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Stocks and Acreage Recap · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Professional Egg Marketing Podcast.
• 0:04
  SPEAKER_01: If you want a deep dive into the egg 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.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:24
  SPEAKER_01: Today is June 30th.
• 0:26
  SPEAKER_01: I've got Jordan with us from Professional Ag Marketing.
• 0:28
  SPEAKER_01: How's it going, Jordan?
• 0:29
  SPEAKER_01: Oh, it's going great.
• 0:30
  SPEAKER_01: How about yourself, Mike?
• 0:31
  SPEAKER_01: Um, yeah, not so great.
• 0:33
  SPEAKER_01: I guess uh corn ended the day up 34 cents lower.
• 0:38
  SPEAKER_01: Um, didn't know if you got that.
• 0:40
  SPEAKER_01: Six nineteen and three quarters on December.
• 0:42
  SPEAKER_01: November 1458, down 20 on the November beans.
• 0:47
  SPEAKER_01: But uh, if I recall, Jordan, didn't soybeans have a friendly number today in the report?
• 0:53
  SPEAKER_00: Yeah, so we had a uh stocks and acreage report that was uh fairly friendly on the soybeans today, and uh didn't quite have that reaction uh out of the market.
• 1:03
  SPEAKER_00: Um pretty neutral on the corn, however, is how we looked.
• 1:07
  SPEAKER_01: Yeah, quarterly stocks report was uh pretty much right at expectations as well.
• 1:12
  SPEAKER_01: All three grains coming in within uh about six million bushels of expected guesses or so.
• 1:18
  SPEAKER_01: So right on the money on the quarterly grain stocks.
• 1:21
  SPEAKER_01: But yeah, acreage there probably the biggest uh takeaway out of that was the soybean number being uh much lower than the expected average trade guess there.
• 1:31
  SPEAKER_01: And uh corn was pretty much right on the money, so it I don't know, it didn't feel like a very strong reaction.
• 1:37
  SPEAKER_01: It did right off the bat, right?
• 1:38
  SPEAKER_01: I mean, we had a really strong reaction there for about 10 minutes and then it pulled back.
• 1:43
  SPEAKER_00: Yeah, so right out of the gate after the report was released, we did have a bump higher.
• 1:47
  SPEAKER_00: You know, corn was down 15, that traded back to steady money, and the soybeans, you know, they were kind of trading a little bit lower.
• 1:53
  SPEAKER_00: They bumped higher and were, I believe, at one point trading uh twenty six.
• 1:57
  SPEAKER_00: Fifteen twenty, yeah.
• 1:58
  SPEAKER_00: Yeah, somewhere in there.
• 1:59
  SPEAKER_00: But you know, as far as you know, numbers, corn came in at 89.9, that would have been up from the March numbers at 89.49, so about a half million more acres there, which was pretty much right on the average trade estimate, right?
• 2:14
  SPEAKER_00: Not a lot of difference there.
• 2:15
  SPEAKER_00: Soybeans, um, the big drop that we're kind of talking about here was eighty-eight point three is where we came in at.
• 2:22
  SPEAKER_00: The average trade guess would have been ninety point four six, so a little over two million less than what was expected, and about two and a half million less than what uh was shown in the March numbers.
• 2:34
  SPEAKER_00: Um, as far as a breakdown, you know, kind of looking at the state by state stuff, um, we actually seen a very large drop on acres in North Dakota and Minnesota, down about a million acres there on soybeans.
• 2:48
  SPEAKER_00: So very interesting to kind of see that, especially with you know late planting going on up in up in that area.
• 2:54
  SPEAKER_00: You would have thought that um, you know, some corn acres wouldn't have been planted on the PP side, which you know, North Dakota on the corn acre side did come down a half million.
• 3:04
  SPEAKER_00: Yeah but we were thinking that we'd see, you know, actually a bump in in soybean acres up there.
