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Aug 07 | Commodity Week · Commodity Week

• 0:00
  Todd Gleason: This is the August 7 edition of Commodity Week. Todd Gleason's services are made available to WILL by Welcome to Commodity Week. I am Todd Gleason. Our panelists for the day include Brian Split. He is with agmarket.net.
• 0:21
  Chuck Shelby is here from Risk Management Commodities, Chip Nellinger joins us from Blue Reef Agrimarketing. Commodity Week is a production of Illinois Public Medium. It is public radio for the farming world online on demand anytime you'd like to listen to us at willag.org, willag.0rg. Chuck Shelby at risk management commodities, I'd like to start with you. What's on your list of items we should discuss for the day?
• 0:46
  Chuck Shelby: Well, have the SBA report next week, and, obviously, the market thinks it's a giant crop. Question is how big it is? What's the weather gonna be in August? And, we had, you know, this is a interesting crop to say the least and, certainly had plenty of
• 1:04
  Todd Gleason: water this year. Brian Split from agmarket.net. I hope your list includes some chart techs for the day.
• 1:13
  Brian Splitt: Yeah. Absolutely. I think we could, definitely cover some tech things. We've got, multiple agricultural markets that are testing some very big picture areas. We can get into that as we discuss more.
• 1:23
  Todd Gleason: And finally Chip Nellinger of Blue Reef Agri Marketing on your list.
• 1:27
  Chip Nellinger: Yeah, both those guys covered a lot Todd. The crop report coming up, what are the funds going to do going forward? Have we built in the biggest crop size right now with some of these massive corn crop estimates we've got? And are we going to see any trade deal out there? I think the funds have been a little handcuffed not wanting to put too big of a position on in beans because of the uncertainty.
• 1:51
  Just one tweet, one news story, could really change the name of the game in the bean market. So, that could cause some choppy trade going forward into August.
• 1:59
  Todd Gleason: Well, let's start with the USDA, WASDE, world agricultural supply and domestic demand estimates, the crop production report, which are both due out at 11AM central noon in the Eastern time zone on Tuesday of next week. Chuck Shelby, you've looked at this. You always at risk management commodities have a set of numbers you're thinking about as it's related to yield national for corn and soybeans. And I also wanna know whether you think Nebraska can make 200 bushel better corn this year than not. What are
• 2:28
  Chuck Shelby: you seeing? Looking close to one eighty five on corn. You know, it's a really good crop out there. When you look across the country, some of the states to the West, interestingly enough, were supposed to have bad and dry weather and hot weather. Turns out it's one of the wettest growing seasons ever.
• 2:47
  You know, there's some problems out there. We keep seeing these pollination issues. Know there's a lot of diseases going around. Guys are pretty good at treating that but will they put two passes on? A lot of perfection is hard to achieve at times so right now, again, as the guys have talked about, perfection is the name of the game.
• 3:12
  I think one thing that we will be interested in seeing no matter how high I believe it is a record crop, but what happens next year? Can we duplicate these conditions? I mean is this the best we can be as far as moisture? So I look at this crop being a record and again it's going to set the bar pretty high for years to come. So will we duplicate this kind of weather?
• 3:35
  How do we finish in August? Right now looks pretty good.
• 3:37
  Todd Gleason: Chip Nellinger, what numbers are you using at Blue Reef AGRA marketing?
• 3:41
  Chip Nellinger: Yeah. Right now I think I'm in the one eighty two, one eighty three range. I don't think Chuck's out of line to be one eighty five. I think it's an almost impossibility to be up at the high end of some of these estimates there at 188, one hundred eighty nine. Just a variable amount of problems out there.
• 4:01
  Chuck mentioned some of them, you know, I mean, we have plenty of rain in July, but we had some awful hot temperatures. I'm hearing producers also talk about, man, I might actually have an early harvest. I'm talking some Northern Illinois corn that has never stressed for moisture. The heat's really pushing things along and typically when you do that, it's not the type of finish that you want even if you get some moisture along with it. So I think I'm in the 182 ish type number.
