Latest / Professional Ag Marketing Podcast / Grains: Crop Update

Transcript

Grains: Crop Update · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:23
  SPEAKER_00: Today is D-Day.
• 0:25
  SPEAKER_00: I've got Lucas Peters with us, June 6th.
• 0:27
  SPEAKER_00: How's it going, Lucas?
• 0:28
  SPEAKER_01: Well, it's going great.
• 0:29
  SPEAKER_01: It's always good to be back in studio with you, Mike.
• 0:32
  SPEAKER_00: That it is.
• 0:33
  SPEAKER_00: Well, we're going to talk a little bit about the grain markets today.
• 0:36
  SPEAKER_00: We're going to talk about the just the market in general here for a couple minutes, some of the changes, uh, what we saw this week in market action.
• 0:44
  SPEAKER_00: And then we're going to talk about, we were at the World Pork Expo, so we're just going to talk about our drive down and back and what we we talked for to people from all over the United States, and I just want to talk about what we saw in crop conditions and what they've said about their own.
• 0:58
  SPEAKER_00: So let's get into it.
• 0:59
  SPEAKER_00: December corn, 449 at the close today.
• 1:02
  SPEAKER_00: We are up a penny, but a really good week on Dees Corn.
• 1:05
  SPEAKER_00: We had four straight closes higher on the corn market after putting in uh fresh contract uh lows on the move at uh 434 earlier this week, Lucas.
• 1:15
  SPEAKER_00: So uh a pretty nice, you know, 15, 20 cents across some of the deferreds there, a little bump in our prices.
• 1:23
  SPEAKER_00: Some of it occurred with one, we saw the end of June in the GFS show a little dry forecast.
• 1:29
  SPEAKER_00: Uh that helped a little bit, I would argue.
• 1:31
  SPEAKER_00: Trump meeting with G and having a good phone call yesterday.
• 1:34
  SPEAKER_00: That was part of it.
• 1:36
  SPEAKER_00: And then soybean oil bounced back today, kind of leading the soybean complex back.
• 1:41
  SPEAKER_00: Uh very normal correlative trade there, meal down, oil up, and then soybeans up as well.
• 1:46
  SPEAKER_00: So I would give those kind of reasons most of the market action this week, up until that.
• 1:52
  SPEAKER_00: We were on a losing streak.
• 1:53
  SPEAKER_00: You know, last week at this point, we had about seven straight lower closes on D's corn, for example.
• 1:59
  SPEAKER_00: Uh it was looking pretty rough there for a little bit.
• 2:01
  SPEAKER_00: Not that this price is fantastic, but it's going, you know, we're going the other way now at least.
• 2:07
  SPEAKER_01: And so you you have all that that happened this week, Mike, but but also like seasonally it should go up.
• 2:11
  SPEAKER_01: It should go up.
• 2:12
  SPEAKER_01: And it was an easy quick buy, I feel like.
• 2:14
  SPEAKER_01: When it was going down, they it was kind of like, wait a minute, this isn't what's supposed to happen the end of May and early June when we still haven't planted some of these acres out east, and and uh it was just kind of scratch your head.
• 2:26
  SPEAKER_01: And now maybe we've kind of turned the corner and here is our a little bit of a rally, and hopefully it continues to create some selling opportunities uh for the new crop going forward.
• 2:35
  SPEAKER_00: Yeah, and if you look, D's 26 futures today actually closed at 476.
• 2:40
  SPEAKER_00: So, like uh uh you know, if you look at it from that perspective, we put on 20 cents really fast there, and that's the highest trade.
• 2:47
  SPEAKER_00: If you look back, that's the highest trade on D's 26 that we've really had going all the way back to like June of 24.
• 2:55
  SPEAKER_01: Well, that's real interesting.
• 2:56
  SPEAKER_01: So potentially looking, you know, selling uh December corn in June is the right play, maybe even out another year, Mike?
• 3:04
  SPEAKER_00: That uh from my perspective, that far out, I mean it it looks like a pretty interesting situation because that's yeah, highest we've been in a year.
• 3:13
  SPEAKER_00: So you're not missing anything uh on that one, at least at this point.
• 3:16
  SPEAKER_00: So unless you sold it three or you know, years in advance.
• 3:20
  SPEAKER_01: So now, like we've we've talked a little bit about uh I know in the office and with customers of how there's very little weather premium built into the market.
• 3:29
  SPEAKER_01: Are they just kind of starting to build that in this week, you think?
• 3:32
  SPEAKER_00: Trying to gain some of it back even.
