Latest / AG Bull / AG Squawk with Davis Michaelsen | Brian Hoops | Commodity News Hits Mainstream Media

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AG Squawk with Davis Michaelsen | Brian Hoops | Commodity News Hits Mainstream Media · AG Bull

• 0:10
  SPEAKER_02: Well, August is quickly winding down, and we'll soon see you in September.
• 0:16
  SPEAKER_02: Corn, soybeans, and wheat all posted fairly wide ranges today.
• 0:21
  SPEAKER_02: Although by the close, you might not notice that corn and beans moved a whole lot.
• 0:25
  SPEAKER_02: We'll talk about what September historically has held for the markets and maybe even speculate on the impacts of some upcoming crop estimates.
• 0:45
  SPEAKER_02: From behind the big blue bodacious microphone of Agbol, your pal Davis Michelson here.
• 0:51
  SPEAKER_02: Glad to have you along on this Monday afternoon, the last day of August, and we're looking forward to September.
• 0:59
  SPEAKER_02: Combine's about to roll.
• 1:01
  SPEAKER_02: Some already rolling, as I understand it.
• 1:04
  SPEAKER_02: Let me just put this out there.
• 1:07
  SPEAKER_02: I like to do this every year.
• 1:09
  SPEAKER_02: And maybe, maybe you've heard me say this before.
• 1:12
  SPEAKER_02: Don't stick your hand in there.
• 1:14
  SPEAKER_02: Don't stick your hand in there.
• 1:16
  SPEAKER_02: Safety first, please.
• 1:18
  SPEAKER_02: If you have to ask, well, it in where?
• 1:22
  SPEAKER_02: Anywhere.
• 1:22
  SPEAKER_02: Don't stick your hand in there.
• 1:24
  SPEAKER_02: We want everyone to have a safe harvest season and to come out the other end of harvest all in one piece, in the same condition that you begin harvest.
• 1:33
  SPEAKER_02: We would love it if you could end that way too.
• 1:36
  SPEAKER_02: And my first piece of advice don't stick your hand in there.
• 1:41
  SPEAKER_02: Don't stick your hand in there.
• 1:42
  SPEAKER_02: Safety first, everybody.
• 1:43
  SPEAKER_02: We care about you.
• 1:44
  SPEAKER_02: And hope I hope it all goes well.
• 1:47
  SPEAKER_02: Just be careful.
• 1:47
  SPEAKER_02: Just be careful.
• 1:49
  SPEAKER_02: Ag Squawk of the Afternoon.
• 1:50
  SPEAKER_02: Today we've got to Brian Hoops, Midwest Market Solutions up in South Dakota.
• 1:55
  SPEAKER_02: If you're not an AgBull subscriber, let me urge you to check out the info available at AgBull.com.
• 2:01
  SPEAKER_02: Take your marketing by the horns with AgBull Intel, AgBull.com or 855-737 Farm.
• 2:09
  SPEAKER_02: Let's get into it.
• 2:10
  SPEAKER_02: Private exporters reported sales, 159,000 metric tons of soybeans for delivery to unknown destinations.
• 2:18
  SPEAKER_02: That's for the 2627 marketing year.
• 2:22
  SPEAKER_02: And being Monday, we've got some export inspections to discuss.
• 2:27
  SPEAKER_02: Corn export inspections came in just a hair shy of 1.5 million metric tons in the weekend of August 27.
• 2:35
  SPEAKER_02: That was 6% above the same week last year, 13% above the prior week.
• 2:41
  SPEAKER_02: Soybeans and wheat kind of went the other way, each nearly half of what they were the same week last year, both below a week ago.
• 2:49
  SPEAKER_02: I want to talk about some of the seasonals here as we're heading in.
• 2:53
  SPEAKER_02: I wonder what the flip of the calendar between August and September may have meant historically, as far as Brian Hoops has observed.
• 3:02
  SPEAKER_02: Maybe, you know, business as usual status quo.
• 3:05
  SPEAKER_02: But, you know, we got fires over there, we got we've got flooding over there, we're dry, we're too wet.
• 3:11
  SPEAKER_02: It's hot as a dickens down here in KC.
• 3:14
  SPEAKER_02: The heat flipped back on for us down here.
• 3:17
  SPEAKER_02: And I know in the you know parts south, it's definitely going to be hot for at least the next week.
• 3:24
  SPEAKER_02: I mean, I'm talking 100 degrees, 98, 99 degrees with overnight temperatures, which may not be quite as much of a concern this time of year, although we want to uh give these crops the best chance that they've got to finish strong and to finish correctly.
• 3:40
  SPEAKER_02: So we'll see if Brian has any any idea on what uh some of this heat further down south here.
• 3:46
  SPEAKER_02: Because we've seen, especially on the corn side, the southern growers have really stepped it up and come out with some terrific yields the last few years.
• 3:56
  SPEAKER_02: It's just seems like it's building and building and building every year.
• 4:00
  SPEAKER_02: And uh the heat this year may have something to say about that.
• 4:04
  SPEAKER_02: Let's get to the tail of the ticker.
• 4:07
  SPEAKER_02: Corn futures gained a penny just after the open this morning as soybeans were fractionally mixed, but mostly lower.
• 4:13
  SPEAKER_02: Meanwhile, winter wheat futures rushed to double-digit losses.
• 4:18
  SPEAKER_02: Cattle futures were higher, with fed cattle leading gains as lean hogs sprang higher as well.
• 4:24
  SPEAKER_02: That just out of the opening gate.
• 4:26
  SPEAKER_02: Ahead of the noon hour, corn dipped slightly below unchanged for a short time, but was working on a recovery, posting fractional gains, soybeans turned around as well, moving moving roughly a nickel into positive territory while winter wheat was off session lows, but still more than 20 cents lower.
• 4:45
  SPEAKER_02: Livestock features continued to work higher as the lunch bell rang.
• 4:50
  SPEAKER_02: Before we talk settlements, let me mention plus 500.
• 4:53
  SPEAKER_02: Me and my squad all use plus 500 T4 software for real-time quotes, futures and options, and a host of handy dandy features, plus 500 trust, plus 500.
• 5:07
  SPEAKER_02: Let's go to December Corn Futures to begin.
• 5:09
  SPEAKER_02: 537 and three quarters.