• 4:30
  I wouldn't be shocked in the end result just to have it be 181, 182 and maybe kind of disappoint the market because we're trading somewhere maybe well north of that, maybe even north of 185. It's not where we finish, it's where we trade. You never know that in real time, but I think we may be going a long ways towards factoring in maybe the biggest yield especially in corn.
• 4:57
  Todd Gleason: And Brian Split from agmarket.net.
• 5:00
  Brian Splitt: Yeah, so part of this is the art of trying to figure out what the USDA might say versus what you really believe internally that the crop is. So for the purpose of this, we felt pretty comfortable to go just a hair over 2% above trend. A year ago, the USDA went 183.1, and with just, a lot of the satellite imagery that's being used, which is a big part of their their yield estimate, so we went 184.8. But I I think we are at the point where the market is pricing in more than that. We've seen some private numbers that have been obviously higher than that.
• 5:33
  I think the the most well known one is one eighty eight point one out of Stonex. And so I think the market's more in danger of of currently overdoing the yield estimates to the upside than they are underestimating it. And Chip made a really good point about the overnight temperatures we've seen, especially in the Eastern Corn Belt. And I think that's going to be something that kind of sneaks back into the market here. But a lot of this crop I'm hearing is maybe twenty four days ahead of schedule just by being pushed along further than it should be at this stage.
• 6:05
  That's going to have an impact on the crop. But again, a year ago, the USDA raised yield in August. We had a dry August. They raised it again in September and October, and then we really didn't get a major cut until January with a very small revision in November. But the market knew before the USDA told us.
• 6:21
  Todd Gleason: Chuck, outside of Lafayette, Indiana, I know you've probably been into the cornfields. What are you seeing in your own crop? I was in a bit more than a week ago. Good crop. However, it is missing here and there just a kernel, which surprised me.
• 6:40
  I don't know that I've come across that in years.
• 6:43
  Chuck Shelby: Well, it was kind of interesting ten days ago. I was looking at our own sweet corn and was gonna fix them first time. We share a lane with one of our neighbors, and I hadn't noticed it driving down the road at 50 miles an hour but once I stopped I noticed the soaps were extremely long and I pulled some ears and you know really poor pollination. I was surprised now our our corn different variety and different planting but it was fine so that was a shock to me. But you know, as I talked to producers around, we have, you know, fields that look great, but you really need to look at it.
• 7:17
  I think there's going to be some tip back out there. The years are extremely long, you know, sixteen, eighteen around. It's a good crop, but I think Brian alluded to the fact and Chip, I mean, the finish is really important. What we're going to see now in this August report is, you know, what farmers might think, what the satellites look like. A very good crop but how far we blow it out to the top end I don't think we'll know again as we get in the field and see what the combines roll but a lot of variability out there but a lot of really fantastic some guys are gonna have the best crop ever.
• 7:52
  Todd Gleason: Okay Brian start with the tech for me in the charts. What do you see after the three days this week where we made new contract lows for corn?
• 8:03
  Brian Splitt: So I'll start with what I would consider really the big picture long term support, you know, that would be a continuous chart. And what I mean by a continuous chart is, it always plots the front month contract at any given time. And so if we go back to 2020 and draw the uptrend from 2020, which were lows that we made during COVID, there were two kind of distinct lows. One was in April during the initial onset of the bearishness when we realized what was going on in the world was shutting down, and then there was kind of a secondary low in August. That started the uptrend.
• 8:33
  The lows we made in August of a year ago bottomed right at that trend line, and so the lows yesterday that we scored, this is now the September contract at $3.75 was right against that trend line. So you've got long term trend line support on corn. You could go into the soybeans and draw their long term uptrend and this actually goes all the way back to the period of what is this back in the early 2000s, 02/2001, and draw that long term uptrend. That is where the front month beans bottomed out here this week, and that's also right where the short term uptrend from August of a year ago to December comes in. So we're at really some key long term support, it's not just corn and soybeans.
