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WASDE Week · 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 Miner.
• 0:22
  SPEAKER_00: Let's get started.
• 0:23
  SPEAKER_00: Today is October 13th, and I've got two guests with us here today.
• 0:26
  SPEAKER_00: I got Lucas and Jordan.
• 0:28
  SPEAKER_00: How's it going today?
• 0:29
  SPEAKER_01: It's going pretty good, Mike.
• 0:31
  SPEAKER_01: Awesome.
• 0:32
  SPEAKER_01: Going well, Mike.
• 0:33
  SPEAKER_01: How you doing?
• 0:34
  SPEAKER_00: We're doing good.
• 0:35
  SPEAKER_00: So it's raining outside.
• 0:36
  SPEAKER_00: We had a lot of harvest progress here.
• 0:38
  SPEAKER_00: We're going to talk about that to start off with.
• 0:40
  SPEAKER_00: Then we're going to talk about the Wazd Airport today.
• 0:43
  SPEAKER_00: And then we're going to wrap up our podcast talking a little bit about crop insurance.
• 0:47
  SPEAKER_00: I promise not too much.
• 0:48
  SPEAKER_00: We're just going to talk about the averaging period.
• 0:50
  SPEAKER_00: So let's get started with some yields.
• 1:01
  SPEAKER_01: So so far, you know, this fall, um harvest has gone pretty good.
• 1:05
  SPEAKER_01: Um most probably finished up beans there last week, early this week, it seems like moving into corn, corn harvest.
• 1:12
  SPEAKER_01: You know, after this rain event should be uh pretty heavy over the next two weeks now.
• 1:16
  SPEAKER_01: Um lot of the corn is, you know, dried down extremely well.
• 1:21
  SPEAKER_01: So, you know, we're hearing anything from 13.5% to 16.5% moisture on the corn.
• 1:27
  SPEAKER_01: So, you know, really should come out uh really quick as far as uh that goes.
• 1:33
  SPEAKER_02: Yeah, and I guess I'd echo what Jordan said, uh, you know, looking more into South Dakota area, uh yields generally better than expected.
• 1:42
  SPEAKER_02: Um not not definitely probably setting records anywhere, but if guys thought they were gonna get 150, they're getting 170, 180.
• 1:50
  SPEAKER_02: And if guys thought they were gonna get 180, they're pushing over 200.
• 1:53
  SPEAKER_02: So uh I think everybody's a little surprised how fast the corn dried down, but yields overall have been pretty good, and harvest progress seems to be coming along nicely.
• 2:03
  SPEAKER_02: This rain event will slow us down, but I don't know, it'll uh get started again probably mid next week.
• 2:09
  SPEAKER_00: First real break we've really had during harvest so far.
• 2:12
  SPEAKER_00: You know, as we look forward here, it's really gonna pick up pretty much as the rain was falling uh last night.
• 2:18
  SPEAKER_00: I really thought to myself, it was a really good thing it wasn't 10 degrees colder because that was some crazy stuff out there.
• 2:24
  SPEAKER_00: So keep that in mind as we still have soybeans out in the field and in smaller places, anyways, uh, as we got some colder temps approaching us from here on out.
• 2:33
  SPEAKER_00: Let's talk about the Wazdair port yesterday.
• 2:36
  SPEAKER_00: We saw that number come out at 11.
• 2:38
  SPEAKER_00: Uh, really strong reaction out of the grain markets after the report.
• 2:42
  SPEAKER_00: Soybeans closing the day in the upper uh 30 cents higher.
• 2:46
  SPEAKER_00: Um we spent most of the day around 40 to 45 cents higher on soybeans or so.
• 2:51
  SPEAKER_00: Uh really strong reaction.
• 2:53
  SPEAKER_00: The corn market not quite as strong, but we did bounce up against that five dollar wall yet again.
• 2:59
  SPEAKER_00: So tell me a little bit about what you thought the report showed us, Jordan, and and what you took from it.
• 3:04
  SPEAKER_01: Yeah, so Wazday report yesterday, like you said, markets uh closed uh a little bit higher there yesterday on the corn and quite a bit higher on the soybeans.
• 3:12
  SPEAKER_01: We saw a yield reduction on both corn and soybeans.
• 3:16
  SPEAKER_01: Um surprise the market, you know, like Lucas pointed out earlier, everything we've heard here so far is probably a little bit better than expected.
• 3:24
  SPEAKER_01: Now, I believe you know, we probably got a little bit down on our crop heading into harvest that maybe we shouldn't have, but you know, there's been some some outstanding uh yields, especially on corn, is what uh what I've kind of heard.
• 3:36
  SPEAKER_01: So, you know, yield to yesterday at 173 down from 173 and a half, not not much different, right?
• 3:43
  SPEAKER_01: Um, you know, going forward, the USCA's got this thing plugged in pretty well.
