Latest / AG Bull / Wiesemeyer's Perspectives | Diesel Fuel Explodes Higher

Transcript

Wiesemeyer's Perspectives | Diesel Fuel Explodes Higher · AG Bull

0:12
SPEAKER_01: Welcome back, everyone.
0:13
SPEAKER_01: It's good that you're here.
0:15
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0:16
SPEAKER_01: You're getting ready to watch Ag Bull Media, Ag Bull Trading, We Smeyers Perspectives.
0:22
SPEAKER_01: Now, we're coming back from a short, abbreviated holiday week.
0:25
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0:39
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0:39
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0:42
SPEAKER_01: Every day we do Ag Squawk AM and Ag Squawk in the afternoons with Mr.
0:47
SPEAKER_01: Davis Michelson.
0:48
SPEAKER_01: That's been really, really we enjoy putting those on.
0:51
SPEAKER_01: And uh what would you like to see more of?
0:53
SPEAKER_01: You you are the listener.
0:55
SPEAKER_01: We do this for you.
0:56
SPEAKER_01: With that, we won't hold back.
0:57
SPEAKER_01: We're gonna get right to Mr.
0:59
SPEAKER_01: Jim.
0:59
SPEAKER_01: We do have to take a little bit of time to talk about where we were.
1:03
SPEAKER_01: And I ask you, where were you on 9-11?
1:06
SPEAKER_01: Let's get Mr.
1:07
SPEAKER_01: Jim and see what he says.
1:36
SPEAKER_01: All right, everybody, let's get ready.
1:38
SPEAKER_01: It's been a week or two.
1:39
SPEAKER_01: We got Mr.
1:39
SPEAKER_01: Jim waiting here, and here it comes.
1:42
SPEAKER_01: Mr.
1:42
SPEAKER_01: Jim Weesmeyer.
1:44
SPEAKER_01: I do have to ask.
1:45
SPEAKER_01: Jim, yes, 25 years, 9-11.
1:48
SPEAKER_01: I've never asked you where were you?
1:51
SPEAKER_00: It was a Tuesday.
1:53
SPEAKER_00: I was going to work in my car, and I, of course, I had the radio on for news, and I heard that a plane had hit one of the first buildings.
2:04
SPEAKER_00: And I knew that wasn't a mistake, even though they said that on the radio, it could have been an accident.
2:09
SPEAKER_00: And I turned around, went home, and this almost the second I got into my office at my house, I saw the other plane hit the other building.
2:20
SPEAKER_00: And the rest of that day, and basically the rest of the week, I huddled with then pro farmer editor Chip Flory and discussing how we would cover it in the newsletter and online that time.
2:34
SPEAKER_00: But I'll never forget the next day, Tommy, when I went down to my office in DC, and it was just like a ghost town.
2:43
SPEAKER_00: And there were police cars parked on the on the corners of the streets at the ends of the streets.
2:51
SPEAKER_00: They were catty corner.
2:53
SPEAKER_00: And I saw Black Hawk helicopters flying around.
2:57
SPEAKER_00: It was just very eerie, like a movie, you know.
3:01
SPEAKER_00: Hope I don't ever have to see that uh again.
3:03
SPEAKER_00: And it was quite a quite an experience.
3:06
SPEAKER_00: And on a personal note, one of my best friends, his girl, was in college at Catholic University going, and of course, she was quite upset.
3:16
SPEAKER_00: So she came to stay with me that night because she was upset.
3:21
SPEAKER_00: And of course, then we had a good meal and and discussed it.
3:25
SPEAKER_00: So that uh vivid, uh, I think most people remember what they were doing, where they were at.
3:31
SPEAKER_01: Absolutely.
3:31
SPEAKER_01: 25 years, Jim, since 9-11.
3:34
SPEAKER_01: We remember and we honor, we will never forget all the people with courage.
3:38
SPEAKER_01: They sacrificed unity, inspiration, and forever in our hearts.
3:43
SPEAKER_01: Yes.
3:43
SPEAKER_01: Unbelievable.
3:44
SPEAKER_01: Jim, I without going into detail, I have a friend who was on the 55th floor of the second building, and he was working, and all his co-workers went to breakfast.
3:55
SPEAKER_01: And they said, Do you want to come with us?
3:56
SPEAKER_01: His name's Kenny Polkari.
3:58
SPEAKER_01: Uh, you see him on Fox News all the time.
4:00
SPEAKER_01: Handsome Italian guy, beard, gray hair.
4:03
SPEAKER_01: He he he just a ball of energy.
4:06
SPEAKER_01: And his friend said, Let's go to breakfast.
4:08
SPEAKER_01: He is a floor trader on the uh New York Stock Exchange.
4:12
SPEAKER_01: And he said, No, no, I can't go.
4:13
SPEAKER_01: I got work to do.
4:14
SPEAKER_01: His friends left.
4:15
SPEAKER_01: One of his friends turned around, came back, and said, Ken, I'm begging you, come with us.
4:19
SPEAKER_01: And when the planes hit, he was at breakfast.
4:22
SPEAKER_01: I mean, there's a so many stories like that.
4:24
SPEAKER_01: Yes.
4:25
SPEAKER_01: So many stories.
4:26
SPEAKER_00: Uh well, Howard Lutnick, the commerce secretary, was his firm.
4:32
SPEAKER_01: Canner Fitzgerald.
4:33
SPEAKER_00: Canner Fitzgerald, they lost hundreds and his brother.
4:36
SPEAKER_00: Yes, he lost his brother.
4:37
SPEAKER_00: They lost hundreds of souls.
4:39
SPEAKER_01: About 665, if I remember.
4:42
SPEAKER_01: A lot of souls.
4:43
SPEAKER_01: Yes.
4:43
SPEAKER_01: Canner Fitzgerald.
4:44
SPEAKER_01: If you're out there and you wonder what we're talking about, just Google Howard Lutnick, Canner Fitzgerald, 911, and uh they were on like make up a number, 101st, 102nd, and 103rd floors.
