Latest / Professional Ag Marketing Podcast / Commodity Boom? | Grain Talk January 29th, 2026

Transcript

Commodity Boom? | Grain Talk January 29th, 2026 · Professional Ag Marketing Podcast

• 0:03
  SPEAKER_00: You're locked in to the Green Market Talk Podcast.
• 0:06
  SPEAKER_00: Fast updates, market movers, and the grain news you need right now.
• 0:12
  SPEAKER_00: Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
• 0:20
  SPEAKER_02: All right, today is January 29th.
• 0:22
  SPEAKER_02: I've got Pat back with us here live.
• 0:24
  SPEAKER_02: How's it going, Pat?
• 0:25
  SPEAKER_03: It's going good.
• 0:26
  SPEAKER_03: How are you today, Mike?
• 0:27
  SPEAKER_02: We're doing really good.
• 0:28
  SPEAKER_02: We're going to talk about the grain markets today, a few different items.
• 0:31
  SPEAKER_02: We're going to kind of break down uh Trump's visit into Iowa.
• 0:34
  SPEAKER_02: We're going to talk about some of the reasons why the grain markets are moving a little bit higher this week, Pat talking about uh whether it be Argentina or the US dollar phone a little bit.
• 0:44
  SPEAKER_02: So those are a few of the items we're going to discuss today.
• 0:46
  SPEAKER_03: Looking forward to the discussion.
• 0:48
  SPEAKER_02: Awesome.
• 0:48
  SPEAKER_02: So let's talk about Trump's little visit to Iowa here this week.
• 0:52
  SPEAKER_02: He he boasted about a couple different things.
• 0:54
  SPEAKER_02: One was maybe a little bit of a pep rally that the uh Chinese administration has uh successfully purchased their first 12 million metric tons of soybeans.
• 1:03
  SPEAKER_02: So it he uh as we know Trump likes to go to Iowa to take a victory lap on some of those trade items.
• 1:09
  SPEAKER_02: And then also he discussed the potential or possibility still for E-15 being available for a season round uh time frame.
• 1:17
  SPEAKER_02: And uh the he boasted about how that could pose some good things for corn demand here and and he's talked to uh a little bit more too about this idea that he's brought two John Deere plants back into the United States, uh, you know, um uh a lot in the manufacturing industry, which he's been working on as well.
• 1:34
  SPEAKER_02: So did you have any uh key takeaways from Trump's visit here in Iowa this week?
• 1:38
  SPEAKER_03: Yeah, I um I appreciate uh your your summary there, and and you're right, it was more of a of a political rally than it than uh than anything else, but um probably well timed as we start to think about midterms and those sorts of things.
• 1:51
  SPEAKER_03: And and and uh um I think it is important for this administration to um remind uh uh his their supporters, right, uh on on the process a little bit here.
• 2:06
  SPEAKER_03: And so touching on all of those topics, um certainly uh uh would be appropriate uh uh for our group, if you will.
• 2:13
  SPEAKER_03: But but uh you know the the the 12 million metric ton in this uh in into China on soybeans is is uh um you know still half of what we normally would would expect, right?
• 2:24
  SPEAKER_03: And and and so um so so taking a victory lap on on starting a fire and put putting it half out is is is okay, I guess, right?
• 2:33
  SPEAKER_03: But but I think it's kind of our responsibility to keep perspective on those things too, right?
• 2:38
  SPEAKER_03: Now, having said that, um, you know, I also um we also all believe, of course, that energy insecurity or energy security is important, right?
• 2:49
  SPEAKER_03: And and uh um ethanol has played a a real role in that for decades now, and the the possibility or probability of building that to E15 year-round um certainly helps um helps corn growers for sure, helps agriculture in general, um, but does does provide for an additional layer of of energy security, which is vitally important to our country.
• 3:12
  SPEAKER_02: From a demand on corn perspective, it's probably not too big of a deal.
• 3:16
  SPEAKER_02: It's two three hundred million bushels maybe max that we're gonna see out of this, especially in the near term.
• 3:21
  SPEAKER_02: Uh they they had language in there like, oh, it could be up two bit two billion bushels of more corn demand, but that would be that every person going to the pump is basically choosing E15 instead of ten.
• 3:31
  SPEAKER_02: And uh from an economic perspective, like maybe it's not as good as we have been, but at the same time, crude oil and gas is pretty cheap again.
• 3:38
  SPEAKER_03: So it's not the that that billion bushel projection or two, whatever, that that's not a it's not a that that's not a wrong answer.
