Latest / Professional Ag Marketing Podcast / 2022 Crop Tour Day 2

Transcript

2022 Crop Tour Day 2 · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_01: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_01: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:24
  SPEAKER_01: Today is August 2nd.
• 0:26
  SPEAKER_01: This is day two of the Crop Tour.
• 0:28
  SPEAKER_01: I've got Lucas Peters on with us today.
• 0:30
  SPEAKER_01: We're going to talk a little bit about the uh first and second days of the crop tour, but specifically here uh the state of Missouri, as we finished that up last night.
• 0:40
  SPEAKER_01: And then we're gonna have Lucas talk more about South Dakota, Minnesota, and North Dakota right in our backyard and uh get a little bit more in depth on our own area here.
• 0:49
  SPEAKER_01: So to get started today, another red day in these grain markets.
• 0:53
  SPEAKER_01: We've got the corn market down specific specifically the December 12 cents, so 598 back under six bucks, and then the November soybeans here down about 20 cents, 1385.
• 1:05
  SPEAKER_01: So a pretty rough day here for the grains yet again, wheat down as well.
• 1:08
  SPEAKER_01: We've seen a few different things develop over the last 24 hours with grains being lower.
• 1:13
  SPEAKER_01: We had the uh Speaker of the House planned uh visit to Taiwan, so that could interrupt some of the geopolitical uh trade issues with China as well.
• 1:22
  SPEAKER_01: And then over the last 24 hours they changed up the uh the weather patterns a little bit, Lucas.
• 1:28
  SPEAKER_01: If you want to add into that as well, they did add a little bit more rain coming in for the uh rest of the week towards the end of the week, into the weekend.
• 1:35
  SPEAKER_01: And then we've also backed off a little bit of these temps.
• 1:38
  SPEAKER_01: It's still gonna be pretty hot today, but the rest of the week should be somewhat manageable.
• 1:42
  SPEAKER_01: Crop ratings as well, 61% good to excellent on the corn.
• 1:46
  SPEAKER_01: They were expecting about 60, and then uh the USDA on soybeans for their good to excellent came in at 60% versus the 58 expected.
• 1:54
  SPEAKER_01: So a little bit disappointing there too, as they're looking for that crop to uh to deteriorate a little bit more here recently with some of this hot and dry weather.
• 2:02
  SPEAKER_01: So the grain market's really hit a really hit some resistance over the past two trading days here and uh after some pretty good support last week.
• 2:11
  SPEAKER_01: But to get into the crop tour here, Lucas, Missouri, as we started through and finished up that state yesterday, we uh we got pretty far south towards Saline County and then kind of back bounced back up north so that Saline County is normally the biggest producing county for Missouri, and it's pretty much right where the edge is for getting south into Missouri.
• 2:33
  SPEAKER_01: There starts to be a lot more drought south of that, but north of it where almost all of the corn is grown, it is uh it is white in the drought monitor.
• 2:42
  SPEAKER_01: It seemed like it was fine conditions, it wasn't that area sometimes.
• 2:46
  SPEAKER_01: We'll get way too much water or not enough, it seems like.
• 2:50
  SPEAKER_01: And the stands were pretty decent.
• 2:52
  SPEAKER_01: It was okay.
• 2:53
  SPEAKER_01: Um, average crop, I don't think it was maybe a record, but you know, it it's uh an average to top trend line yield, in our opinion, from what we saw from Missouri.
• 3:03
  SPEAKER_01: Uh not as important of a state, um, but we will have some uh some outlying areas in Missouri, obviously, that struggle a little bit more as we've seen some pretty crazy pictures out there.
• 3:13
  SPEAKER_01: But the good areas, the high production areas for Missouri where most of the corn is grown, uh look pretty good yet, from our opinion, as we rolled through that state quickly yesterday.
• 3:24
  SPEAKER_01: And then as we got into Illinois, here into southern Illinois, um a little spotty here and there, but for the most part, you know, McLean, uh, we pulled out some pretty normal-ish samples.
• 3:34
  SPEAKER_01: It wasn't spectacular.
• 3:35
  SPEAKER_01: I I wouldn't say it stood out uh very much compared to the normal year, but I will say that's the largest corn production county in the United States most years, and uh one of the highest yields as well, uh usually floating around that 200 or above.
• 3:49
  SPEAKER_01: And I I would say it's an average crop.
• 3:51
  SPEAKER_01: There, um they've had a few difficulties here and there, and there's some spots that maybe pollination didn't go too well in Illinois, but I mean, for the most part, it's a pretty hard crop to kill, I think, Lucas.
• 4:03
  SPEAKER_01: But I am very interested in hearing what you have to say about South Dakota, Minnesota, and North Dakota from your travels yesterday.
• 4:11
  SPEAKER_00: Yeah, you bet.
