The risks in this growing season

Jeremy

Doetch: Welcome everybody to the Ag View Pitch. Today we've got Jim McCormick, Chief Operating Officer, officer, sorry, from AgMarketing.net. Jim, how you doing today?

Jim

McCormick: I'm doing well. Thanks for having me. It's been quite an interesting week we just had of trading, a lot of interesting dynamics in the outside world, trade negotiation-wise. We know a lot of payroll updates there. Then as we move into this new week, we have the June WASDE coming across the board toward the end of the weekend. Hopefully we give some bullish news right now because right now the market feels, at least on the corn and bean fronts, we're just starving for some bullish news to try to get this market excited like the producers, producers out there are looking for, I believe.

Jeremy

Doetch: Yeah, I know. And, you know, And at one point, you know, we've talked to people that said, hey, you know, look at, look at planning progress. You know, we're at this stage, obviously, at this point in the year where, you know, there's no yield expectations. We're not going to adjust a heck of a lot. But, you know, planning progress, kind of where we're at with all that type of stuff, you know, conditions, you know, I would say there's pockets that are maybe struggling here and there. But overall, I think it's probably pretty darn good, isn't it?

Jim

McCormick: Overall, we look very good, I believe. I mean, where I'm at in northern Illinois, we've definitely been a little bit dry. But we, we caught about an inch of rain over the past week and that really helped. We're not getting a lot of heat. I think there's a little bit of complaint out there is the temperatures. It's only in the mid-70s. We don't have a lot of heat over the next 7 days. I was— Jeremy, I was looking kind of out in Des Moines, Iowa, just before we got on, kind of curious what the forecast is out there. And it's interesting, you know, you can go out 30 days on AccuWeather map. I mean, anybody can do it. What's interesting, I don't know how accurate is 30 days out, there is not one day that they in the next 30, they're forecasting for Des Moines to hit 90 degrees. And I think, you know, that's kind of what this market wants to see is some extreme heat.

Now, there is some maps that are trying to hit the first heat dome of the year, maybe building in portions of the central to western part of the U.S. toward the latter part of June. But right now, it's not anticipated to lock in hard and long and really generate the heat that would get a bull market excited at this point. But, you know, the maps are still a few weeks out, so we'll see what happens.

Jeremy

Doetch: Yeah, well, I think you're 100% right, Jim. I mean, I would echo those concerns. I mean, we— what I'm experiencing, and you and I just were talking right before we hit the record button here, you know, we're looking at today, you know, being the 6th of June, we're recording this for the, you know, June 9th through the 13th week. All of our corn's planted, everything's there, beans are planted, everything looks good. But, you know, I would say in the last 2 weeks, you know, growth has stalled a little bit because of the heat. You know, we need heat. Units. Um, and that's, that's been a big deal. We, we finally got a little touch of rain that has come through that, you know, I think is gonna really do, uh, well for some of the residuals and some of the stuff we've got out there. We see a lot of guys trying to go through and putting 32% on.

We've got maybe 50% of it done at this point. But, you know, about the time that we get rain, we still aren't getting temperature. And, and I don't know, uh, in the McHenry area, um, you know, where you, where you live, if you're seeing this, but you know, we're starting to get that, you know, that, that smoke from the wildfires rolling. And, you know, for whatever reason, I think maybe it's just lack of sunlight, but that, that tends to stunt our beans a little bit too. So, you know, we've got a little bit going on, but I mean, everything, you know, emergence was great. Everything came out, looked good. We had a few people in our area pre-planting, I'm sorry, replanting. But yeah, I think for you, you hit it on the head, you know, as far as crop conditions, heat would be a welcome, you know, it would be very welcomed at this point.

Jim

McCormick: I mean, the one section of the country I would say, Jeremy, that's really struggling, parts of southern Illinois, southern Indiana into Ohio. We still have some clients that are still fighting, trying to get the rest of that crop in. I know there's a lot of rhetoric. We do have a WASDE report coming up here, the June report. You know, are they going to make some big acreage adjustments? They traditionally, folks, do not make any acreage adjustment on this June WASDE report. They will make— they're going to resurvey the producer here in the next couple of weeks and they will release that data at the end of June. And then we'll get that acreage adjustment. But the fact of the matter is, what I'm seeing is we're probably going to lose some corn acres in the eastern Corn Belt.