• 5:12
  SPEAKER_02: That's up one cent and one quarter on the day.
• 5:15
  SPEAKER_02: Dear Novi beans, 1288 even unchanged, dead steady on the Nove.
• 5:20
  SPEAKER_02: Now we have the September down a penny.
• 5:23
  SPEAKER_02: I'm not sure that means anything to us.
• 5:25
  SPEAKER_02: We look a little further out and we're we're up two and a half in the March, up three and a half in the May, but unchanged at 1288 on the November soybeans.
• 5:36
  SPEAKER_02: Soybean meal was lower, soybean oil was higher.
• 5:40
  SPEAKER_02: And here we've got the wheat.
• 5:42
  SPEAKER_02: Actually, a decent recovery today.
• 5:45
  SPEAKER_02: We were down as much as 20, 25 cents in some of these contracts.
• 5:48
  SPEAKER_02: The December Chicago wheat wound up down a dime.
• 5:52
  SPEAKER_02: Nice recovery, popped off of session lows, 774 on the December Chicago, and over to the December KC at 838.
• 6:01
  SPEAKER_02: That's down just six and one quarter cents on the day.
• 6:04
  SPEAKER_02: And now let me click my livestock tab.
• 6:07
  SPEAKER_02: I've got October feeder cattle futures 317.02 and a half at settlement, down 50 cents on the day.
• 6:14
  SPEAKER_02: 50.55 cents, very narrow range in the feeder cattle today.
• 6:18
  SPEAKER_02: October Live Cattle, similar deal here, a little wider range between the contracts, but 212.67.5 is what we got out of the day.
• 6:26
  SPEAKER_02: Up 95 cents for the October fats, and over to Lean Hogs, the October contract at 83.67 and a half, all told.
• 6:35
  SPEAKER_02: Up a buck 77.5.
• 6:37
  SPEAKER_02: Good day for the Squealers.
• 6:39
  SPEAKER_02: December Hogs 74.15, up a buck 85 on the day.
• 6:44
  SPEAKER_02: And with that, we've had him on before, and he's good enough to come back with us.
• 6:50
  SPEAKER_02: Brian Hoops, Midwest Market Solutions.
• 6:53
  SPEAKER_02: Uh, so glad to have you back here with us again, Brian.
• 6:56
  SPEAKER_02: How's everything?
• 6:58
  SPEAKER_00: Hey, good, everything is good.
• 7:00
  SPEAKER_00: It used to be in South Dakota.
• 7:02
  SPEAKER_00: I'm farther south than you are.
• 7:03
  SPEAKER_00: I'm down in Springfield, if you remember right.
• 7:06
  SPEAKER_02: Oh, that's right.
• 7:07
  SPEAKER_02: Yeah.
• 7:08
  SPEAKER_02: How are you enjoying that heat?
• 7:09
  SPEAKER_00: We got the heat back, baby.
• 7:11
  SPEAKER_00: Yeah, we do.
• 7:12
  SPEAKER_00: We've got lots of heat.
• 7:13
  SPEAKER_00: Hottest week of the summer this week.
• 7:15
  SPEAKER_00: It's supposed to be the Burr months.
• 7:17
  SPEAKER_00: You know, it's supposed to get into the fall, but unfortunately, we've got 100 degrees all this week.
• 7:21
  SPEAKER_00: Yeah.
• 7:22
  SPEAKER_00: And boy, is it is it dry?
• 7:23
  SPEAKER_00: We are certainly very dry.
• 7:25
  SPEAKER_00: You've had a lot more rain than we've had.
• 7:27
  SPEAKER_00: And so, yeah, the uh wands are nice and crispy down here.
• 7:30
  SPEAKER_02: Yeah, absolutely.
• 7:32
  SPEAKER_02: I wonder, you know, I may not have to mow again.
• 7:34
  SPEAKER_02: I I was I was procrastinating mowing, knowing that it was gonna get hot.
• 7:38
  SPEAKER_02: I knew it was coming.
• 7:40
  SPEAKER_02: I didn't I I waited one way too late.
• 7:43
  SPEAKER_02: It wound up sweating the entire time.
• 7:46
  SPEAKER_02: Maybe this is the last time we have to mow.
• 7:49
  SPEAKER_00: I think we're getting to that point, getting close anyway.
• 7:51
  SPEAKER_00: Then it'll be uh pick up the leaves season here pretty soon, too.
• 7:55
  SPEAKER_02: Oh, that's right.
• 7:56
  SPEAKER_02: That's right.
• 7:56
  SPEAKER_02: Always something.
• 7:57
  SPEAKER_02: That's always something at least we don't have to scoop snow very often.
• 8:02
  SPEAKER_02: Right, right.
• 8:03
  SPEAKER_02: Last year we hardly had to scoop any at all.
• 8:06
  SPEAKER_02: I'm gonna I'm gonna start bringing in some weather dudes along the way here and just talk about the super El Nino that they're they're talking about here.
• 8:14
  SPEAKER_02: That's that could that be exciting.
• 8:17
  SPEAKER_00: It could very well be exciting, exactly.
• 8:19
  SPEAKER_00: Yeah, make things interesting.
• 8:21
  SPEAKER_02: Well, let's talk about.
• 8:22
  SPEAKER_02: I know you've got a ton of experience here.
• 8:25
  SPEAKER_02: It's the last day of August.
• 8:27
  SPEAKER_02: Can we talk about seasonal tendencies within the corn and soybean markets once we round into September?
• 8:33
  SPEAKER_02: What are we expecting generally?
• 8:35
  SPEAKER_00: You know, for the really the long-term seasonal tendency was to trade lower until we got into the harvest.
• 8:42
  SPEAKER_00: And that, you know, so that usually doesn't occur September 1.
• 8:45
  SPEAKER_00: It's usually later than that, late September, early October.
• 8:49
  SPEAKER_00: But that was maybe a 30-year pattern.
• 8:51
  SPEAKER_00: And then we got to the 15-year where we were starting to see earlier and earlier type lows.
• 8:58
  SPEAKER_00: And now you if you look at the last five years, it's it's getting even earlier.
• 9:02
  SPEAKER_00: August is sometimes a low, very early, right around Labor Day, sometimes is a low, so much earlier than what it has been in in recent years past.