4:54
SPEAKER_01: Howard Lutnick, the Secretary of Commerce, was most likely the owner and president CEO of Canner Fitzgerald on that day.
5:03
SPEAKER_01: I personally don't think I know anyone.
5:06
SPEAKER_01: Maybe I'd met him at some point, but I can't say like a certain name of anyone I know.
5:10
SPEAKER_01: But so many stories.
5:11
SPEAKER_01: And a little story, just while we're chatting about it before we get warmed up and get into today's show, my wife, Gina Grsafi, is a flight attendant for United.
5:20
SPEAKER_01: And she used to fly that route that was Boston to LA, and she knew three of the flight attendants who perished that day.
5:27
SPEAKER_01: So it hits close to home for so many of us.
5:29
SPEAKER_00: Absolutely.
5:30
SPEAKER_00: And there are still uh uh residual negatives because as people who were in the area with all the smoke and that, that that affected their health.
5:41
SPEAKER_00: So we're see still seeing ramifications from that.
5:44
SPEAKER_00: Horrible.
5:45
SPEAKER_01: Horrible.
5:46
SPEAKER_01: We'll never forget, and America changed forever.
5:49
SPEAKER_01: It did with that.
5:50
SPEAKER_01: You have a whole lineup of things you want to talk about, and you wanted a few minutes before we get into markets just to kind of give a rundown.
5:56
SPEAKER_01: You said, Tommy, in the future, let's do a rundown of what we're gonna talk about.
5:59
SPEAKER_00: Yeah, this is what we will talk about.
6:00
SPEAKER_00: Of course, we always start with markets.
6:02
SPEAKER_00: We're gonna do corn.
6:03
SPEAKER_00: Soybeans, wheat to show you we're just not Midwest oriented.
6:07
SPEAKER_00: We'll talk about sorghum or Milo, cotton, rice, cattle, and hawks.
6:12
SPEAKER_00: And then we're gonna shift to uh issues, the uh topic uh issues, diesel prices in the news today because President Trump is urging Ukraine's leaders to quit bombing Russian uh refineries because it's impacting diesel supply and prices.
6:32
SPEAKER_00: The FOMC meeting Tuesday, Wednesday, expect a hike.
6:36
SPEAKER_00: We're gonna see if that happens.
6:37
SPEAKER_00: We'll have perspective on that.
6:39
SPEAKER_00: Farm bill, Senate Act Committee.
6:41
SPEAKER_00: Looks like we're gonna have it.
6:42
SPEAKER_00: Key is whether or not Senator Mitch McConnell arrives, and we're gonna end with the Trump Xi Summit.
6:49
SPEAKER_00: Late breaking news on that today, on Sunday.
6:52
SPEAKER_00: President Trump said he is uh he does not believe that Xi Jinping will cancel it as a result of Xi Jinping's concern about a$14 billion potential military weapons sale to Taiwan.
7:07
SPEAKER_00: So that's how we're gonna bridge everything together, Tommy.
7:10
SPEAKER_01: Let's get started, my friend.
7:12
SPEAKER_01: Now we'll have some enthusiasm.
7:14
SPEAKER_01: I just want to add one more thing, and I can't stop talking about or thinking about 9-11.
7:20
SPEAKER_01: But did you know that one-third of Americans who are alive today weren't even born when 9-11 happened, Jim?
7:27
SPEAKER_00: No, I did not.
7:28
SPEAKER_00: No, yeah, and that's a learning, it's a learning experience.
7:32
SPEAKER_01: That's why history is so important.
7:34
SPEAKER_01: When I was younger, I didn't like history.
7:36
SPEAKER_01: Now I love it.
7:36
SPEAKER_00: So and visiting New York City, yes, sir.
7:40
SPEAKER_00: To to see it, to see it and to feel it.
7:43
SPEAKER_01: Yes.
7:43
SPEAKER_01: Let's get ready.
7:44
SPEAKER_01: Let's feel markets, my friend.
7:46
SPEAKER_00: Okay, look at there.
7:47
SPEAKER_00: There's more red on that screen than what we we've been used to.
7:51
SPEAKER_00: Corn was down uh a little over six cents for the week.
7:54
SPEAKER_00: Uh soybeans uh 13 cents plus meal had a down week.
7:59
SPEAKER_00: Soybean oil is holding in there, they was up a little over 40 points, wheat down, both SRW and HRW.
8:06
SPEAKER_00: You've got some technical damage in the wheat uh charts, Tommy, from the technicians tell me.
8:12
SPEAKER_00: Cotton, although they've really rallied recently, they had a down week, but I think that they're they're that they're still have firm fundamentals going for them.
8:22
SPEAKER_00: Cattle, look at live cattle, feeder cattle up.
8:25
SPEAKER_00: Look at feeder cattle up.
8:27
SPEAKER_00: What is that?
8:27
SPEAKER_00: $13?
8:28
SPEAKER_00: Is that 13?
8:29
SPEAKER_00: Yeah, that was a big move.
8:30
SPEAKER_01: It was accurate, yeah.
8:32
SPEAKER_00: And lean hogs just just kind of boring market.
8:35
SPEAKER_00: They're not much much going on in the hog market.
8:38
SPEAKER_00: That's the price situation.
8:40
SPEAKER_00: Now we're gonna get into it, but we have the crop production report, and just history has shown me that especially traders or analysts who were lower than USDA eventually put out almost two uh every year, they immediately questioned the accuracy of USDA's number.
9:05
SPEAKER_00: It took them a nanosecond, and a nanosecond is defined, by the way, as when you're at a red stoplight and it goes green, and if you don't go right away, the guy in back of you beeps his horn.
9:18
SPEAKER_00: Okay, that's an example.
9:21
SPEAKER_00: But corn, we had a September 11th yield, uh September crop report yield is as of September 1 of 178.5 bushels.
9:31
SPEAKER_00: Now it was 180.7.
9:34
SPEAKER_00: Now, those who are saying, oh, they're still too high because of the ear counts.
9:39
SPEAKER_00: Well, on Agbol.com, I did a perspective piece on ear counts.
