2019 comes to an end; how long will it take to sort it out?

Narrator: The Ag View Pitch is created by Ag View Solutions to provide value to its clients and farmers like you. We'd like to welcome our new listeners today and encourage you to check out our other podcasts on The Ag View Pitch, which can be found on Apple Podcasts, Anchor, and Podbean. You can also find us on Facebook at Ag View Solutions and online at agviewsolutions.com. Enjoy.

Chris

Barron: Welcome everybody to another episode of the Ag View Pitch, and today we're going to be talking about the markets as we head into a new week. And you've got Chris Barron and Dwayne Lowery, and, uh, we're just getting heading into a new week. Dwayne, how's things going?

Duane

Lowery: Good, uh, Chris. It looks like next week's going to be a lot of more cold temperatures for the Midwest. We still got harvest left to do, and it's going to be a, a race to the finish with— I imagine some acres are going to be left until spring to get harvested, but it's— we're closing in on the final days of 2019, and it's certainly going to be a year that we're going to look back with probably a lot of question marks, a lot of frustration, and, and hopefully some memory loss.

Chris

Barron: Yeah, yeah, for sure. What, uh, you know, you mentioned the harvested, you know, or the harvest going on still yet in a lot of areas, and probably the frustration that comes along with that for a lot of, a lot of these growers. We did get a little bit done last week. There was a few areas of, uh, the weather opened up a little bit and let let a few guys get some stuff done. What about, um, like total acres or, or percentages left? I mean, how much is really out there yet, do you think, as far as what needs to be harvested yet on, on the corn and soybean side of things?

Duane

Lowery: I suppose there's about 8 million acres left. If you go back to Monday's harvest progress numbers from USDA, it's interesting, uh, Iowa, Illinois, and Indiana all had 78% of their acres still left. Ohio had 10% of its acres left. Minnesota had 9% left. Michigan had 34% of their acres left to harvest. And then you go to South Dakota, 20% left to harvest. Wisconsin, uh, 34% left to harvest. And then I left the, the big one, North Dakota had 63% of its acres left to harvest. And the other story that comes out of North Dakota is a quality issue, low test weight, um, reports of elevators not accepting delivery of, of bushels. I don't know how widespread that is, but when you got 63% remaining in the field, You know, this can't be good. And, uh, I'm sure a large chunk of those acres will still be there in the spring.

And I'm— I find it very interesting, the, the storyline that people— that elevators are refusing delivery of the, the some of the new crop corn just because test weight and quality is so low. I'm not sure how to really respond to that. I'm not sure how to react to it. You know, you don't have, you know, North Dakota is not a high-producing state, but still, um, it's still noteworthy. And, uh, this week we had pretty good weather, uh, and improving weather as the week went along, and we probably got a few more days of pretty decent harvest weather opportunities. So this will continue to whittle this down, but it's just amazing how many acres are left and how long this is drawn out. And each week, you know, you're— we're not able to get a lot accomplished because you just got, statistically, you just got a smaller number of operations that are working on this.

So we're not going to be completed in next week's report. And I think this brings up another thing that maybe we would have got to talk about it in another segment. Maybe we'll bring it up again, but You know, USDA already kind of told us how significant this is in terms of late harvest when they came out and said that they're going to resurvey, um, in the first couple of weeks in December, and the data will be offered up in the January report. But they were sending out, I believe it was 80,000 surveys, the most surveys they've ever sent out and the latest they've ever done a resurvey. And they're looking for harvested acres on survey, and they're looking for yield. So obviously you have, um, USDA think it's— thinks it's a big deal.

And it also tells you that USDA must not be real confident in their numbers, or they want to do this resurvey to add credibility to whatever they put out for a final number. There's been obviously a lot of, uh, frustration, confusion, disbelief regarding USDA numbers and, and almost everything associated with 2019. So either USDA themselves are not confident in their own numbers and they want that resurvey, or, and maybe this is an and/or, they want to make sure that they've done everything they can do that whatever numbers they put out in January they have credibility because they can say they resurveyed them again in December and this is what it really is type of thing. But I think the fact that they're resurveying tells us that we should not be surprised if there are some noteworthy adjustments from USDA in January.

