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Aerial Crop Tour and Market Recap · Professional Ag Marketing Podcast

• 0:03
  SPEAKER_00: You're locked in to the Grain Market Talk Podcast.
• 0:06
  SPEAKER_00: Fast updates, market movers, and the grain news you need right now.
• 0:12
  SPEAKER_00: Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: All right, today is June 26th, and I've got just Cade with me here today.
• 0:26
  SPEAKER_01: We're gonna talk a little bit about the grain markets, but first we are going to cover our aerial crop tour that we did this week across the United States as the first real vision of what this crop is looking like in the United States, Cades.
• 0:43
  SPEAKER_01: You flew around the whole US there in a one-day stretch.
• 0:46
  SPEAKER_01: We got a look at what our crop tour in the month of August will look like in just one day.
• 0:52
  SPEAKER_01: So what what can you tell me about the route that you had taken versus kind of what we normally take for uh a route through the US, Cade?
• 1:00
  SPEAKER_02: Yeah, thanks for having me on to be on this side of the camera, it's a little different, so happy to be here.
• 1:05
  SPEAKER_02: But yeah, we went on the aerial crop tour uh this week, and just a picture for our audience here online to see what our normal ground tour looks like.
• 1:13
  SPEAKER_02: Uh we basically did this on the bottom half, that red route there, all the way through the ice states, a little bit into Nebraska, Missouri.
• 1:21
  SPEAKER_02: Um we flew basically that same path, and I'll show that path here in just a second, too.
• 1:26
  SPEAKER_02: But you know, started in Laverne, Minnesota, obviously, and went down to Nebraska, across Iowa, Illinois, Indiana, and into Ohio, and then turned it back around to the northern part of those same states.
• 1:37
  SPEAKER_02: And um basically what we saw is what everyone's saying here.
• 1:41
  SPEAKER_02: So uh take a look at the drought map there.
• 1:43
  SPEAKER_02: As we went down into South Dakota and into Nebraska, we did see themes of some dryness um of what everyone's saying, and I have pictures of those too.
• 1:53
  SPEAKER_02: So here's a little bit of the Minnesota we got.
• 1:55
  SPEAKER_02: Um head into South Dakota, you could kind of see some dryness there and Nebraska as well as those drought conditions um were present.
• 2:05
  SPEAKER_02: But you know, as we got over the Missouri and into Iowa, the Missouri River that is, um, we got to see uh Iowa corn.
• 2:12
  SPEAKER_02: So uh green around there.
• 2:14
  SPEAKER_02: Um as we kept going east, it just kept showing us green.
• 2:18
  SPEAKER_02: Heading into Illinois, you know, it was pretty much the same thing, a really good crop until we hit um around central Illinois.
• 2:25
  SPEAKER_02: You can see here on the image on the screen, I have shown a little water um in the fields there.
• 2:30
  SPEAKER_02: This is about where we started picking that up, was around the central Illinois spot, and that was around the time of our first stop.
• 2:37
  SPEAKER_02: So um as soon as we took back up in the air, the water continued um pretty much into Indiana.
• 2:44
  SPEAKER_02: And you can see here on the Indiana pictures as there's a little bit of dryness here as well.
• 2:49
  SPEAKER_02: Um as we flew into Ohio and you turned out of there, basically what we saw in eastern Indiana, um, pretty much the same conditions of those.
• 2:59
  SPEAKER_02: And we spun things back around to the northern parts of Iowa where we saw what we saw.
• 3:05
  SPEAKER_01: All right.
• 3:06
  SPEAKER_01: Well, it's it's a story of the west versus the east a little bit here still.
• 3:10
  SPEAKER_01: So, I mean, if you look at it, you know, pull up that drought map one more time there.
• 3:15
  SPEAKER_01: Just basically, as you went down in through central uh eastern Nebraska, what you saw there was the drought map on the west side of the state, very, very dry.
• 3:25
  SPEAKER_01: That you saw signs of that throughout the state, which wasn't surprising at all on current crop conditions, especially you're growing a lot of corn on very light soil, under pivots, it can only hold on for so long.
• 3:40
  SPEAKER_01: In some cases, it completely started behind the eight ball.
• 3:43
  SPEAKER_01: Uh, some of that corn didn't even get planted, for example, using things like PP on it.
• 3:47
  SPEAKER_01: So it that area is interesting to watch because when I look at the rainfall over the past couple or so days here, the last week, um, on that rainfall map, going back the last week there, two to the right of that cade.