• 3:47
  SPEAKER_03: It's just not a probable one.
• 3:49
  SPEAKER_03: Yeah, that's right.
• 3:50
  SPEAKER_03: And we are exporting about 13% of the ethanol that we produce too, so that that could end up backfilling some additional domestic demand as well.
• 3:57
  SPEAKER_02: With ethanol, I really feel like that continues to be the if there's a growth opportunity, it's one of these days I feel like we're gonna wake up and if Trump does do something really bullish for the corn market, is probably sign some trade deal with India and we're gonna ship him a bunch of ethanol or something, you know.
• 4:12
  SPEAKER_02: So from a from a growth perspective, can we get the American consumer to go from 10 to 15% on a mandate or something?
• 4:19
  SPEAKER_02: Doesn't seem likely.
• 4:20
  SPEAKER_02: I we can we can barely get these guys to do it seasonally at this point, just the availability of it.
• 4:25
  SPEAKER_02: Um the growth opportunity really seems like if if we could get the rest of the world up to E ten at some point.
• 4:31
  SPEAKER_03: So And maybe this is as good a time as any to talk about exports and just exports in general and and what impact that's uh that's uh um the US currency has been having on that.
• 4:40
  SPEAKER_02: For sure.
• 4:41
  SPEAKER_02: If we look at the US currency today, it's had a massive impact on the grain markets this week specifically.
• 4:46
  SPEAKER_02: You know, going until really the end of last week, the corn market and soybean market's been pretty uh pretty boring, Pat.
• 4:52
  SPEAKER_02: I mean, there really hasn't been much news.
• 4:54
  SPEAKER_02: You had the Wazdir port, and now it's not a whole lot to trade until basically prospective planning.
• 4:59
  SPEAKER_02: And one of the things that's found its way in was the US dollar has been collapsing pretty hard in the last 10 days.
• 5:06
  SPEAKER_02: If you look, the debasement trade seems well and alive.
• 5:09
  SPEAKER_02: Uh it to make this simple, basically, we are really buying up metals right now and selling off the US dollar.
• 5:17
  SPEAKER_02: People don't want the US dollar.
• 5:19
  SPEAKER_02: Uh they're playing the debasement trade, and we've seen that.
• 5:22
  SPEAKER_02: The US dollar is as low as it's been now for over four years, and that's a fantastic thing for our industry and ag exports.
• 5:28
  SPEAKER_02: Uh Trump even boasted about that a little bit this week that he wants a low US dollar.
• 5:33
  SPEAKER_02: He's not concerned about it at all.
• 5:35
  SPEAKER_02: So, what are some of your takes about uh the US dollar impact it has on agriculture and and uh what that's doing this week?
• 5:41
  SPEAKER_03: Well, definitely the executive branch, the the this this fits their narrative, right?
• 5:46
  SPEAKER_03: The uh the idea of of uh improving increasing economic activity at home and and making foreign goods less competitive to the to the U.S.
• 5:55
  SPEAKER_03: consumer.
• 5:56
  SPEAKER_03: And so um so absolutely it that's all part of it.
• 6:00
  SPEAKER_03: And and the only the other comment that I just make as it relates to that, Mike, is is um through the years when we've when rallies have snuck up on us, there's been a US a weak currency in the US dollar component to them, right?
• 6:16
  SPEAKER_03: It and so we can do a little bit of of history on that, but I I suspect I'm not too far off.
• 6:21
  SPEAKER_03: Like like some what some rallies are are really easy to explain, even from the beginning, weather related specifically, but but once in a while we've we've seen some some unexplained life in commodities, and and oftentimes it's tied to uh um the opportunity to be more competitive on it from a global perspective, um, and and usually some sort of a of a of a currency change is is is is part of that discussion.
• 6:46
  SPEAKER_03: And so, you know, let's just and we'll get into to to uh uh South America weather here in a second, but but let's just talk a little bit about that and how that application or observation as it relates to exports and currency, how does that fit into the to the the the corn balance sheet, right?
• 7:04
  SPEAKER_03: And I'm where I'm trying to lead the witness here just a little bit is a burdensome, I say in quotes, um um domestic balance sheet on on feed grains, corn in particular, right?
• 7:15
  SPEAKER_03: But a global balance sheet that's kind of sneaky tightening up here some, right?
• 7:20
  SPEAKER_03: Yeah at least month over month.
• 7:22
  SPEAKER_03: Still from a historical perspective, it's it's comfortable.