But I'm not looking for a major shakeup in acres because I don't know what I'm hearing or what you're hearing, Jeremy, but I've heard a lot of people in Iowa, heard a lot of people talk in Iowa saying a few more acres of corn we're throwing in the western Corn Belt. Yeah, because the crop went in at such a timely basis. Even here in northern Illinois, McHenry County, it went in very, very fast. I had clients say it's some of the fastest planting they've ever done. So I do think in the acreage as a whole, we've probably lost a million, million and a half potentially in the east. But I think the net is we picked up a million, million and a half in the west. So right now I wouldn't look for any major adjustments on the acres. So it's all, I believe, is going to come down to yield and we'll see if we can attain that.

Jeremy

Doetch: Yeah, yeah, no, I would agree. Everything went in fast, you know. So I guess, you know, there's been a lot of speculation during, you know, planting pace of whether we're going to hit 95 or potentially 96, you know, on this acreage side. I mean, you kind of still in that ballpark of, you know, in that range or slightly lower? What's kind of everything kind of telling you at this point?

Jim

McCormick: I think we're gonna be right around that range, right around that 95.5. Like I said, if you look at Ohio, you might say, well, that should drop closer to 95. But like I said, if you look at some of the, what we're hearing from seed corn dealers in the West, extra acres went in, they're going to offset each other. So I think that 95.5, 96 is going to be there. And like I said, then it comes down to yield. The government's using that trendline yield. They should use that trendline yield here on the June WASDE report. So it's going to show a pretty cumbersome supply. Now the real question is, can that yield be maintained? Because we've yet to hit trendline yield in the corn in recent history. Now, is this year we're going to do it? Right now, I would say it looks pretty good.

But, you know, like we were mentioning, we do need the heat units and we'll see the long-range maps of the weather guys. Not all of them, but a bulk of them are arguing as we get into the latter part of summer, July into August, they still are arguing— the long-range maps are, I should say— that we're going to see dryness and heat build, especially in the western Corn Belt. It's not going to be a drought like 2012. There's just too much moisture in the Ohio River Valley that's just going to keep them storms firing. But the West could have some dryness issues. And if that does manifest itself, the idea of hitting trendline yield seems very, very hard to hit.

Jeremy

Doetch: Yeah. Yeah. No, I hear you. So you talked about the WASDE here a couple of times. We know it's coming out next week. Do you have— what are some of your expectations on the WASDE report?

Jim

McCormick: We're not looking for much in the many adjustments on the old crop beans. The export number looks pretty much on target. The crush looks pretty much on target. So that number should stay relatively unchanged. If there's a little bit bullish story to be, should potentially be the old crop corn number. Exports have been phenomenal. You know, the question into the year was, hey, are they front loaded? It looks like they weren't front loaded. It's just been a very good demand story for the U.S. corn market. So we are looking for the export number to increase a little bit, potentially increase the ethanol number. If those two things happen, you should see the ending stocks decline. The one wild card could be what they do with feed and residual. They could cut that a little bit.

There's been an argument on the last quarterly grain stock would suggest that we were, we had to feed a lot of corn this second half of the year to reach that feed number the government's using. When you look at the livestock numbers we're seeing in the price of cattle, I'm not sure if those livestock numbers are there to increase that feed, like they're to use the feed number the government's using. So that might mitigate the bullishness of the export sale or export increase a little bit. But net is, Jeremy, we are looking for that carryout to drop on the old crop corn, which hopefully give us a little bit of a bullish reaction.

Jeremy

Doetch: Yeah, no, and I would tell you, you know, you had mentioned it and I had read an article that I think it was— correct me if I'm wrong, Jim, but I thought it was this week we hit a weekly high from the ethanol production. And, you know, a lot of the— there's a couple ethanol plants in our area that's paying a really good basis. Like they, you know, like they're thinking that they're, you know, they're going to continue to make ethanol and they're trying to get it. So maybe that is the play in our areas is to, you know, there is going to be some old crop demand. I know there's a lot of us that certainly hope so.