• 4:02
  SPEAKER_01: Yeah, that one there.
• 4:03
  SPEAKER_01: You can see that part of Nebraska got hit pretty hard with rains over the last week or so.
• 4:09
  SPEAKER_01: And some pretty bad storms came with that too.
• 4:12
  SPEAKER_01: They didn't just get their happy-go-lucky, two inches rain.
• 4:14
  SPEAKER_01: It came with hail, wind, things like that uh to come along with it.
• 4:19
  SPEAKER_01: So kind of a tough start for the Nebraska crowd to say the least on the crop tour.
• 4:24
  SPEAKER_01: Uh, we saw the same thing for the most part.
• 4:26
  SPEAKER_01: You go east, uh, saw a good crop through most of Iowa, but that eastern Iowa, you start to get wet, a little bit excessively wet, um, bigger rainfall amounts to say the least, but things are caught up.
• 4:39
  SPEAKER_01: There's uh there's no real you had delayed planning concerns in in kind of the northern Illinois, northern Indiana, northern Ohio, but it still got in by the end of May, and it yeah, things have dried out just enough to kind of keep things rolling okay.
• 4:54
  SPEAKER_01: The the problem is when you go, yeah, that one right there, when you show that we're looking at the observed rainfalls over the last week or so, that stretch continues to get hit kind of through Illinois uh with some pretty heavy rainfall amounts, 10-15 inches so far this year, just plenty of rain.
• 5:13
  SPEAKER_01: And uh we did see that excessively through the fields.
• 5:16
  SPEAKER_01: If uh if if you kind of pull up what we saw, anyways, and a few things we'll be watching on this will be one, the wet fields in Illinois specifically.
• 5:26
  SPEAKER_01: So if you pull up what we saw on the uh the two fields, uh just for different categories, basically, we saw ponding through a lot of uh Illinois right there.
• 5:38
  SPEAKER_01: That's the one you can see just on the top middle of the screen.
• 5:42
  SPEAKER_01: You saw very heavy moisture, very prevalent through a good chunk of the area for major corn production uh in Illinois.
• 5:51
  SPEAKER_01: And for example, you go to a dry picture from the Western Corn Belt, that one there, you can just see there's no signs of excess moisture, it's uh pretty spotty.
• 6:03
  SPEAKER_01: I I'm gonna gauge an interesting question here because you can only see so much, especially from a plane at the end of June, right?
• 6:12
  SPEAKER_01: But this does give you an idea of what to look for going forward.
• 6:17
  SPEAKER_01: Uh the thing we're gonna be watching going forward is one, how the Western Corn Belt can handle any precip going forward, or if we can get precip going forward, when that starts to turn with it being too late or not.
• 6:30
  SPEAKER_01: One, I would say this next week is a really big week for it, um, where you could finally start to see real stress on this crop for being too dry in the western corn belt.
• 6:41
  SPEAKER_01: In the eastern corn belt, you start to pour a little heat to this thing, you don't you kind of stop getting a few of the excess moisture rainfall, you just kind of keep getting key rains through the year.
• 6:52
  SPEAKER_01: The question is, would you rather?
• 6:54
  SPEAKER_01: We will be watching going forward that west first east and the two completely different weather situations going on, but would you rather have that field or the other field that we showed up on that map?
• 7:06
  SPEAKER_01: Would you rather have the ponding in the eastern corn belt right now or the four inches or two inches of rain total for the entirety of the year so far that we're seeing in some of these spots in the western cornbelt?
• 7:18
  SPEAKER_01: And this next week, when we start to talk about 100 degree temps and we start to talk about uh very, very hot, dry moisture, this is gonna start to really, really stress the crops in the western corn belt.
• 7:32
  SPEAKER_01: And if it stays dry here, you're probably gonna want that eastern cornbelt crop to say the least.
• 7:37
  SPEAKER_01: So that's gonna be what we're watching going forward, not just where it's raining or not, but the severity of it too.
• 7:44
  SPEAKER_01: Obviously, the people in the east, they're still gonna need some rain going forward, just not in this type of amount, uh, and they're gonna need a little heat.
• 7:52
  SPEAKER_01: In the west, we just need rain to say the least here.
• 7:54
  SPEAKER_01: Uh, so those are a few of the things we're gonna be watching.