Chris

Barron: Well, this year has just been such a cluster trying to figure out you know, who's on first, what's on second, and I don't know who's on third, right? I mean, it's just been a mess.

Duane

Lowery: I think even the USDA— I think you're talking about on who's on first and second and third, etc. I think there's a debate whether we're on a soccer field or a baseball field.

Chris

Barron: Yeah, exactly. And then the USDA, you know, I mean, we can be as critical as we want, we can't figure the numbers out. How's You know, USDA's got just more numbers to push around and same confusion level. But, you know, what do you think? I mean, if the USDA— I mean, having said that, you know, we, we have pretty good credible evidence though, that, you know, the yields are way off of last year and that kind of thing. I mean, and again, I've asked you this question in the last several podcasts and stuff, but you know, there are actionable things that on the farm that we as producers have to be doing, right? Making sales when, when we got to make sales, you know, we're watching basis. There's some areas where I just talked to a producer yesterday in western, western Iowa that said, you know, he had some 26% corn in a bin and moved it.

You know, the elevator was glad to come get it, didn't charge him very much for trucking and was really nice to him on, on just, you know, not, not having too massive of a dock, you know. So obviously, some of these elevators are still trying to get things filled up yet and see some opportunities. So as producers, you know, as, as those who are trying to finish harvest and those who are sitting with the bins heaping full and those that don't have them full but are going to need cash flow, what should we be doing? What should we be thinking about? Do we need to be patient until January? And I think I know the answer to this, but I'm asking it again, um, you know, until this report comes through and hope for some for some strength, or is there something we should be doing in the meantime to protect, you know, so that we don't just have total risk with those bushels that are in the bin?

Duane

Lowery: Well, no matter what the farmer does, and no matter what we can throw out there for risk management tools, the reality is, it seems like there's almost always total risk, and or if not total risk, a transfer of risk from risk of one kind to risk of another kind. So I think the farmers has accepted the fact that he's dealing with risk on most levels. In terms of cash flow, obviously if the guy needs cash flow, then you've got to make— you've got to do something. And at that point in time, with prices where they're at, the historical relationship of prices, the uncertainty still left out here in terms of what final yield and harvested acres were for 2019, which are— could very significantly impact us.

The fact that we still have a trade agreement that we're, you know, walking a fine line between getting one done now versus, you know, maybe not getting one done for months, that could impact us. I guess I'll put— I'll answer the question this way because we've talked about this before, and I'll summarize what I've said before, and that is do not lose control of your physical bushels until you are, are forced to for cash flow reasons. Once you are forced to make those sales, uh, for cash flow reasons, do an evaluation about whether you want to reown that on paper or whether you do not. At this point in time, if a guy had to move physical bushels, had to turn it into cash, I would definitely want to reown those bushels on paper. That would be my approach at this particular time.

If we are able to get spot corn futures back to $4.10 and, and we were at that level and you had to make cash sales, would I want to own futures then? Maybe not. But right now I would. As far as beans are so historically cheap from a relationship standpoint versus corn, that if you were forced to sell beans to turn them into cash, would I want to reown those beans on paper? The answer is yes, but I would strongly not want to get rid of the physical ownership on beans if, but if at all possible, because basis levels spreads still offer some incentive to store and they have plenty of room for the physical commodity to get a lot stronger in relationship to paper ownership. And I say that based on where basis is at in beans, where spreads are at in beans, and also the fact that carryout levels are half of what they were last year.

