Latest / Professional Ag Marketing Podcast / Energy Surge | Grain Talk March 20th, 2026

Transcript

Energy Surge | Grain Talk March 20th, 2026 · Professional Ag Marketing Podcast

• 0:03
  SPEAKER_00: You're locked in to the Green Market Talk Podcast.
• 0:07
  SPEAKER_00: Fast updates, market movers, and the green news you need right now.
• 0:12
  SPEAKER_00: Trading commodity futures and options involve substantial risk of luck and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is Mike Minor, and I've got Pat back with us here today on a sunny afternoon on Friday.
• 0:26
  SPEAKER_01: How's it going?
• 0:27
  SPEAKER_02: Good.
• 0:28
  SPEAKER_02: Mike is keeping me in the podcast room when it's 75 degrees out on a Friday afternoon.
• 0:34
  SPEAKER_01: We'll try to keep it a slave driver, he is we'll try to keep it 10 minutes or shorter, Pat.
• 0:38
  SPEAKER_01: It's not like we have anything important to talk about on these grain markets here this week, do we?
• 0:43
  SPEAKER_01: Well, we do have a little bit of volatility finally, doing that.
• 0:47
  SPEAKER_01: Yeah, it's a it's only taken a minor war in the Middle East again.
• 0:52
  SPEAKER_01: Yeah.
• 0:52
  SPEAKER_01: But we got something brewing.
• 0:55
  SPEAKER_01: Indeed, indeed.
• 0:56
  SPEAKER_01: Let's talk a little bit about just we'll do a broad overview of the Iran conflict, impact on agricultural commodities, specifically, Pat.
• 1:05
  SPEAKER_01: But uh we can dive in a little bit later to maybe what this means for planning fertilizer, uh, weather, things like that going forward.
• 1:13
  SPEAKER_01: So let's start with what you're seeing, anyways, out of the corn and soybean market on some futures, a lot of volatility this week.
• 1:20
  SPEAKER_01: Uh, and any anything clear or clean you see from some of the activity.
• 1:25
  SPEAKER_01: I mean, Monday, we haven't done a podcast since we had a limit day on Monday out of the soybean market on on May and July.
• 1:31
  SPEAKER_01: So, what was your take at the start of the week?
• 1:34
  SPEAKER_02: Sure.
• 1:34
  SPEAKER_02: I mean, so I mean, it's as we settle up this week, uh Dece corn is a solid close uh um above 490, a little bit of a correction today, but um a nice little rally in the new crop option months that we've experienced over the last uh little while here.
• 1:52
  SPEAKER_02: And I I when I keep when I think about this market, Mike, I keep thinking about like multiple layers, and and you know the the the first um layer that that I think is important is is just the the recognition that um we've built um and and and experienced some pretty nicely sized crops for multiple years here.
• 2:19
  SPEAKER_02: And I've mentioned this on the on the on a the last couple podcasts, but you know, over the last three years, I I could argue that uh you know really both hemispheres we've had either trend or above trend crops.
• 2:30
  SPEAKER_02: We really haven't had a crop problem for a while.
• 2:33
  SPEAKER_02: And and so, I mean, just as it relates to well, we're due, like like like maybe we will have a weather problem, that's fair enough, and maybe there's some truth to that statistically, probably not.
• 2:44
  SPEAKER_02: But the point is, is that there's not very many times in my career where I've been able to say that, well, gosh, we've had four years or five years or six years in a row, we haven't any crap problems anywhere.
• 2:53
  SPEAKER_02: Brazil's fine, Argentina's fine, US fine, China's fine, all that.
• 2:56
  SPEAKER_02: And so anyway, we we might be sort of we might be a little bit due.
• 3:00
  SPEAKER_02: Um, but but perhaps more importantly to that observation is is that when we look at at world or global ending stocks on feed grains, it's comfortable, right?
• 3:12
  SPEAKER_02: But it's not burdensome.
• 3:14
  SPEAKER_02: And it's not burdensome in spite of the fact that we really haven't, we've we've grown some nice crops.
• 3:21
  SPEAKER_02: And so in a in a little bit of a quiet, sneaky way, corn demand has really been pretty good.
• 3:27
  SPEAKER_02: And that I would argue is especially true domestically, right?
• 3:31
  SPEAKER_02: I mean, we've we've uh um our balance sheet, while it too is comfortable, again in quotes, it's not burdensome and could have been with a couple of like last year's crop, the final yield with acres, holy smokes.
• 3:48
  SPEAKER_02: Not like Brazil's been letting off the gas either.
• 3:50
  SPEAKER_02: That's exactly right.
• 3:51
  SPEAKER_02: And so, and so anyway, that's interesting.
