Are the highs in for grain markets?

Chris

Barron: Welcome everybody to another episode of the Ag View Pitch. We're heading into another marketing week. We're actually at the third week of May already, believe it or not, the 18th through the 22nd. And we are lucky enough today to have with us Brian Split, AgMarket.net. How's it going, Brian?

Brian

Splitt: It's really good, Chris. Had a heck of a week in the market and Son's turning 12 this weekend, so we've got some, some festivities and some, some baseball to attend. So, oh, should be a good one.

Chris

Barron: Yeah, that's awesome. Yeah, well, hopefully, uh, after a wild week of markets we'll talk about here in a minute, you'll get a little, a little break from the action or non-action or a little both. And, uh, one thing I do want to do is tell all the listeners again, because I always do a terrible job of this, is please hit the subscribe button or the like button if you're on YouTube, because Mac tells me that 85% of the people— he just told me this the other day— 85% of the people that watch this are not subscribed. So if you are listening to this, please do that. Appreciate it. Let's get back to business here, Brian. First thing I want to talk about, and we'll get to market movements and stuff here, but what are you hearing on planting progress? I mean, we're, we're entering the third week of May. There's still some pockets that are pretty damn wet.

There's some pockets that are pretty damn dry, and there's some areas in between. Some of those areas in between are on their second round of planting, from what I'm hearing a little bit. What are you hearing on planting progress and that type of thing?

Brian

Splitt: Yeah, I mean, you know, from a trade perspective, when we look at just the numbers that we get on Monday afternoon, there hasn't been a concern about progress from that perspective. So when we look at it in totality, and then we compare that to last year and 5-year averages, it looks okay. Now, obviously, as you're mentioning, within, you know, certain parts of the country, there's a degree of varying concerns. I have talked to producers in Indiana, for example, that had to replant some soybeans. I've got some producers that as you had mentioned here in Iowa, you got a lot planted in the last week and now there's a rain event coming. And so you want to see the rain, but you don't want to have, you know, violent storms with it. So you're hoping that everything comes out okay over the next week.

So but I think that's part of the problem is that right now and when I say problem, I talk about, you know, the move in the market over the last couple of days has been, I think, a few different variables. But part of that has been Planning progress is fine in general, and we do have a forecast of some rain in areas that frankly need it. So we'll see how it verifies, what type of totals we get. But that, among other things I'm sure we'll discuss, has been part of the pressure in the market over the last couple of sessions here.

Chris

Barron: Mm-hmm. Yeah. So talk about that. We'll just segue right into that. You know, we saw a pretty, pretty big bump after No news. Usually there's news from Trump usually, and then there's no news. And so talk a little bit about that reaction first of all, then we can dive into some of the technicals, but thoughts on the reaction and what that might mean or does it mean?

Brian

Splitt: Yeah, there was definitely a setup going into the summit with China of that buy the rumor, sell the fact type of a setup. Just because any event you have where there's an expected development in news, Or a report, for example, where you rally into a report and the expectation is that it'll be bullish. A lot of times they price in the bullishness ahead of time and then you get the report that you thought should be bullish and it sells off anyway. So I think this was a lot like that with the summit with China, except there was no news, right? So we didn't get bullish news that we sold off from. We got, no, you know, guys, what we know is what we know. Effectively, Secretary Bessant said that the 25 million tons a year for 3 years is where they lie on soybeans. And that was agreed to back in fall.

So that was the first initial purchase that, that of 12 million tons, and then 25 million tons a year after that. So nothing new on that landscape. And having already had that in place, I'm not sure why there was the narrative as strong as it was that something additional would come out regarding soybeans. I thought it was a lot more plausible that if there was something that was agreed to as it relates to agricultural purchases, that it'd be more likely to be sorghum or milo or corn or dried distillers grains, ethanol, something to that effect. Um, and, and so there wasn't any of that. Um, and, and so no positive news really, I think, just exacerbated the amount of selling. And not to mention, that's no secret, the size of the fund position, um, for all of agricultural commodities, not just corn, soybeans, or wheat, all of it cumulatively was a record length.