• 3:48
  SPEAKER_01: So, you know, I I suspect that's probably the smallest yield we see on corn as we move forward.
• 3:54
  SPEAKER_01: Um, but don't expect you know too much higher uh type of numbers is what that kind of looks like.
• 3:59
  SPEAKER_01: Um the carrion number, beginning stocks, um last year's crop was lowered uh down to a 136, a little bit lower than what uh most were people most people were kind of looking at.
• 4:10
  SPEAKER_01: Uh stocks number though was was lower, right?
• 4:13
  SPEAKER_01: So, you know, we used a little bit more corn than what we were expecting, so shouldn't be too surprising.
• 4:18
  SPEAKER_01: But uh, you know, a 2.1 billion bushel ending stocks on corn is is kind of the main thing to look at.
• 4:23
  SPEAKER_01: And and you know, looking at that, there's there's plenty of corn around.
• 4:26
  SPEAKER_01: It's gonna be you know a tough year marketing when you're looking at uh over two billion bushels and you know probably grows from there.
• 4:33
  SPEAKER_01: Exports dropped 25 million bushels, and we're behind export sales by 5%.
• 4:39
  SPEAKER_01: A good export sales number this morning, but you know, we're we're running behind, and and that's a big export number to kind of hit.
• 4:45
  SPEAKER_01: Soybeans, a little lower there, uh 49 and a half bushel yield.
• 4:49
  SPEAKER_01: Um, you know, still remains really tight on soybeans, right?
• 4:53
  SPEAKER_01: Uh 220 million bushel ending stocks, five percent stocks to use ratio.
• 4:58
  SPEAKER_01: Um, it's it's uh you know gonna be interesting as we head into the South America, you know, weather time frame, right?
• 5:05
  SPEAKER_00: Yeah, we've posted uh lower yields in uh September and October six times out of the last 30 years, and in the November report following it, we lowered yield uh five out of the six times half a bushel each one of those times.
• 5:20
  SPEAKER_00: So it'll be interesting to see if we do that again, or if uh if we've seen enough out of this soybean uh yield number get dropped after some adverse August weather.
• 5:30
  SPEAKER_00: Uh, looking at uh a few other things within the report, you know, the initial reaction right after it wasn't very strong.
• 5:36
  SPEAKER_00: We saw soybeans up ten cents or so.
• 5:38
  SPEAKER_00: Uh about a half hour later, we were up about 40 cents, and one of the things I think they caught on to really quickly is um they were looking at the lower stocks number on soybeans.
• 5:48
  SPEAKER_00: They came out uh very low for the world uh below the range of estimates, actually, and and we saw a nice reaction uh once they kind of caught on to that number.
• 5:57
  SPEAKER_00: So I do believe going forward we're gonna focus more on uh other other news items, talk about Israel a little bit, we're gonna talk about crude oil price a little bit.
• 6:08
  SPEAKER_00: You know, the soybean market's been in an odd position, how you've been liquidating spec soybean oil longs as crude oil's been going up.
• 6:16
  SPEAKER_00: And if if we do see that uh process stop, we could see them correlate a little bit stronger together, and uh uh that'll be interesting to watch as soybean crush margins have been dropping uh a little bit here uh recently.
• 6:30
  SPEAKER_00: So keep an eye on that and some of the other outside fundamentals, whether it be Argentina production with their drier weather uh or just Chinese demand going forward and the impact that has.
• 6:40
  SPEAKER_00: And then obviously the big the big uh cloud over all of these markets being the uh global economic activity and concerns uh in that section and how that uh could hold some of these prices back, particularly uh you know, crude oil and uh some of these other things like cattle, obviously.
• 6:59
  SPEAKER_00: So what else do you want to talk about here on the crop insurance side, Lucas?
• 7:04
  SPEAKER_02: Yeah, so uh just a quick reminder that we're setting our uh fall harvest price for corn and beans uh along with some other crops right now during the month of October.
• 7:13
  SPEAKER_02: So month of October has 22 trading days in it, I believe.
• 7:17
  SPEAKER_02: So we're roughly halfway through uh setting that price.
• 7:21
  SPEAKER_02: Uh we're at 490 on corn.
• 7:24
  SPEAKER_02: Uh so in the spring we were 591 on corn, roughly 17-18% lower on the corn price on soybeans$12.72 and uh about 8% below the 1376 we were at uh in the spring.
• 7:41
  SPEAKER_02: So uh why is that important?
• 7:43
  SPEAKER_02: Well, uh of course if you buy revenue protection, uh we got to set that fall price to determine uh if there's a revenue loss, and we take our final yield times that fall price to determine our revenue to count and see if we have any crop insurance claims.
