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Grains: The Precautionary Principle · 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 Miner.
• 0:22
  SPEAKER_01: Let's get started.
• 0:23
  SPEAKER_01: Today is November 7th.
• 0:24
  SPEAKER_01: I've got Jaden back with us here today.
• 0:26
  SPEAKER_01: How's it going, Jaden?
• 0:27
  SPEAKER_01: It's going pretty good, Mike.
• 0:29
  SPEAKER_01: How about yourself?
• 0:30
  SPEAKER_01: I guess it's going as good as it's going to be.
• 0:32
  SPEAKER_01: Uh going into the weekend here, we've had a crazy week.
• 0:35
  SPEAKER_01: We're going to talk a little bit about the trading range and some of these grain markets.
• 0:39
  SPEAKER_01: We're going to talk about the Stonex yields.
• 0:41
  SPEAKER_01: We're going to talk about the Waz Day coming up.
• 0:43
  SPEAKER_01: Let's get right into it.
• 0:44
  SPEAKER_01: So soybeans had a pretty crazy trading week here.
• 0:48
  SPEAKER_01: Uh when I look at the January contract, for example, we traded almost double-digit closes almost every day this whole week.
• 0:56
  SPEAKER_00: Just kind of go nowhere, didn't we?
• 0:58
  SPEAKER_00: Yeah, Mike, we had like a round of a 33 cent trading range on the jan beans, and on the week we only ended up up two.
• 1:06
  SPEAKER_01: So yeah, the just saying we ended up two this week doesn't really tell the whole story of everything we traded, did it?
• 1:12
  SPEAKER_00: No, Mike.
• 1:13
  SPEAKER_00: Um seeing a lot of volatility in this market, and any pullback we get, it seems like funds are buying it right back up.
• 1:20
  SPEAKER_01: It seems like it.
• 1:21
  SPEAKER_01: Uh yesterday I noticed there's a recurring theme of basically a risk-off attitude across all equities and commodities.
• 1:29
  SPEAKER_01: Uh when it look when we look at basically that risk-off attitude, it was soybeans, it was the uh cattle market, it was the equities.
• 1:38
  SPEAKER_01: Uh, we're really seeing it all the way across.
• 1:40
  SPEAKER_01: So one of the things I noticed with it was that uh at this point, it seems like you're trading concerns regarding an AI bubble, essentially, in in the equity markets.
• 1:52
  SPEAKER_01: That's been a big talking point and something to really focus on there, I think, just for if that continues or if that's going to be a short-term theme of a risk-off attitude.
• 2:01
  SPEAKER_01: And uh it seemed like today they actually bounced back pretty well.
• 2:05
  SPEAKER_01: Most of the trade, whether it be cattle, we traded higher, the soybean market traded higher, even the SP 500 trying to end the week as we're meeting here chatting uh in the afternoon around two o'clock.
• 2:16
  SPEAKER_01: The SP's clawed its way back about 50 points.
• 2:18
  SPEAKER_01: So I again I look at almost trading green here by the end of the day, which is quite the feat.
• 2:23
  SPEAKER_01: But at this point, it seems like the volatility is definitely there, Jaden.
• 2:27
  SPEAKER_00: Yeah, Mike, um just to back up on that, um consumer sentiment is some of the lowest of the last 10 years, um, tie in June of 2022.
• 2:38
  SPEAKER_00: Um what what does that kind of tell us, Mike, from a consumer or investor perspective?
• 2:44
  SPEAKER_01: I feel like the consumer sentiment at this point is poor because we keep telling them they should be poor.
• 2:49
  SPEAKER_01: You know, a lot of folks keep coming out and saying, like, uh, you know, we're gonna have a downturn, we're gonna have a downturn, you're paying too much for stuff.
• 2:57
  SPEAKER_01: So I feel like the uh the economy, people feel like they should be worried about the economy.
• 3:03
  SPEAKER_01: And we keep telling them to be worried about the economy, and that's why they feel bad about the economy, I feel like.
• 3:09
  SPEAKER_01: Now, uh, when we look at a few other things, it's probably not that bad, at least from an economic parameter, from the things I follow, uh, whether it be unemployment rate, whether it be credit card uh delinquencies, whether it whether it be uh things like that, you know, failing to pay on single-family mortgages, things like that.
• 3:27
  SPEAKER_01: I I don't see any uh rapid upticks that are outside of the normal trend.
• 3:31
  SPEAKER_01: So uh just following that, anyways, following what we can follow, given the fact that the government shut down, something also to keep in mind here from that perspective.
• 3:40
  SPEAKER_01: Um a few things uh that we traded early on this week happen to be the Stonex yields as well.