Um, and so there's definitely, uh, you know, that vulnerability too, where we, we need to keep feeding the bull in order to want them to maintain that, that position, much less add to it. And we just didn't have anything of that sort come to fruition.

Chris

Barron: Yeah, it's kind of interesting, you know, when you, you talk about the funds, because, you know, some of that news, to your point, kind of becomes old news, right? They're trading it. And then depending on what happens or what doesn't happen, or as the news kind of gets stale, there's nothing— there's nothing new to trade. They're not going to probably trade it anyway, are they? To a large extent.

Brian

Splitt: Yeah, right. I mean, you know, what's the next shoe to drop? What's the next thing they're going to be looking for now? And so now that the summit's out of the way, the first and foremost thing as it relates to grains, especially this time of year, is going to be that look at weather. And so, you know, we've seen what the wheat market's done because of dryness. And undoubtedly, that's been validated from the USDA this week. But here we go again. We got a very bullish report for wheat. We were limit up that day, made a high the next night. And then here we are off of those highs. And when we think about KC wheat, that's to the tune of about $0.70 from the high just the day after the report to today's lows.

So there was definitely an element of buy the rumor, sell the fact from a report stance in the wheat pricing in, you know, that yield reduction and then also with the generalized selling going on after the summit. But, you know, as we, as we move forward here, weather is going to be a major component, obviously how things verify as far as the weather, that's the rain that's forecast in the Corn Belt. But, you know, I think there's still some some bigger picture supportive things that are still out there. When we look at the energy market, you know, that hasn't been solved. The ongoing closure of the Strait of Hormuz and the price of crude oil. We look at crude oil, you know, finishing up the week and we're going to have the June contract expiring early next week. But know, we're sitting at $105 a barrel. So we haven't let go of $100 crude.

I think another thing that's also important to note is that the initial rally in energy values was more just right in the front contract. So at that point, this happened back in March, the April contract went and traded near $120 a barrel and the deferred contracts. So think maybe come fall, your, you know, your September, October, November, December type contracts. You know, we didn't see nearly the same type of move. That rally got them to where they got close to $80 on some of those fall contracts. So now I look at December crude oil, for example, and we're right up against contract highs. So there does seem to be now that mechanism that is pricing in maybe a little bit higher for a little bit longer on some of these more deferred energy values.

It looks like the, the unleaded gasoline market is right up against contract highs in the front., and we're, we're poised to, to potentially make new highs on these deferred contracts. So energy as a whole is still a supportive narrative to what's going on in, in grains. And then there is still the other issue that comes with the closure of the strait and everything that's going on there is the fertilizer issue. Um, and, and so that has not been solved yet. So I think there's kind of some short-term money in the market that was trading, you know, uh, the run-up into the, uh, the summit. Uh, there was some short-term money that was trading the WASDE report, but I, I do believe that there's still some longer-term money that is owning agriculture for the energy and fertilizer bigger picture reason. So we're likely to see the funds reduce the size of their length.

But I don't know that they're going to abandon their long position until they're rather comfortable with the idea of what weather looks like in the key growing stages. Because let's face it, you know, with a 1.9 and some change expected carryout for new crop corn from the report that we got, that's assuming a 183 bushel, you know, per acre yield. And that's a great yield, you know, on a national average. So there's not a lot of room for, you know, conversation of, well, what if yield ends up, you know, at 179 or 178, which just a few years ago was a record crop. But the balance sheet's going to have to, you know, really, the price is going to have to do some work to discourage some demand in order to make the balance sheet stay intact. If that's the case, you think about soybeans, 310 million bushels. That's kind of that same scenario. We're using a 53 yield.

