Latest / AG Bull / Ag Squawk | Davis Michaelsen | Brian Hoops

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Ag Squawk | Davis Michaelsen | Brian Hoops · AG Bull

0:11
SPEAKER_00: Grains gained meekly but left wheat behind.
0:15
SPEAKER_00: Cattle and hog futures drudged higher, and crude futures factored in flaring fears.
0:20
SPEAKER_00: I was gonna try and focus on just one market with my guest today, but as as Salieri once said to Amadeus, too many notes.
0:41
SPEAKER_00: From behind the big blue, bodacious microphone of Ag Bull, nestled in the ultimate man cave right here in Kansas City, USA.
0:49
SPEAKER_00: Your pal Davis Michelson, the handsome newsman.
0:52
SPEAKER_00: Glad to have you along on Ag Squawk in the afternoon.
0:55
SPEAKER_00: It's July 23rd.
0:57
SPEAKER_00: It's already Thursday, gang.
1:00
SPEAKER_00: We're almost there.
1:01
SPEAKER_00: Was that was that reference a little too obscure from Amadeus?
1:05
SPEAKER_00: Because you know, Mozart kept writing all these awesome songs, and then the the uh I think he was the Salieri was like the the court musician or something, and he's like, Yeah, that's pretty good, but it's too many notes.
1:15
SPEAKER_00: Well, uh what I've got going here is I just started as I do every day, kind of writing down little things throughout the day.
1:23
SPEAKER_00: Oh, yeah, I want to talk to Brian about this.
1:25
SPEAKER_00: Oh well, we'll we'll bounce this off of him.
1:27
SPEAKER_00: Too many notes.
1:29
SPEAKER_00: So we're gonna we're gonna hit them all if we can today.
1:33
SPEAKER_00: At least all of the important ones will uh Brian and I will decide together.
1:37
SPEAKER_00: Brian Hoops, Midwest Market Solutions, is my guest today.
1:41
SPEAKER_00: I'm excited to have him.
1:43
SPEAKER_00: And you know, he's he's got a lot of things to say, and I've got a lot of questions to ask.
1:48
SPEAKER_00: We'll we'll uh we'll we'll try to keep it brief.
1:51
SPEAKER_00: Brevity good, as Frankenstein once said.
1:54
SPEAKER_00: We'll get to Brian, but first let me just check in with a few things here.
1:59
SPEAKER_00: Let's see, like I said, a lot of notes.
2:01
SPEAKER_00: Got to keep her out of the rhubarb.
2:02
SPEAKER_00: Here we go.
2:03
SPEAKER_00: Daily export sale.
2:04
SPEAKER_00: Private exporters reported a daily sale of 126,000 metric tons for 26-27 to unknown destinations.
2:13
SPEAKER_00: Weekly export sales of corn, soybeans, and wheat were within their respective ranges of expectations, although soybean meal export sales exceeded expectations by just a bit.
2:25
SPEAKER_00: Uh, jobless claims as of July 18 were below expectations at 187,000 on an expected 210,000.
2:33
SPEAKER_00: That feels like a pretty significant miss on the uh the jobless claims.
2:39
SPEAKER_00: Turning to the markets, the tail of the tape goes something like this.
2:43
SPEAKER_00: Corn and soybeans were mildly higher through the morning hours.
2:46
SPEAKER_00: KC Wheat eventually caught that upside drift.
2:49
SPEAKER_00: Livestock futures were moderately higher after yesterday's super sketchy price performance.
2:55
SPEAKER_00: Rounding past the noon hour, corn and soybeans held gains, but KC Wheat slipped to trade fractionally on either side of Unchanged.
3:02
SPEAKER_00: Meanwhile, the cattle complex was moderately higher, as were nearby lean hogs.
3:07
SPEAKER_00: Before we get to the actual settlements, let me mention plus 500 software.
3:11
SPEAKER_00: We use plus 500 T4 software every single day for real-time quotes and a host of other features.
3:20
SPEAKER_00: Plus 500 T4 software, plus 500.
3:23
SPEAKER_00: That's plus 500.
3:25
SPEAKER_00: All right, let's get over to the uh let's start with the grains.
3:29
SPEAKER_00: Look at the November soybeans, up just two cents on the day on the November beans, 1243 and three quarters.
3:37
SPEAKER_00: I like that 12 handle, and I like just inching higher here in the soybeans.
3:42
SPEAKER_00: Similar kind of a deal here in the Deese corn, 487 and a half at the settlement.
3:47
SPEAKER_00: That one also up two cents.
3:48
SPEAKER_00: And to me, that one, well, obviously, that's a bigger two cents than it was in soybeans.
3:53
SPEAKER_00: Is it more significant?
3:54
SPEAKER_00: I mean, we're at we only need to go out to the march to find a five-handle, 503 up uh a cent and a quarter in the march corn contract.
4:04
SPEAKER_00: Bean meal was higher, bean or bean meal was lower, excuse me.
4:08
SPEAKER_00: Bean oil looks like that one was higher.
4:10
SPEAKER_00: And then there are the wheats.
4:11
SPEAKER_00: I've got Chicago here up on the up on the chart, 696 and a quarter, down 11 and 1 quarter cents.
4:18
SPEAKER_00: Look out to the D's where it's 713 and three-quarters, but still down 11 cents on the the Chicago wheat and the KC down six cents, but still a similar story there.
4:29
SPEAKER_00: Over to the live stocks.
4:31
SPEAKER_00: I'm gonna look at October contracts, the live cattle.
4:35
SPEAKER_00: Your fats were up$2.27.5,$221.37.5.
4:39
SPEAKER_00: October feeders$333 and 45 cents, up$3.72 and a half.
4:46
SPEAKER_00: And then over to the lean hogs, strength in the nearby's and some light pressure on deferred contracts.
4:52
SPEAKER_00: The October Lean Hogs ended the day at$88.90.
4:55
SPEAKER_00: That's up 57 and one half cents.
