Weekly market outlook, Nov. 15-19: multiple moving parts in the market

Narrator: This is Alyssa, and I just wanted to check in with everyone and remind you that the registration for our Ag View Executive Business Conference is now open. If you have not heard about our conference that we are hosting, it is taking place in January, January 26th, 27th, and 28th in Phoenix, Arizona. Please check out our website. If you go to agviewsolutions.com, on the front page of our website, you can click on the button that says Executive Business Conference. And on that page, then you will find all the information related to the conference, such as the speaker lineup, the agenda, and also at the bottom of the page, you'll find the links to register for the event and also to book your hotel. If you have any questions on the conference, please reach out to me, abarron@agviewsolutions.com. I'd be happy to answer any questions. We are limiting registrations for the events.

So if you're interested, please get registered as soon as you can, and we are looking forward to seeing you all in Phoenix in January.

Chris

Barron: Thanks. Welcome everybody to another episode of the Ag View Pitch. We're heading into another marketing week in November, and we have with us Pete Meyer with S&P Global Platts. Pete, how's it going?

Peter

Meyer: I'm doing well today, Chris. Uh, how are you doing?

Chris

Barron: All right, we're hanging in there. We had some snow Yesterday, and, you know, it looks like we're gonna get some decent weather to let a lot of the operations kind of finish up some tillage or continue to work on tillage. There's still a handful of people I know that are frustrated trying to just wrap up the last harvest there where they had a lot of wet weather and stuff. So a little bit of everything. I think a lot of people want to kind of get things wrapped up though, so, and that's kind of where we're at. We can get got some of the equipment cleaned up and, and, uh, getting ready to start crunching some numbers looking at '22, which we'll get to here in a bit. But what I want to start out with you and get your take on is last week we had the USDA report. Um, the interesting thing is, is it seemed like we had a lot of strength after that, is like the reaction was interesting.

So I guess, you know, what's your thought there? What What should we glean from that?

Peter

Meyer: I just don't get it. I really don't. We didn't learn anything new.

Chris

Barron: Right.

Peter

Meyer: We learned nothing. I mean, corn yield was up a little bit. Excuse me. One thing I'll say is that, you know, what we saw in, now let's talk about soybeans first. What we saw in soybeans was before the report, we saw probably one of the largest and longest sell-offs before any report. So, you know, maybe the sellers got a little bit ahead of themselves there, but certainly a half bushel cut in yield with no other changes for the most part, you know, really, you know, you would have thought we would have been flat. On the corn side, the only thing I can say about corn is that these ethanol margins continue to be very good. We also, we see these margins in some places approaching $1. I mean, we see ethanol prices over $3. I mean, some of this stuff is the highest stuff we've ever seen. So that ethanol, those ethanol plants keep bidding for it.

They keep the basis strong where they are. And I think that that's, that probably has something to it as well. The other thing that I'm a little bit, leery of is the fact that the funds bought a lot of corn before the report, the week before the report, we sunk before the report, they kind of— and now they still have, from our estimation, they still have it because Thursday was a holiday, we didn't see the Commitment of Traders report yet. So I don't know, it's hard for me to substantiate this 30-cent rally over $5.50. I mean, you know, we've talked a couple of times this year and, you know, we keep telling our clients it's $5.50. I mean, I write report after report, says, "Corn's $5.50." So now we're at $5.80 or wherever we are, 30 cents over.

I'd have a hard time putting my finger on exactly what was the cause of the rally beside the fact that, As you just mentioned in the opening, farmers are, you know, they have it, they're done, they may not want to sell anymore, they like the market the way it is. And the funds always, through their algorithms and through their trading, they always go to the path of least resistance. And maybe at the moment, the path of least resistance is higher in corn. I also think that there are two longer-term factors that we have to look at. Obviously inflation is not going anywhere. I mean, you saw in the CPI and the inflation indicators yesterday or this week, just awful inflation numbers. And maybe the funds are saying, well, inflation's not going down, so we'll keep buying it until such time.

And the second thing is that there is some, in my opinion, there is some concern regarding next year's corn acres that's starting to creep into the market. We can talk about that a little bit later.

