Demand is heating up: weekly market outlook July 29th to Aug 2nd

Joe

Paulsen: Welcome to the Ag View Pitch weekly market outlook for July 29th through August 2nd. We're recording this on Thursday afternoon, the 25th, and I am Joe Paulsen and I got Jeff Fickleman here with Interactive Ag. How's it going today, Jeff?

Jeff

Fichtelman: Yeah, I'm doing well. It's nice to have, although not a huge rally, but at least some green on the screen for 3 full days. And, uh, no, it's a shift in optimism from the farmers I get to work with.

Joe

Paulsen: So yeah, it seems like most people are ready to go slit their throats, and, uh, it's been a little, little rough out there.

Jeff

Fichtelman: The last 18 months have been, uh, Very difficult. And it took a new step down when really I feel like we broke $450 and it shifted from I can make money to now I can't. Now it's just a matter of do we sell and minimize and lock in a small loss to avoid what could be a big one, or do we just keep holding on and hope for the best? And it's been a lot of my conversations in the last really couple months, I guess.

Joe

Paulsen: So if a guy is well into insurance territory, is there any real reason to, to sell really at this point? You know, you guys just better off waiting or, or do you try and, you know, do better than what the crop insurance is going to do?

Jeff

Fichtelman: Yeah. I mean, you asked the right question. Obviously it's around, I think, $4.65 as the Feb average. We're well below that. The key, of course, is our yields better? And if so, where is that true floor? So I have been talking to a lot of guys and playing around with that math. A fair amount of our guys signed up for ECO, the extended coverage option, which starts the coverage at 95%, although it's county-based. But that 95% is really around $4.40, assuming an average county yield. Now, most of the families I work with are the very eastern edge of Illinois all the way to Ohio and Michigan. So we're the eastern half of the Corn Belt, really. And I would say yields are looking incredible. I mean, most guys don't like to admit it yet, but I've heard this will be the best crop they've ever had. Last year was their best crop. They think it could be better.

So I mean, obviously, we still have a solid month to finish this crop out. It could obviously go backwards a little bit. But those better yields kind of offset that true insurance floor. So technically speaking, if you're at or below APH or if the county's at or below the county average, no, there's really no need because you have in a way a benefit for the market going down through October. Now, I would say the key is, of course, understanding your true floor. If you signed up for 85 or 80% coverage, your floor is really below $4. And if your yields are a little better, you really don't have a floor at all here. So I mean, I think it's situational. I mean, you asked the right question, but I wish everybody signed up for 95%. But I've met a lot of farmers recently that have not. Most of the time they do the same thing every year, 80, maybe 85. And even 85% policy is a $4 true floor.

Joe

Paulsen: So it's, you know, I'm, I'm going to— I'm an insurance guy. When things are— when the chips are down, I want that floor as, as close to me as possible. And, you know, the guys that, that buy 85% or even 75%, you know, it's going to hurt this year. But, you know, you are self-insuring for a point. You know, if you look over a 5-year pull, you know, if you saved whatever it is, $10, $15 a year, well, you know, you've got a little bit of that to work with. But when you're in the bottom of the hole, it sucks. And we're all kind of there right now.

Jeff

Fichtelman: I mean, that's a really good point on the concept of self-insure, which I think most guys, the yields are pretty consistent and even consistently good. And that creates an environment that really 2023 was about as good of a setup as you could create for the insurance being a floor. Most people think of insurance as the 2012 environment, but last year— and I know out west yields maybe weren't as good in Iowa and Nebraska, they probably did get pretty big payouts— but out east, a lot of guys even who had 85% policies didn't get a payout because yields were too good, even though markets fell a dollar plus from their Fed average. And that's why I always tell guys, like, for the right environment, overinsure. But then the key is, if you have that Cadillac insurance policy, when we get those rallies, we can't be scared to sell them.

Because I've always told guys, I mean, everybody says insurance is a floor, but in my opinion, it's really the opposite. I think it's a an upside call in the sense that in a year like '23 where the market goes down but yields go up, the average payout is either nothing or small— $10, $20, $30 an acre. But in 2012, which is what we're all scared of, that's why we don't sell those rallies, because we're fearful of what if '12 happens again. And the average payout for the guys I knew then was $200 to $300 an acre. And you think of that disparity as like, we're scared to sell those rallies, but that's when insurance pays in a huge way. Uh, and most of the time, Mother Nature, she, she seems to pull through.