That's a very strong yield performance on a national average. And any conversation of potentially lower yield than that is going to be supportive in market. Now, I'm a little concerned about the soybean balance sheet just because it seems to me the USDA is very aggressive on their demand assumptions. And, and You know, maybe they've got the crush part of the balance sheet maxed out. They, they raised old crop soybean demand for crush by 20 million bushels on this report. And then they started their new crop assessment for soybeans with an extra 120 million bushels on top of the increase that they did on the, on the old crop. So we've got 180 million bushels already in the pipeline here for, for beans for crush for next year. And they increased the year-over-year export demand by a little over 100 million bushels.

And I think there's still concerns about whether the soybean export demand number on old crop is even going to be achievable, much less seeing that go up over 100 million bushels by next year. So I think there's maybe some holes that we can, can find in the USDA's balance sheet on the demand side. But, but hopefully that's, you know, the new reality that, you know, the crush is going to continue to take more and more of our domestic soybean production. I tell you what, crush margins right now, absolutely unreal, especially, you know, after we finished the week with soybean meal making a new high for the move. We had soybean oil finish positive on the day and the big break in beans. These crush margins are absolutely phenomenal.

Chris

Barron: Mm-hmm. Yeah. So there's a lot of fundamental things to keep an eye on and watch. Talk a little bit, you know, you're kind of the— I would call you probably the guru of tech, you know, of the, you know, looking at where the— not just the fundamentals are, but the technicals, right? You know, you study that probably better than anybody I've ever met. Talk a little bit about what you're watching there and where the threats are, or the opportunities on the Three Sisters, you know, from wheat to corn to soybeans. And while you're doing that, I'm going to see why my battery is low. So here for a second, I'm listening to you. Now that we got the technical glitches out of the way and I asked you about the technicals, we'll have you give us a little bit more.

Brian

Splitt: Here we go.

Chris

Barron: A little bit more detail here, Brian.

Brian

Splitt: Yeah, so I'll start with the July corn contract. Can you see it on the screen?

Chris

Barron: Okay. Yep, we're good.

Brian

Splitt: Okay, so essentially what we're looking at is a, uh, a consolidative pattern here. You know, we've got a downtrend above the market, we've got an uptrend below the market, and this goes back to February of 2025. So those are the yearly highs that we scored last year. Uh, here's your August low. So here's the contract lows we made in late summer. And so as of late, and there's going to be a common theme that I point out between corn, soybeans, and wheat, and why how we perform coming out of the weekend is going to be so critical. But it doesn't take a lot to see right now that you've got an uptrend in place. This is from our lows in January. So we had that January crop report, we make lows right at the beginning of the calendar year, and that begins our uptrend. We had this pullback in April. So the uptrend for the year is still intact.

Uh, the question is, with the 200-day moving average right at today's low, uh, the uptrend right at today's low— and when I say today, this is Friday, uh, the 15th for the settlements— um, we absolutely need to hold this coming out of the weekend. If we have a negative opening, especially if we open— because we closed very close to the low of the day, so that makes it a lot easier potentially gap lower. Now you're going to have the July contract gapping down over the 200-day, over the uptrend, and very quickly you're likely to revisit the low from last month at $48.50. If you violate that, then there's really not much to stop you from coming back down into these upper $430s. So very important technically that we find some buying early next week, and if we do, then hopefully we're just going to go right back to the upper end. But you can see we've got multiple failures here.

This is the, the March high, $4.87 and a half. Here's your May high, $4.87 and a half. So at this point, this is a double top until proven otherwise, with multiple other highs that have been scattered, you know, at or above $4.80. So that is going to continue to be the resistance level. And especially if you've got old crop and maybe too much old crop that's sitting unpriced, you still have to look at this $4.75 to $4.80 as an opportunity to, to maybe reduce that cash position at the upper end of this trading range.

Chris

Barron: Well, basis will say that's not going to get any better either, is it, moving forward?

