Latest / Professional Ag Marketing Podcast / 2022 Crop Tour Day 1

Transcript

2022 Crop Tour Day 1 · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_00: Today is August 1st.
• 0:25
  SPEAKER_00: This is Mike Minor, and we are on our crop tour here.
• 0:29
  SPEAKER_00: We started yesterday on Sunday, got a decent start as we moved kind of from the South Dakota, Minnesota bottom down to uh Missouri late last night.
• 0:39
  SPEAKER_00: So we have a decent start already.
• 0:41
  SPEAKER_00: So we're gonna talk a little bit about our big down day that we've got to start off with.
• 0:45
  SPEAKER_00: Talk a little bit about our route, what we uh planned all hit, how many states, etc.
• 0:50
  SPEAKER_00: And then we're gonna go through and uh just kind of go through how the first four stops of day one kind of went there.
• 0:57
  SPEAKER_00: So as we start on uh the market activity on the overnight, we've got a really big down day all of a sudden on us.
• 1:05
  SPEAKER_00: We've got the corn market down about 14 cents here after the open, and then the November soybeans down about 53 cents.
• 1:14
  SPEAKER_00: So uh really taking some uh some prices off here.
• 1:18
  SPEAKER_00: We've got US stocks a little bit lower after a really good month in July.
• 1:22
  SPEAKER_00: We had uh crude oil lower, and then the China economic data uh suggest uh delay is in the rebound there, so uh US dollar is also lower, and then uh soybean futures.
• 1:34
  SPEAKER_00: I would say those are lower.
• 1:36
  SPEAKER_00: We've got some concerns about uh Chinese demand, a little bit more uh changes in the further out weather models as well.
• 1:43
  SPEAKER_00: The EU model is gonna show a little bit more rain uh stretching into the western core but corn belt.
• 1:49
  SPEAKER_00: The GFS is gonna keep it a little bit further east on the uh Mississippi.
• 1:54
  SPEAKER_00: So uh the next 8 to 14 days, still pretty hot and dry out there.
• 1:58
  SPEAKER_00: The uh NOAA, the 30-day forecast, pretty warm and dry as well.
• 2:03
  SPEAKER_00: So uh we still have some uh some pretty conflicting weather models here, but really need some rains to help finish this crop off.
• 2:11
  SPEAKER_00: The wheat prices, that's another major talking point from the overnight.
• 2:15
  SPEAKER_00: Wheat prices are lower on an increase in Ukraine grain exports.
• 2:20
  SPEAKER_00: A ship carrying Ukraine grain has left Odessa.
• 2:23
  SPEAKER_00: This is the first vessel to leave since the deal was signed on July 19th.
• 2:27
  SPEAKER_00: It's carrying corn and it's going to Lebanon.
• 2:30
  SPEAKER_00: So that as well could be impacting some of these overnight prices, but really haven't seen that wheat market be influenced by the Ukraine news headlines here since probably about early June.
• 2:40
  SPEAKER_00: So uh really not having much of an impact these days, but maybe it is a little bit here this morning.
• 2:46
  SPEAKER_00: So for the for the start for the crop tour here, we are gonna start kind of in the Iowa Northwest Iowa.
• 2:54
  SPEAKER_00: Iowa was a first stop.
• 2:55
  SPEAKER_00: We're going down through Nebraska, wrap up those stops, and then into Missouri, and then east all the way to Ohio, and then wrap back on the northern side of the corn belt.
• 3:06
  SPEAKER_00: And then on our second crop tour here going on during the week as well, we will have Lucas Peters and Jake von Tirsch hit more of the northern cornbelt around the South Dakota, Minnesota, and North Dakota areas, and really hit uh our backyard a little bit harder with a few more farmer visits and uh really try to uh dig into that area anyways to get some further input.
• 3:30
  SPEAKER_00: So that'll be interesting to see as well.
• 3:32
  SPEAKER_00: The first year that we've done two legs of the crop door, but as we uh go forward here as well, it's key uh key timing.
