Latest / AG Bull / Wiesemeyer's Perspectives | USDA Corn Conundrum

Transcript

Wiesemeyer's Perspectives | USDA Corn Conundrum · AG Bull

• 0:10
  SPEAKER_00: Welcome back, everybody.
• 0:11
  SPEAKER_00: Tommy Grossaffi, Ag Bull, Media Ag Bull Trading Company from Nashville, Tennessee.
• 0:15
  SPEAKER_00: Well, we all have hopes and dreams, and it looks like the USDA changed some of those.
• 0:20
  SPEAKER_00: Although you may think the corn market had a bad day, one of the great things about doing a weekly show is we look at how did it do for the week.
• 0:28
  SPEAKER_00: And I think by the end of this show, you're going to say those guys put a spot, a positive spin on some really negative stuff.
• 0:36
  SPEAKER_00: Before you go throwing in the tall on the great bull market of 2026, cool your jets, grab a drink, and enjoy the show.
• 1:28
  SPEAKER_00: Let's bring them in.
• 1:29
  SPEAKER_00: Jim, I don't even know.
• 1:31
  SPEAKER_00: I'm going to put a lot of pressure on you because you really did some deep dives.
• 1:34
  SPEAKER_00: And folks, if you didn't catch it, Jim already did some releases here on Saturday and Sunday explaining these USDA numbers.
• 1:42
  SPEAKER_00: But before we do that, let's do what you love to do.
• 1:45
  SPEAKER_00: Let's talk about what we're going to talk about.
• 1:48
  SPEAKER_00: And I really think by the end of the show, because I had a good practice run with the one and only Mr.
• 1:53
  SPEAKER_00: Davis Michelson on Friday.
• 1:56
  SPEAKER_00: And we went longer than you and I go.
• 1:58
  SPEAKER_00: We went an hour and two minutes.
• 1:59
  SPEAKER_00: We I think we broke an egg bowl record.
• 2:02
  SPEAKER_00: Let's talk about what we're going to talk about, and then let's get into it.
• 2:14
  SPEAKER_01: And they focused on Nebraska and we'll say the reasons why on that.
• 2:19
  SPEAKER_01: But we're going to cover the markets, uh, soybean meal, the biggest winner, and cattle this past week.
• 2:24
  SPEAKER_01: We'll go through that.
• 2:26
  SPEAKER_01: Of course, the USDA reports what it means for corn.
• 2:29
  SPEAKER_01: Soybeans came out okay, believe it or not.
• 2:32
  SPEAKER_01: Crop condition debate.
• 2:34
  SPEAKER_01: Do those weekly crop conditions really equate to what the crop's going to be?
• 2:39
  SPEAKER_01: The answer?
• 2:40
  SPEAKER_01: No, but tell that to an ag journalist.
• 2:43
  SPEAKER_01: They'll keep on writing about it.
• 2:45
  SPEAKER_01: Harvest, we're going to talk about that because it's resuming.
• 2:48
  SPEAKER_01: Not in all places in the upper Midwest, because Iowa and parts of Illinois on Friday got deluged with more with more rain, Tommy.
• 2:58
  SPEAKER_01: And they're going to have a few more days, probably a dryout.
• 3:01
  SPEAKER_01: Then we're, other than the crop production report, the biggest story in ag has been diesel.
• 3:07
  SPEAKER_01: And we had lots of information on that from late Friday, with Trump announcing a big deal with Russia on both supply and hopefully price.
• 3:17
  SPEAKER_01: But then also over the weekend, we had some developments on the diesel front with Canada.
• 3:24
  SPEAKER_01: Positive news.
• 3:25
  SPEAKER_01: We'll we'll update that information and reason why we like to do this whenever possible on a Sunday.
• 3:32
  SPEAKER_01: Died diesel.
• 3:33
  SPEAKER_01: That has been the news, and we're still awaiting the Treasury and IRS answers to some key questions.
• 3:40
  SPEAKER_01: The FOMC minutes are going to be coming out October 27th and 28.
• 3:45
  SPEAKER_01: We'll have perspective on that.
• 3:47
  SPEAKER_01: With less than 30 days to go before November 30th elections, we're going to give a snapshot of uh what the so-called election gurus are saying, but it's not good news for Republicans if they're right.
• 4:00
  SPEAKER_01: You always have to talk about U.S.
• 4:02
  SPEAKER_01: Iran war.
• 4:03
  SPEAKER_01: Trump is at it again, saying initially that he didn't want to bomb them again because uh talks are going on, but then he comes right back and says, Well, the Houthis are starting to attack an American in the Saudi Arabia Airport, was killed, by the way.
• 4:20
  SPEAKER_01: And so we're back into the Echesketch Iran trade policy.
• 4:24
  SPEAKER_01: Hurricane Azasius, it hit directly or struck near Destin, Florida.
• 4:30
  SPEAKER_01: Ag impacts, cotton, and peanuts.
• 4:32
  SPEAKER_01: We'll we'll discuss that.
• 4:34
  SPEAKER_01: We had a big announcement from USDA this past week on ARC and PLC payments, totaling, they said,$13.8 billion.
• 4:43
  SPEAKER_01: But when you factor out the 5.7% sequestration rate and payment caps, it's closer to$13.1 billion.
• 4:52
  SPEAKER_01: We'll go through the specifics on that.
• 4:55
  SPEAKER_01: USDA and the Federal Trade Commission had had an announcement on right to repair.
• 5:00
  SPEAKER_01: Well, just bottom line that one.
• 5:02
  SPEAKER_01: Ag trade data came out, wasn't good news uh for ag exports.
• 5:07
  SPEAKER_01: We went the other way, wider trade deficit, and that's where we ended, but we still have positive news as we always do at the end of the program.
• 5:17
  SPEAKER_00: And not fake news.
• 5:18
  SPEAKER_00: So you uh you talked a little bit about finger pointing.
• 5:23
  SPEAKER_00: And I went back, let's go, you and I on the screen.
• 5:27
  SPEAKER_00: I went back and watched some old videos of just I searched seven dollar corn, six fifty corn, six dollar corn.
• 5:33
  SPEAKER_00: And when people put that in their headlines, I mean, there are brokers and analysts out there that and you and I had said on this show and several other shows, before we get to six, we got to get back up and through 550 because we spent weeks and weeks and weeks at that 525 level, and everyone's like six, six fifty, as if downside never existed.
• 5:53
  SPEAKER_00: And I I find that interesting because it it you don't make up a penny on a bushel of corn, beans, or wheat until you sell it.
• 6:02
  SPEAKER_00: And I feel like people disregarded the the risk part of this, and also in this new world of you know, podcasting headlines, so many people can get their name out there, and I feel like there was some clickbait or something.
• 6:16
  SPEAKER_00: But I want to get your opinion about all the folks who went on the Pro Farmer Crop Tour and other crop tours.
• 6:24
  SPEAKER_00: They spent hundreds of thousands of dollars of their own money to go on that tour, find out what they found out.
• 6:30
  SPEAKER_00: If you were someone and you took a team of people out, would you do it again next year, Jim?
• 6:35
  SPEAKER_01: Yeah, I wouldn't just let one year, but uh maybe we'll have to see the final.
• 6:39
  SPEAKER_01: That's what they'll always say.
• 6:41
  SPEAKER_01: We're gonna have to see the final because that wasn't just the next crop report, it was the final.
• 6:46
  SPEAKER_01: So I don't think that uh crop tour is gonna give up quite yet.
• 6:51
  SPEAKER_01: But I want to go back to what you said initially.
• 6:54
  SPEAKER_01: I think the market has been talking but on corn that we weren't getting the rallies we normally would with some of the quality issues and things like that.
• 7:03
  SPEAKER_01: And now we know why.
• 7:05
  SPEAKER_01: Maybe that crop is bigger than what we thought.
• 7:08
  SPEAKER_01: And maybe the September corn production report from USDA was too low to begin with.
• 7:13
  SPEAKER_01: So the baseline maybe was low, Tommy.
• 7:16
  SPEAKER_01: Uh, those are all open questions on that, but it didn't take a nanosecond before the people who were wrong about that estimate.
• 7:24
  SPEAKER_01: I will tell you, Stone X was pretty close.
• 7:27
  SPEAKER_01: So I'll give them kudos for that.
• 7:28
  SPEAKER_01: They were very close.
• 7:29
  SPEAKER_01: Yeah, yes, hats off.
• 7:31
  SPEAKER_01: But the naysayer saying, hey, wait a minute, look at Nebraska, and we're going to detail some of the reasons on that.
• 7:37
  SPEAKER_01: But so, so they're they're they're looking on that.
• 7:40
  SPEAKER_01: In fact, we may want to go to Nebraska right away.