Brian

Splitt: I mean, you know what, it depends where you are. You know, producers in the Eastern Corn Belt have seen very good basis, and I imagine with the board breaking that their basis is probably improving. Yeah, there's, there's a different situation in the Western Corn Belt in some areas where there's quite a bit of corn still around. Again, a weak board might help it out a little bit. But you're also— it doesn't seem like it's not that far away. And maybe it seems further than it is. But you just don't want to be sitting on old crop bushels as you get past, you know, that typically, you know, late June, early July period. If there's not something that's happening by then, you know, you're likely to see weakness through June into August. So you don't want to have all of these old crop bushels still sitting in your bin as you're getting ready to harvest next year's crop.

So again, very critical support here on the July contract specifically. Now, if I go over to the December contract, it's really the same story, right? You've got the uptrend in place. This is from January to April, same thing right on the uptrend. If you find the other side of $4.80 early next week, you're jumping back over the uptrend probably pretty quickly, revisiting the $4.70 level as last month's lows. On the other side of $4.70, there's really not much to stop you from going back into the mid to upper $4.40s. So we want to avoid going back inside of this trading range because once we're back in this trading range, we're likely to want to visit the whole range, and that means from the upper end of it to the lower end of it. So we want to see $4.70 continue to hold.

I'd prefer to see this uptrend hold in the next week and make another push up to $5, but we'll see how that pans out on the November soybeans. Here we go. Uptrend. This is— we had that limit down move, if you recall, back in mid-March. And so it was not limit down on new crop, it was limit down on the old crop. And then from there we started an uptrend. Today's low right on the trend line. So I think you're picking up the pattern here. You've got all of these contracts that are sitting right at or above their uptrend here. That's pretty critical. So much the same. If we could recover here and find buying against the trendline into next week, I think we go right back up to $12. I will caution you with this low here and this low here. If we go back up to $12 and then reach essentially a revisit of this high over here and it fails there, that would be your classic head and shoulder top.

So this would be left shoulder, this would be the head. This would be the right shoulder here. So again, you got to go up to $12 and then fail, make a right shoulder. That would then give you a very classic looking head and shoulder pattern. And then when that validates, you'd have to take out these lows, this $11.65 area. But what does that do? That suggests that, um, we, we go down about 50 cents from this neckline. And if you do that, now you're right back down to these March lows. So below, uh, this low for the month of May, if we start making new lows for the month on November after a recovery bounce like that, um, you're going to go look at the March lows again. And again, you got to get to back up to $12 first to make a right shoulder if that's going to be the case. But much the same, we've got the uptrend. Uh, and then let's take a look at the KC wheat. What do you see here?

What did we hit today, Chris? Uh, same line uptrend, right? Yeah. So the timing of corn, beans, and wheat all going to their respective uptrends on the same day to finish mid-May, uh, and finish, you know, the finish the week in mid-May, um, it is absolutely critical, uh, that we maintain these levels. Now I want to look at this in another fashion for you. And what I'm going to do is I'm going to look at corn on a basis where we're looking at the front month at any given time. All right. So back here, you know, this was back in January. So we were trading the March contract and then March expires and then we see the May contract become the front month. Right. So every, every bar on here is the weekly bar for whatever the front month contract was at that time. And so look at kind of what we've got going on here, right?

We've got the uptrend from August to January into February into April and here and into May. If we zoom in on this, we absolutely do not want to give up $4.50 on July corn into next week. That violates this very clear uptrend that we've been in. And look at where we continue to fail. We had this failure here at $73.75. The high last night was $73.75. Last week's high was $75. So go back 2 years. This was 2024. When did we make highs? The week of the 17th at $4.73 and a quarter. That was it. 2024 high, seasonal high peak, back to $3.60 and a half, which was the September contract. So it's really important because if we fail here, we can't go up, we take out this uptrend, you're just back down to the low end of the range again. That would be scary. Yeah. Looking at the soybeans in the same fashion, we've got the uptrend right here. This is from our lows that were made back in January.

