Latest / AG Bull / Wiesemeyer's Perspectives | Pro Farmer Corn Surprise And The Signals To Watch

Transcript

Wiesemeyer's Perspectives | Pro Farmer Corn Surprise And The Signals To Watch · AG Bull

0:09
SPEAKER_03: Welcome to the AgBull Podcast.
0:11
SPEAKER_03: Tommy Grassofi, Ag Bull Media, Ag Bull Trading.
0:14
SPEAKER_03: Well, I'm at the AgBull Media Studios in Mayville, North Dakota.
0:19
SPEAKER_03: It is Sunday afternoon, and Jim and I decided there was so much breaking news at the end of the day of Friday and coming in to Sunday that we said we better get it together and get a show recorded.
0:32
SPEAKER_03: Because when the markets open, outside markets open at 5 central, grains open at 7 central.
0:39
SPEAKER_03: Of course, we're expecting volatility.
0:43
SPEAKER_03: Enjoy the show.
0:44
SPEAKER_03: Enjoy the storm.
0:45
SPEAKER_03: Hope you weather these markets.
0:47
SPEAKER_03: If we could help you in any way, don't be afraid to reach out.
0:49
SPEAKER_03: www.agbull.com.
0:52
SPEAKER_03: Mr.
0:52
SPEAKER_03: Jim will be up next.
1:22
SPEAKER_03: Oh, baby, do we have a show for you?
1:24
SPEAKER_03: Breaking news, all that and much more.
1:26
SPEAKER_03: Mr.
1:26
SPEAKER_03: Jim Wiesmeyer, he's coming on the stage here right now.
1:30
SPEAKER_03: Let me unmute him.
1:31
SPEAKER_03: There he is.
1:33
SPEAKER_01: We had quite a Friday, as you well know, that we'll get into on the pro farmer estimates.
1:38
SPEAKER_01: And then late Friday, we had a bullish, looks like, cattle on feed report after markets closed.
1:46
SPEAKER_01: And then, of course, before that, we had Trump getting once again back into the beef market.
1:53
SPEAKER_01: And then, but Friday evening, I had a feeling.
1:58
SPEAKER_01: Once I when you're a news person, sometimes you get a feeling that the Canada US trade talks might fall apart.
2:05
SPEAKER_01: So I went to bed early, which is rare for me.
2:08
SPEAKER_01: And then I got up at midnight, Eastern time, because that's when the sanctions would go into place.
2:15
SPEAKER_01: And that's what happened.
2:16
SPEAKER_01: And we're going to dig into that.
2:18
SPEAKER_01: And then, but we've got one of the most important Sunday openings and Monday that I've uh seen for quite a while, Tommy.
2:29
SPEAKER_01: And we're going to get some of the reasons why in this podcast.
2:33
SPEAKER_03: Okay, let's just cut to the chase here and get right to the markets.
2:36
SPEAKER_03: We always start with the markets.
2:37
SPEAKER_03: It's a great way to recap the week.
2:39
SPEAKER_01: And a lot of green on the screen.
2:42
SPEAKER_01: Yeah, let's talk about it.
2:43
SPEAKER_01: Yeah.
2:43
SPEAKER_01: Look at the leader was beans up 47 cents in the November contract.
2:48
SPEAKER_01: But look at the silent bull market as we call it, cotton, up 355 points.
2:54
SPEAKER_01: Wow.
2:55
SPEAKER_01: We're almost at 89 cents a pound there.
2:59
SPEAKER_01: Corn was up 25 and a quarter cents.
3:02
SPEAKER_01: And that was an accumulation of markets run up as the crop scouts on the pro farmer crop tour went through.
3:10
SPEAKER_01: So some people say, is that already built into the market?
3:13
SPEAKER_01: We're going to see based on their estimates, maybe not.
3:17
SPEAKER_01: You had oil down and you had cattle and feeder cattle down, but they were down a lot harder as we'll go through, Tommy, as a result of the White House getting back into that market again.
3:31
SPEAKER_01: Weed had a pretty good week again.
3:34
SPEAKER_01: Look at spring wheat up 20 cents.
3:36
SPEAKER_01: That's all Black Sea grain tussle over there.
3:40
SPEAKER_01: And the the big unknown there is not, I don't think it's not if it's when increased demand comes into uh wheat exporter markets, including the United States later rather than sooner.
3:55
SPEAKER_01: But it's no longer just a Ukraine-Russia issue, it's a market issue now.
3:59
SPEAKER_03: And a weather issue, also, still that overlag from Europe.
4:02
SPEAKER_03: Uh, you presented the charts in a different way, and I like the way this looks too.
4:06
SPEAKER_03: Leaders versus losers, I guess.
4:08
SPEAKER_01: Yeah, yeah.
4:09
SPEAKER_01: And we we've got the percentages there.
4:11
SPEAKER_01: You can see look at look at uh the leader was uh corn from from a percentage basis, and look at cotton up for a little over four percent.
4:22
SPEAKER_01: But this just gives you some perspective on the on the marketplace.
4:26
SPEAKER_01: But look at feeder cattle down one call it 1.06 per percent.
4:31
SPEAKER_01: Hogs actually were worse earlier in the week, but they had a mini rally as we went through the week, so it could have been uh uh worse there for hogs.
4:40
SPEAKER_01: But this just gives you a setup on what happened.
4:44
SPEAKER_01: Now we're gonna get into some of the reasons why and some of the perspective for the week ahead, Tommy.
4:50
SPEAKER_03: Very good.
4:50
SPEAKER_03: Let's move on to the next slide.
4:52
SPEAKER_03: Okay, let's talk about this.
4:53
SPEAKER_03: I'm pretty excited.
4:54
SPEAKER_03: I have a chart of the Pro Farmer number two, corn, pro farmer sharply USDA.
4:59
SPEAKER_03: Now, of course, the ProFarmer talks about soybeans too.
5:01
SPEAKER_03: Not as much news there for different reasons.
5:03
SPEAKER_03: We could talk about that in a little bit.
5:04
SPEAKER_03: Let me pop up this graphic.
5:06
SPEAKER_03: This graphic is from ProFarmer, the 2026 crop estimates.
5:11
SPEAKER_03: They read is a national corn crop of 15.344 and an average yield of 173.2.
5:20
SPEAKER_03: Uh, that, my friend, I would think is pretty pretty friendly to the markets.
5:24
SPEAKER_03: What do you think, Jim?
5:25
SPEAKER_01: Now, look at there is a range on that estimate.
5:27
SPEAKER_01: That's the midpoint estimate.
5:29
SPEAKER_01: I always like to point out that it could go lower and it could go higher, at least from their perspective on that one.
5:35
SPEAKER_01: But again, trying to put the direction is not the news here, it's the magnitude.
5:40
SPEAKER_01: ProFarmer has come in below USDA's August yield for corn in every one of the last seven tours, Tommy.
5:49
SPEAKER_03: Okay.
5:50
SPEAKER_01: The 7.5 bushel gap is the widest of that series, and it's wider than the 2022 7.3 bushels and 2025 6.1.
6:02
SPEAKER_01: And it arrives in a year when USDA raised planted corn acres and while cutting yield.
6:09
SPEAKER_01: So that combination left the trade arguing about acres rather than ears, but now they're arguing about ears.
6:16
SPEAKER_01: So the perspective, again, we're uh what most people are thinking, the number by itself is bullish.
6:24
SPEAKER_01: The more interesting question is what analysts are telling me is what happens to it in the 51 hours that that transaction between Friday's close and Sunday night 7 p.m.
6:37
SPEAKER_01: CT opening, as you said, electronic opening.
6:45
SPEAKER_01: The core measures ear count and grain length.
6:49
SPEAKER_01: It does not measure kernel depth or test length.
7:01
SPEAKER_01: History offers no dependable directional tendency for the session after and the trading session after.
7:09
SPEAKER_01: So again, it what analysts say to watch is not the opening Monday, but what comes becomes of it.
7:18
SPEAKER_01: A Sunday night gap that holds through Monday's close with December with the December coins settling in the upper third of the daily trading range and ultimate interest building rather than reducing.
7:31
SPEAKER_01: That says the funds are adding length, as we call it, and dollars has turned resistance into support.
7:38
SPEAKER_01: That's what that's what the traders are saying.
7:41
SPEAKER_01: A gap higher that leads the way through Monday to classify the rumor, sell the fact because the tour was already pricey and commercial and farmer selling his fact above the market.
7:53
SPEAKER_01: That's what we don't know.
7:55
SPEAKER_01: That's what the market's gonna market's gonna talk Monday.
7:58
SPEAKER_01: That's what traders are saying.
8:00
SPEAKER_03: That's the price discovery mechanism.
8:02
SPEAKER_03: Look at that, look what I have behind me.
8:04
SPEAKER_03: I have a picture of the border trade in my podcast studio, and uh I love that poster.
8:08
SPEAKER_03: It says, on our way to Chicago Border Trade.
8:10
SPEAKER_03: I love that guy carrying some corn to uh the border trade, and that's the function of the market.
8:15
SPEAKER_03: Yes, Jim, you had several articles come out on the Eggbowl website under Weissmeyer Perspective uh section.
8:22
SPEAKER_03: What was that one you said?