9:45
SPEAKER_00: And you can't really, that's not really a true barometer of whether they're gonna go down or even up.
9:52
SPEAKER_00: But yet that's the case that you hear every time from the people who think that they're gonna go lower because more than a few people think that USDA is still too high by two to four bushels per acre to be truthful to you.
10:07
SPEAKER_00: Production was cut 213 million bushels, carryover one point, let's call it 1.57 billion bushels.
10:15
SPEAKER_00: Now that's a stocks to use ratio of 9.7 percent.
10:20
SPEAKER_00: Now that's down from 10.1 percent, but that's still okay adequate stocks, Tommy, from from history.
10:27
SPEAKER_00: However, those people who think USDA is gonna go down, it could go to that stocks to use ratio, it could go to 8% or even below.
10:36
SPEAKER_00: Now, if you go that, then you're talking a bull market in the corn price scenario.
10:42
SPEAKER_00: USDA up their season average price 30 cents.
10:46
SPEAKER_00: That's a big move for USDA to$4.80.
10:50
SPEAKER_00: Now that's a season average price.
10:52
SPEAKER_00: That means you're going to have prices above and below that.
10:55
SPEAKER_00: That those are farm gate prices, by the way.
10:58
SPEAKER_00: Futures closed, what, three to five cents lower on Friday?
11:02
SPEAKER_00: Again, as we say, some argue USDA is still too high on yield.
11:06
SPEAKER_00: What's coming up next?
11:07
SPEAKER_00: Grain stocks report September 30th, and the crop production and WASDI report on October 9th.
11:14
SPEAKER_00: Those are your keys for corn coming up.
11:16
SPEAKER_00: You have anything else for corn?
11:17
SPEAKER_00: They really zapped North Dakota where you're at, I believe.
11:20
SPEAKER_01: Yep.
11:20
SPEAKER_01: Yeah, I'm at the Agbol Studios in Mayville, North Dakota right now.
11:24
SPEAKER_01: I had a client do what he thinks will be his worst field down in Galesburg, North Dakota, and he had a yield of 50 bushels per acre.
11:32
SPEAKER_01: Now he definitely thinks this will be his worst field.
11:35
SPEAKER_01: It just did terrible.
11:36
SPEAKER_01: He missed every rain possible.
11:38
SPEAKER_01: I was also at a little tailgate for Mayville State University here.
11:43
SPEAKER_01: Got to visit with a lot of farmers and clients, and they're disappointing in yields, but they're excited about price.
11:48
SPEAKER_01: So what's really important to talk about, Jim, not that we can affect it, is it's important for farmers that October prices stay high.
11:56
SPEAKER_01: And the risk now between now and October is if the market breaks hard and you still have this poor yield.
12:01
SPEAKER_01: Let's be honest, what's done is done in corn.
12:04
SPEAKER_01: It's not going to get better.
12:05
SPEAKER_01: One interesting note the state of Iowa this week is going to be inundated with rains, two to three inch rains forecast.
12:13
SPEAKER_01: But if those turn into three, four, five, it might be interesting if we start talking about uh harvest delays.
12:18
SPEAKER_01: Now, of course, the crops out there, but we need to get it in also.
12:23
SPEAKER_01: One other thing to note I did go on a speaking tour here last week.
12:27
SPEAKER_01: I spoke at two pioneer meetings.
12:28
SPEAKER_01: Thank you, Pioneer Seed, 100-year anniversary.
12:31
SPEAKER_01: I also spoke at a channel seed meeting.
12:33
SPEAKER_01: Thank you, channel.
12:34
SPEAKER_01: But interesting crop mix, and we'll do some Ag Bull specials here on the uh premium side.
12:40
SPEAKER_01: Farmers up here have a lot of choices for next year.
12:43
SPEAKER_01: Are they going to plant wheat, which is at elevated prices?
12:46
SPEAKER_01: Are they going to plant canola, which is at elevated prices, or maybe they'll even go at corn again?
12:53
SPEAKER_01: But the the thing, the crop that looks least attractive in the North Dakota in 2027 is soybeans.
13:00
SPEAKER_01: That means, Jim, they have a lot of choices.
13:02
SPEAKER_01: So short crops give you choices.
13:05
SPEAKER_01: Everything going on in Russia and Ukraine, we grow a lot of those same crops up here.
13:10
SPEAKER_01: Let's get into soybeans.
13:11
SPEAKER_00: Well, you mentioned the the uh rain that there's a negative on that one, not only for the crop, but for drying cost.
13:19
SPEAKER_00: Oh, okay.
13:19
SPEAKER_00: Yeah, yeah.
13:20
SPEAKER_00: That and and that cuts into the margin, which I think increasingly so is gonna be the story for agriculture.
13:28
SPEAKER_00: I hope I'm wrong, but we're gonna have relatively firm prices.
13:32
SPEAKER_00: I won't say high, relatively firm prices and not too bad yields, to tell you the truth.
13:39
SPEAKER_00: On average, I'm not talking North Dakota there, but still the margins are gonna not look so good.
13:45
SPEAKER_00: I hope I'm wrong, but I think that's a good idea.
13:48
SPEAKER_01: Uh later on the show to uh yeah, we'll show that.
13:50
SPEAKER_00: Yeah, absolutely.
13:51
SPEAKER_00: Soybeans, we had a yield, they actually went up 16 million bushels, yield of 52.8.
13:59
SPEAKER_00: That's just a little boost up.
14:01
SPEAKER_00: But September, the month we're in, is the month for soybeans.
14:05
SPEAKER_00: So it's the October crop production report that will be key for beans.
14:10
SPEAKER_00: People are mentioning the number of pod counts that USDA found, so that's uh signals a robust crop.
14:18
SPEAKER_00: Carry out was 310 million bushels, Tommy.
14:21
SPEAKER_00: That was higher than uh most traders thought, and that's why you had that very negative reaction to the report.
14:27
SPEAKER_00: You know, a bull needs to eat every day.
14:30
SPEAKER_00: Price, they they increased 60 cents.
