Weekly market outlook July 17-21st: weather and volatility

Peter

Meyer: Thank you for listening to the Weekly Market Outlook. It is our pleasure to bring an industry-leading market analyst to provide you with the most value possible in your farm business. Please reach out anytime by emailing cbarron@agviewsolutions.com.

Chris

Barron: Welcome everybody to another episode of the Ag View Pitch. We are heading into a new marketing week, July. 17th through the 21st. We've seen a lot of volatility and we're gonna get rolling here in a second with Pete Meyer, but I want to, uh, mention that we need to make sure and announce for all of you that are interested in the Ag View Executive Business Conference. Again, this will be our third annual. Um, we want to make sure you save the date. The dates for that conference are January 24th, 25th, and 26th. And so it's for those of you that have been there before, kind of the same type of deal. We'll have a welcome reception and we're going to have a two-man best shot on the 24th and some just some cool opportunities to network with some fellow producers. And then we get down to business the afternoon of the 24th and then 25th and 26th.

So that's a Wednesday, Thursday, and Friday. And so there'll be a ton of great speakers, amazing operations there. Again, just the networking is just super cool. And so Just want to make sure you save the dates. It looks like we'll probably have registration out on August 15th, and so stay tuned. We'll have some information on our website, and we'll announce that more next week on the Ag View Pitch as well too. So with that said, we are lucky enough to have with us today for the market outlook Pete Meyer. Pete, how's it going?

Peter

Meyer: It's going good, but I hope that your listeners don't turn away from your, from from your thing in Phoenix since I'm going to be there as well. But yeah, well, that doesn't, doesn't become a deterrent to them.

Chris

Barron: Yeah, I don't think so. I think we're excited to have you there. It's going to be really cool. Uh, we're, uh, super excited to have you. You're going to be talking about all kinds of things that's going on in the, on the, uh, consumer side, the big side of, of agriculture and where all of our products are going and bring us all kinds of good info, I'm sure.

Peter

Meyer: Oh, I look forward to it.

Chris

Barron: Thank you. Yeah, that'll be great. So With that said, we better start talking a little bit about what we're supposed to be talking about here today, which is what's going on in the markets, which has been a massive amount of volatility. I don't know if I've seen some of the things that have happened in the last couple of weeks ever before when we saw the divergence of corn and soybean markets move in opposite directions massively. We've seen a ton of volatility last week. What are you watching? Let's just start with the big picture. Is it weather? Is it, you know, what's driving the volatility currently?

Peter

Meyer: Well, I think the— it's funny you mentioned the volatility because we had a call with an overseas client 2 weeks ago after the acreage report, after we saw the run-up to $6.35 and then in corn and then straight down again. And the guy, I've known him for a while, and he said, He said, what do you think? And I said, you know, I've never seen volatility like this. And he kind of stopped and he said, well, he says, that's saying something. And I guess that was a backhanded compliment that I have been in the business for over 40 years, but I've never seen anything like it before. I think what's happened here, Chris, is that, you know, we got into a weather market a little bit too early in June that all of a sudden, I mean, there were certainly signposts out there that would suggest that the weather was going to change in the beginning of, uh, beginning of July. Nobody believed it.

Um, we do a lot of work with Drew Lerner at, uh, at Worldwide Weather, but I know that T Storm and a few of these other guys were calling for a pattern change, a pattern change, a pattern change. It never really materialized until, you know, June 30th, which was right around the— or right before that. And, and all of a sudden everybody got caught offside. Now You know, it's our understanding, and the last time I talked to you, I think was about a month or 6 weeks ago, and you asked about putting your farmer's hat on. And I, we were below $5.50 at the time, and I said, well, you certainly have to sell it above $5.75 and then certainly above $6. And, you know, it's one of those things where it's better to be lucky than good. But if you had sold your beans at the same time, you would not be happy at this point. You'd be happy with your corn sales, but not with your bean sales.

So what we're watching, um, We're watching South America, and the reason, and especially in Brazil, they're sitting on both a record soybean crop and a record corn crop. They have not marketed much of their corn yet. This rally based off of the acreage numbers, which we can talk about a little bit more in depth, but this rally in soybeans based off the acreage numbers has really kind of forced them to market more of their soybeans. They're getting a better price and they're going to hold on to their, um, their corn. That's dangerous. We've seen pictures in Mato Grosso and some of the other high-producing states of mountains and mountains of corn sitting out, sitting outside. That's fine for now. But once you get into October and the rainy season starts, that stuff better be gone. So, you know, we're watching that.

