Tariff talk: weekly market outlook, Dec. 9-13th

Chris: Welcome everybody to another episode of the Ag View Pitch. We're heading into a new marketing week. We're already the second week of December. This week we're going to be talking about going through the 9th to the 13th, looking ahead. Today we have with us Dwayne Lowery. Dwayne, how's it going?

Duane

Lowry: Good, Chris. Glad to be here.

Chris: Good, good, good to have you. It's been a little while. We need to catch up here sometime and kind of see what's going on in the world. But there is a lot of things going on in the world geopolitically, a new administration, lots of stuff going on across the world. And then everything from, you know, some strength in the corn market to just a lot of question marks when it comes to profitability and stuff. So I think we have a lot, a lot of things we can hit on today, but I want to start out with this week. You know, we have the monthly supply and demand USDA report coming out on Tuesday. Some people listen to this before and some after, but any, any thoughts on that in terms of what, you know, we're not expecting much, we're expecting something. What's your two cents on, on that report?

Duane

Lowry: We might find a lower corn carryout on improved demand prospects. I doubt if there'll be much of a change on the soybeans. I'm not sure that there's anything to be expected that'll be a large market mover. But that's probably the trend that we'll be going with. It's a little bit smaller corn carryout. And I think it's important to point out last month when they lowered the bean production by just under 1.5 bushels an acre. Um, and while the stocks carryout went down, the total usage went down also. So the, the full reduction in supplies from the production and the yield change didn't get translated to the bottom line. And I think that's, uh, you know, somewhat troubling.

And, um, the South American weather situation so far is, you know, everything's good enough and, uh, without a problem down there, it's, it's difficult to find the fundamental narrative that really gives us a, you know, a driving higher type of mentality. Not to say that the calendar doesn't still allow for a problem to develop there, and there have been different times that the longer range maps have suggested there might be a problem develop again, but, uh, so far we don't really have that It seems like, you know, it's kind of the tug of war between, you know, that a little bit, and then, you know, we've had—

Chris: seems like really good demand for corn. Hit on that for a minute. I mean, do you think that demand is kind of front-loaded? Is that something that you think will continue? I mean, most of it I think has been Mexico. I'll have you touch on that, but is it something that, you know, maybe we you know, need to— let me back up and just say there's a lot of grain unsold, you know, and I think you're aware of that too. There's a lot of corn guys are sitting on trying to decide, do I sell some of this or a bunch of this before the year end, or, you know, or, or do we hold on and hope for a little higher price? And, and, you know, there's probably some downside risk that we have to consider too. Thoughts on, on corn specifically?

Duane

Lowry: Well, demand has been good. Total export numbers are projected for the current marketing year are up from last year slightly. They're up quite a bit from the year before that. The ethanol demand is projected to be up a little bit, and there might be an increase in that projection here in Tuesday's report. But at the end of the day, you know, you're sitting here at 1.9 billion bushel carryout, and that's higher than we've been the last few years. It is not as high as it was projected to have been maybe a year ago or at different times during the growing season this past year. But at the end of the day, The demand might be a little bit front-loaded and the selling pressures may yet to come from on the farmer end. But the overall supply situation and the overall market action has been a market that appears to be well-supplied.

To the extent it's not well-supplied, to the extent that the farmer has seen an increase in his prices, this has largely come about from basis strength. There's been pushes and bids at different times throughout harvest and post-harvest period. The corn spreads have tightened, like Dec '24 versus July '25 has probably tightened about 20 cents. The July '25 versus— well, let's just leave that for later. But the corn spreads are probably tightened at least 20 cents. But what does that mean? That we had plenty of carry in the market. And the market is not earning its carry. The futures market has largely been in a sideways pattern, in most of the time a very narrow range with certain brief periods of, of an upshot and then followed by a decline. But basically today's price in, in, uh, March futures was first seen at the end, at the end of June.

And the, the range that we've been in, um, has probably been for the most part a 20-cent range with the amount of time spent outside of that 20-cent range, um, either to the upside or to the downside, has been a limited number of days. And it can be argued that we are currently at the top part of that 20-cent range, but I think the overall market structure with the spreads tightening, um, and the market not earning its carry and in a, in a relatively small trading range is a sign that, you know, we kind of have a ceiling on prices, we have a lid. And if one was to argue which market is more justified to go up without a South American production problem, you know, I can understand an argument that it might be corn. But I'm concerned that we will see increased sales before we get to the end of the year, or shortly thereafter.