By historical standards, our carryout level is still plentiful for sure. But we have enough unknowns out here with getting some final numbers from USDA and the potential trade deal and a bump in, in Chinese demand, which will force an adjustment to our balance sheet. Because if you remember several months ago, USDA did lower demand projections based off the trade war, and if the trade war is solved, or at least the agricultural components of the trade war are solved, I think there's going to be a bump in, in some of these balance sheets in terms of usage. And so if your carryout is roughly 470 million bushels of beans, you know, it wouldn't take much of an imagination and harvested acres yield and demand combination to suddenly be under 300 million or maybe less. And all of a sudden, that paints a much different scenario than what we have.

And again, the relationship between soybean prices and corn prices— beans are at the, the cheapest relationship value to corn it's been since 2007. And the only time we've been cheaper than where we are right now as we speak today would have been a few or several weeks ago, but it was all associated with trade war, um, developments and trade war factors. And if we happen to have anything that causes there to be an acreage battle storyline between now and next spring, there is no way soybean prices where they're at currently buys any acres away from corn. If, if, you know, beans have to gain $1 with corn being unchanged before you really turn the head of the farmer to say, hey, I think I want to make a decision to positively grow more beans than corn, you know, and if corn happens to go up 30 cents, you know, on 200 bushels an acre corn, that's $60 of revenue.

$60 of revenue per acre translates to approximately $1 a bushel beans. So if you got to go up $1 in beans to get the $50 an acre current disadvantage there is in planting beans for a lot of calculations,, and then beans, corn goes up 30 cents. Now all of a sudden beans have to go up $2 from where they're at right now. So beans are extremely cheap. And so I don't want to lose ownership of those. And because of basis and spreads, I think there's a strong incentive to try to keep the physical bushels. But if you're forced to sell the physical bushels, I would want to reown that on paper. And once corn futures get to say $4.10, then all of a sudden the calculation wanting to reown it right now, I would be inclined to say maybe not. Maybe we'll find out what factors we're dealing with as to why we get to $4.10 if we get to $4.10. But right now I would definitely want to reown it.

So that's a long answer to your question.

Chris

Barron: But yeah, and reowning it, you would either just do it either with a call option or with futures.

Duane

Lowery: I'm not a big fan of options, but they have a purpose and their purpose is predominantly a known cost, a known loss, so to speak. But if you pay a premium to own at a particular strike price, and oftentimes people are buying a strike price that's out of the money, and if you spend, you know, 10 cents to have a call that's 10 cents out of the money, all of a sudden, you're 20 cents in the hole and you gave up the physical ownership. And more than likely, just based on seasonal tendencies, basis values will tend to strengthen some between now and over the next, you know, 60 days. And so you've, you've gave it, you've given up what is of real value, that which is the physical bushels, and you've paid to have ownership in paper. And, you know, so the cost of the option is oftentimes more than just what you pay for that option.

It's also the amount out of the money that you're buying, and it's also the amount of lost basis opportunity that you're giving up. So I would prefer to lean towards futures, but that's just a personal preference.

Chris

Barron: I'm gonna ask you a question along those lines on the 2020 stuff. Before I do that, real quick, another, thing on soybeans to have you touch on is, so I've heard last week from a couple of clients, and then also we actually got some phone calls from processors sourcing soybeans. And they have their posted bids, and then they have the bids that they're calling growers up and saying, you know, hey, if you can deliver this week or that week or whatever, we're gonna you know, like in our area, it was down around 10 cents. And just, you know, 2 weeks ago, the basis was 40. So we've seen a, you know, a 30 to 35 cent basis improvement in soybeans here in the last week or so. Based on some sourcing that's going on out there, calling, making some phone calls, and looking for beans. What's— have you heard that? And if you have or haven't, what do you think's going on there?

Do you think that's going to continue? Is that something that a grower should do and then possibly reown, or, you know, when they're reaching for them, or do you— or does basis continue to get a little bit better yet? What's your thoughts there on the soybean side of things?