• 7:57
  SPEAKER_01: And our our conclusion on this all is December corn, if I had to sum it up, the entirety of the of the plane ride, uh, everything you guys saw this week, it's gonna be December corn today is showing exactly what you saw from the plane, and that's 440 D's corn, not$5 D's corn.
• 8:18
  SPEAKER_01: Um, the excess reasons for reasons we had premium in this corn market was things like oil being above$100, the threat of that Iran situation being a big deal, China buying corn at some point as well because of a trade deal that they're supposed to buy excess egg uh purchases from the United States, which we haven't seen yet on any commodities besides the the last two weeks on some very, very minute soybean purchases, I would argue.
• 8:46
  SPEAKER_01: And that's what Deese Corn's showing us today.
• 8:48
  SPEAKER_01: It took that premium out of it, and really at this point there's no weather story.
• 8:52
  SPEAKER_01: There might be little weather stories here and there through the corn belt, like you saw on the plane ride, Cade, but there's no one big weather story yet at the end of June that we can really take December corn and try to run with it.
• 9:05
  SPEAKER_01: And I think that pulling of the excess premium out ahead of the report that we've got next Tuesday is a big part of that.
• 9:12
  SPEAKER_01: Anything else you want to mention about your trip before I just get into some market fundamentals here?
• 9:17
  SPEAKER_02: Yeah, I do want to say if you're interested in this stuff, uh it's all over our Twitter, uh Ag Professional or just search professional egg marketing.
• 9:23
  SPEAKER_02: We're verified.
• 9:24
  SPEAKER_02: I'm share uh not sharing the screen.
• 9:26
  SPEAKER_02: We'll share the screen and give you a little glimpse at it.
• 9:29
  SPEAKER_02: But we had a ton of photos of every stop.
• 9:31
  SPEAKER_02: It was like 30-minute increments.
• 9:33
  SPEAKER_02: We were posting new photos of where we were because they were basically completely new um destinations we were at.
• 9:39
  SPEAKER_02: So if you are interested, uh go to our Twitter, go to our website, um, it's a blog post on there, or even go to a link in the description.
• 9:46
  SPEAKER_02: It'll be uh it'll sign up for our daily market commentary where we've been posting some of these findings as well.
• 9:52
  SPEAKER_02: So I'm don't be afraid, get in there.
• 9:54
  SPEAKER_02: Um, we'll get you these up to date then and as we're doing it.
• 9:57
  SPEAKER_01: Awesome.
• 9:58
  SPEAKER_01: Yeah, that's gonna be good.
• 9:59
  SPEAKER_01: We'll do uh just as a generic summary here, we did the one aerial tour this week.
• 10:04
  SPEAKER_01: We're gonna do one more aerial tour at the end of July, and then we'll go on our crop tour the beginning-ish of August, there as we head out, boots on the ground, and try to look at the crop that we've seen overhead a couple times.
• 10:17
  SPEAKER_01: So gonna try to get a more immersive, little bit longer uh path to try to uh follow this crop.
• 10:24
  SPEAKER_01: And we want you all to participate as well.
• 10:26
  SPEAKER_01: Please put in the comments, please put on our comments on Twitter, on the feeds, put in there what you're seeing in your exact area and how you think your crop is looking first normal or what the USDA has for your area as well here for your state.
• 10:40
  SPEAKER_01: And uh just a few things I wanted to mention from the fundamental side here.
• 10:44
  SPEAKER_01: Let's start with we've had some short covering ahead of this report.
• 10:48
  SPEAKER_01: We've had a little rally in these futures, if you can show one of those charts there uh over the last couple weeks, and we've seen a couple pops.
• 10:56
  SPEAKER_01: And when I talk about these corns trading, exactly what you saw on the plane, this is it.
• 11:01
  SPEAKER_01: You've normally hold on to some premium until about the May, you kind of plant the crop and it goes in fine, no problems.
• 11:08
  SPEAKER_01: You start to get in, get some key rainfalls, we uh start to tear some premium out of the market, and then if you start to see decent rainfall, and the USDA doesn't give you a reason really to rally this thing, you start to fall apart by the middle of June pretty hard normally.
• 11:22
  SPEAKER_01: On the screen, I've got last year 25 and blue.
• 11:25
  SPEAKER_01: I've got blue, I've got the white year is 2024, and then on the kind of maroon lines, I've got the 10 and 20 year averages on Dece Corn.