Chris

Barron: Yeah, for sure. So, you know, if we look at where farmers are at right now and the, the bend doors are closed in a lot of operations now, probably because of either tax reasons or they've got enough sold or cash flow is sufficient, or, you know, just not at that point to probably pull the trigger on some more things. However, when you see the price movement that we saw last week, you know, you're talking about these price levels where they're at now on new crop, or excuse me, on old crop, on the '21 crop. I mean, what's a producer to be thinking about or watching for when it comes to both flat price and basis? Because there's margins here like I've never seen for at least I mean, we saw some of that in 2012 in some areas where the drought didn't kill them and they had the opportunity to sell at high levels and had yield and price.

But in my career, I don't ever remember where we've had yield and price for most operations. And so what do you tell guys? You know, I mean, what do we wait for here?

Peter

Meyer: One word, wheat. I forgot to mention that in the previous one. Wheat is the only thing that I can really, as we were talking there, Chris, I was thinking back, I mean, wheat is still explosive to the upside. We set new highs every week. Wheat's not going anywhere without dragging little brother corn along, or in this case, little brother corn along, right?

Narrator: Right.

Peter

Meyer: I mean, this is just, we have a wheat crisis. We have a bad Canadian crop. US crop was okay. Northern Plains spring crop was awful. Russia has a shortage. China bought some wheat for feed earlier in the year. There's really a wheat shortage around. So when you look at, if wheat starts to weaken a bit, but I mean, who's going to sell wheat? Wheat, excuse me. If there's no wheat around, who's going to sell wheat? So if you want to look at outside influences, I think that you have to look at the wheat price. I know it's ridiculous because you look at the fundamentals of corn and you'd say, Well, why should I be watching wheat if I want to hedge some corn? Totally get that. You have to watch the oil market. We're hovering back down here around $80. We saw a pretty good sell-off here the last couple of days.

So, and then you have to watch the natural gas market as far as, you know, nitrogen-based fertilizer, and we'll talk about that in a little bit. You know, that sort of thing, because I think all those three things come together. What's the value of corn? You know, we think that the value of corn from the buyer's perspective is $5.25, right? For— and USDA, I think, is a little bit lower than us, or maybe a little bit higher than us on their full year average. We think that's right. So we think that it's right in that $5.25. Initially, when I looked at the size of the crop, I thought— we put out a suggestion that it'd be worth around $5, and $5 is our our farm gate cash price average for the entire year, right? So we upped that to $5.25, um, this, uh, this go-around in November, before the November report. We're probably going to stay there a while.

We're not going to learn anything in December from the USDA. So, you know, I mean, in my personal opinion, anything over $5.25, if that, you know, your average price, that's going to be that's gonna be a good value. I mean, I don't know what drives this thing to $6 unless it's just the funds or oil goes to $100. That's all I can say. I mean, so in a continuation of our first, your first question and second question, I mean, wheat's a big driver here and I apologize for not mentioning that earlier. You know, the oil market certainly is a driver given ethanol margins. Natural gas is a driver given nitrogen-based fertilizers. And yeah, I think those are the things you have to watch. And we think that the value is around 5.25 for the year. So you're going to do well in our opinion, you know, by being above that price. Does that make sense to you, Chris? You understand what I'm saying?

Chris

Barron: Yeah, it does completely. And does just inflation in general continue to give us the possibility for additional strength too, or the cash is going to flow into that? Because I I hear resistance on that topic from some people and I hear some people really pushing that idea.

Peter

Meyer: So— No, I'm not going to push that idea because, you know, to say that corn was up because the inflation numbers are up this week is kind of like the tail wagging the dog, in my opinion, right? I mean, inflation is a measurement of price. It doesn't tell you where the price is going. So, you know, people are complaining about the gasoline prices around here. You know, they're in the $3 to $3.30. I mean, it's not really that bad, but in other parts of the country, it's awful. You know, and you know, you keep hearing this from the White House as well this week. Oh, you know, we don't really mind it that much. The prices are high because that, that gives, uh, you know, it gives us a chance to push our green agenda, you know. But then in the other, then a day later they say they're talking to OPEC about, you know, more, more flow. They're not talking to OPEC about more flow.