We're watching that balance because Brazilian farmers typically don't sell both and they're selling beans. We're watching the weather for sure. This is definitely a weather market. I think that our probability going into the July WASDE was 25% that we could see a cut in yield. We did see it. We gave a very low percentage to any cut below 175. They came out at 177.5. Our current estimation is we think the crop is 175. But given the 94.1 million planted and 86.3 million harvested, 2 bushel an acre is not going to matter at this point. So we're watching the weather. And unfortunately, now we're going to have to wait until September to see if there's any change in the acres. And You know, Lance Honig, who's the head of NAS, who, um, I have a relationship with, he's been very public about it.

He told me probably right after the report, and then I, I see that he was on a couple podcasts and talked about it. They couldn't believe the number. They couldn't believe that the number was 94 million corn and, um, and, uh, what was it supposed to be, number 83, 83.5?

Chris

Barron: Yeah.

Peter

Meyer: And he, he actually went back to his staff and said, hey, You have to go look at this again. And they looked at it and looked at it and looked at it. So I said to him, I said, what is your biggest fear? He says, my biggest fear is that I have to make a, a pretty big adjustment in September after the FSA data comes out in August. Yeah, I see that. But history suggests that there's not going to be much of a shift. History suggests that both go down. Both corn and soybean acres go down when the FSA data comes out. I think for the last, we looked at the last 20 years, it's maybe 600,000 corn acres down on average. And a similar number in soybeans. So, you know, there is this concern that we might get a very large acreage shift or acreage adjustment in September.

And that's really the first time that, that NASS is going to offer you an acreage adjustment because they're going to get the August FSA data and they will also have the September FSA data. Before the report. The market won't get the September FSA data until after the WASDE. But in the meantime, yeah, this is weather, weather, weather, weather, weather. And, you know, I personally, I hear awful things about the bean crop. Just by and large, people are not impressed, knowing full well that the US farmer is never really impressed with his bean crop the way it looks. We all, we all know that. We all know that August makes a bean crop. But if you don't have enough plant structure, and rows aren't, rows aren't closed. I mean, I, a friend of mine in central Iowa sent me a picture the other day of geese sitting between the rows still. Here we are in the middle of July.

It's not, you know, it's very questionable. And then when you bring in the fact that we have 83.5 million planted and only 82.7 million harvested, Yeah, you've got a very, very tight balance sheet with, with no room for error. Now, in my opinion, both the soybean balance sheet and the corn balance sheet were reverse engineered by the World Board. I think that what happened there was that Mike Jewison at the, at the World Board who runs the corn group, he just didn't, they didn't want to change much. And, and you saw the carryout was, was 5 million higher. That was it. Through a combination of higher feed and residual demand. You know, they pumped that up by $150 million in old crop. They lowered exports. That's very— that was a responsible move. Lowering ethanol, don't really care.

But I mean, the fact of the matter is it just seems like they wanted to get to a certain number and they got to that certain number. He used the Westcott-Jewison model. They reduced yield by 4 bushels an acre based on the June precipitation. Okay, I get it. And in beans, to me, I think that the World Board in beans said, okay, we have a 200 million bushel pipeline number. We're not going to go below that. We can't go below that. They didn't last year. Well, they went down below it in the 190s for a month or so. So let's keep that at 300 million and then let's let Lance Honig and NAS worry about it in August when they start to get their to get their yield estimates in. We're already using a 50.5 bushel yield estimate versus the USDA at 52.

I understand why he— it may not make sense that he changed the corn yield based on June precipitation, while the soybean model that they employ also uses June precipitation, not, not as high a coefficient. But why he didn't lower that, He can't lower it, or they can't lower it, I should say. They can't lower it with acres at 82.7. You just can't. Exports are down to 1.85.

