The Grain Feed – July 27, 2023

00:00:00:21 – 00:00:09:12
VOICEOVER
Future trading involves risk and it’s not suitable for all. Investor contact provided in the strike is meant for educational purposes and is not a solicitation to buy or sell commodities.

00:00:09:15 – 00:00:29:24
JIM
Hello. Welcome to another edition of the grain feed brought to you by Ever.Ag. This is your weekly news feed for all things grain and all things feed. Each week we bring you updates on the markets with unique perspectives from an amazing team of analysts with the intention of helping dairy and livestock producers manage the risk. I’m your host, Jim Matthews, reporting from the Chicago office.

00:00:29:26 – 00:00:45:00
JIM
Joining me today, as always, from Texas, director of feed procurement, Mr. Jake Kingsley. And returning to the grain feeds in the great state of Iowa, grain marketing advisor and broker Ms. Kristin Stien. Team, how are we today?

00:00:45:02 – 00:00:45:20
KRISTIN
Doing Great.

00:00:45:20 – 00:00:47:25
JAKE
Pretty good. Jim Thanks.

00:00:47:25 – 00:00:52:03
JIM
Great. Kristin How is our favorite four letter I’s state?

00:00:52:06 – 00:01:01:09
KRISTIN
You know, we’re, we’re a little steamy right now. We’re sweating when we go outside. Thankful for air conditioning, but looking forward to a week out, we start to cool down.

00:01:01:15 – 00:01:05:19
JIM
Amen, sister. Yeah, the I states are it is toasty, it is humid.

00:01:05:25 – 00:01:10:14
KRISTIN
It’s all kind of Jake bringing it up our way. He can keep it down there.

00:01:10:16 – 00:01:18:12
JIM
Yeah. Keep that stuff in Texas. All, all these high pressure ridges that were kind of sitting over the panhandle on the plains. I’m okay with them staying there now.

00:01:18:13 – 00:01:26:00
JAKE
They’ve been here long enough. I’ve been here long enough. They zapped the humidity out of the air. So we have a nice dry heat here.

00:01:26:03 – 00:01:26:21
KRISTIN
So happy for you.

00:01:26:21 – 00:01:32:24
JIM
Jake. Sure appears to be a like sweat absorbing humidity battling shirt, right, Jake?

00:01:32:26 – 00:01:35:06
JAKE
Yep, that’s exactly right.

00:01:35:08 – 00:01:38:23
JIM
Why are we wearing this shirt today, besides the fact that it looks fantastic?

00:01:38:28 – 00:01:42:03
JAKE
Well, we got a big concert coming up. It’s Taylor Swift weekend.

00:01:42:03 – 00:01:46:28
JIM
So Taylor Swift weekend. Okay. Gotcha. This is in the Dallas Fort Worth area.

00:01:47:01 – 00:01:51:09
JAKE
It is not. We missed that one. So we’ve got to do a little travel and going, oh.

00:01:51:09 – 00:01:54:05
JIM
Good for you. So where are you going to see Taylor Swift.

00:01:54:05 – 00:01:57:10
JAKE
We’re going to see her in Santa Clara Saturday night.

00:01:57:12 – 00:02:05:11
JIM
Beautiful. Santa Clara, California. Excellent. Much. You’re gonna be here tomorrow, right? You’re going to be on the road tomorrow. You won’t be online year. Watching the markets.

00:02:05:11 – 00:02:13:20
JAKE
That’s right. I will be out around California checking out wine country. Maybe we’ll run into a few California dairymen while we’re out there.

00:02:13:20 – 00:02:36:09
JIM
That’s the spirit, Jake. Always be hustling. That is the spirit. Well, we’ve got a lot to run through today. So, Paige, if you would kindly timestamp the broadcast, It’s Thursday morning of another wild week in Chicago. And for all you swifties out there, it’s been a cruel summer for anyone trying to time out the corn market. Certainly not a love story for the Bears.

00:02:36:14 – 00:03:01:00
JIM
Just yet. But as market veterans know all too well, the market has plenty of time to look back to December futures for another move to $5. It’s a delicate situation with volatility this high. And for anyone trying to step in and chase this market on weather rallies, Jake, would say that you need to calm down and try to limit the bullish imaginary ocean of your wildest dreams when it comes to the property market.

00:03:01:00 – 00:03:28:29
JIM
We’ve had a lot of bad blood with our stubborn little byproduct soybean meal maintaining its strength since our bullish USDA acreage report. And when Jake eyes this meal market, he thinks I knew you were trouble. And one has to wonder when viewing the strength of protein, if we will be able to shake it off, helping us determine the grain market direction For the second half of the summer, we turn to Iowa resident Kristen Steen and Kristen, what’s your take on the grain markets this morning?