4:59
SPEAKER_00: Having spoken through the markets, I'm I'm very excited to bring in our guest today.
5:05
SPEAKER_00: Mr.
5:05
SPEAKER_00: Brian Hoops from Midwest Market Solutions.
5:09
SPEAKER_00: Brian, it's uh great to see you.
5:10
SPEAKER_00: I'm glad you took the time to be with us here on Xbox in the afternoon.
5:15
SPEAKER_00: How are you doing, brother?
5:17
SPEAKER_02: Yeah, I love that music.
5:18
SPEAKER_02: That is that is fabulous, fantastic.
5:21
SPEAKER_02: I I'm good, privileged to talk with you again, Davis.
5:24
SPEAKER_02: Always good to speak with you.
5:25
SPEAKER_02: It's been a little while since we last talked.
5:27
SPEAKER_00: It absolutely has.
5:28
SPEAKER_00: It has.
5:29
SPEAKER_00: Well, for me, I got a new gig going, got some new eyes on the program.
5:33
SPEAKER_00: Talk to us about Midwest Market Solutions.
5:35
SPEAKER_00: Where are you located?
5:36
SPEAKER_00: What do you do?
5:37
SPEAKER_00: And tell us a little bit about Brian Hoops.
5:40
SPEAKER_02: Yeah, you know, I'm not all that far from you.
5:43
SPEAKER_02: Down in Springfield, Missouri, so just a little farther south of you, and spend a lot of time in Kansas City.
5:48
SPEAKER_02: So I know that area well where you're located, was there a couple weeks ago.
5:53
SPEAKER_02: Yeah, we have offices up in north of you.
5:56
SPEAKER_02: I used to have one in Omaha till he retired.
5:58
SPEAKER_02: And we have one in South Dakota, Yankton, South Dakota, Thief River Falls, Minnesota, Pocahontas, Iowa, as well as my home office here in Springfield.
6:07
SPEAKER_02: But boy, I think back to when I started in this business.
6:11
SPEAKER_02: I was in banking and ag management, uh, doing some merchandising of sales starting in 94.
6:18
SPEAKER_02: So I guess I've been around longer than I care to remember, and uh started doing brokerage work in 99 and market advisory work.
6:26
SPEAKER_02: So it's been this is like my 27th year of doing the commodity brokerage.
6:31
SPEAKER_02: So you would you would think I would learn something by now, but I I seem to I seem to not retain as much as I used to be able to.
6:38
SPEAKER_00: It catches up with us, doesn't it, Brian?
6:40
SPEAKER_02: It seems to.
6:41
SPEAKER_02: It seems to, yes, sir.
6:42
SPEAKER_00: If you started out on a a somewhat fiduciary foot, can I can I assume you're you're kind of a numbers cruncher?
6:48
SPEAKER_00: Are you uh are you a bit of an abacus nerd?
6:50
SPEAKER_00: Are you are you into numbers?
6:52
SPEAKER_02: I to an extent, you know.
6:53
SPEAKER_02: I I there there are people who are way more into them than I am, but yes, I I do like I do like the numbers, and I do like to uh see what they represent, what they mean, and maybe even look at what they can tell us for the future.
7:06
SPEAKER_02: You know, if you can see what has worked in the past or what hasn't worked, what trends we've seen, can we replicate those trends or duplicate them going forward and and how you can use those trends for your marketing for your trading?
7:19
SPEAKER_00: I love it.
7:20
SPEAKER_00: I love it.
7:21
SPEAKER_00: I want to use when when I was coaxing you into being on the show with me, I said, Well, you know, we'll kind of hit the high points of of all the markets, but I don't want to get too deep into any of them.
7:32
SPEAKER_00: I just want to pick one that was happened to be super interesting, and we'll just talk about that one.
7:39
SPEAKER_00: I'm not sure we can do that today, Brian.
7:41
SPEAKER_00: I I want to I want to end up in the grains, but I feel like sort of an overarching factor here is gotta be crude oil.
7:51
SPEAKER_00: I use some alliteration.
7:52
SPEAKER_00: By the way, alliteration almost always annoys, but I did say crude futures factored in flaring fears.
8:00
SPEAKER_00: I mean, if you want to talk about some numbers, I'm looking at the September WTI up five dollars three cents at 91.86.
8:08
SPEAKER_00: I I feel like corn and beans and even wheat were were already headed higher, pointed higher before crude re-rallied.
8:18
SPEAKER_00: Can I say re-rallied tensions have flared again, and and it's it's back to the races, I guess.
8:24
SPEAKER_00: How much is crude influencing the ag markets presently in your mind?
8:28
SPEAKER_02: Yeah, you know, it's you can probably describe this summer as two words both begin with W, weather and war.
8:36
SPEAKER_02: And it's certainly impacting us.
8:38
SPEAKER_02: Yeah, you can't really talk about corn without talking about soybeans, and you can't talk about any of these markets without talking about wheat and what's happening because crude oil is pushing back higher.
8:49
SPEAKER_02: You know, we've we pretty much removed all the premium that that we had put into because of the war when we thought we were at an end of the war.
8:58
SPEAKER_02: We came back to those areas that we were, what late February, early March, when the war broke out over the weekend.
9:04
SPEAKER_02: We had given all those all that rally back, and then now we're starting to put market premium back in place once again.
9:11
SPEAKER_02: We went from what 68 up to this 91 dollar area rather quickly because of the war and the what's happening overseas between the U.S.
9:19
SPEAKER_02: and Iran.
9:20
SPEAKER_02: And I'm just not sure that we have a good exit policy here going forward.
9:24
SPEAKER_02: How are we going to get out of this war?
9:27
SPEAKER_02: President Trump says Iran wants to make a deal.
9:29
SPEAKER_02: He said that so many times.
9:31
SPEAKER_02: I don't know that anyone believes him at this point in time that we are close to ending the war, even if they want to make a deal, that Iran would hold to their port part of the deal.