Chris

Barron: Yeah. Let's stay on soybeans for a minute. What does that mean for the market potentially? You know, a lot of times, and I brought this up a couple weeks ago, you know, this time of year, growers are trying to look at what their potential overrun would be versus what they can store, what they can't store, and what needs to be sold. And I think some of, you know, I know there's bad areas, but there's also a lot of producers listening. They're still going to have bushels that probably aren't yet marketed. They have to figure out, do you store some extra soybeans? Do you store the corn? What's this mean for the bean market potentially? I mean, is this an explosive potential for the bean market if everything's as tight as you're talking on the soybean side?

Peter

Meyer: I don't know that it's explosive just based, based on the fact that, that you're sitting with a record Brazilian crop hanging over your head. And certainly if prices stay elevated where they are, okay, we've already talked to Brazilian farmers that are ready to plant more beans in the fall. So look, if I was trading this thing, and we can't trade it because that would be a conflict of interest, I certainly wouldn't be short the bean complex. Anything in the bean complex, but it's hard for me to get too excited about 50 cents or a dollar to the upside. I'm not saying that can't happen, but the fact of the matter is that the carryout's already at 300. We don't see the carryout going below 200 because that's what we need to move. Maybe it goes to 170 or something like that. But does that mean beans can rally to $14, $15, $16?

I don't see it because the Brazilian farmer is going to lay into this rally. He and she laid into the rally based off the acreage report. They're laying into the rally every time and they're going to sell their beans before they sell the corn. Now, when we talk about the corn market, just real quick, Chris, corn does not pencil in Brazil at all. So what does that mean? Does that mean that the Brazilian farmer is not going to plant much fall corn or for them, spring corn? You know, could be. So that means even more soybean acres could be coming if the price stays up. So my point, my point here is that, you know, you're going to have these knee-jerk reactions. And let's, let's be on— let's be clear about this. The reaction of corn up to $6.35 was a knee-jerk reaction. The reaction of corn down to $5.84 after the WASDE was a knee-jerk reaction.

These algorithms are trading this thing, so you're going to need to have, you're going to need to clear your head and not get caught up in these moves. If you're a producer trying to hedge some stuff, you need to pick out your numbers and just stay there, and that's it. And I mean, look, I know producers that are selling $24, $25 corn already because they're scared to death. And we'll talk about the corn balance sheet in a bit. But when we stay on beans, beans is the one that I would not be short as a trader. But these balance sheets so far have been reverse engineered, so there's only so far you can go.

Chris

Barron: The other thing too that I want to hit on on this, and we can bounce it back over to corn, but we need China in this deal and they're not there, at least for us anyway. No. What, what's going on? I mean, is, are they getting everything they need elsewhere or is it going to— are they going to come back to us at some point or not? Or what, what are you hearing? What are you seeing?

Peter

Meyer: Well, what we hear, what we hear is that they're buying wheat. For feed from Russia. You know, the USDA had the Russian wheat crop for last year at 92. We think it could have been 100. And that really provided 2 years' worth of exports for Russia. And that really takes Ukraine sort of out of the picture. And it was not, you know, that record wheat crop in the '22-'23 marketing year was not based on Russian farmers saying, okay, we took Ukraine out, let's plant more wheat. Area was up maybe 1%. Production was up like 8% or 9%. They just had a good summer. I'm sorry, not a good summer, but a good growing season, and they just went for it. So we hear that there's a fair amount of wheat going from Russia to China for feed, but it's difficult to say because both the Russian agricultural website offers us no help at all. We basically just can't even get in there to take a look. Right.

So China, you know, China, we have to remember that even though this takes time, China has a shrinking population as well. It started a couple of years ago. So I think that as analysts, we have always been able to pencil in some growth for China, and I just don't see it anymore. And the scariest thing to me, Chris, as you know, Brazil passed us, the US, on soybean exports, I don't know, 6, 7 years ago. And now last year for '22-'23 and '23-'24, they're going to pass us for corn exports. Now that's scary to me when they pass when they passed us as a corn exporter. We were the largest corn exporter in the world. Now we're number 2 in a time where we really don't see a lot of demand.

Chris

Barron: What about currencies? You know, the US dollar is adjusted some. I mean, is that going to have any, any help for us on the commodity side?

