Don't sleep on 2026: weekly market outlook, Nov. 17th-21st

Shay: Welcome back, everyone, to another episode of the Ag View Pitch and today's Sunday Market Outlook with Daniel Elsner. Daniel, how are you today?

Daniel

Elsner: Doing great, Shay. How are you?

Shay: Oh man, it's middle of November, November 15th when we're recording it. Field work is pretty well wrapped up. I know a lot of you listening are at least on the tail end. I think most people have harvest tucked away and Interesting report that we had this week, lots of decisions being made, and that's why I'm glad to have you on here today.

Daniel

Elsner: Yeah, it's a pleasure. Thanks for the invite.

Shay: I guess I'd like your initial reaction to the numbers that came out in the report here yesterday. We're recording Saturday the 15th, the report that came out November 14th. Specifically, what are your thoughts about the data? Do, do we feel that we have updated, reflected numbers, or are we lacking there?

Daniel

Elsner: I think we're lacking, and the USDA basically said that. If you go to the website and pull up the WASDE, it says right there at the top, there's a big note that says that due to the, the lack of government funding and the shutdown, they essentially didn't have all of their, their normal resources to pull off of when compiling the report. So I don't think they had all of their, their tools that they typically use. So it, I think it's gonna throw into question, you know, how good the numbers are.

Shay: So I think that's certainly something that I would say that's, that's probably going to piss some people off though, because they expect USDA to have the right numbers. This is what, you know, a lot of the trade is surrounded by. How does that strike you for the impacts that this has at the farm gate for farm operations making market decisions here at the end of '25. We're headed into South American production and there's a lot of uncertainty right now.

Daniel

Elsner: Yeah, for sure. I think it just throws a huge wrench into things. I mean, this market was trending higher on both corn and beans and we basically erased all of our gains from this past week. Now, that being said, we're still in a solid uptrend. You know, we'll see what the market does here to open up the week. Um, but it seems like it was rushed and probably, you know, you could have waited, uh, another couple weeks or another month to put together a more compiled report that, you know, had all of the, the data sources that they typically use. And I think the market would have trusted that a little bit more and would have reacted better, um, just to the quality of data regardless of what the numbers said.

Shay: So when you think about farm operations out there. You know, we have people that were heavily sold coming into '25. We have people that had almost nothing sold. We have people that are still sitting at low amounts sold. Who's the— which, I guess, defined character there that I just highlighted concerns you the most, especially with, you know, in light of recent events with this report and the uncertainty as we head into the next 2 months here?

Daniel

Elsner: Yeah, I think those that don't have anything sold, need to seriously look at making sales and seeing what levels are profitable and make sense for them, just because there's so much risk in this market. And now that you have the government coming out with, you know, reports on a weekly basis with exports and the WASDE and all these other reports, I think there's going to be a lot of risk in this thing, especially on the beans. And I think you're just going to have a lot more volatility. So I think just being disciplined, especially if you have nothing sold, is probably a prudent idea at this point in time.

Shay: Now, some of the traders out there I know are excited to have a little bit more volatility back into the game. We've been in such a narrow trading range, you know, corn, corn seems to like $4.20 here over the last couple months, it seems like on the, on the Dec '25 contract. Is that volatility good for farmers? How do they, how do they manage that? Because we went from a narrow trading range where we knew we didn't like the price to now it's like, well, we're getting these 10, 12, 15-cent moves. Still not ideal, but, uh, there's a lot more emotion involved there.

Daniel

Elsner: And the emotion is the key thing. I mean, volatility is good for the farmer if it goes up, but, uh, you also need to stay disciplined too, because how many times do we see where the farmer will see that the market's rallying a lot and then they hold back, they don't want to sell anything, their price targets keep getting bumped up. So I think if you're a farmer and you see we move 10, 15 cents higher, I mean seriously take a look at, you know, where do I need to be in terms of, in terms of making a sale, and, you know, what makes sense for my operation, and not just letting it ride and hoping we go to $5 or $12 on beans. And just staying disciplined, I think, is really important in volatile times.