9:42
SPEAKER_02: I just I think the market's sensitive to that right now, that we've been here, we've seen all this happen before, and it and it hasn't held true.
9:50
SPEAKER_02: So we're gonna put some premium back into the marketplace, and we're doing that pretty rapidly.
9:54
SPEAKER_02: And then, you know, you talk about war, you talk about Russia and Ukraine war, that's been going on for over four years now, seems to be intensifying here with bombs and strikes against wheat export ports, and together those two countries export about what 35-40 percent of the world's wheat output.
10:13
SPEAKER_02: And so when you shut that supply down, just like you're shutting off the Strait of Hermuz, shut crude oil supply prices go up.
10:19
SPEAKER_02: When you shut the world wheat supply, prices are going to go up.
10:23
SPEAKER_02: And we've seen a huge rally in this wheat market.
10:26
SPEAKER_02: Now, there's longer-term fundamentals at play that I think we have to address, especially if you're a producer.
10:32
SPEAKER_02: And then you also look at corn and soybeans, weather, major impact of what's going on, too hot, too dry this summer, but yet it's maybe not hotter, it's maybe not drier than a lot of other summers.
10:45
SPEAKER_02: But I think the difference is similar to the crude oil market, this spring we had a really big rally, and then we gave it all back and dropped all the way back down into some long-term weekly chart support for corn for soybeans, and and theoretically gave back all of our weather premium that we had built in.
11:03
SPEAKER_02: And this was by early mid-June.
11:05
SPEAKER_02: And once we gave back that weather premium, now it gets hot and dry.
11:08
SPEAKER_02: Now we have to put some back into the marketplace.
11:11
SPEAKER_02: So up we rally the funds who had kind of abandoned alongside of the corn and soybean markets and wheat for that matter, now building back in some large net long positions, and so we're putting price levels that we haven't seen in soybeans in several years.
11:27
SPEAKER_02: Same thing for wheat.
11:28
SPEAKER_02: Corn, we're just more retracing or getting closer to our highs.
11:32
SPEAKER_02: We haven't made all all-time new highs here or new highs for this move yet, but we're we're certainly working on it and having it have not eclipsed those spring and summer highs.
11:40
SPEAKER_02: So it's yeah, it's a combination of war, weather, all this coming together to give us kind of an explosive movement here in the last uh 30 days for the grain producer.
11:50
SPEAKER_00: Well, and I think, and I don't want to belabor this point, but I've I've said this before.
11:55
SPEAKER_00: Number one, I feel like Iran has figured out the that diplomacy can be used as a lever to buy themselves a little bit of time to to restock, to re-arm, to you know, do whatever it is that they're doing over there.
12:08
SPEAKER_00: And I mean, dude, we just kind of keep taking the bait.
12:12
SPEAKER_00: Like, okay, well, they want to talk.
12:14
SPEAKER_00: That's supposed to be good news.
12:15
SPEAKER_00: I don't take that as good news anymore.
12:18
SPEAKER_00: I don't believe it.
12:19
SPEAKER_00: I want to, I want it to be true, but we've seen this movie before, as you've said, and it feels like maybe the markets have caught on to that, but uh but then again, here we go, crude shooting higher.
12:31
SPEAKER_02: Right, you know, at some point I think the war will come to an end, and when we do, we'll probably give back a lot of this premium.
12:37
SPEAKER_02: But it may take some time to reach that point, you know.
12:40
SPEAKER_02: I like as you said, the market has become desensitized to statements that we're going to end this war quickly, that Iran wants to make a deal until we actually see it being proven that it's that it's over.
12:54
SPEAKER_02: It's I think we're going to keep a fairly sizable premium in this crude oil market.
12:58
SPEAKER_02: It's unfortunate because we we planted the crop with much higher fertilizer prices, much higher energy prices, fuel prices to put the crop in the ground.
13:07
SPEAKER_02: Now we caught a break as far as uh urethra dropping back to or urea dropping back to to what prices they were, they're starting to be on the rise again.
13:16
SPEAKER_02: Now we're gonna look at fall fertilizers.
13:19
SPEAKER_02: That that hurts the farmer's pocketbook.
13:21
SPEAKER_02: And then, you know, farmers never never slow down.
13:24
SPEAKER_02: But if there's a slower time in the summer, you're not actively planting or or doing field work as much or harvesting.
13:32
SPEAKER_02: We go into the harvest here before too much longer.
13:34
SPEAKER_02: Clients in Texas are gonna be starting to harvest their crops here in another week.
13:38
SPEAKER_02: You know, you're faced with high fuel costs once again.
13:41
SPEAKER_02: So it just at real bad timing for the U.S.
13:43
SPEAKER_02: farmer to have these spikes in fuel prices that we've been seeing in the spring here and now this late summer.
13:49
SPEAKER_00: When you talked about corn and soybeans sort of shrugging off the war premium and going and and testing lows in June, is am I am I too optimistic that well the market just needed to prove where the low is, and now that we've got that established, we just sort of were we'll look to maybe establish a new low, but at a at a higher level there.
14:14
SPEAKER_00: I mean, did did it all get flushed out there and we establish longer-term lows?
14:20
SPEAKER_02: I want to say we have.
14:22
SPEAKER_02: I think that's you know, that tells us these summer lows that we put in in in June.
14:26
SPEAKER_02: That was the expectations we're gonna have these huge yields, and I think yields are probably starting to trickle down, maybe not a huge amount, but a smaller yield than what we saw earlier this spring.
14:37
SPEAKER_02: We'll probably be updated in the August splying demand report.
14:41
SPEAKER_02: So a little bit smaller yields combined with you know, with the demand that we're seeing, improving demand.
14:47
SPEAKER_02: Uh, China is actually buying some of their products.
14:50
SPEAKER_02: Our our soybean sales exports were out this morning.
