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Grains: China and COF · 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 involves substantial risk of loss and is not suitable for all investors.
• 0:22
  SPEAKER_00: Well, hello everybody out there.
• 0:24
  SPEAKER_00: Today is Friday, November 21st, and this is Lucas Peters in the ProWag Podcast Studios filling in for Mike Minor, who uh hopefully, as we sit here, is uh uh celebrating the the birth of uh another child for Mike.
• 0:41
  SPEAKER_00: Uh he and his wife are expecting really any minute now, so we we wish him good luck and uh hope everything turns out well and healthy for everyone in his family.
• 0:52
  SPEAKER_00: But today you got uh Lucas here and I got Jaden Houslogg to come in uh to the studios today.
• 0:58
  SPEAKER_00: How are we doing, Jaden?
• 0:59
  SPEAKER_02: I'm doing good, Lucas.
• 1:00
  SPEAKER_02: Well, good.
• 1:01
  SPEAKER_00: So uh lots of uh lots of things going on this week, and so we got a uh a few bullet points we're gonna cover on the podcast today.
• 1:09
  SPEAKER_00: Uh we'll wrap up with the Catalon Feed Report that came out.
• 1:12
  SPEAKER_00: We'll talk a little bit about the government programs and kind of some news that have been coming out on Twitter on when are some of these uh potential uh farmer uh programs gonna come out.
• 1:23
  SPEAKER_00: Uh talk a little bit, uh review the price action on the corn soybeans for the week.
• 1:28
  SPEAKER_00: But first off, uh the kind of the topic that's been really affecting the soybean market, well, for quite a while, but um kind of lately here is the China and their soybean purchases, and we actually got some purchases on the books.
• 1:42
  SPEAKER_00: And Jaden, what uh what did we see this week from China and the U.S.
• 1:46
  SPEAKER_00: soybeans?
• 1:48
  SPEAKER_02: Yeah, Lucas.
• 1:48
  SPEAKER_02: So uh after uh last Friday's uh Wazley report, we kind of sold off in the soybean and corn market, and kind of in surprising fashion on Monday we rallied the soybean market.
• 1:58
  SPEAKER_02: We were up to 35 cents higher on the January beans.
• 2:01
  SPEAKER_02: Um but there wasn't a lot of headlines that uh gave the reason for this rally, but over the next three days we we kind of saw why.
• 2:10
  SPEAKER_02: Um the USD released um some flash sales from China, um 1.58 million metric tons.
• 2:17
  SPEAKER_02: And that still that's that's still only 15% of the 12 million metric tons that that they pledged to buy before the end of the year.
• 2:26
  SPEAKER_02: Um so that kind of got the market excited, and it and it seemed like after that it was kind of the buy the rumor, sell the fact, typical kind of trade there to end the week.
• 2:36
  SPEAKER_00: Yep, so uh definitely uh definitely what we saw kind of a strange week of uh get a relatively uh bearish report last week, and of course, Monday everything races higher.
• 2:48
  SPEAKER_00: You figure there was some news out there floating around, and then we finally got it and saw those sales China.
• 2:53
  SPEAKER_00: Uh so I guess the positive side is yes, there are actually sales being made.
• 2:57
  SPEAKER_00: Uh to your point, Jaden, we got a long way to go to follow up on there uh what Trump and uh President Xia agreed to uh in principle anyway.
• 3:08
  SPEAKER_00: Uh but good to see sales on the books, and we'll keep tracking that uh going forward.
• 3:14
  SPEAKER_00: Expect them to be doing more.
• 3:15
  SPEAKER_00: I know Trump came out and clarified, like, oh, this deal's gonna, you know, they got until January or whatever to buy these.
• 3:21
  SPEAKER_00: It's not gonna be a next week type situation.
• 3:24
  SPEAKER_00: Um, I like that also they were reviewing uh did they actually follow through in the in the trade deal they made his first time around.