• 4:12
  SPEAKER_00: So uh kind of did a 450-mile loop uh across the South Dakota, southern North Dakota, western Minnesota yesterday.
• 4:20
  SPEAKER_00: Um, you know, probably not the uh most important states for a national yield, but uh it is right.
• 4:26
  SPEAKER_01: Right in your backyard, right?
• 4:27
  SPEAKER_00: Yeah, yeah.
• 4:28
  SPEAKER_00: So we kind of want to know what's going on.
• 4:30
  SPEAKER_00: And and uh um so we in South Dakota we went to the three largest uh corn producing counties, and so we swung through Moody, uh Spink, and uh Brown County in uh South Dakota.
• 4:41
  SPEAKER_00: Um Moody County, I mean some of the best dirt in the state, if not the best dirt in the state.
• 4:47
  SPEAKER_00: And uh, you know, one kind of unique thing in this uh part of the tour, none of the counties are in the drought monitor.
• 4:54
  SPEAKER_00: Maybe Moody is just you know slight drought, uh, but uh east to west, it looks pretty consistent.
• 5:01
  SPEAKER_00: Just some timely rains have kind of held that crop together.
• 5:04
  SPEAKER_00: Um, you know, we were uh did a couple uh of samples in Moody County coming up in that upper 190, low 200 bushel uh uh yield, which is kind of typical.
• 5:16
  SPEAKER_00: That's what we expected in Moody County.
• 5:19
  SPEAKER_00: Yeah, I mean uh uh you look at uh you know the last uh couple years, 21 was pretty dry in that area.
• 5:26
  SPEAKER_00: We're in the uh final county yield of like 192, 2020.
• 5:31
  SPEAKER_00: I would say it was a pretty typical year in Moody County with a final county yield of 203.
• 5:36
  SPEAKER_00: I think we're gonna be closer to the uh 203 level than uh the 190 level.
• 5:42
  SPEAKER_00: Um, I think uh Moody County this year is gonna shake out into the in the mid-190s for a for a final yield.
• 5:49
  SPEAKER_01: Um as we you know venture uh west and and kind of Which before you move on to the next stop, it is interesting that that area is not in a drought map, kind of north of it is, kind of south of it is, and honestly, it's not like we've had huge rains there.
• 6:02
  SPEAKER_01: So I have been surprised that we haven't been in the drought map.
• 6:06
  SPEAKER_01: Um we do have, you know, it's not like we've had to mow our lawn very consistently there, right?
• 6:11
  SPEAKER_01: It's uh so I was surprised by that, and uh I thought that was an interesting uh statement there.
• 6:17
  SPEAKER_01: But when you started going through how much rain we've had, I mean we you know we've got enough to make a crop, I guess, when we went through the last few years compared to what we had right now, right?
• 6:27
  SPEAKER_00: Yeah, so I think I think that's the thing is uh you know, when you look when you run total precipitation numbers for that area, um it it's it's probably a little higher than uh normal.
• 6:38
  SPEAKER_00: Um, but they came in some pretty big spurts early in the year.
• 6:42
  SPEAKER_00: And so now lately we've had uh I mean a couple tenths uh one day, maybe up to four tenths another day, and they never seem to add up to a lot, but I think they've carried us along along with some of the subsoil moisture we built up early, um, that we're gonna, you know, we probably got uh you know month, month and a half left uh before we're gonna hit black layer, so it's it's not you know done by any means, but uh really pretty impressed to how that uh crop held together uh in in that part of the state.
• 7:16
  SPEAKER_01: How about as you move north?
• 7:18
  SPEAKER_00: Yeah, so as you as you go further north, uh you know, that's kind of where the the wettest area of South Dakota was this uh this spring.
• 7:26
  SPEAKER_00: Um and you see it.
• 7:28
  SPEAKER_00: Uh, I mean, as you go through Spink County up to Brown County, uh, you know, two of the largest counties in the state, uh, and plus they grow a lot of corn, there there are uh noticeable amount of PP acres.
• 7:40
  SPEAKER_00: And so that you know, there's gonna be you know crop that's not there.
• 7:43
  SPEAKER_00: Um the other thing we noticed is you know, we stopped by several fields that are just starting pollination.
• 7:50
  SPEAKER_00: Uh so you know is it's uh trying to find one that was at least uh completed pollination was uh a bit of a challenge.
• 7:58
  SPEAKER_00: So that I think the biggest threat remaining to the crops up in that part of the World Island into southern North Dakota is going to be uh getting enough heat units to finish off the crop.
• 8:08
  SPEAKER_00: Um, but the the crop that is there uh looks to be really good.
• 8:15
  SPEAKER_00: Um, and it kind of makes sense, right?
• 8:17
  SPEAKER_00: When you have a wet spring in in that part of the world, the acres that get planted are the the best drained, which are usually the best producing acres as well.