So this is holding so far. That right off there. Here we go.

Chris

Barron: Right.

Brian

Splitt: Low to low. We're right on it. And actually, you've got the long-term downtrend here. We closed right on it. So you've got what better be good support. We're revisiting the downtrend from above. We've got the uptrend underneath. But look at these highs, 23.25, 22. So you get below $11.40 on a front-month bean contract. That is going to be devastating. And basically that low is $40.50. That would be an 80-cent range from these double top through that low. So whenever you have a double top, if you take out the low that's made in between those highs, what you do is you take the measurement from the high to that low, right? So you're talking $11.40 basically up to $12.20. So we've got an 80-ish cent range. If you take out $11.40, then you subtract that $0.80 and then that gives you your downside objectives.

You're talking basically $10.60 would be where the market would go for, for the downside objective. That's kind of where this, this uptrend comes from. What, July of last year, August of last year into our January lows. So really critical we catch here. And absolutely, if we see the other side of $11.40 on front month beans, we're probably going back to mid-tens to upper tens. So I can't stress enough how important the technical setup is right now.

Chris

Barron: And then like, like Sunday night is important, but it's more important on how we close Monday, probably, right?

Brian

Splitt: Yeah, that, you know, and the way that the markets behaved, I wouldn't be surprised to see them maybe make it look one way or the other early on Sunday night just to look the opposite on Monday. Um, very often we do that, but, uh, we'll see what, uh, this KC wheat looks like And then let's look at that on a continuous basis. So we've got some very key resistance here. We've got lows that were scored back in '22. We've got this series of lows into this consolidation before we broke hard, revisited this spot again. This was a May of 2024 high. So we keep talking about May of '24. That's very close to where we had traded on highs this week. And the reason why this contract didn't actually trade up here. It was the May contract, it was the night session, and it was a contract in delivery.

If the July contract, uh, was the front month, that's right where we went, was right up here, $7.50. So everything got to really good resistance here, um, this week. Now we're at really good support, and we, we better hold that support.

Chris

Barron: Mm-hmm. Yeah. Yeah, that's, that's pretty scary stuff. I mean, you know, the— there's a double-edged sword here, too. I mean, we don't want to violate your uptrend. On the same token, I was having a couple of conversations with some guys this week that on the upside, too, you know, if we, if we could just get into a nice comfortable range in that, you know, on the corn at $5.10 to $4.90 range or something and trade in there and just stay in a range because you get above that $5.10 or you get above, you know, pushing $13 on the soybeans and, you know, you get wheat up to where it was at here recently. It starts to, you know, there's an inflationary component on the, on the input side for the '27 crop. And it's just, you know, it starts to go the other way. So You know, I don't think as farmers we're greedy.

I just think we, you know, we want a range that we can make a little money. And, you know, and we don't have to go blasting through that. But we also, you know, your, your, your lines where you're drawn, at least from what we see with a lot of our clients, I mean, you, we violate those uptrend lines, that puts us back into the red for a lot of operations pretty fast too.

Brian

Splitt: Yeah, I— the people that are watching this may or may not care about the stock market, but now I have a chart up. I think this is pretty incredible. We've got a whole cycle right now, and this goes back to when we had that financial collapse back in '07-'08 with the mortgage-backed securities. And then that started that quantitative easing from the Fed, and that led to a long uptrend that eventually culminated when COVID hit, right? And so that was a major high. And then we, we started this cycle where from that high we took back about half of that whole rally and we revisited the previous high that was made. So here was that, that previous high took back half of it. Here we go. So now this is the low that we made during COVID and that started a new rally of all of the injection of money that we had that came in. And what we did is we made a new high above the previous high.