• 7:44
  SPEAKER_00: What they're what they're looking out for is I just tell our viewers and listeners that Davis Michelson on Monday will have on Mike Castle from Stone X, and he's been one of our more popular videos.
• 7:57
  SPEAKER_00: So, Egg Squawk in the afternoon with Davis will have a representative from Stone X, and it'll be really neat to see how they digest the numbers.
• 8:06
  SPEAKER_01: I know Davis, I know Davis will asking the pertinent questions, but the one I want is to ask him, what did you see, Stone X, that many others did not see in that October survey?
• 8:18
  SPEAKER_00: Very good.
• 8:18
  SPEAKER_01: And let them talk.
• 8:19
  SPEAKER_00: Did you want to talk about Nebraska Real?
• 8:21
  SPEAKER_01: Yeah, the October production report has sharpened questions about Nebraska corn, where a statewide ear count increase rests on an implied irrigated weighting of just 10% in September.
• 8:36
  SPEAKER_01: Now, normally it's at the 50% or so mark.
• 8:40
  SPEAKER_01: So a spicy quantifiable anomaly exists that NAS has yet to explain.
• 8:47
  SPEAKER_01: And so I do agree that there are legitimate questions about Nebraska's data.
• 8:54
  SPEAKER_01: And I think for transparency purposes alone, NAS needs to comment on this.
• 9:00
  SPEAKER_01: I cannot confirm that it was as a reason for it was a reason because they didn't have enough people, Tommy.
• 9:07
  SPEAKER_01: I just have not confirmed that.
• 9:09
  SPEAKER_01: I want NAS to talk about it, so let's see if they do.
• 9:12
  SPEAKER_01: Okay.
• 9:13
  SPEAKER_01: But as far as the USDA, well, first let's go the markets.
• 9:16
  SPEAKER_01: We have some some charts there, right?
• 9:18
  SPEAKER_00: Yeah, absolutely.
• 9:19
  SPEAKER_00: And I just think people right off watching this video are gonna say, well, what do you guys think?
• 9:24
  SPEAKER_00: Or I can tell you full blown, I went in the report in my personal trading account 100% flat, but I wanted to be bullish corn, but I also wanted to be able to buy corn if it dipped.
• 9:38
  SPEAKER_00: Well, it dipped, and I was able to buy corn, but for all the reasons that I didn't think.
• 9:43
  SPEAKER_00: I also thought if corn was down big, beans would be down big, and beans closed higher in the day.
• 9:49
  SPEAKER_00: So if I had would have listed everything I thought on that report, about the opposite of everything happened, and which brings me to my point.
• 9:57
  SPEAKER_00: If I've done this for 30 some years and I really have experience doing it, why are we trying so hard to figure out these numbers when, regardless of what some of the smartest minds in the industry tried to figure out, were dead wrong.
• 10:13
  SPEAKER_00: I mean, there were people I think, I think I know some people might have gone broke on this report, and there's some cocky young brokers, analysts, traders who just were so sure that they were wrong.
• 10:26
  SPEAKER_00: These are like the same people who knew the Titanic couldn't sink.
• 10:29
  SPEAKER_00: All right.
• 10:29
  SPEAKER_01: Yeah, true.
• 10:30
  SPEAKER_01: Well, you know, a lesson that I've learned over the decades is from both weather forecasters, election year forecasters, and uh commodity forecasters.
• 10:41
  SPEAKER_01: If you're wrong, what are the reasons why you could be wrong?
• 10:46
  SPEAKER_01: And if you did that on a piece of paper before the information comes out, you'll be a lot more knowledgeable because then you won't be totally blindsided, like, oh, that did happen.
• 10:57
  SPEAKER_01: We we did get more uh uh you know production, and this is why.
• 11:03
  SPEAKER_01: Uh just like elections.
• 11:04
  SPEAKER_01: What what elections did I not did I miss and why?
• 11:08
  SPEAKER_01: And the weather forecast, it's usually what front did I not see coming from the West that obliterated the short-term forecast.
• 11:17
  SPEAKER_01: We had an excellent example of that Friday.
• 11:19
  SPEAKER_01: Friday morning, you know, I put out a daily weather briefing, you know, based on on your weather forecaster, and they do a good job, but all of a sudden, avalanche of rain hit part a lot of Iowa and portions of Illinois.
• 11:35
  SPEAKER_01: I had to do an update on the daily weather briefing.
• 11:40
  SPEAKER_01: That's how fast things can can change.
• 11:43
  SPEAKER_01: You know, a front came through and bingo.
• 11:46
  SPEAKER_01: So, yeah, you have to be challengers of change in all sorts of life and definitely markets.
• 11:51
  SPEAKER_01: But let's go through the market tables, right?
• 11:53
  SPEAKER_00: Before we get in the markets, Jim, real quick, and then we'll get flying through.
• 11:57
  SPEAKER_00: It is 525 on Sunday.
• 12:00
  SPEAKER_00: SP's up 10, NASIC's up 71, crude oil's up 75, bond markets calm, gold and silver pretty calm.
• 12:07
  SPEAKER_00: I just wanted to let you know in a time frame reference where we are upon filming this.
• 12:12
  SPEAKER_00: Let's go into the markets.
• 12:14
  SPEAKER_01: Well, look at the first the the the red, the weekly change.
• 12:18
  SPEAKER_01: Look at corn down what almost 20 cents, 18 cents.
• 12:22
  SPEAKER_01: Look at soybean oil, had a bad week.
• 12:24
  SPEAKER_01: They basically gave up what they on the pluses that they had the wheat before.
• 12:28
  SPEAKER_01: Wheat is following uh corn primarily, but then they they just had a bad week.
• 12:33
  SPEAKER_01: But look at cotton up 166 points because they saw this uh hurricane with especially with open bowls affecting the uh quality of cotton, Tommy.
• 12:44
  SPEAKER_01: And then look at cattle.
• 12:46
  SPEAKER_01: Uh wow, a bigger corn number means a higher feeder cattle prices, right?
• 12:51
  SPEAKER_01: And that's what we saw.
• 12:52
  SPEAKER_01: That's what we saw.
• 12:54
  SPEAKER_00: That board doesn't look as ugly as I felt sad going home on Friday, just full disclosure.
• 13:00
  SPEAKER_00: Like down 18 cents in corn, it's not the end of the world.
• 13:03
  SPEAKER_00: It had to be the couple prior weeks before that of just constant down, down, down, which is, you know, Jim, the whole time we've been doing the show, and the whole time I talked to clients as a trader and a broker, I've been asking myself, how in the hell are the funds going to be a record long coming into harvest and get away with it?
• 13:21
  SPEAKER_00: Now we know the answer.
• 13:22
  SPEAKER_00: They're not, they didn't get away with it.
• 13:24
  SPEAKER_01: Yeah, and that's why you saw some of that reaction Friday, and you could see some continued action on on Tuesday, on Monday night.
• 13:33
  SPEAKER_01: We are open, yeah.
• 13:34
  SPEAKER_01: We are open, even though the government is on holiday.
• 13:37
  SPEAKER_00: Yeah, if you owe money, you won't be able to wire it in, but somebody's got to pay, margins are due.
• 13:42
  SPEAKER_00: You'll be on a day two call.
• 13:44
  SPEAKER_00: But yes, I had a client text me then this today.
• 13:46
  SPEAKER_00: He's like, Are the markets open on Monday?
• 13:49
  SPEAKER_00: I said they're open on Sunday, Monday.
• 13:51
  SPEAKER_00: We're trading here, and typically the Board of Trade stays open during harvest in the futures and options and grains.
• 13:57
  SPEAKER_00: When I was a young man, they would close the treasury pit because the Fed was closed.
• 14:02
  SPEAKER_00: And this is a cute story.
• 14:04
  SPEAKER_00: And all the bond traders, there'd be hundreds of bond traders that would drive to work because they didn't know the markets were closed.
• 14:11
  SPEAKER_00: They'd walk in the bond pit, it was closed, and they had full seats at the border trade.
• 14:15
  SPEAKER_00: And they're like, hell with it, I'm gonna go trade corn and beans today.
• 14:17
  SPEAKER_00: And so all of a sudden, on this holiday, you'd see some of the largest bond traders in the world throwing around soybeans.
• 14:24
  SPEAKER_00: And I can just tell you, I've traded bonds in corn and beans.
• 14:27
  SPEAKER_00: They don't trade anything alike, but people like to take risks, wanting to take some risk.
• 14:31
  SPEAKER_00: All right, this is uh a chart I like that you do every week.
• 14:35
  SPEAKER_01: Blow it up, blow it up.
• 14:36
  SPEAKER_01: Do we have a full up there?
• 14:38
  SPEAKER_01: There we go.