14:53
SPEAKER_02: The soybean sales, new crop beans, 225 million bushels compared to last year, 96 million at this time, and almost all that is because of China stepping in and buying U.S.
15:03
SPEAKER_02: soybeans.
15:04
SPEAKER_02: So I think, yes, you know, to answer your question, the lows we saw in June, I think they're gonna be very hard to be tested or taken out into the fall.
15:14
SPEAKER_02: And even if we do, I don't think we spend a lot of time below those price levels.
15:18
SPEAKER_02: So, you know, the farmers get has in his back pocket, has crop insurance guarantees where he knows downside risk.
15:26
SPEAKER_02: I think these summer lows are probably gonna tell you that's our price risk on the futures markets, and they can plan accordingly from there.
15:33
SPEAKER_02: Uh, you don't really want to lose sight of marketing and just blindly follow the crops here and harvest and throw everything in the bin and think it's all gonna be easy for you.
15:42
SPEAKER_02: I think, like in the case of wheat right now, we're probably gonna see planted acres spike higher in in September when we start going to the fields here in the southern plains and into October.
15:52
SPEAKER_02: We're gonna have more acres.
15:53
SPEAKER_02: You look at July 27, is uh close to that$8 mark.
15:57
SPEAKER_02: That's gonna buy some wheat acres.
15:59
SPEAKER_02: And I think our export markets are gonna shut off pretty quickly.
16:02
SPEAKER_02: In fact, we're probably seeing that again.
16:04
SPEAKER_02: Our exports for wheat this morning were not very good, around 10 million bushels, about what we need to be to reach the USDA forecast.
16:12
SPEAKER_02: But our new crop commitments were only at 244 million bushels, and last year's wasn't all that great, but it was better than this year, which was about 329 million bushels.
16:23
SPEAKER_02: So we're we're slowing down our export business, and I think that we're going to slow it even further at these price levels that we're at for the in the case of wheat.
16:30
SPEAKER_00: Yeah, yeah.
16:31
SPEAKER_00: That makes sense.
16:32
SPEAKER_00: How much how much uh how much does the heat wave in Europe uh benefit uh American exports?
16:43
SPEAKER_02: Yeah, you know, that's something we didn't even even discuss, but that's another reason to think we're probably not going to go back to those those lows that we saw in June.
16:51
SPEAKER_02: You you have crops that are really getting hurt in Europe because of the heat that they're experiencing, drought-like conditions, and so their crops become smaller.
17:01
SPEAKER_02: For those kind those uh sellers there are not able to supply some other countries' needs, it opens the door for the US to have better exports.
17:09
SPEAKER_02: So you're looking at the I think this growing season as kind of a transition for corn soybean producers, where we don't produce some a massive crop like we did last year in the case of corn, it's gonna be big, I think, but not as massive because we have less acres, a little bit less yield, and we're gonna have even better demand than what we saw a year ago.
17:29
SPEAKER_00: Do you think USCA overshot it with the with the 183 corn yield print?
17:34
SPEAKER_02: You know, that's a good question, and that's kind of what's debating right now.
17:38
SPEAKER_02: You know, I I think well, we clear our trades through RJ O'Brien, which was bought out by Stonex, so we have access to some of their information now.
17:45
SPEAKER_02: And Stonex yield model last year was the by far and away the closest one when it came to expectations of last year's uh corn and soybean yields.
17:55
SPEAKER_02: Well, this year they're still at 186.7 for corn and 53.8 bushels per acre for soybeans.
18:02
SPEAKER_02: I think that's higher than most people would be right now, but yet their yield model was almost spot on last year.
18:08
SPEAKER_02: So that's gonna be a debate is how big is this crop?
18:11
SPEAKER_02: Is it is it 181, 183, like the USDA said, or is it gonna be closer to 185 or 186, like uh weather this Stonex model is anticipating?
18:21
SPEAKER_02: And that's where I think we will debate as we go into the harvest time frame in in August into September is how big is this crap and what size are we?
18:31
SPEAKER_00: Yeah.
18:32
SPEAKER_00: I've spoken to some some mostly in Iowa, but farmers in the I states talking about to me, it feels like the corn is a little bit ahead of schedule, and even with the uh the crop condition report, maturity seems just a couple of couple of points ahead of last year.
18:49
SPEAKER_00: I remember hearing about northern Missouri, eastern Missouri having trouble getting the soybean crop planted because of excessive rain.
18:58
SPEAKER_00: Is there anything to that at all?
18:59
SPEAKER_00: Did you notice that as well?
19:03
SPEAKER_02: You know, to an extent here, you know, a lot of the crop around in my area anyway is going to be double crop soybeans, you know, harvest the wheat, plant soybeans behind it.
19:13
SPEAKER_02: I don't think they'd have any issues planting those beans as the rain's kind of shut off in in June and they were able to plant.
19:19
SPEAKER_02: You know, one thing I note on the crop ratings, go into that for a second, is the northern states like North Dakota and Minnesota, parts of Wisconsin, those crop ratings are higher than last year, and you go farther south, you get into you know Iowa, Illinois, Missouri, down into Kansas.
19:37
SPEAKER_02: The ratings are less than it was a year ago.
19:39
SPEAKER_02: And I think that's definitely tied to the spring and the summer's weather.
19:43
SPEAKER_02: A lot of producers are telling us they're surprised how well the crop is hanging on.
19:48
SPEAKER_02: The corn still looks very good, very green, despite the lack of moisture, lack of rain that they've had, because it's been so dry in a lot of areas.
19:55
SPEAKER_02: But we do have areas that have had a lot of rain, and that's you know, it's almost true for every year.
20:00
SPEAKER_02: Since I I think I said started in 99, 27 years, every year has been a little bit different.
20:06
SPEAKER_02: There's been years where some of the areas of the crop have been really good.
20:10
SPEAKER_02: There's going to be bad areas almost every year as well.
20:13
unknown: Sure.
20:14
SPEAKER_00: You're not an agronomist, and I'm not asking you to be, but this is something of an agronomy question.