And once we made that high, we pulled back and we took back half of that rally and revisited the high that was made before COVID And then that started a new rally. And that rally was in October of '22 until January of '25. And what we did is we eventually made a low that was in April of last year on the onset of the tariffs announcement, and we took back half of that rally and revisited the old high. And so I had this drawn prior to this week's high. And so the assumption was, okay, if this was a new rally from this retest of the last one, then the high should be the halfway point to the next high that's been made. And then once that high has been made, we should pull back 50% of it back to the old high. So I— my thesis right now is the S&P has topped. And we're going to see a major correction ahead of us. And we're likely to get back to, let's just call it around 6200 on the S&P.

So you're talking about a 1200-point break in the S&P to repeat the current pattern. So we'll see what that does to the marketplace in general. But I think this stock market's gotten really extended. And again, My thought is that we're right on the precipice of a major correction on equity values.

Chris

Barron: Does that indirectly or directly influence money flow back to the commodities though, or not? Or you think it does?

Brian

Splitt: First thing first, I think whenever you see a major event, so if there is an event on the horizon, it's always shoot first, ask questions later. And that means get out of whatever you're in. And I'm going to show you another thing that makes me concerned about maybe a liquidity event happening. Here's the bond market. Bonds crashed into new lows today. Look at this bar, right? This is a, this is a bad development. And, you know, we can talk all we want about the US dollar and crude oil. The bond market in the world is the most important market. And when you've got bonds doing what they're doing. You know, yields are surging. You know, the British gilts are seeing yields that they haven't seen in centuries. So there's a, there's a problem happening right now.

And so it looks like now we've got the, you know, the, the bond market potentially breaking out of some uptrend support that's been in place going back to 2023. So now we're starting the beginning of the second quarter, taking that support out. What did we do at the beginning of the month? We went and hit that line from underneath. Now we're making new lows for the year. We're very close to the 2025 lows. That was $110.1. We've got a $110.18 low. So if we start taking out the lows from last year, a bond market debacle. So what does this do? I guess in order to relate this to grains, if the funds were short, it could actually be somewhat supportive to grains. Because they would just exit positions, right? They need to get to cash. Yeah. But the funds aren't short grains right now. As a matter of fact, they're long.

So if there is a liquidity event where liquidation is the name of the game, then the market's going lower.

Chris

Barron: Interesting. Yeah, that's all interesting stuff and things to keep an eye on. I, you know, for sure, I, I, like I said, you're kind of the guru of the tech, you know, of looking, you know, looking at the technical side of things, and probably the, the best student of that and, and monitoring individual of that of anybody I've ever met. So really appreciate your, your perspective.

Brian

Splitt: Thank you for that.

Chris

Barron: Yeah, I really appreciate your perspective there because I think, you know, what we're always trying to do with the market outlook is we're trying to look ahead, you know, a couple of weeks and, and be asking, and this is going to get me to couple, couple last questions for you. Um, but as a producer, you know, going into the next couple of weeks, um, you know, there's still some planting, and it's pretty hard for a lot of people when you're in the middle of planting season to focus on the markets like you should. But there's always things we need to be watching and thinking about and paying attention to. So that's kind of my question for you as we get close to wrapping up here in the next couple of weeks. What are you know, if you put your farmer hat on, what are you watching? What are you doing? What decisions are you making in the next couple of weeks?

Brian

Splitt: Yeah, so one of the things you mentioned, we start kind of taking out some of these levels on corn and soybeans, that changes the scenario from being in the black to being in the red. So I don't know what we're going to be dealing with Sunday night into Monday. But if it is, you know, some type of somewhat positive price action, I think you have to take a really hard look at whether, you know, you feel comfortable with your marketing, what you have sold, what you don't have sold. And especially on the new crop, I think any rallies that you get short term, you just got to sell the physical on old crop.

But on the new crop, at least having some type of floor established under it, You know, one of the things that, that we've done is buy some September short-dated puts and then sell some December puts that are deeper out of the money to help pay for that, because I can at least get to a pretty decent floor under new crop corn with that September short-dated put. And, you know, so for example, I think when we were around $5, the SEP short-dated $4.90 put if you bought that and then sold the Dec 440 put, so it'd be a $0.50 window, was going for maybe $0.12. Upside's 100% open. So, you know, if we get to a point where this market does get into the downward slide through summer into, into late summer, at least we've got, you know, a $4.90 position that, that we're going to be working with from the short side. It will be assigned to us.