Duane

Lowery: One, yes, I've heard that. Two, it implies there's not a lot of physical bushels available in the cash pipeline. Some of that is seasonal. This is not And this is not abnormal really for that to happen. Um, and I want to go back and just do a little sidebar here. Um, if bean basis was 40 under and now you had an opportunity for 10 under, that's a 30-cent change in basis. Okay, and so how many producers, uh, didn't make a basis contract with beans because one, they were maybe trying to generate cash flow 2, they didn't have the storage space, or 3, they weren't willing to pay for that storage at their local elevator. Well, that basis contract, if basis went from 40 under to now 10 under—

Chris

Barron: Well, at harvest, Dwayne, it was more like 50 or 55 under, and now it's 10 under.

Duane

Lowery: Okay, then you're at 45 cents. Okay, then you're just putting an exclamation point at the end of the sentence that I'm about to say. Right. Physical ownership is almost always the most desired thing to have. And that depends on what basis values you're dealing with, and it depends on seasonals, it depends on some historicals. But as a general rule, the physical commodity is what you want to try to maintain as long as possible. And once you give that up, you've given up leverage. And what if you look at it in, in total, Once all farmers give that up, they've given up all leverage. Okay, so I, I've preached on that on this podcast many, many times, and you really don't want to part with that physical ownership.

So here you have people that did basis contracts on those beans, and they may have seen the cash market come up, but the futures market has come down, and those basis contracts don't look very good anymore. And that's all because they didn't want to pay that local co-op maybe 15 or 20 cents for their for their minimum storage charge, but oftentimes that is still the best route if you don't have the storage space for yourself. And again, another little sidebar, um, storage oftentimes can be paid for through these types of opportunities. Every year doesn't present that opportunity, but, but there's still value in it beyond just the logistical part of it. And I know you can read all kinds of articles, books, publications telling you that storage doesn't pay and just do a better job of marketing.

Well, that's a great Monday morning quarterback perspective from somebody that's probably never sat in a combine. Okay. And so some years you can do a good job of marketing and you don't maybe need that storage. Maybe you got some stuff sold in advance,, but even then, uh, instead of selling the physical commodity in advance, there might have been an opportunity to hedge it and then still put yourself in a position to try to gain this basis, uh, seasonal basis patterns that unfold. So these are both little sidebars. We don't want to go too deep into that, but I just want to point out that what you're describing and what we're seeing this year is another example where the guy that has the storage space on the farm is given an opportunity that the guy that is forced to make the sale of the physical commodity, uh, in the gut slot of harvest is missing out on an opportunity.

That's, that's what I wanted to point out.

Chris

Barron: Yeah, and but, you know, the only thing I, the only thing I would throw out there to one of your, part of your comment, I guess, is that part of the reason I think sometimes the producer hesitates with the local elevator is like in our case and a couple of the growers I talked to this week similarly, is, you know, if you, if you take it to the local elevator, you actually have the processor calling the grower to source it. So, you know, if, if the processor is going to source it from wherever it's sitting at, and so if the farmer moves it into the elevator's hand, they may not be able to capitalize on that basis, uh, knowingly anyway, at least as to what it really is versus what the posted bid is. You see what I'm saying?

I mean, it might, it might be, I mean, you still get some of it probably, but you, if you, if there's any way of storing it on farm, that's where I think a lot of times when people calculate their, the ROI on, on grain bin facilities on site, there's some additional opportunity usually there in basis that sometimes doesn't get calculated into the ROI or the opportunity that, you know, on on-farm storage actually pays you back, provided you manage it correctly and don't just put it in the bin and forget about it, but actually take advantage of that basis opportunity when it's there. And then, you know, use your reownership strategy and stuff, I think is really key.

Duane

Lowery: No question that when you deliver to your local elevator and get a warehouse receipt, there is no doubt about it, you have removed some opportunities for reasons you just stated. Um, and it's also true that, um, I believe on these ROI calculations to farm storage, many times the opportunities that are presented are not calculated because one, people have a hard time defining them and understanding them, but, um, they, they exist more years than they do not exist in terms of an opportunity. But still, even in that example where you gave where you do miss out on an opportunity with that local elevator commitment that you've committed to one location's bid, if the trend in the basis and the trend in the spreads is general and prolonged, I would argue that, that might still be better than giving up the physical ownership, but it would depend on a year-over-year basis.