Jim

McCormick: I mean, if you've got old crop grain, I would argue you are hearing pushes across the Midwest. And that is because the board price, let's face it, it stinks. No one's excited about this July market. The July board just absolutely collapsed this week as they eventually— the market, what happened was, folks, is they said, look, we got this monster crop out of Brazil. There's estimates saying this Brazil's crop is 139, that's 89 million metric tons bigger than the current USDA estimate. And that just absolutely caused the July contract to wash out near the contract lows. And what's happening is the basis is firming simply because the producers just don't want to sell this. Right. So you are getting some basis opportunity. If you want to be aggressive, I'm going to stress this is aggressive.

You might take advantage of a basis, do a basis contract and deliver the grain and then see if we do happen to get a board rally. There is risk to that, but there are opportunities right now because of the soft futures. And I'm encouraging people to take advantage of it because something to remember, the carryout is going to be tighter than it's been the last couple of years. It's going to be best guess, 1,375,000,000. But remember, that's 1,375,000,000 we will not need. In the latter part of July and August, if we come anywhere close to trendline yields, you do not want to be that person holding on to that old crop corn when the market says, I've got enough to get us to the new crop, and then that basis will absolutely implode on you once that ethanol industry hits its, you know, its buying targets and gets everything they need covered.

Jeremy

Doetch: Yeah, I think that is an excellent point. And, you know, for, I guess, all the producers that have corn, if you're listening to this, you know, I hope you've written that down because anybody that's thinking, you know, and honestly, you know, obviously, Jim, we could go the other way if you have a drought, if you have anything that pushes that. But, you know, if you're thinking that, you know, you're holding off for a weather event or something that's going to change and we continue to hit trendline, there's a lot of decisions that need to be made here before we start, you know, getting in the field and harvesting again. And they may not be good ones.

Jim

McCormick: No, it may not. I mean, you know, the fact of the matter is we're in the middle of a trade war with most countries. That is the brutal reality. I mean, yeah, uh, nothing has really been locked into stone. We will see the Chinese situation. We kind of really got ugly, they kind of got a thaw, then it kind of got ugly again, and now there's potentially a thaw. But the fact of the matter is that last trade war with China, that took a year and a half from the day it started before they got the deals done. These are very, very hard negotiations. Europe, you know, we're hearing countries come in. Germany, Chancellor was just in the Oval Office. But the fact of the matter, it's not a US-German deal. It's a US-European deal. When you're dealing with 27 different countries' opinions, it's going to be very hard to get these deals done potentially.

So if we have some weak economic situation and we can't get these deals done and we end up with a big trendline yield cropper, potentially there, we will add to the ending stocks potentially. And that unfortunately could drive the market down. Now, right now, the current estimated carryout for new crops, we're on 8. Remember late summer or late summer, early fall last year, Sep corn got to 3.365, I believe it was. And that's when the market was trading around a 2 billion carryout. So could we see the corn market sell off if the market starts talking at 2 billion carryout? Unfortunately, yes.

Jeremy

Doetch: Yeah. Yep. Nice. So I guess maybe before we switch off of corn, anything else you want to say? And maybe we tackle the soy market real quick.

Jim

McCormick: I think on the corn, I do think there's a lot of statistical odds out there. A lot of people are saying, look, you know, we have a history of going out and testing that February average price, which is right there around $4.70, the insurance price. So there's some statistical history saying we're going to get there. And then you get some chart resistance at $4.85. If you're a producer out there and you haven't sold a lot of corn, figure out your breakevens. I know that, you know, Chris Barron's group does a very good job of figuring out and get the orders working because one thing in my 30 years of history of trading this and hedging out the producers market, I can tell you traditionally supply-driven rallies, which are a weather-driven rally per se, they tend to be very vicious but very fast going and they go up.

And then as soon as the weather model changes and brings the rain in, it goes down. So if you have a price target there, you want to sell, get that order working. Be it with a hedger, with a broker, or be it in your cash market, get those orders in now. Because like I said, if we do get a rally, I fear it's going to be fast and over with. And by the time you make that mental decision to do it, it may be too late.

