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Grain Attack · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_01: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_01: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:24
  SPEAKER_01: Today is August 4th.
• 0:26
  SPEAKER_01: I've got Jeff with us here today.
• 0:27
  SPEAKER_01: How's it going, Jeff?
• 0:28
  SPEAKER_00: Good afternoon, Mike.
• 0:30
  SPEAKER_01: Well, let's talk a little bit about grains today, shall we?
• 0:34
  SPEAKER_00: I think the season is ripe for that.
• 0:37
  SPEAKER_01: I think so too.
• 0:38
  SPEAKER_01: So what I want to focus on here is through the week we've seen uh grain prices really before this week pull all the way back to some major support levels for corn and soybeans and wheat too.
• 0:52
  SPEAKER_01: And can't forget about wheat here, real recently, Jeff, because what we've been seeing is uh the wheat market's really been pushing around the corn market lately, I think.
• 1:01
  SPEAKER_01: When we start looking at even the overnight headlines here last night, uh wheat futures were higher following Ukraine drone strikes on key Russian grain export port of don't even make me try to pronounce that name, but nonetheless, the uh wheat futures had pushed corn and soybean futures higher last night, and that wasn't the first time we've seen this in the last couple weeks.
• 1:24
  SPEAKER_00: So that's kind of the third region that they've um had that they've done some attacks on, right?
• 1:31
  SPEAKER_00: As far as a little bit further inland in the last two weeks, is if memory serves me.
• 1:36
  SPEAKER_01: Ukraine?
• 1:36
  SPEAKER_01: Yeah.
• 1:37
  SPEAKER_01: Well the Russians on Ukraine.
• 1:38
  SPEAKER_01: The Russians on Ukraine, but this was Ukraine fighting back.
• 1:42
  SPEAKER_01: So we um we did have some retaliation finally from Ukraine getting some headlines at least.
• 1:48
  SPEAKER_01: But they did make more new lows on Thursday yesterday.
• 1:52
  SPEAKER_01: Uh it sounded like Romania was gonna try to help Ukraine and getting some of that loadout uh going through them.
• 1:58
  SPEAKER_01: But nonetheless, um I think the tensions between Russia and Ukraine are pretty high right now.
• 2:04
  SPEAKER_01: That's pushing wheat prices around, and that's pushing corn and swiping prices around.
• 2:09
  SPEAKER_01: And so when we pulled back to very strong support lines, I thought from a chart perspective on corn and mainly uh wheat, I thought maybe you could start to see a little something here, anyways.
• 2:21
  SPEAKER_01: And we've held those lines.
• 2:23
  SPEAKER_01: You know, if we can continue to hold$495 on corn, I think the longer we hold that here, the better chance it is that maybe it was too dry in this area, maybe these August rains that are expected won't happen.
• 2:36
  SPEAKER_01: Maybe Russia bombs Ukraine a little bit more, something like that'll get some buying at least done to get you a little bit of a pop.
• 2:42
  SPEAKER_00: So you probably so you hang out here at these support levels looking for the next wave of information, correct?
• 2:49
  SPEAKER_00: Pretty much.
• 2:50
  SPEAKER_01: Now, time's gonna be pretty limited on that from a seasonal perspective.
• 2:54
  SPEAKER_01: Historically, um the end of August is not a fantastic time frame to sell grain.
• 3:00
  SPEAKER_01: So you're normally looking at pretty low prices seasonally at the end of August.
• 3:05
  SPEAKER_01: Fair point.
• 3:06
  SPEAKER_01: So that I'm gonna keep that in mind as we move forward here, but getting too friendly to these grain prices, um, especially when it comes to looking at weather.
• 3:14
  SPEAKER_01: So uh a few things that have happened this week regarding crop size, weather, conditions has been uh you've seen a couple different uh estimates come out.
• 3:24
  SPEAKER_01: Stone X was kind of the first one I saw.
• 3:27
  SPEAKER_01: They came out with a 177 corn yield, 50 and a half soybean yield.
• 3:31
  SPEAKER_01: Um the soybean yield I don't think they give a ton of credit to, but that did support the soybean market just a little bit because if you do pull it back to 50, then the SD sheet starts to get pretty tight.
• 3:42
  SPEAKER_01: You're down to pipeline levels at that point, so you don't have to move that a lot.
• 3:46
  SPEAKER_01: The Informa came out as well, they were 176, so not too crazy of uh yield estimates out of those two compared to where the USTA is at 177.5 or whatever, so it's pretty in line with expectations, and it sounds like you've got to get something below 174 to really get this market excited.
• 4:05
  SPEAKER_01: And uh, I know we've talked about that before, but uh we're not quite there yet from the looks of it.
• 4:11
  SPEAKER_01: Now, this next report's gonna be NAS next Friday.