• 9:12
  SPEAKER_00: And it's certainly true this year.
• 9:14
  SPEAKER_00: We've uh made our, I guess you want to call them harvest lows very early before the August WASD report.
• 9:20
  SPEAKER_00: Last year it was right on report day, and this year it's even before that.
• 9:24
  SPEAKER_00: So we're we're making a case where the summer lows are actually going to be harvest lows before too much longer.
• 9:31
  SPEAKER_00: So we can't uh used to be when I first started back in the 90s in marketing, you'd be looking at you know getting the planners out of the shed, that was your seasonal high, and you you'd want to buy puts or make sales, and when you got the combines out of the shed, that's your seasonal low, and you'd be taking your puts off or buying back uh futures.
• 9:50
  SPEAKER_00: That's not necessarily the case anymore.
• 9:52
  SPEAKER_00: We we're a few weeks away from getting a lot of combines out of the sheds, but we've already put in our seasonal lows.
• 9:57
  SPEAKER_00: So it's getting to the point where now we turn the calendar to September.
• 10:02
  SPEAKER_00: A lot of times we have our lows or within a week or two of having our lows put in, but certainly that's a lot earlier this year than what we've seen in the last couple years.
• 10:12
  SPEAKER_02: I've seen reports of uh some funds going ahead and buying some new longs in both the corn and and the wheat there.
• 10:21
  SPEAKER_02: Does that uh is that something that that can continue here?
• 10:24
  SPEAKER_02: I feel like at some point, you know, that length is gonna come right back out.
• 10:28
  SPEAKER_02: It just it makes me a little nervous this time of year.
• 10:31
  SPEAKER_00: You're absolutely right.
• 10:33
  SPEAKER_00: And and if you look at Friday's commitment trainers report, there's a few interesting things, especially in the corn market.
• 10:39
  SPEAKER_00: The managed lawns, and we look at the futures only, they control about 22% of the open interest in corn right now, and that is the largest control of open interest they've had since March of 2022.
• 10:52
  SPEAKER_00: So you're talking four-year high in open interest in that in the fund managed length in corn.
• 10:59
  SPEAKER_00: And the commercials have taken the other side, they're very heavy sellers.
• 11:02
  SPEAKER_00: In fact, the last three rally attempts have been stalled out by this area where the commercials are holding net shorts.
• 11:10
  SPEAKER_00: And so I think you have to be we have to be very cognizant of the idea that maybe corn isn't just gonna keep screaming higher from here, that maybe we don't have a long-term high in place, but we may have some sort of a temporary high in here as the funds have really been aggressive buyers.
• 11:29
  SPEAKER_00: Maybe we start to back off now once we get into harvest and see some of the yield potential.
• 11:35
  SPEAKER_00: Maybe we take another run later this uh fall and go into the spring and into the the winter months and and and look at higher prices at that point in time.
• 11:43
  SPEAKER_00: But I think at least for now, we have to say that this fund length, this commercial net short position, telling us that maybe we've priced in all we're gonna price in for at least this time being.
• 11:55
  SPEAKER_00: And I, you know, I sit at my desk and see all the orders from our other offices and our other brokers that flow in, and I can see who's buying, who's selling.
• 12:04
  SPEAKER_00: And I will tell you, though, we've had huge volumes the last week in corn and almost all of it's on the buy side.
• 12:11
  SPEAKER_00: And so, you know, you know what that means is once everybody gets along, the market wants to go the other direction, we may be getting close to that point where we at least have a fairly sizable correction coming here.
• 12:23
  SPEAKER_02: I forget which news outlet it was, but I was watching, I don't watch a whole lot of TV news, but I I did hear a guy talking on a financial channel about all commodities, you know, are they the play right now?
• 12:35
  SPEAKER_02: And you the way that I came up, once once a rally in the commodities makes it to the news, it's over.
• 12:43
  SPEAKER_02: You can pretty much count on it being over.
• 12:46
  SPEAKER_02: Is there is there still still a little juice left for uh for corn here?
• 12:51
  SPEAKER_00: Well, yeah, you know, I I know exactly what you're talking about.
• 12:53
  SPEAKER_00: Used to be when the when the Des Moines register would have corn prices on its front page, you knew the rally was over.
• 12:59
  SPEAKER_00: And we're we're getting to that point where all these news outlets are talking about corn and fox and cmbc, they're talking about corn and the rallying the commodities.
• 13:08
  SPEAKER_00: And you know what, once it hits national mainstream media, we may be getting close to close to a top here as well.
• 13:15
  SPEAKER_00: So yeah, you know, if you've been out buying corn, I think you really have to tighten up your stops or be prepared to have some sort of a correction coming off of these price levels that we're at for corn soybeans.
• 13:26
  SPEAKER_00: We've been advising our clients that if you have a lot of storage at home and that's your plan, terrific store your crop.
• 13:33
  SPEAKER_00: But what you don't have storage for, and you have to take the town, maybe you should be selling it now.
• 13:38
  SPEAKER_00: All these prices are here, rather than waiting 30 or 45 days.
• 13:42
  SPEAKER_00: If prices do start to slip, like I think they're they're very likely to, you could see a lot of pressure against these values, and you might not have that opportunity to sell right off the combine at these price levels.
• 13:52
  SPEAKER_00: Yeah.
• 13:53
  SPEAKER_02: Is is is is the news a a real thing?
• 13:58
  SPEAKER_02: Is that is that a thing, or is it just sort of a you know, you you chuckle about it and you kind of observe, and yeah, it it seems about right.
• 14:06
  SPEAKER_02: Is is that a real thing?
• 14:07
  SPEAKER_02: And if so, what what's the mechanism?
• 14:09
  SPEAKER_02: What's what's behind that there?
• 14:11
  SPEAKER_02: How does how does it happen that commodities show up in the in the news and then it does seem like they retreat from there?
• 14:20
  SPEAKER_00: Yeah, you know, it's like we we track sediment, you know, pretty closely, sentiment index and uh the percentage of people bullish, people percentage of people that turn bearish, and you know, the sentiment has turned from you know mildly bullish or or even bearish, neutral, to to wildly bullish here now, and and everybody has turned in that uh in that camp.
• 14:41
  SPEAKER_00: So I think it is a real thing.
• 14:43
  SPEAKER_00: You know, people we track it.