• 14:40
  SPEAKER_01: Look at the yeah, corn down 3.6 percent, but look at meal up 5.2 percent.
• 14:45
  SPEAKER_01: Meal was the leading chart, at least in in my dashboard one.
• 14:50
  SPEAKER_01: But look again, feeder cattle, live cattle, good weeks on that.
• 14:54
  SPEAKER_01: Soybeans was still up 1.1% for the week, Tommy.
• 14:57
  SPEAKER_01: That just reflects what you said before.
• 15:00
  SPEAKER_01: So, yeah, it could have been worse for corn and and wheat, but it wasn't because they had an early week buildup where uh either uh traders were getting even or still biased to the long side.
• 15:13
  SPEAKER_01: But so we still could have some follow-through on uh on Monday.
• 15:18
  SPEAKER_00: Absolutely.
• 15:19
  SPEAKER_00: All right, let's get in the show here.
• 15:20
  SPEAKER_01: We have as far as the reports itself, corn delivered the biggest surprise, and you've got a chart too.
• 15:26
  SPEAKER_01: USDA raised yield raised yields 2.7 bushels to 181.2 bushels per acre.
• 15:34
  SPEAKER_01: That added 234 million bushels to production, where traders were expecting a reduction.
• 15:43
  SPEAKER_01: So that's why the shock projected carry out out, which is so important, increased 282 million bushels to 1.849 billion bushels.
• 15:55
  SPEAKER_01: Now that's over, that's what almost 11% stocks to use ratio, and you need to get it under 10% to get back into that firming market for corn.
• 16:05
  SPEAKER_01: So, so that just means now demand is going to be the focus now to get rid of that additional carryover.
• 16:14
  SPEAKER_01: Soybean supplies also increased, the yield rose 0.3 bushels to 53.1.
• 16:21
  SPEAKER_01: That pushed production to a record, repeat, a record 4.562 billion bushels.
• 16:27
  SPEAKER_01: What were the market implications?
• 16:30
  SPEAKER_01: Larger supplies put more is putting more responsibility on exports, livestock feeding, and biofuel demand to support prices ahead.
• 16:40
  SPEAKER_01: So strong demand can can coexist with falling prices when supply grows faster.
• 16:46
  SPEAKER_01: So so again, we're gonna focus on demand now for the months following.
• 16:50
  SPEAKER_01: And I I raised this as an issue before crop condition debate, the divergence between disappointing condition ratings, and we we saw them weeks going into this last October talk.
• 17:03
  SPEAKER_00: Absolutely.
• 17:04
  SPEAKER_00: We dropped the corn rating three, four percent on Monday.
• 17:06
  SPEAKER_01: Yeah, too many.
• 17:07
  SPEAKER_01: I think ag industry analysts and definitely the mainstream ag journalists uh think that they're really, really important.
• 17:15
  SPEAKER_01: No, they're a subjective analysis to begin with, and they they don't have a strong correlation to yields.
• 17:24
  SPEAKER_01: I don't know how many years it's going to take people to reflect that, but I'll still see some good analysts say they do.
• 17:31
  SPEAKER_01: They don't.
• 17:32
  SPEAKER_01: So weekly ratings describe crop appearance, they are not a direct yield measurement, period.
• 17:40
  SPEAKER_01: Okay.
• 17:41
  SPEAKER_01: So, and what should be the discussion following the October report?
• 17:46
  SPEAKER_01: Are technology and management decisions helping crops withstand stress better than the visual ratings suggest?
• 17:57
  SPEAKER_01: And how should analysts adjust their interpretation?
• 18:00
  SPEAKER_01: Maybe they'll learn from this again.
• 18:02
  SPEAKER_01: We'll see.
• 18:03
  SPEAKER_00: Yeah, you built a real pretty chart on full screen on this bumper crops USDA finds corn.
• 18:08
  SPEAKER_00: Nobody else could find catchy headline there.
• 18:12
  SPEAKER_00: Our good friend Mr.
• 18:13
  SPEAKER_00: Paul Nefer actually used that.
• 18:15
  SPEAKER_00: Paul the Egg CPA.
• 18:16
  SPEAKER_00: All of a sudden, I saw a story come out.
• 18:18
  SPEAKER_00: I'm like, that's that's your story.
• 18:20
  SPEAKER_00: He goes, No, you go, we're Paul and I are friends and we share information.
• 18:23
  SPEAKER_01: We do share.
• 18:24
  SPEAKER_01: In fact, I had good lunch with him out in Napa when we were both at the SEPA crop insurance agents uh convention, uh or meeting, I should say, for multiple days in California last week.
• 18:35
  SPEAKER_01: We had a very, very good time, and then I went later in the week to Kansas City to speak to the uh Fats and Oils uh Association, and they had 650 people there, Tommy.
• 18:47
  SPEAKER_00: And they paid you?
• 18:49
  SPEAKER_01: Yes, they paid me 650 people like for Christ.
• 18:53
  SPEAKER_01: Yeah, I just connected the dots in their industry with what's happening.
• 18:58
  SPEAKER_01: So it was a good crowd, good perspective, things like that.
• 19:02
  SPEAKER_01: So, anyway, that that's the crop production report, right?
• 19:06
  SPEAKER_00: Yeah, do you want to talk about this chart anymore?
• 19:08
  SPEAKER_00: Or you talked all the way through it?
• 19:09
  SPEAKER_01: I think we did talk all the way through it.
• 19:11
  SPEAKER_01: It's carryover, you've got to get lower.
• 19:13
  SPEAKER_01: Soybean carryover stayed what at 350 million bushels.
• 19:16
  SPEAKER_01: So that's why soybeans still has a pretty good demand base, and we're gonna end the program with China, and why that is still gonna be a very good demand going for the months ahead between now and the end of the year, and it's China, really.
• 19:32
  SPEAKER_01: So I I think that there's reasons why soybeans held up quite well.
• 19:37
  SPEAKER_01: Friday, it came back and came back to the city.
• 19:40
  SPEAKER_00: I think uh just briefly talking in my head, I want to say soybeans pulled uh for full full disclosure, real quick.
• 19:46
  SPEAKER_00: I just want to run y'all through this because I I trade, I have software, I think our sponsor T4 software.
• 19:52
  SPEAKER_00: This is if you're wondering how we trade, this is what I use T4 software, your pro trading platform by plus 500.
• 19:59
  SPEAKER_00: I uh that's what we all use here at Nesvik to trade and execute trades.
• 20:04
  SPEAKER_00: All right, full disclosure.
• 20:05
  SPEAKER_00: If you think somebody had the number, then I will say they didn't do a good job of selling it before.
• 20:15
  SPEAKER_00: 10 seconds for the number came out.
• 20:17
  SPEAKER_00: Corn was on the high of the day, up four and a half, five cents.
• 20:20
  SPEAKER_00: Beans were up nine to ten cents overnight.
• 20:23
  SPEAKER_00: China came back from holiday.
• 20:25
  SPEAKER_00: I've been saying during the week to paid subscribers, watch what happens when China comes back.
• 20:30
  SPEAKER_00: You know, a lot of times they go on vacation, they come back if they need stuff, they buy it.
• 20:35
  SPEAKER_00: Thursday night, corn and beans were both down two, three cents.
• 20:38
  SPEAKER_00: And by eight o'clock, eight o'clock at night here, Central Standard Time is eight o'clock in the morning in Asia, and beans went from down three to up 13 before the crop report.
• 20:49
  SPEAKER_00: Beans were up 10, corn was up four, corn went from up four to limit down, down 30 cents.
• 20:57
  SPEAKER_00: Over 50,000 contracts traded in the bottom penny just indeed.
• 21:01
  SPEAKER_00: Jim, I'm hearing from my friends in the industry that corn futures traded 1.2 million contracts.
• 21:07
  SPEAKER_00: I'm not sure if that's a record.
• 21:09
  SPEAKER_00: We'll find out more about that tomorrow.
• 21:11
  SPEAKER_01: But let me, I'm gonna this is a good, good spot for the positive news for soybeans.
• 21:17
  SPEAKER_01: If China's gonna fulfill their commitment to purchase the 25 million metric tons of soybeans this calendar year, they're a little over halfway there, Tommy.
• 21:27
  SPEAKER_01: And I be and I believe my best China watchers tell me they will, okay.
• 21:33
  SPEAKER_01: That because you'll have some more conferences between Xi Jinping, their leader, and President Trump, between now and the end of the year, at least one, maybe two.
• 21:41
  SPEAKER_01: That means they're gonna have to purchase a little over 800,000 tons of soybeans a week, Tommy.
• 21:48
  SPEAKER_01: A week.
• 21:49
  SPEAKER_01: So you're gonna see uh uh more than a few daily sales, the flash sales from USDA.
• 21:56
  SPEAKER_01: And uh, you probably saw Chinese coming in and buying Friday on that dip.