• 7:25
  SPEAKER_03: I don't want to send the wrong message here, but it is tightening up in spite of really pretty decent weather in the primary growing regions all over the planet recently, and what we believe to be um not significant um um increase in animal numbers really anywhere.
• 7:41
  SPEAKER_03: Yeah.
• 7:41
  SPEAKER_03: Materially, right?
• 7:42
  SPEAKER_03: So so anyway, just connecting those two dots.
• 7:45
  SPEAKER_03: I don't know if you have any additional thoughts on all of that.
• 7:47
  SPEAKER_02: We have a lot of corn, excess corn in the United States this year.
• 7:51
  SPEAKER_02: We have a very low US dollar, and that's made us very competitive on the global market, especially when the global market is the lowest ending stocks we've seen in 10 years over 10 years now.
• 8:02
  SPEAKER_02: And uh uh especially for some of our major trade partners, which is still China, their stocks are are low, about 10-year lows on both corn and soybeans and even wheat at this point.
• 8:12
  SPEAKER_02: So uh from that perspective, I think just to try to round it all up is that you know, a low US dollar right now, it does move the needle pretty good for we got a lot of product we got to move out of the United States because we don't have more crush plants for ethanol, really.
• 8:26
  SPEAKER_02: There's some expansion at current ones, but not a lot.
• 8:29
  SPEAKER_02: And we don't have any more ethanol or uh any more animal numbers, so we gotta get rid of it.
• 8:34
  SPEAKER_02: And right now's a really good time that that's lining up.
• 8:36
  SPEAKER_03: Absolutely.
• 8:37
  SPEAKER_02: And if we wanted to build on it a little bit more, you know, um Argentina, their crop conditions are are decreasing pretty hard right now.
• 8:46
  SPEAKER_02: That's been part of this week's support as well, Pat.
• 8:49
  SPEAKER_02: They started off at really high levels, like Kate'll pull up the uh cr crop condition scores in Argentina right now, and you'll see that normally we start off at 20 to 40 percent good to excellent there, and we were like 80% this year.
• 9:00
  SPEAKER_02: Now it's just coming back to normal, basically, but it's on a pretty steep decline.
• 9:05
  SPEAKER_02: So at this point, when we talk about exports, meal's been exporting a lot out of the United States lately.
• 9:12
  SPEAKER_02: And as we found ourselves just under$300 on meal, seems like historically we find pretty good support here, don't we?
• 9:19
  SPEAKER_03: Yep.
• 9:19
  SPEAKER_03: Haven't spent a lot of time for 10 years below 300 bucks in the in the meal complex, to your point.
• 9:24
  SPEAKER_03: Absolutely.
• 9:25
  SPEAKER_02: Yeah.
• 9:26
  SPEAKER_02: If we go a little bit further, Pat, just on we've talked about US balance sheets being a little bit weak, um, but we've also tied this into a lower US dollar, major money flow a little bit.
• 9:38
  SPEAKER_02: I just want to talk about because uh the the corn market seems a little bit too easy right now.
• 9:43
  SPEAKER_02: We've got 2.2 billion bushels of corn.
• 9:46
  SPEAKER_02: Um fundamentally, it suggests historically with this fundamental situation, we should be like 380.
• 9:52
  SPEAKER_02: We should be sub-4 dollars.
• 9:53
  SPEAKER_02: But we keep holding above four here.
• 9:55
  SPEAKER_02: And uh we're seeing other commodity markets like gold, for example, run up astronomically high.
• 10:01
  SPEAKER_02: The yesterday was the biggest uh day in gold's history, and today, even this morning, we eclipsed it.
• 10:06
  SPEAKER_02: So uh from that perspective, gold versus like corn prices is is severely out of whack.
• 10:13
  SPEAKER_02: And I just feel like if there's something that the market, uh specifically the agriculture farm industry, is potentially missing for what could be ahead, and this is a key, right?
• 10:24
  SPEAKER_02: The black swans are always the things we can't see, right?
• 10:27
  SPEAKER_02: Uh including you and I.
• 10:28
  SPEAKER_02: But one of them that's coming out of the woodwork this week sure seems to be that we could be severely under undershooting the potential upside of these grain markets right now if even just a little bit of money flow comes into these commodities.
• 10:42
  SPEAKER_02: Balance sheets don't support it to the upside, but historically, you know, oh six, oh eight, we we deck technically didn't support that fundamentally either.
• 10:50
  SPEAKER_02: So I'm I'm not really sure if that would matter for at least a shorter period of time.
• 10:55
  SPEAKER_02: And because a grain market is such a small percentage of even the commodities market, uh it if even a little bit of outside money flow comes in, it moves a needle a lot.