I can assure you there's been no conversations between the White House and OPEC after the first one where they said, hey, 'Can you pump us some more oil?' And OPEC said, 'Mind your own business. Goodbye.' That was the end of it. So, you know, that's just nonsense. And I mean, here we have a guy, you know, between all the pipelines and the shutdown last week, they were talking about turning it off Pipeline 5. I don't really know. There's some funny business going on at the energy side of things. I mean, you know, is there really, you know, look, It's like Putin, you know, Vladimir Putin controls the, controls the gas price in, in, in Western Europe. He controls his fertilizer prices on the way out the door. China controls their fertilizer prices on the way out the door and the UN, OPEC controls the oil prices.

So you know what we have, we're really at their mercy and that, you know, if those prices continue to soar higher, yeah, that's going to be the basis of more food inflation, which in turn is going to be, you know, the basis of, of, uh, of our overall inflation. So yeah, I know, I, I'm sorry, I got off on a tangent there, but coming back to a good tangent though, but going back to your point, it's not— that's the tail wagon, Doug. I don't see how any economist could, could say, well, yeah, you know, the higher inflation goes, the higher corn goes. I mean, it's—

Chris

Barron: no, it's driving the energy and the, and some of the input stuff, which you'll get to here in a minute. I, I want to though Um, just for a second, finish up here on, on this, uh, you know, '21 crop in the bin. Last week, um, in Cedar Rapids, Iowa, you know, we just continue to see really strong basis. But then I talked to some guys in Illinois and other areas where the basis is not that aggressive, but we're really seeing it. I mean, like in Cedar Rapids last week, they— there were some bids that came out that said $6 corn, just bring the corn in, we'll give you $6. Fantastic. You know, how do you not just get the trucks fired up and haul as fast as you can? I mean, is there anything holding you back? I mean, are we waiting for—

Peter

Meyer: I'm not, I'm not waiting, I'm not, I'm not waiting for anything. But then again, I don't, you know, look, we've talked about this many times and you're, you, you're a longtime friend of mine and a good friend of mine, and, and I have many good friends that are farmers and you've never really seen You never see in any other business an emotional attachment to the production that we see in farming, right? And it's the same thing, you know, I caught a lot of heat on Twitter a few weeks ago for saying that we basically, corn was at the same price it was before the August WASDE, before the November WASDE. Beans were way down. So tell me about reownership of this stuff. And I got blasted by guys who I know promote the reownership of it. And I understand it.

If you sold your corn, '21 corn in 2020, well, certainly you want, you would have had some reownership because given the price at the time, but now we're at such a price, you know, that I just don't, I don't understand it. I mean, when you look at the oil business, the mining business, you know, any other business that you can trade a commodity against, no oil company is out, is out, an oil production company is selling their crude at $80 and then going in to buy $80 calls. They don't do it. I mean, it's, you know, it's, but, So that's what I'm saying is that there's an— and I get it. It's you and your clients and all these others. It's your life's work. There's so much passion involved in farming that I get it. But I mean, when you're at $6, I mean, you really have to make a business decision. And to me, the business decision is pretty obvious.

I mean, FOMO, fear of missing out, is extremely strong from a trading standpoint. From a farming standpoint, it's an extreme, it seems to be an extremely strong emotion. Most, almost all other production companies. Now I get it, right? I can't really compare a farmer with 5,000 acres who has all these bills to pay or 2,000 acres has all these bills to pay and sees inflation for everything else that he uses going up thinking, why am I selling it here? You know, I'm not General Motors. I'm sorry. I'm not ExxonMobil or I'm not, you know, a chemical company or something like that, I totally get it. But, but it's—

Chris

Barron: but yeah, and to your point, I mean, a lot of us sold what we would all say was too soon on a portion of the crop, and some way too much of a portion of the crop, we would all probably admit. But on the same token, for a lot of operations, we had yields that still generated way more revenue than we ever expected. And now, and With that said, I'm going to preface, I mean, there's a lot of operations out there that were in the quote-unquote drought areas and some of the troubled areas where they had rootworm pressure, you know, tar spot, wind damage, hail, weather issues where they got enough yield that, that was right in that what I call that crappy zone of your, your crop insurance doesn't quite cover you in that zone. You had just enough yield, you don't quite collect.