• 14:44
  SPEAKER_00: There's services that track sediment and and put out indexes, and once that sediment index gets too high, it's a sign that there's just too much bullishness being factored in these markets.
• 14:55
  SPEAKER_00: You know, we could we call these markets futures for a reason.
• 14:57
  SPEAKER_00: They're always looking ahead, they're looking down the road.
• 15:00
  SPEAKER_00: And so, what could the market be looking at down the road that may pull this corn market off its highs?
• 15:06
  SPEAKER_00: Well, look at the exports from last Thursday.
• 15:09
  SPEAKER_00: We're off to a poor start compared to a year ago.
• 15:12
  SPEAKER_00: Now we're off to a good start, but compared to a year ago, I think we're like at 440 million bushels sold this year versus 739 a year ago.
• 15:21
  SPEAKER_00: So we're far behind last year's export pace, and we may not catch up to it.
• 15:27
  SPEAKER_00: Now, almost everybody is using last year's export forecast to forecast this year's corn crop, assuming we'll have record exports again.
• 15:35
  SPEAKER_00: But in reality, we're not exporting a lot of corn right now, certainly not as much as what we did a year ago.
• 15:41
  SPEAKER_00: We do think exports are going to back off because you won't have as many cattle going to Mexico, so you won't be exporting as much corn to Mexico.
• 15:49
  SPEAKER_00: In theory, you should make up for it in feed usage.
• 15:52
  SPEAKER_00: You should feed more more corn because the cattle are here.
• 15:56
  SPEAKER_00: But ethanol demand, I think, will stay very strong, especially with gas prices where they are at these higher levels.
• 16:03
  SPEAKER_02: And really, it's it's almost apples and oranges because we're talking about last year's export forecast.
• 16:08
  SPEAKER_02: That was a that was a dollar ago in corn, wasn't it?
• 16:13
  SPEAKER_00: You know, and that's the other thing is at these higher price levels, exports will slow down.
• 16:18
  SPEAKER_00: And you know, we want to point to what's happening overseas with the Black Sea region and Ukraine and Russia, and think that Ukraine is going to slow some of their exports down, which they obviously will.
• 16:29
  SPEAKER_00: China's number one buyer of Ukraine corn, but China has not come to the United States yet for any uh corn purchases.
• 16:36
  SPEAKER_00: They've been buying everything out of Brazil or Argentina, so they'll probably continue to be good buyers from South America.
• 16:43
  SPEAKER_00: And unless they start to come to the United States, there may be reasons to not be quite as bullish now after we've rallied a dollar as what we were earlier this summer when we had removed all that weather premium and prices were hovering around weekly chart support around that 435, 440 range.
• 17:00
  SPEAKER_00: We had taken all the weather premium out of the market and we started to put some back in, and now we put in a lot of premium, another dollar from that 440 level up to 540 range, 535, 540.
• 17:12
  SPEAKER_00: These will definitely slow our export business.
• 17:16
  SPEAKER_02: Do you foresee a quick retreat in corn?
• 17:21
  SPEAKER_02: Should it decide that that it's had enough, or do we kind of get a little bit of a wink and a nod and she drips lower instead?
• 17:29
  SPEAKER_00: Well, you know, they always they they there's an old saying that you know you take the stair, staircase higher, elevator lower.
• 17:36
  SPEAKER_00: Usually it's not a slow descent, it's a pretty rapid descent.
• 17:40
  SPEAKER_00: And you know, we don't know if the you know the funds if they decide to just completely exit this market, we will fall sharply because they are the ones holding this thing up right now.
• 17:50
  SPEAKER_00: You can love them, you can hate them, but the one thing about them is when you have big strong rallies, like we've seen in all these grains, corn, soybeans, and wheat, it's led by fun either short covering or fun buying.
• 18:02
  SPEAKER_00: And they were short, now they're long and holding massive longs.
• 18:05
  SPEAKER_00: That's one thing that's holding us back in this cattle market is the funds sold so aggressively, now they're not really committed to the buy side.
• 18:14
  SPEAKER_00: We're just kind of languishing at these areas without a lot of movement because they're not either willing to buy or sell at these price levels.
• 18:21
  SPEAKER_00: But they've been really willing to buy corn, soybeans, wheat, cotton for for that uh matter, because that crop's burning up as well.
• 18:29
  SPEAKER_00: Everybody loves a good bull market, and we just hate to see it.
• 18:32
  SPEAKER_00: And so we hope this isn't the end, but a correction, I think it's very, very possible here.
• 18:37
  SPEAKER_00: Yeah, yeah.
• 18:38
  SPEAKER_01: Okay.
• 18:39
  SPEAKER_02: Take me back to the livestock comment that you just made there and sort of the fund activity kind of languishing there.
• 18:46
  SPEAKER_02: That's a good word.
• 18:48
  SPEAKER_02: I've last week I was mildly obsessed with the Trump administration's import policy, bringing in foreign beef and gonna sell it below market prices, basically for ground beef.
• 19:01
  SPEAKER_02: I'm curious how much do do those funds is that's is that the sort of thing, those sorts of policy kind of uncertainties that are keeping it quiet is as far as the funds go in the cattle?
• 19:18
  SPEAKER_00: The algorithm type trades are gonna read that headline and determine its various and they're just gonna sell, even though it you know they're not doing the math and and looking at it's very it's gonna matter very little to the consumer.
• 19:30
  SPEAKER_00: They're gonna feel very little effect out of this, I think.
• 19:33
  SPEAKER_00: Once that cost gets passed down through all these hands and gets to the retail level, there's not gonna be a lot left for the consumer that's going to save a lot of money.
• 19:42
  SPEAKER_00: And Ruth, if you look at it from the standpoint, a pound of ground beef is what$650 to$7, kind of depending upon how much uh what percentage lean it is.
• 19:52
  SPEAKER_00: That's really not very expensive compared to a Starbucks cup of coffee.
• 19:55
  SPEAKER_00: And I see lines and lines that every Starbucks around here in Springfield, there's lines of almost any time of the day, people willing to pay five or six dollars for a cup of coffee, but they don't want to pay the same amount for a pound of ground beef.
• 20:09
  SPEAKER_00: So beef isn't overpriced.
