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0:23

There were no sparks from

0:26

this morning's USDA updates to

0:28

the supply and demand tables,

0:30

but there are some signals

0:32

we need to tap into

0:34

from the reports. Wheat was

0:36

lower, corn and soy being

0:38

slightly lower, live cattle were

0:41

lower, feeder cattle were mixed,

0:43

and lean hogs were lower.

0:45

Oh, hey, cotton closed higher,

0:47

well, mostly. From

0:51

the report day after

0:54

glow via farm journal

0:56

broadcast. This is Agri-talk

0:58

this afternoon. It's a

1:00

conversation with Bill Lapp

1:03

from advanced economic solutions

1:05

That it's Matt Bennett

1:07

from ag market net.

1:09

I'm handsome newsman Davis

1:12

Michelson Now here's the host

1:14

of Agri-talk chip Lori.

1:16

All right sugar lower coffee was

1:19

higher Okay. Energy markets except

1:21

for natural gas were

1:23

mostly higher. So, I mean, it's

1:26

not like it was lower prices

1:28

across the board, but we've

1:30

also got to take a look

1:32

at what was going on in

1:34

the equities because the doubt was

1:36

sharply lower again this morning. It's

1:39

off about 180 points right now.

1:41

So, it's well off the lows.

1:44

The NASDAQ is trading higher. The

1:46

S&P is trading higher is, well,

1:48

I believe. So, you know, a little bit

1:50

of backing and filling in here and

1:53

oh man, the S&P's just slightly

1:55

higher only about seven points. So

1:57

a little bit of backing and

1:59

filling I guess. uh... you know

2:01

some some uh... uh... corrections to

2:03

the heavy selling pressure that we've

2:05

seen in the equities over the

2:07

past couple of days all right

2:09

welcome you're gonna you're gonna welcome

2:11

folks to the show and everything

2:13

were you know i was just

2:15

gonna yammer about natural gas let's

2:17

do your thing do your thing

2:19

welcome to agritok hey Davis what

2:21

do you got our natural gas

2:23

bro four and a half box

2:25

let's look at the june four

2:27

sixty three and three quarters currently

2:29

the may at four forty nine

2:31

maybe i like the april contract

2:34

better for forty three and three

2:36

quarters and down just slightly on

2:38

the day today uh... these uh...

2:40

holy smoke four handle on natural

2:42

gas bro and it's it's like

2:44

four fifty Yeah, what is it?

2:46

That's a pretty amazing move. We

2:48

can use a correction there. Yeah.

2:50

Man, oh man, I'm pulling up

2:52

the chart right now. It goes

2:54

bottom left to top right on

2:56

that chart. Yep. Holy smokes. It's

2:58

been at it for a while.

3:00

No doubt. It's a good thing

3:02

that none of us need any

3:04

fertilizer here coming up, you know?

3:06

Right, exactly. Well, it is good

3:08

news that we're almost through the

3:10

heating season. Well, there's that. Yeah,

3:12

it feels it feels pretty good

3:14

here today. Not as good as

3:16

what it did yesterday, but feels

3:18

pretty good. 50 degrees here in

3:20

northeast Iowa. What's looking alright? I

3:23

think we're a dead even 70

3:25

here right now. Oh, that's gorgeous.

3:27

You might as well be in

3:29

San Diego. It's so good. San

3:31

Diego, it doesn't matter. San Diego

3:33

without the Californians is what it's

3:35

like down here. Oh! Oh! Oh,

3:37

man. It's like paradise. Paradise. Paradise.

3:39

All right, let's get to the

3:41

markets. I better read the news.

3:43

USDA estimates 24 25 wheat carryover

3:45

at 819 million bushels up 25

3:47

million bushels from last month and

3:49

22 million bushels above the average

3:51

pre-report trade guess. USDA increased the

3:53

total wheat supply 10 million bushels

3:55

on larger imports and cut estimated

3:57

exports 15 million bushels. The bigger

3:59

carryover estimate had a little... impact

4:01

on wheat futures. July's soft red

4:03

winter wheat opened lower and then

4:05

fell to close near session lows

4:07

while completing an inside trading day.

4:09

The US dollar index traded sharply

4:11

lower again today but that failed

4:14

to provide much support for wheat

4:16

prices. July H.R.W. wheat 5 and

4:18

3 quarters lower 585 and a

4:20

half July SRW down five and

4:22

a half cents to five seventy

4:24

one and three quarters and at

4:26

last report July spring wheat futures

4:28

at six ten and a quarter

4:30

Unsettled but down eight cents at

4:32

that point chip Yeah a little

4:34

bit of movement on that quote

4:36

excuse me on the wheat export

4:38

estimate in the supply and demand

4:40

report We'll talk to Bill about

4:42

that See what that's all about

4:44

and and you know a little

4:46

bit of movement on the import

4:48

number two Well USDA estimates 2425

4:50

corn carryover at 1.54 billion bushels

4:52

steady with February, but 24 million

4:54

bushels above the average pre-report trade

4:56

estimate. USDA made no change to

4:58

the supply or demand side of

5:00

the balance sheet and left the

5:03

national average cash corn price projection

5:05

unchanged from last month at 4.35.