And I've been doing this since '07, uh, so about 17 years, and I feel like after 2012 happened, guys were so— it was such a mentally difficult year that every year thereafter, there was a moment in the summer where people told me, all right, it's 2012 all over again. That's why I'm not going to sell. And, and I've learned now every time I hear those words, it's probably the time to sell. But it's hard. I mean, this, this is probably the most difficult environment from a marketing perspective. And, and I would say though, we are at least seeing strong demand. We're finally at a price level that nobody loves from a farm perspective, but the end users are really coming in strong. Our export market is very competitive against the world. Markets. We're seeing, uh, some of Ukraine and Russia, that area, see crop reductions off of not ideal weather.

Those bushels will be brought to the US in, in higher demand. The USDA has been extremely aggressive in increasing demand, for good reason, on corn. Beans have been a little more lackluster, but we just are in this environment now where I feel like if I had to summarize it, between now and the end of harvest, we have an absolute ton of unsold corn that's going to hit the market. But at the same time, we have very strong demand and we have the big speculators massively short. So you got end users buying rateably, you got the speculators probably trying to figure out how to get out of that short at some point. But every rally, you got farmers willing to sell it. There's a decent chance we might just be in a choppy range until we get through harvest. And kind of farmers sold what they need to sell, put the rest in the bin. And I could see maybe a December, January rally, um, coming.

It's just, it's going to be a grind. And I also think it's not going to be at levels that everybody wants.

Joe

Paulsen: And, uh, so, so, uh, that, that, those are excellent points and brings us into kind of another conversation about, you know, let's talk about the stuff that is sold and basis. You know, do we, you know, is there an advantage to try and set basis early? Or do you think that people are going to stay very tight-fisted and it's going to be, they're gonna have to bid it up to get it out of the farmers' hands throughout the fall? You know, what's, what's your perspective?

Jeff

Fichtelman: Good question, actually. I mean, I work with farmers on the markets, we talked a lot of the grain elevators. And it's interesting hearing their perspective right now. It's a, it's a weird environment for them. They have the lowest amount of farmer purchases, or to arrive, as they call it, that they've had in a long time, like, the lowest ownership they've had in a long, long time for new crop. However, they're all so confident that all of this corn is just going to come to the market that basis has been average to even below average. They're not chasing yet. The farmer, on the other hand, it's a matter of staying power. I think the combination is there's still a fair amount, especially out east, of old crop that's been waiting, waiting, waiting for a good value and never got it. Now it's kind of being forced into the market. A lot of those are setting basis.

So a lot of that ownership will come. That could fill the bin for some or fill the storage for some of these facilities to make their needs not as great for the harvest gut slot. I personally am a little pessimistic on basis. But the tough thing is a lot of the grain companies know it. The thing that could possibly save the day is just how strong demand is for corn that could keep a relative floor. Again, kind of similar to the futures market. I think we might be in a fairly tight range where there's— I don't know if there's a ton of downside. I mean, there could be if all farmers selling puke it out at once. I think the real risk to basis is actually a 40 or 50 cent rally in futures because then every farmer would just be like, okay, good enough, sell it. And a blind sell. And that would really allow basis to weaken. Because futures did the work.

If I— the farmers I talked to right now, I'm actively setting basis for harvest. And then I'm going to be patient on anything beyond that. Not taking 100% of their harvest needs to lock in, but at least half, if not two-thirds of their harvest needs locking in on basis, just in case, because I think the combination of yields being really good, and a ton of unsold old crop hitting the market right now, are two net negatives and those offset the demand that I think is there. So I'm a little concerned about basis for harvest, but long term, I mean, I think it could be a good basis year if you're Jan, Feb, March and beyond, just because of how resilient demand is.

Joe

Paulsen: It's— so just to recap a little bit, If you've got delivered corn in the fall, you're, you're, you're kind of a fan of, of maybe price or setting basis on some of that. Yeah, whether it's corn and/or beans, or, or you just talking corn, do you see the same picture for beans?