• 22:01
  SPEAKER_01: So we'll either get we won't get a confirmation of that Monday reason.
• 22:05
  SPEAKER_01: USDA isn't there, right?
• 22:08
  SPEAKER_01: So Tuesday should should show a China soybean sale.
• 22:13
  SPEAKER_01: Should.
• 22:14
  SPEAKER_01: I don't have any inside information on that, but you're going to be supported by China between now and the end of the year if they're going to fulfill that commitment.
• 22:24
  SPEAKER_01: 800, about 830,000 tons, I think it works out to be.
• 22:28
  SPEAKER_01: That's a chunk of soybeans every week.
• 22:31
  SPEAKER_01: Every week.
• 22:32
  SPEAKER_00: Yeah, absolutely.
• 22:33
  SPEAKER_00: All right, let's get back to harvest here.
• 22:34
  SPEAKER_00: Number three, harvest will resume.
• 22:36
  SPEAKER_01: Progress remains uneven.
• 22:38
  SPEAKER_01: Those Friday rains that I told you interrupted activity in parts of Iowa, while northeast, northwest Iowa produced, you know, reported improved soybean harvest during the warmer, drier conditions, but corn moisture remained a constraint.
• 22:53
  SPEAKER_01: So you're going to have more than a few mushy soybeans and some sprout heading and all that.
• 23:00
  SPEAKER_01: We've been talking about that.
• 23:02
  SPEAKER_01: Now, how wide of an area that remains to be seen.
• 23:05
  SPEAKER_01: But dry forecast does not immediately make saturated fields trafficable.
• 23:12
  SPEAKER_01: So you're going to have to have a few more days in those wet portions of uh Iowa.
• 23:16
  SPEAKER_01: So producers still need to balance harvest urgencies against rutting and soil compaction.
• 23:23
  SPEAKER_01: I talked to a number of uh uh uh farm wives in California at the crop insurance agents uh meeting, and they said their husbands could not wait to get out into the fields, and sometimes they were, but then they got caught in those mushy fields, and they won't learn that uh there's compaction problems right there.
• 23:46
  SPEAKER_01: So the desire is there, but the but the weather wasn't.
• 23:50
  SPEAKER_01: But that'll change because the weather forecast, subject to change, calls for continued dryness for most of this week, I think.
• 23:58
  SPEAKER_01: But quality deserves attention because following repeated wet wetness, you got to watch soybean deterioration, shattering, sprouting, along with corn stalk strength and lodging.
• 24:11
  SPEAKER_01: So those are risks to monitor and not evidence of widespread losses, but losses in certain areas.
• 24:18
  SPEAKER_01: So that'll be reflected, I think, primarily in the cash market.
• 24:21
  SPEAKER_01: So we're gonna see even more variable cash prices than we usually do, Tommy.
• 24:27
  SPEAKER_00: Yeah, and and the way I would frame it up is regardless of what you think of the report, ultimately the basis is the only one who ever tells the truth.
• 24:34
  SPEAKER_00: The basis doesn't lie.
• 24:37
  SPEAKER_00: And if so we continue, if we continue to get a hot cash market, it can only be for a few reasons.
• 24:43
  SPEAKER_00: Demand's unbelievable believable, or the farmer gets so pissed that they quit selling bushels, which can make the market go up, but in the end, those bushels will eventually get sold.
• 24:55
  SPEAKER_00: So regardless of what you think of the USDA, what you think yield is.
• 24:58
  SPEAKER_00: Also, Jim, the USDA told us what they thought the yield was.
• 25:01
  SPEAKER_00: They didn't say this is the amount of perfect bushels, pretty bushels, this is the colors of beans, the colors of corn.
• 25:09
  SPEAKER_00: They just said this is how much is out there.
• 25:12
  SPEAKER_00: It there's no doubt.
• 25:14
  SPEAKER_00: I don't doubt anyone who says that this crop has some uh quality issues in places.
• 25:19
  SPEAKER_01: So we'll we've always said that the that the basis is the market's confessional booth.
• 25:25
  SPEAKER_00: Okay.
• 25:25
  SPEAKER_00: Speaking of confession, should we go to the next subject?
• 25:27
  SPEAKER_00: Diesel.
• 25:28
  SPEAKER_01: Yeah, but first I want to tell the market implications of harvest, a faster harvest now, because we're gonna speed that harvest.
• 25:34
  SPEAKER_01: There were a lot of soybeans harvested in Iowa.
• 25:37
  SPEAKER_01: I think the crop progress report is gonna show that Tuesday.
• 25:40
  SPEAKER_01: So a faster harvest is going to increase elevator receipts, strain drying capacity, and weaken local bases, especially where storage is tight.
• 25:49
  SPEAKER_01: Now, the bigger concern now is the number of bushels or the cost of harvesting, drying, and preserving their quality.
• 25:58
  SPEAKER_01: I talked to a seed company representatives, and he said, you know, uh it's gonna be hard to find clean 56-pound number two yellow corn in the countryside in this year and well into early 2027.
• 26:15
  SPEAKER_01: That's that's what that means is uh we've got a quality issues throughout the uh corn and soybean belt, period.
• 26:22
  SPEAKER_01: Now we can go through.
• 26:23
  SPEAKER_00: Do you think that'll affect exports or people buy what they'll buy?
• 26:27
  SPEAKER_01: They'll buy what they buy, they'll have just have to buy more on it.
• 26:31
  SPEAKER_01: Okay.
• 26:32
  SPEAKER_00: Well, that that right there.
• 26:34
  SPEAKER_00: Yeah, just volume.
• 26:35
  SPEAKER_00: Right.
• 26:36
  SPEAKER_00: Volume, yeah.
• 26:36
  SPEAKER_00: All right, number four, diesel.
• 26:37
  SPEAKER_00: Diesel with Russia.
• 26:39
  SPEAKER_00: What the heck happened?
• 26:40
  SPEAKER_00: I was on with Davis.
• 26:41
  SPEAKER_00: I'm getting these texts and notifications from you.
• 26:44
  SPEAKER_00: Did we do a deal with the devil?
• 26:46
  SPEAKER_01: Yeah, that's what the Democrats are saying.
• 26:49
  SPEAKER_01: Announce volumes, Russia said it would supply 300,000 metric tons of diesel immediately, 500,000 tons in November, and 1 million tons thereafter.
• 27:01
  SPEAKER_01: Now, Treasury, the Treasury Department issued temporary sanctions relief allowing Russian diesel transactions through April the 7th, 2027.
• 27:13
  SPEAKER_01: That didn't make Ukraine happy.
• 27:16
  SPEAKER_01: So you had a lot of words between Ukraine's president and and President Trump.
• 27:22
  SPEAKER_01: In fact, Trump in Trump's way came out and said Ukraine needs a different president.
• 27:28
  SPEAKER_01: So we had volatility in US-Ukraine relations uh Friday and over the weekend.
• 27:34
  SPEAKER_01: What's the immediate market reaction to the Russian news?
• 27:37
  SPEAKER_01: Diesel futures fell.
• 27:38
  SPEAKER_01: I think they fell about 4% following the announcement, but some analysts questioned whether the agreement would deliver the sustained price relief.
• 27:47
  SPEAKER_01: The key distinction in this, Tommy, is additional global production definitely will ease shortages more than simply redirecting existing Russian exports to different buyers.
• 27:59
  SPEAKER_01: So Ukraine said Sunday, and this is why we like to have our program Sunday, said Sunday it would stop attacking Russian refineries if Russia stopped striking Ukrainian energy infrastructure, but they struck an a Ukrainian energy infrastructure today.
• 28:20
  SPEAKER_01: So refinery security remains important to Russia's ability to deliver any ceasefire, which is very doubtful.
• 28:29
  SPEAKER_01: So, what's the question?
• 28:31
  SPEAKER_01: How much genuinely additional diesel reaches the market?
• 28:36
  SPEAKER_01: How quickly?
• 28:37
  SPEAKER_01: And will wholesale savings reach farmers in time before harvest end?
• 28:43
  SPEAKER_01: So Russia does have diesel available.
• 28:45
  SPEAKER_01: The Financial Times today cited estimates of 1.2 million to 2 million metric tons potentially available for export monthly out of Russia, despite gasoline shortages.
• 28:58
  SPEAKER_01: You can have gasoline shortages in Russia, but not diesel fuel shortages.
• 29:04
  SPEAKER_01: Restoring withheld exports could and should ease prices.
• 29:08
  SPEAKER_01: And yes, redirecting existing shipments will offer limited global relief.
• 29:15
  SPEAKER_01: U.S.
• 29:15
  SPEAKER_01: benefits could be indirect, maybe not direct.