00:03:29:00 – 00:03:59:02
KRISTIN
Yeah, I mean, we’re we’re pretty boring here today, so I guess we’ll take that from a bullish sentiment and say maybe things are settling down or shaking off to your you’re a little allusion there. But really when we look at when we look at it overall, let’s start on corn market. Right. I read some commentary today that I think hit the nail on the head that just said fundamentally 550 corn really is is our reason because of what we look at for ending stocks.

00:03:59:02 – 00:04:19:13
KRISTIN
And that was not commentary that I wrote myself, but I tend to agree with it in a pretty big perspective. I think the thing that’s really got us back into this 550 to 570 corn market is just everything that’s gone on with Russia and Ukraine is on top of the hot weather forecast that we that we’re currently experiencing right now.

00:04:19:15 – 00:04:42:28
KRISTIN
So I mean, as far as the corn picture goes here in Iowa, when we look out the backyard, all things considered, with how dry it was in May and June and the heat that we’re seeing at the end of this month, things do look pretty good right there. You’re starting to see the stress come out in the heat that we have.

00:04:43:00 – 00:05:09:08
KRISTIN
But bear in mind, if this heat was coming at the beginning of July rather than the end of July, that corn market would look a lot different than what it does now. So some of the commentary that I’m hearing from guys from away of concern as far as yield goes is if this heat extends 5 to 10 days longer than what they’re expecting it to be, then they start to think that you’re going to see that aborting of the kernels and the lack of fill and whatnot.

00:05:09:10 – 00:05:31:12
KRISTIN
The other other concerning commentary that I heard was just some of that later planted corn beans that some of the delayed stuff that we had. They’re worried about pollination, period. But by and large, it seems as if a lot of guys still think that there’s the chance for that average that crop. The chart, the hope for a bumper crop is kind of out the window.

00:05:31:12 – 00:05:37:23
KRISTIN
But in all fairness, we always start to think that that this time of the year as well. So we’ll see how it progresses that way.

00:05:37:24 – 00:05:58:12
JIM
Okay, Good deal. Thank you, Kristen. Yes. So you you referenced Russia and Ukraine there for a second as well, because that has added volatility to this market. And, you know, market pundits can argue over this is going to be immediate effect like that is why corn has rallied or not certainly probably factors into the wheat rally that we’ve seen, which then supports corn.

00:05:58:19 – 00:06:18:20
JIM
But it’s certainly something to keep on the back burner. You’ve been saying this for a long time now. Keep Ukraine and that situation on the back burner is because as the Russians were damaging Ukrainian export infrastructure over the weekend, we saw that big rally on Monday morning. So definitely still an impact. And then weather. Yeah, that’s the big one, right?

00:06:18:20 – 00:06:41:07
JIM
And we referenced jokingly about the high pressure ridge kind of in Jake’s territory, but the big concerns were for a bit and still could be if that shifts over our respective states up here in the Midwest, because that could really start to roast things into August here. But yeah, Kristen that kind of that sentiment of things actually look pretty good, right?

00:06:41:07 – 00:06:56:00
JIM
I mean, and the second half of May was super dry most of June Superdrive but we’ve got some rains and things look not bad. If I may ask, would you say the same for the potential soybean crop on your side of the Big river?

00:06:56:06 – 00:07:12:26
KRISTIN
I love it when guys ask me what or what we’re thinking for soybean yields, because that’s always the crapshoot of the deal. Right? So the interesting thing about beans is, one, you never know what’s going to happen as far as yield goes. They surprise the heck out of you from when you think there’s not going to be a crop.

00:07:12:26 – 00:07:33:14
KRISTIN
And then all of a sudden there is. The last two years of having dry August were the epidemy of that story. The the concerning factors right now from a yield perspective is when those beans got planted, they really didn’t get rained on for a long time. And so it took a really long time for those rows to close in and canopy that way.

00:07:33:17 – 00:07:59:21
KRISTIN
And and from there, they’re also short beans does not determine yield. I don’t know when you factor in weather forecasts. Again, I’m not a meteorologist, but at the same time, what I hear is that the chances for that El Nino weather pattern to start to come in in the month of August continue to get better and better. So there could be hope that we see those yield saving rains come August.

00:07:59:21 – 00:08:03:26
KRISTIN
But again, it goes back to, well, what type of potential do we have going forward.

