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Soy Selloff and Corn Exports · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Egg Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the egg markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_01: Well, hello, everybody.
• 0:25
  SPEAKER_01: It's uh Lucas Peters here from Professional Egg Marketing filling in for Mike Minor, and we got uh Jordan Wrecker here joining us for the podcast today.
• 0:32
  SPEAKER_01: How's it going, Jordan?
• 0:34
  SPEAKER_02: Good.
• 0:34
  SPEAKER_02: How are you, Luke?
• 0:35
  SPEAKER_01: Well, it's going pretty well today.
• 0:37
  SPEAKER_01: Uh so we got Mike off, we're filling in, and it's a Friday, so that's always good.
• 0:42
  SPEAKER_01: And by gosh, the commodities were mostly green today, so that's always good as well.
• 0:47
  SPEAKER_01: Yeah, finally, right?
• 0:48
  SPEAKER_01: Finally, uh on Friday.
• 0:50
  SPEAKER_01: We ended a little uh a little higher here.
• 0:52
  SPEAKER_01: Corn, uh, what do we have?
• 0:53
  SPEAKER_01: Uh 11 up on the May, uh new crop, December up eight, uh soybeans, uh, May beans up eight, new crop up 14.
• 1:02
  SPEAKER_01: Wheat was up quite a bit.
• 1:04
  SPEAKER_01: Uh what we had, Kansas City wheat up 26, or excuse me, 28, Chicago wheat up 26, Minneapolis wheat up a little bit.
• 1:11
  SPEAKER_01: What caused the big jump in uh wheat today, uh Jordan?
• 1:14
  SPEAKER_02: Yeah, so uh a little bit higher there on wheat, up uh you know, over a quarter there on the Chicago wheat um talk was that uh you know wheat kind of getting cheap enough uh that it wasn't uh you know as profitable as it had been for um Russia and pu uh Putin.
• 1:30
  SPEAKER_02: So um coming out and kind of saying that maybe they would halt uh wheat exports is what uh pushed uh that wheat market higher and helped uh corn kind of follow that a little bit.
• 1:39
  SPEAKER_01: Yep.
• 1:40
  SPEAKER_01: That's you got one going and the rest followed, and boy, even the livestock was uh up for the most part.
• 1:45
  SPEAKER_01: We had cattle back up uh 50 cents to almost a dollar, and even even lean hogs were higher uh today, Jordan.
• 1:52
  SPEAKER_01: We haven't been able to say that very often, have we?
• 1:54
  SPEAKER_02: No, it's uh it's been a while on those hogs, but yeah, June up uh 205, 91, 95, so just short of 92 there, finally on that June market.
• 2:02
  SPEAKER_02: Did see a little bit higher cutout uh midday, so hopefully we can kind of turn this thing around into next week, right?
• 2:08
  SPEAKER_01: Well, that would be uh good for everybody if we could finally turn this thing around.
• 2:12
  SPEAKER_01: Uh so on the podcast today, kind of the two main topics we want to talk about.
• 2:16
  SPEAKER_01: Uh we're gonna focus on some corn and soybean news, kind of going in the opposite directions.
• 2:21
  SPEAKER_01: We're some positive news on corn uh out of the exports that we're seeing from China, and and then we'll maybe take a look at what the heck's going on in the soybean market.
• 2:30
  SPEAKER_01: So, Jordan, let's start off uh with corn exports and kind of been on a tear, haven't we?
• 2:37
  SPEAKER_02: Yeah, so um, you know, the export side has been you know looking pretty bright on the corn.
• 2:42
  SPEAKER_02: So, you know, beginning of March there, we took you know 90 cents off that uh May board and pushed uh corn down below 620 to 617 or 615 somewhere in there.
• 2:52
  SPEAKER_02: Um and since then China's kind of been buying and um you know they've made some rather large purchases last week and kept right on buying this week.
• 3:00
  SPEAKER_02: So eight out of the past nine days, we've seen China come in and uh make a flash sale there.
• 3:06
  SPEAKER_02: Um so pretty pretty positive from the demand demand side, especially uh considering you know we came out of the March uh WASDA report and saw the USDA lower exports 75 million bushels because we were running behind you know 250 million bushels at that point is what we kind of seen.
• 3:24
  SPEAKER_02: You know, now um you know, looking at looking back after uh you know over 120 million bushels there last week, we're getting close to you know being back on track now is where we're kind of at.
• 3:35
  SPEAKER_02: Um so it's uh pretty positive, right?
• 3:38
  SPEAKER_01: Yeah, that big trend of we aren't gonna hit export numbers and then all of a sudden we can fix it in uh almost a week.