• 29:18
  SPEAKER_01: More Russian diesel overseas could reduce the competition for U.S.
• 29:23
  SPEAKER_01: supplies.
• 29:24
  SPEAKER_01: In other words, we may not have to export as much of our diesel because Russia will supply Europe more.
• 29:31
  SPEAKER_01: So that's potentially going to lower our domestic prices.
• 29:36
  SPEAKER_01: Sustained improvement, however, requires reliable production and shipments.
• 29:42
  SPEAKER_01: Russian exports alone cannot resolve the broader refining constraints.
• 29:48
  SPEAKER_01: So watch actual export loadings and whether lower wholesale prices reach local suppliers in the U.S.
• 29:56
  SPEAKER_01: during harvest and grain transportation.
• 29:59
  SPEAKER_01: As far as the ceasefire, I would doubt between Russia and Ukraine, because Russia struck a thermal power plant in Ukraine today, hours after President Trump announced an immediate energy ceasefire.
• 30:15
  SPEAKER_01: And that's just not correct.
• 30:17
  SPEAKER_01: And Zelensky said the announcement between the Russia and the U.S.
• 30:22
  SPEAKER_01: surprised him.
• 30:23
  SPEAKER_01: But still, they said Ukraine would comply if Russia did.
• 30:26
  SPEAKER_01: Russia didn't.
• 30:27
  SPEAKER_01: So Trump's separate agreement, again, calls for Russia to supply more diesel to the U.S.
• 30:33
  SPEAKER_01: with sanctions relief.
• 30:35
  SPEAKER_01: That was the trade-off.
• 30:36
  SPEAKER_01: Senate Majority Leader Chuck Schumer, Democrat from New York, condemned the deal as the administration seeks lower fuel costs before the midterms.
• 30:45
  SPEAKER_01: That's when he called it a deal with the devil.
• 30:48
  SPEAKER_01: Any energy relief for farmers on actual diesel deliveries and Russian compliance has to be monitored.
• 30:56
  SPEAKER_01: That's the bottom line on this issue.
• 30:58
  SPEAKER_00: Okay.
• 30:58
  SPEAKER_00: Is now the time to talk about this Canada news?
• 31:01
  SPEAKER_00: Because I wasn't familiar with this Canada diesel news.
• 31:04
  SPEAKER_01: Yeah, Canada came out today and said they would increase diesel supply short term to the United States.
• 31:11
  SPEAKER_01: Corney, their prime minister, talked with Trump today.
• 31:15
  SPEAKER_01: So that's good news in US Canada relations.
• 31:20
  SPEAKER_01: And it could go away to help very fractious U.S.-Canada relations.
• 31:26
  SPEAKER_01: A little sidebar tidbit.
• 31:28
  SPEAKER_01: When I was at the Fats and Oils uh conference, there were traders there, oil traders from ag traders from Australia.
• 31:36
  SPEAKER_01: And they came up to me afterwards and they say, how they asked me, how do we convince the White House to get rid of the 12.5% tariff on Australian products?
• 31:48
  SPEAKER_01: I thought to myself, well, let me get back to you.
• 31:51
  SPEAKER_01: However, you have to kiss you know what on Trump.
• 31:55
  SPEAKER_01: That was one.
• 31:57
  SPEAKER_01: Two, you have to invest in the United States because that'll give you good steed.
• 32:03
  SPEAKER_01: And three, you probably have to modify the current US-Australian agreements to be a little more friendly to the United States.
• 32:11
  SPEAKER_01: And whether you can do that politically within an Australia, that's your call, not mine.
• 32:16
  SPEAKER_01: So that's how I responded to their initial question.
• 32:19
  SPEAKER_01: But there's a lot of uh uh people coming over here from other countries saying they don't like whatever that 12.5%, that's your average tariff because that's keeping out niche markets, Tommy.
• 32:32
  SPEAKER_01: This particular group of Australians had a niche non-GMO, I think, uh canola product that was coming in to the United States, and they basically are losing that market.
• 32:45
  SPEAKER_00: That's very interesting, Jim.
• 32:47
  SPEAKER_00: All right, did we talk about DI diesel or not?
• 32:49
  SPEAKER_01: Dide diesel, no, but we can handle that real quick.
• 32:52
  SPEAKER_01: We're waiting for more information because it has it was initially, I think, misreported.
• 32:58
  SPEAKER_01: Some people thought it was an exemption of the diesel tax.
• 33:02
  SPEAKER_01: No, it's just a deferral.
• 33:04
  SPEAKER_01: That tax still has to be paid.
• 33:06
  SPEAKER_01: So it the order directs the IRS to suspend uh specified penalties for dyed diesel sold or used on highways from October the 5th, that's when they announced it, through December 31.
• 33:22
  SPEAKER_01: So there's been no IRS guidance, new guidance uh yet answering who reports the gallons, who owes the deferred tax, when payment becomes due, and what records are required.
• 33:35
  SPEAKER_01: So there's a lot of hesitancy about this announcement.
• 33:39
  SPEAKER_01: So federal action does not settle also every state tax or enforcement issues.
• 33:45
  SPEAKER_01: So now there's got there's a state component to this.
• 33:48
  SPEAKER_01: So the executive order by Trump encouraged corresponding similar state action, but we saw in the case of California, they're not following what Trump has asked them to do.
• 33:59
  SPEAKER_01: But opening another use for dyed diesel could actually increase competition for local supplies and farm country, Tommy, even though the executive order specifically directs USDA to protect farmers' access in high demand areas.
• 34:17
  SPEAKER_01: But you know, there could be, and I'm not predicting this, but there could be some price gouging going on.
• 34:23
  SPEAKER_01: So, how much practical savings can users count on before the tax and implementation details are settled remains very murky.
• 34:32
  SPEAKER_01: That's our bottom line on this.
• 34:34
  SPEAKER_00: Very interesting.
• 34:35
  SPEAKER_00: All right, let's get to number six here.
• 34:37
  SPEAKER_00: FOMC minutes.
• 34:38
  SPEAKER_00: We're talking inflation, bonds, bonds.
• 34:40
  SPEAKER_00: If you wake up early, Jim, and you look watch the business channels, it's all they have is the twos, fives, tens, thirties, French bonds, bonds across Europe, bonds across the world, Japanese yield, 24-year highs in multiple countries, bond markets.
• 34:57
  SPEAKER_00: Do tell FOMC minutes we're out.
• 35:00
  SPEAKER_01: Yeah, and their F FOMC's next policy meeting is October 27th and 28th.
• 35:05
  SPEAKER_01: You always go to the second date, and that's when the FOMC makes their interest rate decisions.
• 35:10
  SPEAKER_01: Now, with the recent data, it's widely expected that there'll be no interest rate increase.
• 35:17
  SPEAKER_01: Now, their next meeting is December.
• 35:20
  SPEAKER_01: We've got too much data to come out on inflation between now and then to see whether or not there'll be another rate increase.
• 35:27
  SPEAKER_01: I doubt if there's a decrease.
• 35:29
  SPEAKER_01: So, how much are financing expenses changing producers' decisions about selling grain or delaying equipment purchases?
• 35:38
  SPEAKER_01: That's all important.
• 35:39
  SPEAKER_01: You've got some investment houses talking about yields going to 6%, Tommy.
• 35:44
  SPEAKER_01: I we had a story on AgBull.com this past weekend on that.
• 35:48
  SPEAKER_01: And, you know, holding grain requires enough potential price appreciation to cover interest storage and quality risk.
• 35:55
  SPEAKER_01: That's your so-called storage hedge.
• 35:58
  SPEAKER_01: So elevated interest rates increase the cost of operating loans, stored grain, machinery financing, and carrying livestock uh inventory.
• 36:08
  SPEAKER_01: So that's what all this means.
• 36:10
  SPEAKER_01: But for now, October 27th and 28th FOMC meeting, the federal funds future is clearly signaling no change.
• 36:18
  SPEAKER_01: I think they're probably a little bit over 50% for a slight increase in December, but we have too much data that needs to come out before then to really get comfortable with the prediction.
• 36:29
  SPEAKER_00: Very good.
• 36:30
  SPEAKER_00: Number seven, Cook Report, House and Senate.
• 36:34
  SPEAKER_01: You know, with each passing, it's almost our news gets worse for the Republicans.
• 36:39
  SPEAKER_01: That's just not me.
• 36:40
  SPEAKER_01: That's your so-called election gurus.
• 36:42
  SPEAKER_01: Now, the Cook Political Report came out with their latest House and Senate projections.
• 36:47
  SPEAKER_01: Now, they projected on Friday Democratic gains of nine to 19 seats.
• 36:53
  SPEAKER_01: The Democrat needs only three to regain control of the House.
• 36:57
  SPEAKER_01: That implies total Democratic seats of 224 to 234.