8:23
SPEAKER_03: Six pro farmers six hundred and let's talk about if this number is 89 million bushels.
8:29
SPEAKER_01: That's that's what the difference is in production, you know.
8:33
SPEAKER_01: Uh, and we can go through that because there's your difference in in the crop in in the crop between USDA's August and what pro farmers' crop estimate was.
8:45
SPEAKER_01: And the key thing on that, Tommy, is you go through the the scenarios on uh carryover.
8:52
SPEAKER_01: Now, there's gonna be if if it's that low, you're gonna have to ration some demand, but you can get that stocks to use ratio down pretty low.
9:02
SPEAKER_01: That that's what that uh says, and that's what we dealt with in our report in our summary with analyst comments about the ProFarmer Crop Tour.
9:12
SPEAKER_01: That we we we spent some time on that one.
9:15
SPEAKER_03: Yeah, folks, you can find that over on Agble.
9:17
SPEAKER_03: Just hit the Weesmeier tab and look at Agbull Intel and you could see all that.
9:22
SPEAKER_03: Of course, if you'd like uh more in-depth access to markets and be able to talk to a brokerage firm trader company, of course, subscribe, AgBull Intel,$25 a month,$250 annually.
9:34
SPEAKER_03: As you can see on this top right, top middle, Ag Intel.
9:38
SPEAKER_03: That's where you'll find Jim.
9:39
SPEAKER_03: And then in the next few weeks and months, Jim will have his own tab as he has officially joined Ag Bull, and you'll be able to get all Jim's content there, of course.
9:48
SPEAKER_03: Uh that also will be moving the subscriber package.
9:51
SPEAKER_03: But Jim will be Jim and our team will be mailing out a coupon.
9:55
SPEAKER_03: If you're not on Jim's list and you'd like to be mailed that coupon, we'll first join the list.
9:59
SPEAKER_03: Uh go under the AgBull website and say contact us.
10:03
SPEAKER_03: And I want to be on Jim's list.
10:04
SPEAKER_03: And we're getting, even in, even though we say this every week, I'd say uh we're getting two or three people at late a day saying, Jim, add me to your list.
10:12
SPEAKER_03: I want the coupon.
10:13
SPEAKER_01: Yeah.
10:14
SPEAKER_01: And if you're if you're currently getting it, you don't have to worry.
10:17
SPEAKER_03: You don't like double adding people who are already on there.
10:20
SPEAKER_01: I've got to check on that.
10:22
SPEAKER_01: And if you haven't received, if you've signed up and and it and you haven't been receiving it, first check your spam folder.
10:32
SPEAKER_01: That it it's not in that one.
10:34
SPEAKER_01: So but we but if it's if it's something we have to look into, of course, we'll look into it.
10:39
SPEAKER_03: Absolutely.
10:39
SPEAKER_03: Okay, let's go back to the slides.
10:41
SPEAKER_03: I just want to go in this.
10:42
SPEAKER_03: I think we covered all this.
10:43
SPEAKER_03: Pro Farmer 173.2 yield, uh 15.344 billion bushel crop.
10:48
SPEAKER_03: That is the 669 million bushel below the USDA.
10:52
SPEAKER_03: December corn gained 25 and a quarter cents for the week.
10:54
SPEAKER_01: Yeah, that's big.
10:55
SPEAKER_01: And what it means to the carryover and it that it's sensitivity now.
11:00
SPEAKER_01: There's your volatility.
11:02
SPEAKER_01: If if you know, if if you know how would I say it?
11:06
SPEAKER_01: It's it's it the arbiter is going to be USDA September report.
11:13
SPEAKER_03: Right.
11:14
SPEAKER_03: There's a lot of indiv I think what you're saying is there's a lot of individual people doing boots on the ground tours.
11:20
SPEAKER_03: Our our mutual friend Dan Bossey from Ag Resource put out a very bullish scenario earlier in the week that was sent to uh ag resource clients.
11:29
SPEAKER_03: Dan's a friend of ours, friend of Nesvix.
11:31
SPEAKER_03: And you know, when you and I talked about that, you're like, wow, is that bullish?
11:36
SPEAKER_03: He put that out before the Pro Farmer Tour on his own little boots in the ground thing.
11:40
SPEAKER_03: I do want to add one thing, a little color just from my perspective.
11:45
SPEAKER_03: I'm up in North Dakota right now, and I'm gonna pull up the drought map and we'll talk our way through this.
11:51
SPEAKER_03: So if you have been taught rain makes grain, you would say, wow, there's a good crop.
11:56
SPEAKER_03: Look at Ohio, Indiana, Illinois, uh parts of Iowa, the parts of the East Coast, and the drought, I'm up in that very, very red, red dot in North Dakota that's caught right in between Grand Forks and Fargo, and the corn around here looks horrible.
12:13
SPEAKER_03: And the crops are way, way, way ahead of schedule on maturity.
12:18
SPEAKER_03: Now, when you look at the crop tour, and when I watch the crop tour videos every day, if you look at that drought map, Jim, you say rain makes grain, there's no freaking drought.
12:27
SPEAKER_03: This should be a big crop.
12:29
SPEAKER_03: What the drought map doesn't show is flooding.
12:31
SPEAKER_03: That is not a flooding map, that's a drought map.
12:34
SPEAKER_03: What the drought map doesn't show is crops that were destroyed in the spring, crops that were blown over by winds.
12:41
SPEAKER_03: There's there's some real problems.
12:43
SPEAKER_03: And if I'm understanding uh young Lane, Lane who did the eastern part of the crop tour, I thought if I I thought he was saying like the crops behind almost, like it's not as mature as he would have expected for this time of year.
12:58
SPEAKER_01: Yeah, denif denetrification steps in, and then you're gonna have potential disease problems that will show up later uh on that one and quality issues.
13:10
SPEAKER_01: So a combination of things that you have to watch your bases.
13:13
SPEAKER_01: I've learned over the decades uh the bases fox a lot before futures a lot of times.
13:20
SPEAKER_01: And in the Dakota area, the bases should be firming there because if you're gonna have less draw, at least to me, bases should be firming eventually.
13:31
SPEAKER_03: Eventually.
13:31
SPEAKER_03: Let's go with eventually because the because and I want to add color that where I'm qualified.
13:36
SPEAKER_03: You you said on your chart that soybeans were up 40-50 cents on the week.
13:40
SPEAKER_03: And when soybeans go up that much that fast before harvest, one of the local end user plants here, right on the BNSF that's going to ship out to the PNW, they low, they they widen their basis in beans.
13:53
SPEAKER_03: But what I think, I think not held here, is going to happen is every end user widens their basis before harvest, trying to grab as many bushels as cheaply as they can.
14:05
SPEAKER_03: And then when farmers who have a short crop, and trust me, folks, in a lot of the Western Belt, the the crop just isn't there, and we're starting to see a hot basis, I think what you'll see is they widen it, they try to get those bushels, and then as they don't come in, I I would add to what you said and say watch the acceleration of the basis increase.
14:26
SPEAKER_01: Right.
14:27
SPEAKER_03: So if we go from 70 under for beans in North Dakota to 60 to 50 to 40, it's game on.
14:32
SPEAKER_03: And if we keep getting these sales from China, which we'll talk about more in a little bit, but I want to wrap up this with ProFarmer Crop Tour.
14:39
SPEAKER_03: I want to thank all the scouts who went out.
14:40
SPEAKER_03: I want to thank all the people, Emily and myself and Clinton.
14:44
SPEAKER_03: We did some work early in the mornings, uh, Chip and his crew, Lane.
14:48
SPEAKER_03: Here's what's interesting.
14:51
SPEAKER_03: The Profarmer Crop Tour goes through the best states to look at grain.
14:56
SPEAKER_03: I think where the outlier is, Jim, is that states like Kansas that last year had a record yield, Kansas is not going to be put Kansas down for not good for corn.
15:07
SPEAKER_03: North Dakota, which has consistently been putting in above average yields, is going to come in below average.
15:14
SPEAKER_03: And they're already taking cornfields along 29 and chopping them for silage.
15:18
SPEAKER_03: So I don't know how that's going to factor in the USDA economics.
15:22
SPEAKER_03: Also take states like South Dakota, and then you take your good states like Indiana and Illinois.
15:28
SPEAKER_03: Things were not nearly, nearly as good in Illinois as they were hoping for.
15:34
SPEAKER_01: Yeah, Illinois and Iowa were the two biggies on the downside from USDA basis the pro farmer crop tour.
15:42
SPEAKER_01: But don't forget the sorghum, the much lower sorghum crop that USDA forecast last month in Texas and area uh and other uh states.
15:51
SPEAKER_01: That's gonna lead to again more demand for corn for on the demand side in the months ahead.
15:56
SPEAKER_03: Well, I didn't that's a really great way to connect the dots.
15:59
SPEAKER_03: You know, it took you eight, it took you 80 years to put that together because I but but but then I could argue when we get in the later slide, there's less cattle, and maybe we're using less grain that way, also, too, correct?
16:12
SPEAKER_03: True, true.
16:13
SPEAKER_03: Yeah, all right, let's move on to soybeans.
16:14
SPEAKER_03: I feel like we didn't spend a lot of time on soybeans.