And I think that the current cash bids, while not the price levels that people want, I think there is some fear amongst the producer that they might not get a whole lot better. So I, I'm tending to think that we have a little bit of a price ceiling environment here. And there might be other reasons that the market experiences, you know, some weakness in front of us and maybe the cash corn market can maintain these levels, uh, or revisit these levels again if we get a sell-off. But at the end of the day, your cost of carrying that inventory just on the interest alone is probably approaching, you know, 3 cents a month. And, um, I think that, uh, to imagine a, a price rally rewards you significantly for storing that right now, it's kind of difficult to imagine. And I think to get to something that does reward you in a big way.

You almost have to get to a point where you're going to have to have a production problem during the summer. Because we're set up to have a marketplace that'll talk about a narrative where corn acres are going to be up this, this in '25. And I would think that we're up by a minimum of 3 million acres from this past year, maybe more. And that's going to come with it a depressing narrative for these '25 levels, it might not be depressing for the old crop levels and it might allow the spreads to tighten more. But that again is a market that's not going to earn carry and those tend to have price ceilings. And I'm not so sure that our cash market price ceiling isn't very far away from where levels that we're at. So I'm, I'm a little bit concerned that, you know, the rally that we saw this week which in essence was kind of a recovery of the days before that.

And, you know, we're right— current levels, we're still 5 to 10 cents off the peak of the futures market at different times in October and November. And I would say that getting above those peaks will be difficult. So let's say that the price ceiling is, uh, 10 cents away from where we're at.

Chris: I, I think, uh, one of the challenges too is just going to be before the end of the year for those that need to be moving grain. Before the end of the year is going to be a real tough thing too, um, just logistically, you know, there is a wall of corn big time. And whether it's before the end of the year or if it's, you know, whatever it is, you know, it's going to be a going to be a wall of corn. And obviously, I think that's a huge, huge impact, both logistically, both on, you know, also on basis and also on, on flat price. So there's a lot of pressure, it looks like to me, with that kind of wet blanket of all the bushels.

Duane

Lowry: Yeah, which again, I think leaves us with a kind of a price ceiling scenario. And I think it needs to be pointed out that if your depiction of this wall of corn is accurate, even if, well, let's, let's, let's say we find a different reason for the ag markets to weaken over the next several weeks, let's say, that might allow some of those bushels that the farmer had hoped he could sell shortly after the first of the year, they may elect to wait because they don't like the price. But only all that does is allow spreads to tighten more allows basis to tighten again, and maybe he can attain these cash price levels again that he's offered, say, today. But that doesn't really set the stage for a price rally that goes much beyond the cost of money. So I don't want to sound super bearish, but I find it difficult to craft a bullish narrative here.

Chris: I think it's just the message is, is be cautious. And I mean, you know, people can leave the top side open too, you know, if they're so certain that it's going to go up. But I echo what you say, what we're seeing with our clients that we've been starting to work with. And, you know, the market always talks about carry in the market, but there's also cost of carry in the market. That's an individual line item, to your point, interest rates. But there's also other other factors in there too, you know, of timing of cash flow and all these other things. And the banks are going to be really critical, I think, of a lot of operations too. So there's just going to be a lot of things to watch. I'm going to hit on soybeans, kind of the same mantra here for a second. You know, the— and I don't want to stay bleak forever here, we'll talk about '25 in a minute.

But, you know, the soybean side of things, obviously demand isn't, isn't there. But on the same token, we don't have a wall of soybeans, at least from my perspective, from what I see, at least from the clients that we work with. And I would gather a lot of people that are listening to this podcast are probably not sitting on a lot of inventory. So is that a helpful piece? Is that enough to make any difference? Or, or do you think it's going to be the other way because it just looks and feels like there's not that many beans out there, but, but on the same token, nobody's buying them either?

Duane

Lowry: Well, here again, there has been carry in the marketplace and the market is eroding that carry. And to the extent that you're correct, the supply out there maybe isn't that much in the farmers' hands. That's something that will be handled with spreads and basis. And at the end of the day, you've got, you know, just under 500 million bushels of excess supplies nobody's going to want at the end of this year., and so far we're on track to have a, uh, very plentiful South American supply, which will, uh, probably hurt the demand for US supplies going forward. And we run the risk that some of the sales that we've made in beans could end up being switched to South American supplies down the road, uh, once their harvest becomes more confident, more known. And those, uh, the cash, global cash prices structure in a way that maybe South American becomes the preferred origin.

