interest rates and gold.
28:42
SPEAKER_01: We could talk an hour an hour on this stuff, but uh give it your best spin.
28:46
SPEAKER_00: Well, our interest rates uh went up 25 basis points in the in the recent FOM Federal Open Market Committee meeting.
28:54
SPEAKER_00: And now our dashboard showed uh a little over 75% odds of a quarter point hike to four to four and a quarter percent in in the next FOMC meeting.
29:04
SPEAKER_00: Now, higher financing costs and a stronger dollar will continue to challenge farm margins and export competitiveness.
29:11
SPEAKER_00: But what does that do to the dollar?
29:13
SPEAKER_00: It increases the dollar strength.
29:15
SPEAKER_00: We're at a two-month high, I believe, and a rising treasury yields weighed on gold this past week as traders anticipated additional Fed tiding.
29:26
SPEAKER_00: That's the connecting of the dots that I wanted to put on the higher interest rate than the U.S., what it meant for the dollar and treasury yields, and that it's pressured gold prices.
29:37
SPEAKER_01: Absolutely.
29:38
SPEAKER_01: And the 10 year yield hit 5.20.
29:42
SPEAKER_01: And it's not that 5.20 is like, oh, really high and it's ruining everything, it's the intensity of how fast we went from 4.80 to 5.20.
29:51
SPEAKER_01: And if we just keep going up that much every week, it's like they're pricing in multiple, multiple, multiple rate hikes.
29:58
SPEAKER_01: If you want to learn more about the Fed and rate hikes, go to cme.com, Google CME Fed watch page.
30:05
SPEAKER_01: A lot of informative stuff on there, Jim.
30:07
SPEAKER_01: Sure.
30:07
SPEAKER_01: And I'm sure you use that tool all the time.
30:09
SPEAKER_01: But keep an eye, and gold and silver are down tonight, and the dollar is again strengthening.
30:14
SPEAKER_01: And that's not good for grains, if my spidey senses tell me correctly.
30:18
SPEAKER_00: You're you're correct.
30:19
SPEAKER_00: You're correct.
30:20
SPEAKER_01: Number nine, USDA food price report inflation.
30:23
SPEAKER_00: Inflation forecasts were trimmed.
30:25
SPEAKER_00: USDA that's still high, but USDA projects 2026 this year, increases of 2.9 percent for all food, 2.4 percent for groceries, and 3.5 percent for restaurants.
30:38
SPEAKER_00: Have you been to a restaurant lately?
30:40
SPEAKER_00: It's not cheap.
30:41
SPEAKER_00: Grocery inflation is forecast at 1.8 percent in 2027.
30:47
SPEAKER_00: Now that's good news showing inflation food inflation going down.
30:51
SPEAKER_00: Beef remains quite costly.
30:53
SPEAKER_00: Beef prices are forecast to rise 9.4 percent this year.
30:58
SPEAKER_00: Slower overall inflation still means rising food bills.
31:02
SPEAKER_00: It doesn't mean they're going down, Tommy.
31:04
SPEAKER_00: It's just the rate of inflation is easing.
31:07
SPEAKER_00: So and with elevated diesel cost adding uncertainty.
31:12
SPEAKER_00: And that's why I say this diesel situation is so big that it's it's playing into a host of uh uh products in the United States where hope I'm wrong, don't think I am, that in the next few months, inflation reports, both at the producer and at the wholesale end, I think we're gonna have somewhat rising inflation levels.
31:35
SPEAKER_00: And that means uh probably another boost or two in interest rates by the Fed, though you know coming up in December.
31:44
SPEAKER_01: Yeah, and just to add a little color on that, how does a cattle get from the farm to the to the packing plant?
31:53
SPEAKER_01: Transportation, that's all how does it leave the packing plant get to the transportation, yeah.
31:59
SPEAKER_01: And how do you get your ass to the store to go buy the beef?
32:02
SPEAKER_00: Yeah, absolutely.
32:04
SPEAKER_01: I mean, the price per pound of beef is probably not the thing we should be focusing on anymore.
32:09
SPEAKER_01: Uh, little moves here or there in the cattle market are nothing compared to that heating oil price.
32:13
SPEAKER_01: Heating oil, I just looked at my phone, is up two and a half percent tonight, Jim.
32:17
SPEAKER_00: Well, see, this is the accumulation of things, Tommy.