And, but, but you, to your point, you are correct, you, you've given up some opportunity. But again, that drives home to the— my, my main point is, you know, some on-farm storage is still pretty valuable and can pay for itself and can provide some logistical benefits during the harvest season.

Chris

Barron: Oh, it does. For sure. So it's one of the, one of the top things and one of the things that we can help a lot of people do some calculations on. And we've kind of, I don't know if you'd say we've got into the weeds, but we've kind of gone into a lot of depth on that. But I think it's a good conversation to have because it, you know, it's things that we can put some action items together for, for upcoming years. And if we had some shortfalls and storage and, and managing basis and managing some of these opportunities. I think storage really helps with them.

Duane

Lowery: Just one second, Chris. To get this thing back on track where we were at and away from some of these sidebars, I would just go back to say that what I think we have here is in 2019, at this point in time, what we've witnessed and what I think is still yet to come, we have a situation that looks to me like the cash market, the pipeline is going to continue to be very tight. There's going to be these spot pushes, they're going to be these bids from the, from the feeder, the ethanol plant, the processor, whoever. And I find it absolutely amazing that this is occurring after we're supposed to have had 2.2 billion bushels of old crop corn carryover we were supposed to have had 1 billion bushels or nearly 1 billion bushels of beans carry, carry in. And I'm not even going to argue about the numbers being right or being wrong.

I'm just going to take them at face value and say USDA is 100% right. The cash market doesn't reflect that. The cash market reflects that if that is what actually was carried in, somehow those bushels are not getting into the pipeline or The pipeline must require that level of bushels in order to maintain something that's not super, super tight. Either way you look at it, at the end of the day, it's got to be evaluated against what are spot bids and how aggressive are spot buyers versus how aggressive are spot sellers. And right now, it's the buyers that have to call up the, the guy that might have something for sale They're the ones in search of it. They're the ones paying for a big premium. And why are they doing that? I mean, this is just at the end of harvest. Why are they so anxious to go out there and, and lock up January and February supplies?

You know, I can't help but think whatever they're, whatever they're looking at, and from their perspective, which is a different perspective than the producer looks at it from, you know, they're, they're concerned about supplies. And I think that speaks volumes about the underlying situation we have here.. And regardless of what some data may look like on a balance sheet, we're, we're dealing with the real world where, you know, a real pig needs that food, or feed, and a real processor needs those beans to process, and a real ethanol plant needs those bushels to, to produce ethanol. And that seems pretty real to me.

Chris

Barron: Yeah. And where's it at? It reminds me of the It's gonna probably bypass some of the younger listeners on here, but you remember the TV commercial for Hardee's with that little old lady that's standing at the counter saying, where's the beef? You know, you got a beef patty that's about half the size or three-quarters of the size of a regular one. That's kind of the way the, the grain inventory is, right? You know, where's the beef? I mean, there's just— it's not— it doesn't appear to be there from a physical standpoint versus what So that's where I think the January 10th is going to be an interesting report.

Duane

Lowery: It's going to be interesting in January, but as soon as we get a stocks report, and the first two stocks reports of this marketing year are going to be watched closely for whether or not, you know, the harvested numbers, the production numbers might have to be adjusted. So I, I, there's going to be an endless parade of these reports that come out there that could have some significant meaning. You know, the last thing that comes out of this 2019— another little sidebar here— but the Chicago trader, the speculator, the large funds, they're going to be pretty immune from ever believing anything about a weather-related production shortfall. The farmer is going to be very unwilling to buy into a production shortfall either. He'll be reminded of what happened in '19. We're still down from last year and pretty uniform in my opinion, but not nearly down as much as we feared it would be.