Again, it's very difficult to craft a bullish narrative on beans without a South American weather problem, which at the present time does not yet exist. It is true that we're going to have fewer acres of beans next year based on a lot of different reasons that the farmer is dealing with when he looks at cash flow. But If the soybean yield were to bump back up to say 53, which is what was projected for this year in October, you're talking about a situation where you can lose 3 million acres of soybeans versus this past year and still end up with a carryout around 500 million. So again, it's very, very troubling. I think there are other factors here that we run the risk of getting a downshot in futures prices, probably more related to soybeans than corn. But again, I'm struggling to find the upside narrative at the present time.

Chris: Yeah, I want to shift gears for a minute and then we'll talk on '25 and then we'll wrap it up. But we have a new administration You know, there's two sides of the argument. I was at a couple of several farm meetings with a bunch of farmers this past week, and there's a couple of different camps. Most people are, you know, and I don't want to get political here because I don't have time to get a bunch of hate mail in my email box, we're busy. But on the same token, there's, there's kind of two camps, you know, there's those that are really against the tariffs, and they really think it's going to hurt the farmers. And then there are those who say, you know, we got to get rid of the corruption, we got to fix that stuff.

We, you know, and it's not just corruption internally in-house domestically, but it's the trade imbalances and all these things, and we got to fix it, and we got to, we got to pay the price to get it fixed. If the tariffs come back in, because we've kind of continued with the original, you know, tariff scenario that he set up, the Biden administration didn't really change a lot. What's your take in terms of the impact on, you know, and let's talk commodities here, but do you, does your crystal ball say, you know, that this is really going to be impactful on pricing, or do you, are you cautiously optimistic, or are you just kind of going to sit on the fence here for a bit? What's kind of your, your thoughts or your take on, on this administration and tariffs and all this?

Duane

Lowry: Well, let's skip over the merit of this tariff itself, pro or con, and focus on what Trump is about. I think that Trump is using tariff as a leverage. And when he threatened Canada and he threatened Mexico with tariffs, if they didn't close down the border and do things associated with that, man, he got an instantaneous response and he got Trudeau to fly down to Florida unannounced. He got Mexico's president to be very upset, but at the end of the day, also make concessions and pledges to take care of the border. So he threatens these tariffs, he gets what he wants, and we'll see how it— whether it actually unfolds in either of those two cases. I think it's also important to remember what happened with Trump and China. And he threatened the tariffs, he imposed the tariffs. What was China's response? Did they put on tariffs? Did they do retaliatory action?

Maybe some token things, but not in any large way. What they did do is they agreed to buy a large chunk of agricultural supplies from the US, and then COVID hit, and they were on track to meet those goals. So to the extent that we have tariffs again on China, and you're correct, the Biden administration did little to lift them. To the extent that there's anything tougher, it might be for leverage purposes, number one. And number two, China's response might be to make some sort of concessions in terms of agricultural purchases like they did before. Um, I think that it's possible that the marketplace has a period of time where we trade tariffs, and that's a, uh, there's a very reaction to that as we get closer to, to, uh, um, Trump's inauguration, etc. But to a large extent, I think market has kind of digested that and traded it.

Um, but that's not to say that we won't have a, a window of time where we, we get negative price reaction off of that. But overall, I'm really not concerned about whatever happens with tariffs having a big influence on egg prices going forward from the price levels we've already visited at some point during the last, you know, several weeks. So I'm not overly concerned about that.

Chris: It seems like we saw this movie before, too. You know, it's kind of like it's the repeat of, you know, we saw part 1, now we're gonna see part 2. And it always seems like part 2 is just kind of the same thing over again. And, you know, you just, you wonder, I mean, we've kind of seen what he did. And if there is an impact on farmers, and I tell everybody when we're doing budgets and stuff, let's not plan on any ad hoc money or any, you know, any, market facilitation stuff or any of those kind of things. But on the same token, I think, you know, even though he's a one-term president now, I don't think he wants to piss off the farmer too bad. And it'll be— like you said, it'll be interesting to see how this all shakes out too. But I'm optimistic, I guess.