You know, again, you're going to be limiting your downside coverage if you sell the put below the market. But Most of what we're trying to do is to keep things flexible right now. So, you know, we have been layering in cash sales on new crop, but also accommodating those with some calls because, you know, there's enough going on in the world where if it doesn't get straightened out, we could still, you know, see bigger picture moves down the road. We want to be able to participate in that.

But, you know, if we have good weather and it's like last year where there's really not a major weather threat through the summer, if we do get an off-ramp in the Middle East, and all those things transpire over the next, you know, 3, 4 months, uh, it's going to be a tough, uh, trend, uh, to fight, uh, you know, with all of that going on and expect that we're going to have higher grain values to come harvest. So I think you got to at least get some type of coverage under it. And again, if we're working with something positive early next week, um, you know, I, I, it's just you think about $5 corn and $12 beans, and if we talked to producers and surveyed them back January of whether you'd be willing to sell that, I think the answer would have been resoundingly yes. And then here we go. We get to $5 corn and $12 beans and it wasn't so resounding, at least, you know, not from conversations.

Chris

Barron: Yeah.

Brian

Splitt: Well, and so I don't know what the— Go ahead.

Chris

Barron: Well, I was going to say, yeah, I mean, and that's true. I mean, how, how bullish everybody gets when the market goes up, right? I mean, I've always called it price increase resistance. As the price goes up, you sell some. As it goes up more, you sell about half as much. It goes up a little more, and then you're pretty much frozen. And I think that's the dilemma. And I think a setback like this is actually a good thing. Hopefully, we don't pierce through your uptrend lines, because this usually is a good wake-up call to have a correction and be like, okay, this market doesn't have to go up all the time either.. So I think it's good for the psychology from that side of the equation.

Brian

Splitt: Yeah. And hopefully you're right. It says maybe next time we get there, you know, you should do a little something, right? Here's your crude oil. This is the July contract. So July is going to be the front month once June expires next week. You got the high settlement price was May 4th, and that was at $101.51. You know, here we are right now trading at $101.42. So we're like $0.10 off the highest settlement for this contract. So again, we're not where we were on the, you know, the April contract when the war started and all that frenzy really got priced in rather quickly and too much. But we're definitely not letting go of $100 crude very willingly. And, you know, once the June expires, this July contract is going to be looking at the June level as its target because it's trading at about a $4.50 or $4.50 discount to the June.

So and again, when you look at these deferred contracts, here's your December, right? December crude oil up against the highs right here. So anything, you know, coming out of the weekend that's positive energy, you know, we're breaking into new highs. So we'll see how, you know, if there's anything that transpires in the Middle East as far as sentiment goes there on the energy.

Chris

Barron: Maybe I'm wrong here, but it always feels like though whether it's energy, you know, whatever the news story is, the longer it goes, the more stale it gets for the, for the funds. It's like, okay, now what else? You know, it's like, and I'm wondering, is $100 oil that range, or does it continue to give it a little strength as time goes on if we stay in that higher range, you know, in that $100 range? Just your perspective.

Brian

Splitt: I think the, the most important part of that is how the products, you know, so if we see— here's your RBOB, for example, right? You got old highs, new high, pullback, test the old high. Looks like we're trying to make a run for the, for the, for the highs again. So if you get the products starting to push to new highs and we'll see how that again occurs next week. Here's our heating oil. So again, very close to the highs. I think if your products make new highs, that's going to be something that drives the crude higher. And so to me, the products are the real driver, not the oil itself. Makes sense. The JPMorgan analysts had kind of a timeline they put out into June because, you know, frankly, the world's running at a deficit of oil right now.