Jeff

Fichtelman: Yeah, I mean, beans are an interesting one because we rotated acres to beans, but old crop was extremely tight. And like unusually tight for what— versus what the USDA said the carryout should be. You've seen big inverses in the market, you've seen strong basis. Typically, when you see that environment, that rolls into harvest, and you see better basis opportunities because of that. I think personally, the bean basis opportunities will come for early harvest. I think you could get a nice window if if you happen to plant beans on the early side, and you're the first 2 or 3 weeks before everybody else is rolling, or first week for everyone else is rolling, I'd save some of those bullets just in case you get that, that quick ship opportunity. General gut slot harvest, I think it'll be okay. I mean, again, I don't mind being a little patient. It depends on the location.

So I always tell guys, as farmers, you know your area better than anyone else, you've obviously set basis in the harvest window. So if you feel like the current basis is better than normal, I'd lock it in. If it's worse than normal, I'd be patient on the bean side. But it's corn I'm worried about. I mean, I, I used to work at CGB, as we talked before we started here, and I've been calling just an impromptu survey of sorts over the last, I guess, about 15-20 days now. I called 25 guys randomly, again, across the eastern half of the Corn Belt. So it's a bit biased there. And I asked them a couple questions. What— how much old crop do you have left? And what percent sold are you in new crop? And of the 20 or so guys that I called, 80% of them had at least half of their old crop unsold. And all of them, except one guy, had no more than 10% sold new crop. And that scared the crap out of me.

And on the old crop, the majority who had more than half, it was a mixture between bushels in the bin and delivered basis, roll, roll, roll, wait for that better value. There's a good— and maybe we're in the day of reckoning, but I feel like right now is kind of the proverbial end of the line on old crop. And, uh, we're seeing strong movement, but again, a lot of guys are— the stuff that was in the bin, they're still setting bases because they just don't want to sell. And that's why I think rallies are just going to be such a grind for the next 3 to 4 months, because all these guys have to sell something. And the tolerance, it used to be $4.75. Everybody started at $5, didn't get it. They're willing to sell $4.75, didn't get that. They're willing to sell $4.50. And now I'm starting to hear guys say, hey, if I get $4.25, I'll take it.

So I feel like if we get September up to $4.25, we're going to hit a brick wall.

Joe

Paulsen: Oh yeah, because we've, you know, I've got a guy that works for me and drives, drives truck and he was hauling into the ethanol plant, my local ethanol plant this week. And he got in there at, you know, 45 minutes after they had opened and nobody had been there yet. You know, which is just absolutely crazy to me. Uh, it's a large ethanol plant and, uh, you know, you're just starting to hear of some neighbors that are, you know, got a lot of corn in the bins yet. That's got to— that they got to do something with. Now, I will say my local elevator, they are starting to move some grain. They've been super slow this entire year. And with this little bump in the rally, they're starting to move stuff again. And, you know, people are just throwing the towel in, you know, they're just— which I think is a good move. You know, so you can focus on, you know, focus on new crop bushels.

And, you know, a loss is a loss. And let's just move on with life. It's a tough environment to be in. So next, next question that I have in, you know, talking about sold, sold grain again. What about, what about rolling? You know, what, what are, what are you, what are you looking at as far as like carry targets to March, you know, to May on, on corn? And then kind of what are you looking at on beans?

Jeff

Fichtelman: Yeah, so December to March futures spreads about $0.15 right now, which historically has been a level that all the way up until last year, every time you get to $0.15, you roll it. That's about as good as you get. Um, a couple thoughts. Last year we saw it trade out to about $0.22. That was unique. Uh, I think there's a few competing factors that won't allow us to get to $0.22 this year. One, the general market has come down. So part of it is the cost of interest. Well, if corn was $5 and interest was 7.5% versus $4 and interest might be 6.5 or 7%, it's not that much, but the whole market's down 20%. That cost of money isn't as big, so the spread doesn't have to get as wide. I also think this extremely strong demand— I went back to years where we saw very strong demand. 2020 was one of them.

and we never really got beyond about 15 or 16 cents, even though we had a big crop conceivably, but we just had incredibly strong demand. So I think that will be a part of the issue. And the other tough thing when it comes to getting spreads as wide as they can go is if the farmer is just unwilling to sell, that lack of selling pressure does not allow that front month to fall. Speculators are already shorted, so they're eventually going to have to buy the front month and sell the back— sell the next month. So buy Dec, sell March. That'll keep the spread tight. Um, I would love 22 cents again. I would love 20, uh, but I have a bad feeling 15 or 16 might be the best we get. Um, I— unless again we get some kind of unique pop that suddenly bring out a bunch of farmers selling But I have a bad feeling the spreads are not going to be as wide just because of how strong demand is this year.