And so maybe I'm, maybe I'm too optimistic, but I just, I still think this will all shake out okay and be just fine for the producer. It's just Sometimes when it, when it's, you know, the darkest, it's going to start getting light again, you know, and I think there's a lot of, a lot of threats out there. But I think there's a lot of positive things too going into, into 2025. Any final comments on that? And I want to hit '25 for a minute here too.

Duane

Lowry: I had this discussion with a farmer about the tariffs and about the possibility of the farmer getting a subsidy from Trump. I would caution that I don't think Trump has near the incentive to put money in the farmers' hands as he did the first go-round.

Chris: Yeah.

Duane

Lowry: And so I think that's the first thing to say. Second thing is I think the environment of putting money into farmers' hands might still facilitate some payment if we get a bad tariff response, but at the same time you've got strong and new effort through Vivek Ramaswamy and Elon Musk and that DOGE effort to cut costs. The environment for spending money on new money and subsidies may not be conducive to a large large payment. So I won't say that you couldn't get a farmer subsidy because the banking industry would probably be pushing for it. But I don't think it'll come quite as easy, nor will it be as lucrative maybe as has been in other times. So I guess that would be the last— I would throw some caution on that.

I think you make marketing decisions on trying to survive with decisions within your own control as opposed to, um, betting on something from, from, uh, um, the government. And there's a possibility that this whole tariff, uh, discussion goes through without a major market reaction. And if you don't get the major market reaction, um, I don't think you can get the, the environment for the subsidy. If you, if you want to put all your marbles on betting on a subsidy and you want that big subsidy, then whether you know it or not, you're, you're also betting and hoping for a big dump in the market because that's what it's going to take to get the subsidy.

Chris: Yeah. The other thing I would say, just as an observation, literally 27 years of looking at cash flows and budgets, it always seems like every time we get in a trough or we get into where there's this ad hoc money, it kind of goes right through the farmers, goes into their left hand and into their right hand and right back out to everybody else anyway. And the farmer keeps a small percentage of it because rents, all of your other inputs seem like, and you create this short-term inflationary impact, at least from what I see anyway. So I'm not sure that it's like a sugar high for a little bit. It feels good when it shows up, but then you end up only keeping a little bit of it anyway. But I guess time will tell, but I just thought that'd be interesting to hit on that for a minute.

Duane

Lowry: So while you haven't asked this question specifically, this seems— discussion seems appropriate to give this answer. With the cash corn, with the cash corn prices where they're at, which is at the upper end of where we've been at any time from the time harvest began, and maybe for several weeks prior to that, considering the fact that some people were fortunate to get some very good yields and their neighbors not that many miles down the road may have been unfortunate and didn't get those good yields. But, um, everybody's got to look at their own operation.

And if, if they're able to take these cash prices along with whatever sales they may have made ahead of time before, and maybe they did have some good yields and that dollars up and makes it a good survivable year for them, um, they might want to remove the risk for what— of whatever's ahead in terms of tariff or any other concern one might have and take the approach that we have a price ceiling, we have a difficult time finding a fundamental narrative. And without a South American weather problem or without a summer weather problem in the US, which means you'd have to wait that long to get it, maybe you just take what is offered, close the books on it.

And to the extent that you either now or sometime in the future might want to make a bet on, on a South American weather play or a US summer weather play, then save a few dollars in reserve to find a futures or option strategy to initiate at some point in time in the future to participate that. But I don't think, I don't think risking what is currently offered is a good bet. I think this rally that we've had in the cash market from the lows that we've seen from, you know, throughout harvest, and there might be better basis opportunities ahead. I, I could see that scenario. There might be some slightly better cash market prices ahead, but I think this is, we need to be in survival mode. And I think for many producers that did get some nice yields, some favorable yields, maybe even some excessively large yields, they can do that. And, maybe that's, all one should expect.

Chris: Yeah, it seems like a person too, you know, we've talked about this, I know you and I have talked about this, that the day to make the cash sale isn't always the same day that you want to lock basis. And it, it kind of feels like, I mean, throw a dart at this if you think I'm wrong, but it feels like, you know, maybe if we get a rally in this week, for example, and a person decides to make a sale and logistically they can't get it moved or don't want to move it in this year, but they could price it on on the May or whatever and then not lock basis, that like you said, there could be an opportunity out there or price it for the, you know, and those are bushels that sometimes can go during planting season or whatever, and you can capture that, add that basis to it. And conversely, the other side of it, I want to get your take on this real quick.