• 3:32
  SPEAKER_00: Um, so you always gotta be a little careful when you're dealing with China on trade deals, but uh at least there's something out there in the news, and at least it was kind of positive this week coming from uh from China.
• 3:43
  SPEAKER_02: Yeah, and Lucas, and it kind of brought the corn market down with it this week.
• 3:47
  SPEAKER_02: Probably maybe some little bit of hedge selling pressure there, too, also.
• 3:51
  SPEAKER_02: But the corn market's really been following the soybean market the last month, ever since this you know pledge from China has came about.
• 3:59
  SPEAKER_02: And this week with the weakness in the beans after the flash sales, uh the corn just came came right along with it.
• 4:05
  SPEAKER_00: Yeah, I kind of thought that was the case.
• 4:08
  SPEAKER_00: Uh, you know, with that Wazi report we got, you know, didn't bring the bushels down very much, and so corn probably lacking a little direction, or the easiest direction I would say right now is down a little bit, right, Jaden?
• 4:20
  SPEAKER_00: Uh kind of they want to follow soybeans as the news banker, corn's following along.
• 4:25
  SPEAKER_00: We're gonna need something to you know change that direction a little bit.
• 4:30
  SPEAKER_00: Uh, but even that, not a whole lot of uh of movement either way, right?
• 4:35
  SPEAKER_00: I mean, we're down for the week, don't get me wrong, but uh we weren't drastic, uh drastically down, were we?
• 4:40
  SPEAKER_00: Do you know what we were down for the week uh on the on the corn, uh Jayden, as you're frankly clicking along here?
• 4:47
  SPEAKER_02: No, uh so on the December corn we were down four cents for the week, and in the March down six.
• 4:52
  SPEAKER_02: Seems like they're pretty comfortable around this four four thirty level.
• 4:56
  SPEAKER_02: Um the futures likes to trade around.
• 4:58
  SPEAKER_00: Yep, that's kind of what I was thinking we were at.
• 5:00
  SPEAKER_00: We're we seem like we're in a range, and we might be heading down toward the bottom end of that range and and see what happens.
• 5:07
  SPEAKER_00: I it'll be interesting, you know.
• 5:08
  SPEAKER_00: Kind of there a lot of people expect maybe that corn yield number to come down a little bit in future reports, so maybe that's kind of settling in on where we gotta trade that number too.
• 5:19
  SPEAKER_00: But um yeah, interesting uh week there on the uh corn and soybean front.
• 5:24
  SPEAKER_00: Kind of just waiting for more headlines.
• 5:26
  SPEAKER_00: Last week we got the data dump from the government reopening and WASD and a lot of reports coming out.
• 5:32
  SPEAKER_00: Definitely had a a jumpy week with Friday being down, and of course Monday being up, and now maybe we're settling back more into the range as we had been trading for a while.
• 5:42
  SPEAKER_00: Um, one thing I wanted to talk a little bit about uh are the government program payments, and this has gotten quite a bit of headline, or I get a lot of questions on it this week with the government reopening now.
• 5:56
  SPEAKER_00: You know, when the back in October 1st or in the month of October, there was a lot of headlines coming out that, well, we're gonna help the American soybean farmer out, and uh we'll be having a disaster program or or some sort of price support program coming out after the government reopens.
• 6:15
  SPEAKER_00: Well, here we are, the government has reopened, and we haven't seen many details come out about it, but uh both both Brooke Rollins and Trump have hinted this week through different social media posts and interviews that a program is coming.
• 6:29
  SPEAKER_00: And so everything I've read on it, uh it seems like they're gonna push this off, even in an announcement of any potential program into December.
• 6:40
  SPEAKER_00: Uh so if if they announce in December, typically it's uh a month to two months before any program is enacted.
• 6:49
  SPEAKER_00: So you're probably looking at February, March type uh time frame of a potential program.
• 6:57
  SPEAKER_00: And right now, I kind of anticipate this to look like the way the ECAP program was last March, April.
• 7:04
  SPEAKER_00: Uh, you know, where you know that w last year's program was that you know, roughly$43 an acre on corn,$32 on beans, I think it was.