• 3:34
  SPEAKER_00: I mean, March futures, I would still argue 465.
• 3:38
  SPEAKER_00: You don't have any weather premium in it still, and we're at 464.
• 3:42
  SPEAKER_00: Yeah.
• 3:42
  SPEAKER_00: So I mean we're I think we still we just got back kind of what we needed to.
• 3:46
  SPEAKER_00: Yep.
• 3:46
  SPEAKER_01: Um hopefully this is a jumping off point going forward.
• 3:49
  SPEAKER_01: Yeah.
• 3:49
  SPEAKER_01: And the I mean the the I mean the big weather story out there right now, you mentioned like a little bit of drier forecast, maybe which is still a reach.
• 3:58
  SPEAKER_01: Which uh and right now, if it would be warmer, I'd make everybody feel a little better because we're you know, we started out the year so nice and warm and ahead on heat units, and now we've kind of slowly eroded that away to we're still slightly ahead of normal, but not near as where like where we wanted to be here, started out the crop year at which we're gonna build on in a little bit.
• 4:16
  SPEAKER_01: Well, I hope so.
• 4:17
  SPEAKER_01: And uh but the the out you know, kind of the main story that I know we talked uh with some customers this this week down at the World Pork Expo about is the wet conditions out east and some of the late planting that has been going on, and they did make up quite a few acres uh here.
• 4:33
  SPEAKER_01: I I know you mentioned on the Monday report uh on the planting acres.
• 4:37
  SPEAKER_01: There was how many acres on planted yet?
• 4:39
  SPEAKER_00: So eight hundred K in Ohio had to be planted yet, seven hundred in Indiana and Illinois, so it that's a decent amount.
• 4:47
  SPEAKER_01: And then you do have uh a lot of their final plant dates from a crop insurance perspective hit like on the 5th of June this week.
• 4:53
  SPEAKER_01: Yep.
• 4:54
  SPEAKER_01: And so of course they can still plant, they only lose one percent a day, so yeah.
• 4:58
  SPEAKER_01: Uh it probably not gonna stop them if the if the field is really close, they'd plant it.
• 5:03
  SPEAKER_01: But forecast which is suggests that they're gonna get a little more rain this week.
• 5:07
  SPEAKER_01: So if they didn't get it planted, they probably aren't going to plant it.
• 5:11
  SPEAKER_01: Tight windows.
• 5:12
  SPEAKER_01: Which probably means there's gonna be a few more prevent plant acres out there in the east uh than maybe than normal, I would say.
• 5:20
  SPEAKER_01: Yeah.
• 5:21
  SPEAKER_01: Uh uh, but on the flip side, you're gonna have a few less in the west.
• 5:25
  SPEAKER_01: Um, I mean the south you look at South Dakota, North Dakota, North Dakota will have some just because they always do, right?
• 5:32
  SPEAKER_01: It's uh pockets of North Dakota had some you know late snow and some rain, and so they didn't get as as many acres planted.
• 5:39
  SPEAKER_01: Of course, there are a lot smaller areas this year, which which helps out, but you know, South Dakota for the most part got planted, northern Minnesota got planted.
• 5:47
  SPEAKER_01: So our traditional PP acres kind of brainstorming, but I I feels like it's gonna be about a million acres more PP than maybe the the flat number they use, right?
• 6:00
  SPEAKER_01: Um corn PP specifically.
• 6:03
  SPEAKER_01: Yeah, yep, yep, and that that's a good point.
• 6:05
  SPEAKER_01: Not talking about soybeans because well for one soybeans would have still twenty.
• 6:10
  SPEAKER_01: Yeah, still in another twelve days before they'd hit their final plant date out east, um, so they could still be planting there.
• 6:18
  SPEAKER_01: But uh it just feels like um that maybe we're not gonna hit that expected corn planted acre number.
• 6:25
  SPEAKER_00: Nope.
• 6:26
  SPEAKER_01: Unless the farmers were actually gonna plant more acres uh than the USDA said, and now we'll kind of back into the USDA number, but that will be seen here at the end of the month, right?
• 6:38
  SPEAKER_00: So the extra acres in the west probably canceled out by the prevent plant in the east uh in excess.
• 6:43
  SPEAKER_00: So that ninety-five plus million acres, if it was gonna be ninety-six, maybe it is only ninety-five now, but nonetheless, the end of June, that acreage report's gonna be very interesting because all of that will be put into that report, won't it?
• 6:58
  SPEAKER_00: Correct, exactly.