20:20
SPEAKER_00: Do you think it's genetics?
20:21
SPEAKER_00: Is it the seed genetics that are that just make a stronger corn and soybean plant that they're able to because, dude, we've burnt it and then we've overwatered it, and then we've we've gotten cool, and then we burnt it and overwatered it.
20:34
SPEAKER_00: And you know, it there has been so much thrown at this corn and soybean crop this year.
20:39
SPEAKER_00: And time and again, people say, no, no, it looks pretty good, looks real good.
20:43
SPEAKER_00: And I'm hearing, you know, the same thing from you there.
20:45
SPEAKER_00: That it's got to be genetics, doesn't it?
20:47
SPEAKER_02: I'd say 95% of it has to be genetics.
20:51
SPEAKER_02: Yeah, I think if you planted hybrids uh from 30 years ago today, you would certainly not have as good a crop as what you're gonna see this year.
20:59
SPEAKER_02: It's but yeah, it has to be genetics.
21:01
SPEAKER_02: I think farming practices to an extent have probably improved as well over that time frame.
21:06
SPEAKER_02: I think farmers more diligent to an extent about their their conservation of soil moisture and their practices as far as as growing the crop.
21:15
SPEAKER_02: We've learned different things about how to plant spacing of the crop, how deep to plant the kernels.
21:20
SPEAKER_02: But yeah, genetics is probably the biggest factor in increasing these corn yields that we've seen, you know, back in the in the 90s.
21:28
SPEAKER_02: You know, you would think maybe 170 bushel corn yield in Iowa was pretty good.
21:33
SPEAKER_02: Now you're probably disappointed anything under 210 or 215.
21:36
SPEAKER_00: Yeah, yeah.
21:37
SPEAKER_00: I think you just shouted out the American farmer.
21:39
SPEAKER_00: It's what you did.
21:41
SPEAKER_00: Well done, sir.
21:42
SPEAKER_00: Well done.
21:43
SPEAKER_00: We're all excited about uh the November bean contract being in the mid-12s, today closing out at 1243 and three quarters.
21:50
SPEAKER_00: I mean, up two whole cents today.
21:52
SPEAKER_00: Uh, does December corn have the juice based on the current setup to hang a five handle?
21:59
SPEAKER_02: Oh, absolutely.
22:00
SPEAKER_02: I think it does.
22:01
SPEAKER_02: Yeah, I I think so.
22:02
SPEAKER_02: I think you know, beans still have some upside potential.
22:05
SPEAKER_02: I think corn can get to that five dollar mark.
22:07
SPEAKER_02: You know, the funds have.
22:09
SPEAKER_02: The best buyers here that we've seen, and I think as long as they continue to be strong buyers, I think we can get there.
22:15
SPEAKER_02: You know, our export sales slowed down a little bit here, which is what you would expect, especially with South America advancing with their harvest and competing with us here in the U.S.
22:26
SPEAKER_02: market.
22:26
SPEAKER_02: But Ukraine is a major exporter of corn, especially to China.
22:31
SPEAKER_02: And if they're not able to, because the war export wheat or corn, a lot of that business may start to trickle over to the corn market.
22:39
SPEAKER_02: So, yeah, absolutely.
22:40
SPEAKER_02: I think there's a chance we can get to that five dollar area, maybe up in the low five to five, five, ten.
22:46
SPEAKER_02: A lot of it's going to depend upon weather.
22:48
SPEAKER_02: You know, we've we've said this before where you know it's the staircase higher, elevator shaft lower, or whatever analogy you want to use.
22:55
SPEAKER_02: Well, we've had a pretty quick run to these price levels for corn, soybeans, and wheat.
22:59
SPEAKER_02: We could be one major rain shower, one uh weather model change away from giving a lot of this back, too.
23:07
SPEAKER_02: But I think as as long as that weather gets there, the funds have uh plenty of buying ammunition left.
23:13
SPEAKER_02: They can really buy a lot of contracts if they really want to.
23:15
SPEAKER_00: Could could you speculate just a little bit for us?
23:18
SPEAKER_00: What what might a level should should everything get perfect and people say, Yeah, you know what, corn's not so sexy here, beans aren't so sexy here.
23:25
SPEAKER_00: What kind of levels might we need to retest before we get a little concerned?
23:30
SPEAKER_02: You mean on the upside here?
23:32
SPEAKER_00: To the downside.
23:33
SPEAKER_02: To the downside, yeah.
23:35
SPEAKER_02: I you know, I th I don't, you know, I don't think we're gonna go test those lows that we put in in back in June.
23:40
SPEAKER_02: I don't see that as a situation, but I do think we could retrace, you know, 30-40 cents at least in the corn market.
23:47
SPEAKER_02: We could put beans back down below$12, easy enough in the 1180s area, 1175.
23:53
SPEAKER_02: But again, the demand from China, I think, is going to be there.
23:57
SPEAKER_02: You have biofuels demand for soybeans this year.
23:59
SPEAKER_02: There's just a lot of uh pent-up demand, I think, waiting for this crop, both corn and soybeans, to carry us through the fall and into the winter months into the spring time frame.
24:11
SPEAKER_00: Okay, very good.
24:12
SPEAKER_00: Well, and the and the reason I sort of ask is you know, the number 475 had kind of been thrown out as a rough break-even figure for corn, or at least someplace that you that you want to be.
24:26
SPEAKER_00: I don't think fertilizer is gonna get any cheaper.
24:28
SPEAKER_00: We just I just got this from Jim Wiesmeyer, if I can find it.
24:31
SPEAKER_00: Among my many, many notes here.
24:35
SPEAKER_00: Well, already we'd we'd heard from God got it, where did I put that?
24:39
SPEAKER_00: I've got it here.
24:40
SPEAKER_00: Here we go.
24:41
SPEAKER_00: We'd already heard from Farm Bureau, Red Inc.