And then, you know, the last thing is the farmer is going to be scared to death every month when USDA offers up a report, And whether it's right or it's wrong, the— in the image, in the farmers' eyes, USDA's credibility has been hurt. Is that a justified charge or an accusation? Who knows. Maybe history will eventually tell us, but in the farmers' eyes on a collective basis, they've— they have a a lot of, uh, distrust in, in the numbers from USDA. And somehow I hope that is fixed over the next few years so we can gain some confidence in, in the system and the numbers that we're dealing with. Um, but 2019 was a very historic and difficult year for the grower, for the livestock feeder, And I'm sure probably for a USDA analyst as well.

Chris

Barron: In the, in the upcoming week, let's, let's hit the short term here for a minute. You know, as we go through this new week, what, any, anything out there on either wheat, corn, soybeans, or anything that we should be paying attention to or looking for? Or is it going to just kind of be a sideways thing in your opinion?

Duane

Lowery: Well, Thursday we have the USDA reports. Who knows what those are going to be, but because of what I've already talked about, USDA going through all the extra effort to do surveys in the first couple weeks of January and telling us this is data that will be incorporated into the January report, I have to believe that the December report will not have significant changes of any magnitude. Maybe there'll be some demand adjustments. I think the trade in general will be looking for corn, beans, and wheat carryout to all be lowered a little bit. But I don't think it'll be a dramatic report. And I think that whatever dramatics are out there, we'll wait for the January report. So we got USDA reports. We have US-China trade war developments that we'll be looking for. December 15th is when the tariffs are set to go in place.

I've gone on record saying I don't think those tariffs will go in place. And I think we'll have a a Phase 1 trade agreement sometime prior to Dec. 15. But with today being the 7th, that means we, you know, we got about a week, and by that time, we're going to know what we've got. And so the US-China trade development storylines will be important to watch. Friday, we had a Commitment of Traders report that showed funds had sold record amounts of beans in the last 2 weeks., and they now have a very sizable short position on— they have a very sizable short position on in meal, which is near historic levels. And they are short corn, but interestingly, last week they, they covered almost a third of their corn shorts, and they covered— they added to some length in the bean and the wheat market.

The Commitment of Traders report data that's released Friday afternoon I think that's going to be our opening call for Sunday night. I think that will produce a higher opening call. We'll have trade development news if there's anything else that happens over the weekend that might impact that. But it looks to me like we're going to start next week out on a positive note.

Chris

Barron: The—

Duane

Lowery: if you take a step back view, the wheat market has been leading everything else up while corn and beans were in a a price erosion, in the case of soybeans, a free fall. Wheat actually had been working higher. And then as soon as we get corn to stabilize here a couple of weeks ago, had one day, day before Thanksgiving where we were down. And other than that one day, you would classify everything as being stabilizing. This week's price action corrected some of the recent gains in the several days before that. But overall, that chart pattern is constructive. The technical conditions are constructive. And then the bean, bean market had been very oversold by virtually every technical system that you'd want to try to measure it. We had a lower close on Monday this past week and then 4 higher closes in a row. I think beans will be well supported on small weakness.

I think that will start out higher. I wouldn't be surprised that we could see beans trade a dime higher than where they are right now before we even get to Thursday's USDA reports. Since I don't think that'll offer anything very significant, I'm not overly concerned about, you know, volatile price action after that. But overall, I think the wheat, corn, and beans all seem to me to be poised to have some price recovery. I think if you look at the export opportunities, our competitors were, in, in the case of corn, were very front-end loaded. And I think that we have a 75 to 90-day window, maybe a little more, where the U.S. has an opportunity to see corn exports improve significantly versus the pace we've had before, as some of our competitors' supplies are, are much dwindled and after being very front-end loaded.

In the case of beans, I find it very interesting that this on Friday China announced that they were remove their punitive tariffs on pork and soybeans, and you know again we have this debate, is that an olive branch or is that an absolute need? I am thoroughly convinced at least in my own little world that that every purchase they've made over the last several months, none of it was associated with an olive branch. It was all associated with the need. And despite all the large percentage of Brazilian exports that they've been attached to a China label, a sales ticket to China, they've still had to come to the U.S. for supply. I think there are indications that China's demand is not going to be on an upturn from year-ago levels over the next several months. So I think the outlook there is, is much brighter than what a lot of people have to say.