And those, and I feel for those guys because it seems like every other year in our operation we've had that opportunity to be in that zone. And so, and so I know, I understand that. And so that, that does make it harder, you know, to pull the trigger. And you, you know, you want to make sure you maximize everything you can on the price side when, when the yield isn't there. But for those that did have the yield, it's just, you know, it's like, man, this, this is a gift. And so But basis is just that thing I just, I think we need to be watching because it's, there's gonna be some opportunities.

Peter

Meyer: Right, I think two comments on that. I mean, obviously everybody had their focus on the East as being the savior this year. Now, Ohio, some parts of Indiana, you know, I talked to guys, it's record. And Illinois, it's interesting because when you talk to guys around Decatur, you know, when they went out after pollinated, they thought, ah, 220, $220, and then they came back and then things were going really well and they thought, oh, $230, $240, $250, then they came back, then the rains came in the fall, then they got flooded and then they went back in and they ended up taking $220 out and they're disappointed, but it's the same number that they had when it started.

Now, I think that there was probably some lower prices that were in the East and some of those areas that didn't produce enough and I think we're going to see some some transportation of corn, but then again, which may be behind your higher basis in some areas, but then again, we have such a problem with logistics in this country, I don't really know, and that might be exasperating the situation as well. I will say this, Chris, we spent an inordinate amount, well, I did not, but a lot of people spent an inordinate amount of time yelling and screaming about Dakotas and Minnesota and Western Iowa and Northern Iowa just being a total disaster. It wasn't even close to being a disaster, as you just mentioned.

So I think that what we have to learn from that, and when you talk to the seed companies, and I talked to both major seed companies, they'll tell you that the, the, there's a misconception out there that genetics have added bushels to the bottom line. They haven't. What genetics has done is they've flattened the curve as far as the reaction to adverse weather, specifically dry weather. And if there was ever a year that we saw that, It was this year. There is no question in my mind that you have to be aware that, you know, let's say you see a really good price, but you're not sure about the weather, this and that. I mean, maybe you could be next year 10 or 20, 10, 10 or 20% more aggressive.

You know, if we are in kind of a falling market, because I think if it's dry, because I think what's happened is that everybody was pointing at the Plains, at South Dakota, North Dakota, Southern Minnesota, You know, like the whole area that I mentioned before, and all of a sudden it's like, boy, I don't know where this crop is coming from. I know where the crop came from. The crop came from the fact that these genetics are not adding bushels to the bottom line. They're flattening the reaction. They're flattening the curve on the reaction to the adverse weather, the dryness.

Chris

Barron: Well, and timing is everything too, though I would add to that is that, you know, we had a dry early season in a big portion of the I-states and particularly Iowa. I think part of the reason our bushels in, in the state of Iowa showed up was because we were dry at the right time when we were developing our root system, and then we caught some rains after we thought the crop was dead a couple of times, just in time to actually still produce a pretty good crop. And, you know, I've jokingly told a lot of people, you know, we had a quote-unquote drought this year, and if that's, that's what a drought does, I guess I want to drought again next year. I mean, we We grow, you know, we grow better crops usually in a dry year than we do a wet year anyway. The wet years kill us more, right?

Peter

Meyer: Because you know what you can do, you know what to do with a dry crop. You don't know what to do with a wet crop, right? You have, you have soil compaction, you have all these other issues. And, and yeah, but, but, you know, I mean, it's, it's just we had an early planting season, we had tremendous, as you mentioned, we had tremendous conditions at the time. The thing was almost planted in perfect conditions almost universally. And I think that you're right, that had a lot to do with it. I mean, you know, when we came off a crop tour in August, I kept saying the stand counts in corn were unbelievable. Why is that? Well, it got planted at the right time. You're right, it got planted at the right time.

Chris

Barron: It's just frustrating for the guys that, you know, had some of the issues that did drag the yield down. Because, you know, you sit there and you hear about, well, the guys that had the really good yields that were unexpected, and then, you know, there are those operations out there that, that had half crop too.