16:16
SPEAKER_01: Well, because soybeans is a September, you know, it's a September crop.
16:21
SPEAKER_01: And you saw that Pearl Farmer actually went up, right?
16:26
SPEAKER_03: Yeah, let me pop up that chart one more time.
16:27
SPEAKER_01: Yeah, yeah, they they went up up from USDA.
16:32
SPEAKER_01: That says all you need to know on on soybeans, and and look at Minnesota.
16:40
SPEAKER_01: They were they're the garden spot for for uh soybeans, at least right now.
16:44
SPEAKER_01: You always hold your fingers to make sure.
16:48
SPEAKER_01: Sorry, that it continues that way.
16:51
SPEAKER_03: But I I want to argue with you, and this is the most argumentative I've ever been with you, and I just sometimes you just gotta argue with someone, right?
16:58
SPEAKER_03: No, but being in North Dakota, North Dakota can put up some big numbers in soybeans also.
17:04
SPEAKER_03: Cass County is one of the largest counties in physical acres planted in soybeans, just because it's such a big square.
17:10
SPEAKER_03: I think you can get four Iowa counties in Cass County, North Dakota, and that's where Fargo is.
17:16
SPEAKER_03: They that they have a horrible crop there.
17:18
SPEAKER_03: And I've had several farmers uh ask me today still, will you guys come out and look at a couple fields?
17:25
SPEAKER_03: I don't know if they're trying to get me all revved up or what, but there is definitely you know how you don't believe it till you see it?
17:30
SPEAKER_03: Yeah, oh yeah.
17:31
SPEAKER_03: I'm up here now, I believe it, I see it.
17:33
SPEAKER_03: Also, note when I went to Hefty Field Days a few weeks ago in South Dakota, it was eye-opening also.
17:38
SPEAKER_03: But living in northern Indiana, real quick, we spent a lot of time on this.
17:42
SPEAKER_03: We still have a lot of friends and family who don't have power after 12 days.
17:47
SPEAKER_03: Or this coming up Tuesday will be two weeks.
17:49
SPEAKER_03: That's 14 days, right?
17:50
SPEAKER_03: There's 10, 11, day 12 today of no power.
17:53
SPEAKER_03: There's still 100,000 people without power.
17:56
SPEAKER_03: That's just in the state of Indiana, and we have all that flooding.
18:00
SPEAKER_03: And I have a feeling I I'm going long in this one, but if I was a crop scout and I stopped by a field that had two feet of water, I would keep driving till I found a dry field.
18:10
SPEAKER_03: I mean, who the heck's gonna be like, yeah, we went duck hunting and found out the pod count, right?
18:14
SPEAKER_03: Like, no one's going to do that.
18:16
SPEAKER_03: So the damage, this is not a regardless of how we are today, I think we have continued volatility.
18:24
SPEAKER_03: It's gonna take a while to figure out the final size of this crop.
18:27
SPEAKER_01: It will.
18:28
SPEAKER_01: You know, our good friend Chip Flory, I think, drew the distinction between the two crops in one line that he said.
18:34
SPEAKER_01: He said, quote, don't sleep on beans.
18:36
SPEAKER_01: The bean crops got some moisture to go ahead and finish.
18:41
SPEAKER_01: And some forecasters in their Friday outlook called for infrequent rain and net drying, net drying across much of the Midwest over the next two weeks.
18:51
SPEAKER_01: Now, the soybean crop needs that.
18:53
SPEAKER_01: Beneficial in the excessively wet areas where concern over early harvest delays will now diminish, Tommy.
19:00
SPEAKER_01: Uh so the rain has been a problem.
19:04
SPEAKER_01: But the other soybean story, I think, are we ready for that one?
19:08
SPEAKER_03: Is yeah, I'll pull it up, sir.
19:10
SPEAKER_01: It's going through not the U.S., it's going through Beijing, China.
19:14
SPEAKER_03: Okay.
19:15
SPEAKER_03: This is, and you just put out several stories on this yesterday and today, correct?
19:18
SPEAKER_01: We're hitting it hard because cino grain, that's China's state reserve manager, has been auctioning imported soybeans out of their reserves on a roughly weekly basis since late July, and the clearance rate has climbed steeply.
19:34
SPEAKER_01: Now, on Friday, the National Grain Trade Center listed a fifth sale coming up this Wednesday, August 26th, okay for call it 291,000.
19:45
SPEAKER_01: It's uh rounds to that.
19:47
SPEAKER_01: Or uh that's roughly 10.7 million bushels.
19:51
SPEAKER_01: It's just the smallest offering of the series.
19:53
SPEAKER_01: That doesn't mean that it's negative.
19:56
SPEAKER_01: That means that they the the the buyers in China want those soybeans.
20:03
SPEAKER_01: And China's really starting to clear out uh their inventory, their reserves to take in what hopefully will be a lot of U.S.
20:13
SPEAKER_01: soybeans in the months ahead.
20:16
SPEAKER_03: Okay.
20:17
SPEAKER_03: And when I first heard China was selling soybeans, I'm like, oh, maybe that's bearish.
20:21
SPEAKER_03: And you're like, no, they're getting rid of the old stuff to get rid of the new stuff to get the new stuff into to possibly meet their commitment to the United States, correct?
20:30
SPEAKER_01: Absolutely.
20:31
SPEAKER_01: A country can't take delivery of 25 million tons a year into full warehouses.
20:37
SPEAKER_01: They were full.
20:38
SPEAKER_01: And the reserve sales are what emptying them looks like.
20:41
SPEAKER_01: That's what's happening.
20:43
SPEAKER_01: You know, the auction itself is not a new sale, though.
20:46
SPEAKER_01: That I want to caution.
20:48
SPEAKER_01: In the near term, the reserve beans, Tommy, are an additional source of supply inside China that's weighing domestically on their basis and capping prices.
20:59
SPEAKER_01: It's only when cino grain replaces what it sells with the newly purchased U.S.
21:06
SPEAKER_01: soybeans and then that the auction becomes a rotation rather than a net addition.
21:12
SPEAKER_01: So that's what I think we're going to go through.
21:14
SPEAKER_01: It's like a Ferris wheel, okay?
21:16
SPEAKER_01: Or you get on and off is how I'd write it.
21:19
SPEAKER_01: So analysts are telling me to watch, and that's why we're hitting this hard on Agbol Media because it is a market factor.
21:27
SPEAKER_01: Analysts are saying to watch the clearance percentage rather than the headline volume.
21:33
SPEAKER_01: Why do they say that?
21:34
SPEAKER_01: The shrinking offer is not the very signal it looks like.
21:38
SPEAKER_01: The drop from roughly 500,000 tons in late July to 360,000 tons this past week on the 19th, and now call it 291,000, is evidence that the heavy phase of warehouse clearing has largely done its job.
21:57
SPEAKER_03: So where are you getting that data?
21:59
SPEAKER_03: Is that Chinese?
22:00
SPEAKER_01: I'm getting data from China sources.
22:01
SPEAKER_01: From China sources.
22:03
SPEAKER_01: Oh, yeah.
22:04
SPEAKER_01: We've got several China watchers, let me tell you.
22:07
SPEAKER_03: All right.
22:08
SPEAKER_03: I'm just checking, keeping you honest.
22:10
SPEAKER_03: You're a little shady.
22:11
SPEAKER_03: All right.
22:12
SPEAKER_03: Speaking of shady, number five, uh wheat, Black Sea disruption, U.S.
22:16
SPEAKER_03: demand.
22:16
SPEAKER_03: This goes under the shady category because the fighting's continuing there.
22:20
SPEAKER_01: Yeah, it keeps the writing the story.
22:22
SPEAKER_01: The Black Sea does.
22:24
SPEAKER_01: So the conflict escalated this past week from infrastructure to vessels.
22:30
SPEAKER_01: Ukraine's August 12th strike on the key ports halted all three of the port's grain terminals.
22:36
SPEAKER_01: And that's what got the market going.
22:38
SPEAKER_01: They together handle on the order, Tommy, of 25 to 26 million tons a year.
22:44
SPEAKER_01: And they were still shut a week later.
22:46
SPEAKER_01: So the Moscow Times, yes, we have to read the Moscow Times.
22:50
SPEAKER_01: They reported that more than 90% of Russia's uh Azov Black Sea grain export capacity was offline as of August 17th, with another area Taman halted since late July.
23:05
SPEAKER_01: The Sea of Azov navigation suspended since early July.
23:11
SPEAKER_01: So uh this is just really not just a logistics headline anymore.
23:17
SPEAKER_01: The the numbers are starting to catch up to the headlines.
23:21
SPEAKER_01: And but the other thing is Russian wheat is getting cheaper because they can't sell it.
23:27
SPEAKER_01: You know, they can't get it, they can't get it to people yet.
23:31
SPEAKER_01: So the the just keep watching what we're writing on this one.
23:36
SPEAKER_01: Buyers are responding mostly by not buying.
23:39
SPEAKER_01: You know, Jordan passed on a 120,000 ton milling wheat tender that closed August the 11th, and only three bidders showed up for that.
23:48
SPEAKER_01: They're starting to switch to other markets.
23:51
SPEAKER_01: Australia.