• 37:04
  SPEAKER_01: That's comfortably above the 218 needed for control.
• 37:09
  SPEAKER_01: And if it's at the top end of that, near 234, Tommy, that means the Democratic leadership, if they do control the House, which I personally think they will, that means some of these real far, far, far left lawmakers that are in the party, they can vote against the uh Democratic leadership and but they can still get their legislation through the House.
• 37:32
  SPEAKER_01: The Republicans were unable to do that because they had a squeezy-tight uh uh hair raiser lead in the House.
• 37:40
  SPEAKER_01: So the Senate outlook, Cook's potential Democratic pickup range is two seats to six seats.
• 37:47
  SPEAKER_01: Now, the Democrats need to pick up four net four seats.
• 37:51
  SPEAKER_01: So you can see that's still a jump ball because the Democrats need a net gain of four for a majority.
• 37:57
  SPEAKER_01: So that range includes both continued Republican control and a Democratic takeover.
• 38:03
  SPEAKER_01: And the key states, as we well know now, are Iowa, Alaska, Maine, Michigan, Ohio, Texas.
• 38:11
  SPEAKER_01: I think those are your biggest to watch on election night.
• 38:16
  SPEAKER_01: So, and this is really why you're having the White House so focused on diesel fuel prices because it's affecting their internal poll numbers on the election, Tommy.
• 38:26
  SPEAKER_01: There's no secret about that.
• 38:27
  SPEAKER_01: High energy, gasoline prices and diesel prices and inflation are weighing on the Republican outlook.
• 38:34
  SPEAKER_01: And these are these are forecasts, not election results.
• 38:37
  SPEAKER_01: So, what are the ag implications?
• 38:39
  SPEAKER_01: A change in control in Congress would affect committee leadership, oversight, spending negotiations, and the path for future farm legislation.
• 38:49
  SPEAKER_01: Lame duck issues are gonna be paramount.
• 38:52
  SPEAKER_01: I will tell you, with these bigger crop estimates, I think this increases the odds that you're gonna have a farmer additional farmer aid legislation pass in the lame duck session of Congress.
• 39:05
  SPEAKER_01: And by the way, it could be a total above the 12 billion that you frequently hear about, with both leadership in the House and Senate Act Committee pushing 17 to 17 and a half billion dollars.
• 39:19
  SPEAKER_01: Now, I'm not gonna rule that out, Tommy.
• 39:21
  SPEAKER_01: And I and I have also increase my odds that I think the Democrats and the Republicans will probably compromise enough to get that Farm Bill 2.0 actually passed and on its way to President Trump sometime during the lame duck session.
• 39:40
  SPEAKER_00: Interesting, interesting, my friend.
• 39:42
  SPEAKER_00: We'll see.
• 39:43
  SPEAKER_00: This election is gonna pop up and it's gonna give us a lot of a lot of people are speculating on what's gonna happen.
• 39:52
  SPEAKER_00: We should know what's gonna happen.
• 39:53
  SPEAKER_00: When are we gonna have Mr.
• 39:55
  SPEAKER_00: Cook on a premium?
• 39:57
  SPEAKER_01: Well, we'll have David, my friend at Cook, David Washerman on.
• 40:00
  SPEAKER_01: I'll go, I'll get him on before the November 3rd elections.
• 40:04
  SPEAKER_01: He was unable to attend the the CEPA conference, but he gave an online one in private.
• 40:11
  SPEAKER_01: I think he said it there too.
• 40:12
  SPEAKER_01: But I asked him what was his personal, not just Cook, what was David Washerman's prediction, and he echoed what they said in the House.
• 40:20
  SPEAKER_01: But he says that uh from what we know today, subject to change, he sees the Democrats picking up 51 seats, and he sees the Republicans 49.
• 40:33
  SPEAKER_01: So he sees a a uh a pickup of both the House and the Senate at this particular time.
• 40:39
  SPEAKER_01: So maybe I can get him on this coming week.
• 40:42
  SPEAKER_01: Let me give him a buzz to see.
• 40:44
  SPEAKER_01: He's a very busy man, as you're well aware.
• 40:47
  SPEAKER_01: But uh, but we'll uh uh he's a good friend, so maybe I'll pull that on him.
• 40:52
  SPEAKER_01: But we can maybe have him Thursday or Friday this coming week.
• 40:56
  SPEAKER_01: I can't I can't guarantee it, but we'll try to get him, okay?
• 40:59
  SPEAKER_00: Sounds good.
• 41:00
  SPEAKER_00: Let's take a little break here for uh I'll mute you and go full screen on me.
• 41:04
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• 41:09
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• 41:31
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• 41:38
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• 41:43
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• 41:46
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• 41:51
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• 41:56
  SPEAKER_00: With that, let's bring Mr.
• 41:57
  SPEAKER_00: Jim back in the show.
• 41:58
  SPEAKER_00: As you all know, we talk about it.
• 42:00
  SPEAKER_00: Jim's part of the website's almost done.
• 42:03
  SPEAKER_00: I think we're gonna roll you out, Jim.
• 42:05
  SPEAKER_00: It looks like around midterms after.
• 42:07
  SPEAKER_00: We don't want to do any shock to your loyal listeners and be like, oh, and it's gone.
• 42:12
  SPEAKER_00: I mean, but I did a premium with Mr.
• 42:15
  SPEAKER_00: Paul Nefer that was extremely informative and carry our tech with charts.
• 42:21
  SPEAKER_00: We're gonna start doing premiums with our weathermen here at Nesvik, and that that's gonna be really interesting to uh get Craig Solberg's perspective.
• 42:30
  SPEAKER_00: We have our premium that comes out every day with your friend Mike Sands.
• 42:34
  SPEAKER_00: Mike Sands before the bell, subscriber only.
• 42:36
  SPEAKER_00: Those are all little tidbits we're doing.
• 42:38
  SPEAKER_00: But in the future, this show will be for clients of AgBo Media, whether it be Tommy or Jim, both sets of clients will be uh sent.
• 42:46
  SPEAKER_00: Jim does more DC and policy.
• 42:49
  SPEAKER_00: I'm definitely more markets, and I think the blend of it is interesting.
• 42:53
  SPEAKER_00: But someone asked me, Jim, why are there two subscriptions?
• 42:57
  SPEAKER_00: And I have to tell you, there are a lot of people who want what you have, and they may already have a marketing guy, and so they just want to sign up for Jim, correct?
• 43:06
  SPEAKER_01: That's that, yeah, that makes sense to me, and vice versa.
• 43:09
  SPEAKER_01: You know, vice versa.
• 43:10
  SPEAKER_01: So yeah, but we're gonna be at an affordable price.
• 43:14
  SPEAKER_01: I think you're already affordable price, and I'll be even lower.
• 43:17
  SPEAKER_00: Okay, yeah, yeah.
• 43:18
  SPEAKER_00: Well, you're gonna spill more grain than uh this cost, I'll tell you.
• 43:22
  SPEAKER_00: And with diesel going up, this is the least of your worries.
• 43:25
  SPEAKER_00: But I I do think just take a lesson from this report that there was a lot of free information out there, and sometimes free is too expensive.
• 43:33
  SPEAKER_00: And man, for months I've been saying, how are the funds gonna get out of this length?
• 43:38
  SPEAKER_00: And I now know how they're gonna do it.
• 43:40
  SPEAKER_00: Limit down on a Friday.
• 43:42
  SPEAKER_00: Oh, by the way, the funds last week took off 60,000 in corn based off of Tuesday, but we had Wednesday's trade, Thursday's trade, Friday's trade.
• 43:50
  SPEAKER_00: I think you'll see at least 150 come off by next Tuesday because they might have done that all on Friday, Jim.
• 43:57
  SPEAKER_00: And as these funds get out of the way, as a story brews or maybe brews in South America or demand picks up or everything else.
• 44:06
  SPEAKER_00: God, do we want to go on the show and say that?
• 44:09
  SPEAKER_00: The great bull market of 2026 and corn is over.
• 44:11
  SPEAKER_01: Is that no, not whatsoever?
• 44:14
  SPEAKER_01: I wouldn't, I wouldn't.
• 44:15
  SPEAKER_01: And you've got strong seasonals going in favor of higher prices for corn and soybeans.
• 44:21
  SPEAKER_01: That doesn't mean the seasonals work all the time, but uh there's a reason for stats, and that's one of them that you're going in between now and the end of the year, you usually have accelerating uh markets in the corn and soybean sector.
• 44:34
  SPEAKER_01: Once you get past that 50% mark in harvesting, that's we're gonna get there in the next week or two.
• 44:41
  SPEAKER_01: We'll be yeah, we'll be there.
• 44:42
  SPEAKER_00: Every week, I wish we didn't have to talk about it, but Iran number eight.
