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Broad Market Overview · 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 involve substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:24
  SPEAKER_01: Today is June 14th.
• 0:25
  SPEAKER_01: I've got Jeff with us here today.
• 0:27
  SPEAKER_01: How's it going, Jeff?
• 0:28
  SPEAKER_00: It's going pretty good, Mike.
• 0:29
  SPEAKER_01: An all too familiar spot.
• 0:31
  SPEAKER_01: We did uh Eger talk together yesterday afternoon.
• 0:34
  SPEAKER_01: Oh it was a good time to have uh Chipright and Laverne here.
• 0:38
  SPEAKER_01: Uh good times, anyways.
• 0:39
  SPEAKER_01: What do you want to talk about today?
• 0:40
  SPEAKER_01: Where do you want to start?
• 0:42
  SPEAKER_00: Well, Mike, you know we gotta talk about cash cattle, right?
• 0:45
  SPEAKER_01: I guess so.
• 0:46
  SPEAKER_00: We gotta talk.
• 0:47
  SPEAKER_00: I know every old news by now.
• 0:49
  SPEAKER_00: I get that, but we're gonna toot the horn as long as we can.
• 0:52
  SPEAKER_00: So yeah, obviously uh explain how good cash cattle is right now.
• 0:56
  SPEAKER_01: For those who aren't tracking it every single day.
• 0:59
  SPEAKER_01: Like break it down for us.
• 1:01
  SPEAKER_01: How good is it really?
• 1:02
  SPEAKER_00: Well, record highs, Mike, that's probably the about the only thing you have to say.
• 1:06
  SPEAKER_00: And and not by a little bit, um, was an extremely interesting week in the cash cattle world.
• 1:13
  SPEAKER_00: But yeah, for most people, if you're not uh in the business, obviously, record high cash cattle.
• 1:19
  SPEAKER_00: 198 is gonna be the official high mark that I've seen in um on any USDA reports on the live.
• 1:26
  SPEAKER_00: Um there's a little bit of volume that had gotten done there.
• 1:30
  SPEAKER_00: Some 307 taking place yesterday on the reports.
• 1:34
  SPEAKER_00: I know we've we've heard some different reports from with higher money than that here and there.
• 1:38
  SPEAKER_00: I have I didn't see it come through the USDA, um, so I'm gonna call that the official new record high cash for cattle.
• 1:45
  SPEAKER_00: Um last week, you know, we traded kind of steady-ish, uh, I think right in that 192 area, 193 up here in the north.
• 1:56
  SPEAKER_00: Um, so a big jump.
• 1:58
  SPEAKER_00: And as the day went on yesterday, most of the activity took place yesterday, uh, as the you know, it just started equal to last week at that$1.92 or three, and we just worked higher all day and and did, you know, each each bid was a little bit higher than the last one.
• 2:16
  SPEAKER_00: So it was some people, some packers were pretty short on some cattle.
• 2:19
  SPEAKER_00: They had to get some needs covered.
• 2:21
  SPEAKER_00: Um, it'll be interesting to see what happens in the weeks coming.
• 2:25
  SPEAKER_00: You know, this is this is it's very possible that we're seeing the high for this uh for this.
• 2:31
  SPEAKER_00: I don't know if I dare say a year, uh, although that's kind of what I want to say.
• 2:35
  SPEAKER_00: It's you know, this these markets can kind of die this way, they can blow off the top find some cash that gets everybody's attention, so a few more cattle come to town.
• 2:45
  SPEAKER_00: Um I it'll be interesting to see kind of what happens here in the next couple weeks.
• 2:50
  SPEAKER_00: But you know, you've got a situation where the packer is, you know, he's got some margin, which is not crazy unusual for this time of year, obviously.
• 3:00
  SPEAKER_00: But another interesting thing is that they they are killing quite a few fed cattle, so you've got to kind of separate out the noise between the fed cattle and the total cattle going to town.