23:51
SPEAKER_03: That could be good for America.
23:53
SPEAKER_01: It could eventually be.
23:54
SPEAKER_01: The switching cost is starting to show up.
23:59
SPEAKER_01: So it's gonna take a while for the U.S., but I think it's gonna build.
24:03
SPEAKER_01: It's gonna build.
24:04
SPEAKER_01: So not only do we suite, by the way, is running some 17 percentage points behind the pace its own export forecast requires, by the way.
24:14
SPEAKER_01: So we've got some catching, catching up to do on the export sales area.
24:18
SPEAKER_03: Okay, let's move to the uh next subject.
24:21
SPEAKER_03: While you're doing that, Jim, uh before we talk about cotton, you just take a 10-second break.
24:27
SPEAKER_03: I just want to uh you clear your throat.
24:29
SPEAKER_03: I want to thank our good friends at Trade the News because when all this news is coming out of Russia and everything else, I'll literally hear on Trade the News, Trade the News and Audio Squawk Service, they'll say Russia confirms bombing two more ships in Ukraine.
24:42
SPEAKER_03: I hear it on the vocal squad squawk service of uh trade the news.
24:46
SPEAKER_03: Trade News is an audio squawk service.
24:48
SPEAKER_03: They are sponsor this show, and I rely very heavily on trade the news.
24:52
SPEAKER_03: The other people rely heavy heavily on our uh T4, T4 trading quotes.
24:58
SPEAKER_03: All the folks here at Agbo Media, AgBO Trading, we all have live quotes, charts, graphs, everything else from uh plus 500.
25:05
SPEAKER_03: That's what I use to execute orders for clients, execute the the the way we do business and the way we gather information.
25:13
SPEAKER_03: All right, we'll bring Jim back on.
25:15
SPEAKER_03: We're about halfway through the show.
25:16
SPEAKER_03: Exciting show.
25:18
SPEAKER_03: I can't stress enough what a big deal tomorrow can be, Jim, on the open.
25:23
SPEAKER_01: Oh my goodness, for for both uh corn, soybeans, and cattle that we'll get into eventually.
25:29
SPEAKER_01: But cotton.
25:30
SPEAKER_01: Cotton remains the market, Tommy, where the charts and the fundamentals agree.
25:36
SPEAKER_01: And this past week they added the third leg, funds, the fund position.
25:42
SPEAKER_01: A managed money net long near a two-year high.
25:46
SPEAKER_01: That's a confirmation that while the trend runs and fuels for a sharp reversal when it breaks, it argues for respecting the uptrend.
25:55
SPEAKER_01: And we've got some pretty good export growth in cotton.
25:59
SPEAKER_01: I mean, when you look at the numbers, uh upland export commitments are running, let me see, up they're up 31%.
26:07
SPEAKER_01: So that's why cotton is going, you know, and so supply is cooperating in the least pleasant way.
26:14
SPEAKER_01: 46%.
26:16
SPEAKER_01: Let's see, you know, good to excellent is 38% as of August 16th.
26:21
SPEAKER_01: It was 55% a year ago and a 46, five-year average.
26:24
SPEAKER_01: That means the crop's down.
26:26
SPEAKER_01: So there's going to be more crop stress if you look at the weather forecast and declines and yields in the biggie western Texas and southwestern Oklahoma over the next two weeks, with hot temps are going to continue and rain is too light and infrequent.
26:42
SPEAKER_01: So I don't think you're out of this for the cotton as as far as the crop situation, regretfully.
26:49
SPEAKER_03: Okay, yeah.
26:50
SPEAKER_03: The Western and that brings me to my point again.
26:53
SPEAKER_03: When you talk about the United States producing a big corn crop when a state like Texas didn't get it done, Oklahoma, you know, they grow play, they grow grain in so many places, whether it be a pivot less by rains, whether it's dry land, whatever.
27:10
SPEAKER_03: But the there's a lot, there's a lot.
27:13
SPEAKER_03: There's a nut I don't want to be dramatic, but I do want people to understand that there could be areas add up.
27:20
SPEAKER_01: Fringe areas when you accumulate them, they add up.
27:24
SPEAKER_03: You don't have a big crop without all the I states hitting, and then the fringes are what really when the USDA comes out with a report and everyone's all pissed off, it's the fringe states.
27:35
SPEAKER_03: I once seen the yield go up in North Dakota enough to single-handedly knock corn down 12.14 cents on a USDA report.
27:42
SPEAKER_03: And the only state that stuck out that year was North Dakota.
27:46
SPEAKER_03: I mean, we knew everything was good coming into it, but North Dakota put up like a way above record.
27:52
SPEAKER_03: And it it it was hundreds and hundreds and hundreds of millions of extra bushels, and that knocks the corn price down.
27:59
SPEAKER_01: I would no longer put North Dakota in the fringe state area.
28:02
SPEAKER_01: They're they're a key corn and soybean producing state now.
28:05
SPEAKER_03: You feel like when you say fringe, you're insulting people.
28:08
SPEAKER_03: Yeah, but you know, I guess you should say everyone but the eyes, right?
28:12
SPEAKER_03: And whatever, you know, they they all know what we mean.
28:15
SPEAKER_03: But because they have access to great equipment, great technology, great everything, no one tries to not grow the bushels.
28:21
SPEAKER_03: The truth is, for all the smart people, all the analysts, all the experts, all the BS, the funds got really, really long.
28:28
SPEAKER_03: The war in the beginning, then the funds sold everything.
28:31
SPEAKER_03: The funds are approaching big numbers, and that's why the caution flag should go up.
28:37
SPEAKER_03: And why you're stressing you can watch the open tomorrow night, but where do we close on Monday morning?
28:43
SPEAKER_03: Because right, right there.
28:44
SPEAKER_03: That's the case.
28:53
SPEAKER_01: I can be a market reporter if I have to.
28:56
SPEAKER_01: You know, you can just you can explain some of the things if it is down.
29:01
SPEAKER_03: You you'll also have the natural hedger who has scale-up hedging at 510, 515, 520, 525 indees.
29:09
SPEAKER_03: There's all these levels where people call elevators and place orders, and that's I guess where our value comes in, is we actually still answer our phones on uh Saturdays, Sundays, Mondays, late at night, whatever.
29:20
SPEAKER_03: That's what we do.
29:21
SPEAKER_03: Okay, now if you want to be angry, get pre get prepared to be angry.
29:26
SPEAKER_03: This is where, as they say, the stuff's gonna hit the fan right here.
29:30
SPEAKER_03: Number seven, cattle.
29:31
SPEAKER_03: Political shock, then bullish supply news.
29:34
SPEAKER_03: What a day.
29:35
SPEAKER_03: Driving here to the studio, and I see a true social on Friday, and this guy comes up with a great idea for ground beef.
29:45
SPEAKER_03: What do you what say you?
29:46
SPEAKER_01: He's all hat when it comes to cattle.
29:49
SPEAKER_01: By he meaning President Trump.
29:51
SPEAKER_01: There he goes again on the cattle, not understanding the cattle.
29:55
SPEAKER_01: And I, in fact, I called said, Who's advising the president on cattle?
30:00
SPEAKER_01: Well, it wasn't USDA Secretary Brooke Rollins because regretfully, she was just given word about what Trump blindsided them with.
30:10
SPEAKER_01: At least she got some advanced word.
30:12
SPEAKER_01: Uh, cattle futures were blindsided Friday morning.
30:16
SPEAKER_01: And but by the end of the day, they erased nearly all of the damage by the bell.
30:20
SPEAKER_01: That's we're getting a little ahead of ourselves.
30:22
SPEAKER_01: But what he did is Trump announced on True Social, it wasn't a statement from the White House.
30:29
SPEAKER_01: He said that he would allow up to 300,000 metric tons of ground beef into the United States without affecting the tariff quotas.
30:37
SPEAKER_01: That's part of a 90-day effort, so 90 days there, to bring down consumer prices.
30:43
SPEAKER_01: Well, I think you had Mike Sand on Friday morning, right?
30:47
SPEAKER_03: Jed did do an interview with them.
30:49
SPEAKER_03: Yeah.
30:49
SPEAKER_03: Well, we do Mike Sand, and thank you for uh talking about that.
30:52
SPEAKER_03: Yes, every morning as a subscriber to the AGBO platform.
30:56
SPEAKER_03: If you subscribe and pay, uh we have before the bell with Mike Sands.
31:00
SPEAKER_03: Yes, thank you for reminding me.
31:01
SPEAKER_01: Yeah, and he basically said, where are they going to get it from?
31:05
SPEAKER_01: Because, you know, Brazil and Argentina, we've already uh purchased a lot from them.
31:10
SPEAKER_01: And then he went into some of the other areas that definitely don't add up to 300,000 tons.
31:17
SPEAKER_01: So, and that's what the market finally, it took them a while.
31:21
SPEAKER_01: They finally decided when they analyzed this announcement, saying, Well, this is just mainly politics rather than economics.
31:29
SPEAKER_01: You know, it's just not gonna amount to much, which is another reason why I I'll tell you, every email I've been getting on this is negative as far as that announcement.
31:40
SPEAKER_01: And you have more than a few Republican senators coming out against it, and some of whom normally never say anything negative about you know uh President Trump.