• 3:43
  SPEAKER_01: And you know, it's interesting.
• 3:44
  SPEAKER_01: I was seeing something on Twitter, I don't Karen Braun or somebody put it out that the sales to China this week are or over the last few days have been historic, right?
• 3:54
  SPEAKER_01: Like it's historically high.
• 3:55
  SPEAKER_01: This is kind of a big deal.
• 3:57
  SPEAKER_02: Yes, it uh very much is.
• 3:58
  SPEAKER_02: So, you know, kind of looking at you know last year and the five-year average, you know, this is a time of year where they do tend to come in and buy a little bit, um, and we we see good weeks, right?
• 4:10
  SPEAKER_02: But you know, a good week is a hundred million, is um, you know, something that's kind of happened, you know, beginning of January.
• 4:17
  SPEAKER_02: Um so when you're pushing 120, it's historic.
• 4:21
  SPEAKER_02: It's a it's a really good uh you know export uh push there.
• 4:25
  SPEAKER_02: Um but we needed it, right?
• 4:26
  SPEAKER_02: You know, this pretty much you know gets us on track, but still a little bit behind.
• 4:30
  SPEAKER_02: So, you know, it's it's not uh you know, hopefully it's not just shutting up shutting off here.
• 4:36
  SPEAKER_02: You know, you're gonna need to continue to see that uh grow.
• 4:38
  SPEAKER_01: And you're probably that's why you've seen most of the market response be in the near term, right?
• 4:44
  SPEAKER_01: The May contract is shot up, uh uh, but the new crap really didn't respond, right?
• 4:49
  SPEAKER_01: We're still buying old crop corn.
• 4:51
  SPEAKER_02: Yep, exactly.
• 4:52
  SPEAKER_02: Um, you know, you look at the May July spread and that has widened out significantly.
• 4:57
  SPEAKER_02: You know, it was uh down around uh you know a ten to eleven cent inverse, and this week it pushed to twenty-five.
• 5:04
  SPEAKER_02: So the market is wanting the corn now, right?
• 5:06
  SPEAKER_02: Um and you we're seeing that in basis today, too.
• 5:09
  SPEAKER_02: You know, basis is driving that.
• 5:11
  SPEAKER_02: Um we've you know sold the corn market off 60 cents, you know, it's rallied now back to 645, um 30 cents off its lows.
• 5:20
  SPEAKER_02: And also I would argue that you've probably seen a 20 cent push here in southwest Minnesota on basis, is what we've kind of seen.
• 5:27
  SPEAKER_02: So, you know, you're getting back into that 680, 690, maybe in some areas in northwest Iowa closer to$7 bill, is what you're kind of seeing.
• 5:34
  SPEAKER_02: So you're getting a little bit of a second shot at$7 corn for for the grain guy today.
• 5:39
  SPEAKER_01: Yeah, that's actually a really good point.
• 5:41
  SPEAKER_01: Of you know, futures markets have gone down, it kind of makes you f feel uh not real excited about selling corn.
• 5:47
  SPEAKER_01: Uh, but if you look at the basis and the opportunity here today, uh hopefully it's not your last chance, but it might be leaning towards your last chance to sell seven dollar corn.
• 5:56
  SPEAKER_01: Uh might be worth battling the mud and the snow and everything else to try to get some of that corn sold.
• 6:02
  SPEAKER_02: Yep.
• 6:02
  SPEAKER_02: Because as soon as as soon as uh you know the mill or these ethanol plants do, you know, get bought up um, you know, kind of through that May-June time frame, um, we're probably gonna see them starting to shift uh bids to the July and could be relatively quick.
• 6:16
  SPEAKER_02: So, you know, a 20 cent inverse when you s uh switch to the July, you could lose that pretty quick.
• 6:21
  SPEAKER_02: And you know, really if you if you uh rally this corn board much um and you do start to see some farmer selling, I would argue that basis is probably gonna work its way back out.
• 6:30
  SPEAKER_01: Yeah, that's it's probably the take-home point of if you got some corn to move, um, you better do your homework, find out who needs it, who's bidding off the May, check out your basis levels and get something done.
• 6:42
  SPEAKER_01: Um, rather than just like say you wait another week or two and all of a sudden then we we fill our needs, we flip to July, we lose the opportunity, and all of a sudden we can't sell seven dollar corn anymore.
• 6:53
  SPEAKER_02: Exactly.
• 6:54
  SPEAKER_02: That's that's that's a that's exactly right.
• 6:56
  SPEAKER_02: That's kind of the take home.