14:34
SPEAKER_00: You think corn was high?
14:36
SPEAKER_00: 60 cents to 12 dollars.
14:39
SPEAKER_00: So wow.
14:40
SPEAKER_00: Again, that means that's farm gain price, you'll be uh prices above and below that flat cash price.
14:46
SPEAKER_00: Very surprised futures fell 30 to 36 cents.
14:50
SPEAKER_00: Now, what's coming up for beans, other than the October crop report, NOPA crush, and and Conab's first Brazil estimate, that's key, September the 15th.
15:01
SPEAKER_00: So that's coming up this week, and the Trump G summit, uh, we think on September the 24th.
15:07
SPEAKER_00: That's big because we're going to see continued purchases of uh U.S.
15:13
SPEAKER_00: soybeans by China leading into and out of that report.
15:17
SPEAKER_00: Again, we'll have more on China later, Tommy.
15:20
SPEAKER_00: Wheat, wheat's the next one.
15:22
SPEAKER_00: U.S.
15:22
SPEAKER_00: held, it's kind of what's boring.
15:24
SPEAKER_00: U.S.
15:24
SPEAKER_00: held stocks at 177 million bushels, exports they held at 775.
15:31
SPEAKER_00: They raised price 20 cents to six dollars and 40 cents.
15:35
SPEAKER_00: They cut Russia's exports of wheat to 43 and Ukraine to 12 and a half, but they raised Australia and Canada's crop.
15:45
SPEAKER_00: So world stocks were up 3 million tons.
15:47
SPEAKER_00: So that's why you you had a, I would say, a neutral to negative tone in the wheat market.
15:54
SPEAKER_00: Kansas City, December closed under$8 Friday for the first time in three weeks.
16:00
SPEAKER_00: That caught my attention.
16:02
SPEAKER_00: What's coming up for wheat?
16:03
SPEAKER_00: Small grain summary, September 30th, and the Wazdi Report on October the 9th.
16:10
SPEAKER_00: So that's that's the wheat.
16:12
SPEAKER_00: Of course, we always have to watch the Ukraine, Russia, Black Sea area, and they continue to hit each other, Tommy.
16:19
SPEAKER_01: So let me pull up a picture of that just to refresh people with what's talk about that a little bit over there.
16:24
SPEAKER_00: The insurance costs are going up again.
16:28
SPEAKER_00: The grain is still there, they just can't get it out.
16:33
SPEAKER_00: And you're starting to see uh uh location changes in uh countries purchasing normal purchasers of Russia and Ukraine grain.
16:44
SPEAKER_00: And the month of September, those two countries usually pump out a lot of exports.
16:49
SPEAKER_00: They're gonna get some out, but not near the level that they usually do.
16:54
SPEAKER_00: And so that's why you're seeing European cash prices not only steady, but a lot higher.
17:01
SPEAKER_00: And I think eventually we could see some uh spillover to the purchases of US uh uh foreign products, especially corn.
17:11
SPEAKER_00: And that that'll bring that stocks to use ratio down more because we'll we'll bump up that uh uh export number.
17:18
SPEAKER_01: Yeah.
17:19
SPEAKER_01: And I just want to say, uh, give a shout out to the boys and girls on ProFarmer.
17:23
SPEAKER_01: They said the corn yield was down and that beans were at a record or close to record.
17:28
SPEAKER_01: They and the USDA followed right in suit.
17:31
SPEAKER_01: Now, of course, ProFarmer immediately put a drastically lower corn yield in there.
17:36
SPEAKER_01: We may eventually get there.
17:37
SPEAKER_01: I mean, some of these yields up here in North Dakota are just horrible.
17:40
SPEAKER_01: I was with several clients today.
17:42
SPEAKER_01: We had a beautiful uh baptism for a newborn child and met talked to a lot of farmers after church because they're all getting ready to start harvest, and this is abnormally early.
17:53
SPEAKER_01: I'll be at Big Iron this week in Fargo, North Dakota on Tuesday with our mutual friend, Mr.
17:59
SPEAKER_01: Don Wick from the Red River Farm Network.
18:02
SPEAKER_01: But I'm a little worried about poor turnout, Jim.
18:04
SPEAKER_01: Here's what's going on up in North Dakota edible beans are ready, soybeans will be ready, and cornfields that matured just way too quick due to lack of moisture are getting ready to harvest.
18:14
SPEAKER_01: So I have clients this week who will have a choice of what do we go get first?
18:19
SPEAKER_01: And that's not usually how it goes, my friend.
18:22
SPEAKER_00: No, that's a sign of of a of a market factor right there.
18:26
SPEAKER_00: And two, the you know uh the farmers will get into the fields for sure.
18:30
SPEAKER_01: Yeah, and then when the combines roll, that that's what gives you truth.
18:34
SPEAKER_01: Real quick note, too, keep an eye on that cash market, seeing some interesting things up here, Jim, with basis, and that's going to be a key.
18:42
SPEAKER_01: I'm sure you'll put out an article here in the in the next week or two on uh different levels of what the basis is trading across the United States.
18:49
SPEAKER_01: Sure.
18:50
SPEAKER_01: All right, sorghum.
18:51
SPEAKER_00: Next commodity, sorghum or Milo.
18:53
SPEAKER_00: In the case I learned it as Milo, USDA trimmed the crop again.
18:57
SPEAKER_00: Remember, they whacked it the month before to 248 million bushels and stocks of only 21 million bushels.
19:06
SPEAKER_00: Price was increased 30 cents to 460.
19:10
SPEAKER_00: Watch the feed grain language, if any, at the September 24th Trump G meeting.
19:16
SPEAKER_00: Because if they continue to import U.S.
19:19
SPEAKER_00: sorghum for their liquor industry, they love U.S.
19:22
SPEAKER_00: sorghum.
19:23
SPEAKER_00: Your your sorghum is going to increase in value, and they need it because of chart we'll show later on, Tommy, on the on the uh revenue side.
19:33
SPEAKER_00: Cotton is our next one.
19:34
SPEAKER_00: USDA cut the production by 3% to 13.2 million bales.