Jeremy

Doetch: Yeah. And that, Jim, that's just great advice. I'm glad you— I'm glad you said that. And it all— I think you're right. Maybe we're biased on the Ag View side. A lot of those decisions start with knowing your cost of production. You know, you have got to know that part of it. And then once you know the cost of production, you can start putting offers in, you can start getting things on the table that you can, you know, start feeling good about. You know, maybe it's not something you feel great about, but at least you can start putting stuff on there that you feel good about. Now, whether it hits or not, that's another story, but at least you know where you're at, right?

Jim

McCormick: Well, exactly. And like I said, this is going to be a tough year. I mean, the reality is, you know, you can only get what the market will give you. And the fact of the matter is We deal in an industry that is, is a boom and bust. It has always been a boom or bust. Some years you make money, some years you're just trying to survive. This year is very tough. You know, we get a severe weather problem, we could be in a boom stage very, very quick. On the other hand, the economy goes the wrong way, the tariff battle gets ugly, and we end up having good yields for some reason, you could get where it's going to struggle. And a lot of producers right now are very tight fiscally and It's going to get worse next year. By all accounts, the price of fertilizer is going to continue to go up. And if we have the price of corn going up, fertilizer is only going to get more expensive.

The big fear in the economy is we're going to get in stagflation, weak economy, but higher costs. And that's just some, you know, the younger farmers haven't had to deal with. But the older, old-time farmers will tell you that's a very tough economic situation. We're in that stagflation, if it would form. Yeah.

Jeremy

Doetch: Yeah. No, I think those are all great thoughts and all things that, you know, producers, if you're listening to, you know, I I think you got to keep all those— that's the tough thing about, you know, being a producer is you got to keep all of those things front and center while you're growing your crop. So I know there's a— I mean, I know it's a job ahead of you, but, you know, we've got to do it. So appreciate your commentary on that. So I guess let's switch to the bean market. What's your thoughts on the bean market? Are you— I mean, do we see anything to make us feel good about this, or is this the one that's keeping the corn down?

Jim

McCormick: Right now, the bean market has been very interesting. If you look at the 10-day, the 20-day, the 50-day, the 100-day, 200-day, they're all converging within like a nickel of each other, which shows you we are just been in a massively sideways range. It's nothing exciting. Let's face it, new crop beans at current prices are not covering the cost of production. So no one's really excited about it. Where we're at right now is we're waiting for the government, unfortunately, is probably going to set the tone for the beans. It is the RVO mandates. It is is, you know, what kind of mandates we're going to get, the blend rates, you know, some of the, you know, the— what are the incentives from the oil industries trying to get? You know, I forget what I'm blanking on the term right now, you know, but that's what's holding the industry up.

There is a firm belief that, you know, the Biden— excuse me, the Trump administration is going to give us some mandates in the renewable fuel industry, in the biofuel industry that's going to be positive. And that is what's holding the market up. Now, you got to be very cautious because if that does not come to fruition for some reason, there's a lot of downward risk in these beans. 2018, the chart we've been watching very closely, 2018, the bean market actually puked out a couple of dollars in the month of June. What happened in 2018? That's when the China trade war got really, really ugly. Yeah. So, you know, if we have a bad, you know, we patched up the trade war this past week.

If the meetings go bad next week and we do not get the RVO mandates that the market's thinking is going to fall in line and be bullish, there is some downward risk in the beans, I believe, back down toward the fall lows where the corn is currently trading at.

Jeremy

Doetch: Yeah. Yeah. Well, and I think that's a, that's a great point because, you know, off the top of my head, Jim, and I you know, if anybody's listening, don't hold me to this exactly, but I know that we've seen a lot of profit managers that have come through Ag View here that's showing that, you know, around that, you know, $11 breakeven range, sometimes a little bit higher, $11.50, you know, somewhere in that range, you know, on that. We're well below that now. And if that, like you said, the mandates don't go through, we've got even more of a carryout, more of us, you know, ending stocks to use. I mean, I guess, I mean, it's a, it could be scary where this bean market could potentially go if we don't get things, you know, get things on the books and get moving on some of this.