• 7:58
  SPEAKER_02: On corn, generally, if you have ECO, SEO, 85% coverage and you're combining you know a decent crop, your APH level, um, you're probably gonna trigger some claims.
• 8:10
  SPEAKER_02: So be sure to talk to your agent about that.
• 8:13
  SPEAKER_02: Or if you want a calculator, we can sure shoot you one as well.
• 8:16
  SPEAKER_02: Uh soybeans, you know the price is down, so that's gonna improve your guarantees a little bit.
• 8:20
  SPEAKER_02: Uh, not quite as drastic down as compared to corn, but uh good reminder to as you're finishing up harvest, make some good notes, connect with your crop insurance agent, see if we have any uh claims that need to be worked there.
• 8:35
  SPEAKER_02: Uh, final price will come out November 1st.
• 8:37
  SPEAKER_02: Of course, since we're halfway through, it'll take a dramatic shift in the price one way or the other uh to move much off of that number, but we'll see what happens in the last half of October for uh setting the fall price.
• 8:50
  SPEAKER_02: Uh, two other things I did want to talk about quick, Mike, or just mention uh there is an ERP disaster program payment for 2022, and so ERP is kind of the new WIP program that was a few years ago, and so for 2022, if you had a crop insurance loss, you will most likely be getting a form in the mail from FSA, uh, all pre-filled out based on your crop insurance loss information.
• 9:20
  SPEAKER_02: And I have not seen it officially, but everything I read, uh, you should be able to just double check it, sign it, send it back, and get your payment.
• 9:29
  SPEAKER_02: Not sure what the payment levels are gonna be.
• 9:31
  SPEAKER_02: The funding for ERP 22, which is what the program is called, is pretty limited.
• 9:37
  SPEAKER_02: So I'm not exactly sure of the percentage as what they're gonna cover.
• 9:40
  SPEAKER_02: But if you remember, um, about a year ago, uh it was a year ago in June, ERP1 was the program payment where everybody got the pre-filled out form, they signed it and payments triggered pretty fast.
• 9:53
  SPEAKER_02: That is the same process that they're gonna use for this disaster uh program payment.
• 9:59
  SPEAKER_02: ARC and PLC payments for 22 uh were released this week, and uh maybe this is a little more plug for crop insurance versus disaster or government programs.
• 10:11
  SPEAKER_02: You know, ARC PLC is the program you sign up for at FSA office.
• 10:15
  SPEAKER_02: Um there were zero counties in Minnesota or Iowa that had ARC payments on ARC or PLC payments on corn and beans, um, no plc payments on corn or beans uh nationwide.
• 10:29
  SPEAKER_02: There were 12, I think, counties that had a corn payment in South Dakota.
• 10:36
  SPEAKER_02: Now you say, okay, well that makes sense.
• 10:38
  SPEAKER_02: It was kind of dry in southern South Dakota.
• 10:40
  SPEAKER_02: Well, it was drier in a bigger area than 12 counties.
• 10:44
  SPEAKER_02: So uh kind of a good reminder.
• 10:46
  SPEAKER_02: Uh let's support the risk management tool that's working well for corn and bean farmers, and that's uh crop insurance.
• 10:51
  SPEAKER_02: Something to keep in mind as we're looking into a farm bill discussion or heading into the farm bill discussion, although there are a few more important things going on in the world, so farm bill talk is getting uh pushed back towards the end.
• 11:03
  SPEAKER_02: So, yeah, I guess that's uh the update on the crop insurance side, Mike.
• 11:07
  SPEAKER_00: All right, we'll wrap up the podcast here.
• 11:10
  SPEAKER_00: Any additional thoughts, Jordan, on uh what's going on in the marketplace or what to watch here?
• 11:15
  SPEAKER_01: Yeah, one thing I did want to mention, um, you know, looking out uh DS-25, I think you mentioned this, Mike, actually a little bit uh as the report was unfolding there yesterday.
• 11:25
  SPEAKER_01: Um with that market pop, DS 25 I think got close to 520 futures.
• 11:30
  SPEAKER_01: You know, so as you're uh you know looking at seed and fertilizer and rent here this fall, you know, that's might not be a bad spot to kind of look at, you know, getting started on some sales as we move forward.
• 11:40
  SPEAKER_00: Yeah, still holding above 520 here for next year, uh pretty decent price.
• 11:45
  SPEAKER_00: Uh, we can get some decent option strategies done.
• 11:48
  SPEAKER_00: Give us a call and talk about those.
• 11:49
  SPEAKER_00: I think that's a really important topic right now.
• 11:51
  SPEAKER_00: Thanks, guys.
• 11:52
  SPEAKER_00: And thank you to all our listeners.
• 11:54
  SPEAKER_00: Please reach out to us at professional eggmarketing.com.
• 11:58
  SPEAKER_00: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 12:03
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 12:09
  SPEAKER_00: See you next time.