• 8:27
  SPEAKER_00: Um, so we have probably fewer corn acres overall, planted on better ground.
• 8:33
  SPEAKER_00: Um, we did see some lower stands, you know.
• 8:35
  SPEAKER_00: When you mud a crop in, it you you are gonna have you know a tough stand count, but you're in the upper 20s, low 30s.
• 8:43
  SPEAKER_00: Um, you know, in Spink County, I our uh estimate we came in with the 177.
• 8:49
  SPEAKER_00: You know, 2020 was a record crop at 182.6.
• 8:54
  SPEAKER_00: Um I I don't know if we'll be there, but I I think we're gonna be really close for Spink County.
• 9:00
  SPEAKER_00: Brown County, which is the the biggest corn producing county in the state, which is surprising, right?
• 9:05
  SPEAKER_01: Just geographically, it's a bigger county, I think.
• 9:08
  SPEAKER_01: Yeah, exactly.
• 9:09
  SPEAKER_01: And they plant a lot of corn up there too.
• 9:11
  SPEAKER_00: Yep, it's a big county, they plant a lot of corn, and and so we went kind of up the the eastern side of Brown County where there are more corn acres.
• 9:20
  SPEAKER_00: Um, you know, are you go out and there's there's good stands, uh, you know, the corn's planted on good dirt, and uh, you know, you're getting uh yield checks in the mid-180s.
• 9:32
  SPEAKER_00: Um at first I thought, well, maybe that's gonna be a record.
• 9:35
  SPEAKER_00: You know, you look back, history says 2016 uh was a 189.
• 9:40
  SPEAKER_00: I don't think they're gonna set a new record, no, but I definitely think uh 175 to 180 is well within reach.
• 9:49
  SPEAKER_00: As long as we can avoid uh frost uh before probably the and not even frost, as long as we can avoid below 30 degree temperatures up until about September 20th, I think that crop's gonna be uh be really good.
• 10:03
  SPEAKER_00: And and you mentioned about the heat breaking down.
• 10:05
  SPEAKER_00: I mean, today's a really hot day across across the corn belt, uh, right?
• 10:10
  SPEAKER_00: And and especially in that area.
• 10:12
  SPEAKER_00: But you know, you look at the forecast, and we got a lot of upper 80s.
• 10:16
  SPEAKER_00: Uh that's not terrible.
• 10:17
  SPEAKER_00: And in fact, that area is gonna need that to continue for a while um in order to finish the the corn crop off.
• 10:25
  SPEAKER_01: How about as you moved a little bit more north?
• 10:27
  SPEAKER_00: Yep, so we crossing the border in North Dakota, which might be the first year the crop tour made it to North Dakota.
• 10:33
  SPEAKER_00: Might have been in so that uh that was kind of neat.
• 10:36
  SPEAKER_00: And and so we uh went across uh through Richland County, uh, which plants more corn acres uh in North Dakota than any other county by by a long way.
• 10:44
  SPEAKER_01: One of the largest producing counties and areas in the United States, surprisingly, too.
• 10:48
  SPEAKER_01: That's a big county.
• 10:49
  SPEAKER_00: Yep, exactly.
• 10:50
  SPEAKER_00: And and you know, good dirt and and uh again, noticeable the PP acres, uh also noticeable the amount of soybean acres, um, especially in western uh Richland County of kind of ghost.
• 11:05
  SPEAKER_00: The spring was wet, so guys got scared of planting corn late, so they went to soybeans, and and so maybe we see that in some of these acre adjustments coming out uh that USDA is doing.
• 11:16
  SPEAKER_00: But um, you know, for the corn crop that's there, again, looks really good.
• 11:20
  SPEAKER_00: I mean, there's there's no drought stress, there's uh um, you know, the stands are pretty good, and you know, there's definitely an east-west bias.
• 11:29
  SPEAKER_00: Eastern Richland County uh is historically better than western.
• 11:34
  SPEAKER_00: And so, you know, you get to that eastern side, you're getting yield checks uh up in the upper 190s, 200.
• 11:40
  SPEAKER_00: Uh record yield for Richland County is 187.
• 11:44
  SPEAKER_00: Uh, I I think that is well within reach.
• 11:47
  SPEAKER_00: Um, you know, maybe in that 185 range for Richland, primarily driven because again, wet spring, acres are planted on the best ground, and the best ground is in the east.
• 11:59
  SPEAKER_00: And so uh with consistent rains, um, they're definitely set up to have a record yield in that southeast corner of the part of the state.
• 12:07
  SPEAKER_00: Uh, the biggest threat, again, will be can we get the crop finished?
• 12:11
  SPEAKER_00: You know, uh, I would say, you know, we didn't stop by every field, obviously.