Peter

Meyer: Oh, there's no question that China is a— is a— not a bargain buyer, but they're very price sensitive. So, but you know, relationship, relations, political relations between us and China aren't great, right? Uh, they have a much stronger relationship with Brazil. So, you know, but Brazilian, you know, Brazilian crop still is— I mean, corn, Brazilian corn for sure is the cheapest feed in the world, and Brazilian beans are cheap too relative to us. So it's going to take something. I mean, I, I think that I think that they'll continue to buy from us. But am I going to argue about an export number at 1.85 billion bushels that the USDA put out last month versus 1.98 in '22-'23 and 2.1 the year before? It's hard to argue because we're just not going to have the crop to sell either. Mm-hmm.

Chris

Barron: What about, what about the corn side of the equation here? We've been talking about beans pretty heavily. What about What are you seeing on the corn side?

Peter

Meyer: I think we have to be very, very careful on the corn side. And the reason for that is that, you know, let's say, I mean, corn exports in the '22-'23 marketing year, the one that we're just finishing up, our 1.65, USDA has them at 2.1 for next year. We're not even close to that. So we're at 1.8. So we see some export growth, but certainly not to 2.1. So let's say we're right, but, and all of a sudden now you have 300 million bushels that you can add if the yield stays at 177.5. Now all of a sudden you're talking a 2.5, 2.6 carryout. So I think that we, the market doesn't have that yet. The market is certainly not trading at 25, 26 carryout. But I think you have to be, as a hedger, you have to be cognizant of the fact that that could happen. That could very well happen if the yield stays here. And if acres stay here, right? Acres may go down a million.

Let's say acres go down a million. Okay, well then you're gonna, and let's say yield goes down to 175 or something like that. Let's say we're right on yield so far. Yeah, it's gonna come down, but you know, your carryout's gonna come down. But I think that there's a, You know, I would, I would put maybe a 20 or 25% probability on the fact that carryout could be above 2.5 billion. What does that mean historically to price? You're at a 3 handle. So I'm not saying corn's going there because we see a lot of support for corn around the $4.50 level or so basis December futures at the moment, just given the uncertainty. But You know, I think we have to be— this feed and residual, you know, they're already at 5.6. They just added 150 to that, and that was so in the old crop, and that's up to 5.4. They're 200 million bushels above that for next year.

Certainly the cattle numbers don't seem to reflect an increase in feed use. Ethanol, you know, they're up 75 to 5.3. I get that. You know, ethanol, that, that will revert back to where we were in '21, '22. Not a problem. Exports, oh boy. Oh boy. You know, as I, as, as we started in the beginning, I mean, the Brazilians were sitting on what we think could be as large as 137 million metric tons of corn, maybe 140 million metric tons of corn, and they haven't even really started to sell yet. Sure, they sold with the US farmer when December futures got above $6. How much they sold, we're not really sure. Maybe they have 30% of their crop sold. Maybe they have 40% of the crop sold. Even if they have 50% of the crop sold, that's still gonna leave somewhere between 65 and 70 million metric tons to go.

Chris

Barron: And the US farmer didn't sell very much because the US farmer didn't know what they had.

Peter

Meyer: So, right.

Chris

Barron: Was not a lot to say. I mean, you know, those, those rallies are meant to be sold. Those weather rallies are meant to be sold and And, you know, the hard part is, is we need to sell when we don't think we have it.

Peter

Meyer: And, and, you know, well, no, you're 100% right. You and I have had this conversation. You know the way I feel about this. Production rallies are meant to be sold. Demand rallies are meant to be respected. We don't— these are not— we cannot confuse these for demand rallies. Okay. So we're— we started trading a weather market on June 15th and we're still trading a weather market now. But if you see, if you see a weather market rally or a production rally, supply rally, especially in corn, yeah, you gotta go. And then, you know, the fearful thing then, I'm sorry to cut you off, the fearful thing then, Chris, is that let's say, let's say Brazil doesn't plant corn because it, you know, I mean, some of the interior, in Mato Grosso and some of those places, the interior price has a two-handle at the moment.

So on corn, so let's say they don't plant any corn for their first crop, which is typically their domestic use crop. Let's say, you know, that, that kind of, that kind of prompts a, prompts a little bit of a, a little bit of a rally. We, we have to be ready to be selling $24 and maybe even $25, um, corn, in my opinion, because this, it, this is going to be a hole. If we get over $2.50 on our carryout, this is going to be a hole we're going to have to dig out of for a while. It's going to— I'm sure— sorry, we're going to have to— yeah, it's going to take us some time to dig out of that hole.