• 3:10
  SPEAKER_00: Um, you know, corn acres going out and into soybeans, but it looks like those uh those rain events here um at the end of uh May, June kind of actually held them out of planting.
• 3:22
  SPEAKER_00: Soybeans too is what uh that kind of amounts to.
• 3:25
  SPEAKER_01: But um Yeah, so you've got like three states there, right?
• 3:29
  SPEAKER_01: That you had extensive rainfall in that really delayed planning during the time of the survey, which would have been somewhere between May 6 uh and May, and then uh it was the 28th of May and June 16th.
• 3:42
  SPEAKER_01: So, like North Dakota, for example, we know guys didn't get a bundle of their acres planted in North Dakota until well into June.
• 3:49
  SPEAKER_01: There they had that 10-day stretch.
• 3:51
  SPEAKER_01: So a lot of them could have got surveyed before that uh before that planting occurred.
• 3:57
  SPEAKER_01: So they will be redoing some uh surveys there in Minnesota, North Dakota, and in South Dakota for pretty much all of the uh the grains there, corn, dry edible, beans, soybeans, things like that.
• 4:11
  SPEAKER_01: So um that if the newly collected data justifies any changes, NAS will publish uh updated acreage estimates in the crop production report that'll be released in August 12th.
• 4:24
  SPEAKER_01: So that's kind of how uh that looks for changes going forward on those acres for resurveys.
• 4:29
  SPEAKER_00: Yeah, that was kind of floating around the market there at the end of the day that uh you know we can't get too excited on these numbers with this big drop in soybeans that you know maybe that was kind of missed, and they are gonna do a little bit of a resurvey there.
• 4:40
  SPEAKER_00: Um, and we'll know the results there in August, like you're kind of talking about.
• 4:44
  SPEAKER_00: Yeah.
• 4:44
  SPEAKER_01: Because I mean, if you drop the soybean number there to 88.32, I mean, if you just change your balance sheet for the United States to that, you're gonna push a 140 yield pretty easy with the number or a 140 ending stocks number for the United States for that 22, 23 year pretty easily.
• 5:02
  SPEAKER_01: So after we kind of digested today's reports, you know, normally a neutral report, things would just drift lower into the close.
• 5:09
  SPEAKER_01: But really, today we saw a wave of selling.
• 5:12
  SPEAKER_01: So, you know, money flows exiting these commodity markets at a pretty rapid pace.
• 5:17
  SPEAKER_01: We're at the end of the month, end of the quarter.
• 5:19
  SPEAKER_01: Uh, managed money funds are still long, about 230 contracts of corn, they're figuring, and about 158 of soybeans.
• 5:27
  SPEAKER_01: So really large positions still on managed money.
• 5:30
  SPEAKER_01: Um, they're getting some help to liquidate on margin calls from other sectors like the equity side of things, which uh again today took some more red action across the SP and the Dow.
• 5:40
  SPEAKER_01: The SP now is back down to about 3,800, so not as bad as what we have seen here recently, but it looks like uh we found some resistance there again.
• 5:50
  SPEAKER_01: And with um with those large positions liquidating here, um, you know, uh a big storyline in this all has been the weight of everyone's uh mind here on the recession talk.
• 6:02
  SPEAKER_01: And economists have raised their estimate for the U.S.
• 6:06
  SPEAKER_01: recession uh risk to be at like 44%.
• 6:09
  SPEAKER_01: So nobody knows, but they have pretty good um indications showing that you know it's a 50-50 shot at this point almost.
• 6:15
  SPEAKER_01: So timing and levels are important.
• 6:18
  SPEAKER_01: End of June, and it's historically pretty decent time to sell corn, right?
• 6:23
  SPEAKER_01: So there haven't been many buyers to step in and stop this this sell-off, Jordan, in these grain markets.
• 6:30
  SPEAKER_01: But talk to me about how much of it has just been, you know, fund uh liquidity here, or did it have something to do with these weekend rains coming up and uh maybe they're gonna adjust that yield number then, or what are you thinking?