If a person sets basis because basis is good and the price gets away from you, that was a lesson that I think a bunch of people learned the hard way last year too. Any thoughts on navigating price setting and basis management real quick on that thought perspective.

Duane

Lowry: In the case of the corn, the last thing I would do is set the basis but not set the futures price. And many times throughout my 40-some years of being around the cash corn market, many times that has been a trap to do so and to lock in that basis and then wait on the futures. And few times has it been the right thing to do. And we have— we still have a price structure with futures and spreads that suggest that would be a trap again. So I would not be doing that.

Chris: Yeah, agreed. Good. Well, we agree on that one, I guess. Last thing, Duane, I want to hit on with you is the 25-acre mix. Based on what I'm seeing, and we'll know more from the seed companies, a lot of them are in the process of getting those early orders finished up and things, and we'll get some feedback from, from some of those people, and we'll have a better idea here in a week or two of kind of what the orders look like. And that gives us a little insight, but from what I've seen so far is, is a definite shift to some more corn. Obviously the majority of the people don't change anything, they just kind of go with their rotation and they don't adjust it. But those who do have made, at least from my perspective, and I get I'll be smarter in another 2 months probably, but it looks like that shift is to quite a bit more corn. What kind of impact do you see, if any?

Because then you hear people saying, well, I'm going to stay the same because beans are going to go up because the bean acres are going to be way down. The problem is we need to sell them too. So Any thoughts on 2025 and then we'll wrap it up. But just things that people should be thinking about as they think about selling 2025. Last thing I want to say, throw in there. I'm sorry, this is a— I mean, this to be a narrative instead of want it to be a question. But last thing I want to throw in there is you've got, you know, a lot of people wondering, you know, should they be pricing some stuff on these rallies? Because the problem is, is for most of our clients, it's in the red and it's really hard to make sales when you're below your cost of production. And we have very few people that could pull the trigger right now.

You know, probably less than 10% of our clients could pull the trigger right now on the current Dec '24 and Dec and Nov soybeans and even be anywhere close to making, making any money. Thoughts on '25?

Duane

Lowry: Definitely going to see more corn acres. It'll be at least 3 million more, could be more than that. And the, the impact on that is any strength you get in the old crop corn market will be driven by basis and spreads, not futures flat price rally. The Dec '25 futures will be a dog. And if the corn market rallies and if the futures do happen to rally, Dec '25 will be the weakest part of that component. So if you want to get Dec '25 corn futures back to something that is more palatable, and let's say that is something $4.50 and beyond, and, you know, for the longest time, you know, I was hoping we might get a chance at $4.70. In October, we got up to, I think, just under or right near $4.60. And then the best we ever saw in November for Dec '25 futures was $4.50. We're now sitting under $4.40.

I think that producers, when they look to '25, I agree it's difficult to make these sales right now. There are scenarios that you can imagine and numbers you can throw out with the extra acres to work. People will be talking about sub-$4 futures for new crop '25. I'm not sure I totally embrace that. But I understand where it's coming from. And I think that we will have to deal with that narrative and in the price discovery situation in the weeks ahead of us. But I, I'm reluctant to make sales on Dec '25 on anything less than $4.50 futures. But as you gravitate upwards from $4.50, given that opportunity, I think the incentive to make sales before you get to the actual growing season would be quite high. So hopefully we can find some reason to get there. Maybe it'll be a South American weather concern. As far as beans are concerned.

Chris: Can I throw something?

Duane

Lowry: You got to get—

Chris: you're gonna— can I throw something in there as you're thinking, get coming up with your thought? I was just looking here and I don't have the exact numbers in front of me, but I think our average client's cost of production on soybeans projected for '25 right now, and this number will change a little bit, but it's like $1,176. So, you know, it it's pretty bleak looking right now. I just wanted to throw that out there.