• 20:11
  SPEAKER_00: You can buy potato chips and bags for three dollars, probably, and and you know, buy two bags and you'd have an equivalent for ground beef.
• 20:18
  SPEAKER_00: It's just really not a fair comparison to say that beef is is overpriced.
• 20:22
  SPEAKER_00: I know the government wants food prices to be cheap, they want gas prices to be cheap for the consumer, but this isn't really the way to uh to do that.
• 20:32
  SPEAKER_00: But to get back to your question, the funds, you know, they're they're very much a trend following so as long as the trend remains lower in cattle, it's hard pressed for them to step in and buy this market.
• 20:44
  SPEAKER_00: Now we do have some positive moves that's starting to develop here at these lower levels.
• 20:49
  SPEAKER_00: We talked about corn at higher price levels, exports would slow down at these lower levels.
• 20:54
  SPEAKER_00: We're seeing better demand for beef, actually.
• 20:56
  SPEAKER_00: Uh, we're starting to see our export sales uh improve each week.
• 21:00
  SPEAKER_00: Cutout values have have really taken a hit because of increased slaughter capacity, but we're selling like 132 loads on Friday.
• 21:09
  SPEAKER_00: That was a pretty good low count for beef.
• 21:11
  SPEAKER_00: And we talked about the box beef and and how we've had usually have a season run up into Labor Day, and I think that buying has pretty much been completed.
• 21:20
  SPEAKER_00: But we are increasing our kill capacity right now.
• 21:23
  SPEAKER_00: Last week's kill was 542,000 head.
• 21:25
  SPEAKER_00: That's the largest since last February, which tells us the Packers now with positive margins are going to have to pay up for some of these kills.
• 21:33
  SPEAKER_00: So we also next week have Labor Day, but the day after Labor Day, the Fort Morgan plant in Colorado comes back online.
• 21:40
  SPEAKER_00: They've been shut down, I think, since May.
• 21:43
  SPEAKER_00: So they'll be needing to buy cattle to meet their kills.
• 21:47
  SPEAKER_00: So there is some positives coming back in here.
• 21:49
  SPEAKER_00: We're increasing our capacity to slaughter, and that should mean better demand from the Packers going forward in the next several months.
• 21:57
  SPEAKER_02: And I would argue none too soon, as I understand it.
• 22:00
  SPEAKER_02: Uh there's there's plenty of feed yards out there that have been holding back cattle and feeding them to higher weights.
• 22:06
  SPEAKER_02: And so if we can get those Packers interested.
• 22:09
  SPEAKER_02: Maybe we can move some of those on out and and bring some fresh stock in.
• 22:15
  SPEAKER_00: We probably won't see them anymore because now we have a dollar higher corn values.
• 22:19
  SPEAKER_00: We won't be feeding out those cattle to those extremely heavy, heavy weights any longer.
• 22:24
  SPEAKER_00: That last hundred pounds or 150 pounds of gain is very costly for that animal and for the feedlot to put into the animal.
• 22:31
  SPEAKER_00: So if we can put the weights back down, we'll start to see those weights start to shrink compared to a year ago or two year ago levels.
• 22:38
  SPEAKER_00: Then I think we are, you know, making some headway to lighter animals, bigger demand capacity from the feed from the packers for the feedlot animals.
• 22:48
  SPEAKER_00: We have some positives going in this cattle market.
• 22:50
  SPEAKER_00: We're just not reacting to it in prices because the funds are not really committed to the buy side of this market yet.
• 22:56
  unknown: Yeah.
• 22:56
  SPEAKER_02: Yeah.
• 22:57
  SPEAKER_02: What are they waiting on?
• 23:01
  SPEAKER_00: I think a technical change is what you're looking at.
• 23:03
  SPEAKER_00: You know, and who knows what specific specific fund is going to look at a moving average, a trend line, some other trend indication.
• 23:12
  SPEAKER_00: But until the trend changes back to an uptrending market, they're probably not going to be really excited about buying a market.
• 23:19
  SPEAKER_00: They're not going to buy the lows, they're not going to sell the highs, they're going to wait till that trend changes.
• 23:24
  SPEAKER_02: Interesting.
• 23:25
  SPEAKER_02: Okay.
• 23:26
  SPEAKER_02: I want to let's steer back toward toward the corn, because as I understand, Stonex, SP Global, AgriSource, all due to release some crop estimates this week.
• 23:38
  SPEAKER_02: And I'm curious your thoughts.
• 23:40
  SPEAKER_02: If they if they confirm estimates already sort of in play, is there still upside for corn, or does there need to be a real eye-popping low yield come out from some of these folks here in order for corn to even pay attention at all?
• 24:01
  SPEAKER_00: You know, this you know, the pro farmer tour has been going on for seemingly forever, and we followed it every year that I've been in business.
• 24:08
  SPEAKER_00: And this year it seems like the market followed the reactions to that tour results more than any other year.
• 24:16
  SPEAKER_00: It just seemed like we hear poor yield reports and the market would rally.
• 24:20
  SPEAKER_00: We gapped higher after a Monday night when they announced uh South Dakota and Ohio ratings and crop ratings were down again.
• 24:27
  SPEAKER_00: We we actually gapped higher in the night session and continued to move in higher.
• 24:30
  SPEAKER_00: So it really seems like we followed along.
• 24:33
  SPEAKER_00: And when they finally gave their re their tour results on Friday afternoon, the Sunday night was a bullish reaction to it.
• 24:40
  SPEAKER_00: And so have we priced in that 173 that they had forecast?
• 24:45
  SPEAKER_00: Probably have at this point.
• 24:47
  SPEAKER_00: Now, if Stonex or a resource of some of these other big players come in and talk about a yield 178, 179, close to the 180 that the USDA says, I think we're overvalued, and that could be something that could pull us back a little bit.
• 25:03
  SPEAKER_00: You're you're gonna have to see that 173 confirmed by some of these big players this week for these prices, I think, to stay here or even take another advance higher.
• 25:14
  SPEAKER_00: If in fact we do get more of a 178-79 type rating, I think that's in the market, and anything above that could be a little bit bearish to the market.
• 25:24
  SPEAKER_00: And certainly if we see 173, 174 confirmed, yeah, we probably won't be pulling back much of it at all, waiting for any harvest data.
• 25:33
  SPEAKER_00: It's uh this is gonna be a probably a very strong market.