• 6:57
  SPEAKER_02: Now soybeans you kind of flip to that and it's the exact opposite.
• 7:00
  SPEAKER_01: That's not that's not a good story at all, Jordan.
• 7:02
  SPEAKER_02: No, no.
• 7:04
  SPEAKER_02: Um, you know, that soybean market, I was uh, you know, kind of writing up the grain summary here this afternoon and doing some math.
• 7:10
  SPEAKER_02: Um so we set the March uh, you know, just in the month of March, the high for uh May soybeans was 1538 on March 6th.
• 7:19
  SPEAKER_02: Today we set a low at 1405.
• 7:21
  SPEAKER_02: That's a dollar thirty-three we've lost off that March contract.
• 7:24
  SPEAKER_02: It's it's been brutal.
• 7:26
  SPEAKER_02: And on the uh new crop side, it's been even worse.
• 7:29
  SPEAKER_02: Um 1386 the high that day and the low today at twelve forty-seven.
• 7:33
  SPEAKER_02: So a dollar thirty-nine we've lost off that soybean market.
• 7:36
  SPEAKER_01: Dollar thirty-nine off a new crop beans.
• 7:39
  SPEAKER_01: Uh in a time of the year when we don't know how many acres we're gonna have, we don't know what the weather's gonna be.
• 7:45
  SPEAKER_01: Uh that's I mean, that's just uh when you put the numbers to it, it really doesn't make a soybean producer feel very good, Jordan.
• 7:53
  SPEAKER_01: Thanks, thanks for ruining my Friday there.
• 7:55
  SPEAKER_01: But yeah, profitability on beans was tight before, and now we've taken that much off in in a short period of time.
• 8:02
  SPEAKER_01: Uh that really does hit a guy's pocketbook pretty hard.
• 8:05
  SPEAKER_02: Yes, it does.
• 8:06
  SPEAKER_02: So, you know, a lot of you know, a couple different things that uh kind of added to the soybean market this week, right?
• 8:11
  SPEAKER_02: Um, you know, we've we've talked a couple different times about how you know this banking crisis is adding turmoil and commodities don't like turmoil, right?
• 8:19
  SPEAKER_02: So, you know, I think it all kind of snowballed on onto that, but you know, the conversation has flipped from the small Argentina crop conversation to well, wow, this South American crop as a whole is huge.
• 8:35
  SPEAKER_02: It's a record, right?
• 8:36
  SPEAKER_02: And they're starting to, you know, really come along, really start harvesting there in Brazil.
• 8:40
  SPEAKER_02: Um, and they don't have a lot of storage, right?
• 8:42
  SPEAKER_02: So they're selling straight off the combine, and that's you know, adding selling pressure to this bean market.
• 8:47
  SPEAKER_02: And, you know, even uh seeing uh last night uh three cargoes possibly working into the U.S.
• 8:53
  SPEAKER_02: So maybe even importing a little bit of beans from from South America is kind of pushing uh pushing this market lower, which by the way, was lower 13 sessions in a row.
• 9:05
  SPEAKER_01: You know, remember uh wasn't it last year when that corn market was up for a lot of days in a row?
• 9:10
  SPEAKER_01: That's way more fun to talk about than uh the soybean market being down what 13 straight days until today.
• 9:17
  SPEAKER_02: Until today.
• 9:18
  SPEAKER_02: Today was the first uh green day in 14 sessions, so we uh broke a 50-year-old record.
• 9:23
  SPEAKER_01: Well, hopefully we don't break that very often, but uh no, it's uh there's been a lot of pressure on that soybean market and the and the taking that new crop value down uh as we kind of look ahead to next week, uh Prospective Plantings report coming out next Friday from USDA.
• 9:42
  SPEAKER_01: Uh of course that corn soybean ratio comes into play a little bit, right?
• 9:46
  SPEAKER_01: On how many acres are we gonna plant, corn versus beans.
• 9:50
  SPEAKER_01: Um, you know, a lot of the estimates and you know USDA outlook has been shaken at that ninety, ninety-one million acres of corn, eighty-seven, eighty-eight million acres of beans, right?
• 10:01
  SPEAKER_02: Yeah, so you know just what you said, right?
• 10:03
  SPEAKER_02: That corn to soybean ratio is pretty interesting.
• 10:05
  SPEAKER_02: You know, at the beginning of March, when we were setting these highs, this corn to soybean ratio was 2.45, 2.46, and all we've done is seen it, you know, pull back down to this 2.2 range.
• 10:17
  SPEAKER_02: Um, so at a time frame where fertilizer has gotten cheaper.