19:41
SPEAKER_00: The stocks are 3.6 million bales, price was increased three cents to 78 cents.
19:48
SPEAKER_00: That's average.
19:49
SPEAKER_00: Here's your kicker for uh cotton.
19:52
SPEAKER_00: World stocks of cotton are the lowest since 2011 to 2012.
19:59
SPEAKER_00: Wow.
20:00
SPEAKER_00: So that tells you cotton has a fundamental going uh far as far as U.S.
20:07
SPEAKER_00: cotton.
20:07
SPEAKER_00: We've got the cotton, okay?
20:09
SPEAKER_00: But that crop is uh is not a good one at all.
20:12
SPEAKER_00: And the Lubbock area and Texas area just didn't get the reins when they should have.
20:17
SPEAKER_00: That's the bottom line on cotton.
20:20
SPEAKER_01: Let's move to rice.
20:21
SPEAKER_01: You're one of the only people I know who talks about rice.
20:23
SPEAKER_01: I love that you cover the sector.
20:25
SPEAKER_00: I have been doing the USA Rice Federation meeting for over a decade.
20:30
SPEAKER_00: Okay.
20:31
SPEAKER_00: I'm telling you, I love the rice growers.
20:33
SPEAKER_00: And they have larger beginning stocks or outweighing a smaller harvest.
20:38
SPEAKER_00: So USDA uh had a slight decline in the crop, but stocks were raised somewhat to 40.4 million hundred weight.
20:48
SPEAKER_00: Prices held steady at 1490.
20:51
SPEAKER_00: The upside on on rice hinges on any Indian export curves under El Nino.
20:58
SPEAKER_00: You have to watch India as far as their rice situation to really understand what's going to happen to the US and world rice market.
21:08
SPEAKER_00: That's the bottom line for rice.
21:10
SPEAKER_00: But boy, they need they still need high prices because of all the crops that I cover, Tommy, rice has been impacted the most on the negative side on the revenue.
21:20
SPEAKER_01: Yeah, you take a break.
21:21
SPEAKER_01: I'm gonna mute your mic real quick, Jim, and I'm gonna just I want to give we have a couple great sponsors for the show.
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21:53
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21:56
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22:36
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22:43
SPEAKER_01: If you're already on it, no need to re-enter.
22:45
SPEAKER_01: But uh, as you know, Jim is now part of the AGBL media team.
22:50
SPEAKER_01: I actually had someone come up to me at the baptism day.
22:53
SPEAKER_01: That Jim, I love watching him talk.
22:55
SPEAKER_01: And they said, How did you two get together?
22:57
SPEAKER_01: And I said, I don't know what happened there, but uh here we are.
23:01
SPEAKER_01: And you you're you they talk about you at tailgates in North Dakota, they talk about you all over, Jim.
23:08
SPEAKER_01: And oh, Jim's muted.
23:10
SPEAKER_01: Hold on, Jim.
23:11
SPEAKER_01: Oh, there you go.
23:12
SPEAKER_01: Whatever you're saying.
23:13
SPEAKER_01: Yeah, go ahead, sir.
23:15
SPEAKER_00: You even sent me a video of a longtime uh farmer friend of mine since the 1980s, and it was just a joy to see those.
23:24
SPEAKER_00: And he told me to keep on trucking as far as information.
23:29
SPEAKER_00: So I love those.
23:31
SPEAKER_00: I do want to insert um, I'll tell you something that we've started on AgBull.com because we're going to continue to improve of our graphics and how we present the information as we gear up, Tommy, for our internet site that's coming up in the months ahead.
23:50
SPEAKER_00: But I created a what I'm calling a scoreboard of markets and policy to digest as briefly as possible the major issues and market factors going on.
24:03
SPEAKER_00: Because I get more than a few emails and calls from people saying, Jim, I'm almost throwing up my hands.
24:09
SPEAKER_00: There's just too much going on.
24:11
SPEAKER_00: So this scorecard was designed to help you out.
24:15
SPEAKER_00: If you read anything during the day from us, at least from me, go to that scorecard because it'll it'll connect the different issues in energy, in trade, in markets, in elections, and Congress in a concise background, what's the current developments and what's the next step on each of those issues?
24:36
SPEAKER_00: So I did want to promote that.
24:38
SPEAKER_00: That uh that's just not a one-shot only.
24:41
SPEAKER_00: We're going to continue that based on the email response I got.
24:44
SPEAKER_00: Now let's get back to the markets, Tommy.
24:47
SPEAKER_01: Okay, back to the show.
24:48
SPEAKER_00: Cattle.
24:49
SPEAKER_00: All right, we are eight race.
24:51
SPEAKER_00: Number eight cattle.
24:53
SPEAKER_00: Live cattle settled at uh what up almost two bucks at almost$218.
24:59
SPEAKER_00: Feeder cattle up about the same, but a little over$327.
25:03
SPEAKER_00: That was short covering and firmer cash.
25:06
SPEAKER_00: Choice cutout is uh rallying to almost$378.
25:11
SPEAKER_00: We have about$700 to$900 now feeder cattle coming across the US-Mexico border daily.
25:20
SPEAKER_00: Now that's going to increase in the weeks and months ahead.
25:24
SPEAKER_00: Uh so it's it's not that much of a market factor now.
25:28
SPEAKER_00: That's just not enough to to uh can worry about.
25:32
SPEAKER_00: But you know, once we get back up to a considerable level, Tommy, if it continues, USDA for corn cut uh feed and residual.
25:42
SPEAKER_00: That's just not feed.
25:43
SPEAKER_00: Residual is a whole nother, I call it the fudge factor, but they cut corn, feed, and residual.
25:48
SPEAKER_00: They could have to uh some people are saying they cut corn, feed, and residual too much.
25:54
SPEAKER_00: This could be a factor in about uh four to six months if we continue to increase those number of feeder cattle coming across the US-Mexico border, and if USDA increases the number of uh areas in which they bring those Mexican feeder cattle in.
26:14
SPEAKER_00: What's the next issues for cattle?