• 3:46
  SPEAKER_01: What can you tell us about what Stonex came out with on their uh surveys versus what expectations probably were?
• 3:53
  SPEAKER_00: Yeah, Mike, so Stonex came out with a corn yield of 186.
• 3:58
  SPEAKER_00: Um I think there's no question about it.
• 4:00
  SPEAKER_00: The the peak of the crop was was in mid-August, so we we've definitely shrunk from there.
• 4:06
  SPEAKER_00: But it seems like the the market's looking for a bigger pullback for any you know significant price, you know, increase on the corn side of things.
• 4:15
  SPEAKER_00: On beans, they kind of held that steady at a 53.6.
• 4:19
  SPEAKER_00: Kind of surprising there with the with the really dry August we had out out east there.
• 4:24
  SPEAKER_01: Yeah, so the 186, uh that was a surprise.
• 4:28
  SPEAKER_01: I think a lot of folks would have liked that to be a little bit lower than the 186.
• 4:32
  SPEAKER_01: That was quite shocking, and uh, in our opinion, even being a little bit higher month over month there going into this next week's WASDA report.
• 4:40
  SPEAKER_01: So next Friday, we have a WASDA report coming out from the government.
• 4:43
  SPEAKER_01: They're gonna reopen, just have that come out.
• 4:45
  SPEAKER_01: Originally it was supposed to be Monday, now it's gonna be Friday uh because of the shutdown.
• 4:50
  SPEAKER_01: But we're at least getting some data that we're gonna be able to trade.
• 4:53
  SPEAKER_01: It's been a while since we got to trade anything besides tariff China news.
• 4:57
  SPEAKER_01: Uh what are a few things that you're looking at in that WASDA report that you think will be major categories?
• 5:04
  SPEAKER_00: Yeah, when that when that report comes out, the first things I'm gonna run to is probably the corn yield just to see where the USDA is sitting there.
• 5:11
  SPEAKER_00: You know, they're kind of similar to Stonex where they do a lot of farmer surveys.
• 5:16
  SPEAKER_00: So maybe, you know, we're we are looking for that big yield cut, but maybe they are similar to Stonex since since they are kind of the do the same thing the same way.
• 5:25
  SPEAKER_00: Yeah.
• 5:25
  SPEAKER_00: Yeah.
• 5:26
  SPEAKER_00: And then I guess another thing I would look at here is the bean exports.
• 5:30
  SPEAKER_00: Um, it did that's massive.
• 5:33
  SPEAKER_01: I'm gonna be really looking at that's probably the first category I'm gonna run to right away.
• 5:37
  SPEAKER_00: Yeah, did did the USD have you know China factored in before they they made this pledge of commitments of 12 million metric tons before the end of the year and with really no sign of actual major purchases from China?
• 5:50
  SPEAKER_00: Are they gonna cut that back?
• 5:52
  SPEAKER_01: If they leave that the same at 1.685, I'm gonna be so mad with everything that's changed since the last time that that WASD airport came out.
• 6:00
  SPEAKER_01: If they just leave it the same, I feel like I'm gonna be so disappointed in the lack of new news and transparency in the USDA's WASDAerport for exports.
• 6:10
  SPEAKER_01: I want to know in that in that 1.68 billion, what is the China number and what's not?
• 6:15
  SPEAKER_01: And I feel like this will be a good test to see what that number should be.
• 6:19
  SPEAKER_01: If not, by January, especially it's gonna be some interesting WASDA ports, Jaden.
• 6:24
  SPEAKER_01: Any final thoughts going into the weekend?
• 6:26
  SPEAKER_00: Yeah, whether or not what you think we're gonna see next Friday, it's gonna be interesting because I tell you what, this government shutdown, it's it's caused the market, the grain market specifically, to only trade China news.
• 6:38
  SPEAKER_00: So it'll be interesting to actually trade something else for once.
• 6:41
  SPEAKER_01: For sure.
• 6:41
  SPEAKER_01: I'm really looking forward to it.
• 6:42
  SPEAKER_01: It's gonna be a a healthy, uh, a healthy reminder, I think, for a lot of us to trade some of those numbers, and uh, we're looking forward to it.
• 6:50
  SPEAKER_01: So thank you for the uh wonderful podcast going into the weekend.
• 6:54
  SPEAKER_01: Uh I know up in the northwestern corn belt where we're at, a lot of harvest has wrapped up, but it's gonna get awfully cold this weekend before getting nice next week, and we're actually gonna get a little precip.
• 7:04
  SPEAKER_01: Uh watch out for that white stuff up in the sky.
• 7:07
  SPEAKER_01: Thanks for your time.