And having offers in the system, whether it's a cash offer at your local end user or a future offer on the board, just staying disciplined with those and if you like a price, put an offer in. And if it hits, don't be too upset that it hits because you like that price when you put it in.

Shay: And don't pull the targets when they're 2 cents away. Maintain that discipline. You know, it's, it's kind of interesting as we sit here again, November 15th, there's corn that's been sitting in the bins for 2 months. And I think that's the other part of the equation that people need to seriously consider here, that storage we factor anywhere from 3 to 5 cents per month per bushel on corn and a little bit higher on soybeans. Those are real dollars that are being burned essentially every day to the equivalent interest or opportunity cost depending on your operation. So the question that I have here was based around a discussion on X last night of people saying, oh, well, go figure, they kept the yield high, they're going to come back and have a remediation and this happened in 2019, and then they got caught with their pants down with the derecho and they couldn't cover it up.

You know, I'm not into the, the whole conspiracy thing. I think the people that are there do as good of a job as they can with the numbers that they have. But if that's the case, and if farmers are sitting there and saying, oh, this thing isn't as big as they thought it was going to be, there's options. I mean, there's opportunities. You can, you can sell the cash, you can have reownership. There's different option strategies that are out there. I mean, is it, is it the lack of education on the options that exist, or is it people just not feeling comfortable with taking that assumed risk? You know, they'd rather just talk about it than, than assume the actual risk of, of what they believe.

Daniel

Elsner: Yeah, I think that a little bit of both. There's certainly a lot more education that could be done. And when I talk to farmers, a lot of them, you know, some of them don't even know what an HTA is, and a lot of them are traditional cash sellers. They go to the local elevator. But there's a lot of opportunity out there and a lot of different tools in the toolbox that you can use. And they're not all for everyone. But I think at least playing the futures and basis game and splitting up that cash sale into those two components is really crucial to maximizing your farm's, you know, profit operations. And there's other tools on top of that too.

I mean, there's stuff you can do on the board, there's options, there's over-the-counter tools that you can use with your local processor, you know, different accumulators and things like that too, where you can get a premium price to where it's at today. And like I said, it's not for everyone, but there's certainly a lot of tools out there for the farmer to use. It's just a matter of wanting to go and learn about it and ask about it.

Shay: And if you're listening to this and you know that you're that person that doesn't have the knowledge or isn't educated and doesn't quite understand, just call up your grain merchandiser and ask them. Call up your local elevator, call up you know, someone in the industry that you feel that you could have that conversation with and say, what options are available? What's the cost to me as a producer? How does it fit into my logistics of my operation? And then what makes sense moving forward? You hit on something there. I've, uh, transparently, I've not been paying attention, uh, very much to, uh, kind of the carry situation. Uh, can you talk about carry in the market that exists today, um, from Dec as we roll into the beginning of 2026 delivery months and what your thoughts are there.

Daniel

Elsner: Yeah, the carry is right about at the cost of carry that you talked about. It's about 4 to 5 cents a month on corn and I think 6, 7 cents on beans. So if you're long cash corn and you're holding it in the bin, you're really hoping for either a basis rally or futures rally because cash to cash, you're better off just selling it now versus holding it, um, into the future months with where the board's at today. So you need to be bullish basis or futures for it to make sense to even carry. And we've seen with this bean rally, the carry's just eroded away. There used to be pretty good carry on the board for old crop beans, and it's really narrowed up. And you're seeing that narrowing on the corn side too. The spreads continue to narrow from Dec to March. I know we're getting into, um, Dec delivery here, so it's going to be less relevant.