Jim

McCormick: Yeah, there's no doubt, no doubt about it. You know, if you're a producer out there and you're nervous because we're not, you know, what we're telling you isn't making you comfortable, you might go with an option play because it's a situation if we get to deals done, we get a trade deal with China, we could get a nice rally. But the fact of the matter is we're building carryout. And I'm going to be honest with you, I'm a little bit pessimistic about the potential deal with China. Why do I say that? China has invested not millions, but billions of dollars into Brazil over the last 6 years since the last trade war. They essentially financed that massive port, I believe, Is it right off of Peru? Yeah. You know, they did not build that port to import stuff in. They built that port to export beans out.

The next phase is going to build rail lines and road lines out of Brazil into that port.

Jeremy

Doetch: Yeah.

Jim

McCormick: So if you look at that investment and what they've done down there, it's very hard for me to believe that they're going to make this massive commitment to buy US beans. Now, are they going to not buy— are they going to shun us completely? No, if we are value, they're going to buy it. They like buying our beans because they store well. But the fact of the matter is, if you look at it in the long-term, 5, 10-year arc, overarching plan, I think you got to look at the renewable diesel is going to be the key to supporting the US bean producer. I just unfortunately don't think China is going to be the answer. So that's why these renewable mandates that are being discussed in Congress, they really need to come through for the American farmer, hopefully.

Jeremy

Doetch: Yeah. And, you know, I guess one little caveat, you know, I guess, or icing on all this discussion, we've talked about the risk in there. You know, it's very different from a producer standpoint. You know, if I'm putting on my producer hat, you know, and thinking about my own farm, you know, I'm not saying I'm lackadaisical on my sales on the corn. But I have, you know, I've got a lot better margin on my crop insurance with the ECO and where we're at. I've got a little bit more comfort to be a little more patient on the corn sales. We don't have that on the bean side. The bean side isn't giving us the comfort there.

So, you know, I guess protecting the downside risk, like you said, whether it's an option play or whatever makes sense for you, you know, it's I personally, I think it's the right play because we've got a lot more risk on the bean side than we do corn at this, at this particular point as we record, you know, June 6th. Now, you know, after July 4th, maybe it's completely different, right, Jim? But as of we're talking today, you've got a lot of downside risk on the bean market right now. And you don't have the guarantees that you do on the corn side if you're a producer.

Jim

McCormick: Exactly. And what's very hard is, like I said, like I mentioned, like, you look at the moving averages, folks, they're just sideways. I mean, when you look at everything condensing, when The 10-day, the 20-day, the 50-day, and the 100 and 200-day are all within 5, 6 cents each other. It tells you this market is in a mode of indecisiveness and eventually it will move out of that depending on how the weather breaks in the beans and depending on how essentially the trade deals go with the beans. Worst case scenario, trade deal goes bad and the weather goes good. Beans could go down. Now, no one wants to sell stuff at a loss. I know I don't want to encourage people to sell at a loss. Yeah, but we just got to be cognizant there is some downward risk. Without a weather problem, unfortunately, without a trade deal.

Jeremy

Doetch: Yeah. And like you said, it's really hard if you, if you've got, if you're facing a, you know, let's just say it's a 50-acre loss, it's hard to pull that trigger. But on the flip side, if all the fundamentals are, you know, showing us that, hey, you know, writing's kind of on the wall that if you're not moving, it could go to a 100-acre loss. A 50-acre loss is a heck of a lot better than a 100-acre loss. And that, like you said, that's hard to do. But we have to, you know, I think that right now we got to be prepared to, you know, to have some, you know, backstopping losses, whether that's, you know, however you want to, you know, come through and make that plan happen. It might be behoove you to be thinking about how am I going to, how am I backstopping my losses here?