31:53
SPEAKER_01: So but the cash market was already softening before any of this, you know.
32:00
SPEAKER_01: But then came the cattle on feed report.
32:05
SPEAKER_01: And look what that they released that at 3 p.m.
32:08
SPEAKER_01: Friday after the markets closed.
32:10
SPEAKER_01: Okay, they put August 1 feedlot inventories 102% of a year ago, and close to the trades expectations, but but the flows are where the news was.
32:21
SPEAKER_01: July placements came in 89% of a year ago.
32:27
SPEAKER_01: I'm not gonna give the exact numbers, it's just that's boring to me.
32:30
SPEAKER_01: Against an average trade estimate near 95.8 percent.
32:36
SPEAKER_01: So July marketings were 93% of a year ago against an expected 92.7.
32:44
SPEAKER_01: So both are the lowest for the month of July in the 30-year history of the series, which began in 1996.
32:54
SPEAKER_01: That tells you something right there.
32:56
SPEAKER_01: So that's why it's gonna be curious.
32:58
SPEAKER_01: They've got to trade that, they haven't traded it yet.
33:01
SPEAKER_01: That's gonna happen Monday during during trade.
33:05
SPEAKER_01: So July placements came in far below what the trade expected, period.
33:10
SPEAKER_03: On Ag Squawk in the afternoons, which I was the uh guest, and Jed Sidwell was also on.
33:17
SPEAKER_03: I my quote to to Davis, and if folks, if you're not watching this, these are free.
33:21
SPEAKER_03: Agsquawk a.m.
33:22
SPEAKER_03: ag squawk p.m.
33:23
SPEAKER_03: Jed Sidwell, the host in the morning, Jed Davis the host in the afternoon on YouTube, Apple, Spotify all on video.
33:30
SPEAKER_03: You can of course get it on X also.
33:33
SPEAKER_03: We restream at night.
33:35
SPEAKER_03: My quote to Davis was if you were a cattleman or cattle trader and you drank too much the night before and you woke up and looked at the closes, you would have thought it was a slow day.
33:45
SPEAKER_03: We traded way past the old limits when we had simpler limits of three dollars in lives, four, four and a half in feeders.
33:52
SPEAKER_03: We were down eight, nine dollars in feeders, we were down six dollars heavy offered, big volume traded on the lows, and then cooler hands prevailed.
34:01
SPEAKER_03: But I'm telling you, if there was a cattle pit, Jim, if there was still a cattle pit, this is what it looked like the first hour.
34:07
SPEAKER_03: Like this.
34:09
SPEAKER_03: Like this.
34:10
SPEAKER_03: Where are you in this picture?
34:12
SPEAKER_01: Let's just how I would ride it and did Friday handed the cattle market a bearish political headline before lunch and a bullish government report after dinner.
34:24
SPEAKER_01: And the two don't cancel each other out, they operate on different time frames and on different paths of the curve.
34:32
SPEAKER_01: The beef waiver, as we said, is a 90-day ceiling of 300,000 tons on lean grinding product.
34:40
SPEAKER_01: That's roughly 44 days of U.S.
34:43
SPEAKER_01: ground beef consumption.
34:44
SPEAKER_01: That's perspective.
34:46
SPEAKER_01: From suppliers, nobody has named.
34:48
SPEAKER_01: They didn't release any details on this from the White House.
34:51
SPEAKER_01: And there's been no implementing proclamation published by the White House.
34:56
SPEAKER_01: Cattle on feed is the deeper number.
34:58
SPEAKER_01: Again, placements 11% below a year ago, and the lowest July in the history of the series.
35:05
SPEAKER_01: What's that mean?
35:06
SPEAKER_01: Fewer fed cattle available in the first quarter of 27, and one more feedlot bidding for every feeder calf this fall.
35:15
SPEAKER_01: So that combination that we talked about is exactly what Friday's intraday reversal and the strength and deferred contracts were groping toward before the report, the cattle on feed report was even out.
35:30
SPEAKER_01: So the cattle open Sunday night with the report in hand and the beef headline three days old.
35:37
SPEAKER_01: And if the market gaps higher on placements, it will run straight back into the same political story in Monday's daylight with the cash trade three dollars lower on the week and the cutout still falling.
35:50
SPEAKER_01: So analysts are telling me to watch feeders more closely than fed cattle.
35:55
SPEAKER_03: Okay.
35:56
SPEAKER_01: They carry the leverage, Tommy, to both the placement number and to corn, and corn just closed to a two and a half year high.
36:03
SPEAKER_03: Yep.
36:04
SPEAKER_03: Cattle opened at 8:30 central time at on the old computer screen.
36:08
SPEAKER_03: And we used to trade night cattle, and then it got so crazy they just shut it down.
36:12
SPEAKER_03: One of the few markets to actually contract in hours and and not expand.
36:17
SPEAKER_03: Of course, once again, we need it.
36:19
SPEAKER_01: We need it.
36:19
SPEAKER_03: What you think cattle should be open at night?
36:21
SPEAKER_01: I think it should, absolutely.
36:23
SPEAKER_03: I could give you 20 reasons why it shouldn't, but I don't want to talk about them on here.
36:27
SPEAKER_03: I will say I do like the fact about commodity markets, and I'm not one of those guys who only likes to work six hours and go golfing.
36:34
SPEAKER_03: Half the reason they always used to tell people to be a pit trader was you could come in late, work a full day, and go out golfing by two, right?
36:41
SPEAKER_03: But the the markets, you know, I trade a lot of different markets and per are are part of a lot of different markets, but I do feel on when it comes to cattle, we can get the business we need done during that short time frame.
36:55
SPEAKER_03: I I really do.
36:56
SPEAKER_03: But with that being said, the CME group every week, every other week is introducing introducing silver over the weekend, introducing gold over the weekend.
37:05
SPEAKER_03: I could log into my iPhone right now, and there are markets trading at the CME group in cryptocurrencies that are trading right now on a Saturday afternoon.
37:15
SPEAKER_03: So I think gold's trading too.
37:17
SPEAKER_03: I think you could trade one ounce gold.
37:19
SPEAKER_03: But with that, you know, all this talk about trading, futures options.
37:22
SPEAKER_03: I'm just gonna plop this up there.
37:24
SPEAKER_03: This hold on, not this one.
37:27
SPEAKER_03: I want to change my ticker.
37:28
SPEAKER_03: I want to plug up this one.
37:30
SPEAKER_03: Futures trading involves risk and laws is not suitable for everyone.
37:34
SPEAKER_03: Trading's a wild thing, but I I did tell Davis on the Friday show.
37:39
SPEAKER_03: He's like, Oh, what are supposed people supposed to do with all this volatility?
37:43
SPEAKER_03: Be grateful you live in a country that has crop insurance, LRP, futures options, the ability to take risk by buying it, the ability to take off risk by hedging it.
37:55
SPEAKER_03: You'll use the tools of the market, don't become a victim.
37:58
SPEAKER_03: And you know, there's still a need for education out there, Jim.
38:02
SPEAKER_01: Oh, absolutely.
38:03
SPEAKER_01: I'll just leave it at that.
38:04
SPEAKER_01: Options, et cetera, et cetera.
38:06
SPEAKER_03: Yeah, did we cover the the the beef imports or this is flight?
38:09
SPEAKER_01: Yeah, it's just I'll just bottom line on the beef imports.
38:12
SPEAKER_01: It was a dumb decision.
38:14
SPEAKER_01: And it looks like I know Secretary Rollins didn't have a role in it.
38:19
SPEAKER_01: She was just giving a heads up, which asked who's making these decisions.
38:23
SPEAKER_01: If it's uh Kevin Hassett, National Economic Council director, he's a smart guy.
38:29
SPEAKER_01: So some people say it may be the political person in the White House, Stephen Miller, and he doesn't know he's he doesn't know cattle.
38:37
SPEAKER_01: So I don't know.
38:39
SPEAKER_01: Now the questions I'm getting at is they can they draw that issue back?
38:43
SPEAKER_01: Well, of course, they can they cannot implement it, but that's I I haven't heard that at all.
38:48
SPEAKER_01: But I'll I'll tell you one thing they're surprised.
38:50
SPEAKER_01: NCBA came out against it, RCAF, of course, came out against it, Farm Bureau came out against it, the state cattle groups came out against it, they're being hit hard.
39:00
SPEAKER_01: So they just got to understand the cattle cycle.
39:04
SPEAKER_01: And this is the worst signal to give a cow calf or any cattle producer who wants to expand in the years ahead.
39:12
SPEAKER_01: You don't do that with the trying to always play the the import card.
39:18
SPEAKER_01: But what this does elevate, Tommy, is the odds, I think.
39:22
SPEAKER_01: This is what I'm hearing in Washington relative to MCOOL.
39:26
SPEAKER_01: That now the supporters of MCOOL are saying, look, if you're gonna go this way, American consumers have every right to know where their beef is coming from.
39:38
SPEAKER_01: And by MCOL, they would.
39:40
SPEAKER_01: At least uh that's changed, I think, some of the odds that you'll have some form if we do have a farm bill, you know, 2.0.
39:48
SPEAKER_01: If.