Peter

Meyer: And there was— I totally understand, you're never going to have a perfect year, right, all over the place. And yeah, of course we, we feel for them who didn't, you know. Yeah, but it's, it's one of those things where I think that You know, every year for me as an analyst is a learning year, and you learned a lot this year about getting the crop in early and also these, um, the genetics taking the dryness out of the equation, right?

Chris

Barron: So let's wrap up with the last segment of what I wanted to hit on with you, Pete, is the '22 pricing. And I mentioned to you offline before we started to record, I said, you know, hey, Just looking at this from a crop rotation standpoint, that's going to be probably one of the number one things that we're talking with clients about for a while here now is, you know, what— how do we manage this crop rotation? A lot of producers are probably going to be like, well, I'm not going to change much. But when you look at corn versus soybeans, you know, as we look at it and record here today, you know, you're in that $1,240-something versus $550-something. That's, that's a little shy. I mean, to, to make beans be kind of where they're at, we need $13-something if we got $5.50 corn to make the beans work.

And everybody thinks, well, people are going to plant a bunch more soybeans because of the price of fertilizer. But if you run the numbers on the entire cost of production, it's right now at this second, it's, it's an advantage to corn. In 80% or 90% of the scenarios that we would sit down and run. So what's your take on this price ratio between corn, soybean as we, you know, move into the wintertime and watch this? Is there going to be any kind of a battle between those prices?

Peter

Meyer: We're of the belief that it looks great on paper, but it's not going to materialize. We're of the belief that we lose 3 million corn acres. We're going into 2022 with 90 and 90. We totally understand, we totally understand that the price ratio of fertilizer, whatever, our focus at the moment is the availability of fertilizer. We have no idea. I have been on more fertilizer calls, Mosaic, CF, all of these guys, the last 2 months they've had their earnings season. And CF was asked specifically, you know, why are you not price, why are you not putting any prices out there for next year? For next year. I mean, I have farmer friends of mine that their fertilizer providers are not even putting a price out. And they said, "We have no idea what it's worth.

We have no idea if it's worth $750 a ton or if it's worth $1,500 a ton." I think that's why you're seeing a lot of anhydrous going down at the moment. Guys can get their anhydrous. But here's the problem, Chris, is that Putin has already said They are not going to ship any fertilizer until such time when their farmers have enough. China is starting to mine coal again, so there should be some offtake for phosphates there, but their main customer is Australia, which brings us back to the circle of you gotta watch wheat prices. So the problem there is that if they don't, they kind of stopped mining a while ago and said they were not going to export any phosphates until June of '22. They wanna clean up the air before the Olympics.

I really worry about, I, and given all the supply chain issues, I mean, I can't order an even a new truck from GM for '22 because I want a few items in there that they don't, they just don't have the parts for. How is that going to work? You and I both have guys that have been waiting 6 months for tires. How do they feel about 6 months from now? And I hear it 6 months from now being able to get their fertilizer delivered. And I hear this all the time. About the fact, well, I got it locked in, I got it locked in, I got it locked in. I don't know if that works. It scares me to death.

Chris

Barron: So having it locked in doesn't have it. You don't have it.

Peter

Meyer: Correct.

Chris

Barron: You have it locked in.

Peter

Meyer: Gotcha. Right. Now you and I know a guy, we have a mutual friend, you've met him a few times up in Minnesota. I talked to him right after harvest. He's in southern Minnesota. I said, what are you gonna do? He said, I was 2/3 corn, 1/3 beans this year. I said, what are you gonna do next year? He said, 1/3 corn, 2/3 beans. I said, look at the price. He goes, doesn't matter. He said, that's my initial plan because what happened is I have 1/3 of my corn acres, I have the fertilizer for 1/3 of my corn acres in the shed. And I believe that that's an issue. And I think, you know, that's a problem going into next year. And I know that we've seen our competitors and I was saying, oh, we're gonna see the same amount of corn acres being here. And I certainly understand pencil to paper, that it does pencil in. But don't forget, we're not putting pen to paper, we're putting pencil to paper.