• 3:10
  SPEAKER_00: Total cattle continue to be, you know, four to some weeks five and a half percent lower than last year.
• 3:16
  SPEAKER_00: Well, the fed cattle um beat of kill has really been right on top of last year, the last few weeks, so that's a change from the per rest of the year.
• 3:26
  SPEAKER_00: But you know, we've we've kind of ramped up our Fed kill cattle kills here, and I think that's part of what got the Packers having to bid up as much as they did this week, is they're killing a fair amount of them.
• 3:38
  SPEAKER_00: Um so hopefully they got the meat moved, choice and selected pretty well this week.
• 3:44
  SPEAKER_00: So that's I mean it's all good news on the protein side, right?
• 3:47
  SPEAKER_00: It's it's hard to put too many chinks in this cattle market right now.
• 3:51
  SPEAKER_01: But it seems like demand is where everyone wants to run to with the chink, don't they?
• 3:56
  SPEAKER_00: Yeah, that's the one that and and it's a concern, no doubt.
• 3:59
  SPEAKER_00: It's but it's been a concern for a year, and it really hasn't materialized into anything that you know has been very disappointing.
• 4:06
  SPEAKER_00: Now you bounce over to the hogs, okay.
• 4:10
  SPEAKER_00: This hundred dollar cutout stuff's getting that's getting to the point of being disappointed, right?
• 4:14
  SPEAKER_00: I mean, March, April, even the first of May, it's like, yeah, we'd like it to be moving higher, but it's still at a hundred bucks.
• 4:21
  SPEAKER_00: So we can't complain.
• 4:24
  SPEAKER_00: It was a really impressive day in the hogs, absolutely.
• 4:27
  SPEAKER_01: Um it got dark this morning in this office.
• 4:30
  SPEAKER_00: That's a good way to describe it.
• 4:32
  SPEAKER_00: It's almost like the cattle yesterday, you know, when we were on the radio yester yesterday afternoon, Mike is like, man, this thing is just ugly.
• 4:40
  SPEAKER_00: It was down a buck, and then the cattle drug up uh you know to a dollar higher.
• 4:44
  SPEAKER_00: Hogs did the same thing.
• 4:45
  SPEAKER_00: What were they 230 or something lower for a bit this morning?
• 4:48
  SPEAKER_01: New low 9040 on the July there.
• 4:52
  SPEAKER_00: Contract lows.
• 4:53
  SPEAKER_00: Contract lows in the middle of June, just punching you in the gut, right?
• 4:59
  SPEAKER_00: But yeah, really nice move higher on the close, big time reversal.
• 5:04
  SPEAKER_00: So boy, I sure, and then foul, you know, we had some decent product prices, although, you know, week over week you're gonna be about steady, right?
• 5:12
  SPEAKER_00: So I'm not sure that's anything to shout about, but big reversal.
• 5:17
  SPEAKER_00: I sure hope we can get some foul through on that next week.
• 5:20
  SPEAKER_01: We also had some fun things to talk about this week on the grain side, Wazday report, basis, and uh weather here.
• 5:28
  SPEAKER_01: So let's start with the Wazday report.
• 5:29
  SPEAKER_01: We'll get that one out of the way real fast with very little changes, Jeffrey.
• 5:34
  SPEAKER_01: Uh June report here.
• 5:36
  SPEAKER_01: We're maybe looking for a couple of changes.
• 5:38
  SPEAKER_01: U.S.
• 5:38
  SPEAKER_01: corn yield.
• 5:39
  SPEAKER_01: I know we barked about it a lot that maybe they would change U.S.
• 5:42
  SPEAKER_01: corn yield a little bit with the slower planning pace than normal.
• 5:46
  SPEAKER_01: Didn't quite get that done.
• 5:47
  SPEAKER_01: They kicked the can uh uh down the road till the July report.
• 5:51
  SPEAKER_01: I would uh be surprised if we didn't change yield a little bit and or acres in that report at the end of June here, so I think that'll be the next fun thing to look at.