• 3:40
  SPEAKER_00: We know it's a little bit early in the process here, but we just want to talk a little bit this morning about the WASDA yields and the WASDA estimates that'll be coming out in this August report, because they are a little bit different.
• 3:52
  SPEAKER_00: So, like the the July forecasted yield was an enti entirely different um estimate.
• 3:59
  SPEAKER_00: It was a completely different company even.
• 4:01
  SPEAKER_00: The August Harvest uh uses the NA NASS estimate, the NASA estimate.
• 4:08
  SPEAKER_00: This will be the first time.
• 4:10
  SPEAKER_00: The August yield number will be a hundred percent independent of the July calculation.
• 4:15
  SPEAKER_00: For example, this is not a revision, it's just an entirely new estimate, and so can see those vary from one another pretty greatly some years.
• 4:24
  SPEAKER_00: Um there are two surveys within the NASA estimate that they use, so the one is a farmers reported survey, and the other one would be field measurement surveys.
• 4:33
  SPEAKER_00: So the farmer reported survey that's gonna be drawn from people who respond to a planning survey in June.
• 4:39
  SPEAKER_00: Same operations interviewed each month through November essentially.
• 4:43
  SPEAKER_00: Um they are asked for a number of acres on corn that they'll harvest, estimated yield, roughly a a week prior to the report.
• 4:51
  SPEAKER_00: Uh it should be roughly around 20,000 farmers on that farmer estimate.
• 4:56
  SPEAKER_00: The uh fleet field measurement survey samples are taken from farms that are reported corn acres planted on the June survey, uh selected from 10 principal growing producing states.
• 5:08
  SPEAKER_00: Uh random samples are drawn, maturity measured, four to five thousand sites are kind of measured in that in that sample as well.
• 5:16
  SPEAKER_00: So that's how the August estimate has been uh has been calculated.
• 5:20
  SPEAKER_00: Our estimates are gonna be samples drawn across mainly the 20 largest corn production counties within the United States.
• 5:28
  SPEAKER_00: We really back it up versus history on who grows the most corn where, and then we take our samples that we collect in that county, and then we run it back past their historical yields and try to estimate how far off a trend they are, for example.
• 5:43
  SPEAKER_00: So that's how our um estimates will kind of line up against the August West estimates coming from the USDA here this month.
• 5:50
  SPEAKER_00: So after the first day, we did uh stop at Sioux Center, Iowa for our first stop.
• 5:56
  SPEAKER_00: The second stop was down in Coleridge, Nebraska, so northeast Nebraska.
• 6:01
  SPEAKER_00: Then we stopped in southern York, Nebraska, and then our fourth stop of the day was in uh trainer, Iowa, Pottawanomie County.
• 6:09
  SPEAKER_00: So the first stop, uh, we we did see some lower rainfall estimates.
• 6:14
  SPEAKER_00: The the grass was still green for the most part, but we were seeing some firing up um in the ditches and whatnot around the local area there.
• 6:22
  SPEAKER_00: For for the corn, it was still holding on pretty well.
• 6:25
  SPEAKER_00: We had estimates for a field uh for example that was like 236 versus uh about 230 normal.
• 6:32
  SPEAKER_00: So that was very close on that one uh to pretty much trend line for them.
• 6:36
  SPEAKER_00: He was expecting uh the one farmer was a little bit better than uh than the average estimate.
• 6:42
  SPEAKER_00: But other older farmers in the area, they had been suggesting maybe uh it would struggle to hit that, especially if these uh hot weather and then rains didn't hit, we would uh not have a very good fill as a crop was a little bit hind in maturity, even with some uh GDUs ahead of schedule, anyways.
• 7:00
  SPEAKER_00: So uh that range of estimates was about 192 to 230 for that county over the past five years or so, uh, with a 209 estimate on that, and uh, we're probably gonna float to the middle of that range.
• 7:13
  SPEAKER_00: I would say it's gonna be a very average year.
• 7:15
  SPEAKER_00: If we had more rainfall, it could have uh been leaps and bounds above this potential.