39:49
SPEAKER_03: I can tell you where my beef comes from.
39:51
SPEAKER_03: I buy my beef from a client, it gets processed at a local processor, it gets put in a freezer.
39:57
SPEAKER_03: My house that's hooked up to a generator when the power goes out for 10 days.
40:01
SPEAKER_03: So that's that's how the grassafis get beef.
40:03
SPEAKER_03: And I think after this video, just to support the cattle, men and women ranchers, I'm gonna take my beautiful bride out for a big steak.
40:10
SPEAKER_03: Matter of fact, if you could uh take a picture of your credit card, Jim, both the front and back and expiration date, we would appreciate it.
40:16
SPEAKER_03: All right.
40:17
SPEAKER_03: All right, let's move on with the show.
40:20
SPEAKER_03: Oh, you got off that subject so quick.
40:22
SPEAKER_03: We asked for the credit card.
40:23
SPEAKER_03: Well, how about Canada?
40:26
SPEAKER_01: In what way?
40:27
SPEAKER_03: Oh, the next slide.
40:29
SPEAKER_01: Is Canada the next slide?
40:30
SPEAKER_03: Hold on.
40:31
SPEAKER_03: We still had more one on this one.
40:32
SPEAKER_03: I got so excited when I heard you were buying me dinner, I skipped the slide.
40:35
SPEAKER_03: Well, we have beef imports, but you said let's go to hogs.
40:38
SPEAKER_01: Hogs, you know, they they had a chart covering, but it wasn't a turn.
40:41
SPEAKER_01: They uh lean October lean hogs rose 65 cents, I think Friday to 80, 80, call it uh 80, 81.
40:49
SPEAKER_01: That was near the daily high after hitting a 12-month low early in the session, and they finished the week, what, 88.5 cents lower?
40:57
SPEAKER_01: That's October.
40:58
SPEAKER_03: Okay, the hog market's struggling.
41:00
SPEAKER_01: Yeah, they're struggling.
41:02
SPEAKER_01: So uh October futures are still trading about uh 1285 under the cash in tech index.
41:09
SPEAKER_01: That's a wide discount to defend if the seasonal cash decline you know proves shallower than the board assumes.
41:15
SPEAKER_01: So it it's it we'll take the recovery, but again, the the the fundamentals are not looking good for the Hogmark.
41:25
SPEAKER_03: Can can I add a little color to this?
41:27
SPEAKER_03: Sure.
41:28
SPEAKER_03: Tommy Grassaffee, longtime listener, first-time subscriber.
41:31
SPEAKER_03: I got put on your list.
41:32
SPEAKER_03: I get your newsletter.
41:34
SPEAKER_03: If the price of corn did go up 25 cents last week, which it did, if soybeans went up, if meal went up, because meal had a good week versus soybean oil, that meal oil spread move, if there's a lot of ifs, I'm not saying it will, but if grain prices in feed stay elevated, that is very much going to hurt the profitability of people who are trying to convert grains to proteins.
41:59
SPEAKER_03: Thoughts on that?
42:00
SPEAKER_01: Yes, it's it's why the White House, usually a Republican president will go and say, let the markets work, not this one.
42:11
SPEAKER_01: They're not letting the market work.
42:13
SPEAKER_01: The the consumers have meat choices.
42:17
SPEAKER_01: If they think beef is too high, they won't buy it.
42:23
SPEAKER_01: Now they'll complain, but you have chicken, you have veal, you have pork, etc.
42:30
SPEAKER_01: But I don't know why they don't let the market work.
42:33
SPEAKER_01: Now the market's not perfect, but it's politics, Tommy.
42:37
SPEAKER_01: They they want the price of hamburger down before the November 3rd elections.
42:42
SPEAKER_01: But beef is not like eggs, it just takes a while.
42:47
SPEAKER_01: That's called the cattle cycle.
42:48
SPEAKER_01: And we're gonna have to educate Kevin Hassett.
42:52
SPEAKER_03: Well, you live right by Washington.
42:54
SPEAKER_03: Let's set up an appointment.
42:55
SPEAKER_01: Yeah, we're gonna try.
42:57
SPEAKER_01: He's smart enough that he has to know that, which tells me I don't think he made that decision.
43:02
SPEAKER_01: It was probably Stephen Miller, but politics.
43:05
SPEAKER_01: And when you just make a decision based on politics rather than policy, you get your boss in trouble.
43:11
SPEAKER_01: And now we're gonna see.
43:13
SPEAKER_01: It's gotten him in trouble because the industry reaction, as we said, was uniform and immediate.
43:18
SPEAKER_01: They blew it.
43:19
SPEAKER_03: Okay.
43:20
SPEAKER_03: Now let me see if you're still on your A game.
43:23
SPEAKER_03: Let's see if Jim can connect the dots.
43:24
SPEAKER_03: Walmart had earnings this week, and you put out a story about it.
43:29
SPEAKER_03: Connect Walmart to cattle in consumer demand.
43:32
SPEAKER_01: Because the consumer demand is down for in Walmart, especially for certain products like steak and beef.
43:39
SPEAKER_01: That's what's the market signaling that it's working, you know?
43:44
SPEAKER_01: And for for the White House to say this imported beef is going to be priced 25% uh lower.
43:51
SPEAKER_01: No, that it's just incredible.
43:53
SPEAKER_03: Let the market do its job.
43:55
SPEAKER_03: That's why we have a border trade, that's why we have a cash market, that's why we have competitive bidding.
44:00
SPEAKER_03: Right.
44:01
SPEAKER_01: That's what the Walmart number said.
44:02
SPEAKER_03: That's in Walmart stock traded down nine percent, which is a significant move.
44:07
SPEAKER_03: Very true.
44:09
SPEAKER_03: One tenth of all your value of your stock gone before the opening bell based on earnings?
44:14
SPEAKER_01: Yeah.
44:15
SPEAKER_03: That was a big deal.
44:16
SPEAKER_01: Let the consumers adjust and they will.
44:19
SPEAKER_01: But like you said, the livestock industry is going to have to deal with if corn's going to go to the level some people say some, you know.
44:29
SPEAKER_02: Right.
44:30
SPEAKER_01: Some they're going to be hurting on the on the feed components on their input cost, if you will.
44:35
SPEAKER_01: They just won't be like a corn and fertilizer.
44:38
SPEAKER_01: Their fertilizer is feed and it could go way up.
44:41
SPEAKER_01: It could go way up.
44:43
SPEAKER_03: And and I do think we're not predicting price.
44:46
SPEAKER_03: We're connecting the dots.
44:48
SPEAKER_03: If.
44:49
SPEAKER_03: Let me just throw something out there.
44:51
SPEAKER_03: I think it's important to talk about.
44:53
SPEAKER_03: What if the yield's 170?
44:55
SPEAKER_03: What what is the function of the market?
44:57
SPEAKER_03: The United States government's not going to be able to stop what's going to happen, correct?
45:02
SPEAKER_01: No, price rationing.
45:03
SPEAKER_01: That's when you have price rationing.
45:05
SPEAKER_01: You know, that's when you have your your accelerated uh yield prices, you know, until you start cutting demand out.
45:12
SPEAKER_03: And some analysts we are uh following are talking at extremely higher grain prices.
45:19
SPEAKER_01: I heard the six dollar price today.
45:21
SPEAKER_03: I've heard it right.
45:22
SPEAKER_03: I was at a wedding uh yesterday, Friday, and I had so many farmers come up to me, and they all get the same newsletters, right?
45:29
SPEAKER_03: There's I know all these people who write these, and we're in the information business, but not so much the prediction business as the education business.
45:36
SPEAKER_03: And we feel if we can get you smarter in all fronts, you could you're smart enough to make your own decisions.
45:41
SPEAKER_03: But I'll tell you this: go back to what you said 20 minutes ago, watch your local cash markets.
45:45
SPEAKER_03: Let's talk about what matters.
45:46
SPEAKER_03: Number one, do you have the bushels?
45:48
SPEAKER_03: Number two, what's your local basis?
45:49
SPEAKER_03: Number three, do you have a bin?
45:51
SPEAKER_03: And how are you doing on money?
45:53
SPEAKER_03: Because farmers sell grain for two reasons.
45:56
SPEAKER_03: They're out of space or they need a bin.
45:58
SPEAKER_03: Now, hopefully they do it for a third, that they were planning, they were this, they were that, they were hedged, they used insurance.
46:04
SPEAKER_03: But basics 101, a panic sale happens because you had too big of a crop and you couldn't store it all, or or you needed money.
46:13
SPEAKER_03: And I think it's going to be different this year that if there is demands that good, the United States farmer has built an incredible amount of bins.
46:23
SPEAKER_03: I'm friends with someone who is in the bin building business here in this Mayville area.
46:28
SPEAKER_03: And I was one of the head electricians said, we have a lot of work booked, and he was worried because crops, you know, the production's down.
46:36
SPEAKER_03: I said, but if the price goes up and the dollars show up, the farmers will be motivated to keep building those bins.
46:41
SPEAKER_03: Let me ask you something.
46:42
SPEAKER_03: Do you like bins or do you not like bins?
46:46
SPEAKER_01: Okay, you don't have to explain why.