• 6:00
  SPEAKER_00: Mike, on the on the corn yields, quick side note, sorry.
• 6:03
  SPEAKER_00: Um this is about the first week in my mind that I've been willing to consider the possibility of that corn yield being above trend line.
• 6:12
  SPEAKER_00: I mean, I've always I've been telling everybody who would listen that you know 181 is like the best we can do, but you start looking at some of the moisture and stuff, and I'm not saying it's the most likely scenario, right?
• 6:24
  SPEAKER_00: I just think it's uh it's possible that you end up with a higher than trend line type of a yield.
• 6:28
  SPEAKER_00: What's your thoughts on that?
• 6:29
  SPEAKER_01: It looks really good out our back door.
• 6:31
  SPEAKER_01: Fair that's a first thing.
• 6:33
  SPEAKER_01: It's a little bit of backyard yard farming on that.
• 6:35
  SPEAKER_01: A little bit.
• 6:36
  SPEAKER_01: It's um a little bit of that.
• 6:38
  SPEAKER_01: Yeah, I it's tough to not look at four ye four bushels above our record.
• 6:44
  SPEAKER_01: You know, that's where the trend is.
• 6:45
  SPEAKER_01: So at some point we're gonna have to have some data points above that line to help get us back to a somewhat, you know, uh reasonable trend line.
• 6:54
  SPEAKER_01: Uh so yeah, a pretty decent yield around 180 is a possibility at this point if we finish out well.
• 7:00
  SPEAKER_01: Um it'll be interesting to see what happens.
• 7:02
  SPEAKER_00: Very small chance of getting up above that yet in your mind.
• 7:06
  SPEAKER_00: I can't disagree with that.
• 7:07
  SPEAKER_01: No, it um I'm not ruling anything out there when it comes to that yield situation, but I mean yeah, pretty decent shot here.
• 7:16
  SPEAKER_01: The WASDA report, otherwise, not a whole lot of changes.
• 7:20
  SPEAKER_01: Didn't drop the uh Brazil soybean production very much, just down one million metric ton there.
• 7:25
  SPEAKER_01: Uh still a few away from about six uh million metric ton away from Conab still.
• 7:30
  SPEAKER_01: Wheat production that was raised by seven million bushels.
• 7:33
  SPEAKER_01: That was a pretty big jump in the all wheat production for the United States.
• 7:37
  SPEAKER_01: Russia was lowered a little bit more than what probably I expected, anyways, but pretty decent move lower.
• 7:43
  SPEAKER_01: Still could drop that a little bit more after some drought and freeze events going on there.
• 7:48
  SPEAKER_01: I also think uh, you know, some of these other minor changes in the WASD airport could get talked about, but we really were able to have the report come out and immediately start talking about other items again, which isn't uncommon for that June WASD, which would be uh weather, and uh in particular, let's talk about weather outside of the United States really quick, Jeff.
• 8:09
  SPEAKER_01: We had uh China, so about 30-40% of China's corn production is in a drought right now of pretty substantial size.
• 8:16
  SPEAKER_01: Uh China, uh pretty key grower user, uh all the all the way across the board here.
• 8:22
  SPEAKER_01: I mean, they're the second largest corn producer in the world, uh, they're the largest importer in the world with uh Mexico soon behind them.
• 8:30
  SPEAKER_01: Uh they use the second most uh corn in the world, so uh them getting a drought in a very important part of their corn production area is important, and I would say they have a very similar planting life compared to us, Jeff.
• 8:43
  SPEAKER_01: Plant corn May, June type time frame.
• 8:46
  SPEAKER_01: And then on the other side, too, uh I mentioned Mexico.
• 8:49
  SPEAKER_01: They've got a pretty good drought going on down there as well.
• 8:52
  SPEAKER_01: Uh worries about even uh water in Mexico City, things like that.