And so for this week ahead, we might find out a lot of things about all of these factors in terms of what's ahead and what might be ahead for demand based on whether there's a trade deal or whether there's not, what USDA has to say on Tuesday. But I think the worst of our harvest time, post-harvest sell-off has been accomplished. I think funds have been spending the last 2 weeks putting on a record amount of shorts for a 2-week window. My first question I want to ask is why? On what merit is that? Our carryout is half of what it was last year, cash basis markets have strengthened significantly and the funds are short. Um, with Friday's high to compared to Monday's low, beans rallied 27 cents, and that was in an environment where the funds are, are short by a significant amount.

I have to think that overall conditions point to additional short covering and price strengthening in the days and weeks ahead.

Chris

Barron: Pretty good analysis, I would say, for, for the time being, and that, that kind of gives everybody some pretty good perspective. And obviously you're always watching this thing really close. And, and one thing that we haven't done for a long time is just kind of reminded people that if they have questions, they can email you or give you a call and have some dialogue, or if there are things they, they want us talking about, they can definitely reach out to us and throw us some questions and some topics for discussion.

Duane

Lowery: Sure, that would be great. I, I like talking about this business. I'm sure people can hear that in these podcasts. The last thing I want to say about markets where they're at today, where they might be, etc., it's important to realize that our last little price peak that we had here was in October and Seasonally, it's very unusual to think that your marketing year peak occurs in October or November or December. And right now for this new marketing year, we have the price peak is in October. The odds of that remaining the, the high and the best opportunity you're going to get are not very good. Historical odds of that are, are, are much— more concentrated towards the idea that you're going to have better pricing opportunities ahead. And that's where I line up. How much better pricing opportunities we get, I'm not sure.

I think that producers, if we happen to get some price firmness between now and early part of February, I think we will have to look at that with a very serious eye that maybe that is something that warrants removing a lot of risk off the table in terms of your 2019 production. If we are able to get December '20 corn futures back to $4.20, I think they— that will warrant some serious consideration of protecting prices for 2020 production. In the case of beans, because of the long dissertation I've already given on why soybeans are so cheap from a historical perspective, obviously that translates into an idea that I'm not very interested in thinking about 2020 soybean sales right now.

If the right circumstances comes, comes along, I'll probably be somewhat anxious to price some 2020 corn, but I, I don't have any incentive right now to even look for a place to do any 2020 bean sales because price valuations are so cheap. And so that's kind of a quick picture of an outlook of what I see into the near future for both old and new crop. I still remain very suspicious that old crop price strength potential is much greater than new crop. I think these spreads can tighten significantly, and I think it's possible that the market outlook and the sentiment will be significantly different on the 20th of January than it is today.

Chris

Barron: Gotcha. Well, that's good comments, good content, a lot of good stuff for everybody to, to kind of chew on and think about. And so I guess with that, Duane, it was great conversation for heading into a new week and appreciate the comments and we'll talk again going into another week next time. Thanks a lot.

Duane

Lowery: All right, all right. Thanks, Chris.

Chris

Barron: You bet. So thanks everybody else also for listening, and we will catch you again next time on the Ag View Pitch.

Narrator: Thanks again for listening, everyone. If you would like to hear more content from Ag View Solutions, listen to our other podcasts such as Dad's Wisdom or our current Harvest Series. Ag View Solutions works as an integral part of operations like yours, side by side for farm profit management, business collaboration and structuring, facilitating industry-leading peer groups, and coaching and consulting tailored to your farm's unique needs. We know that no two farms are the same, and we are here to help make your farm be the best it can be. You can learn more at agviewsolutions.com, email us at agviewpitch@gmail.com, or call Chris Barron at 319-533-5703. We really look forward to talking with you.