• 9:17
  You look at the continuous chart for KC wheat, for example, we've got the very same, falling wedge structure that we had, in a period between about 2008 and 2010 that eventually bottomed the market and we came screaming out of there into highs made in 2011. We've got that same descending wedge here. It's just a matter of really getting through this downtrend and it could be several months down the road, but I think we're working on consolidating into a bottom here in the wheat market. And you even look at a market like rice, you know, that's a market that a lot of in the Delta are looking at, and prices have been substantially off of highs there. But we've got a long term uptrend in rice that started back in about twenty fifteen, sixteen, seventeen, eighteen, and we're at that uptrend in the rice market as well.
• 10:05
  So you've got a lot of these agricultural commodities, that have found themselves down to long term uptrend support here as we're pricing in very large crops.
• 10:16
  Todd Gleason: Do you, from your tech side, think that we are at this point where it's the support in it it should bounce? Are you fearful that it might break this to the downside?
• 10:27
  Brian Splitt: I think for what we know right now, we've probably gone low enough for the short term and and we might need to see some more confirmation, actual field reports of big yields. But when I think about where the market bottomed out last year, was in August ago, Dees corn bottomed out at 3.85. The low yesterday was at 3.96 and 3 quarters. We're talking just shy of 12¢, you know, higher than where we bottomed out last year. And when we bottomed out last year, we were operating on the idea of carryout being about 2.037.
• 10:58
  So you have to plug in, I think it's about a one eighty five point five yield, using our balance sheets with, you know, no change to demand whatsoever to get your carryout to a 2.037 because of where the old crop carrying, resides. So I think the idea that we kind of bottomed about a dime above last year, when we're already talking numbers higher than one eighty five, it really puts the onus on, actual field reports to confirm that the crop is is what it is. Because if it's not, it's the same exact setup as last year where we're overdoing the the yield expectation on paper. And meanwhile, as we're doing that, prices are cheap and look at our export book going on. I mean, just sold over 3,000,000 tons of corn last week, and we're we're running at a tremendous pace right now on our demand.
• 11:46
  Todd Gleason: Chip, do you believe that that means we have a sideways market in front of us for a month or a month and a half while we wait for the combines to run-in corn across the Midwest?
• 11:55
  Chip Nellinger: Well, think my biggest fear is the bean side. Think to Brian's point, we hit some pretty key support areas. We were way overextended oversold. We needed a bounce anyway. And the way the markets bottom is they usually bounce like this.
• 12:17
  You get people that wanna sell that first bounce and then the decision or the test comes whether we can make new lows or not. And so I think that's ahead of us. I think sideways, you know, to me make some sense for a period of time, days, a couple of weeks. I think it is going to be important to see how we react, how the market reacts to whatever number the USDA does put out. They come out with a 184 and the market rallies.
• 12:46
  Maybe we are in the case where we have factored the biggest crop in and it's not gonna be as bad. The other thing to keep in mind, Brian mentioned this, demand has just been phenomenal in corn. And, the way that USDA typically works in their economic models, when they increase supply like that, they don't keep demand static typically. So they assume that with increasing supply prices are gonna go lower, that increases demand and it keeps, you know, that this big burdensome carry out from being realized on paper. So that may be enough to kind of keep the bears disappointed so to speak.
• 13:24
  If we can't push into new lows well under $4 and if we can't make new lows, you know, say back under $9.80 in the beans real quick. I think we can bounce a little bit, maybe get into, you know, September, October and kind of find out for real what's out there from actual harvest data.
• 13:42
  Todd Gleason: And Chuck, how do you see this playing out going forward?
• 13:45
  Chuck Shelby: I think the biggest factor is when the funds wanna get out. They're massively short. Maybe we could go down, like Brian said, a little bit lower, but you gotta look at the meat on the bone for the funds. And when we go forward, I mean, how much worse price can we look at? Well you take inflation into account.
• 14:05
  These grains are extremely cheap and I think that's why world buyers are coming to the table. Know do we make a harvest low on futures before we get to you know harvest? It wouldn't be shocking but I think the thing to watch out for is a basis. The basis is in some areas could be a problem if this crop in certain areas is as big as it looks. I know some areas are starting to see the basis widen for harvest delivery but I think that's one thing producers need to you know be aware of and watch out and make plans for.