Jim

McCormick: Well, that's it. And one thing I would say, Jeremy, is that, you know, a lot of producers, the reality is a lot of producers don't use the Board of Trade. They don't. I mean, you read all the statistics. Over 57, depending on which number you look. I've heard 50, 70, 80% of farmers don't use the Board of Trade. They tend to just do the cash marketing or min-max contracts within elevators or something like that. This is one of those years that if you don't, you might consider at least investing in it. Options are one way to kind of backstop it. Puts put a floor under it, leave the top side open. The other way to go is sell some grain and maybe buy some out-of-the-money calls. A lot of clients I've had over the years, you know, losing $0.50 if they sell beans at $10.50 early, let's say, and they go to $11, it's not going to be— it's frustrating, but it's not a game changer.

But if it gets over $11, it goes to $12, that's where it gets frustrating. And the reason why I'm pointing out $11, if you look at a historical chart, beans never stay at $11. It's really amazing. Either they're below $11 or they're above $11. It's just— $11 just seems to be that medium ground. So, you know, you might consider, look, I got to go defensive at least on some of my bushels, but you might come out and buy an out-of-the-money call call just as a way to say, well, what if it turns hot and dry? Because one thing about weather is we have no clue. The maps change day to day, hour to hour. The weather guys are, you know, we think it's going to turn warm and dry in August, but we don't know. So I— one thing I'm telling people, when you're selling stuff at a loss, you want to leave a little bit of flexibility because it can change dramatically in 90 days.

Yeah, I said if you've never used options, this may be a year you start at least thinking about it. Yeah.

Jeremy

Doetch: Great advice. Great advice. Well, Jim, let's move on, I guess a couple others, maybe we got time to cover. Do you, do you have any thoughts on wheat? You know, I read somewhere where there's a drought in China, potentially affecting their wheat crop. I don't know how that, you know, at this point puts a lot of demand on, you know, US wheat or, or not. What's your thoughts around any wheat? Commentary you got?

Jim

McCormick: Well, the funds are majorly short a lot of wheat. The wheat chart probably looks the best out of anything right now. Seasonally, you're fighting the seasonalities. We're going to harvest. Traditionally, it goes down. But, you know, it's really— the world is really strange right now. We're getting too much rain in parts of Kansas and the southern— in soft red wheat. That's hurting the wheat and the quality there. Yes, there is a drought going on in parts of China. China could become an importer of wheat. The Ukraine and the Russia thing is getting very, very violent right now. As we're recording right now, Russia has retaliated. They've shot a couple hundred drones, missiles, hypersonic missiles into and around the Ukrainian countryside, but they have not attacked the ports. Keep an eye on that. It's an interesting situation.

I think it's almost like the world traders and I— world, I mean, China said, do not go after the ports. You go after the ports, it's going to send the price of wheat, the food through the world. And that doesn't help anybody. But let's face it, Putin has been humiliated. He is threatening to go scorched earth this summer across the Ukrainians. If they go after the ports and they shut down that wheat coming out of Ukraine, this wheat market's going to go and that will help pull the corn market up as well. So there is a story out there. It could be the wheat going first, then followed by the corn, then lastly the beans.

Jeremy

Doetch: Yeah. Yeah. Well, and, you know, all of those things, you know, like you said, it's, it's a Pretty crazy world right now. So I certainly hope all of it, you know, we get the weather we need to be able to, you know, get the wheat in the ground and get it all done. 'Cause there's a lot of guys on this podcast that they could, you know, that grow wheat and listen to us there. Any strategy on protecting the risk on the wheat side at this point?

Jim

McCormick: Well, it's the same situation. I mean, if you look at where the wheat is, we're at the lower end of the band. If you look at the chart patterns, that's kind of a head and shoulder pattern going in. I'd be a situation right now, if you can't store the wheat, a lot of people don't store wheat. I would encourage you maybe using an option play to reown some of the wheat going into the latter part of summer. Like I said, the charts look like they're trying to bottom. The weather is becoming a problem here. It's becoming a problem in China. The dollar is weakening. The overall economic situation we're in has got the dollar weakening. A weaker dollar is good for exports. It's not good if you're buying imports, but if you're exporting, it's going to offset some of the costs. And that will keep us wheat competitive in the world market.