24:43
SPEAKER_00: year six, Farm Bureau sees$32 billion crop loss in 2027 as pressure builds for new aid package.
24:50
SPEAKER_00: That's kind of a policy note, but then today the world's fertilizer squeeze closes in on Brazil, and Asia's rice bowl with the Strait of Hormoose disrupted, Russia and China rationing exports, Brazilian farmers barely half covered on nutrients.
25:06
SPEAKER_00: These are between between Asia, Oceania.
25:09
SPEAKER_00: Do we still call it that?
25:10
SPEAKER_00: Oceanic, Oceanica, whatever rice country, and and and Brazil, South America in general.
25:18
SPEAKER_00: It sounds to me like they're a little bit short bought, and supplies may be hard to come by here.
25:23
SPEAKER_00: I I feel like the economics would I don't know if we can count on 475 doing it anymore on corn, uh, especially once we get into 2027.
25:32
SPEAKER_00: Any what's your crystal ball tell you about 2027, bro?
25:36
SPEAKER_02: Yeah, uh I'm pretty I'm pretty bullish on agriculture going into 2027.
25:40
SPEAKER_02: I I think you know you're gonna have some opportunities in that wheat market to hedge at, like I said, maybe eight dollars on the new crop wheat.
25:47
SPEAKER_02: I think a lot of producers will be doing that all day long.
25:49
SPEAKER_02: But corn and soybeans could be what I think is a real bull type markets going into this fall and into the summer.
25:57
SPEAKER_02: There may not be enough fertilizer go around when South America does start planting their crops, when the US wants to look at producers wanting to lock in this fall, lock in their fertilizer costs, or at least even start applying fall fertilizers, that's gonna be a real issue.
26:11
SPEAKER_02: It wasn't as big an issue other than price in 26, but in 27, it could be availability, it could be a big issue.
26:19
SPEAKER_02: And if we start applying less fertilizers, now you start talking about reducing yields, no matter how good the genetics are, you got to have good fertilizer to get that crop up and running.
26:29
SPEAKER_02: So I think there's a real good demand base, a real good demand story for both corn and for soybeans here, less so for the wheat market, and then possibly reduce yields, possibly this this year because of the heat and dryness this summer, and then possibly again going into 27 because of fertilizer concerns.
26:47
SPEAKER_02: I think there's there's a good bull market here, good bull story here coming in in the U.S.
26:51
SPEAKER_02: agriculture.
26:52
SPEAKER_00: Yeah, excellent, excellent.
26:53
SPEAKER_00: I think that was a second shout out, actually.
26:56
SPEAKER_00: You're just weaving them in here into the conversation.
26:58
SPEAKER_00: I love it.
26:59
SPEAKER_02: You know, I grew up on a grain farm, so I gotta support the American farmers.
27:03
SPEAKER_00: Amen, brother.
27:04
SPEAKER_00: Well, and you know, usually I have some kind of thought on on fertilizer prices.
27:09
SPEAKER_00: Well, should we be, you know, because I know that there's an idea, a sound principle of uh farm economics, and maybe you can help me unwind myself on this.
27:20
SPEAKER_00: But a sound principle is okay, lock in your your variable prices so you can minimize variables, even if that means booking ahead in an uncertain market.
27:33
SPEAKER_00: But if if Brazil's already running short, if they're running short across the ocean on on fertilizer, man, uh I don't like this, but you know, it'd be it'd be a real roll of the dice, I guess I would say, to just wait and say, well, maybe we get over the hump here, we get closer to fall, we get into harvest, and I'll just go hand to mouth on my fertilizer.
27:54
SPEAKER_00: I don't like that any better.
27:56
SPEAKER_02: It's hard to know what a producer should do.
27:58
SPEAKER_02: You know, we we had that big break in energy prices and urea prices coming back down to those previous levels.
28:05
SPEAKER_02: Can that happen again?
28:06
SPEAKER_02: Absolutely.
28:07
SPEAKER_02: If we can somehow end this war with Iran and get the straight of hormouths opened up, fertilizer prices will fall once again, and energy prices will fall, and the availability will be there.
28:17
SPEAKER_02: So there is a way, a path forward to us having a fertilizer and having cheaper fertilizer than what we are seeing today.
28:25
SPEAKER_02: It today is not the probably the best time to lock it in, but we don't really see an end to this war either, and prices may continue to move higher.
28:34
SPEAKER_02: So either be prepared to pay those higher fertilizer costs or kind of take a risk that by this fall, when you need fertilizer, the war will come to an end and energy prices will be lower, ERIA will be lower, and and hopefully that is the case.
28:49
SPEAKER_02: But if if that's not the case, I hope there's some other alternatives where we can get some fertilizer imported into the United States if we have to.
28:56
SPEAKER_00: Yeah, I I agree with with what you said a moment ago, too.
29:00
SPEAKER_00: There there definitely is risk that fertilizer supplies run run short.
29:05
SPEAKER_00: And that is, as they say, rather bullish for fertilizer prices in my book.
29:10
SPEAKER_00: Anyt anything else you want to make sure that we talk about in the grains in any of these markets here?
29:16
SPEAKER_00: Anything stick out to you that that we want to make sure and and let our viewers know about before we move on?
29:23
SPEAKER_02: You know, we've covered a lot of things.
29:24
SPEAKER_02: I guess there isn't really one thing that stands out that we didn't hit already.
29:28
SPEAKER_02: You know, managing your risk is is always the key, you know, going it has been back in in the 90s when when I was doing egg lending and and farm management, you know, growing up on a grain farm in the 80s in Iowa, definitely that was that was a key.
29:43
SPEAKER_02: That hasn't changed.
29:44
SPEAKER_02: A lot of other things have changed, but managing risk never, never has, probably never will.
29:49
SPEAKER_00: Yeah, yeah.
29:50
SPEAKER_00: I didn't know you were an Iowa boy from back in the day.