5:07

USDA didn't make any changes to

5:09

its South American production estimates, with

5:11

Argentine corn unchanged from last month

5:13

at 50 million metric tons, and

5:15

the Brazilian crop estimated at 126

5:17

million. July corn futures opened steady

5:19

and rallied through resistance at 4.80,

5:21

before turning back to post a

5:23

low-range close just below the opening

5:25

range, May corn futures today. one

5:27

and three quarters lower four seventy

5:29

and a quarter july corn down

5:31

a penny and a half to

5:33

four seventy seven d sember corn

5:35

futures closed at four fifty four

5:37

and a half that's down just

5:39

one half of a cent man

5:41

talk about second verse same as

5:43

the first uh... we just got

5:45

Basically, no change, no change at

5:47

all from it. You know, something

5:49

interesting is we're back into that

5:51

Jan 10 trading range. We've got

5:54

to, we're going to see some

5:56

pretty tough resistance at the Jan

5:58

10 high of 484. Well

6:00

soybean carryover for the current marketing year

6:02

is estimated at 380 million bushels, unchanged

6:04

from February, just 1 million bushels above

6:06

the average pre-report trade guess. USDA made

6:09

no changes to the supply or demand

6:11

side of the bean balance sheet and

6:13

dropped 15 cents from the national average

6:15

on-farm cash bean price projection to 9.95.

6:17

USDA also left its South American bean

6:20

crop estimates unchanged from last month, with

6:22

Brazil at 169 million metric metric tons

6:24

in Argentina at 49 million. July soybean

6:26

futures closed to be low supported yesterday's

6:28

low but did end the day just

6:30

above psychological support at 1025 may beans

6:33

two and three quarters cents lower 10

6:35

11 and one quarter July beans down

6:37

two and three quarters since 10 25

6:39

and half and November beans closed at

6:41

1015 and a half down two and

6:44

a quarter cents quickly chip cotton carryover

6:46

unchanged from February 4.9 million bales decotten

6:48

today 19 points higher 6885 over to

6:50

you buddy All right, thank you very

6:52

much. Let's bring in Matt bet at

6:55

ag market dot net. How you doing

6:57

Matt? Doing good, buddy. How are you

6:59

doing all right? Tell me about corn.

7:01

What do you like? You know, the

7:03

thing about it is that these, you

7:06

know, the world numbers, you just kind

7:08

of whittle those down just a little

7:10

bit more. I mean, it's the lowest

7:12

supplies we've had since 2016, so I

7:14

know we're going to have pretty decent-sized

7:16

acres this year, but at the same

7:19

time we're going to need to, in

7:21

my opinion, so we don't whittle world

7:23

stocks down even more, of course, U.S.

7:25

stocks lower than a year ago. So

7:27

I think it gives you a chance

7:30

that you're at least going to have

7:32

people on edge a little bit and

7:34

maybe have a chance for some sort

7:36

of a weather market to actually unfold

7:38

if you see some sort of inclement

7:41

weather. Yeah. That 480 level in the

7:43

July contract, that's kind of the level

7:45

that I'm looking at the most. Is

7:47

there significance to it? What are you

7:49

thinking? Well, I think in the short

7:51

run there probably is but at the

7:54

same time, you know, I think that

7:56

caught report last week certainly was as

7:58

of Tuesday's global it's going to look

8:00

a lot different I think this week.

8:02

I mean I think that they bought

8:05

a fair amount of corn from Wednesday

8:07

to this Tuesday is closed and so

8:09

it'll be very interesting to see how

8:11

that goes but I think funds are

8:13

going to want to see whether we

8:16

continue whittling down stocks and if they

8:18

do I think if they get into

8:20

inclement weather they want to be long

8:22

I think they've already showed us that.

8:24

Yep, yep, I think you're right. I

8:27

think you're right. Talk to me about

8:29

cattle, what do you like, what do

8:31

you like there? Well with cattle chip,

8:33

I mean fundamentally is still a great

8:35

story. There's no question about it We're

8:37

still wanting people to at least be

8:40

protected there I mean some of these

8:42

cash prices of course have been fantastic's

8:44

been a cash-led market Of course you

8:46

can't buy cheap feeders anywhere anybody's selling

8:48

fast has got by cheap feeders anywhere

8:51

Anybody selling fast has got a big

8:53

smile on their face still and so

8:55

my thought is stay protected. You know

8:57

without some sort of protection Right, right.