26:16
SPEAKER_00: Friday, September uh 18th, cattle on feed report.
26:20
SPEAKER_00: And we're gonna have the second beef trim tariff rate quota, TRQ tranche, opens up October 1.
26:27
SPEAKER_00: So if you recall, remember the the 300,000 tons of uh your beef imports.
26:33
SPEAKER_00: Let me just tell you a quick policy thing on that.
26:35
SPEAKER_00: I uh I have not seen as much negative feelings on the part of cattle producers as a result of President Trump's decision to import 300,000 tons of uh of uh uh beef.
26:52
SPEAKER_00: I think that that could have an election year impact if this continues.
26:57
SPEAKER_00: Uh cattle people are not happy, and that's an understatement.
27:01
SPEAKER_00: Let's go to hogs.
27:02
SPEAKER_00: Number nine.
27:03
SPEAKER_00: Cutouts slipped to just a little over$91.
27:07
SPEAKER_00: October lean hogs were a little over 83.
27:10
SPEAKER_00: The next quarterly hogs and prigs report is September 24th.
27:15
SPEAKER_00: Ironically, if the Xi Jinping comes over, that's the key summit date.
27:20
SPEAKER_00: But hogs are just kind of in a trading range, Tommy, as far as I can tell.
27:25
SPEAKER_01: Yeah, and I I do not hedge hogs for anyone, and so I don't really have a feeling hogs with anyone, but I I tell you what, I talk to people about all day, every day is slide number 10 here, diesel fuel.
27:38
SPEAKER_01: I do not know a single person in America or anything shipped anywhere who doesn't have to deal with this.
27:44
SPEAKER_01: I'd hate to be an airline right now, Jim.
27:47
SPEAKER_00: It's really eating into, and I know my nephew has an engineering firm in the St.
27:54
SPEAKER_00: Louis suburbs, and he tells me all the time, uh, Uncle Jimmy, he calls me, you don't have to tell me about diesel prices because he pays the bills, you know.
28:05
SPEAKER_00: The national diesel topped six dollars for the first time ever September the 10th, and it's keeps rising.
28:13
SPEAKER_00: The EIA sees the fourth quarter average again, this is retail at 555.
28:19
SPEAKER_00: That would probably be a record average.
28:22
SPEAKER_00: The stocks, the distillate stocks are below 100 million barrels, which is the lowest since 2003.
28:31
SPEAKER_00: That tells you right there, Tommy.
28:33
SPEAKER_00: Now, the policy thing is we keep on getting chatter, let's say market chatter, that the Trump administration could announce fuel export controls.
28:44
SPEAKER_00: You know, I don't think that's likely, but I can't rule it out because it keeps coming up.
28:49
SPEAKER_00: In our scorecard on the major issues, we present that as a what what to look out for, Tommy.
28:58
SPEAKER_00: So I I would watch that issue.
29:00
SPEAKER_00: And as I said at the beginning, the news uh Sunday uh on on diesel is that Trump is telling Ukraine to halt Russian refinery strikes because as the diesel crisis deepens, he's asked you know Zelensky to halt attacking Russ and Russian diesel and refining infrastructure.
29:23
SPEAKER_00: He he knows that the strikes are worsening a global fuel shortage and raising costs for U.S.
29:29
SPEAKER_00: and other countries.
29:30
SPEAKER_00: So we're gonna see if that happens.
29:33
SPEAKER_01: Yeah, and also what was that emergency thing President Trump said that they could, I mean, it would take a long time to do, but he did that emergency order kind of like when we needed when we need more of anything, you the Oh the Defense Production Act.
29:46
SPEAKER_01: That's what I'm trying to say.
29:47
SPEAKER_01: Thank you.
29:47
SPEAKER_00: Yeah, well, he had a meeting, was it early last week with the refiners, and that was the initial thing that came out of it.
29:55
SPEAKER_00: It took a few days to find out, but he's using that to accelerate the production of munition and and and other things on on the refineries.
30:06
SPEAKER_00: So yeah, that that tells you the Trump knows uh well that energy goes across all markets.
30:14
SPEAKER_00: If if there's one issue that's probably the most important, it's energy, and Aggies know that with fertilizer, diesel, etc.
30:23
SPEAKER_00: So your diesel prices are not going to come down anytime soon because of the world situation, and that's why you have the chatter about putting export controls on all these diesel exports that we have.
30:38
SPEAKER_00: But there's pros and cons on that that we go through uh on our scorecard.
30:43
SPEAKER_00: So I would look for that.
30:44
SPEAKER_00: I just don't like export controls on anything, I think that's bad for U.S.
30:49
SPEAKER_00: agriculture because other countries could do the same.
30:53
SPEAKER_00: If their food prices go up, then they just say, well, let's just stop importing uh fair trade, Jim.
31:00
SPEAKER_01: You know, that's why you have a market.
31:02
SPEAKER_01: And what's happening is the price of diesel.
31:04
SPEAKER_01: Are you comfortable talking about why diesel is so much higher than gasoline?
31:07
SPEAKER_01: I have a lot of people ask me that the huge spread between diesel and gasoline.
31:11
SPEAKER_01: You go to pump, you pay 380, 390, 40.
31:14
SPEAKER_01: Go for diesel, you're at six, six twenty-five, six fifty.
31:18
SPEAKER_01: That spread is really out there.
31:19
SPEAKER_00: The Strait of Harmuz, we've got the backstop in the U.S., at least for diesel, uh our stock situation and things like that.
31:29
SPEAKER_00: And I do believe, Tommy, that the plus side of the Trump administration that increased uh production of of not only gasoline but diesel, we would be uh higher to a lot higher had it not been for uh for pulling out the plugs for for the constraints on U.S.
31:48
SPEAKER_00: energy production.
31:49
SPEAKER_01: We have those are just some of the reasons oil coming into America, yes.
31:54
SPEAKER_00: So, and then plus uh diesel has been hit around the world, and then you have the Ukraine-Russia conflict that just has amplified it.