And so the job is to— the job of the market is to get the products to continue to go high enough to ration usage of it, and then also give the people that do have crude oil even better margins to turn the crude oil into the products, right? And so as we get into June, you— I mean, you got like Europe, and you might have European airlines unable to fly because of the cost of jet fuel. So there's going to be some things, there's going to be some reckoning that occurs because we are running at a deficit for crude oil globally. And so I think they had said if we get into, you know, a period in June and things haven't been fixed yet, we could see another surge in Brent crude oil values. So that's why I just— I don't know that the grain story is done.

I still think that what's going on in the energy world and fertilizer world is something that is going to keep some of the money in the agricultural markets. So again, maybe there's some short-term liquidation that needs to be done, but I don't know. I don't think they're going to get out of that and go short quite yet.

Chris

Barron: Mm-hmm. Interesting. Well, what do you want to leave producers with? Any, any final words? I think we've kind of covered the gamut of things here. And, and like I said, you do a phenomenal job on the technical and the analysis side of things, but I'm going to give you the last word. Anything you want to leave producers with.

Brian

Splitt: Yeah, target orders. Um, you know, you had mentioned something where the timing of this rally and being at $5 corn, um, a lot of producers really weren't even thinking about it because they just were trying to get the crop in and just farming, right? Doing the other stuff you have to do to get done, to even think about selling it. Um, and so that's where kind of that, that fog of war comes in because you got a lot going on and, you know, corn's at $5, you know, beans are at $12, but, you know, they'll be there tomorrow. I got to get this done. And then all of a sudden they're not there tomorrow. So you got to just kind of have levels ahead of time that you've got your orders stacked, you know, and you talked about, you know, having some incremental levels where you at least have some kind of offers there.

A lot of times prices get hit during the night session that we don't actually see during the day. You know, $7.50 wheat being an example, uh, we didn't trade there during the day. By the time we, you know, woke up in the morning, it was back to $7.35, and that was it. So you could have sold $7.50 if you had the order there, but, uh, you know, I, I think waiting for a price to be there when you're aware of it and then making the decision on the spot is the situation you want to avoid. You want to have the plan ahead of time and the price level set ahead of time and then the order there. Because, you know, again, a lot of the time you might be doing something else. You don't know the market's there or you're asleep and the market trades at a price that you could have had if you had the order there. But you wake up and the market already made the move and there you are.

Chris

Barron: That's a great takeaway is let the market work for you. Don't work for the market. So that's a Great, great segue. Yeah, right, right. Appreciate it. Well, it sounds like you got a birthday party to get ready for this weekend, and we'll have an interesting week and an interesting thing to watch on Monday as the trade happens. A lot of people listen to this on Sunday afternoon and a lot on Monday, so there's gonna be a lot of, a lot of things to look at and watch and to monitor. If people want to get a hold of you guys at what you're up to, what you're doing, reach out to you or reach out to your team. The best approach?

Brian

Splitt: Go online, www.agmarket.net. That's the website. You can just check us out. And if you have somebody, all of the advisors or brokers that work for our firm are on the website. So if you want to find somebody that's in your area, you could do that. If you want to speak to me directly, you can call me at 815-665-0463 and be happy to help you out.

Chris

Barron: Awesome. Hey, uh, Brian, as usual, this has been a great conversation. I knew you would have some really interesting technical stuff to look at, so really appreciate your time today.

Brian

Splitt: Thank you for having me, Chris. Uh, have a great weekend, and I'll give a shout out to, uh, Brody, my, uh, little guy. He's turning 12 tomorrow. That's the birthday you're referring to, so got to get his name out there on the airwaves.

Chris

Barron: That's right. All right, happy birthday, Brody, and, uh, everybody have a good safe last couple of weeks. Hopefully we get the planting done and the spraying and all the things everybody's working on. Just be safe out there, get your rest. And with that said, thanks everybody. We'll catch you again next time on the Ag View Pitch.