And I— a big thing of focus for us and the farmers we work with now is most of our guys are out of '23. But even the ones we've started working with recently who have a lot of '23 is— you made a subtle but important point— is like, just you got to close the door on it. Because it clouds your mind and you can't think clearly on '24, let alone '25. And we're doing a, a good amount of work, not to the level of Ag View, but a good amount of work on the cost of production. And it seems like '25's cost is gonna be around the same number as '24. Fertilizer values are roughly about the same as where most guys locked in. Interest is around the same. Equipment's around the same. You got some guys talking maybe they won't apply as much nitrogen, looking at ways to maybe skimp a little bit, but for the most part costs are about the same.

And if you plug in a realistic yield, not a conservative one, guys can get by at $4 to $4.40 corn. And if new crops, $4.60 to $4.80. And you could put it in the bin, roll it, maybe turn another 15 or 20 cents to that. What we're putting a good amount of focus on. Let's not lose sight of $2,500. And just, it's my mindset is if our first 20% at $475, and that's the worst sale we make, that's, that's pretty good. But you think back to the 2010s, those early sales were, they tended to be good.

Joe

Paulsen: And so I completely agree with that. I, you know, especially in these large, large carries, or, you know, large carryout, you know, there's more risk on the table before it goes in the ground. So, you know, it's a good time to sell next year, the year before, it seems like, you know, it just, it just erodes as they start to fill in some of the unknowns, you know, whether it's acres or, or demand numbers or whatever. So, yeah, I just started putting my '25 Profit Manager together. And, and that's kind of, that's kind of what I'm seeing as well. Very, very similar type costs. And because I'm starting to think about what fall fertilizer is going to look like, you know, do we trim a little bit? Do we, you know, do we pull out phosphate and leave, leave, leave, leave the potassium and just different, different ways to kind of trim a few bucks here and here and there.

And everybody should be starting to kind of run a pencil on that because, you know, what's on the board for '25 right now might be a gift.

Jeff

Fichtelman: You know, I'm curious. I agree with you there. To that little scenario you just brought up, I've had, again, a lot of guys bring it up. You farm. Do you think guys will actually do that?

Joe

Paulsen: I, I, I think so. Yes. Percentage of them. It will not be all of them. I know guys that put on whatever the agronomist says. That's what it is. And they put on the same amount every single year. And there's absolutely nothing wrong with that. They tend to own a lot more land, that kind of thing. I, I rent over 90% of the acres that I farm. And you know, we, you got to look at costs. And it seems like, you know, that's part of the reason that I moved to strip-till was to be able to more efficiently place my fertilizer and get a little bit more out of it by putting on a little bit less. I do think that people will trim the fertilizer. I mean, if you talk to people at the co-op, you know, there's people that just flat out don't put any fertilizer on. And if you've got good levels, you can do that and not really see a yield hit.

I mean, you know, people talk about fertility being, being, being the bank, you know, you know, it's a— and sometimes you got to go to the bank and take some money out. And then that's— so I do think people will cut fertilizer, but it's— everybody's got a unique situation.

Jeff

Fichtelman: I agree. And obviously, if there's ever a year to do it, it's worth at least a shot in '25 where maybe saving that extra $20 to $40 an acre can go a long way. And depending on just how much you cut out of there. So yeah, I'm definitely no agronomist. So I'm not going to pretend to be an expert on that side. But it'll be interesting to see if there really is— if there's no yield impact for a year, the market can get by, but Obviously, it could create an environment where if it's a more widespread move, and then we actually have some kind of adverse weather, maybe yields are more sensitive. Whereas today, it feels like we're just resilient to whatever Mother Nature throws at us.

And, and that goes to like, one of the things I always challenge guys with is I feel like, just cherry-pick my average farmer who can grow 220 corn and has grown 220 corn the last 4 years, every time we start the next marketing year, they tell me start by plugging in 180. And I'm like, well, you've grown 220. And like, I know, but Mother Nature's been good. I just plug in 180. And I'm— in most years when the market's high, that's fine because you could still pencil profit at 180. But unfortunately, when you take your cost and you divide it over 180 versus your cost divided by 220, It really is the difference of I can't make money at $180 and I can at $220. And we don't know what yields are going to be, but it creates an environment where you feel like I can't sell new crop corn, even though maybe we should.