• 14:36
  Todd Gleason: On that note JSA follows basis really closely. What are they telling you Brian?
• 14:41
  Brian Splitt: Well we'd actually made a recommendation here recently on corn, and this is really specifically for bushels that need to be sold out of the field that you do not have on farm storage. We want basis locked in on those bushels. We do see that as being a problem as we get closer to harvest. And there are some areas, especially if you're, you know, in the Eastern Corn Belt where basis on old crop is still rather strong. Basis on new crop, is, maybe not strong, but acceptable.
• 15:13
  Could be quite a bit worse. And so, those are the bushels that we're specifically concerned about. You know, on a different side of the market and looking at soybeans, basis for soybeans come fall in most areas just really stinks. But if you kind of look at what basis looks like maybe as you get back out to February delivery, for example, There's quite a bit of carry in the cash market. Maybe going further out, setting basis out there in February if if that's an opportunity for you, try to find a way to lock in the carry from NOV to March.
• 15:48
  When I think about the amount of carry from November to March right now, it's about 35, 35 and a half cents, and that's an awful lot. So like 2023 was a year where we built tremendous carries. We're in a bear market. We had high interest rates for the first time in a bear market, so we saw carries that we hadn't seen. And the biggest carry that we saw from November, March in 2023 was 39 and a half cents.
• 16:09
  We're 4¢ away from that, but we didn't see 39 and a half cents a carry that year until October 3. It's early August. I think we're way overdoing the carry in the market right now. I think the commercials have pushed the carry out here so they can lock it in now before they get the bushels. And I think if you're a producer, got to be thinking the same way.
• 16:29
  Locking the carry here, you could do it on the board by buying spread and set some basis on some of these deferred contracts if it makes sense for you.
• 16:36
  Todd Gleason: I wanna follow-up, on a different area just a bit. And Chuck or Chip, if you could take this up and maybe Chuck maybe start. I'm thinking a little bit about the wheat market and the issues that corn has with it, when wheat is depressed in price and whether it can manage to lead out of this marketplace. We have the harvest done. The Northern Hemisphere is the primary place where most of the wheat crop has grown in The US other than or grown, across the planet other than Argentina and Australia.
• 17:10
  Can we find a way to lift the market or at least lead this market as we go into the fall?
• 17:16
  Chuck Shelby: You know, it seems like the best hope for wheat would be a cheap dollar, but, you know, wheat's just become a crop that is the least profitable for producers to produce. Know my answer has been make wheat the national cover crop for a while and that would solve the problem. It's struggling when you also you know you have to worry about the problems in The Middle East, and we're we're kind of a last resort. I think wheat acres are probably drift lower again. But going forward, you know, I think the hope for corn still lies in the export business out there.
• 17:54
  And wheat, I just can't see it get too excited at a point until we maybe cut acres back even more going forward.
• 18:01
  Todd Gleason: Chip, I'll get to you on wheat in just a second, but let me follow-up, Chuck, with you on on the export market. Mexico has been our number one, export destination for corn. The tariffs are paused again, relatively speaking with that nation. It might give them an option to continue to import corn into Mexico. Rails are you know, the rail lines are the way, and those trains go across every day.
• 18:33
  Will they take advantage of it and front load in fear that they may end up in a tariff situation? I know it's covered by USMCA, but it could deteriorate.
• 18:45
  Chuck Shelby: Well I work with some farmers in Texas that have been harvesting the crop and and that's continually moving into Mexico so you know Mexico has been our best buyer as we go forward you know maybe the tariffs are kinda like the stock market reacted pretty negatively when tariffs were first announced and and we recovered there. I think as time goes on, maybe just the tariff word loses some of its concern. World buyers, I mean if China's gonna buy everything from South America, those other countries, you know, come to us. Again, I think it's a lot to do with price. I mean, they look at charge too.