• 7:13
  SPEAKER_00: Uh, and you got 85% up front, and then got a little top-up payment here September 30th.
• 7:18
  SPEAKER_00: Um that's just my speculation, but it feels like that's where we're going.
• 7:22
  SPEAKER_00: Uh because they they threw out a couple of of numbers of eight billion, ten billion dollars.
• 7:28
  SPEAKER_00: ECAP was eight and a half billion dollars, like all of that just kind of lines up dollar-wise, time frame-wise.
• 7:35
  SPEAKER_00: Um and so that's my uh uh at least thoughts on it.
• 7:40
  SPEAKER_00: One program that is getting going again after the government reopened is the SDRP program.
• 7:48
  SPEAKER_00: Uh remember that is a disaster program for 23 and 24 and has two phases.
• 7:55
  SPEAKER_00: So phase one, uh paid uh producers that had crop insurance losses in 23 or 24.
• 8:02
  SPEAKER_00: Uh, and that, you know, you got your letter from FSA explained, hey, you had a loss, here's the dollar amount, please sign here, returned FSA, and you got paid.
• 8:12
  SPEAKER_00: SDRP2 or phase two of this program is going to look at those producers that didn't have a crop insurance loss, but would have, if the uh uh increased coverage percentage of the SDRP program uh would have resulted in a payment.
• 8:29
  SPEAKER_00: So for example, if you're in southern Minnesota and you carried 85% coverage on your corn or beans in 2023 and 2024, uh the SDRP program would say, okay, now if you bought 85% crop insurance, the new trigger would be 95%.
• 8:46
  SPEAKER_00: So they'll rework your uh guarantees and uh actual yields to determine if you got a payment and then roughly pay you 35% of that number, just like phase one was.
• 8:59
  SPEAKER_00: I think it is possible to collect on both SDRP1 and SDRP two, uh, as long as you know you didn't have every unit have a loss, then that would have been covered on SDRP 1.
• 9:13
  SPEAKER_00: As far as the timeline and process, very similar process to the first phase, you're gonna get a letter in the mail from FSA basically saying, hey, here's your new guarantees, here's your potential loss, your potential payment, sign here uh and return.
• 9:27
  SPEAKER_00: So if you do have questions on that, you can uh please reach out to our office uh or check the uh USDA website, is usually up to date on that.
• 9:35
  SPEAKER_00: You can talk to FSA as well, but I also know their offices are a little overwhelmed since they just uh came back to work here uh fairly recently.
• 9:43
  SPEAKER_00: Um the government programs, just because I do work in the crop insurance industry, uh Jaden, uh we're running around doing crop insurance uh production reporting.
• 9:53
  SPEAKER_00: We had some decent yields across our trade area, so not a lot of claims uh to work.
• 9:58
  SPEAKER_00: But reminding guys, as we look forward to 2026 crop insurance decisions, and I know Jaden and Mike have done a lot of work on looking at 2026 green marketing decisions, how those two are gonna intertwine uh even more than now or this coming year than they have in the past.
• 10:18
  SPEAKER_00: Uh, because remember, in 2026, the on the crop insurance side, that ECO and SEO coverage now is gonna be 80% subsidized by by USDA.
• 10:31
  SPEAKER_00: So that has will drastically decrease the producer premium cost.
• 10:36
  SPEAKER_00: You'll be able to buy high levels of coverage, high levels of revenue protection for a lot less dollars than it cost last year and especially the years before that.
• 10:47
  SPEAKER_00: So we'll definitely be talking a lot about that coming up as we get a little closer as the calendar turns to 2026 and we start looking at those 2026 corn soybean projection numbers.
• 10:58
  SPEAKER_00: Okay, last item on the agenda we're gonna talk about, Jaden, is we did have a Catalon feed report come out today.
• 11:06
  SPEAKER_00: Um seemed like a lot of the numbers are kind of right along trade expectations, but uh give us the rundown if you can.