• 44:46
  SPEAKER_00: What's going on here?
• 44:47
  SPEAKER_01: Well, here we have Trump again.
• 44:49
  SPEAKER_01: He pledged to pause with important limits.
• 44:51
  SPEAKER_01: He said Thursday that the U.S.
• 44:53
  SPEAKER_01: would not attack Iran before the November election, citing productive talks.
• 44:58
  SPEAKER_01: And you know what my position is on that productive talks with whom?
• 45:02
  SPEAKER_01: They're not talking to the right people in Iran.
• 45:05
  SPEAKER_01: The military runs that country and they'll go down with the ship.
• 45:09
  SPEAKER_01: And you don't tell your enemy what you're going to do or not do.
• 45:13
  SPEAKER_01: So I don't know why he's doing things like that.
• 45:16
  SPEAKER_01: The U.S.
• 45:17
  SPEAKER_01: military said it disabled a commercial cargo vessel, cargo vessel, Saturday after it ignored warnings and attempted to breach the Iran blockade.
• 45:27
  SPEAKER_01: And then Trump said today that he was considering joining Saudi Arabia because the Houthis continued to bomb uh uh uh uh spots in Saudi Arabia, including their military airport, and it just happened to kill an American at that uh airport.
• 45:46
  SPEAKER_01: So, Trump, what are you gonna do about it?
• 45:48
  SPEAKER_01: So that that that's that's a serious uh escalation.
• 45:53
  SPEAKER_01: Continued shipping and security is gonna sustain energy, freight, and fertilizer cost, even without a new campaign against Iran itself.
• 46:03
  SPEAKER_01: So I guess the question can diplomacy lower the energy risk premium?
• 46:07
  SPEAKER_01: Don't think so, while attacks on shipping and regional infrastructure continue.
• 46:12
  SPEAKER_01: Bottom line, this thing's gonna continue until Trump decides whether or not he's gonna get serious about ending that war.
• 46:20
  SPEAKER_01: That's my opinion, based on talks with the military people.
• 46:25
  SPEAKER_00: All right.
• 46:26
  SPEAKER_00: That's number eight.
• 46:27
  SPEAKER_00: You ready for now?
• 46:27
  SPEAKER_01: Hurricane is Asias.
• 46:29
  SPEAKER_01: Yes, landfall.
• 46:30
  SPEAKER_01: It struck near Destin, Florida, as a as a category two hurricane.
• 46:34
  SPEAKER_01: DC is feeling the impacts.
• 46:36
  SPEAKER_01: We haven't had this much rain in a long time.
• 46:38
  SPEAKER_01: I mean, we've got almost an inch and a half, two inches of rain.
• 46:42
  SPEAKER_01: That's a lot for DC at this time.
• 46:44
  SPEAKER_01: The ag impact is open bowls of cotton are vulnerable to wind loss, staining, and quality deterioration.
• 46:51
  SPEAKER_01: And I think that got into the cotton market on late last week.
• 46:55
  SPEAKER_01: Damage depends on the storm track, crop maturity, and how much cotton had already been harvested.
• 47:01
  SPEAKER_01: Also, peanut concerns.
• 47:03
  SPEAKER_01: I used to cover peanuts years ago.
• 47:05
  SPEAKER_01: Wet fields can delay digging and combining.
• 47:08
  SPEAKER_01: Peanuts already uh dug can be especially exposed to prolonged wet conditions.
• 47:13
  SPEAKER_01: So we cover the gambit on this podcast, not just corn and soybeans, Tommy.
• 47:19
  SPEAKER_01: So power outages, blocked roads, equipment access can interrupt harvest and handling, even when direct crop damage is limited in that affected hurricane area.
• 47:29
  SPEAKER_01: But I do want to caution acreage exposed to a storm does not equal acreage lost.
• 47:36
  SPEAKER_01: So you'll see probably some reports on mainstream media probably hyping this.
• 47:42
  SPEAKER_01: Field assessments and quality testing will determine the actual economic damage.
• 47:48
  SPEAKER_01: So will the large will the largest losses come from reduced yields, quality discounts, or additional harvested delays.
• 47:56
  SPEAKER_01: That's all the impacts of this hurricane.
• 47:59
  SPEAKER_00: I thought of a joke.
• 48:00
  SPEAKER_00: You want to hear it?
• 48:01
  SPEAKER_00: Sure.
• 48:02
  SPEAKER_00: You used to cover peanuts, but now you're just nuts.
• 48:07
  SPEAKER_00: I was thinking about when you said I used to cover peanuts, and like now you're nuts.
• 48:11
  SPEAKER_00: All right.
• 48:12
  SPEAKER_01: Unless you're allergic to peanuts, my daughters are, yeah.
• 48:15
  SPEAKER_01: Really?
• 48:16
  SPEAKER_01: The best protein available worldwide.
• 48:19
  SPEAKER_01: You can put it in your finger like that, and that's good protein.
• 48:23
  SPEAKER_01: I love peanuts.
• 48:24
  SPEAKER_01: I don't like peanut butter, by the way, but I love peanuts.
• 48:26
  SPEAKER_01: That's odd.
• 48:28
  SPEAKER_00: I had a piece of sourdough today with all real butter, no baked butter, no oils.
• 48:34
  SPEAKER_00: And I I had sourdough, butter, and peanut butter.
• 48:39
  SPEAKER_00: That's how you get this healthy look that we have going to be.
• 48:49
  SPEAKER_01: Yeah.
• 48:49
  SPEAKER_01: USDA announced around$13.8 billion in gross ARC PLC payments for the 2025, let me stress that, 2025 crop and 1.8 billion in 2026 CRP payments.
• 49:03
  SPEAKER_01: Now, that was a gross level of$13.8 billion in ARC PLC payments.
• 49:08
  SPEAKER_01: Why do I say that?
• 49:09
  SPEAKER_01: Because those payments face a$1.7 billion across the board sequestration cut and applicable payment limits, uh, because a number of farmers reach a payment limit and they don't get the full fledged uh payout.
• 49:23
  SPEAKER_01: Individual checks will not simply reflect the headline total.
• 49:28
  SPEAKER_01: Now, when agri talk, when I was on that Friday, Chip asked, What all the what are all the payments that are affected by the 5% reduction?
• 49:38
  SPEAKER_01: And I thought at the time, and I was right, that they don't impact conservation reserve program payments.
• 49:44
  SPEAKER_01: They're exempt because you can't cut across contracts, Tommy.
• 49:48
  SPEAKER_01: That that's including annual rental payments.
• 49:51
  SPEAKER_01: And also federal crop insurance indemnities are exempt under the protection for prior legal obligations under the federal crop insurance corporations.
• 50:00
  SPEAKER_01: These are the programs that the sequestration 5.7% reduction includes.
• 50:07
  SPEAKER_01: The ARC, County, ARCIC, price loss coverage, dairy margin coverage program, the livestock forage disaster program, the livestock indemnity program, ELAP, the tree assistance program, and non-insured crop disaster assistance program.
• 50:25
  SPEAKER_01: So that's that's all it it affects.
• 50:28
  SPEAKER_01: So now we have the answer to uh that USDA says producers automatically receive the higher applicable ARC or PLC payment rate for the 2027 crop.
• 50:40
  SPEAKER_01: That's not going to be the case in 2026.
• 50:42
  SPEAKER_01: That's why producers have to decide, I think by December the 11th.
• 50:46
  SPEAKER_01: That's just memory there.
• 50:49
  SPEAKER_01: And you'll know that ARC and PLC responds to qualifying price or revenue shortfalls, and CRP payments compensate producers under conservation uh contracts.
• 51:00
  SPEAKER_01: So, how much of this money will finance next year's production and how much will retire existing operating debt?
• 51:07
  SPEAKER_01: That's how this money will be used, but it's needed.
• 51:10
  SPEAKER_00: Okay.
• 51:11
  SPEAKER_00: And uh Paul Nefer did a great job going deep dive in that here on AgBull.com.
• 51:16
  SPEAKER_00: That is a premium video, but boy, is Paul good.
• 51:19
  SPEAKER_00: And the combination of you two, I heard when you guys were having lunch that Paul said, I understand we're gonna start doing videos together.
• 51:26
  SPEAKER_00: Yes, a lot of Jim and Paul videos, and then of course I'll moderate or code for try to be quiet and ask a question once in a while and click the buttons.
• 51:34
  SPEAKER_00: But I can't even keep up with you guys.
• 51:36
  SPEAKER_00: I don't pretend to keep up with you guys, and I'm just happy to have both of you on the same team.
• 51:42
  SPEAKER_00: And it it there is such a need for education in agriculture.
• 51:49
  SPEAKER_00: It's 2026, coming in 27, and we're still educating people, and we need to continue to educate people because things are moving so fast under the Trump administration, it it's just hard to keep up with it.