29:52
SPEAKER_00: I was on a I was on a grain farm growing up in the 80s in Iowa.
29:56
SPEAKER_00: Where whereabouts were you from?
29:58
SPEAKER_02: Uh northwest small town called Alta, Iowa.
30:01
SPEAKER_00: Okay.
30:02
SPEAKER_00: I I think I've heard of it.
30:03
SPEAKER_00: Yeah.
30:04
SPEAKER_00: I was from a small town called Dyke, Iowa, right near Cedar Falls, Waterloo area there.
30:09
SPEAKER_02: I'm on the other side of the state over by Storm Lake.
30:11
SPEAKER_00: Okay.
30:11
SPEAKER_00: Okay.
30:12
SPEAKER_00: Yep.
30:12
SPEAKER_00: Yep.
30:13
SPEAKER_00: That sounds good.
30:14
SPEAKER_00: And both of us somehow wound up in the great state of Missouri.
30:16
SPEAKER_00: And I like Missouri.
30:18
SPEAKER_00: Sounds like you do too.
30:19
SPEAKER_00: You got any you got any thoughts on the livestock markets at all?
30:22
SPEAKER_00: Nice run in the in the cattle today.
30:25
SPEAKER_00: Feeder hogs nearby is higher.
30:27
SPEAKER_00: I I feel like the the fundamentals, the story hasn't really changed on cattle.
30:32
SPEAKER_00: Any thoughts there?
30:33
SPEAKER_02: Yeah, you know, the fundamentals have not changed for the better, and we need some good news to give us higher prices in here.
30:39
SPEAKER_02: You know, otherwise, today's movement, it feels good.
30:42
SPEAKER_02: It feels like a relief.
30:43
SPEAKER_02: You know, you open lower, close higher, a couple dollars better.
30:46
SPEAKER_02: But really, to break the trend of downtrending markets, we haven't done that yet.
30:51
SPEAKER_02: We haven't done anything technically, we haven't done anything fundamentally to suggest this is a near-term low.
30:57
SPEAKER_02: You know, we have cattle and feed, inventory reports.
31:00
SPEAKER_02: We expect the numbers to be kind of what they would have been most of the spring and into the summer, pretty tight.
31:05
SPEAKER_02: It's I think a bigger, bigger issue is a loss of demand, and we're just not exporting that much product, and we're certainly not able to sell a lot of the product in here.
31:16
SPEAKER_02: So, you know, it's kind of something that's been signaled.
31:18
SPEAKER_02: We we thought it would happen at some point when the consumer would back away.
31:22
SPEAKER_02: I do think we've fallen enough now, similar to what we did a year ago, where the consumer comes back and says, Okay, beef is on sale now compared to where it was.
31:31
SPEAKER_02: I'm gonna stock up on some beef, you know, buy as much of the products I can as they can store.
31:36
SPEAKER_02: So I think we're at that level now where the consumer is gonna start coming back into it, but it takes time, you know, to turn that ship around, it takes a long time.
31:46
SPEAKER_02: And especially when you have the funds in this marketplace, but sellers rather than buyers, it's it's hard to see an uptrending market.
31:54
SPEAKER_02: So you've got to get them involved back to the long side.
31:56
SPEAKER_02: You do really need to start exporting some more product or at least seeing the US consumer buying more product, and that may be the first thing that's happening is the consumer is starting to buy some product here.
32:08
SPEAKER_00: Yeah, I was watching Jed Sidwell this morning on the the morning edition of Ag Squawk, and he was talking about some signs of heifer retention of all things.
32:16
SPEAKER_00: If people still still do that, some herd rebuilding may be starting there, which probably well, heifer retention might help a little bit, but the herd rebuilding certainly wouldn't help the markets either, would it?
32:28
SPEAKER_02: No, and I don't know that we're rebuilding the herd that quickly.
32:30
SPEAKER_02: I haven't talked to any producers yet who are actively rebuilding their herd.
32:34
SPEAKER_02: I think they had intentions of doing that, but the high hay costs, lack of a bill of availability, especially out in the western parts of the United States, it's limited them in doing exactly that.
32:45
SPEAKER_02: I I think I do think their intentions were that they wanted to rebuild their herd, but just it's just not economically feasible to do that right now.
32:53
SPEAKER_02: And so it may be prolonged for another six months, eight, nine months, ten months until they start in another attempt to do that.
33:00
SPEAKER_02: But there was some rain in the spring.
33:02
SPEAKER_02: I think they they attempted to do that, but now things have gotten dry, hot and dry again, especially in Kansas, Oklahoma, and regions where hay and grass availability is pretty limited.
33:12
SPEAKER_02: Pretty expensive.
33:13
SPEAKER_00: Yeah, absolutely.
33:15
SPEAKER_00: Very good.
33:16
SPEAKER_00: Well, let's you know what?
33:17
SPEAKER_00: Let's do talk about the uh the weather just a little bit.
33:19
SPEAKER_00: We'll move on.
33:20
SPEAKER_00: Um according to the National Weather Service, dangerous heat will expand from the Gulf Coast into the southern plains and desert southwest through week's end.
33:28
SPEAKER_00: Additional extreme heat impacting the Pacific Northwest will shift to the northern plains by the weekend.
33:34
SPEAKER_00: Tropical storm birthday expected to continue to impact portions of the northwestern Gulf Coast from south central Louisiana to the upper Texas coast today.
33:45
SPEAKER_00: Um, here in KC, we missed out on an awful lot of severe weather, but there was a lot of it nearby, some tornadoes and some some spooky winds and things earlier in uh in the springtime, I guess, more so.
33:58
SPEAKER_00: How did the spring treat you over there in the Springfield area?
34:01
SPEAKER_02: Oh, it was uh you know pretty fantastic.
34:03
SPEAKER_02: We had rain upon rain upon rain showers, and uh, you know, the grass really looked good and everything was growing.