But either way, the carries have been narrowing and tightening up, um, and being taken out of the market. So it, it makes it a harder case to hold the corn now, hold the corn out to the summer or the spring instead of just selling it now, unless you do have, you know, a bullish bias to the market. But if that's the case, I think you need to sit down and think about what numbers do you want to execute at and stay disciplined. That way, if we do get some volatility to the upside, you don't let it slip away.

Shay: I'm going to make a comment and then I'm going to have a question. Personally, I'm not exactly bullish futures right now when we look down the road here, and part of that is because, you know, South America is going to be coming online here soon enough with the delay in the report, the government shutdown. And now you have crops that are, you know, growing or going to be actively planted here over the next few months in South America. You know, I've seen several people online say, hey, carryout only goes up from here, you know, pending any South American issue. So let's assume my bias here and then I'll let you give some feedback on that. But does that just leave basis for us to be bullish on? And if so, your Cedar Rapids, Iowa area, How do you feel about basis? What's your outlook? Is the crop there or is it not there?

Daniel

Elsner: Yeah, in terms of my local draw, I think the crop's there. You know, we're certainly off of last year, but last year was a record crop. So instead of seeing 280 yields, you're seeing 240s, 250s, which is still a good crop. But I know from the farmer perspective, they're disappointed because of what they've had last year. But in the grand scheme of things, it's a good crop. And I think the corn is there. You also had acre increases from last year too. So locally, I think we're probably about the same as last year. And with the basis question, I think there's some risk here from the farmer going out into the spring because you have a lot of people holding as much as they can in the fall with how bad prices were, at least on corn. I mean, we've seen a bean rally now, but on corn, they're, they're not wanting to let go, especially off combine.

So you're going to see a flood of grain, I think, after the first of the year that needs to move for cash flow or logistical reasons. You've had a lot of people bagging too, so that has, you know, a timeline on it. They don't want to hold that into the summer. So I think since they're holding the corn back in the fall, it's just going to have to move even more after the first of the year. So I think that's something that the farmer needs to, you know, keep in mind in terms of basis is when is grain going to move. Because if you're looking to move grain, your neighbors are probably looking to move grain. So I think that's something to keep in mind there for sure.

Shay: So, so what I— I'm not going to put words in your mouth, I'll ask it as a question. We might already seen peak basis opportunities during the harvest timeline, or maybe in the next 30 days, maybe after that it trails off.

Daniel

Elsner: Yeah, I think after the first of the year it's going to be hard to be too bullish on basis just because I think there's going to be a lot of grain that needs to move. Now out into the summer, who knows? But in terms of the next few months, in terms of, in terms of marketing opportunities, I just don't know how strong basis can get here just because there's a lot of corn that I think needs to move.

Shay: I appreciate the perspective on that. Now we'll go back to my comments. I want your opportunity to question on that. So, you know, personally, I don't, I don't have a, I'm not super bearish either at this point, but I don't necessarily have a huge bullish outlook on futures here, either for '25, you know, current crop, or as we, as we move into '26. What are your thoughts?

Daniel

Elsner: Yeah, so if that's the case, you know, fundamentally, if you're— if the numbers are saying, you know, bearish or neutral on, on grain, I would say look where the charts are. You know, I like looking at trends and technical analysis, and the trend is higher. We're still in a solid uptrend from our August lows, both in corn and beans. Now, we did have, you know, a very large rally here, especially on the bean side of things, you know, on this China deal. So you have a lot of risk there in terms of it pulling out. But if you're bearish or neutral, I'd say take advantage of, of an uptrend. And if we continue to go higher, just stay disciplined in terms of making sales. Now, let's say you go up $0.10 on corn, make a sale, go up another $0.10, make a sale, you know, something simple like that.

Just to stay disciplined, I think makes sense if, if you're not overly bullish personally, but if the trend gives you the opportunity, I think, I think making sure you're pulling the trigger on some sales makes sense.