• 19:24
  They look at the crop coming. It's an opportunity I think you know to load up here and I think that demand is going to continue to be there. Know if we try to predict the tariffs that's pretty challenging from day to day it might change but I'm pretty comfortable that some of these countries are going to continue to buy from us. Japan's another example and as we go forward the tariffs will work themselves out and I think a function of price and what this crop is going to impact those world buyers.
• 19:55
  Todd Gleason: And Chip, if you could follow-up in that export market area and maybe say a word about wheat as well.
• 20:02
  Chip Nellinger: Yeah, I think it can go hand in hand. I think the wheat, if you look at the exports of the last couple of months, they've very quietly been above expectations, right? And so some of that is the cheap wheat new contract lows. I think that there's some talk that the Russian crop maybe is off quality and maybe not as big a yielding as what we thought. And so the seasonal post harvest rally is a little bit late in my mind, but I think the rally in wheat, the last couple of days off the lows has really helped the corn market taking some of the pressure off of the corn markets.
• 20:40
  Obviously they're competitive feed grains. I agree with Chuck, obviously in the short run a tariff and increase in the tariff or the breakdown of some trade talks can have a short run influence. I think it's a matter of price, right? And to the point of China, they don't necessarily need our beans right now. They might into winter ahead of the new crop harvest.
• 21:07
  Countries are going to do what's in their best interest and make deals that they feel is right. And whether our biggest customers, whether that's Japan, Mexico, China to some extent, when it pencils for them to buy our products, I think they still will. And I think wheat's a perfect example of that. There hasn't been a standout buyer, but just very quietly, we've really seen a nice uptick in wheat exports. Obviously the corn exports have been enormous.
• 21:37
  I believe for this point of the calendar for new crop were all time record or very close second in having a record amount of corn booked ahead. The exports have been tremendous. So, lot of reasons to be bearish because of trade deals and tariffs, but the numbers just aren't proving it other than the Chinese bean demand right now. And I'm not sure tariff or no tariff if they'd be buying our beans anyway because of the size of the Brazil crop.
• 22:09
  Todd Gleason: Brian, can you talk about the interplay, between wheat and corn as it's related to the charts and how one follows the other sometimes and what that means for producers across the board.
• 22:24
  Brian Splitt: Well, I mean, it's when you have a wheat sometimes becomes a feed component when it gets cheap enough enough relative to corn, and that's gonna help chew through some of that extra wheat supply that you have generally when it's when it's priced low relative to corn. But I think when you in the context of the way that you asked the question earlier, I don't think wheat is necessarily going to be what leads us out of here. I think the market is probably pretty comfortable with the size of the wheat crop. There's really not going to be much change there. We've already seen the harvest.
• 22:54
  So that's a demand story moving forward. Then Chip mentioned it, wheat exports have been good. Not as stellar as the corn exports here this week, but still very good. And so I think you've got the demand here is going to keep a steady hand under the market. But the corn market probably has more potential where we overshot the idea of how big the crop is going to be, and then, you know, we might need to recorrect this thing a little bit more because we still don't really know what's out there.
• 23:18
  We know what the wheat crop is. So I see this market maybe being a little bit more of a corn leader here if the market does perceive that we've overshot the yield. Now, the, big picture for wheat, you know, we are holding the uptrend, that we've had in place since the lows last year. We've been kind of meandering about, we're at the low end of a trading range in wheat, we've been in this trading range for the last year. So, I think you've got, you know, maybe some some upside in wheat here.
• 23:48
  I think the wheat market could probably, if we're looking at yesterday, very good one day bar. We kind of had a long tail below the market, open and closed at the same price at the upper end of the chart. You'd call that a dragonfly doji, which usually is a reversal here off the lows. And that should bring some short covering in, and I think you probably could see wheat rally 40 to 50¢ off the lows we made yesterday. That will help corn, but I I think the leading element of this might be the the corn market overdoing yield estimates to the upside.