8:59

Okay buddy. Hey Matt, thanks so much

9:02

man. We'll talk to you later. Thanks

9:04

buddy. All right that is Matt Bennett

9:06

ag market net Okay, we've got to

9:08

break down some of the numbers in

9:10

the supply and demand Wozdi report that

9:13

we've got from USDA. We're going to

9:15

do that with Bill Lapp advanced economic

9:17

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That's FMH.com. Agritok

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may vary, visit FBN.com/Agritok. Welcome

10:41

back to Agritok. Glad that

10:43

you're with us on this

10:45

report day Tuesday. We're going

10:47

to talk about what's in

10:49

the Wasty report and some

10:51

other issues out there as

10:53

well. with Bill Lapp, Advanced

10:55

Economic Solutions. Bill, it's good

10:57

to talk to you again.

10:59

How are you? I'm wonderful,

11:01

Chip. It's great to be

11:03

back on the program, looking

11:05

forward to it. I'm honored

11:08

to be the person in

11:10

the spotlight on report day.

11:12

Love it. Absolutely. Let's break

11:14

it down. You know what?

11:16

To break this down, Bill,

11:18

I think we need to

11:20

start with the note that

11:22

the World Board included... at

11:24

the start of the WASD,

11:26

the World Egg supply and

11:28

demand estimates, so that we

11:30

just have a good understanding.

11:32

I'm going to read some

11:34

of it. The WASD report

11:37

only considers trade policies that

11:39

are in effect at the

11:41

time of the publication. Further,

11:43

unless the formal end date

11:45

is specified, the report also

11:47

assumes that these policies remain

11:49

in place. U.S. tariffs on

11:51

Canada and Mexico have been

11:53

suspended until April 2. However,

11:55

until these are in effect,

11:57

Wazdi does not incorporate them

11:59

into the commodity forecast, but...

12:01

because Canada's retaliatory tariffs remain

12:03

in place. These were accounted

12:06

for in the Wazdi estimates

12:08

and are assumed to continue.

12:10

Finally, US tariffs on China

12:12

and China's retaliatory tariffs on

12:14

the US are assumed to

12:16

remain in place. So it

12:18

is very much a what

12:20

it is today is what

12:22

it is today and forever

12:24

going forward. That's what we're

12:26

assuming in the in the

12:28

outlook. That's correct,

12:30

and that's been the policy

12:33

of USDA in regard to

12:35

if there's a biofuel issue

12:37

or anything else that's happened

12:39

in the past. What they

12:41

know today to be legally

12:44

in place, they allow. The

12:46

one thing that China put

12:48

tariffs on Canadian canola meal

12:50

and canola oil, which is

12:53

maybe more minor. for some

12:55

of the listeners, but that

12:57

does not go into effect

12:59

because it's not actually in

13:01

place for a week or

13:04

so. So this will be

13:06

more important in the future

13:08

as we go through the

13:10

dynamics, which with regard to

13:12

tariffs, it probably changed 13

13:15

times between that now and

13:17

the next Wazde. Yeah, that's

13:19

right. Did you see any

13:21

sign of this? I mean,

13:23

the one thing that I'm

13:26

looking at. is the export

13:28

number on wheat. China doesn't

13:30

import very much wheat, but

13:32

they did put tariffs on,

13:35

or increased tariffs on U.S.

13:37

wheat. Is that why we

13:39

went down on the wheat

13:41

export number? No. Everything I

13:43

think with regard to their

13:46

export adjustments, they made were

13:48

based on paste data. There

13:50

wasn't enough internationally changing in

13:52

these reports. Chinese imports of

13:54

corn being reduced that it's

13:57

all U.S. pay state which

13:59

is based on export sales,

14:01

export inspections and census reports.

14:03

Yeah, yeah, okay. Let's stay

14:06

on that wheat number just

14:08

a bit. Yeah, that carryover

14:10

went up 15 million bushels,

14:12

but I don't feel like

14:14

that really changes the outlook

14:17

for the wheat market much,

14:19

does it? I don't think

14:21

that change was made. with

14:23

regard to international developments. But

14:25

we did have several countries.

14:28

Argentina up almost a million

14:30

tons in their crop for

14:32

2425. Australia jumped two million

14:34

tons to over 34 million

14:36

tons. And then we saw

14:39

a minor adjustment in Ukraine.

14:41

So there's a few more

14:43

mushels floating out there from

14:45

an international perspective that will

14:48

be big competition within the

14:50

next. I'd say 30 or

14:52

60 days, we'll start watching

14:54

those new crop sales of

14:56

U.S. wheat like a hawk

14:59

to see if there's anything

15:01

we can indicate, say, you

15:03

know, of course, we'll be

15:05

watching in May what the

15:07

initial U.S.D. official forecasts for

15:10

exports are for wheat. Right.

15:12

Okay. Okay. Let's hop on

15:14

over to corn and no

15:16

changes on the supply side

15:19

or the demand side of

15:21

the balance sheet. Do you

15:23

do you anticipate any trends

15:25

going forward in that number?