• 6:44
  SPEAKER_00: Yeah, so I think all the above, right?
• 6:47
  SPEAKER_00: Um, you know, I I I do believe end of the month, end of the end of the quarter had a large uh effect to today's sell-off.
• 6:55
  SPEAKER_00: And to go along with that, you know, this rain event that you kind of mentioned, you know, it looks to be very widespread.
• 7:01
  SPEAKER_00: Kind of the whole Midwest is expected to get a half inch to an inch and a half over the next week.
• 7:07
  SPEAKER_00: And on top of that, Illinois got an inch of rain there last weekend.
• 7:11
  SPEAKER_00: Um, you know, half of Iowa got over an inch of rain.
• 7:14
  SPEAKER_00: So, you know, there's some really, really, really good looking crops there out in the to the east, and you know, just overall yield might actually be trending higher is what you're kind of seeing.
• 7:25
  SPEAKER_00: Um but you're right.
• 7:28
  SPEAKER_00: Um you know, you take acres down on soybeans to eighty-eight point three, and the ending stocks, you know, dipping below one fifty is an extremely tight number, so you gotta believe that, you know, a little bit of a yield bump is figured into this today.
• 7:43
  SPEAKER_00: Um as we kind of exit uh exit the week, right?
• 7:46
  SPEAKER_01: Yeah, they would have to try to do a little bit of that to justify some of these numbers today, I would figure.
• 7:51
  SPEAKER_01: Uh otherwise we'd be down again to towards uh pipeline levels, especially at a time frame where old crops continues to be pretty tight for both soybeans and corn as uh demand continues to charge on there.
• 8:04
  SPEAKER_01: Any final thoughts for our listeners here, Jordan, or uh things to take home before this long three-day weekend here.
• 8:11
  SPEAKER_01: Markets won't open up until Tuesday at 8.30 m that morning, so no Monday overnight trade as well.
• 8:18
  SPEAKER_00: Yeah, so I mean we've we've taken a good, you know, buck to buck twenty off of this corn market now.
• 8:25
  SPEAKER_00: Um you know, we got a three-day weekend coming up here.
• 8:28
  SPEAKER_00: If we you know do hit some, you know, pretty beneficial rains as we um close out uh the the weekend here, um, you know, we actually could push this thing a little bit lower.
• 8:39
  SPEAKER_00: You're looking at six twenty corn with the stocks to use ratio today, you know, you're showing um you know March futures could actually be in that five eighty, five fifty range if we if we do have a good crop.
• 8:51
  SPEAKER_00: So I wouldn't discourage you from you know thinking about some more sales on a little bit of a bump tomorrow before we head into this long three-day weekend on corn, because you know, usually after you kind of get past July 4th, um, you know, that that's kind of the drop-dead sell date there seasonally on on selling new crop corn.
• 9:09
  SPEAKER_01: For sure.
• 9:10
  SPEAKER_01: And uh I would say going into this weekend, I'm curious to see, let's say the East gets rains and the West doesn't, how the market's gonna react with that.
• 9:19
  SPEAKER_01: Uh, that would be really interesting uh going forward here into the pollination period, getting some of those forecasts in here as well.
• 9:27
  SPEAKER_01: So it'll be an interesting market here after the long weekend.
• 9:31
  SPEAKER_01: Other than that, folks, thank you for tuning in today.
• 9:34
  SPEAKER_01: And uh please join us at our block party for a salute to pork producers there on July 8th, if you get the chance.
• 9:42
  SPEAKER_01: Thank you.
• 9:43
  SPEAKER_01: And thank you to all our listeners.
• 9:45
  SPEAKER_01: Please reach out to us from our website at professionaleggmarketing.com, or check out our newly added hog specific podcast named Hog Market Talk, that's released every Thursday.
• 9:56
  SPEAKER_01: Trading commodity futures and options involve substantial risk and loss that is not suitable for all investors.