• 25:36
  SPEAKER_02: Yeah, yeah.
• 25:37
  SPEAKER_02: Well, it feels like we're at a uh kind of almost kind of a tipping point here where we could kind of go one way or the other as as far as corn is concerned.
• 25:47
  SPEAKER_02: And it feels very tenuous to me, Brian.
• 25:51
  SPEAKER_02: Are are soybeans equally as tenuous where they are?
• 25:55
  SPEAKER_02: I mean, let me what are we at here?
• 25:56
  SPEAKER_02: 1288, I think I said on the NOVE.
• 25:59
  SPEAKER_02: I'm I'm pretty comfortable there.
• 26:01
  SPEAKER_02: I I don't know, I don't see what gets in the way of that.
• 26:05
  SPEAKER_00: Uh yeah, you know, we we watched these crop ratings on Mondays to give us an indication of is the crop improving or not.
• 26:12
  SPEAKER_00: And we had a lot of rain in the early part of August across Iowa and northern Missouri and Illinois and Minnesota had rains, and crop ratings didn't improve.
• 26:21
  SPEAKER_00: They actually went down one or two percent each Monday.
• 26:24
  SPEAKER_00: So the USDA number at 53.7, I think it was, might be in jeopardy of being too high.
• 26:31
  SPEAKER_00: They may have to lower that in the subsequent report in September.
• 26:35
  SPEAKER_00: So I'd be on the lookout.
• 26:36
  SPEAKER_00: I think that the soybean yields are not quite as good as what they had forecast in August.
• 26:42
  SPEAKER_00: And if this week is any indication, the double crop beans here in in Missouri and parts of uh uh Illinois, Indiana, they're gonna be in some trouble because it's really hot, really, really dry.
• 26:55
  SPEAKER_00: So I've had some clients in that northern Missouri tell me this morning our crops, our beans are not doing very well.
• 27:02
  SPEAKER_00: We had rains, but right now this heat is just too much for them.
• 27:06
  SPEAKER_00: And this this uh you know, double crops are really getting hurt right now.
• 27:10
  SPEAKER_00: So we'll I think you you've got probably more room to go on the upside yet on the soybean market, yeah.
• 27:16
  SPEAKER_01: Yeah, yeah.
• 27:18
  SPEAKER_02: So we're we're we're looking for we're looking to capture what we can in corn presently.
• 27:25
  SPEAKER_02: We may let beans run just a little bit.
• 27:30
  SPEAKER_02: Do you have a sense for and there may be questions of available storage on farm and price, of course, would figure into it.
• 27:40
  SPEAKER_02: How do you think sales straight off the combine are going to fare corn or beans?
• 27:45
  SPEAKER_02: How much of this crop goes straight to town?
• 27:49
  SPEAKER_00: I think a lot of it gets stored.
• 27:51
  SPEAKER_00: I think you know the optimum optimism is out there but in the farmer.
• 27:55
  SPEAKER_00: And you know, I think there's reasons to be optimistic going into 27 and be bullish agriculture in general, and I think that translates into a lot of crop being stored at home as much as possible.
• 28:06
  SPEAKER_00: So there will be some sales, right?
• 28:08
  SPEAKER_00: I think you know they'll be generating some cash.
• 28:10
  SPEAKER_00: You can get$12 cash beans right out of the field in many locations right now.
• 28:14
  SPEAKER_00: You can get close to$5 corn.
• 28:16
  SPEAKER_00: And when if there is that opportunity for$5 corn right out of the right off the combines, that will get sold as well to generate some cash.
• 28:25
  SPEAKER_00: But I do think there's gonna be a lot of storage.
• 28:26
  SPEAKER_00: And and in the case of wheat, it uh is probably as much of a follower as anything this year.
• 28:33
  SPEAKER_00: It's it needs to stay price competitive with corn and soybeans.
• 28:37
  SPEAKER_00: If we do take another leg higher in corn and soybeans, that wheat really needs to stay with it because it's so hot and so dry across the winter wheat plains.
• 28:46
  SPEAKER_00: There's very little planting going to be done here in the month of September.
• 28:50
  SPEAKER_00: Usually like to start around September 15th and go through October into November, get that crop a nice good stand.
• 28:57
  SPEAKER_00: It's cement out there right now.
• 28:58
  SPEAKER_00: There's just no way they're gonna be able to plant anything.
• 29:01
  SPEAKER_00: And so wheat has to maintain them incentive.
• 29:04
  SPEAKER_00: For our clients in the Pacific Northwest and Montana and Idaho and Washington State, they're re responding to these high wheat prices and planting a lot of wheat, but it's the plains areas that need to plant the some winter wheat this fall.
• 29:18
  SPEAKER_00: And if they're not able to, that means they're gonna plant something else next spring, maybe corn or maybe Milo or sorghum or something else, but it won't be winter wheat this fall because it won't be because of price, it'll because of weather that's just not cooperating right now.
• 29:34
  SPEAKER_02: It feels like thanks to the Russia-Ukraine conflict, that those who do get it in the ground and are able to get a crop up might stand to do all right.
• 29:45
  SPEAKER_02: Ukraine purchasing a whole bunch of silo bags, apparently.
• 29:49
  SPEAKER_02: Have you heard about this?
• 29:50
  SPEAKER_02: And then we've got Russia exploring alternate means to move wheat to the Baltic.
• 29:55
  SPEAKER_02: None of this looks like either side is expecting a quick end to this conflict, i.e., a uh a quick resumption of the free flow right out of Europe's breadbasket here.
• 30:08
  SPEAKER_02: How do we interpret that?
• 30:10
  SPEAKER_00: Well, you know, I think everybody wants to assume that the U.S.
• 30:13
  SPEAKER_00: is going to be able to export wheat because of the conflict.
• 30:17
  SPEAKER_00: And, you know, this conflict's been going on for four years plus now, and uh we haven't sold anything really because of the conflict.
• 30:25
  SPEAKER_00: There's other buyers, uh, other foreign countries that are have a wheat crop that they can supply some of the world wheat's needs with.
• 30:32
  SPEAKER_00: Now, this year, France and the European and have had a drought, and so they don't have a lot of wheat.
• 30:38
  SPEAKER_00: We may end up sending selling some of this wheat, but nobody's in a rush to buy our wheat right now.