15:27

Yes, I think they're undershooting

15:30

and I'm so proud to

15:32

be able to bring a

15:34

little bit of a bullish

15:36

light to this because I

15:38

usually don't. You know, I

15:41

think we could see some

15:43

some adjustments there in the

15:45

corn export number and I

15:47

think that could be of

15:49

some interest that maybe we

15:52

get to 2.5 billion on

15:54

exports and in the report

15:56

today they're 2450 and we

15:58

probably are under ethanol grind

16:01

too. And you know, there are human

16:03

beings in the world board that

16:06

are putting this together. And

16:08

much like a lot of business

16:10

today, they're kind of a

16:12

little bit frozen in their

16:14

tracks because things could go

16:16

either way. But it looks like

16:19

to me, before it's said and

16:21

done, before we get fully into

16:23

the growing season, we're gonna see

16:26

a tighter balance sheet for

16:28

corn this year. Tell me more

16:30

on the ethanol grind. Why? What

16:32

what what do you see that

16:34

that makes you think that we

16:37

could maybe add a little bit

16:39

there? That is primarily

16:41

reflective of paste data

16:43

that's been better surprisingly

16:46

good to me, but really better

16:48

than I think we've been expecting

16:50

all year. So a pretty

16:53

good upward push in in

16:55

ethanol, maybe 25 to 50 million

16:57

bushels are in here.

16:59

You're getting to levels

17:01

that at least justify

17:03

where we are, if not

17:06

a little bit higher board.

17:08

Okay. All right. Did you

17:10

see anything on the

17:12

global S&D's that that cut

17:15

your attention? Oh, we didn't

17:17

change South America, and

17:19

it looks like they're

17:22

crops finishing out without

17:24

too much problem right

17:26

now. China's remains a

17:28

wall. I think we're 23 million

17:30

tons a year going, now we're down

17:33

to 8 million tons. So we're kind

17:35

of free, was it free 2019?

17:37

Or I just remember the Duratio

17:39

year, they bought about a billion

17:41

bushes of US corn. We're back

17:44

to levels we saw before

17:46

that and that's been six

17:48

or seven years now. So

17:50

China's presence in there is

17:52

backed off. And maybe they're

17:54

pulling down some of their

17:56

internal inventories. You know, their

17:58

economy has been slowing down

18:00

here and not growing as

18:02

rapidly. So China is not

18:04

the catalyst for US demand,

18:06

at least not right now,

18:08

that it has been over

18:10

the past couple years. Okay.

18:13

So what is your outlook

18:15

here on corn? It sounds

18:17

to me like maybe we.

18:19

inch this this price projection

18:21

which is a national average

18:23

on farm cash price projection

18:25

for 35 you might see

18:27

that working just a bit

18:29

higher. Yes so let's talk

18:31

about that for just a

18:33

second. 435 that's a an

18:35

average for the year. And

18:37

it's waited towards farmer marketing.

18:39

So we've got September through

18:41

February done and. If I

18:43

do my southern Illinois math

18:45

six months of the year,

18:47

that's half the crop year.

18:49

I would say that probably

18:51

represents three quarters of marketings

18:53

or a little bit more.

18:55

So what my point is,

18:57

it's hard to get that

18:59

number to move much even

19:01

at prices because we have

19:03

so much of the crop

19:05

already marketed. And that goes

19:07

into their calculation of that

19:09

the annual average. Yep. All

19:12

right. Very good. But, well,

19:14

you know what, I'm going

19:16

to ask that question again.

19:18

It sounds to me like

19:20

you're a little bit bullish

19:22

on the outlook for corn.

19:24

Yes, I think this is,

19:26

it's dangerous to be bullish

19:28

having a good memory of

19:30

what happened in 2018 and

19:32

19 with tariffs that we

19:34

really hurt the US markets

19:36

significantly. But from here, the

19:38

fundamentals. seem to suggest we

19:40

could hold in. Let's call

19:42

it the May contract in

19:44

something 460 to 490. So

19:46

there's probably more upside than

19:48

downside. And then we'll start

19:50

to get into the weather

19:52

and it's a pretty different

19:54

situation when you go to

19:56

the new crop because of

19:58

the expected recovery in acres.