• 8:56
  SPEAKER_01: So just uh two very key people in the corn use category uh struggling with some weather adversity here at this time of the year that we normally would focus on ours.
• 9:06
  SPEAKER_01: So to uh wrap up here uh talking about our own weather in the United States, Jeff, you're looking at uh short term, a lot of rain coming for northwestern uh corn belt here.
• 9:17
  SPEAKER_01: Our area, I think if you look, we got about six straight days coming up of uh rain in this part of the world.
• 9:24
  SPEAKER_01: Yeah, and we're getting some heat too coming at us, uh, but we're not gonna feel the effects of it too bad because of all that water.
• 9:30
  SPEAKER_01: Uh Eastern Corn Belt, they're kind of getting left out of the rain clouds.
• 9:34
  SPEAKER_01: Uh, gonna miss some rains there, and the temps certainly do turn up.
• 9:37
  SPEAKER_01: It looks like the end of June, beginning of July is gonna be awfully hot.
• 9:41
  SPEAKER_01: So uh looking like the weather forecast kind of got this one right going all the way back a few months here, kind of a cool, wet spring, and then we dive into a hot, dry back half of the summer.
• 9:52
  SPEAKER_01: So we'll see what impact that has, weather condition-wise.
• 9:55
  SPEAKER_01: But at this point, it seems like buyers are uh getting some uh some things done on some sell-offs because of the forecast being hot and dry.
• 10:03
  SPEAKER_01: And then the rallies seem to be cut short a little bit because of the uh United States U.S.
• 10:08
  SPEAKER_01: corn production is now only two percent uh growing in a drought.
• 10:12
  SPEAKER_01: Only two percent of the U.S.
• 10:13
  SPEAKER_01: corn production is in a drought.
• 10:15
  SPEAKER_01: Immaculate.
• 10:16
  SPEAKER_01: End of June last year it was 70% in the United States, was in a drought.
• 10:20
  SPEAKER_01: So very big change year over year.
• 10:24
  SPEAKER_01: Any final thoughts for our listeners this week?
• 10:26
  SPEAKER_00: What about corn movement?
• 10:28
  SPEAKER_00: Um did we see a little bit of farmer selling this week?
• 10:31
  SPEAKER_00: Is it something that they ought to be looking at?
• 10:34
  SPEAKER_00: I know the basis sure looked pretty strong here a couple days ago.
• 10:37
  SPEAKER_01: Basis has been strengthening a little bit, trying to get more bushels to uh come after.
• 10:42
  SPEAKER_01: Uh we've had a little bit of a dry spell here, sell-off in the grain prices, people are busy in the field, so trying to own some corn uh here to get through the month of June, a lot of these ethanol plants and uh some of these other end users, anyways.
• 10:57
  SPEAKER_01: However, even without the market really giving us much of a futures rally at this point, it seemed like people have wrapped up planning, wrapped up spraying corn, and now we got corn haul into town and uh gaining a lot of interest there.
• 11:11
  SPEAKER_01: The phone lines are busy, so I would say when it comes to basis and uh the importance of what's left in the bin here, Jeff, I would get that on a truck awfully faster uh going towards uh time is ticking, isn't it?
• 11:24
  SPEAKER_01: It seems to be ticking.
• 11:27
  SPEAKER_00: Absolutely.
• 11:28
  SPEAKER_01: Definitely.
• 11:28
  SPEAKER_01: All right.
• 11:29
  SPEAKER_01: Well, thank you for joining me today.
• 11:30
  SPEAKER_01: Uh, we'll catch you next week here on both the Hog Podcast and the uh Professional Egg Marketing Podcast.
• 11:36
  SPEAKER_01: If you have any uh requests, please send them into our office.
• 11:40
  SPEAKER_01: Thank you.
• 11:40
  SPEAKER_01: And thank you to all our listeners.
• 11:42
  SPEAKER_01: Please reach out to us at professional eggmarketing.com.
• 11:46
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 11:51
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 11:57
  SPEAKER_01: See you next time.