Joe

Paulsen: And it does, it gives a false sense of it makes the marketing more difficult because you're like, oh, well, I can't, you know, your cost per bushel is going to be higher. We, we tend to use like a 5-year average. Not necessarily an APH, like a 5-year average. And, you know, that's what I plug in. That's what I start. I, that gives you a more realistic view of what your costs are. And, but each his own. And big thing is, is put the costs in and then, and then I love to run scenarios, you know, What is it like, you know, if I end up producing my APH, which is a terrible place to be really, you know, and then, and then, and then be able to run scenarios on both sides of it to see, okay, this is what it is at that, this is what it is at that. I mean, one of the lowest ways to lower your, your cost per bushel is to produce more bushels.

So going back to our fertilizer conversation or whatever. I mean, you know, whatever you do, you want to make sure that you're not really sacrificing, you know, you got to watch economic yield, but, you know, you don't, you don't want to be throwing the baby out with the bathwater. So.

Jeff

Fichtelman: You don't, don't give up $40 of revenue to save $20 in cost. And yeah, it's, And I know that as a farm operation, you're dealing with multiple variables, all of them seem to be moving in their own direction. And some are, you just can't predict like the true yield impact. But I agree with you, it does feel like next year, guys almost be blinded by trying to lower the cost side, and possibly at the expense of the yield side. And then this, and that's where like, next year, this year, even, and who knows, maybe the next 3 or 4 years, we just might be in an environment where you just got to hit base hits, which is maximize your yield as best you can, be smart and sell decent levels. Don't do 100%, but don't do 0%. Just keep chipping away at it.

I say marketing is always going to be difficult, but if every time we get a 3-day rally, you just sell 5 or 10% and that's going to create a decent average and some sales won't be good, some sales will be great. Don't sell too little, but don't sell too much. And I know that's overly simplified, but it feels like every time we get a 3-day rally, everybody gets all bulled up and they don't sell a thing.

Joe

Paulsen: So simple in grain marketing makes money all the time. It, it, it, we, we, I do almost 100% all flex leases. And so I track my local grain elevator. On, it's like the second Wednesday of every month. And my dad really loves to do that job and he's really good at it. And he was, he's super disgusted with his marketing this year. I tell him on the bright side, he's got less tax to pay. So I was talking about tax, but he didn't care for that much this morning. But anyway, he was saying, you know, I look at the average And he goes, if I would just sell, you know, 8% of my crop on that second Wednesday of every month, he said, I would be better off. And I've, you know, done analysis of— I had a farm that was high cash rent. And, you know, the guy was— I was preparing for our meeting, and I wanted to be educated.

And I wanted to look at what is, what is my 5-year history on this farm as far as, you know, did I, did I make money on that specific farm? And what I did is I had my average price. And then I went up, went and looked at the FSA, like, market year average price. And I was 10 cents over, 10 cents below, 10 cents over, 20 cents below. 10 cents over, 30 cents below. And, you know, a simple averaging contract at your local elevator is a phenomenal way and cheap as far as a, uh, you know, market, you know, reducing risk, managing risk.

Jeff

Fichtelman: And that's where everybody wants to be able to beat the market, and it's really freaking hard. I always call the averaging contracts the blind monkey. And I've spent my career trying to beat them and it is really difficult. And I watch the markets every day. There's something to it. And you could be strategic and say, only average May, June, and July or something like that. But it's a law of averages. In the long run, it's going to work really well. And some years you'll have the guy at the coffee shop who did nothing that'll be bragging to you, but you can't shift the old discipline. And I'll never forget at the end of 2019, I went back 5 years. This was when I was at CGB, and I was at their hedge desk. So all farm orders came through me, and I put it in with Chicago. And so I had insight into when farmers sold and the average price they got.

And I looked at essentially one simple way to think about it: where did the farmer sell versus the range in corn and beans? And what was really interesting— now, these might be a biased set of years, it was like 2013 to 2019.. And, uh, on average, the farmers sold in the bottom third of the corn market. You had occasionally guys who sold well, but their average price was always in the bottom third. But beans were always in the top third. And I found that interesting. And, you know, I talked to a lot of guys, and during that era, as you may recall, $4.10 was like the motto. $4.50 would have been great. But like clockwork, the guys who I got to talk to in those, in those periods of time, they always stored the corn and moved their beans at harvest. Every time beans got to 10, they just called up and sold.