Shay: And just to reiterate, those sales, you know, we always encourage people to think about it as a percent of your production as opposed to, you know, a contract of 5,000 bushels or a couple thousand bushels or a load at a time. Look at how many sales do I legitimately want to make in my operation. For me, the fewer sales, the better. You know, if I can make, if I can make 6 sales on any given marketing year and I feel comfortable about the price levels that we're at, that's more of a target on my end to where it's less to manage. I'm more disciplined with my approach. I know what my targets are going to be. I think sometimes we see people get into trouble when they say, yeah, I'll make a sale, like Daniel said, at every 10 cents, but I'm going to sell 2,000 bushels and I'm producing 400,000.

You know, you're gonna— you need 200 sales, um, and you're probably not going to go up, uh, 200 times 10 cents. So, uh, just kind of an interesting perspective there. I got a couple charts here on the screen, uh, just kind of looking for your reaction on this, I guess. So, uh, the current one is Dec '26, which is the blue in the background, uh, overlaid with Dec '25. And I think it's been interesting, kind of, uh, that spread that we've held there as 2025 has, you know, it dipped down $3.90, upper $3.80s there, and then you tack basis onto that, we were, we're kind of ugly there, uh, 3, 4 months back. Now it seems we've regained a little bit of that strength, tapped up around $4.40 here, uh, a couple days ago and, and settled back in that $4.30 range.

Anything that you would comment, just as we, we're kind of looking, we're blending here between 2025 and 2026, but Does anything strike you about this chart that you think is interesting?

Daniel

Elsner: Yeah, I, I think Dec '26 is really strong compared to where Dec '25 was. I mean, at this $4.70 level, you're basically within the top $0.10 of where Dec '25 traded last year. And I know it's not a seasonal, you know, quote, seasonal time to sell next year's crop. But if you're looking at it year over year, at this $4.70 level on the Dec board, I mean, that's getting you $4.50, $4.40 corn, cash corn at a lot of different locations across the country for bushels that you're going to have to move at harvest. That's a lot better than sub-$4 corn that we saw this year. So I think it would, you know, if the numbers make sense for you, it makes sense to think about making a sale there out on Dec '26 at these levels. Locking in, you know, at least those bushels you need to move at harvest, because that way you're locking in something that's 40, 50 cents better than it was this year.

And then that makes it easier to make marketing decisions going down the road. And going back earlier in the conversation, and there's tools that can get you closer to $5 on the Dec '26 board, you know, in terms of options or accumulators and things like that. And there's tools to even get a premium on that $4.70 price. So I definitely think this is a place for farmers to seriously consider getting at least a base layer on for next year, just comparing it to what we've seen this past year.

Shay: And on top of just the logistics piece that you mentioned there about, you know, the bushels that you can't hold during harvest or as you kind of get through the whole 2026 harvest season, as we're talking about, is look at those variable costs or fixed costs depending on your operation and say, what expenses do I want to make sure that I have covered or protected? You know, I know I'm going to have that cash flow coming in. And as I've had people asking me, you know, marketing questions here over the last few weeks, that's been kind of my response of let's get your variable costs covered. You know, you're going to buy fertilizer, you're going to buy nitrogen, you're going to buy seed, you're going to buy crop protection. Take whatever dollar amount estimates that you have and look at doing an equivalent amount of sales.

It doesn't mean you have to go out— if, uh, you know, your variable costs are 40% of your expense in your operation, I'm not saying you have to go out and be 40% sold. But let's have a mark-to-market, or let's have a target here for that crop year and say, what do I want to make sure that I have covered? And that gets you started, that gets you headed in the right direction. And for a lot of our operations, that $4.50 to $4.60, and then you also mentioned some of the, you know, accumulator contracts that have premium opportunities to get those bushels bought. There's, there's opportunity not only for breakeven, but actually pretty decent profitability, even with increased input prices there. So I appreciate your perspective on that.

And I guess as I look at it from the work that we do in Ag View Solutions with Profit Manager, figure out what your variable costs are, figure out what you want to make sure that you have covered, and maybe use that as a preliminary target. Any other thoughts there?