32:03
SPEAKER_00: So, yeah, and the stock situation are lower relative to the world situation for crude oil.
32:09
SPEAKER_00: Those are the reasons.
32:11
SPEAKER_01: Very good.
32:11
SPEAKER_01: Now let's move to finance.
32:13
SPEAKER_01: This could be big, Jim.
32:14
SPEAKER_01: Number 11 FOMC meeting, and this is gonna be a wild one.
32:20
SPEAKER_01: What day does this happen?
32:21
SPEAKER_00: The when Tuesday and Wednesday, but Wednesday's the key day because that's decision day.
32:26
SPEAKER_00: We'll have a press what we call a presser, a press conference by Kevin Walsh, the FO the uh Fed chief.
32:33
SPEAKER_00: And the market Bloomberg had an interesting line that said, Walsh put up or shut up.
32:39
SPEAKER_00: I mean, that's a little biased there, but they there's around 90% odds now of a quarter point hike, which would take the Fed funds rate to 3.75 to 4%, Tommy.
32:54
SPEAKER_00: Uh that's built into prices right now.
32:57
SPEAKER_00: Now, if Walsh or the Fed doesn't increase rates, you that that's gonna have a big market reaction because they're they'll the market would be say, oh my goodness, the Fed doesn't have control of the situation.
33:10
SPEAKER_00: So the the the key is not, let's just assume they're gonna hike, although everybody's not in that ballpark, by the way.
33:17
SPEAKER_00: Right.
33:18
SPEAKER_00: But let's assume they do.
33:20
SPEAKER_00: The thing you listen for in the press conference that Warsh will give is what's ahead.
33:26
SPEAKER_00: Now, he's already established a system where he doesn't give many signals, so every word he's gonna be like Greenspan used to be.
33:36
SPEAKER_00: You have to parse every single word, so it's it's the future.
33:41
SPEAKER_00: But look at inflation in the United States.
33:44
SPEAKER_00: We had we're still elevated inflation.
33:47
SPEAKER_00: We had the producer price index first last week, and then we had uh CPI, and they both show core inflation uh higher, uh I think significantly higher than what the Fed really wants it to be in that two percent area, it's over three percent.
34:07
SPEAKER_00: So, and the producer price index showed higher than the trade thought.
34:14
SPEAKER_00: Now, what does that mean?
34:15
SPEAKER_00: That means you're gonna have sticky inflation even longer than what we thought, and your inflation is gonna rise between now and the end of the year as companies increase their prices.
34:29
SPEAKER_00: So, again, I hope I'm wrong, but I don't think I am.
34:33
SPEAKER_00: Inflation is gonna be continue to be a big story with a lot of ramifications on farmer financing, land financing, housing industry.
34:44
SPEAKER_00: We we hit what 7% for average mortgage rate again.
34:49
SPEAKER_00: Those are not signs of a golden era to me.
34:52
SPEAKER_00: You know, so we've and the Fed's gonna have to deal with that.
34:55
SPEAKER_00: And so we're gonna see Wednesday if they get into reality here.
35:00
SPEAKER_01: Yeah, one quick interesting tidbit.
35:02
SPEAKER_01: Alan Greenspan raised rates maybe a week or two before midterms when he was chairman.
35:08
SPEAKER_01: So don't think that the Fed uh the Fed says they operate separate, they can't be manipulated from the White House, that it's their job to take care of uh policy or not so much policy, but to to make sure that the American engine runs well.
35:23
SPEAKER_01: And if we're overheating, it's their job to cool it down.
35:27
SPEAKER_01: If we're running slow, they give it a little higher octane and give her a boost.
35:30
SPEAKER_01: That's it's pretty much that simple.
35:32
SPEAKER_00: Now, yeah, and Walsh's credibility is on the line.
35:35
SPEAKER_00: If 90% about think that there's a quarter point hike, not that they're always right, but if they don't hike, then you're gonna have more stories about the credibility of our new Fed chairman, Kevin Walsh.
35:49
SPEAKER_00: So that's what's at stake coming up Wednesday, Tommy.
35:51
SPEAKER_01: Yeah, let's go to number 12, the farm bill.
35:54
SPEAKER_01: Will we see Mr.
35:55
SPEAKER_01: Mitch McConnell?
35:57
SPEAKER_00: Well, the word from Kentucky lawmakers is that he she is expected to return.
36:03
SPEAKER_00: Now, if he does, you're gonna get that uh Farm Bill 2.0 out of the Senate Ag Committee.
36:08
SPEAKER_00: They still don't have, I looked right before we went on air, they still don't have an announced date.
36:14
SPEAKER_00: I think it could come Tuesday or it's Wednesday, it's gonna be a very busy week in Washington, D.C.
36:20
SPEAKER_00: But Senate Ag Committee Chairman John Bozeman wants to hold a markup.
36:24
SPEAKER_00: If he announces a markup, to me, that just increases the odds that uh you know Mitch McConnell is gonna be there.
36:32
SPEAKER_00: The key, if he does show up, it'll come out of the committee, but we're gonna see if any Democrats vote for it.
36:39
SPEAKER_00: Now, if any Democrats vote for that bill, they didn't the last time that it was defeated in the committee because McConnell wasn't there.
36:48
SPEAKER_00: If any of them vote in favor of it, that speaks well that they could get eventually off the Senate floor because you need 60 votes.
36:58
SPEAKER_00: That means Bozeman's gonna need some Democratic votes once this bill, if it ever gets to the Senate floor.
37:05
SPEAKER_00: And I just don't see it getting there between now and the November 3rd elections.
37:11
SPEAKER_00: So that'll be a post-November 3rd election lame duck session of Congress issue.
37:16
SPEAKER_00: But the issues that we've talked about a lot on this podcast, uh mandatory country of origin labeling for beef is in there, year-round E15, etc.
37:28
SPEAKER_00: So, and there's differences within the House Ag Committee, the House that has passed its its farm bill, so we'll we'll have to have a conference to to iron out those differences.
37:40
SPEAKER_00: And again, you can't have all that done between now and November 3rd.