20:00

Yeah, yeah, we are definitely

20:02

going to talk more about

20:04

that when we come back

20:06

from the break, Bill. You

20:08

know, this. the fun positioning

20:11

the way that they rolled

20:13

out of that long position

20:15

and did it in a

20:17

hurry i mean the price

20:19

reflected reflected it though didn't

20:21

it yes yes when you

20:23

don't know how big of

20:25

a backstop they are for

20:27

the market that if you

20:29

get a move in the

20:31

market they're going to respond

20:33

to it and and offset

20:35

some of that's that's pretty

20:37

common but they aren't there

20:39

we went fully risk often

20:41

I think to some degree

20:43

we still are in a

20:45

risk off environment that when

20:47

there's nobody there to buy

20:49

you see what happens in

20:51

the stock market. Yeah, yeah,

20:53

absolutely. We're going to talk

20:55

more about that risk off

20:57

environment. We've got to and

20:59

we talk about some tariffs

21:01

and and the trade issues

21:03

that we're dealing with right

21:05

now. We need to break

21:07

down the S&D balance sheets

21:10

on soybeans. We're going to

21:12

do that and then we'll

21:14

get into that trade issue

21:16

with Bill lap. Advanced Economic

21:18

Solutions. Let's go to the

21:20

markets page of pro-farmer.com and

21:22

check today's closes where April

21:24

leanhog futures were a dollar

21:26

seventy-five lower at eighty six

21:28

fifty five April fat cattle

21:30

one dollar two and one

21:32

half cents lower at one

21:34

ninety nine fifty five April

21:36

feeder futures twenty two and

21:38

one half cents lower at

21:40

two seventy seven seventy December

21:42

Cotton today, 19 points higher

21:44

at 6885. May soybean futures

21:46

2 and 3 quarters lower,

21:48

10 11 and 1 quarter,

21:50

Novy Beans closed at 1015

21:52

and 1 half that's down

21:54

2 and a quarter cents.

21:56

futures. One, three-quarter cents lower,

21:58

four, 70 and a quarter.

22:00

December corn futures closed at

22:02

four, 54 and one-half, that's

22:04

down one-half cent on the

22:06

day. July, H.R.W. wheat futures,

22:09

five and three-quarter cents lower,

22:11

at 585 and a half,

22:13

July, S.R.W., down five and

22:15

a half cents to five,

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71 and three quarters. Get

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23:22

That's FMH.com. Opinions

23:29

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23:31

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23:33

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23:44

We are in the middle

23:46

of a conversation with Bill

23:48

Lapp. Advanced Economic Solutions. We've

23:50

covered wheat. We've covered corn.

23:53

Let's move straight on to

23:55

soybeans here, Bill. Any messages

23:57

in the supply and demand

23:59

reports? we need to? I

24:01

think we'll have a larger

24:03

crush when it's all. I'm

24:05

reminded that maybe denial ain't

24:08

just a river in Egypt.

24:10

I don't think we fully

24:12

adjusted those numbers like I

24:14

think we need to. I

24:16

think we'll have a larger

24:18

crush when it's all said

24:20

and done to support two

24:23

things. One. strong demand on

24:25

the export side for soybean

24:27

oil probably higher than USAs

24:29

even got it now. And

24:31

also just a tremendous growth

24:33

in domestic demand for soybean

24:35

meal. It's been pretty astonishing

24:37

that most of the growth

24:40

in crush has gone not

24:42

into exports, which was the

24:44

conventionalism, but into domestic usage.

24:46

So I think there's some

24:48

adjustments to come in the,

24:50

at least on the soybean

24:52

balance table in the crush.

24:55

And we also get on

24:57

December 1 some stocks that

24:59

to me indicated an overestimation

25:01

of the 2024 soybean crop

25:03

and maybe like 20 million

25:05

bushels. And that's something to

25:07

look for on the March

25:10

31 when we get the

25:12

March 1 stocks because that'll

25:14

say whether we have can

25:16

confirm that that's it and

25:18

we can say, hey, this.

25:20

This residual needs to be

25:22

bigger than what USC has

25:25

at $39 million. So I

25:27

think $3.80 is, we've got

25:29

a downside from $380 million

25:31

in the soybean carry-on. Okay.

25:33

So these demand trends that

25:35

you talked about, Bill, for

25:37

the products, they're like the

25:40

opposite of what everybody is

25:42

expecting, including me. Okay, I

25:44

thought hey watch out our

25:46

domestic use on soybean oil

25:48

is going to be going

25:50

through the roof and Soybean

25:52

meal We better find a

25:55

way to export it or

25:57

we're not going to be

25:59

able to use it all

26:01

and here we are using

26:03

it to domestically. How do

26:05

we explain this? Yes, and

26:07

a share of the oil

26:10

side, significant share of the

26:12

oil side is in the

26:14

export. So domestic food use

26:16

is basically flat. Actually, USDA

26:18

has it down a little

26:20

bit, but exports are up

26:22

1.2 billion pounds. So that's

26:24

a big driver of the

26:27

crush. The meal is a

26:29

little bit inexplicable. I always

26:31

thought that. these rations that

26:33

these hard producers had were

26:35

kind of sit in stone

26:37

unless soybean meal got extremely

26:39

cheap relative to corn. We

26:42

probably aren't quite there yet,

26:44

but I think that there

26:46

may be some substitution of

26:48

soybean meal in for synthetic

26:50

protein in some cases. Well,

26:52

and then just the bird

26:54

numbers and the layer. numbers.

26:57

It takes soybean meal to

26:59

make eggs. It takes soybean

27:01

meal to make broilers and

27:03

it's like I said, it's

27:05

a little head scratching to

27:07

figure out where this meal

27:09

is going. Yes, yes. And

27:12

it's I think, you know,

27:14

the pay state through January

27:16

or February, it certainly shows

27:18

that it's actually happening. It's

27:20

actually happening. It's not. illusionary.