• 12:16
  SPEAKER_00: Uh, I would say they're probably like 50% done with pollination.
• 12:20
  SPEAKER_00: Um, you know, you need roughly 55 to 60 days after uh you know silks are out to black layer.
• 12:28
  SPEAKER_00: So that puts it the end of February, or excuse me, end of September.
• 12:32
  SPEAKER_00: Um, you know, end of September for Southeast North Dakota, not to have a below 30 temp for a while.
• 12:39
  SPEAKER_00: It's risky, um, but it's definitely possible.
• 12:42
  SPEAKER_01: So that's been a trend I've noticed on the crop tour is not a lot, if any, samples have come in uh ahead of uh where they probably should be normally uh for maturity.
• 12:53
  SPEAKER_01: But I would say some of the stuff we've looked at, GDU-wise, it probably should be a little bit ahead of it, but some of those planning dates did get stretched out a little bit, didn't they?
• 13:03
  SPEAKER_00: Yep, and yeah, planning dates get stretched out.
• 13:05
  SPEAKER_00: Uh, you know, some of those hot spells that we had early on uh probably maybe contributed to a little bit more GDUs than the crop was actually using, might have shut down a little prematurely.
• 13:16
  SPEAKER_00: Yeah.
• 13:17
  SPEAKER_00: Uh maybe held on to the tassels and silks a little longer before shooting them out, depending on when the heat hit.
• 13:23
  SPEAKER_00: Um, but you know, we saw in those uh crop ratings yesterday, North Dakota's got the best or most good to excellent uh corn crop, or as far as percentage-wise in the country, and at least in the southeast part of the state, uh I would a hundred percent agree with that.
• 13:38
  SPEAKER_01: Definitely worth noting.
• 13:40
  SPEAKER_00: Yeah, it really looked really good.
• 13:42
  SPEAKER_00: Um, and then I I guess kind of working our way back uh to the home front here in Laverne, we came down uh the western side of Minnesota.
• 13:50
  SPEAKER_00: Um, it kind of discontinued, you know, once we crossed the border into Minnesota, uh, you know, Travers County, Big Stone County.
• 13:58
  SPEAKER_00: Uh, you know, again, wet spring, uh delayed uh planting, a little delayed maturity, but uh the crop looks really good.
• 14:09
  SPEAKER_00: Um, you know, we were getting yield checks, some of our highest yield checks of the day uh in that area.
• 14:14
  SPEAKER_00: Um historically, um, you know, in 18 they had a yield of 196.9, and 16 203.7.
• 14:23
  SPEAKER_00: You know, I don't know if we'll get there just because of the the maturity and and things, but I think that uh 195 range uh for that western uh side of the state is definitely possible.
• 14:36
  SPEAKER_00: Um, you know, we the you know, Jake riding with me yesterday.
• 14:39
  SPEAKER_01: We kind of joked of uh you know, when are we gonna see bad corn and and we we never really did it uh the area bounced back pretty well for having a late start to the spring, some really heavy storms there with hail and wind and stuff like that.
• 14:55
  SPEAKER_01: It's pretty much all stood up.
• 14:56
  SPEAKER_01: It's recovering.
• 14:58
  SPEAKER_01: It needs a a little catching up still maturity-wise, but um, you know, it's it's capable of average to top trend line yields, but probably not record-setting yields uh from almost anywhere we've been on the trip so far, I would say is a pretty consistent analysis.
• 15:14
  SPEAKER_00: I I would uh 100% agree with you of you know some of these areas we were in, you know, last year where they were in in South Dakota in the drought, um, and you know, we were getting county yields in the 140s, and then they've bounced back really well.
• 15:27
  SPEAKER_00: Um got some subsoil moisture and the crops looking uh really good.
• 15:31
  SPEAKER_00: Um so yeah, I we again that was you know northern South Dakota, southern North Dakota, western Minnesota uh for the rest of the week.
• 15:40
  SPEAKER_00: We'll we'll try to shoot down into southern South Dakota.
• 15:42
  SPEAKER_00: I know that doesn't look quite as pretty and uh and get across the rest of the state of Minnesota and and get a few highlights there.
• 15:49
  SPEAKER_01: Looking for some updates there.
• 15:51
  SPEAKER_01: Thank you for your time today, Lucas.
• 15:52
  SPEAKER_00: You bet.
• 15:53
  SPEAKER_00: Have fun, Mike.
• 15:54
  SPEAKER_01: Thanks.
• 15:55
  SPEAKER_01: And thank you to all our listeners.
• 15:57
  SPEAKER_01: Please reach out to us from our website at professionalagmarketing.com or check out our newly added hog specific podcast named Hog Market Talk that's released every Thursday.
• 16:08
  SPEAKER_01: Trading commodity futures and options involve substantial risk and loss that is not suitable for all investors.