So I am generally concerned about the availability of this stuff, the availability of phosphates, the, I'm sorry, the availability of glyphosate, the availability of all this stuff. I'm not really that worried about the price given the price of corn, but I am worried about the price, about the availability of nitrogen-based. Now, What can change? And we mentioned that a little bit earlier, watching natural gas price. Well, sure. If natural gas goes down, if we have a, let's say, a calm or not so cold winter in Western Europe, natural gas prices can go from the current $5 back to $3. Then all of a sudden things start to loosen up and then you're going to see a reaction in the corn market, in my opinion. But then, Then the question is, how fast can these guys gear up?

You know, you still have some plants that have sustained tremendous damage after Ida down there, and they say they're running, but are they running? So I'm not really sure. I mean, you talk to guys that we have very good relationships with some of the biggest barge companies, and they're still kind of on the hunt for some of their barges that they're missing. This logistical nightmare just makes me very, very cautious about the availability of, in the spring of nitrogen-based fertilizer. It's a huge fear of mine. And my other fear is that, you know, we continue to spend all of our, well, not all of our time, most of our time talking to the big oil companies and the big refiners about Renewable diesel and sustainable aviation fuel. So a lot of, so we've met, I think we've met, we've talked before about this, the demand for renewable diesel for soybean oil, it's going to be tremendous.

I mean, you see, you see already soybean oil as compared to meal, meal's at $3.50, soybean oil's at $0.60. We've never seen ratios like that, right? So these plants are going to continue to come on. Now, will they be fed? Probably not. So will they continue to bid up for the soybean oil? Until 2023, they will. In 2023, all of a sudden, all these investments that these refining companies have made into the crushing plants, whether it be Bunge, Cargill, ADM, whatever, and I'll get back to ADM here in a second. So that will kick in in '23. We think by 2025, we need 40 billion pounds of feedstock. We only produce 25 billion pounds of of soybean oil in this country, we produce much, much, much less corn oil and 14 million pounds of fats, pallos, and used cooking oil. We can use, they can use it all.

So our exports are going to stop, but we think so that, but my fear is that we're, if we, if we do get a shift to 3 million acres, it's going to be too much too fast. Now on the flip side of that, if we look even further out from next year, The announcement 2 weeks ago that ADM had a memo of understanding with Gevo, who's a client of ours. Gevo is a company that makes sustainable aviation fuel. Now, after ADM announced they sold their Peoria dry mill to BioJora, and then all of a sudden they come out with this memo of understanding with Gevo, where they're going to— now, ADM is the second largest ethanol— third largest ethanol producer in the country behind Valero and POET. They are going to set aside, starting in 2025, 900 million gallons. They produce probably about 1.7, 1.8 billion. 900 million gallons are gonna go to this Gevo company to produce sustainable aviation fuel.

It'll turn into 500 million gallons of sustainable aviation fuel. The rest are byproducts such as carbon dioxide and a few other things. This is kind of a, a game changer because we were worried in the fact that if we move past the 2025, the proliferation of electric vehicles will then stop this or flatten the ethanol curve and the ethanol curve starts to go down. We were worried about ethanol. We were worried about that long-term impact on corn. This is a game changer now that both Gevo and this other company, LanzaJet, which has a plant in Indiana, and also they're down in, right around Atlanta Hartsfield Airport. They also claim that they have the technology to turn ethanol into sustainable aviation fuel. This is a big deal. So now this balances the corn-bean acres.

You know, for a while I'd have farmers, after I'd give my talk about renewable diesel and sustainable aviation fuel, say, "Well, I need to learn how to plant beans on beans then, right, Pete?" I said, "Yeah, you probably do." Now this technology, it's unfounded. Or I'm sorry, it's not in production yet. So we don't know what the, you know, if it's really there to turn ethanol into aviation fuel is a game changer in our opinion, it balances things back out. Now, some companies will continue to make sustainable aviation fuel out of bean oil, fats, tallows, you know, municipal waste, everything they can get, everything they can get their hands on. But this ethanol thing is a, Uh, that, that's a game changer, but that's not until 2025. Again, we're getting, we're getting a little bit off the, off the path here, but, uh, that's all right.