46:49
SPEAKER_01: Apparently, you're going to.
46:51
SPEAKER_01: Absolutely.
46:51
SPEAKER_01: It just gives the every farmer should have at least 18 months, okay, to market a crop.
46:58
SPEAKER_03: Okay, at least.
46:59
SPEAKER_03: Can I ask you another question?
47:00
SPEAKER_03: Yeah.
47:01
SPEAKER_03: Do cattle store well in a bin?
47:03
unknown: No.
47:04
SPEAKER_03: Well, that's why the cattle hedging and marketing is so much different than the all right.
47:10
SPEAKER_03: Let's go up north.
47:11
SPEAKER_03: Enough of that.
47:11
SPEAKER_03: Let's go up north.
47:12
SPEAKER_03: Canada, Canada talks collapse.
47:14
SPEAKER_03: You have bags under your ice.
47:15
SPEAKER_03: I'm at a wedding, coming home, and I'm getting Jim Wiesmeyer text at 12:15 Central, 115.
47:22
SPEAKER_03: Are you on drugs?
47:23
SPEAKER_03: Yes or no?
47:25
SPEAKER_01: I told you I went to bed earlier and got up at right or at midnight because I knew that's when we'll see whether or not they collapsed, and they collapsed.
47:34
SPEAKER_01: The U.S.
47:35
SPEAKER_01: Canada trade negotiations broke off minutes before midnight Friday Eastern time.
47:41
SPEAKER_01: And 50% U.S.
47:43
SPEAKER_01: tariffs on a long list of Canadian goods took effect early, early today.
47:50
SPEAKER_03: Okay.
47:50
SPEAKER_03: Let's hope let's hope our little buddy uh ethanol's not involved in that, right?
47:54
SPEAKER_01: Not yet.
47:55
SPEAKER_01: And I don't think it will be, but Canada, here's your key here.
47:59
SPEAKER_03: Yes, sir.
48:00
SPEAKER_01: Canada's uh prime minister announced the retaliation date is going to be Tuesday, September the 8th.
48:07
SPEAKER_01: Now that's key because that means still talks can continue.
48:10
SPEAKER_01: They're not going on right now.
48:12
SPEAKER_01: It's uh the uh Canada said, yes, we're in a trade war with the United States, so both sides are huffing and puffing.
48:19
SPEAKER_01: And we've got special reports out on it given both sides of the argument.
48:24
SPEAKER_01: But but for agriculture, the exposure runs mostly the other way.
48:29
SPEAKER_01: It's autos, you mean like autos, yeah.
48:32
SPEAKER_01: But it's what Ottawa does next rather than what Washington just did.
48:38
SPEAKER_01: Canada by a wide margin, Tommy, is the largest export market for U.S.
48:44
SPEAKER_01: ethanol, you know.
48:46
SPEAKER_01: Okay, about a third of our exports.
48:48
SPEAKER_03: I don't know if everyone knows that.
48:50
SPEAKER_03: I mean, that number surprises me.
48:52
SPEAKER_01: Yeah, but now Canada Smart politically, they know dairy is a sensitive product.
48:59
SPEAKER_01: So and US dairy is sitting on Canada's counter-retaliation list, and US access to the Canadian market was the hardest issue in these ongoing talks that just failed.
49:11
SPEAKER_01: And there's why do you think they failed?
49:14
SPEAKER_01: Well, Carney has said Ottawa, well, they said that the US both sides says they they they changed their the goalpost both times.
49:23
SPEAKER_01: And there was some people said that Howard Lutnick, our commerce secretary, came in late in the process and wanted more.
49:30
SPEAKER_01: Well, he was part of the process early on, so I don't I don't buy that uh argument.
49:36
SPEAKER_01: So but but uh it could be the case where it, you know, Trump likes leverage.
49:42
SPEAKER_01: If he thinks he's got something, then uh his people are very aggressive and they want more, and that's when they must have hit the no button for Canada, and that's where we're at right now, you know.
49:55
SPEAKER_03: If we can't get along with Canada, we got who can we get along with?
49:59
SPEAKER_03: We seem to get along with Mexico, yeah.
50:01
SPEAKER_01: And boy, Mexico will be watching this one very closely of what not to do relative.
50:08
SPEAKER_01: But there are all their sidebar issues on this, the alcohol issue that are down like 80 percent Canadian purchases of U.S.
50:16
SPEAKER_01: alcohol, and but but dairy is the big loser for right now if we don't have an agreement with Canada because they stood to gain the most under how uh a re-look at how they allocated their TRQ for dairy products.
50:31
SPEAKER_01: So this dairy producer is not gonna like at least the current situation between U.S.
50:37
SPEAKER_01: and Canada.
50:38
SPEAKER_01: That that's really the bottom line there.
50:40
SPEAKER_01: But uh what I want to say is that there's still room for talks because Canada is not gonna implement their retaliation until September the 8th.
50:52
SPEAKER_01: But I'll tell you, if they would retaliate, the White House is already saying they'll increase their sanctions on Canada.
51:02
SPEAKER_01: So there's your tit for tat.
51:04
SPEAKER_01: But we have between now and September the 8th to try to work a solution to come to some sort of an agreement.
51:11
SPEAKER_01: Because frankly, Friday, all day Friday, Trump was saying he thought that the deal was going to be announced on the positive side, and then they broke down rather late.
51:21
SPEAKER_01: They did it did break down late.
51:23
SPEAKER_03: Not not a market mover, you don't think, in grains, though.
51:26
SPEAKER_01: I don't think so.
51:27
SPEAKER_01: No, I do not think so.
51:29
SPEAKER_01: Because the the the ethanol has not been mentioned, your potash is still uh safe and things like that.
51:36
SPEAKER_01: But uh dairy, yes, it which has already had some problems in their markets, but they're not gonna like it at all.
51:44
SPEAKER_01: But you never know how a trade war can go into later on if this continues to accelerate.
51:50
SPEAKER_01: But I don't think we're there yet.
51:52
SPEAKER_01: I think eventually uh Jamis and Greer, our U.S.
51:55
SPEAKER_01: trade rep, will continue to talk with his Canadian counterparts.
51:59
SPEAKER_01: And they need, they were close, they were close to an agreement.
52:03
SPEAKER_01: So I don't know whether the U.S.
52:05
SPEAKER_01: tried to get too much leverage again or what, but I think they'll eventually settle it before uh September the 8th.
52:12
SPEAKER_01: That's my prediction.
52:13
SPEAKER_01: I'm not hearing that from anyone, but I think so.
52:16
SPEAKER_03: All right, let's move to outside markets.
52:18
SPEAKER_03: By far, one of my favorite things to talk about, Jim.
52:20
SPEAKER_03: Outside markets, weak dollar, expensive money.
52:22
SPEAKER_03: Dollar index fell to 98.8, call it 98, its lowest level since May.
52:27
SPEAKER_03: Also, the 30-year treasury, a pit I spent time in.
52:31
SPEAKER_03: I stood in the 10-year note pit, Chicago Board of Trade, for a long time.
52:34
SPEAKER_03: I've actually spent an incredible amount of time trading interest rates.
52:38
SPEAKER_03: Although I don't really help farmers hedge the interest rate.
52:41
SPEAKER_03: That's uh it we could if they wanted to.
52:44
SPEAKER_03: Best time to hedge interest rates are before they go up.
52:47
SPEAKER_03: But this is bad for the United States housing market.
52:49
SPEAKER_03: This is bad for farmers who will be renewing operating notes.
52:53
SPEAKER_01: This is bad for real estate, real estate loans.
52:55
SPEAKER_03: It's bad for real estate, yeah.
52:57
SPEAKER_03: It just means the cost of doing business is not going down, it's going up.
53:02
SPEAKER_03: Now, the biggest news I thought of the week, besides what happened with the crop tour, was the explosion in gold and silver and cryptocurrencies.
53:11
SPEAKER_03: They're still going cuckoo for Cocoa Puffs here because they trade 24 hours a day.
53:16
SPEAKER_03: But there's so many things that happen in the outside markets.
53:20
SPEAKER_03: The Fed our not our Fed, our Treasury did like an out of nowhere.
53:25
SPEAKER_03: We're gonna buy 30 years back.
53:26
SPEAKER_03: And I don't think 95% of the people watching this podcast understands what that means.
53:32
SPEAKER_03: Out of nowhere, before the markets opened, he did a sort of QE, which means quantitative easing.
53:38
SPEAKER_03: I would challenge people if you don't know what we're talking about, call us, text us, whatever.
53:42
SPEAKER_03: But Google it.
53:43
SPEAKER_01: You you know what's it mean when it's working against the Fed Chairman Walsh of what he wants to do.
53:49
SPEAKER_01: So, but he uh Besson, our Treasury Secretary, Scott Besson, is trying to outmuscle the bond traders and only that.
53:56
SPEAKER_03: I'm gonna tell you the articles I seen this weekend, Jim, said pay attention to the bond market.
54:01
SPEAKER_03: It's screaming.
54:03
SPEAKER_03: Bonds talk to you people.
54:05
SPEAKER_03: When we tell you listen to the basis, it's trying to tell you something.
54:08
SPEAKER_03: The bond market is the Mac Daddy of them all.
