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Grain Market Overview · 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.
• 0:23
  SPEAKER_01: Today is August 30th.
• 0:25
  SPEAKER_01: I've got Pat back with us today.
• 0:26
  SPEAKER_01: How's it going, Pat?
• 0:27
  SPEAKER_00: Good Mike.
• 0:28
  SPEAKER_00: How are you this afternoon?
• 0:29
  SPEAKER_01: Doing really good.
• 0:30
  SPEAKER_01: I uh I can't complain today.
• 0:33
  SPEAKER_01: We've had some really interesting trade news, I think, come out since the last time you and I chatted.
• 0:38
  SPEAKER_01: You know, uh the soybean market in particular would be a good place for us to start today ahead of the three-day weekend, especially.
• 0:45
  SPEAKER_01: Some of these grain markets, when you start to look, uh, you know, November soybeans now since the August 16th low have put on over 50 cents.
• 0:53
  SPEAKER_01: We opened and closed above the 20-day moving average today.
• 0:58
  SPEAKER_01: We closed at 10 bucks, I guess, right pretty much smack at it.
• 1:03
  SPEAKER_01: Um, we uh pretty much closed above 20-day moving moving averages in all the wheat markets, the soybean market, the corn market.
• 1:13
  SPEAKER_01: So the grains here have just quietly put on a a little small rally kind of back to the top end of trading ranges, or maybe a little bit too early to suggest a breakout by any means, Pat.
• 1:23
  SPEAKER_01: But what do you see out of uh some of these uh market moving events lately?
• 1:28
  SPEAKER_00: Yeah, fifty cents seems like a lot um to to rally this thing over the last couple of weeks.
• 1:33
  SPEAKER_00: And and uh so as you're describing that, Mike, I was looking at the chart and and and uh I guess looking at mid-July to um really around the twenty-third or twenty-fifth of July, we th there was a fifty cent corrective rally there too that uh ultimately ended up being uh uh a well uh a short-term high and then and then uh uh new lows there um a couple more times as we go through.
• 2:01
  SPEAKER_00: So um we'll see how that all looks.
• 2:04
  SPEAKER_00: I do know that all of us are looking at these commodity markets and and really obviously seeing a significant sell-off from from the the the peak uh um last November and uh again uh uh in May there and and uh significant sell-off.
• 2:23
  SPEAKER_00: Um the the talk about um um crop prospects uh for this year obviously is what's putting pressure on this thing.
• 2:32
  SPEAKER_00: But um I do think that uh not only um producers and risk managers that have the pleasure of working with producers are are hoping that we're able to kind of ground this thing just a little bit and find a grind out a bottom here, so to speak.
• 2:48
  SPEAKER_00: Um I do think traders are looking at this market too, and and especially when you start to look at today's values, Mike, relative to, you know, where we were at uh pre-COVID, you know, before this uh um little commodity run on uh on all of these markets in the last three or four years.
• 3:08
  SPEAKER_00: And and you start talking about 950 soybeans or 370 corn or$300 meal, uh those are kind of price levels that we didn't spend a whole lot of time below, even in pre-COVID type times.
• 3:22
  SPEAKER_00: And and we know that that uh commodity prices, commodity pricings are fickle funny things, and it it doesn't have to um respect uh cost of production and and all of those sorts of things.
• 3:35
  SPEAKER_00: But boy, you sure you sure are getting these markets trading at uh at some value propositions that that look pretty attractive um even from a long-term perspective.
• 3:47
  SPEAKER_00: And so, and so maybe as we wrap up um this month, uh maybe as we get uh the nearby September uh contracts to to roll into uh first notice, um maybe we're starting to see just a little bit of of uh of interest from outside money and in attracting into commodities here.
• 4:09
  SPEAKER_00: And and uh, you know, last Friday, Mike uh uh Chairman Powell uh um um declared again that he's gonna be raising some interest uh or lowering some interest rates here and and uh you know the goal of that is to is to spur some economic activity, right?
• 4:27
  SPEAKER_00: He that's the reason why he's talking about lowering interest rates and and uh um spurring economic activity should be good for commodity demand.
• 4:35
  SPEAKER_00: So so maybe there's a playbook there for uh you know for this outside money flow to start coming back into these commodities a bit.
• 4:42
  SPEAKER_00: And and so, you know, we'll see what happens.
• 4:45
  SPEAKER_00: And the last part, the last thing that you just said, there's exactly right.
• 4:49
  SPEAKER_00: That this market hasn't done enough from a technical perspective for us to sit here and pound our fists and say, hey, the lows are in, we're gonna run this thing higher.
• 4:58
  SPEAKER_00: But there's at least uh uh an opportunity there or a recipe there that maybe that could occur.
• 5:03
  SPEAKER_00: So certainly something that bears watching.