• 11:05
  SPEAKER_02: So like you can see Cade pulled up the chart here just showing a pie graph of the commodity index on sector weights.
• 11:12
  SPEAKER_02: And you can see like egg only makes up an entirety of 16% of it.
• 11:16
  SPEAKER_02: Right.
• 11:16
  SPEAKER_02: And energy over half of it.
• 11:18
  SPEAKER_02: Well, look what's happened to metals at 5% of it lately.
• 11:22
  SPEAKER_02: Uh we've just skyrocketed Pat.
• 11:24
  SPEAKER_02: So uh do you have anything to add on just the correlation between some of these other commodity markets and and maybe the grain or proteins?
• 11:33
  SPEAKER_03: Yeah, well, we're even in this discussion, but just you know, in our interactions with our clients and producers in general, we're looking for a a reason or or a possibility of this thing, uh especially this corn complex and soybeans too to some extent.
• 11:49
  SPEAKER_03: We're looking for a reason for this thing to break out of the funk that it's been in, right?
• 11:53
  SPEAKER_03: And and and so that's what this discussion is all about.
• 11:56
  SPEAKER_03: And I and so I appreciate I appreciate all of those observations.
• 12:00
  SPEAKER_03: And I and and and uh a little bit, that's what I was was referencing earlier in this discussion, just as it relates to you know, cheaper U.S.
• 12:08
  SPEAKER_03: currency um has in the past stimulated some money flow to the long side on commodities.
• 12:14
  SPEAKER_03: And and I think you know your point here is a is a great illustration that that uh um they they can can move the the outside money can can move these markets pretty significantly with with a um with a relatively uh small percentage investment, right?
• 12:29
  SPEAKER_03: So so so that can happen, and then and then just maybe, maybe we're also giving giving those folks and others a little bit of a reason with a with a with a a uh uh a bit of a weather scare in Argentina today.
• 12:43
  SPEAKER_02: For sure.
• 12:44
  SPEAKER_02: Any other final thoughts this week?
• 12:45
  SPEAKER_03: Well, uh first I I would like for you to kind of explain to all of us.
• 12:49
  SPEAKER_03: Um, you know, we've referenced uh um the video option here and and the and the the slides that that that Kate has uh has up.
• 12:57
  SPEAKER_03: So so talk to um us traditional podcast listeners as how we can make this transition.
• 13:02
  SPEAKER_02: Yeah, the transition's pretty easy.
• 13:03
  SPEAKER_02: You can go on YouTube onto our face or on our Facebook or Instagram, you can get the the link on our bio.
• 13:09
  SPEAKER_02: That'll take you uh right to our YouTube page where we have basically uh a small grouping of folders that can break it down from.
• 13:16
  SPEAKER_02: We have our three weekly podcasts a week hogs, cattle, grains like this one.
• 13:21
  SPEAKER_02: And then we've got things like an educational series you can dip into as well now, and uh work your way through each folder once a week.
• 13:28
  SPEAKER_03: Yeah, and and then so for those of you that are on video and for the first time have seen Mike and I confirm Brad Pitt Tom Cruise look alike.
• 13:37
  SPEAKER_03: Yep, just less hair.
• 13:38
  SPEAKER_03: Yeah, exactly.
• 13:39
  SPEAKER_03: We're waiting on the hair transplants.
• 13:41
  SPEAKER_03: Yeah.
• 13:42
  SPEAKER_03: That's um like this last thing we'll just say is is is as we wrap up this time of year.
• 13:47
  SPEAKER_03: We haven't mentioned crop insurance once and should, right?
• 13:50
  SPEAKER_03: We're gonna start our averaging period um next week uh for for the spring price.
• 13:55
  SPEAKER_03: And and uh, you know, a nice little pop in both Nov and and and and D's corn, Nove beans D's corn in in terms of of starting that averaging period.
• 14:04
  SPEAKER_03: And and uh we really appreciate the opportunity to engage with with producers on on how the combination of a solid risk management plan and and and uh um our uh uh uh crop insurance products can can can can work really well in your operation.
• 14:19
  SPEAKER_02: This week and this year is really important for that because at ProAg here we have a very interesting opportunity on the insurance side for row crops that's definitely worth reaching out to us on.
• 14:29
  SPEAKER_02: Uh gives us a little bit of a competitive advantage, I think, Pat.
• 14:32
  SPEAKER_02: Absolutely.
• 14:33
  SPEAKER_02: Thank you.
• 14:34
  SPEAKER_02: Thank you.