Daniel

Elsner: No, I totally agree on that.

Shay: Okay. So the other chart that I have here, I just overlaid kind of some, some retracements here. And again, this is looking at Dec of 2026 sitting here around $4.67 today that I marked it at. Really what I wanted to show, this is a year-to-date chart, uh, going back to January 3rd or January 6th, something like that. If you were to market Dec '26 today, you're in the top 20% sales of what this trading period has, uh, given you the opportunity for over the last, call it, 10 and a half months here. To me, if I can be a top 20% marketer, and who knows what the next year is going to bring for this contract, but If I can be a top 20% marketer or top 30% marketer year over year, that's going to line me up for some success. Am I— and the question I've posed to people, and I'll pose this to you, is am I missing out on too much upside potential by doing that?

I know I'm very heavy forward sold. That's just kind of my— that's my marketing strategy. How do you think about that risk of maybe missing out on some of that top-end potential versus you know, 80 out of 100 days we're going to be trading lower than where we are now.

Daniel

Elsner: What I'd say to that, I think it's better to lock in, lock and break even, lock in profit hopefully on the first set of sales, then try to chase it to the upside. And if you look at the chart, I mean, we're on the higher end of what it's traded the last year. That $4.70 mark was pretty heavy resistance. We ticked above it on Thursday, I think $4.73. Or so is what, what we got on the high. And even on the summer highs, it's $4.75 or $4.79. So you're really getting to the higher end of where this contract has traded over the last year. And in terms of risk management, I think there's going to be resistance there, and it makes sense to lay off some risk there. Now, you could break above and make a run higher, maybe closer to $5, but as a farmer, unless you're you know, retiring, you're always going to have grain to sell, you're always going to be long grain.

So just knowing that, I think it makes sense to lock something in at a level that makes sense for you. And knowing that you might have 80-90% of your crop left to sell. So if we do get a run higher, there's your upside participation. And if for some reason you are heavily marketed, you know, maybe in your case, Shay, or other folks, and you see the market start to rally, I mean, it's not advice, but you can always, you know, do some kind of reownership too, as well. And then you also have the next year's crop to market too. So farmers are always gonna be long grain.

Shay: You're speaking my love language. If it rallies as we head into the next marketing year, I'm just gonna sell the year after that. I'm the minority here. So I understand that. But I just, I like to offer that as a perspective because I know there's people that listen that you had referenced earlier that they only do the cash sales or they only do what makes sense for their operation. And there's a lot of, a lot of, well, let's, let's look at soybeans here. We're going to go to soybeans next. I don't have a '25 chart, but the people that put soybeans in a bin and did nothing and sat on their hands are the ones that, you know, look pretty smart now that we had an over a dollar move there. So, you know, I think it goes both ways, but I think just being consistent in whatever you do, This is NOV of '26, looking somewhere in that, you know, above $11.

And you look at least well over a dollar from what we saw in those low tens here over the last year. There's opportunity there. And I've had a lot of people calling and asking me about the NOV '26 on soybeans. What are your thoughts there?

Daniel

Elsner: Yeah, layer in sales above $11. I think that makes a lot of sense. You don't need to do everything at once. I said layer it in. So you could do something simple like I talked about earlier. If you're above $11, make a sale. Goes up 15 cents, make another sale. I mean, you can tailor that to your operation too and what makes sense. But I think anything above $11, we should at least be doing something. I'm not saying sell everything, but at least get that base layer on for what you need to move at harvest. Because this past year, I mean, I mean, basis one was terrible, but Futures-wise, you're in the low tens. I mean, you're basically a buck, buck 20 higher than what we were at harvest time. So I don't know why you wouldn't really lock any, you know, at least a starting layer up at above $11. And I've been working with a lot of farmers to do that.

And I mean, there's pricing tools on that where you can probably get close to $11.50 on the board using some of those contracts. So I think it makes a lot of sense here on soybeans to do something. If you're not doing something, ask yourself why, you know, what's the goal?