• 3:54
  SPEAKER_02: And that isn't again some prediction of a weather problem this summer, but if or when um trend changes from trend to above trend type crops somewhere, the market's gonna be forced, um, I I think to react to that.
• 4:08
  SPEAKER_02: So that's that's one layer, an important one, right?
• 4:11
  SPEAKER_02: Um, the second layer, you know, you mentioned uh uh Middle East and in Israel and Iran and war and all that stuff, and and uh um I too kind of think that uh the the uh the administration maybe got caught a little flat-footed on this thing.
• 4:28
  SPEAKER_02: I think they were um maybe believing a little too much this could be closer to Venezuela than than than something else.
• 4:35
  SPEAKER_02: And um obviously, clearly, it's something different, and more than that.
• 4:40
  SPEAKER_02: Um I find myself now thinking more about well, um, plenty of discussion about the Strait of Hormuz and it being closed and and the impact that has on logistics and oil moving, all those things, and I leave that to everybody else to to analyze and talk about.
• 4:58
  SPEAKER_02: Um, but I I think what what's important now to be considering is that we've done some significant infrastructure damage um much more long term, much more long term, right?
• 5:12
  SPEAKER_02: I mean, a couple of those natural gas facilities and and LNG facilities that that were destroyed this week, um, that's that likely has a long-term lasting impact on um nitrogen fertilizer supplies.
• 5:27
  SPEAKER_01: And that's been the story the last two days probably has been just uh energy infrastructure getting taken out through a few of those regions, whether it be Kuwait, uh, which was kind of a big deal, uh um Qatar, some of those places along with the others now over the past probably 24 hours has been getting talked about a lot more.
• 5:46
  SPEAKER_02: Exactly right.
• 5:47
  SPEAKER_02: And so, and so there's another layer.
• 5:50
  SPEAKER_02: And so then I and then I would just say that some you know the the you know, if this was a two-day deal or or now it's not a two-week deal and it's a two-month deal, or if it's a if it's a two-year deal, I'm not sure.
• 6:02
  SPEAKER_02: Um, but regardless, it doesn't seem like uh, you know, crude oil is going back to 70 bucks anytime soon and just gonna hang out there, right?
• 6:09
  SPEAKER_02: And so that just has a material structural change in um what the base value of corn is worth, potentially, right?
• 6:17
  SPEAKER_02: So there's another layer.
• 6:18
  SPEAKER_02: And then the third layer is as we're just talking about what corn is worth, um, you still also have this like this discussion about um about inflation and and wage inflation and and you know what the feds decided to do this week again and all of those things, but but you know, just more chatter about, and we've you know we've talked about this a lot with our clients this week and and some other uh experts in the field, if you will, but you know, there's there's you know the the commodity space, you know, is still our the commodities that we care about, right?
• 6:49
  SPEAKER_02: It's still relatively cheap when adjusted for inflation over the last 10 years or so.
• 6:54
  SPEAKER_02: And so anyway, um money flow uh is is always something that we like to keep an eye on, and and there's been a little activity in that space, and there there could be more, right?
• 7:04
  SPEAKER_02: Like just uh, and so um, you know, we just say all of those things, and we're just talking about two or three different layers in the corn market.
• 7:11
  SPEAKER_02: And then the last thing that I would just say about this is that is that Mike, it's not uncommon for us to have these conversations this time of year, right?
• 7:19
  SPEAKER_02: Like it from a seasonal perspective, putting 20 cents on corn or 25 cents on corn from Jan to March, leading into acreage intentions, leading into our spring and more volatility with weather, yeah, that happens.
• 7:33
  SPEAKER_02: Happens a lot, right?
• 7:34
  SPEAKER_02: And so, and so anyway, I guess that that I'm just again trying to kind of wrap a circle around the whole conversation.
• 7:42
  SPEAKER_02: Like all of the things that we just talked about, I think make some sense for for consideration, but I think it also is is a um a relatively normal thing for us to see a little bit of volatility in these markets this time of year.
• 7:54
  SPEAKER_01: I've been trying to do the impossible, which is see how long the markets care.
• 7:59
  SPEAKER_01: Like if this pattern kind of continues, or if it's pretty mellow here, how long is corn gonna care that crude oil is around 95 bucks?
• 8:07
  SPEAKER_01: You know, that's the that's a huge question in this.
• 8:10
  SPEAKER_01: And part of that might, part of the answer, Pat, might be some of the dates that we're looking at going forward.
• 8:16
  SPEAKER_01: And I feel like this week we really saw it, which was we came out of the weekend and Trump's uh convert Trump's team's conversation with China saying that they're interested in still buying US commodities agriculture-wise, just not soybeans.
• 8:30
  SPEAKER_01: And we were down limit.