• 11:33
  SPEAKER_01: And you can tell we're we're seeing exactly what you saw on the plane, which is there's no problems in the corn belt, just minute ones here or there.
• 11:41
  SPEAKER_01: And Deese Corn today gets to trade that and trade a little bit lower with no weather premium because we now don't have as much excess outside noise that's holding or inflating those corn prices higher.
• 11:53
  SPEAKER_01: So that's worth mentioning for one.
• 11:55
  SPEAKER_01: On a on a December or November bean chart, just on commodity view, if we look at the last couple weeks here and what we've seen for December corn or November beans, we've seen a little short covering.
• 12:06
  SPEAKER_01: What we saw was you see a uh China buying coming on the soybean side last week and this week for new crop soybeans.
• 12:15
  SPEAKER_01: That's 1% of their total end uh target about.
• 12:19
  SPEAKER_01: So they've got a lot, a lot of room to go there.
• 12:22
  SPEAKER_01: That's probably why November beans haven't been able to take hold of it and really run on it.
• 12:26
  SPEAKER_01: Just a day pop here or there.
• 12:28
  SPEAKER_01: And we were even lower going into the weekend most of the day here uh with that nice bounce yesterday.
• 12:33
  SPEAKER_01: Just couldn't really follow through with it.
• 12:35
  SPEAKER_01: And uh so short covering ahead of the report.
• 12:38
  SPEAKER_01: We are gonna have a report on Tuesday that's got acreage quarterly stocks that I'll have you pull up as well.
• 12:43
  SPEAKER_01: It's gonna show over 180 million acres on corn and soybeans in that quarterly stocks and acreage report that we are expecting.
• 12:53
  SPEAKER_01: And uh, that's a lot of acres, 180 plus.
• 12:56
  SPEAKER_01: We're gonna be approaching record type levels between corn and soybeans there, uh, as you can see on the screen.
• 13:02
  SPEAKER_01: And uh that that's kind of what we're expecting going into this thing.
• 13:05
  SPEAKER_01: Not exactly the huge decrease in corn acres like we were expecting with the Iran situation and fertilizer.
• 13:12
  SPEAKER_01: So we uh we get to see that next week, which will really help determine where price direction could go going forward.
• 13:18
  SPEAKER_01: On December corn, we did see the other day a key reversal.
• 13:22
  SPEAKER_01: We saw some bullish divergence, saw some good technical features that could give us a little bit of a short-term local low here.
• 13:29
  SPEAKER_01: And uh I think uh it could build on it if we got some good news next Tuesday.
• 13:34
  SPEAKER_01: However, if we get some bad news, if they find plenty of acres, it's gonna be hard for that technical to really matter going forward.
• 13:40
  SPEAKER_01: And on uh last but not least, some of the bearish uh bearishness has been turned around lately based on the the uh dome of doom, uh so so-called we could call it.
• 13:52
  SPEAKER_01: Uh the forecast going the next 10 days here or so, as we'll pull up on the screen for Laverne.
• 13:57
  SPEAKER_01: It's just a lot of hot weather.
• 13:58
  SPEAKER_01: There's little rainfall amounts through that stretch, but it's a tenth here or there.
• 14:02
  SPEAKER_01: Not enough to matter at all, especially with a hundred-ish degree heat uh here around Laverne, mainly up to ninety through most of those days.
• 14:10
  SPEAKER_01: But I'm really hoping that we can get a 90 or 100 degree day to really spur up some rainfall activity, some big thunderstorms, and try to get some rain in the western corn belt here, because uh you and I both know we definitely need it going into the 4th of July here.
• 14:24
  SPEAKER_01: So please follow along on Twitter, follow along on our website here going forward with the crop tour, the both aerial crop tours and the one we see in August.
• 14:34
  SPEAKER_01: So far here, it looks like we have no reason for the uh USDA to move yields lower at all in this next report in the month of July, and uh acres will come out at the end of the month, which uh we had plenty of acres of uh corn and soybeans planted everywhere, but uh a record amount is uh is going to be interesting to see if we do find that many or not.
• 14:55
  SPEAKER_01: So thank you for the update, Cade.
• 14:57
  SPEAKER_01: Thank you again for tuning in, everybody.
• 14:59
  SPEAKER_01: Please click the link on the description below, click the subscribe button as well, and uh we'll see you next time.
• 15:04
  SPEAKER_02: Thanks, Mike.