And they could almost— I don't want to say they didn't care about it, but beans were there to make cash flow and corn was their baby. And every time corn got to 4, they all got bulled up and said, oh, cancel my offers. Let's, let's see how high this thing can go.. And inevitably, we would hold, hold on to corn way too long to the bitter end and then be forced to sell at the worst possible time. Whereas in beans, it was so unemotional. It was just, I get my price, I sell it, I move it. It's almost robotic. And yet it produced the best results by a sizable margin. And that was a huge lesson to me. It's like, we can't— light emotions, it's hard. We're not built to be good at this as humans. But every time we let emotions get involved, it absolutely produces bad results. And just, I always say, like, think about it like beans.

Every time it got to a certain price, I just close my eyes and sell it because I got to move it and make cash flow. And, uh, sometimes you get years like '21 and '22 that just throw all the discipline out because the discipline didn't work, and then it just jumbles us up for the next 4 or 5 years until we finally get back in order, and then bam, we have another kind of '21-'22 market rally again. So now is the time just to be simple and disciplined, get to a $4.75 to $5 corn, close your eyes and sell it, get the $12 beans, close your eyes and sell it. And don't be afraid. Seems like we're getting pretty darn good at growing this crop. And as I mean, as you just mentioned, I mean, there's so many things that farmers have done with their operation to really minimize, I think, the downside on yield.

And I'm sure we'll have a '12 environment again where Mother Nature just deals massive heat and dryness. But so what do you got crop insurance for? Insure the hell out of your crop and then sell small rallies to modest rallies.

Joe

Paulsen: Yeah, I mean, you bring up an excellent point about like the timing and, and that kind of thing. I have a— I have some farms that are quite a ways away from home and I work with a small family elevator They called me up. I don't know, it was the beginning of April, something like that. And they're like, let's— we're thinking about doing a, like a, like a seasonal high contract where I think it was a 425 floor and it sold. I forget what it was. It was either every day or whatever. And they called me with the results of that the other day and it came out to 437 cash. And I was like, how— like, that's fantastic. I mean, that's, you know, like, like a 465, 470 futures. And, uh, you know, and that, that was just— and it was unemotional. It just did it in the background. And, you know, it's— there's something to be said for doing simple stuff, you know.

Jeff

Fichtelman: It's hard. And the most difficult part of marketing is, is in between the old ears. Like, we get in our own way too many times.

Joe

Paulsen: Oh yeah.

Jeff

Fichtelman: And like, every conversation I've had with guys in the last 18 months has been the exact same. It's like Groundhog's Day. We're always at new lows. They always tell me there's no way I can sell because I don't want to be the guy to sell the low. And I've been told that conversation from $5.90 all the way down to $4. And every time I'm like, The next time we have that conversation, I'm like, the last time you told me that, now you'd give your left arm for that price. And I'm like, who's to say the current market isn't good? Nobody wants to sell the current market. They want what we had just a few weeks, few months ago. And I do believe we're seeing demand now. Like, time might be an asset, but still trying to outguess the market is, is just too difficult. Stay with discipline. Pick a level that makes sense for your operation. Every time we get there, just sell it.

Like, don't overthink it. Don't say why we're there and now it's time to change and all that. This is—

Joe

Paulsen: close your eyes. Looking at the weighted average, you know, farmers tend to fixate on the next sale as if it's under a magnifying glass in a vacuum. I like to plug in what that price is and then it gives me my new average. And then, you know, you, you, you gotta look at what it does to the weighted average. Yeah, well, Jeff, you've been fantastic here. Is there anything else that you would like to, uh, tell the listeners, um, before, before we wrap this up?

Jeff

Fichtelman: No, I mean, I appreciate the opportunity. And, uh, yeah, hopefully for the foreseeable future markets will grind sideways to higher, but I do think the next 3 or 4 months will be somewhat unpleasant. But at least we got demand here, so We got low enough, we got the end user very healthy, and that's good for the long term.

Joe

Paulsen: So, so the high— we'll end on a high note. Demand is good and it's getting better.

Jeff

Fichtelman: That's exactly it.

Joe

Paulsen: So, well, thanks everybody for listening and we'll see you next week.