• 11:13
  SPEAKER_02: Yeah, Lucas.
• 11:14
  SPEAKER_02: Um on the cattle on feed was basically right in line with trade expectations at you know two percent below last year, and then uh uh cattle marketed during that period was just 0.5% less than the average trade estimate.
• 11:29
  SPEAKER_02: But I guess the the number that was a little off was uh the the placements um from a year ago we were 10% below, but that that was kind of expected.
• 11:38
  SPEAKER_02: Um did see some interesting trade action in the in the cattle market today.
• 11:42
  SPEAKER_02: Uh Trump said he would remove uh the 40% tariffs on Brazil and that uh had the feeder cattle open today, nine bucks lower, but actually um to end the day here, we only um ended the day down a couple on the feeder cattle board.
• 11:58
  SPEAKER_02: Um kind of interesting trade action there today.
• 12:01
  SPEAKER_00: Yeah, we actually traded higher for a little while uh earlier or late morning, early afternoon.
• 12:07
  SPEAKER_00: So uh yeah, definitely uh an interesting day in the trade on the cattle side.
• 12:12
  SPEAKER_00: Um and just a little reminder, since we do have a cattle on feed report uh was released today, there is no LRP offered uh this evening uh on the feeder cattle or fed cattle.
• 12:23
  SPEAKER_00: Um well thanks, Jaden, but I do want to call out one thing uh for all of our listeners, and we'll be hitting on this quite a bit uh here in the next uh week or so.
• 12:33
  SPEAKER_00: Uh but December 3rd, I want you to put December 3rd on your calendar.
• 12:38
  SPEAKER_00: Uh we are doing a little customer appreciate appreciation/slash marketing meeting uh for our customers uh right here at the Take 16 Event Center in Laverne, Minnesota.
• 12:51
  SPEAKER_00: And we're very fortunate we are able to get Brett Stewart to come uh do a presentation at that meeting.
• 12:59
  SPEAKER_00: Uh and very exciting.
• 13:01
  SPEAKER_00: He has uh a company Global Agri Trends and has a lot of good insights on the protein markets, grain markets, global trade.
• 13:11
  SPEAKER_00: And right now, just like we got done talking on tariffs, global trade is affecting our commodities and our prices every single day, right?
• 13:19
  SPEAKER_00: So uh great opportunity to come listen in person right here in Laverne to uh to a market expert and a global market expert at that.
• 13:29
  SPEAKER_00: So remember, December 3rd, that's a Wednesday.
• 13:32
  SPEAKER_00: Uh, we're going to kick it off at 4 p.m.
• 13:35
  SPEAKER_00: with a little happy hour.
• 13:36
  SPEAKER_00: Meeting starts at 4:30, and uh then we'll take some questions after the presentation and wrap up with a a little bit of a meal or some appetizers after that.
• 13:47
  SPEAKER_00: So definitely love to see everybody there.
• 13:49
  SPEAKER_00: If you got questions about that uh or want an RSVP, sure reach out to any of us here at Professional Egg Marketing, and we'd be happy to do that.
• 13:58
  SPEAKER_00: And hopefully we'll see you December 3rd.
• 14:00
  SPEAKER_00: Uh Jaden, anything to add?
• 14:02
  SPEAKER_02: No, Mike or Lucas.
• 14:04
  SPEAKER_02: I I just want to tell everyone I I wouldn't want to miss out on December 3rd.
• 14:08
  SPEAKER_00: Yep, I think that's gonna be an awesome event.
• 14:10
  SPEAKER_00: I know Jaden will be there, and I will be there, and I look forward to seeing you guys there.
• 14:14
  SPEAKER_00: Have a uh great weekend.
• 14:22
  SPEAKER_01: Please reach out to us at professionaleggmarketing.com.
• 14:25
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 14:30
  SPEAKER_01: Trading commodity futures and options involve a substantial risk of loss and is not suitable for all investors.
• 14:37
  SPEAKER_01: See you next time.