Shay: Absolutely. All right, so final, final kind of question point in relation to what you were saying. So the chart that I have up here is Dec '26 corn overlaid with Nov '26 soybeans, and obviously it's adjusted based on the, on the charts there. Your comment about resistance in that, you call it $4.70 to $4.80 range as you look into East '26. Part of that is due to the current crop production, maybe some uncertainty in numbers, but we know it's probably a big crop. The question here is South America, you know, what's that look like? Is there any weather events as we move forward? And then really, what's planted acreage look like? So this is my way too early acreage question, uh, But as we look at a profitability comparison, we're still seeing soybeans for a lot of guys below cost of production, even at this above $11 range.

You know, a lot of our operations were sitting at $11.40, $11.80 area. Are we looking at, hey, we had a good year of corn, we like to grow corn, we know we have some margin in corn, let's grow more corn next year, and what are the implications of that? Any thoughts around that, Daniel?

Daniel

Elsner: Yeah, so the, the Dec corn and the, the Nov beans, um, the ratio is about 2.4 now. I mean, typically you want to see that above 2.5 to incentivize soybeans over corn. And yeah, who wants to, to plant something where you can't make a profit today on it if you forward sold? I understand that, um, but we did that last year too. So at some point the rotation's going to need to come back into play. I mean, some people do corn on corn forever, but for a lot of people that doesn't work. So I think you are just going to have rotation pressure in terms of more bean acres than what people would like to see, just because of the corn on corn increase that we saw this past year. So I think that rotation is going to catch up to them and I mean, that ratio is at 2.4. If that goes up 2.5, 2.6, I think it makes a lot more sense for people to start, you know, planting beans over corn.

Shay: And aren't we looking at like 170 out of Brazil for soybeans? That sounds bearish to me.

Daniel

Elsner: Yeah, I mean, they're gonna continue to raise acres and raise yield. I mean, they're just gonna keep growing their supply in South America, so.

Shay: Key considerations here as we look at Nov '26 on soybeans, starting to see some levels of opportunity as we head into next year here. I think the basis discussion was important. I think looking at where your interest and storage cost is going to be is important. We talked a little bit about future opportunities on corn. Daniel, any final thoughts here as we wrap up?

Daniel

Elsner: Yeah, I think, you know, what you guys preach at Profit Manager, just know your numbers. Know your costs. And if the board gives you an opportunity, or if you have the chance to make a cash sale at those times where markets are usually the weakest, you know, harvest time, definitely don't be afraid to put, to put something on at breakeven or profitable levels, especially for those bushels that you need to move at harvest. Because what we see a lot is farmers are undersold. They are forced to move a lot of grain at harvest at really bad prices. And then it makes it harder for them to make future marketing decisions because they want to average up. So it makes it harder for them to take advantage of, you know, say, a 50-cent rally in corn when for them they, they think they need a dollar rally to make up for those sales that they, that they made out of the field at low prices.

So if you lock in your worst sales at breakeven profitable levels, it makes it a whole lot easier and it gives you a lot more staying power in the market to maybe catch some more upside potential and just increase the overall profitability of your operation. I know it's, you know, not the seasonal time to do it, but if the numbers make sense, I, I think definitely it makes sense to do something and have offers in, have numbers in that you're looking to sell at, and don't be afraid to, to put an offer out there and execute on it.

Shay: Yeah, great words of wisdom. As we wrap up here, Daniel, thanks for joining us here for the second week of November Sunday Market Outlook. If folks want to get a hold of you, like what you had to say, is there a good place for them to contact you?

Daniel

Elsner: Yeah, uh, daniel.elsner@rocketmail.com is my email.

Shay: Very good. Thank you so much, Daniel, and thank you everyone for listening to another episode of the Ag View Pitch Sunday Market Outlook. We will catch you next time.