• 10:22
  SPEAKER_02: So new crop corn maybe lost 20-30 cents after today from its highs and beans losing a buck forty.
• 10:29
  SPEAKER_02: Um, fertilizer getting cheaper, that uh that doesn't bode well for more bean acres, does it?
• 10:34
  SPEAKER_02: No, it's with a very tight balance sheet.
• 10:36
  SPEAKER_01: You got a tight balance sheet, you got uh say a lot of I mean uh you you look at the support renewable diesel has, the amount of crush plants that are proposed being built or under construction.
• 10:48
  SPEAKER_01: The bean story long term is a positive one.
• 10:50
  SPEAKER_01: Uh correct.
• 10:51
  SPEAKER_01: But right now it just boy, it's gonna take something to get out of this funk it's in.
• 10:56
  SPEAKER_01: Um so maybe we get a little surprise next week.
• 10:58
  SPEAKER_01: Who knows what happens uh uh to try to spur some some momentum in the market.
• 11:03
  SPEAKER_02: Yep, and that might be what we just need, right?
• 11:05
  SPEAKER_02: We might need to flip this calendar over from March to April um and see, you know, some some new stuff, right?
• 11:11
  SPEAKER_02: I mean, we're coming up on the end of the quarter.
• 11:13
  SPEAKER_02: You got a stocks and acreage report coming up there at the end of the month.
• 11:17
  SPEAKER_02: Um, you know, just kind of I I feel like everything is kind of feeding on itself and everything is negative, right?
• 11:22
  SPEAKER_02: You're just pulling at the negative strings right now.
• 11:24
  SPEAKER_01: So we need we need something to jumpstart, some poor piece of news people and grab onto and and maybe turn the story positive.
• 11:31
  SPEAKER_02: Correct.
• 11:32
  SPEAKER_02: Yeah, and you know, that uh survey for the for the stocks nature acreage report is usually done by March, right?
• 11:39
  SPEAKER_02: But um, you know, if it shows a little less uh bean acres there, that kind of might be what we need.
• 11:44
  SPEAKER_01: Yeah, that's uh I was just reviewing that.
• 11:46
  SPEAKER_01: The the survey is the first two weeks of March.
• 11:49
  SPEAKER_01: So that might be kind of uh odd timing of because during that time period that ratio probably favored uh well we probably favored we favored beans at the beginning of March.
• 12:01
  SPEAKER_01: Yeah, that's what I was thinking.
• 12:02
  SPEAKER_01: So so when you're doing that survey, potential is there maybe we got a little bit of a false reading versus now uh we can always throw stones at a USD report, that's pretty easy to do.
• 12:13
  SPEAKER_01: But um, yeah, something that uh we'll keep our eye on uh going into next week.
• 12:18
  SPEAKER_01: Anything else uh that we should watch out for, Jordan?
• 12:21
  SPEAKER_02: Yeah, I mean uh we gotta keep an eye on these uh you know China purchases on corn.
• 12:26
  SPEAKER_02: Um, you know, if we can continue to see them there next week, uh, you know, we might uh uh be ahead a little bit on those uh those exports.
• 12:34
  SPEAKER_02: Um and then always uh you know, we gotta melt uh melt some more snow here in this weekend, right?
• 12:39
  SPEAKER_02: You know, try to get rid of that historic snowpack.
• 12:41
  SPEAKER_01: Yep.
• 12:42
  SPEAKER_01: That's yeah, we do have a historic snowpack uh out there and uh yeah, about 12, 24 inches across most of Minnesota, South Dakota, North Dakota.
• 12:51
  SPEAKER_01: Uh for this time of year, that's uh that's pretty rare.
• 12:54
  SPEAKER_01: Luckily today uh we got some pretty decent weather.
• 12:57
  SPEAKER_01: It's I think it's almost 40 degrees outside, at least uh while we're recording this.
• 13:02
  SPEAKER_01: Uh so we can melt a little bit of that, make everybody uh feel a little bit better, and ending the Friday on a green screen is always good as well, right?
• 13:10
  SPEAKER_02: Yes, and that is correct.
• 13:12
  SPEAKER_01: Well, sounds good.
• 13:13
  SPEAKER_01: Uh, thanks for uh listening in and uh just joining us, Jordan, and and have a good weekend.
• 13:18
  SPEAKER_00: And thank you to all our listeners.
• 13:19
  SPEAKER_00: Please reach out to us at professionaleggmarketing.com.
• 13:23
  SPEAKER_00: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 13:28
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 13:34
  SPEAKER_00: See you next time.