• 6:58
  SPEAKER_00: So that's gonna give us a uh basically the next look till September, then at that point, right?
• 7:03
  SPEAKER_00: Yep.
• 7:03
  SPEAKER_01: And and the other thing, of course, we've experienced here uh in the West, uh uh well it's been a couple years, but out east, you if it is wet planting and you're planting late, that generally doesn't spell uh a good uh or doesn't set you up for a good yield, right?
• 7:20
  SPEAKER_01: It now you need everything to go perfectly the rest of the year uh in order to get your high yield.
• 7:26
  SPEAKER_01: Um so the more acres you plant after May 15th into poor conditions, your yields are likely to suffer.
• 7:33
  SPEAKER_01: And so those are some pretty important states for the the national yield.
• 7:36
  SPEAKER_01: So I I think uh that'll if you're looking for a weather story on the corn market, that's that might be it.
• 7:42
  SPEAKER_01: That's it.
• 7:43
  SPEAKER_00: So let's talk about uh, you know, we traveled from I'd say I traveled from Brookings, South Dakota down to Des Moines, Iowa this week, and uh, we talked to people from all over, but I kind of like Tuesday morning, there was some rainfall that had occurred between um eastern Iowa and that northern Illinois.
• 8:01
  SPEAKER_00: So people that were dry in northern Illinois got two inches of rain, it kind of sounded like some really nice stuff.
• 8:06
  SPEAKER_00: Eastern Iowa is still pretty dry, they kind of missed out on it.
• 8:09
  SPEAKER_00: Drought map this week really didn't improve much for that stretch.
• 8:13
  SPEAKER_00: But what I noticed immensely from Brookings basically once I crossed over the Iowa border, was that the corn was immediately taller, which it, you know, uh no dir, Mike, but it it I mean the the Algona corn, the farmer that I had met with by there, they said as bad as we were last year, which remember they were flooded out the whole year, like 50 off trend yields, right?
• 8:37
  SPEAKER_00: Yep.
• 8:37
  SPEAKER_00: They looked awful in in around north central Iowa.
• 8:41
  SPEAKER_00: They said as bad as we looked last year, we looked that good this year.
• 8:45
  SPEAKER_00: And I mean they had corn out their front door that was a foot tall, and they're like, it's all like this.
• 8:48
  SPEAKER_00: And the soybeans were huge.
• 8:50
  SPEAKER_00: So very nice crop conditions, all the way down to it.
• 8:53
  SPEAKER_00: Sounded like as I got closer to Des Moines, you could tell there's a little bit more moisture stress in in some areas with just some flooded out areas that a little yellow still, etc.
• 9:03
  SPEAKER_00: But uh nonetheless, that northern Iowa, it looked fantastic, I thought, compared to at least here where we just need sunlight to get things caught back up.
• 9:11
  SPEAKER_01: And 100% agree.
• 9:13
  SPEAKER_01: We you know the comment was uh you know, we kind of traveled down I-90 and then down 35, and the southern Minnesota crop looked really good, especially when you think back to last year, because to your point, Mike, uh, from you know Jackson to Albert Lee South, last year was kind of the worst of it, and and we saw that all the way through the year.
• 9:36
  SPEAKER_01: This year, that area got planted pretty timely, uh, has had some decent rains uh this week.
• 9:42
  SPEAKER_01: A lot of that area had some nice rainfall.
• 9:44
  SPEAKER_01: Um, you know, even locally around here, we had uh you know between a half inch and an inch uh in certain areas, and some areas it got four or five inches and some thunderstorms and hail damage, but that's gonna happen uh in the Midwest in the summer at in certain points.
• 9:58
  SPEAKER_01: So uh no, I I would say the crop conditions as a whole looked really good.
• 10:04
  SPEAKER_01: Uh I think you know, southern Minnesota probably looked uh really, really good.
• 10:09
  SPEAKER_01: I think your area around Algona and things was a hot spot.
• 10:13
  SPEAKER_01: There, then there's a lot of just kind of average looking crops, but it it's good average, right?
• 10:19
  SPEAKER_01: Like it's uh there was nothing wrong with the crop.
• 10:22
  SPEAKER_01: Um and as you go further west, I think it's more noticeable that we just went through two weeks of of really cool temps, right?
• 10:30
  SPEAKER_01: So uh, you know, you look back into May with crops planted come out of the ground and then lows getting down into 30s for two weeks straight, that just beats up a corn crop and slows it down.
• 10:40
  SPEAKER_01: And and so now we're getting into June, we're getting into the herbicide application time frame.