• 4:15
  SPEAKER_01: It'll be the first time they come out with their estimates, so anything can really happen.
• 4:19
  SPEAKER_01: Maybe they do move it lower like we saw last year, but um at this point uh I'm really curious to see what we're gonna find in our uh in our crop tour next week that we go on here for Pro Ag.
• 4:31
  SPEAKER_00: So if you know, I want to take a real quick step back here, Mike.
• 4:35
  SPEAKER_00: Um, you know, the weather event for this weekend to me looks like it is gonna be just a huge deal as far as all the stuff that you just talked about, the timing of us putting uh you know, kind of gathering around the support on the on the charts here, on the especially on the corn and the wheat.
• 4:51
  SPEAKER_00: Um also just the the final yield aspects.
• 4:55
  SPEAKER_00: Um you think I'm overblown that I know it's a big deal for right in our region, right?
• 5:00
  SPEAKER_00: And I you know it's always um always gonna be a little careful that you don't look in your own backyard a little too much, maybe, but I know this is gonna be a huge rain for the crops on our farm.
• 5:11
  SPEAKER_00: What are your thoughts as far as a little bit broader view?
• 5:14
  SPEAKER_00: Is this thing a huge deal or just a big deal for the the regions that we kind of work through here, Mike?
• 5:21
  SPEAKER_01: Well, the by Monday morning, the two main regions that are supposed to re receive this week's rainfall according to the EU uh forecast is the South Dakota mainly, a little bit of North Dakota, just barely, and then mainly Illinois, and maybe a little bit of uh Indiana.
• 5:39
  SPEAKER_01: But that's kind of what we're supposed to know by Monday morning.
• 5:42
  SPEAKER_01: So I think uh those are key spots, pretty significant, uh mainly looking at Illinois there.
• 5:48
  SPEAKER_01: It depends a little bit how far north that gets to, because I know the problem area is really more that eastern Minnesota to Wisconsin and northern Illinois that I'd like to see that push up towards.
• 6:00
  SPEAKER_01: So we'll see how much they can get there.
• 6:02
  SPEAKER_01: But I mean, uh really that pattern's supposed to stick and then include Iowa through next week after that.
• 6:09
  SPEAKER_01: Okay, Iowa's more next week, beginning of next week.
• 6:12
  SPEAKER_00: Okay, yep.
• 6:14
  SPEAKER_00: So that that's interesting, and that kind of brings me back around to the crop tour um that you guys are going on here starting on Monday.
• 6:23
  SPEAKER_00: I think we just wanted to give everybody a heads up on that.
• 6:26
  SPEAKER_00: But you what's the 30-second overview of of what you guys got got going on there for next week, Mike?
• 6:32
  SPEAKER_01: Yeah, so next week we're gonna start here locally, then we're gonna work our way south again.
• 6:36
  SPEAKER_01: It'll be the same exact route as what we took last year and the year before.
• 6:40
  SPEAKER_01: So we're gonna go through uh western Iowa, then eastern Nebraska, through into Missouri, over through Illinois, Indiana, Ohio, and then wrap back north essentially.
• 6:53
  SPEAKER_01: So we're gonna hit our main eight states like we normally do, try to get an estimate for those eight states, cover 2,000 miles, uh, do a lot of the same, pretty much the same exact stops, same tour all together.
• 7:06
  SPEAKER_01: And my main goal in this is normally going into this tour, you've got a problem area of pretty substantial size.
• 7:15
  SPEAKER_01: Usually like Nebraska's awful as a whole state.
• 7:19
  SPEAKER_00: Fair point.
• 7:19
  SPEAKER_01: Or Ohio's awful as a whole state.
• 7:22
  SPEAKER_01: You know, somewhere on the fringe is normally like that, or Missouri.
• 7:25
  SPEAKER_01: Those are kind of the common ones.
• 7:27
  SPEAKER_01: Uh, this year, it I I don't know if I'm gonna see that.
• 7:30
  SPEAKER_01: I'm expecting more of little pockets of inconsistency everywhere.
• 7:34
  SPEAKER_01: So I think that's gonna make it really difficult for a crop tour.
• 7:39
  SPEAKER_01: Um you just see little pockets here and there that are gonna be hard to justify how big is that.
• 7:45
  SPEAKER_01: You know, if the whole state of Nebraska's cooked, at least you only really gotta move one state's number.
• 7:50
  SPEAKER_01: Or um, you know, if the whole US looks good, like when I first started doing this, it was pretty easy to guess what a crop size was.
• 7:57
  SPEAKER_01: Um when you start to plug in more problems, that creates more vulnerability to moving that number on the city.
• 8:04
  SPEAKER_00: And the variation of which field did you stop in, the one that had a few issues on compaction or what have you, you know, just within each region that you're trying to sample, I suppose, is gonna be a little bit variable this year.