Duane

Lowry: It is bleak. And I think that it's going to stay kind of bleak. And I'm not, I'm not in favor of making new crop bean sales. And I'm gonna, I guess I'm, if I'm gonna, if I'm gonna look at the '25, and I'm going to figure out my marketing plans, I'm going to be hoping for an opportunity where I can get, and it doesn't take, you know, you get corn up 15 cents for each 25 from where it is right now. I'm going to, I'm considering that an opportunity. I'd rather be much more aggressive on my corn sales and then not make any soybean sales. And that's my marketing strategy and that's my risk management strategy. I'm just more aggressive on taking what I can get on the corn and, and not so much on the, beans. That's my, my general approach.

There's one other thing that I want to talk about before we wrap up that we haven't touched on, and I consider to be a major threat to agricultural prices. And whether that threat to agricultural prices is in the form of a price ceiling or price decline, the future will still hold that. But The crude oil market is sitting here at the bottom part of price parameters we've had since, uh, 2022. And when Trump gets into office, uh, whether people like it or they don't like it or have different views on, on the merits of it or not, this Ukraine war is going to come to an end. Middle East is going to come to, uh, some sort of an end. And we must recognize that throughout all the Middle East turmoil, throughout all the threat and the what-if scenarios about crude oil supplies in that region, the marketplace hasn't responded.

And I think we have an overall deflationary environment here that Trump's election is probably going to help fuel. And if this crude oil market takes a dump, and let's say a instead of being at, you know, $70 to $80 or $70 to $85, which is where we spent most of the last year plus, we're sitting here perched now at under $68 crude. And for that market to take a dump to, say, $50 crude, that is not going to be favorable to any commodity market. And I think that's a very much of a problem. I'm far more concerned about that impact on agricultural prices than I am on tariffs. And so I think that as we move forward over the next— let's just say between now and mid-February, I think there's a good chance the crude oil market's going to take a dump. And I think that as those prices slide, I think the investor environment for owning commodities is not going to be good.

And we've already talked about the finding it difficult for a fundamental narrative for the corn and the soybean markets absent a South American and/or a US next summer weather problem. So we have a window of time here for where prices could be depressed and the outlook could be heavy. But I think the crude oil and a general deflationary environment I think that's the biggest threat that's going to come in with the Trump administration. And I think that is something that could create a problem for the corn and the soybean markets, more specifically the soybean market. And so I'm very concerned about that. That's also another factor that's motivating me to tell producers to err on, on trying to find a way to view current cash corn prices as an opportunity to lock in your '24 production scenario and capture a survivable situation.

Chris: Well, and if you stuck a fork in the '24 crop, like you said, there's— you're going to be— first, some operations are limiting their losses, you know, a lot of them. 'Cause there's a lot of, there's a lot of red ink in the '24 from what we're seeing as well. But it also is, you know, if the market does go back up, we're long. Most all of these guys are long almost 100% of their '25 crop. That's the best thing that could happen is the price does go back up. Last, last question. You talk, you brought up energy, so I'm going to bring up currencies real quick. The dollar's been really strong. Is that another wet blanket too? I mean, does that, because with a Trump administration, that you would logically— that would tell you we're probably going to have a really strong dollar too, which is a negative for, for the commodity side of the equation. Any thoughts on, on that?

And then we'll wrap it up.

Duane

Lowry: Well, I think that's, uh, part of the reason why the dollar has been strong is the anticipation of a Trump victory, right? As far as being a wet blanket, you know, it's difficult to find any day-to-day connection between corn and soybean price discovery and the currency markets. It's even difficult to find bigger picture connectivity between those two. It is probably a wet blanket. But to be perfectly honest with you, I'm not sure. I'm not convinced that this strength in the dollar is actually the long-term trend. I'm, I'm more inclined to believe that the longer-term trend is that the dollar weakens. And I think the longer-term trend is that a weakening dollar could be something that, uh, changes the price landscape in the months ahead of us. So I'm skeptical of the, the, uh, dollar, um, maintaining strength.

I understand the reaction to Trump's election or anticipation of Trump's election. But going forward, I'm not convinced that's going to be sustained. So I think the dollar and the currency price structure, you know, months from now, we might be talking about how that's actually benefiting the egg prices. But for— so I'm not, I'm not sharing the longevity and the ability of the dollar to hold the strength that it's had.