Chris

Barron: So there's another piece of the equation I want to quiz you on here quick too. The funds, the money managers, what, what, what are— what's in the minds of, you know, the, those that can, can jump in and out of the market and give us the volatility, but also at the same time, um, give us opportunity, right, to, to, to make some sales and stuff. Because usually when that stuff starts moving— and it's not just— and I understand it's not just the funds, it's these algorithms, it's the computers, and they overdo things when it, when it starts to move. And a lot of times that's probably our opportunities. Talk a little bit about that too.

Peter

Meyer: Well, I mean, when you look at, when you look at what the funds are doing, the funds certainly understand that in the US you have a soybean problem. When you look at their corn position, I didn't see what their corn position was as of last Tuesday, but it's probably minimal. But they are long the soy complex. Right. They'll probably defend that position. I understand them defending that position. On the corn side, I think they've become agnostic. And the reason was, to your point, is that a lot of these funds are momentum chasers. They chased it up to $635. They chased it down to $580— I'm sorry, down to $480, uh, this week. You can just see, to your point, that the, the highs and the lows get pushed by the, by the momentum, by the momentum folks.

And then, you know, and then unfortunately you have, um, some quote-unquote analysts out there that say, well, here it goes, you know, they're going to run it, they're going to run it straight up. And when it goes down, they don't say anything, right? But when it Yeah, but the problem is you have to, as I said earlier, I mean, this is the time for everybody to have a level head and just know where your price targets are, stay with your price targets, and don't get talked into, well, you know, we're trading $5.50 and I've got orders at $5.55. Let's just say, boy, this thing looks like it's going to go right back to $6. Yeah, you know, think of what happened the last time when we traded up to $6.35.

Chris

Barron: Mm-hmm. Well, in some of the cases for those who have had weather conditions improve, it, it's a situation where a lot of those individuals feel like they maybe didn't sell enough. And then you still have— there's still some pretty rough pockets yet that are pretty tough. And so it's— everybody's got to do their own thing, right? Exactly what you're saying. I, I preach this all the time is we need to set a margin target, not a price target, because nobody knows where the hell the price is going to go. It's, you know, what, what margin works is, you know, that's the same with corn, beans, wheat, in any commodity, you know, hogs, cattle, whatever is what is that, what is that margin target?

I want to ask you as we get closer to wrapping up here and then see if there's anything I didn't hit you on, but from a practical perspective, and again, I asked you this the last time you were on a while back, you know, you put your farmer hat on, what you know, from a practical perspective, what, what are 2 or 3 key things that, you know, keeps the farmer, you know, in the right mindset and doing what's disciplined, right? You know, disciplined marketing is, is still the key. What, what would you want to— what, what would you be doing with your farmer hat on?

Peter

Meyer: What, what, uh, on corn, I would be very cognizant of the fact that any rally from here is going to be a supply rally, not a demand rally. Until we see this demand change, this is going to be a supply rally, and it's going to be a supply rally based strictly on US corn yield. Because as I mentioned earlier, the Brazilians have it. So we have to understand behind all these undertones that there is still a lot of corn to be moved out of Brazil, and we really don't see a tremendous amount of buyers at this point. The buyers know that if we can hold, let's say we hold $1.75 or $1.77, exports go down to 1.8, the buyers know that we could have a very, very heavy carryout and they'd be, they would not want to be long $5 corn on that. On the soybean side of things.

Chris

Barron: Stay on the corn for a second. Are there some technical downside levels you're watching or technical upside potentials or not really?

Peter

Meyer: I'm not a technician, but I would think that, that, you know, the last time we talked, we, we said, you know, both hands selling above $6, and I think that you've probably taken $0.50 out of that market. Probably. In other words, if we get back to $5.50, and I think you also have to be cognizant of the fact that in the fall, if we do get a rally based on lower yield, that's going to— and lower Brazilian early spring planting rather than winter planting. You know, summer planting rather than winter planting. I think we have to be cognizant of, of what next year looks like as well. Now, you know, we have heard that previous to the, previous to the rally in late June, when we talked to commercial buyers, they had very little on the books. Now they have a fair amount on the books. So kudos to the US farmer for letting the market have it over $6.