54:12
SPEAKER_03: The United States, yes, sir.
54:13
SPEAKER_01: Let's connect some dots here because it's going to make a major announcement Monday, I think at 2 o'clock Eastern Time.
54:21
SPEAKER_01: Uh, Iran sanctions news conference.
54:23
SPEAKER_01: If you followed all the new any of the other news this week, they're going to have the greatest of economic sanctions against Iran.
54:31
SPEAKER_01: Now, in a special report I filed right before we started this podcast, there are elements of maybe compromises again.
54:39
SPEAKER_01: That's what usually happens with Trump, that they come up with some sort of way to talk to Iran again, who are they talking to?
54:47
SPEAKER_01: I have no idea.
54:49
SPEAKER_01: But it doesn't work talking to Iran.
54:52
SPEAKER_01: But that's nonetheless.
54:54
SPEAKER_01: They're going to announce, they maybe, if if they don't have an agreement on some more talks, they're going to Besson is going to detail what these Iran sanctions are going to be.
55:05
SPEAKER_01: Now, the key there is will they impact China?
55:10
SPEAKER_01: There's where we're connecting dots there.
55:13
SPEAKER_01: Because if China gets upset, because it'll get to their oil, then will China become so upset that'll impact the timing of the Xi Jinping visit to the United States?
55:26
SPEAKER_01: Will it impact the purchases of U.S.
55:28
SPEAKER_01: soybeans?
55:29
SPEAKER_01: I'm not predicting that.
55:31
SPEAKER_01: I'm just saying this is what traders are.
55:33
SPEAKER_03: You're doing if-then scenarios.
55:35
SPEAKER_03: If-then scenarios, right?
55:36
SPEAKER_01: This is why you have to watch China's number one, what Besson says, you know, if he does say it, or if they draw it back as a result of last-minute talks again, and we've seen that consistently.
55:50
SPEAKER_00: So I I wouldn't be surprised at all if we have some sort of compromise again.
55:56
SPEAKER_00: It won't work, but they'll they'll delay it.
55:59
SPEAKER_00: But but then if he does announce it, that's what the traders are going to listen for.
56:05
SPEAKER_01: How does it impact China and what's China's reaction?
56:10
SPEAKER_01: Will it impact the visit uh September 24th of scheduled of Xi Jinping to uh Washington DC?
56:18
SPEAKER_01: And will it impact uh China's purchases of U.S.
56:21
SPEAKER_01: foreign products, especially soybeans?
56:23
SPEAKER_01: We don't know, but those are the questions, okay?
56:26
SPEAKER_01: So watch that.
56:27
SPEAKER_01: We'll be covering it, but watch that.
56:30
SPEAKER_01: That's another Monday event that's gonna be oh, Monday's gonna be lit.
56:34
SPEAKER_03: I'll tell you that much, brother.
56:35
SPEAKER_03: Yeah.
56:36
SPEAKER_03: At the end of the show, we'll connect all the dots.
56:38
SPEAKER_03: We're real close to the end, Jim.
56:40
SPEAKER_03: I think this is well, here we are.
56:42
SPEAKER_01: I think this is it.
56:43
SPEAKER_03: Put my own foot in my mouth.
56:44
SPEAKER_03: Here we go, number 12.
56:45
SPEAKER_03: Anything I should say before I let you loose, brother.
56:49
SPEAKER_03: I'll say this.
56:50
SPEAKER_01: It's Sunday.
56:51
SPEAKER_01: We're gonna be a little bit general farmer crop estimate and the cattle on feed report.
56:56
SPEAKER_01: Monday, those Iran sanctions.
56:58
SPEAKER_01: Douglas cattle reopening.
57:00
SPEAKER_01: Remember, we had screwworm.
57:01
SPEAKER_01: We're gonna have the reopening, at least partial, phased in, and we're gonna have the crop progress ratings.
57:08
SPEAKER_01: Uh now we're gonna see if they some of these ratings kind of skew into what the crop tour signaled this past week.
57:17
SPEAKER_01: Wednesday, we have that cyno grain auction, you know, and then Thursday and Friday, Thursday's export sales report.
57:25
SPEAKER_01: We're gonna start to see some buildup in soybean sales and maybe wheat and corn, but Jackson Hole, Wyoming, what's that mean?
57:34
SPEAKER_01: That's where the Fed Reserve chairman, Kevin Walsh, gives a major speech.
57:40
SPEAKER_01: Now he doesn't speak that much.
57:42
SPEAKER_01: And when he talks, he doesn't give that much, but it's his first Jackson Hole keynote as chairman, and the markets are going to be very focused on on his speech.
57:54
SPEAKER_01: I think it's in the morning when Jackson Hole.
57:57
SPEAKER_03: Oh, it'll move things like the dollar, the stock market, the gold, silver, the whole package.
58:01
SPEAKER_03: And I gotta tell you, Jim, all those things are interconnected because when you move the dollar, you affect all commodities.
58:07
SPEAKER_03: When you move something else, you affect this.
58:08
SPEAKER_03: When you move the bond market, so when someone like him comes out with that talk, I'm watching the whole yield curve in the bonds, twos, fives, tens, thirties.
58:16
SPEAKER_03: I'm watching the dollar, I'm watching gold, silver, copper, platinum, palladium, I'm watching the currencies, the euro, the yen, the this, the that, the Canadian, and you watch all these things.
58:27
SPEAKER_03: And with high frequency trading, again, it looks like the high frequency trading.
58:32
SPEAKER_03: If you think this little video of these traders in a pit yelling and screaming is crazy, high frequency trading is moving 10,000 times faster than this because its ability to grab a headline and execute orders without a human behind it is just wild.
58:47
SPEAKER_03: I don't know if it's good or bad.
58:49
SPEAKER_03: I everyone's got uh there's still people wishing the pits were still back there, right?
58:53
SPEAKER_01: But yes, now let's tie this all together.
58:56
SPEAKER_01: The week of August 17th to the 21st gave the grain bulls about everything they asked for and then made them wait a weekend to use it.
59:04
SPEAKER_01: Okay, because we've we've got to have trading.
59:06
SPEAKER_01: Corn closed at a two and a half year high before ProFarmer told the market the crop is 669 million bushels smaller than USDA thinks.
59:16
SPEAKER_01: Soybeans closed at a weekly high before USDA announced a uh a big 1.43 million tons of sales in one morning.
59:25
SPEAKER_01: Both markets opened Sunday night pretty soon with a bullish surprise in hand and the same vulnerability underneath.
59:34
SPEAKER_01: The tour counts ears and pods, remember, not kernel depth and test weight.
59:39
SPEAKER_01: And the September crop report is three weeks away.
59:44
SPEAKER_01: Again, I want to repeat what analysts are telling us.
59:47
SPEAKER_01: They say to trade the opening gap by what happens to it, not by its size, but a Monday close in the upper third of the range means the funds are committing.
1:00:00
SPEAKER_01: A fade means the tour was already priced in.
1:00:04
SPEAKER_01: We don't know.
1:00:04
SPEAKER_01: That's what we're gonna find out.
1:00:06
SPEAKER_01: Livestock, the sequencing sequencing runs the other way.
1:00:11
SPEAKER_01: Cattle absorbed a political shock Friday morning from Trump, recovered from it by the close, and only afterwards received the most bullish cattle on feed report in years, the lowest July placements in the 30-year history of the series.
1:00:29
SPEAKER_01: The imported trimmings are temporary and unnamed that on this on this quota.
1:00:35
SPEAKER_01: The missing feeder cattle are neither.
1:00:38
SPEAKER_01: So watch feeders because they carry the leverage to both the placement number and to corn at a two and a half year high.
1:00:48
SPEAKER_01: So you gotta watch whether an implementing proclamation for the beef waiver ever actually appears.
1:00:56
SPEAKER_01: And then as we concluded, the policy can uh calendar is where the risk is concentrated and it's front-loaded.
1:01:05
SPEAKER_01: Monday brings Bessance Iran sanctions, maybe.
1:01:08
SPEAKER_01: And the answer to the only question that matters for soybeans, whether Chinese financial institutions are named five weeks before Xi Jinping is due in Washington.
1:01:20
SPEAKER_01: So, and Saturday's 50% tariffs on Canada put a retaliation list on the clock.
1:01:27
SPEAKER_01: And the single line to look for is in ethanol, because 35% of U.S.
1:01:33
SPEAKER_01: ethanol exports go to one country, Canada, and that has just been told to match tariffs dollar for dollar.
1:01:40
SPEAKER_01: We'll have to see if he does.
1:01:42
SPEAKER_01: And Friday, as we said, brings a new Fed chairman to Jackson Hole, Wyoming, in a market pricing, a 31% chance of a hike and a 1% chance of a cut, with a dollar falling, as we put detailed, for fiscal rather than monetary reasons, okay?
1:02:01
SPEAKER_01: Spending too much money, debt.
1:02:03
SPEAKER_01: And one of those could take the wind out of a grain rally that has so far earned it.
1:02:09
SPEAKER_01: That's that's really the bottom line.
1:02:12
SPEAKER_03: Well, we'll leave it there.
1:02:13
SPEAKER_03: I'll catch you next week, my friend.
1:02:15
SPEAKER_01: Sure.