• 52:01
  SPEAKER_01: It is, and you know, Paul's a farmer, and you know why Lyne has always said to write it, you don't have to die to write about death, but it probably helps.
• 52:09
  SPEAKER_01: Yeah, like in the case of agriculture, Paul being a farmer helps because he knows the right questions to ask from a tax from a tax perspective uh perspective and a payment cap.
• 52:20
  SPEAKER_01: You want payment cap information.
• 52:22
  SPEAKER_01: Boy, he's the guy to talk to.
• 52:23
  SPEAKER_01: I think our next one before our final one is the USDA Federal Trade Commission, right?
• 52:28
  SPEAKER_01: Right to repair.
• 52:29
  SPEAKER_00: Let me yeah, let me get that up here right there.
• 52:32
  SPEAKER_01: The joint inquiry covers agriculture equipment.
• 52:34
  SPEAKER_01: This was announced by uh uh Secretary Rollins and uh and and Stephen Vaden, too, this past week.
• 52:43
  SPEAKER_01: The joint inquiry covers ag equipment manufacturing and distribution, including potential anti-competitive practices and barriers to obtaining equipment and service.
• 52:56
  SPEAKER_01: They're not saying they have the proof, but they want information from farmers, firsthand accounts of any restrictive contracts, penalties, retaliation, and practices affecting prices, competition, and farmers access.
• 53:10
  SPEAKER_01: That's the information they're calling from for farmers.
• 53:13
  SPEAKER_01: Now, for context, the inquiry follows the Federal Trade Commission's deer repair settlement.
• 53:19
  SPEAKER_01: You'll you'll recall they had a settlement with deer.
• 53:22
  SPEAKER_01: Comments are due December the 7th, and this inquiry can inform either enforcement or regulation.
• 53:29
  SPEAKER_01: It does not itself create a new industry-wide repair rule.
• 53:33
  SPEAKER_01: So, no new rules on this one.
• 53:36
  SPEAKER_01: During a narrow harvest window, repair delays, as you well know, can cost more than the repair bill through lost field time or crop deterioration.
• 53:46
  SPEAKER_01: So that's that's I know a key issue in farm countries.
• 53:49
  SPEAKER_01: So the key discussion question is can farmers and independent shops obtain the necessary diagnostic tools, software, and parts needed to make timely repairs at a reasonable cost.
• 54:04
  SPEAKER_01: That's what this, I think, investigation is going to look into.
• 54:09
  SPEAKER_01: That's that's the issue there.
• 54:10
  SPEAKER_01: Okay.
• 54:12
  SPEAKER_00: Number 12, USDA agricultural.
• 54:14
  SPEAKER_01: I think our last one.
• 54:15
  SPEAKER_01: Yeah, it went the other way.
• 54:16
  SPEAKER_01: Ag exports totaled a little over$14 billion, imports$17.55 billion.
• 54:22
  SPEAKER_01: The monthly deficit was$3.46 billion.
• 54:26
  SPEAKER_01: September data is scheduled for November the 4th.
• 54:29
  SPEAKER_01: So this was August data.
• 54:31
  SPEAKER_01: The lower commodities can reduce export dollars, even when shipment volumes are strong, and they were.
• 54:38
  SPEAKER_01: And the composition always matters.
• 54:40
  SPEAKER_01: The aggregate balance combines bulk commodities, processed products, and consumer foods.
• 54:46
  SPEAKER_01: It cannot explain the performance itself of corn, soy, beans, or beef by itself.
• 54:51
  SPEAKER_01: Now, purchase announcements need to translate into sales.
• 54:55
  SPEAKER_01: That's the China.
• 54:57
  SPEAKER_01: We need to see actual sales, shipments, and sustained market access.
• 55:01
  SPEAKER_01: The August data cannot measure the effects of trade commitments announced forward.
• 55:06
  SPEAKER_01: So, what's the big issue ahead?
• 55:08
  SPEAKER_01: Are export earnings being constrained by prices, shipment values, or market access are a combination of all three.
• 55:17
  SPEAKER_01: Now, on Agri-Talk, we had a little discussion about uh beef and pork.
• 55:23
  SPEAKER_01: Beef versus pork exports, uh, beef benefited from strong Taiwan demand and a Korean rebound.
• 55:30
  SPEAKER_01: Korea and Korea's higher safeguard tariff on Australia beef led to some increased U.S.
• 55:36
  SPEAKER_01: opportunities.
• 55:37
  SPEAKER_01: Pork didn't have a good month.
• 55:39
  SPEAKER_01: They declined, and their the decline centered on Mexico, where Mexican Mexico's domestic production recovered and and ham demand soffered.
• 55:49
  SPEAKER_01: They're the biggest ham buyer in uh for for exports, Tommy.
• 55:54
  SPEAKER_01: So uh the perspective, despite August's August beef gain, January-August beef volume total remained down seven percent.
• 56:05
  SPEAKER_01: Pork volume remained up one percent.
• 56:07
  SPEAKER_01: So when you look at the big picture, pork is still up on a percentage basis.
• 56:12
  SPEAKER_01: One month, as we always say, does not re reverse broader trends.
• 56:18
  SPEAKER_01: So, but there does appear to be an issue about pork domestic pork demand.
• 56:24
  SPEAKER_01: I recall talking to the National Pork Board, and they identified an aging core consumer base and the need to attract younger consumers through flavor, convenience, and easier meal preparation.
• 56:37
  SPEAKER_01: So that tells me pork needs more products and meal occasions that fits the consumer's routine.
• 56:43
  SPEAKER_01: So they have a challenge ahead for them on the pork demand side.
• 56:47
  SPEAKER_00: All right, real quick before we end, Jim, and thank you for taking time out of your Sunday to join us.
• 56:53
  SPEAKER_00: Well, to Jim, myself, the viewer, the listener, we do need you to subscribe.
• 56:57
  SPEAKER_00: It helps us a lot.
• 56:58
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• 57:03
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• 57:06
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• 57:08
  SPEAKER_00: Now, of course, when we move this show to premium, the only way you'll get it is by being a paid subscriber.
• 57:14
  SPEAKER_00: Of course, clients of uh Weismeyer and Agble Intel here will always get this show.
• 57:20
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• 57:22
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• 57:30
  SPEAKER_00: Those Bluetooth speakers are in.
• 57:32
  SPEAKER_00: If I ever promised you a Bluetooth speaker, hit us up at the website and say, hey, I want my DM speaker.
• 57:37
  SPEAKER_00: And uh, Jim, would you like a speaker?
• 57:40
  SPEAKER_01: Yes, I would send it one.
• 57:41
  SPEAKER_01: Yeah, I listen to music all the time.
• 57:43
  SPEAKER_01: And I do want to say Monday I go tomorrow to Boston to speak at the Sunstream business uh meeting, my good friend's there on Tuesday.
• 57:52
  SPEAKER_01: Then I immediately rush to catch a plane in Boston to Des Moines, Iowa, where on Wednesday I speak to the National Ag Marketing Association.
• 58:02
  SPEAKER_01: So I've got a lot of good friends there, and some former colleagues are gonna be there that I can't wait to see.
• 58:08
  SPEAKER_01: So that's what's coming up.
• 58:09
  SPEAKER_01: We're gonna end it as always on a positive note.
• 58:12
  SPEAKER_01: We got the bad news out of the way, let's hopefully, on corn, and we're gonna have to look at that quality and whether or not USDA adjusts that both harvested acres could go down in the months ahead, and also that yield, because we've got some problems out there.
• 58:29
  SPEAKER_01: Whether or not they're nationwide depends.
• 58:32
  SPEAKER_01: But I think we've probably seen the top of that corn production number.
• 58:37
  SPEAKER_01: Two on soybeans, I already gave away the bank there.
• 58:41
  SPEAKER_01: China, if they fulfill their 25 million metric ton commitments, they're gonna have to purchase, not ship, but purchase on average 183,000.
• 58:54
  SPEAKER_01: Yeah, 100 and 830,000 tons of soybeans every week between now and the end of the year.
• 59:02
  SPEAKER_01: That's not bearish.
• 59:04
  SPEAKER_00: Mm-hmm.
• 59:05
  SPEAKER_00: All right, my friend.
• 59:06
  SPEAKER_00: I'm excited to see where the markets open up tonight.
• 59:09
  SPEAKER_00: This is now 6 15 Central Time.
• 59:11
  SPEAKER_00: Oil's up 50 cents, stock markets up, grains will open at night.
• 59:15
  SPEAKER_00: Mr.
• 59:15
  SPEAKER_00: Jim, a pleasure and safe travels, my friend.
• 59:19
  SPEAKER_01: Okay, we'll do.