Yeah, but now that number goes down by 50 cents. On my soybean marketing hat, I think it's very, very difficult. We really have an imbalance in the world. Brazil is sitting on a good— sitting on a lot of a very good crop that they just harvested. And there's such unknown in the US production and supply that I think we have to be— again, if the algorithms jump on that, You know, yeah, you have to be willing to, to reward that rally. But I don't really have any— I, I mean, in corn, we really don't see much downside currently given the uncertainty in the U.S. crop at the moment. We don't see much downside below $4.50. Um, the USDA has a $4.80 price target for the year for '23-'24. Am I going to argue with that at the moment? Maybe by a nickel, that's it.

But on the, on the soybean side, it's, it, it becomes very, very difficult because we, we do have a a situation where, you know, we may have enough in the world in soybeans, but it might be out of position. Kind of like last year, last year with the ethanol plants out west versus the crop being in the east, right? We had— we've seen that ridiculous amount of basis— not ridiculous, strong basis paid in the west because the corn wasn't there while the crop was in the east. Well, that reflects transportation costs. So You know, it's one of those things where, it's very difficult for me to, in corn I have a clearer idea, but in soybeans it's hard. I don't think a 50, you know, let's be honest, 52 is a record yield.

Chris

Barron: Well, and we have a record, the corn—

Peter

Meyer: Do we have a record yield out there?

Chris

Barron: Yeah. And the corn, no, I don't think we do. But the, you just don't know though. I mean, soybeans are crazy. You just can't, You know, until the combines roll, it's almost impossible with soybeans. But what I would say, you know, that, that did change with that past report is we fixed the corn-bean ratio to the extent that finally we got soybeans where the majority of our clients actually are in a margin position, assuming APH yield, or, you know, so that, that was a big shift or a big change where we, you know, we were sucking wind pretty hard on the soybeans, and, and, and I think it was almost like a gift to, to be able to get some soybeans marketed off of that report. And, and, you know, that's something I think that that's a positive.

The other thing you had mentioned too that I think is noteworthy is, is just paying attention to basis too, because this whole thing with, uh, you know, with where things are are going and getting some things priced, I mean, you're probably going to want to separate the basis from that flat price and manage that depending on where you're located. There's a lot, a lot of gain potentially there too, right? Yeah.

Peter

Meyer: I mean, I, you know, to your point about the yields, I mean, I agree we had a 4% swing from '21 when we had 51.7 or something like that versus last year, 49.5. You know, 4% swing out of here would bring it down to 50, you know, but the, the issue is, is that we have, for lack of a better number, let's call it 3.5 million less harvestable acres out there if the data stays the same. But here again, you know, there's a reason, you know, you look at the balance sheet and you say, okay, well, let's see, in '21-'22, we had a carryout of 275 and the price was $13.30. Last year we had a carryout of 255 and the price was $14.20. And I'm telling everybody that we think that the carryout of 300 is too high, yet the price and the USDA price is at $12.40. My point here is that the reason that the USDA price is at $12.40 is because of this monster Brazilian crop.

So, you know, if I put my farmer hat on and say, well, we're definitely going back to $2.50 or something, so we got to be going to $14.20 for an average price. That gives me an opportunity to sell $15s. $15 beans, you know, I think you just have to, you know, you can't be, uh, myopic about it. You have to understand that there's other things going on in the world and that this, this rally, it caused us— it has caused the Brazilians to focus on marketing their old crop beans, but it will also get them to focus on how many acres they want to plant new crop, which could be at the expense of corn.

Chris

Barron: Yeah. Last thing I want to ask you on, and we'll wrap this baby up, but the economy— you're around with S&P Global and stuff. You, you, our guys are always paying really close attention to the economy, interest rates, inflation, all that kind of stuff. Any comments there? Anything that the farmer needs to be paying attention to with respect to those things? And, you know, buying inputs for 2024, anything you're seeing here and or anything you need to leave a message with there?