• 24:18
  Todd Gleason: Chuck, China's still not into the marketplace for soybean imports. How much of an issue is this going to be for The US crop as we go into harvest time and all the way through January? When, if Brazil is predicted, as they do, to go in early because of La Nina and rainfall coming there, we may have a shorter export window. You know, it
• 24:45
  Chuck Shelby: certainly turned into a problem, especially as we enter into harvest here. Concerning here, but I don't think Trump is going to go over to talk to Zee or wherever they might meet till October. So they may just hang out and use that as a kind of a negotiating tool. So it would be great to see them start buying. They're really getting late for the time window that they usually do.
• 25:10
  I think it's just another demand problem that we're going to have to deal with and unfortunately going into harvest we need those kind of buys to pick up the pace and move the beans out at harvest. An issue if they solve something and they decide that they're gonna start buying down the road, probably gives you a pretty good jump in the market, but doesn't seem right now that it's gonna happen anytime soon.
• 25:36
  Todd Gleason: Yeah. And, Chip, if this is the case, and it appears it will be the case, it presents a problem for producers who generally store more corn on the farm than they do soybeans. What should they do in the case that they're running beans across the scale?
• 25:53
  Chip Nellinger: Yeah, that's a tough call Brian mentioned earlier, bean basis in most areas for fall, just abysmal right now. And it's because of that, there may not be a real good choice here other than bite the bullet. A guy may want to think about locking some of that basis sooner rather than later as we get into the gut of harvest in October, that fall bean basis could be pretty ugly. I would say though that we even without China, I have been surprised that we continue to sell beans, more beans than what I had initially expected. I think this world market is really messed up.
• 26:36
  The basis in South America, either they sold way more to Brazil or to China and they're out or it's logistic or political. The basis is out of whack. In fact, there's reports that on paper, it would even pencil to import US beans into Brazil right now. And that's given us an upper hand right now on some of these other countries that might be buying Brazil outside of Chinese demand. I think the other thing that's beneficial is crush margins are still near a ten year high.
• 27:08
  So we've got that demand and that's a that doesn't matter if beans are $14 or $4 a bushel. If the crush margins are profitable, crushers will buy every bushel they can. And I think that's helping offset some of the lost Chinese demand for this point in time as well.
• 27:24
  Todd Gleason: Okay. And finally, before we get to our final word, I'd like each of you to think and talk a little bit about profit per acre bushels times yield, and what producers really have in the field if they have this big of a corn crop and a really pretty good soybean crop. How do they have to think about that and manage it? Sometimes you get caught up in just what what price am I selling at as opposed to what my profit really is per acre. Chuck, can you get me started on that one please?
• 27:55
  Chuck Shelby: I think it's a very good point Todd. Mean producers are definitely disappointed in the price but when you look at the potential and in a lot of areas to have a really good too, maybe one of the best crops ever, It's not as bad as it might seem. Unfortunately there are producers in parts of Illinois, Indiana, Ohio, Kentucky, Eastern Corn Belt that are struggling. It's not going to turn out the way they hoped but again, when you look at maybe have a really good beet yield, a good corn yield times prices, I think that are obtainable or we can rally back and get some more you know opportunities. I think it's not as bad as it might seem.
• 28:33
  I think we have to manage the expectations. Questions still become though that I think some of the guys what's out there in the field it's still still pretty big concern. We got a lot of growing season to go on fill on corn and on soybeans too. So you got to look at it a little bit differently as we move into the harvest season and and get prepared you know make a make a plan here.
• 28:58
  Todd Gleason: Scout figure out what you think you have on the bottom end make sure you have that ready to go and to market. What kind of targets might you set for those kinds of bushels, Brian, split when you look at the tech and the chart side?
• 29:12
  Brian Splitt: I mean, it's hard to say exactly how high the market could go. We know the market March corn, for example, last year went four zero four and then it rallied a dollar, you know, into February. So the market can obviously change direction and make a larger move, in the opposite direction than most people think in the big picture. So, I think right now it's really about managing your high priority bushels, you know, the stuff that needs to be sold maybe of old crop, you know, and those bushels unfortunately are being sold under duress. So if I'm if I'm liquidating those old crop bushels, I would probably like to find some type of an option strategy to maintain ownership far enough into 2026 to, take advantage of a change in market sentiment.