• 8:31
  SPEAKER_01: So they obviously cared about a fundamental on Monday, and throughout the week, here spreads actually mattered a little bit.
• 8:38
  SPEAKER_01: Um they told us a similar story.
• 8:40
  SPEAKER_01: We traded that through most of the week, that they're probably not gonna buy old crop soybeans from us.
• 8:45
  SPEAKER_01: Makes sense.
• 8:45
  SPEAKER_01: We're two and a half dollars too expensive.
• 8:47
  SPEAKER_01: Totally get it.
• 8:48
  SPEAKER_01: The the few dates I'm looking forward to 11 days from now is prospective plannings for the United States, which just got, in my opinion, way more interesting on corn, and so especially.
• 8:59
  SPEAKER_01: So, like if Cade pulls up the balance sheet with just what are a few different uh examples of like what 92, 94, 96 million corn acres looks like, they're pretty different stories, Pat.
• 9:11
  SPEAKER_01: I mean, you start to talk about that 95 million acre mark.
• 9:16
  SPEAKER_01: Anything below that starts to drop you below 2 billion bushels next year for the carryout.
• 9:21
  SPEAKER_01: Anything above 95, basically, you're still sitting in around$4 corn futures historically.
• 9:27
  SPEAKER_01: So when I start to look at some of the key dates, the first one would be this prospective plannings on March 31st.
• 9:35
  SPEAKER_01: Then obviously, right after that, Trump is going to also have that meeting that got put off a little bit for uh his meeting with China.
• 9:42
  SPEAKER_01: And that's gonna be another key date to talk about.
• 9:44
  SPEAKER_01: And then your planning.
• 9:46
  SPEAKER_01: I mean, April 10th, we start talking about planning progress.
• 9:49
  SPEAKER_01: And Katie, you can pull up the drought map.
• 9:51
  SPEAKER_01: It's pretty dry out there, really.
• 9:52
  SPEAKER_01: I mean, you talk about the United States, almost half the corn crops in a drought for production right now.
• 9:58
  SPEAKER_01: Uh typically that would say plant in the dust pencil bust.
• 10:02
  SPEAKER_01: Normally that would say super fast planting pace.
• 10:05
  SPEAKER_01: You probably end up planting more corn acres.
• 10:07
  SPEAKER_01: And really, corn price is pretty good right now, too.
• 10:10
  SPEAKER_01: But now we have another extra layer in that, which would be the fertilizer discussion, which uh how many acres do we lose from that, so to say?
• 10:19
  SPEAKER_01: I I'm viewing it more like I don't think we're gonna lose acres because of the fertilizer situation.
• 10:25
  SPEAKER_01: I just don't think we're gonna gain extra acres if we have fast planting pace because of that fertilizer situation, Pat.
• 10:32
  SPEAKER_01: It it'll be a little bit up in the air, but I'm excited to at least trade a few of those things again in our near future, other than just uh, you know, what was bombed today, uh what crude oil's doing, some of those outside market activities.
• 10:45
  SPEAKER_02: Very well said, and I and agreed.
• 10:47
  SPEAKER_02: I I think that's um um we and and again, I think I can I can add to that discussion with the the same observation, which is we're moving into that time of year where those things start to happen, right?
• 10:59
  SPEAKER_02: Like we we do start to pay attention to whether in planning progress and all of those things, it's the right time of year to be focused on that.
• 11:06
  SPEAKER_01: Any final thoughts for our listeners this week for the grain?
• 11:09
  SPEAKER_02: Well, look, I I just this this discussion as it relates to what's going on with the grain markets is fun, hopefully somewhat entertaining and interesting for um for our listeners.
• 11:22
  SPEAKER_02: But in terms of application, um please give us a call.
• 11:26
  SPEAKER_02: Please, please let's talk through how we can um work through what we believe are current market fundamentals and make some good sound risk management decisions for your business.
• 11:39
  SPEAKER_02: And with volatility is up, um, that's a good thing, right?
• 11:44
  SPEAKER_02: And sometimes we get a little frustrated with the algorithms or whomever, like moving the market around on the on the latest uh Trump tweet or or whatever.
• 11:54
  SPEAKER_02: But but um through the years we've had really good luck, haven't we, Mike, of taking advantage of that volatility and creating good opportunities for our customers.
• 12:03
  SPEAKER_02: And and we sure would appreciate the opportunity to engage, especially on the roll crop side.
• 12:07
  SPEAKER_01: And I feel like that conversation's probably easier right now.
• 12:10
  SPEAKER_01: The end user side, I mean, we really need to talk to end users right now, just about that's a tough conversation with what to do going forward.
• 12:19
  SPEAKER_02: Absolutely.
• 12:19
  SPEAKER_01: All right, thank you, Pat.
• 12:20
  SPEAKER_01: Thank you.