• 8:17
  SPEAKER_01: Yep.
• 8:17
  SPEAKER_01: So it's gonna be a tough tour, but um yeah, I think a year like 19 was way harder or something like that.
• 8:24
  SPEAKER_01: But I uh I'm excited to go on this one, taking both uh two interns with uh this uh crop year as well.
• 8:30
  SPEAKER_01: So it'll be a fun time.
• 8:32
  SPEAKER_01: And if you guys have any questions or uh concerns or anything, please reach out.
• 8:36
  SPEAKER_01: It'll be posted on Twitter.
• 8:38
  SPEAKER_01: We're gonna log this all onto our website on uh the main front page so you can get at it there.
• 8:44
  SPEAKER_01: All of the links for each day's progress.
• 8:47
  SPEAKER_00: Sounds good.
• 8:48
  SPEAKER_00: Be looking forward to some of those updates, Mike.
• 8:50
  SPEAKER_01: All right.
• 8:50
  SPEAKER_01: Any final thoughts for our listeners before we let you go?
• 8:53
  SPEAKER_00: I would just throw out the few comments on the livestock real quick here.
• 8:57
  SPEAKER_00: I think those markets are um, you know, as far as the product values go, we're really have a similar week in this past week.
• 9:05
  SPEAKER_00: We performed very well on both sides, you know, the tale of a little bit two different stories there.
• 9:10
  SPEAKER_00: The cattle really slowed back the shackle space, so I think it probably slowed that up enough to where the product seems to be catching a little bit of footing here, and that'll be interesting to see how that goes forward.
• 9:24
  SPEAKER_00: It I think we've seen just a little more confidence coming out of the Packers here late in the week as far as what they want to pay for cash cattle.
• 9:31
  SPEAKER_00: We're probably gonna call that a good dollar higher than what it was uh a week ago.
• 9:37
  SPEAKER_00: Um, the hogs kind of have a little bit of a different storyline.
• 9:41
  SPEAKER_00: The product there did extremely well throughout this week.
• 9:45
  SPEAKER_00: I I know I thought uh if we could end this week at uh you know somewhere in the mid uh 110s, you know, 112 to 115.
• 9:54
  SPEAKER_00: I was gonna call that a pretty big win.
• 9:57
  SPEAKER_00: And I guess I haven't seen the three o'clock data here yet today, but I think we're gonna settle in there someplace.
• 10:03
  SPEAKER_00: So I think that had an impressive week.
• 10:05
  SPEAKER_00: Um, steady was impressive on the hogs.
• 10:08
  SPEAKER_00: A bit disappointed in the cash market and thus a dip a bit disappointed in the lean hog futures this week.
• 10:14
  SPEAKER_00: And we we kind of we had a good start to the week.
• 10:18
  SPEAKER_00: Um Packers were looking for some pigs Monday, um, Tuesday.
• 10:23
  SPEAKER_00: They filled up awful quick though, um, had a pretty easy time doing it, and then uh, you know, as the seasonal over there goes, if they can buy them cheaper in August, they definitely will.
• 10:34
  SPEAKER_00: So they got that job done towards the tail end of the week.
• 10:37
  SPEAKER_00: But you know, a lot of these hog futures have kind of drifted lower, and that's pretty disappointing, although maybe not horribly unexpected when you start looking at the calendar.
• 10:46
  SPEAKER_01: I thought they would have had a better day today.
• 10:48
  SPEAKER_01: I was a little disappointed at that.
• 10:50
  SPEAKER_00: Very disappointed.
• 10:50
  SPEAKER_00: Even were they even traded red for a while there, so there's definitely some pressure in this marketplace, Mike.
• 10:55
  SPEAKER_01: And just seasonal, you think?
• 10:57
  SPEAKER_01: Yeah, for sure.
• 10:58
  SPEAKER_01: Yep, I would agree to that.
• 10:59
  SPEAKER_01: Uh this afternoon's fundamentals uh looks like those just came out a little bit ago here as well, down a buck ninety-four, so pretty similar to what this morning's number did, anyways.
• 11:09
  SPEAKER_01: Not like we saw last night.
• 11:11
  SPEAKER_01: Uh live catalog, pretty good day here, kind of surprising to end the week.
• 11:16
  SPEAKER_00: Yep.
• 11:17
  SPEAKER_01: But all right, thank you for your time, Jeff.
• 11:19
  SPEAKER_01: And thank you to all our listeners.
• 11:21
  SPEAKER_01: Please reach out to us at professional eggmarketing.com.
• 11:24
  SPEAKER_01: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 11:30
  SPEAKER_01: Trading commodity futures and options involve substantial risk of loss and is not suitable for all investors.
• 11:36
  SPEAKER_01: See ya next time.