• 29:55
  And then it's the bushels that you can't store on farm. And if there's one thing that I will always tell a producer any year, every given year, that I do this, it is please do not pay commercial storage. You can find ways to own, on paper without the downside risk of the market, cheaper than what they're gonna charge you for commercial storage. So do some apple to apple comparisons.
• 30:14
  Todd Gleason: And, Chip, finally, managing total profit per acre. How do you talk to producers about that?
• 30:19
  Chip Nellinger: Yeah, Todd, think that's an interesting question. I actually was thinking about this earlier, preparing for a presentation I'm doing tonight in Burlington, Iowa. And I was thinking about this. I really think now these are assuming bushels that are stored on farm, right? The over the scale stuff at fall is a different animal and a different plan.
• 30:41
  But a lot of producers have a lot of on farm storage anymore. Between the carry in the market and basis expected basis appreciation out into winter. You know, I think it's really possible for producers to kind of see a gross revenue back towards $1,200 an acre on corn. And that should be kind of a target rather than price. If you want some upside ownership, you know, add some calls to it or get some call spreads or something.
• 31:09
  If you can achieve that, I think that's, you know, a 100 to $200 an acre profit, depending on the operation. Beans are gonna be the tough spot in my mind. I I think that if you get them back towards $800 an acre, gross, that we ought to be maybe thinking about playing defense there. I know that's not making much if any money, but that's kind of the way I'm thinking about this to Brian's point. This thing could rally a lot further than what we expect if the crop ends up shorter than expected, but I think this is a year to think about the the carry in the market and learn how to use that if you haven't done it already.
• 31:47
  Expected basis, that alone carrying basis could be $60.70 bucks an acre, improvement from what it looks like at fall. And then look at those gross dollars and have that as your goal rather than an actual price this year.
• 32:01
  Todd Gleason: And let's wrap up as we usually do with a final word from each of you. I'll start with you Chuck Shelby at risk management commodities in Lafayette, Indiana. Your final word, please.
• 32:11
  Chuck Shelby: I think we've been through a lot of negativity here in agriculture. Don't know when it'll turn around, I think the funds have been pushing this market to the downside. I think there'll be opportunities that can turn around. Look for opportunities going forward and make a plan for harvest here.
• 32:30
  Todd Gleason: Brian Split of agmarket.net your final word?
• 32:33
  Brian Splitt: Yeah I think you just really try and hone in on what we were just talking about really get an understanding of your own operation. You know $4 corn is not the same for an individual in North Dakota as it for a farmer in New York as it is for one in Arkansas. Right? So you really just have to focus on what your yield is, what your cost structure is, and have realistic expectations. Then have a plan in place of how you're going to manage it if the price gets to where you need it to be.
• 32:56
  Because a lot of times we kind of try to make decisions on the fly rather than figuring out what we want to do ahead of time and then executing that plan.
• 33:04
  Todd Gleason: And finally, Chip Nellinger of Blue Reef Agrimarketing.
• 33:07
  Chip Nellinger: Yeah. Just reiterate what I what I said earlier about the gross dollar and profit goals this year. I mean, it's definitely different than what we're used to, right? Then a few of the years past here, we're looking at $2.03, 400 an acre profit. We're not in that environment anymore.
• 33:23
  If we can see, know, 100 to $200 an acre gains in corn and back close to, you know, breakeven or small profitability and beans. It may be worthwhile to pull the trigger aggressively if you want some upside, look at some calls or call spreads to to both Chuck and Brian's point. You gotta have a plan. If you don't have a plan, you're gonna watch the rally come. You're gonna watch it go, and you're not gonna have acted on it.
• 33:49
  So I I I would just agree with both those guys too. You gotta have a plan and you gotta implement it.
• 33:54
  Todd Gleason: Commodity week, of course, is a production of Illinois Public Media. It's public radio for the farming world. You may find and listen to the whole of the program anytime you'd like. You can do that on our website at willag.org. That's willag.org.
• 34:08
  Our thanks go to our panelists today including Chip Nellinger, Brian Split, and Chuck Shelton on University of Illinois Extension's Todd Gleeson.