• 30:43
  SPEAKER_00: Our export inspections are running below last year's levels, which are not very good to begin with.
• 30:49
  SPEAKER_00: We only sold about what 775 million bushels of wheat last year.
• 30:53
  SPEAKER_00: We're on pace to sell less than that this year, despite our tight stocks.
• 30:57
  SPEAKER_00: And at these higher prices, I'm afraid we're not going to be able to export a lot of wheat.
• 31:02
  SPEAKER_00: So wheat is going to, I think, be really dependent upon one, that incentive for the farmer out there to plant the wheat crop.
• 31:10
  SPEAKER_00: And once we get past this fall, and then we no longer offer that incentive, that could be taken away pretty quickly.
• 31:16
  SPEAKER_00: It's also going to be dependent upon how long some of this conflict lasts and how committed the funds are to the buy side because there is a lot of producers in in Montana that are hedging a lot of wheat winter wheat right now as they plan to expand their acres, and they are looking at these prices and thinking they can make a fair amount of money planting winter wheat right now.
• 31:38
  SPEAKER_00: Yeah.
• 31:39
  SPEAKER_02: I just got a uh I got a text here, not just a few moments ago.
• 31:45
  SPEAKER_02: We were waiting on some news on some biofuels and some exemptions that were apparently in play, and it looks like EPA is gonna grant 100% exemptions to 18 petitions and partial exemptions to 11 petitions, denying three altogether and determining two petitions to be ineligible, also reissuing partial exemption for one petition for 2024.
• 32:12
  SPEAKER_02: I'm I'm I'm not quite as savvy on biofuels as I probably ought to be, except to uh to suspect that that this is well, I don't know how to feel about this.
• 32:23
  SPEAKER_02: Have you got a thought?
• 32:24
  SPEAKER_02: They're it looks like they're they're granting most of the exemptions.
• 32:36
  SPEAKER_00: You know, they're they're wanting to do everything they can to get gas prices lowered before the midterms, and you know, this is one way to do that.
• 32:44
  SPEAKER_00: Now, they're also talking about increasing the RVOs on this, and this would be bullish for bean oil because it puts a lot of pressure on our bean oil stocks and tightens those stocks up considerably.
• 32:55
  SPEAKER_00: So we saw a late week rally, Thursday, Friday, pretty big moves in bean oil, and off of some of these rumors.
• 33:02
  SPEAKER_00: So if it in fact does go through, and it sounds like it probably is, it is going to be longer term supportive to soybean oil and those biofuels.
• 33:10
  SPEAKER_02: Yeah.
• 33:12
  SPEAKER_02: You know, I was uh I was talking to somebody over the weekend, and I I can't figure out why we don't have year-round E-15 already.
• 33:21
  SPEAKER_02: Uh it it seems like something that the president could get done with a swipe of the pen, as as he's shown.
• 33:27
  SPEAKER_02: He's not afraid to use the you know, the executive order to get something done.
• 33:31
  SPEAKER_02: I mean, heck, he's he's working on changing the name of Lake Ontario, the Gulf of America.
• 33:38
  SPEAKER_02: Why not why not year-round E-15?
• 33:41
  SPEAKER_00: Yeah, I think that's been talked about, and it's something that all the groups would encourage, especially a lot of the corn producers, ethanol, it would be certainly common sense, I think, to to uh enable this to be done uh year-round.
• 33:55
  SPEAKER_00: You know, we have uh some of this uh gas uh down here, and we used a lot of it, or I use a lot of it.
• 34:02
  SPEAKER_00: I mean it's a little bit cleaner burning, a little bit higher octane, a little bit cheaper.
• 34:06
  SPEAKER_00: So I don't know why you know I don't really know the disadvantage to not allowing them to be sold year-round.
• 34:13
  SPEAKER_02: Yeah.
• 34:15
  SPEAKER_02: Especially if we're looking for ways to cut to cut gasoline prices for the consumer, because I feel like at this point, you know, the consumer is just gonna reach for what's cheapest, and if we can get a 20, 25, 30 cent discount per gallon, let's fuel it up and and and let's roll.
• 34:34
  SPEAKER_02: You know what I mean?
• 34:35
  SPEAKER_00: Absolutely.
• 34:35
  SPEAKER_00: Yeah, no, I I totally agree with you, and I think that's would be smart on his part to uh to look into that and to actually uh sign that into law that it's sold year-round all around the United States.
• 34:46
  SPEAKER_00: Absolutely.
• 34:47
  SPEAKER_02: Yeah, very good.
• 34:48
  SPEAKER_02: Well, I'm gonna cut you loose here pretty quick, just a couple of more items.
• 34:53
  SPEAKER_02: I I wonder what what might be top of mind if you were gonna tell me of all these markets that we've discussed today, what's the most pressing issue, what's the most important thing that you want to make sure to get out to the viewers today?
• 35:10
  SPEAKER_00: You know, that's a that's a good question.
• 35:12
  SPEAKER_00: I mean, for the producers, you can you can do well when you have that production.
• 35:17
  SPEAKER_00: So if you if you have production this year, consider yourself thankful.
• 35:21
  SPEAKER_00: You know, and I know everybody is when you have low prices and big production, it can it can help out.
• 35:28
  SPEAKER_00: If you have high prices and large production, that's when you really can heal yourself.
• 35:32
  SPEAKER_00: And so I think uh you know this year, if you if you're lucky enough to have that corn, soybean yields, winter wheat yields, cotton, whatever it is, do a good job of marketing this year, and you know you can stretch that out a long, long ways.
• 35:45
  SPEAKER_00: And and so let's try and keep our input prices down as well next as we go through this fall and into next spring.
• 35:53
  SPEAKER_02: Yeah, that would be keep keep input price, maybe even get a little pressure on input prices.
• 35:59
  SPEAKER_02: Well, I mean, now I'm talking crazy.
• 36:01
  SPEAKER_02: Now I'm talking crazy.
• 36:04
  SPEAKER_02: Well, very good.
• 36:06
  SPEAKER_02: Um, we sure appreciate your time today, Brian Hoops, Midwest Market Solutions.
• 36:10
  SPEAKER_02: You say it's hot there in Springfield.
• 36:12
  SPEAKER_02: I'm just looking at my phone right now, 98 degrees in Kansas City.