32:20
SPEAKER_00: Eventually is gonna temper the demand for beef.
32:24
SPEAKER_00: Now, I love my steak and I'll pay, I'll pay for it, but not all people can and will.
32:31
SPEAKER_00: And the this gasoline and diesel, it's it's it's like a tax.
32:36
SPEAKER_00: So when you add that up with all the other costs for food and others that family have to do, I think that that will eventually temper this demand for beef.
32:47
SPEAKER_00: Again, the numbers aren't showing it quite yet, but watch it.
32:51
SPEAKER_00: It's really starting to to uh begin showing some initial signals here because uh families just can't afford certain cuts.
33:00
SPEAKER_00: They just can't.
33:01
SPEAKER_01: Speaking of cuts, are they gonna cut yield, raise yield, cut stocks, end stocks?
33:05
SPEAKER_01: Number 10 key USDA reports coming.
33:07
SPEAKER_00: Wednesday, we get two biggies.
33:09
SPEAKER_00: The quarterly grain stocks report.
33:11
SPEAKER_00: Now, grain stocks reports are were wild in the past.
33:16
SPEAKER_00: So I'm not you talk about a wild card, you're going to Vegas coming up, I think.
33:21
SPEAKER_00: This is like the Vegas uh report from USDA.
33:25
SPEAKER_00: It can be a head shaker.
33:27
SPEAKER_00: We're gonna get final 25, 26 corn and soybean carryover.
33:32
SPEAKER_00: Okay.
33:33
SPEAKER_00: It's also the small grain summary where we're gonna get uh final US uh uh uh uh wheat crop estimates, and then the very next day, Thursday, we get USDA growing grain and soybean crush reports, and we get the August crush and ethanol use.
33:49
SPEAKER_00: So we've got some demand and supply news coming out big time from USDA this week.
33:55
SPEAKER_00: Uh, ag prices comes out Monday.
33:58
SPEAKER_00: We have the jobs report, didn't even mention that on Friday.
34:01
SPEAKER_00: So this is a big week for reports, believe it or not.
34:04
SPEAKER_01: Pretty crazy everything that's going on, isn't it, Jim?
34:07
SPEAKER_01: Yes, it is, and how the markets react to them, not to mention all these continued headlines.
34:13
SPEAKER_01: We're at the end, my friend.
34:15
SPEAKER_00: Elections, we're we're under 40 days from the November 3rd election.
34:20
SPEAKER_00: So the good friends I have at Cook Political Report.
34:23
SPEAKER_00: They came out to Friday with the report saying the House leans democratic.
34:29
SPEAKER_00: Their most likely outcome is a democratic gain of five to 15 seats.
34:34
SPEAKER_00: That would produce a 220 to 230 seat majority, Tommy.
34:39
SPEAKER_00: You need 218 votes to lead that uh House chamber.
34:44
SPEAKER_00: The Senate remains competitive.
34:46
SPEAKER_00: I don't know what I don't care whether you're talking about Cook Political Report, Inside Elections, Larry Zaboto.
34:52
SPEAKER_00: They're all saying, boy, that's a jump ball right now.
34:55
SPEAKER_00: Cook sees Democratic net gains ranging from one to five seats.
35:01
SPEAKER_00: Now, Democrats need four to capture control of the Senate.
35:05
SPEAKER_00: So watch your races in a number of farm belt states, Iowa, Michigan.
35:11
SPEAKER_00: That's a that's a big state to watch, North Carolina, etc.
35:16
SPEAKER_00: Texas, Texas, because uh Taler Rico, I can't believe it, but but is ahead of the Republican candidate Paxton.
35:24
SPEAKER_00: So but the Republicans, well, the Republicans are first start now starting to throw millions of dollars into election campaigns.
35:32
SPEAKER_00: So that's what they usually do, and they're doing it big time, but they're spending a lot of money.
35:37
SPEAKER_00: Now, my good friend David Wasserman of the Cook Political Report, he came out with a report with the subject decisive.
35:45
SPEAKER_00: Who are the decisive voters?
35:47
SPEAKER_00: He said they're the doubly disenchanted, and they are the voters dissatisfied with Trump, but also are unconvinced that the Democrats deserve their support.
36:00
SPEAKER_00: So that's that the size of that group, the the determination, that's going to determine the size of any Democratic gains.