• 7:19
  SPEAKER_00: I mean, if they catch another inch, they'd be great.
• 7:22
  SPEAKER_00: Uh the drought maps creeping into the area pretty hard, and uh that's gonna probably have a little bit of an impact going forward, but uh over the next couple weeks after pollination here, hopefully they can get some rain, they're gonna need it.
• 7:35
  SPEAKER_00: But not not too shabby yet.
• 7:37
  SPEAKER_00: That area is pretty hard to kill.
• 7:39
  SPEAKER_00: The second stop, however, in Coleridge, Nebraska, up in the northeastern part of that state, we did see some some very dry uh spots, which historically we can run into a really hit or miss area there.
• 7:52
  SPEAKER_00: Um it burns up pretty easily.
• 7:54
  SPEAKER_00: Most of it is irrigated.
• 7:56
  SPEAKER_00: The the dry land stuff, you know, we we're gonna expect 200 bushel yield out of that most years if they get some rains.
• 8:03
  SPEAKER_00: This year we're probably 50 to 80 off of that, so it's very very well off normal on the dry land stuff.
• 8:09
  SPEAKER_00: So you're talking 130 on the dry land and uh normally 200 is what they would push.
• 8:14
  SPEAKER_00: So uh the irrigated that's gonna push more towards normal.
• 8:18
  SPEAKER_00: Um that's gonna have uh really leaps and bounds above the dry land stuff this year, so that's really gonna separate themselves out.
• 8:25
  SPEAKER_00: So 230 somewhere in there, maybe a little bit under that from our yield calculations.
• 8:30
  SPEAKER_00: So the northeastern part of Nebraska is really gonna hold yields down, and the southern part in our third stop at York, that's gonna have to really carry the load.
• 8:38
  SPEAKER_00: So uh York, Nebraska looked great.
• 8:40
  SPEAKER_00: They're not active in the drought monitor at all.
• 8:42
  SPEAKER_00: They've had some adverse weather with hail and a few things like that, but honestly, uh it looked all pretty great through that area, especially as we worked down towards Trainer, Iowa.
• 8:53
  SPEAKER_00: Corn looked exceptional the whole way down there.
• 8:56
  SPEAKER_00: It was really uh really great corn.
• 8:59
  SPEAKER_00: Uh conditions were perfect, consistency was awesome.
• 9:03
  SPEAKER_00: So their expectations out of uh a really big county here, so second in the state of Iowa, that county is seventh in the nation for the largest uh corn production counties.
• 9:13
  SPEAKER_00: By the way, we did hit like four or three three of the top ten corn production counties in the uh in the United States in our just day one, so that was pretty cool.
• 9:25
  SPEAKER_00: And uh out of that fourth and final stop in Iowa, it looked great.
• 9:29
  SPEAKER_00: Uh no problems at all there.
• 9:30
  SPEAKER_00: So we're looking for exceptional things out of Southwest Iowa.
• 9:34
  SPEAKER_00: So that's a first day wrapping up our crop tour.
• 9:37
  SPEAKER_00: Uh, look forward to uh seeing you guys a little bit more.
• 9:40
  SPEAKER_00: We'll have a couple guests on the show this week with agronomists, uh people around the area.
• 9:45
  SPEAKER_00: So please reach out, send in some samples, please ask questions, follow us on Twitter, and then uh we'll get the intern gunner on here as well, who's making the trip with us.
• 9:54
  SPEAKER_00: And uh we'll see you guys tonight over in the uh middle part to eastern part of Illinois is kind of where we're gonna end up at the end of today.
• 10:03
  SPEAKER_00: Thanks.
• 10:04
  SPEAKER_00: And thank you to all our listeners.
• 10:06
  SPEAKER_00: Please reach out to us from our website at professionalagmarketing.com, or check out our newly added hog specific podcast named Hog Market Talk, that's released every Thursday.
• 10:18
  SPEAKER_00: Trading commodity futures and options involve substantial risk and loss that is not suitable for all investors.