27:22

It's not the magic imaginary.

27:24

So, um, yeah, I think,

27:27

you know, we've got we're

27:29

running something like a 6%

27:31

increase in in domestic meal

27:33

use for the year and

27:35

and the USC has a

27:37

projection of up 4.2% for

27:39

the year. So I think

27:42

that, um, you know, we're

27:44

not getting that many more

27:46

numbers out there. The numbers

27:48

are not changing that much

27:50

and they would really changed

27:52

by 4% or we'd be

27:54

have a dramatic shortage or

27:57

be flooded with proteins. It's

27:59

got to be something in

28:01

the usage rates that's changed.

28:03

Yeah. Okay. All right. You

28:05

mentioned the year-to-year changes. I

28:07

want to mention the month-to-month

28:09

changes. Bean oil for biofuels

28:11

down 150 million pounds to

28:14

13.45 billion pounds. And bean

28:16

oil exports up 200 million

28:18

to 1.8 billion. Yeah, it's

28:20

it's a huge increase year

28:22

on year, but there's nothing

28:24

wrong with the two bill,

28:26

excuse me, 200 million pound

28:29

increase in that bean oil

28:31

export number either. That's an

28:33

impressive number. Any other bottom

28:35

lines, any other takeaways from

28:37

the supply and demand reports?

28:39

creates a dramatic market reaction.

28:41

If you look at the

28:44

last 25 years, the percent

28:46

change in on the report

28:48

days, the 15 report days,

28:50

these are among the most

28:52

quiet ones. We have an

28:54

April will be too, but

28:56

the March 31 is not.

28:59

That's one that the market

29:01

responds to where we get

29:03

the new stocks numbers for

29:05

March 1 as well as

29:07

prospective planning. So, you know,

29:09

the market, it won't take

29:11

long. Before we start thinking

29:14

a lot more about, and

29:16

probably with the, the cattle

29:18

will be the running up

29:20

to the prospective planings, we'll

29:22

start focusing a lot more

29:24

on new crop, I think.

29:26

It looks like we're going

29:29

to have mixed outlook for

29:31

beans and growing carryouts for

29:33

wheat and corn in my

29:35

view. Yep. So do a

29:37

little preview of the prospective

29:39

planning's report. Do you like

29:41

USDA, Seth Myers, numbers, 94

29:44

million planted corn, 84? million

29:46

planted soybean? I do, but

29:48

I listen to your show

29:50

and I'm, you know, if

29:52

I wanted to be an

29:54

outlier, I'd have to probably

29:56

go to close to 100

29:58

million acres of corn if

30:01

I wanted to showcase myself.

30:03

I don't, I'm at 93

30:05

and a half, I think

30:07

that the agronomics place and

30:09

logistics on a farm place

30:11

such a role that I

30:13

don't think we year to

30:16

year would expect to see

30:18

that big of a change.

30:20

And we will recall that

30:22

last year we had a

30:24

pretty significant change from the

30:26

March prospective plans to what

30:28

we saw in June, so

30:31

we can't treat that as

30:33

gospel. But certainly, if you

30:35

looked at the economics and

30:37

that's all you had to

30:39

go on, you'd have, Seth

30:41

would be low on his

30:43

94 million corn acres, but

30:46

I think there's... I would

30:48

suspect there's more to it

30:50

in the end than that.