Chris

Barron: I mean, those are all, yeah, those are all things we need to be thinking about and looking toward because the things we do today are affected, you know, down the road with crop rotations and all those things and fertility and the stuff we're doing to the, on the agronomy side.

Peter

Meyer: I mean, I mean, you know, the Really what happened here with corn, if we, you know, one of the things we can put out is put our finger on as well was the failure of the safrinha crop in Brazil, the second season safrinha crop, right? Now the balance sheet got, the global balance sheet got a little bit tighter, but you know, not really that much tighter. So, but you know, it created a psychology there. And I think that, Once the calendar turns, then these guys are going to start to— we know some guys in Mato Grosso in Brazil that'll start harvesting soybeans probably around Christmas time. So they'll go back in and put the safrinha crop in. We'll see what that takes. That's another thing for your listeners to kind of watch. I know it's hard to watch. You can't get up every morning. It's not like the USDA where you can get up every morning or every week at least and take a look in.

It's not that easy. The safrinha crop is one that will influence corn prices in 2022 as well. But one of the biggest things that I worry about is this availability. This supply chain is broken in this country. And no matter what they say, what politicians say, I don't see how it gets fixed in the near term. And that leads me to believe that we may have less corn acres. And, but also what I worry about as well is that there will be a lot of guys that will be forced to go to the fertility bank. And at that point, you know, will the yields look as good next year? But you know, Chris, you know me, I've been in the business a long time. There are so many moving parts going in here.

And I think you know me as well that I typically have, I do have an opinion because our clients pay us for my opinion, but I've told them in the past, I have never seen in my 40 years in the business, this many moving parts going on at the same time. Yeah, it's really a very, very difficult—

Chris

Barron: and I, you know, it's definitely, it's definitely complicated. And, and we're going to need to wrap up here, but I have a last real quick question, and you can give me the short answer on it. But is the— you know, we talked about that, that price ratio between corn and beans, and, and farmers gonna have to make some real decisions, um, as they look at, okay, well, I can sell corn for $5.50 22 crop and pencil out a pretty decent margin. On the soybean side, I need, you know, let's say the producer's saying $13. Is that, is that an achievable goal? I mean, can we sit around and wait for $13 beans, or is that, is that something that's too lofty?

Peter

Meyer: No, you're gonna, you're gonna have 142 million tons coming out of, coming out of Brazil. That's going to be up 5 million from last year. Chinese imports are only going to be up 1. Chinese, Chinese imports in the U.S. Are down 10, what they have on the books already down 10 million metric tons, in round numbers, 400 million bushels from last year. I think the USDA has to sharpen their pencils on that. We're 16 million metric tons behind last year's pace at this point, even though we're looking for 6 million tons less. So I don't necessarily know.

Chris

Barron: So where are you pulling the trigger and would you use like HTAs and not lock in basis or what would you do there?

Peter

Meyer: Last question. Yeah, that's a tough, that's a tough question. Like I said, there's so, so many, so many moving parts in this thing, Chris, that, you know, I really don't mind the guy locking up his bin, but I think that in January you really have to, you know, stay on your fertilizer supplier to make sure he or she is going to get the crop, get what you need. Never mind the fact that you have it locked in, you know, if everything returns to normal, yeah, we could plant 93, 94 million acres of of corn. I totally get it. But at the moment, I'm very— based on what we're— what we hear, not even price-wise, I'd be very worried about the— about that.

Chris

Barron: So, yep. Well, hey, this was a great conversation. You covered a ton of stuff, which I knew you would. You're one of the go-tos for us at Ag View Solutions that sees the macro side of things and can really bring some massive perspective to our farmers. And Pete, we really appreciate all of your, all of your insight. Thanks a lot.

Peter

Meyer: It's my pleasure, and I wish everybody out there a very happy holiday. And to the veterans, uh, we just passed it this week, thank you very much for your service from the bottom of my heart.

Chris

Barron: Awesome. Thank you a lot, Pete, for that. And thanks everybody for listening, and we will catch you again next time on the Ag View Pitch.