Chris: It'll be interesting. And then definitely, You know, we'll get you back sooner rather than later, but you know, you'll be an interesting one to visit with as we get into the month of February. You've got a lot of good knowledge and perspective on risk mitigation and understanding the crop insurance and all that kind of stuff. And with that Trump administration, you know, having a month under their belt or a couple months under their belt, we get into that February timeframe, we're going to be a lot smarter then too in terms of, you know, to your point, you know, with energies and currencies and what the funds are thinking and all that stuff. But definitely get you back, you know, a time or so in front of that. And then for sure, when we get to that risk mitigation timeframe that we all need to be measuring. I'm gonna give you the last word.

Anything you want to leave guys with and we'll wrap it up.

Duane

Lowry: I guess I'll leave the last word would be I understand that prices aren't good. And I'm talking about what— focus mostly here on old crop corn. Prices are not good. Profitability depends on how fortunate you were with rains last year and your yield outcome. But even if you didn't get as good a yield as you wanted to, on a national scale, we got enough to have a record yield by, you know, multiple bushels per acre. We have a carryout that is still plentiful and we have to have a production threat to change the needle on the supply influence on prices. Therefore, even if you didn't have a good year and you're not able to make this dollar up, I think the opportunities and the outlook and the expectation that you're going to get that opportunity might seriously be in question.

So even though you, might be taking a loss, uh, you could have a situation that, um, a loss smaller than what it might eventually be might still end up being a better deal than, than, um, sitting here and hoping that prices get better. So I, I know I sound pretty bleak here, um, and I, and I am bleak in terms of, uh, a price ceiling. That doesn't mean we can't get some ups and downs, but I, I think overall we're dealing with a price ceiling mode, and the quicker the producer can find rationale to put a fork in it for the '24 crop, I think the better. I think there's going to be a challenge ahead for marketing the '25. And if we have a scenario that the prices can't muster a rally until we get into the summer growing season, that's going to be a very heavy emotional burden for everybody to sit through knowing that these prices for new crop just don't work..

And it's possible that we have periods of time between now and next summer where we're dealing with even lower prices for new crop levels than what we have today. And so it's going to be a very difficult emotional ride along with the difficult financial ride that we're going to experience here. And I, I, wish there was something I could point to immediately for some, something more hopeful in that arena. But I don't, I don't see it.

Chris: Yeah, it's going to be interesting at loan renewal time. I think, you know, the banks are going to put a significantly lower number on the balance sheet on unpriced bushels in terms of what the value of that inventory is. And that's going to be a sticker shock, I think, for a lot of producers, because the producer walks in with current price levels or whatever on unpriced bushels, the bank's not going to look at it the the same way. So I think we gotta— we're gonna, we're gonna do a lot of— this is the time of year to, to be thankful for what we got, but also to sit down and really crunch the numbers and think about what the next steps are and, and, uh, and, and kind of get '24 sort of wrapped up so that we can start really putting our mind into '25 and what we can do to, to make '25 a successful year.

But hey, Dwayne, with that said, I think this has been an excellent conversation. You got a ton of really good perspective and things for people to think about, and, uh, Really appreciate it. We're going to get you back here again and, uh, we'll kind of check in and see how things are going. But really appreciate it. Thanks a lot, Dwayne.

Duane

Lowry: Hey Chris, one last thing. I want to put an exclamation point on, on my energy price narrative that I just laid out. If I happen to be right on this, that is something that's going to happen almost immediately, and that's something that's going to— that we're going to be feeling in the next 30 days. And that means that producer marketing decisions associated with the end of the year, first of the year type of scenario could be heavily influenced by this. So keep a very close eye on this energy thing. It looks very troubling to me.

Chris: Awesome. Well, that's a good action item for us all to pay attention to. That is a big piece of the puzzle. With that said, hey, Duane, again, thank you very much. Appreciate it.

Duane

Lowry: Thanks, Chris.

Chris: You bet. And thanks everybody for listening too. And if you guys got, um, any topics that you would like us to be hitting on 19 Minutes— if you're not listening to 19 Minutes, I'd highly recommend you check it out. It's on Spotify. You can, uh, can look it up. It's $30 a month. We come out the 9th, the 19th, and 29th of every month, and we got a lot of really good stuff on there. Just gonna record the next one. It's going to be called You Are Wearing Too Many Hats. And so A lot of us are pretty busy, and so we're going to have some solutions and some discussion on how to navigate and delegate and keep your business going without burning yourself out. With that said, really appreciate everybody. We'll catch you again next time on the IP Pitch.