30:52

Yep. Okay. Yeah, I always,

30:54

always underestimate the the agronomic

30:56

and logistical impacts or considerations

30:58

when I'm looking at what

31:01

these acres might be. Here's

31:03

the deal though, Bill. I

31:05

think cotton's trying to give

31:07

acres away and corn's probably

31:09

going to pick them up

31:11

down south, right? Yeah. Cotton's

31:13

certainly trying to give them

31:16

away. And I would, you

31:18

know, some will go almost

31:20

automatically to soybeans, maybe a

31:22

little bit to rice, but

31:24

the larger share probably is

31:26

to corn. I guess I

31:28

would agree with that. I'm

31:31

not sure where we should

31:33

land in the Dakota's in

31:35

North Dakota in terms of

31:37

switching away from wheat, but

31:39

there's quite a few things

31:41

that could push us above

31:43

the 94 million acre. level

31:45

when it's all said and

31:48

done. Yep, yep, and you

31:50

know what's probably going to

31:52

happen is it's going to

31:54

be wetter than heck. those

31:56

areas that we are talking

31:58

about right now that could

32:00

pick up corn and we'll

32:03

end up right you know

32:05

like 92 or something like

32:07

that. So the point being

32:09

point being weather has a

32:11

lot to do with how

32:13

many corn acres are going

32:15

to get planted yet this

32:18

spring. Okay tariffs Bill just

32:20

give me give me your

32:22

take your take on all

32:24

the tariff issues and all

32:26

the trade issues. An unvarnished

32:28

look at that? Please. Well,

32:30

comparative advantage was discovered like

32:33

200 years ago by David

32:35

Ricardo, and it's still an

32:37

economic axiom that rules. I

32:39

mean, I think even in

32:41

Iowa State, you probably learned

32:43

that. So I think it's

32:45

a real thing. the Wall

32:48

Street Journal referred to tariffs

32:50

on Canada and Mexico as

32:52

the dumbest trade war in

32:54

history, it kind of validates

32:56

what I'm thinking. You know,

32:58

we went through the gap

33:00

rounds, we started where the

33:03

average tariff was 22% among

33:05

all the participants in that,

33:07

and when it was all

33:09

said and done in 1999,

33:11

we had it down to

33:13

5%. And I think that,

33:15

you know, over that over

33:18

that period of time, we

33:20

had growth in inflation adjusted

33:22

exports out of the US

33:24

of 160% so I think

33:26

it's it's a win win

33:28

situation even if the US

33:30

isn't the biggest winner in

33:32

all cases for it so

33:35

I think that it's important

33:37

we get these behind us

33:39

I have some optimism and

33:41

faith that we are not

33:43

going to be focused on

33:45

Canadian tariffs and Mexican tariffs

33:47

much more than a couple

33:50

more months. I think that's

33:52

that story is going to

33:54

play behind us. China is

33:56

a different story. So I

33:58

think there's some, we can

34:00

be somewhat optimistic. But for

34:02

now, we're just, you know,

34:05

sitting at the edge of

34:07

our seat waiting what to

34:09

hear what the next dynamic

34:11

is in, in Canada, for

34:13

the time being, looks like

34:15

they've dropped the gloves and

34:17

they're ready to go. Yeah.

34:20

Yeah. What 30 seconds is

34:22

all I got? But it

34:24

seems like the markets are

34:26

doing, you know, there's volatility

34:28

there, but the markets are

34:30

making adjustments on a on

34:32

a pretty organized effort, aren't

34:35

they? They're trying to admit,

34:37

I haven't looked at the

34:39

volumes, but the funds probably

34:41

have taken their chips and

34:43

gone home for at least

34:45

a minute on that. The

34:47

stock market's not taking it

34:50

quite as bad. The stock

34:52

market does not like the

34:54

uncertainty. The people in the

34:56

stock market just have not

34:58

treated enough commodities to understand

35:00

what volatility is really like.

35:02

That's right. That's right. Oh,

35:05

I've got a million memes

35:07

in my head on that

35:09

one right there. Bill, thank

35:11

you, my friend. That was

35:13

fun. Thank you. That was

35:15

great. I appreciate it and

35:17

I look forward to talking

35:19

to you soon. Excellent. Bill

35:22

Lapp, Advanced Economic Solutions. Davis

35:24

and I will be right

35:26

back to wrap up today's

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or visit FMH.com. The

36:30

truth is hard to

36:32

come by these days,

36:34

unless you listen to

36:36

Agra Talk. And welcome

36:38

back to Agra Talk,

36:40

everybody. Your pal, Davis

36:42

Michelson, here, along with

36:44

Chip Flory, your beloved

36:46

host. How you doing,

36:49

buddy? Outstanding. I feel

36:51

good. Do you? I

36:53

probably feel better than

36:55

I look. Really? Sure.

36:57

Interesting, you must feel

36:59

pretty good. Awfully good.

37:01

Well, let's, let's talk,

37:03

let's talk generally here,

37:05

let's talk generally here.

37:08

The reports today, kind

37:10

of expected to be

37:12

a bit of a

37:14

yonder. You know, I

37:16

feel like both Bill

37:18

and Matt found some

37:20

stuff in there, but

37:22

let's, let's talk to

37:24

you. Did anything stick

37:27

out to you in

37:29

this report or maybe

37:31

in these conversations here?

37:33

Yeah, it was the

37:35

oil. soybean oil usage

37:37

estimates. Okay. Yeah, you

37:39

take 150 million pounds

37:41

out of the biofuel

37:43

use and add 200

37:46

million pounds to the

37:48

export number on the

37:50

on the on soybean

37:52

oil and not make

37:54

a change to the

37:56

soybean meal numbers supply

37:58

or demand. I just

38:00

find that really interesting

38:02

that was. we're you

38:04

know we have shifted

38:07

soybean oil demand yes

38:09

i mean there's no

38:11

question. Let me get

38:13

those numbers in front

38:15

of me because when

38:17

we look at that

38:19

total biofuel demand, you

38:21

go back to 2022-23,

38:23

soybean oil was sending

38:26

12.5 billion pounds to

38:28

biofuels, then 12.989, just

38:30

call it 13 billion

38:32

pounds, then... The estimate

38:34

was 13.6 billion, it's

38:36

now 13.45 billion pounds

38:38

going to biofuel. So

38:40

that's been significant growth,

38:42

excellent growth. But then,

38:45

you know, you look

38:47

at the export side

38:49

of things in good

38:51

grief. We're talking about

38:53

378 million pounds of

38:55

demand in 2022-23 for...