Peter

Meyer: Certainly a half point, a half point increase is, is probable this month. After that, it becomes very uncertain. The CPI and the PPI numbers this past week would certainly reflect lower inflation except in the food quadrant, which is, you know, one of those things. But, you know, look, the cattle herd is so small and, and those prices are, are very, very high. So, you know, that's, that's, that's understandable. But, you know, I think the economy, you know, stock market certainly is reflecting stronger confidence in the economy. We're only a few hundred points away from all-time highs in the— believe it or not, maybe it's 300 points in the S&P from all-time high, which you would have never thought that.

So, you know, I think the economy's moving okay as far as your As far as your inputs are concerned, I mean, I think, you know, given the fall in input prices over the last year, I think you're gonna have some folks that are out there waiting and waiting to get their input prices. Again, you know, if your marketing plan starts with selling '24 or '25 corn specifically, you know, you're gonna know what you can pay for your inputs. So, you know, the reflection of the economy. The other thing, you know, The market is trying to make a big deal out of Ukraine, uh, grain corridor. Um, we don't, we don't see it as a big deal. We were actually surprised that it was renewed the last time. We didn't think it was going to be renewed the last time. You may get a knee-jerk reaction out of that in the market if it does, um, if it does not come to fruition.

But our concern there is that, you know, the Ukrainian farmer has proved to be extremely resilient. Certainly production is down. Corn production is down, wheat production is down, sunflower seed production is down. But what they do produce, they've been able to get out through the west via land, via Poland, so much so that EU farmers are now complaining about Ukrainian farmers dumping crop into the EU. The EU has a little bit of a weather issue, especially in parts of France, the Baltics. There's some northern parts of the Baltics that don't really look great, but we don't know that that's enough to offset some of this stuff, you know. Um, and, and as far as wheat's concerned, I mean, wheat would probably have the strongest reaction to, um, to any sort of grain card or deal. But the Russians have plenty of wheat. We talked about this earlier.

We thought that, you know, we think the Russian wheat is going to China for feed. So I mean, it's one of those things, Chris, where I think, you know, and I understand that as a farmer you need to focus on your crop your own business. But there are a lot of moving parts here, and there will continue to be a lot of moving parts, whether it be the US economy, Brazil's relationship with China, what's going on in the Russia-Ukraine war. You know, so I mean, there's a lot of, you know, and the last thing I'll say is that let's say the Ukraine war, by the grace of God, gets settled here. I mean, we still think it takes 2 or 3 years. For Ukraine to get back to where they were, if not longer. So you're going to have underlying kind of support for the market.

But at that point, if it does get settled, I think you have to— and you look out in your horizon 3 years and you say, well, okay, it's hard for me to market this year's crop, never mind 2 or 3 years down the line. But you have to understand that Ukraine could be back in the game by, let's say 2026 or 2027, and that may represent a bit of a problem as well.

Chris

Barron: Yeah, there's a lot of things to watch, not just today but tomorrow and out into the future. That's why we have futures markets, so for sure. Um, well, hey Pete, this has been a great conversation as usual. You're full of tons and tons of perspective with information that are things that I think as farmers we need to to be aware of. And, and this was a little longer than we typically go, but I think it was well worth it because there's just so many things. Like you said, there's so many moving parts, so many things we need to be watching as producers. And, and I think we still— my, my big thing is always, you know, set those margin targets and, and be disciplined. And, you know, taking your advice, Peter, uh, you know, watch these markets.

And if we're still in a weather market and, and the price gives us an opportunity, we need to make sure we're plugging into that and working into it as, as, uh, as it works with what we think we have for production and that kind of thing. But again, Peter, really appreciate everything. Thank you very much.

Peter

Meyer: Oh, thank you, and I look forward to, uh, to seeing everybody in Phoenix next year.

Chris

Barron: Yeah, that'll be great. And I appreciate you mentioning that. Yeah, just a reminder to everybody, so that at the beginning of the, uh, podcast here, but yeah, if, uh, you can put that on your calendar, January 24th, 25th, 26th, and, uh, We look forward to seeing everybody down there in Phoenix. It'll be a little bit warmer than it is in the, in the Corn Belt that time of year too. So with that said, really appreciate everybody. Stay safe out there. We'll continue to pray for some rain and keep good weather going your way. And with that said, we'll catch you again next time on the Ag View Pitch.