• 36:16
  SPEAKER_02: Heat advisory expected to last until 8 p.m.
• 36:19
  SPEAKER_02: Friday, September 4.
• 36:21
  SPEAKER_02: I imagine you're uh you're under pretty similar conditions, aren't you?
• 36:25
  SPEAKER_00: Exactly the same.
• 36:25
  SPEAKER_00: I think it's like 99 or 100 today, tomorrow, and the humidity is not quite as bad as what it was, but it's it's still pretty high.
• 36:33
  SPEAKER_00: Still pretty high.
• 36:34
  SPEAKER_02: Yeah.
• 36:35
  SPEAKER_02: Well, and the it's been such a mixed bag of weather with the fires and the floods, and you know, apparently there was a flood in the in the Grand Canyon.
• 36:43
  SPEAKER_02: Uh I didn't see that one coming.
• 36:45
  SPEAKER_02: I absolutely didn't have that on my bingo card, but apparently everything is on the table this year for American weather.
• 36:51
  SPEAKER_02: Let's go to the National Weather Service.
• 36:53
  SPEAKER_02: Flash flooding risks continue for portions of the four corners in Great Basin through today, severe thunderstorms from the eastern Great Lakes, southern New England into the mid-Atlantic through Tuesday.
• 37:05
  SPEAKER_02: Yeah, we're dry right through the through the uh middle south of the country there.
• 37:09
  SPEAKER_02: Heat risk increases and expands across the center of the nation, across the Ohio Valley at mid-Atlantic this week.
• 37:16
  SPEAKER_02: Continue to closely monitor tropical developments in the Gulf.
• 37:21
  SPEAKER_02: Brian, before I let you go, some items of mild interest from August 31st in history.
• 37:28
  SPEAKER_02: In 1803, Lewis and Clark started their expedition to the west by leaving Pittsburgh, Pennsylvania on this date.
• 37:37
  SPEAKER_02: When the wife and I travel, she's got two requirements corn nuts and twizzlers.
• 37:43
  SPEAKER_02: I wonder what what sort of snacks Lewis and Clark would have brought with him.
• 37:47
  SPEAKER_02: Probably some fat back, maybe some jerky.
• 37:50
  SPEAKER_02: I don't know.
• 37:50
  SPEAKER_02: What do you like to take with you?
• 37:52
  SPEAKER_02: I know you traveled a fair bit.
• 37:53
  SPEAKER_02: What's your favorite snack of the road?
• 37:55
  SPEAKER_00: Gotta have beef jerky.
• 37:56
  SPEAKER_00: Jerky love.
• 37:57
  SPEAKER_02: It's good protein, too.
• 37:58
  SPEAKER_00: Go ahead.
• 37:59
  SPEAKER_00: Yeah, yeah.
• 38:00
  SPEAKER_02: Excellent.
• 38:00
  SPEAKER_02: Well, you know, you're doing your part to support beef demand.
• 38:03
  SPEAKER_02: Good for you.
• 38:04
  SPEAKER_02: Good for you.
• 38:04
  SPEAKER_02: Thanks for that.
• 38:05
  SPEAKER_02: In 1997, you'll remember this.
• 38:07
  SPEAKER_02: Diana Princess of Wales, her companion Dodi Fayed with driver Henri Paul died in a car crash in Paris.
• 38:16
  SPEAKER_02: Tragic news there.
• 38:17
  SPEAKER_02: People love Lady Die.
• 38:19
  SPEAKER_02: And that was 97.
• 38:20
  SPEAKER_02: It does not seem like it was that long ago.
• 38:23
  SPEAKER_02: And finally, this one I I kind of don't get.
• 38:27
  SPEAKER_02: It's this is from uh popculture madness.com.
• 38:31
  SPEAKER_02: They say the first lighthouse to use electricity was the Statue of Liberty in 1886.
• 38:39
  SPEAKER_02: I've never thought of the Statue of Liberty as a lighthouse.
• 38:42
  SPEAKER_02: Any insight into it?
• 38:44
  SPEAKER_00: I don't think she's a lighthouse, is she?
• 38:46
  SPEAKER_00: I I think the torch has a light on it, and that's about all I know about the light on that.
• 38:51
  SPEAKER_00: Yeah.
• 38:51
  SPEAKER_00: I don't know.
• 38:52
  SPEAKER_02: Well, I suppose you see it from far enough out, and uh, you know, well, there's there's light.
• 38:57
  SPEAKER_02: We must uh we'll go that way.
• 38:58
  SPEAKER_02: We'll go that way.
• 39:00
  SPEAKER_02: Brian Hoops, um dude, we covered an awful lot in a short amount of time here, brother, and I really appreciate your insights here.
• 39:07
  SPEAKER_02: Good words for us.
• 39:08
  SPEAKER_02: We're definitely gonna need to keep an eye on that corn market.
• 39:11
  SPEAKER_02: Thanks for running through the markets with us to get our week started off correct, brother.
• 39:14
  SPEAKER_02: I sure do appreciate you.
• 39:17
  SPEAKER_00: Yep, pleasure being on.
• 39:18
  SPEAKER_00: Always good to talk with you, David.
• 39:20
  SPEAKER_02: Brian Hoops from Midwest Market Solutions.
• 39:23
  SPEAKER_02: Let me say thanks to Trade the News for the view behind the quotes.
• 39:27
  SPEAKER_02: Look to trade the news.
• 39:28
  SPEAKER_02: We appreciate them being part of the AgSquawk program here.
• 39:32
  SPEAKER_02: May I also direct you once more to AgBull.com.
• 39:35
  SPEAKER_02: Dig deeper with AgBull Intel.
• 39:37
  SPEAKER_02: Take your marketing by the horns with Ag Bull.
• 39:39
  SPEAKER_02: Visit AgBull.com or phone us 855-737 Farm for the details.
• 39:45
  SPEAKER_02: Thanks for watching, everybody.
• 39:47
  SPEAKER_02: Jed's coming back first thing in the morning to start off your Tuesday, the first of 70.
• 39:52
  SPEAKER_02: And then I'll be talking with Brad Downing tomorrow afternoon.
• 39:56
  SPEAKER_02: Hang in there, everybody.
• 39:57
  SPEAKER_02: I'll see you next time.