37:44
SPEAKER_00: So this is a lame duck issue.
37:46
SPEAKER_00: But we're gonna we could have potential big news, at least progress to move it out of the committee, and we're gonna we're we'll we'll go from there.
37:54
SPEAKER_00: But it looks like we'll have progress this week, one way or the other.
37:57
SPEAKER_01: Now we're to the end, my friend.
38:00
SPEAKER_00: Number 13.
38:01
SPEAKER_00: Let's hope it's not bad a luck number for Trump.
38:03
SPEAKER_00: He came out today saying no, he's not concerned that Xi Jinping's gonna cancel that because Xi Jinping, China's leader, let it be known, U.S., you're talking about$14 billion of military sales to Taiwan.
38:18
SPEAKER_00: I don't like that.
38:20
SPEAKER_00: And it got some people anxious about this.
38:23
SPEAKER_00: But Trump thinks it's gonna go on.
38:26
SPEAKER_00: The key that markets are gonna look for, especially in agriculture, is will they officially announce a 10% tariff removal?
38:35
SPEAKER_00: If that's the case, that's a shot in the arm, Tommy, for not just soybeans, for but for a host of other U.S.
38:43
SPEAKER_00: commodities, corn, sorghum, cotton, etc.
38:48
SPEAKER_00: Why?
38:49
SPEAKER_00: Because that that means that if you lower the tariff 10%, that just means other entities in China, other than the state trading groups, will find U.S.
38:59
SPEAKER_00: prices competitive relative to South American products, especially Brazil.
39:05
SPEAKER_00: That's how important that is.
39:07
SPEAKER_00: Soybean purchases are now, I think they're over 13 million metric tons.
39:13
SPEAKER_00: And you'll recall that from a calendar year basis, you'll recall uh the 25 million metric ton commitment.
39:20
SPEAKER_00: So we're over 50 percent by the time Xi Jinping comes to the DC, hopefully on December, the uh September the 24th.
39:30
SPEAKER_00: But the the the other big issue is uh we haven't heard much, if anything, about this separate$17 billion pledge that China made for for the three years beginning 2026.
39:43
SPEAKER_00: It's pro rate rated for this year, so it's not 17 billion for 2026, but that gets you into potential purchases of feed grain, beef, poultry, etc.
39:55
SPEAKER_00: So we're gonna see whether or not that surfaces.
39:58
SPEAKER_00: Another issue, Tommy, relative to the summit that most people don't talk about is we have a uh transportation agreement with China that ends November the 10th.
40:10
SPEAKER_00: That if it's not extended, you're gonna have higher shipping costs because of the port price increases.
40:17
SPEAKER_00: But I think that's going to be extended.
40:19
SPEAKER_00: So if you talk to the transportation people, I know at National Grain and Feed, I deal especially close with them, they're closely watching that issue.
40:29
SPEAKER_00: Trump on relations with China and Xi Jinping recently said he gets along with China, he has a very good personal relationship with Xi Jinping.
40:39
SPEAKER_00: On the elements of Chinese cars, there was a development the last few days.
40:45
SPEAKER_00: He said he doesn't want to U.S.
40:48
SPEAKER_00: to import Chinese cars, but if China wants to build plants in the United States and hire U.S.
40:55
SPEAKER_00: workers, he doesn't mind that.
40:58
SPEAKER_00: So uh you've heard some rumors that he was going to allow the imports of Chinese autos, but that's not the case.
41:05
SPEAKER_00: Some Democrats in Michigan put that out on X last week, and I think that's why Trump started to talk about it.
41:13
SPEAKER_00: So that's all involved in what's going on from the market, plus the individual policy issues that we've talked about, energy with diesel, Fed meeting coming up uh Tuesday, Wednesday, farm bill development.
41:27
SPEAKER_00: It looks like we could have progress coming up Tuesday or Wednesday, I think, in the Senate Ag Committee.
41:34
SPEAKER_00: And what we just said, the Trump G summit looks to be still on.
41:38
SPEAKER_00: I still looking for an official confirmation from China.
41:43
SPEAKER_00: That would help.
41:44
SPEAKER_00: We still don't have it.
41:45
SPEAKER_00: And we're we're going to look at the crop progress report coming up Monday, late Monday afternoon from USDA as far as any further.
41:55
SPEAKER_00: Well, we're going to check on the on the harvest, harvest development and the maturation of the crops.
42:01
SPEAKER_00: Grain inspections coming up Monday morning are always key.
42:04
SPEAKER_00: And then the export sales report coming out Thursday, it's normal day.
42:09
SPEAKER_00: We're going to see if even additional sales of U.S.
42:13
SPEAKER_00: farm products to China continue to show up in that weekly report.
42:17
SPEAKER_00: So there you go.
42:18
SPEAKER_00: We're going to have the market decide coming up here pretty soon whether or not they think there's more downside coming to the U.S.
42:26
SPEAKER_00: crop estimate.
42:27
SPEAKER_00: And we're going to see that reflected one way or the other in prices and early week trading.
42:33
SPEAKER_01: And all that, do you have anything to really leave people super, super, super optimistic, or was that it?
42:41
SPEAKER_00: The optimistic is if that summit is held, I think that's your fourth gear, not fifth gear yet.
42:47
SPEAKER_00: Fourth gear kicking off under the demand for U.S.
42:51
SPEAKER_00: commodities.
42:52
SPEAKER_00: And I think we'll be in a demand pull market for the next few months if that's the case.
42:56
SPEAKER_00: That's constructive news for the grains.
42:59
SPEAKER_00: Mr.
42:59
SPEAKER_01: Jim Wesemeyer, now with AgBull Media.
43:03
SPEAKER_01: If you missed any of his articles, go to www.agbull.com.
43:07
SPEAKER_01: Tommy Gersafi coming you from the Mayville, North Dakota EggBull Podcast.
43:12
SPEAKER_01: Jim, right outside Washington, D.C.
43:14
SPEAKER_01: in the beautiful state of Virginia.
43:16
SPEAKER_01: We'll catch you all next week.