34:10
SPEAKER_02: A little bit of uh hail storms, and but that that's pretty common for around here, but uh things have dried off considerably, and it's gotten real hot into the summer months.
34:19
SPEAKER_02: So uh, you know, the it's the the soil is different here than what it was in Iowa.
34:25
SPEAKER_02: You do not retain water here very well.
34:27
SPEAKER_02: Uh it all drains off and the ground is not very good, so it's hard to hard to grow things as well down here.
34:33
SPEAKER_00: Can confirm when I moved from Grundy County, Iowa down here to KC, uh I built a little garden bed and everything, and I I brought I was gonna try and transplant the rhubarb from my backyard down here in KC, and it died within like two years.
34:50
SPEAKER_00: It just wouldn't go.
34:51
SPEAKER_00: There was nothing that I could do to convince it to uh to live.
34:55
SPEAKER_00: Well, very good.
34:56
SPEAKER_00: Um Brian Hoops, Midwest Market Solutions.
35:00
SPEAKER_00: Where's the best place to get a hold of you?
35:02
SPEAKER_02: Uh my number, uh direct number actually, is 417-501-5132.
35:08
SPEAKER_02: You can also go online to our website address, find a list of all of our offices at Midwestmarket Solutions.com.
35:15
SPEAKER_00: Brian, before I cut you loose, um, let's have a little bit of fun to close out the program here on our Thursday.
35:22
SPEAKER_00: I've got some items of mild interest.
35:24
SPEAKER_00: Are you prepared to be mildly interested?
35:27
SPEAKER_02: I will pre I am prepared.
35:29
SPEAKER_00: Excellent, excellent.
35:31
SPEAKER_00: Well, we'll we'll see if any of this does the trick for you.
35:34
SPEAKER_00: In uh 1829, on this date, this is July 23rd, in the United States, William Austin Burt patented the typographer, an early version of the typewriter, clear back in 1829.
35:50
SPEAKER_00: I would have thought it was a more modern invention than that.
35:52
SPEAKER_00: Yeah.
35:53
SPEAKER_00: In 1926, on this date, Fox Film bought the patents of the movie tone sound system for recording sound onto film, and finally in 1950, on this date, the Gene Autry show debuted on CBS.
36:08
SPEAKER_00: And Brian, that brings us to today's Ag Bull Injustice.
36:12
SPEAKER_00: I don't know if you're familiar with this or not, but I take at least one moment to commit an act of injustice.
36:19
SPEAKER_00: And what I do is I ask my guest to try and answer a question that I'm unable to answer myself.
36:27
SPEAKER_00: Are you ready for today's Ag Bull Injustice?
36:31
SPEAKER_02: I'm gonna give it a shot and give it out.
36:32
SPEAKER_00: Absolutely.
36:33
SPEAKER_00: Okay, we were talking about Gene Autry.
36:37
SPEAKER_00: Now, uh, Roy Rogers' horse was named Trigger.
36:41
SPEAKER_00: Wilbur had Mr.
36:42
SPEAKER_00: Ed.
36:42
SPEAKER_00: The Lone Ranger had Silver.
36:45
SPEAKER_00: Any chance you can name Gene Autry's beloved horse?
36:49
SPEAKER_00: They had a little comic book about him and everything.
36:51
SPEAKER_00: Can you name Gene Autry's horse?
36:54
SPEAKER_02: Uh there's no way I will come up with that answer to.
36:57
SPEAKER_02: Would you like a hint?
36:58
SPEAKER_00: I can give you a hint.
37:00
SPEAKER_02: It won't help.
37:01
SPEAKER_00: It might.
37:02
SPEAKER_00: Back when Bruce Jenner was still a dude, they called Wheaties the breakfast of uh champion.
37:11
SPEAKER_00: That's exactly right.
37:12
SPEAKER_00: That's exactly right.
37:13
SPEAKER_00: Champion.
37:14
SPEAKER_00: Gene Autry's beloved horse champion.
37:17
SPEAKER_00: And uh here's the shot of me, a 12-year-old me mimicking uh Gene Autry there with Champion, doing the best we could.
37:25
SPEAKER_00: Uh no.
37:27
SPEAKER_00: We'd we had a lot of time on our hands back in the day.
37:31
SPEAKER_00: Well, uh, Brian, it's it's great to reconnect with you, brother.
37:34
SPEAKER_00: And uh I appreciate you taking some time for us.
37:37
SPEAKER_00: We like to fiddle around just a little bit toward the end of the show, but uh Midwest Market Solutions, Mr.
37:42
SPEAKER_00: Brian Hoops.
37:43
SPEAKER_00: I uh I sure do appreciate you, man.
37:45
SPEAKER_00: It's good to see you.
37:46
SPEAKER_02: Hey, it was a lot of fun.
37:47
SPEAKER_02: Good talking with you.
37:48
SPEAKER_02: Thanks for having me on.
37:49
SPEAKER_02: Appreciate it.
37:50
SPEAKER_00: Absolutely.
37:51
SPEAKER_00: And quick before we go, I want to say thanks to TradeTheNews for keeping my squad updated on the news that moves the markets.
37:57
SPEAKER_00: Get useful news from TradeTheNews.
37:59
SPEAKER_00: That's trade the news.
38:00
SPEAKER_00: And may I quickly direct you to AgBull.com where you can dig deeper with Ag Bull Intel, 855737 Farm.
38:09
SPEAKER_00: 855737 Farm.
38:11
SPEAKER_00: Take the markets by the horns with AgBull.com.
38:14
SPEAKER_00: Jed Sidwell.
38:15
SPEAKER_00: We'll be back first thing in the morning to get you set up with a taste of that at Eggbull Intel.
38:18
SPEAKER_00: And then I've got a conversation.
38:20
SPEAKER_00: Get this, everybody, with the Alberta Breeze.
38:23
SPEAKER_00: Sean Haney from Mural Agg Radio.
38:25
SPEAKER_00: Tomorrow on tomorrow on the afternoon eggs clock.