• 5:05
  SPEAKER_01: Yeah, very similar to the the chart action compared to what we had in the July setback and recovery of 50%, then kind of beginning of August, end of July, that one as well.
• 5:16
  SPEAKER_01: So it'll be interesting to see where this shakes out.
• 5:18
  SPEAKER_01: I and money flow-wise, talking about money flow coming back to something like soybeans, it makes sense, right?
• 5:24
  SPEAKER_01: We were pretty much at a record short position on managed money here uh the last couple weeks.
• 5:29
  SPEAKER_01: So to see some money flow come back into there makes some sense.
• 5:33
  SPEAKER_01: And uh I even had one person today compare it to like, well, ever since Nvidia pretty much started selling off, the soybean market started going up.
• 5:40
  SPEAKER_01: So, like, yeah, the people are throwing out some some crazy stuff out there, but I've uh seen some interesting correlations with money flow and uh from a global outlook here on demand.
• 5:52
  SPEAKER_01: I mean, we pretty much have the cheapest corn, soybeans, and wheat in the world at this point for export, so it'll be interesting there.
• 5:58
  SPEAKER_01: Uh Brazil, we've had some weather concerns there getting a little bit dry towards the beginning of their soybean planning period.
• 6:05
  SPEAKER_01: It'll be interesting.
• 6:06
  SPEAKER_01: Um you're seeing some currency shakeups there as well, where uh like coffee, for example, they had to dump a bunch of coffee long positions this week because of their currency dropped really hard.
• 6:17
  SPEAKER_01: So like maybe their producers won't sell a lot of soybeans and kind of hold those as currency like they've done in the past.
• 6:23
  SPEAKER_01: So that's something to watch going forward on the soybean market too.
• 6:26
  SPEAKER_01: And then obviously uh we've got some silage getting chopped here soon, I think, in this part of the world.
• 6:31
  SPEAKER_01: We're not that far away from soybean harvest really.
• 6:34
  SPEAKER_01: Uh you know, uh a month here, we're gonna be smack dab in the middle of it.
• 6:37
  SPEAKER_01: So we'll start to get some early yield reports out there too.
• 6:40
  SPEAKER_00: Absolutely.
• 6:41
  SPEAKER_00: Absolutely.
• 6:42
  SPEAKER_01: What else are you looking at?
• 6:43
  SPEAKER_00: Well, uh as we get close to harvest here, as you're mentioning, uh, Mike, and and I I do think it's important for us to to talk through uh what risk management strategies that we should be considering today.
• 6:57
  SPEAKER_00: And and uh as we all know, the the the the commodity run cycle here the last three or four years is unfortunately behind us.
• 7:06
  SPEAKER_00: But um and now we need to revert back to and start to look again at some of the details that that helped us uh survive and thrive in a flatter sort of a market.
• 7:17
  SPEAKER_00: And so um would encourage everyone and appreciate the opportunity to interact with folks on these opportunities, but you know, you gotta you gotta manage you gotta manage spreads, you gotta manage basis, you gotta manage your flat price opportunities.
• 7:31
  SPEAKER_00: And and as we collect more information here, as we get closer to harvest and and uh and you start to learn some actual yields and production on your farm, now we can start to make some better merchandising and basis management and storage allocation decisions.
• 7:47
  SPEAKER_00: And and uh, you know, we could talk for hours about that, but what we'd on this podcast, Mike, but what we'd prefer to do is sit down with you guys individually and and talk about what makes the most sense for your business.
• 7:58
  SPEAKER_00: And and those decisions, uh, you know, they're they're sense, uh they're they're penny decisions that can add up to dollars.
• 8:06
  SPEAKER_00: And uh, you know, they're not uh they're not big movers like uh again uh a more volatile, more lucrative market can offer today, but in today's environment, uh uh critical to uh to to success.
• 8:18
  SPEAKER_00: And and we've been in this stage of the cycle before.
• 8:21
  SPEAKER_00: Uh this isn't uh this is how these things go, and and uh and so the opportunity to to uh kind of think through those things and and and and make some good decisions for your operations are are right in front of us and and uh we encourage everyone to take the time to do that.
• 8:37
  SPEAKER_01: One of my favorite questions I asked people this week, Pat, was what do you wish you would have done from 2014 to 2020 with your marketing plan?
• 8:46
  SPEAKER_01: So something to think about, I think, and uh I'd love to chat with people about that.
• 8:50
  SPEAKER_00: Sounds good.
• 8:51
  SPEAKER_01: All right, well, thank you for your time today, Pat.
• 8:53
  SPEAKER_01: Thank you.
• 8:53
  SPEAKER_01: And thank you to all our listeners.
• 8:55
  SPEAKER_01: Please reach out to us at professional eggmarketing.com.
• 8:59
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 9:04
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 9:10
  SPEAKER_01: See you next time.