So, you know, I'd rather if I'm worried about trying to price wheat, I'd either like to sell it and reown it with options or maybe just use an option where I keep a floor in because like I said, right now it looks like maybe we're at the low end of the range here.

Jeremy

Doetch: Yeah. Yeah. No, I think that's good.

Jim

McCormick: All right.

Jeremy

Doetch: I think we got time for one more commodity. I don't— does cattle make sense to talk about a little bit here, Jim?

Jim

McCormick: Well, we have to talk about cattle. That's the one thing that's doing well. I don't know. I mean, it is absolutely amazing. It was an incredibly powerful week in the cash market and that spilled over into the futures market. Futures are still trading at a massive discount to cash on these June contracts. Delivery starts this upcoming week as we're recording. Next week we'll have delivery. Now that's when it gets interesting. Our futures are going to continue to rally to try to converge with cash. Or is cash going to top? A lot of people feel that we're getting close to a blow-off top. That's kind of a dangerous thing to say right now. But, you know, if I'm a producer of livestock right now, I— hogs are following the cattle up. I'm encouraging to start laying off risk, at least put floors in this, if not use LPR insurance, do something to protect this market.

I am— we know the supply is tight. That is why the market's going up. The surprise has been how well the demand has hung in there. But we are starting to see cracks in the demand. The Trump administration, you know, the first Trump administration froze student loans. Yep. Repayments. The Biden administration continued that freeze. Well, the new Trump administration 2.0 has unfrozen those loans. They are saying it is time, folks, to start repaying off your student loans. Well, what that means, it's estimated by JP Morgan at the low end, it's taken $3 billion out of the economy. The high end, it's 8. When I mean 3 and 8, I'm talking per month, not per year. That is a lot of money that was flowing into restaurants, more than likely, you know, younger people going out to eat, going to bars. It is going to constrict consumer spending.

The jobs number on Friday was decent, better than anticipated. But if you look deep into the, into the, into the weeds of it, there's some signs of the job market cracking. The ADP number that came out earlier was the lowest in 2 years. So this economy does start to contract. I got to believe the beef sales are going to be the first one to show it. So the supply can only take you so far. If the demand cracks, then you're going to see a nasty correction. And one thing about it, the higher you go on these squeeze plays, the harder you fall.

Jeremy

Doetch: Yeah, I, you know what, I'm glad you said that because that's exactly what I was hoping you'd cover on the cattle side is, you know, the consumer the health of the consumer, and, you know, where we go with all this, because I think you're 100% right. You know, that's, that's the risk in the cattle market. And, you know, taking a little bit of that risk off, I like your ideas there. So anything, I guess, before we close out here, anything else that you want to cover that we haven't covered at this point, Jim?

Jim

McCormick: Well, I think overall, I mean, I just wanted to say, you know, it's only the first week of June. You know, yeah, there's a lot of uncertainty. I know there's a lot of frustrations. You know, we— Ag Marketing deals with a lot of producers. I know a lot of you guys are very frustrated right now. As we mentioned, you're not making money in beans. The corn margins are very, very tight on the new crop corn, maybe getting close to breakeven. I do think you got a shot. History is in our favor. We should get a rally. But as we mentioned, you need to figure out where you need to sell it and get those orders working. If not the whole crop, start laying off risk. The uncertainty we're seeing in our sector, let alone the economy as a whole, is very, very unpredictable. My mantra is you can sell at profitability. You want to sell when you can.

You want to be able to market grain when you make the decision, not when you're forced to make the decision because you've run out of time in this fall and you got to make a hard decision. So, you know, look for some opportunities, but don't be afraid to take advantage of them.

Jeremy

Doetch: Well, I can't say it any better than that, Jim. So, uh, I guess we'll just close out and say that's, uh, that's the words of wisdom today. Um, and I appreciate you being on. Uh, everybody, you guys have just been listening to, uh, Jim McCormick, Chief Operating Officer at theagmarketing.net, um, and your host Jeremy Dutch, uh, from Ag D Solutions. So I hope you guys all have a good week. And Jim, thanks a lot for being on. We appreciate the time.

Jim

McCormick: Thanks for having me on.