• 10:46
  SPEAKER_01: Uh the thing to watch though is, you know, just reading about this, not to get too agronomic on you, Mike, but uh, you know, V6 is when we start setting uh the size of the ear, you know, girth.
• 10:58
  SPEAKER_01: Uh all the leaves and growing point are above ground now, and so it bec it's a little more susceptible to stress now or as they enter that stage than it was two weeks ago.
• 11:10
  SPEAKER_01: Yeah.
• 11:10
  SPEAKER_01: So I mean, I and maybe this is maybe speaking a little bit to my own crop in South Dakota when I was home at Memorial Day.
• 11:16
  SPEAKER_01: It was like, oh my god, this is the worst looking crop I've ever seen.
• 11:19
  SPEAKER_01: In reality, when it's V2, V3, doesn't do a lot of damage to yield.
• 11:25
  SPEAKER_01: Now we're getting to the stage where stress can.
• 11:28
  SPEAKER_01: And so having decent weather, getting the moisture in the spots that need it, like you said, in northern Illinois and sp and things as that corn enters that stage will be very important, something to watch over the next two, three weeks uh for the weather picture.
• 11:43
  SPEAKER_00: It's been turning quite if you look at the drought map over the last month, uh kind of southern most of Iowa, northern Missouri, eastern Illinois, and uh or uh northern Illinois and northern uh Indiana very that that was a spot kind of getting a little too dry.
• 12:00
  SPEAKER_00: So northern Indiana caused some good rains.
• 12:02
  SPEAKER_00: Iowa still kind of left out of it, but the Dakotas, Nebraska, that's been getting some nice rainfall.
• 12:07
  SPEAKER_00: Nebraska, eastern, probably a little too dry.
• 12:09
  SPEAKER_00: Yep.
• 12:10
  SPEAKER_00: So something to watch.
• 12:11
  SPEAKER_00: It's gonna be one of those things where we need to keep an eye on weather pretty much every day, every forecast.
• 12:15
  SPEAKER_00: It's gonna matter.
• 12:16
  SPEAKER_00: Uh they're gonna trade it really quick.
• 12:18
  SPEAKER_00: We saw this week just the most minor of changes, got the market kind of excited at these levels.
• 12:24
  SPEAKER_00: So uh something to watch here going forward.
• 12:27
  SPEAKER_00: And uh yeah, it was an exciting week this week down at the World Pork Expo.
• 12:31
  SPEAKER_00: We got to host the Farm Progress, the This Week in Agger business from our tent.
• 12:38
  SPEAKER_00: So uh myself and uh Lucas uh Wells got to be on uh that show this week with Mike Pearson and and crew.
• 12:44
  SPEAKER_00: So it was uh some very interesting guests into the tent, and uh we had a really good time.
• 12:50
  SPEAKER_00: When is that gonna be on, Mike?
• 12:51
  SPEAKER_00: So it'll be on tomorrow morning and Sunday, and it'll be on Sirius Radio as well for RFD TV.
• 12:57
  SPEAKER_00: And this is the show that comes on at like 5 a.m.
• 12:58
  SPEAKER_00: on Saturday.
• 12:59
  SPEAKER_00: This is yeah, a very key times time slot there.
• 13:02
  SPEAKER_01: So make sure you all set your alarms.
• 13:04
  SPEAKER_01: I will definitely be tuning in, or at least I'll record it and watch it later.
• 13:07
  SPEAKER_01: But uh no, really fun time a world pork expo.
• 13:10
  SPEAKER_01: Got to interact with a lot of customers and uh and just good people in the pork industry, and it's always a fun time.
• 13:15
  SPEAKER_01: Uh thanks for everybody that stopped out and and had a conversation.
• 13:18
  SPEAKER_00: It and that's a massive show.
• 13:19
  SPEAKER_00: It was like thousands of people.
• 13:21
  SPEAKER_00: I think they said like 15,000 people go to that show or something.
• 13:23
  SPEAKER_00: It's crazy.
• 13:24
  SPEAKER_01: It is a crazy big show with like nothing to eat but pork.
• 13:28
  SPEAKER_01: Yeah, it's fantastic.
• 13:29
  SPEAKER_01: All right.
• 13:30
  SPEAKER_00: We'll see you guys.
• 13:31
  SPEAKER_00: And thank you to all our listeners.
• 13:33
  SPEAKER_00: Please reach out to us at professional eggmarketing.com.
• 13:36
  SPEAKER_00: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 13:41
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 13:48
  SPEAKER_00: See you next time.