38:57

soybean oil exports up

38:59

to 617 up to

39:01

1.6 billion last month

39:04

and up to 1.8

39:06

billion this month like

39:08

you know Bill pointed

39:10

it out it's it's

39:12

a 1.2 billion pound

39:14

increase in in soybean

39:16

oil exports that's two-thirds

39:18

more. It's just it's

39:20

a it's a big

39:23

increase. If past performance

39:25

is any indication of

39:27

future performance, is that

39:29

something we can know?

39:31

If past performance is

39:33

any indication of future

39:35

performance, then yes. Just

39:37

simply based on the

39:39

time of the time

39:42

of future performance, then

39:44

yes. Just simply based

39:46

on the time of

39:48

the year. But

39:50

okay funds funds like to

39:52

move to the long set

39:54

of the market this time

39:56

of the year thinking hey,

39:59

we're gonna have a planting

40:01

Season problem some some where

40:03

some time and they want

40:05

to be on the long

40:07

side of the market for

40:09

that and they want to

40:11

they want to be there

40:13

before the market gets there

40:15

though right sure wanting to

40:17

be long and being long

40:19

are not the same no

40:21

that's you got that exactly

40:23

right exactly right yes they

40:25

want to be there before

40:27

a move of any significance

40:30

would would kick off now

40:32

funds you know they like

40:34

they like to be there

40:36

when a move starts okay

40:38

Sure, but they're not afraid

40:40

to make a market prove

40:42

what you know that a

40:44

trend has changed before changing

40:46

with it. I mean we've

40:48

seen them be stubbornly on

40:50

the short side of the

40:52

corn market stubbornly on the

40:54

long side of the market.

40:56

We've seen that a lot.

40:58

So it's it they like

41:01

to make a market prove

41:03

that it's that it's trending

41:05

before they really jump on.

41:07

Well, that's probably wise. Probably

41:09

wise. Bill lap advanced economic

41:11

solutions claims they undershot the

41:13

corn export number, maybe, understated

41:15

ethanol grind, maybe, he did

41:17

even let it out that

41:19

he might be just slightly

41:21

bullish corn, sort of. Yeah,

41:23

it's sort of, it's the

41:25

pace of usage. He went

41:27

back to that. on the

41:29

on the bean demand he

41:32

went back to that on

41:34

the corn demand a couple

41:36

of times you know he's

41:38

just saying listen I'm looking

41:40

at the pace the pace

41:42

at which we're using this

41:44

stuff up and it's telling

41:46

us that USDA is too

41:48

low so maybe things do

41:50

tighten up a bit I

41:52

can't disagree with with what

41:54

Bill was saying about the

41:56

usage that we've seen so

41:58

far it's been really really

42:00

good the concern is was

42:03

the export demand front loaded

42:05

because of tariffs? Well if

42:07

that's the case then the

42:09

pace is going... slow. If

42:11

that was not the case,

42:13

which I would think that

42:15

corn sales would have slowed

42:17

down by now if it

42:19

weren't the case, then you

42:21

got to respect, you got

42:23

to respect the trend and

42:25

the trend is stronger use

42:27

than what is factored into

42:29

those those balance sheets right

42:31

now. Yeah. Especially with thinning

42:34

global corn stocks, I think

42:36

Matt tagged him at right

42:38

around the 2016 low levels.

42:40

Yeah. Yeah, and anybody that

42:42

I think has been working

42:44

on telling a price-friendly story

42:46

on corn, the first thing

42:48

that they're doing is going

42:50

to the year-to-year trend in

42:52

global corn stocks, okay? Let's

42:54

see, I don't know if

42:56

I can get to it

42:58

here real quick or not,

43:00

I'm going to try. But

43:02

when we take a look

43:05

at these global trends on

43:07

corn demand... 2023-24 are ending

43:09

stocks of corn around the

43:11

world including China, 313.95, this

43:13

year 290.31. I gave you

43:15

the February numbers right there.

43:17

313.95, versus 288.94. So it's

43:19

tightening up around the globe.

43:21

There's just no question about

43:23

it. So that's where the

43:25

bullet I think that's where

43:27

the bullish story comes from.

43:29

Just a little bullish. Yeah,

43:31

just a little. All right

43:33

National Weather Service 6 to

43:36

10 day outlook. This is

43:38

for March 17th through the

43:40

21st I'm going to drink

43:42

a green beer on that

43:44

day just you know. All

43:46

right. Above normal temperatures across...

43:48

Most of the corn belt

43:50

exception is where near normal

43:52

temperatures are expected in North

43:54

Dakota and far northern Minnesota.

43:56

We got mostly above normal

43:58

precipitation.