36:08
SPEAKER_00: Because again, when you look, if you're saying, you know, a number of uh uh you know, farmers who vote typically Republican that I know of are telling me they won't vote for a Democrat, they just may not vote.
36:20
SPEAKER_00: Now, how significant is that number?
36:22
SPEAKER_00: We don't know yet, but watch it.
36:25
SPEAKER_00: Because they're looking around to the Democratic Party, and the key question that the Republicans have not communicated, I don't think correctly enough to the voter is what are the Democrats standing for?
36:39
SPEAKER_00: They're just they're just being negative on Trump and what the Republicans are doing, have done, et cetera.
36:47
SPEAKER_00: But they don't usually say what they would do if given power.
36:51
SPEAKER_00: So that's what the Republicans tell me that they're gonna focus on in the remaining weeks of this of the election before November 3rd.
37:00
SPEAKER_00: So watch that.
37:02
SPEAKER_00: Now we're at the end.
37:03
SPEAKER_00: So what I want to end with is what do we watch for in Monday's day session?
37:08
SPEAKER_00: Grain futures reopened at 7 p.m.
37:12
SPEAKER_00: Right?
37:12
SPEAKER_00: Central time, 8 p.m.
37:13
SPEAKER_00: Eastern time.
37:14
SPEAKER_00: So it's gonna be the first reaction to the White House's China tariff details that we went through earlier in the program and the deterioration in U.S.
37:24
SPEAKER_00: Iran diplomacy that gets into your energy prices that we've already indicated.
37:28
SPEAKER_00: Now, Monday's U.S.
37:30
SPEAKER_00: session will then focus on whether$525 corn and$13 to$13.10 soybeans,$365 to$368 meal,$67 bean oil, and$7 SRW and$760 HRW hold.
37:49
SPEAKER_00: There are your key price barometers to watch out for.
37:53
SPEAKER_00: USDA's weekly export inspections are going to provide the first fresh demand signal of the week.
37:59
SPEAKER_00: And that's going to be followed by crop progress at three o'clock central time.
38:04
SPEAKER_00: Traders are going to gauge how much September rain has slowed corn and soybean harvest.
38:10
SPEAKER_00: And Wednesday, as we said, we're going to get the quarterly grain stocks report, which remains the week's major domestic supply event.
38:19
SPEAKER_00: So, bottom line from the market, from what we know right now, Friday's recovery improved the setup for corn and soybeans, and the subsequently released White House fact sheet provides a more tangible trade catalyst by explicitly placing U.S.
38:38
SPEAKER_00: agricultural goods inside that$30 billion tariff preference framework.
38:43
SPEAKER_00: But the market still lacks commodity-specific tariff cuts.
38:49
SPEAKER_00: The timing of them are new purchase volumes.
38:52
SPEAKER_00: So soybeans and meal have the best upside setup.
38:56
SPEAKER_00: If Monday brings concrete China details, pressure if they don't.
39:01
SPEAKER_00: Wheat remains technically vulnerable, technicians tell me.
39:04
SPEAKER_00: And bean oil could get an immediate lift if crude oil gaps higher after Trump's rejection of Iran's Harmuz proposal.
39:13
SPEAKER_00: That's kind of summarizes of what we're going to have to look for Monday, Tommy.
39:18
SPEAKER_01: Or tonight.
39:23
SPEAKER_01: Positive?
39:24
SPEAKER_01: Yeah.
39:24
SPEAKER_00: Eventually, it might be the delay gratification.
39:28
SPEAKER_00: Eventually, we're going to get that pickup in uh business from China.
39:34
SPEAKER_00: Wish it would come with tariff cuts immediate, and we're going to wait to see if they put a date or whatever on this additional information that U.S.
39:44
SPEAKER_00: trade rep Jamison Greer talked about uh over the weekend.
39:49
SPEAKER_00: But I would say it's coming, Tommy.
39:51
SPEAKER_00: And if that's the case, as we've said on this podcast several times, if China were to purchase X number of million tons of U.S.
40:01
SPEAKER_00: corn, do the math.
40:03
SPEAKER_00: That's uh stocks and use ratio for corn gets into a firm foundation from a market perspective, if not bullish.
40:11
SPEAKER_00: So that's why it's important on getting the details of this coming good news from China.
40:18
SPEAKER_00: We just don't know how and when.
40:21
SPEAKER_01: Now I'm satisfied.
40:22
SPEAKER_01: See you next week, my friend.