00:08:03:27 – 00:08:26:03
JIM
Yeah, and the I mean, just general rule and I’m not an agronomist or meteorologist. Right. But July weather kind of makes or breaks the corn crop, generally speaking, across the Midwest. And August is somewhat a make or break for beans. So it’ll be really interesting to see how beans do over the next four or five weeks. And then of course, that is impacting the pricing of protein.

00:08:26:03 – 00:08:49:14
JIM
And we’ll turn to Jake there because we look at the soybean balance sheet, we saw what the USDA did to us at the end of June, removing that bean acreage. We’ve really strengthened soybeans since then. November went from about 1250 to 14 bucks. We’re continuing to trade at or above 14 bucks a bushel. And that’s really helped keep soybean meal afloat, above 400 bucks a ton.

00:08:49:16 – 00:09:03:27
JIM
And we were asking folks to stay patient. But as long as soybeans remain elevated, it just it’s tough for meal to find that pullback. We’re really hoping for longer term. So any updates from your side, Jake, on the feed markets?

00:09:03:27 – 00:09:28:03
JAKE
I think the big thing on the feed markets here, Jim, is to to really start to consider some some basis moves. We’ve been talking about it in protein, canola and soybean meal here for a little while. You know across most of the country basis values there are within arm’s reach of what I would call the historically average range for those commodities.

00:09:28:06 – 00:09:55:01
JAKE
At one point, I think we touched the top end of those ranges and we’re still just five or $10 off of them. We’ve seen beans run impressively higher over the last few weeks here. The U.S. balance sheet is thin. We’re really relying on a healthy Canadian canola crop and a questionable at this point us bean yield to just maintain the numbers that we’re at now, I think.

00:09:55:04 – 00:10:16:05
JAKE
And so stepping in and doing a little bit of of purchasing and basis contracts at least for the first half of the feed year, you know, October through March, get something started. It just feels like the upside potential is is a fair bit greater than the downside potential in that piece of the market there. You can still have some flexibility, manage the futures, try to catch a better overall price.

00:10:16:07 – 00:10:43:03
JAKE
But we’re in a very fair spot as far as basis values go there and corn in a lot of places, we’re starting to feel the same tone. You guys had mentioned the high pressure ridges over the plains. That’s the places last year that really got burned up and drove values higher, particularly in the Western half of the U.S. So we just said, you know, July makes or breaks the corn crop.

00:10:43:03 – 00:11:11:15
JAKE
And that’s exactly when we had this high pressure system set over the plains. So did that kind of curb those yields a little bit? It’s hard to say. At the end of the day, we’re really only about $10 a ton above what I would call the historically average sweet spot for corn basis in most of the western U.S. And the Midwest is a lot better than last year there within call it, $0.15, $0.20 in the worst case scenario and a lot of the I states and east of there.

00:11:11:17 – 00:11:37:13
JAKE
So very fair place to step in with so much uncertainty. Now, I’m not saying you got to go buy the entire crop, but, you know, get half of the first half of the year. So a quarter on the books or maybe even as much as half of the year on the books or something. Give yourself some flexibility. If South America does string something nice together next spring, February, March, timeframe, but take advantage of some of these prices, especially with milk values down where they’re at.

00:11:37:15 – 00:11:47:27
JAKE
You don’t want to end up stuck with low milk prices and let this feed market turn around and run away from us. After the nice opportunities we’ve seen here for the first time in a couple of years.

00:11:48:00 – 00:12:09:29
JIM
Good deal. Thank you for that, Jake. And you reference the South American weather and that kind of circles back to when Kristen commented on the El Nino patterns potentially benefiting the U.S. Midwest, depending on the extremes of it. But it also benefits South American weather to an extent because the Argentines have been under drought for the last two plus years.

00:12:10:01 – 00:12:36:18
JIM
We’ve really seen a lot of their production come down and that has also helped just naturally elevate the global soybean and protein markets as if they can shift to more, let’s say, appealing temperatures and forecast for their productive period. Maybe they’ll be able to replenish that bean crop. So like you said, Jake, maybe just keep that protein procurement kind of front loaded, maybe for better opportunities out into the marketing year.

00:12:36:20 – 00:12:51:03
JIM
We need to hit some Swifty trivia here in a second. But I also just wanted to ask Kristen and Jake both your gut feelings here on corn pricing. We still have a shot at sub five bucks here the rest of the summer on these futures.

00:12:51:06 – 00:13:00:28
JAKE
I think we do, yeah. So you catch a little break in the weather or see this wheat market kind of stabilize a little bit and you’ll probably get a chance to run back towards five.

00:13:00:29 – 00:13:25:04
JIM
Gotcha. And because, Kristen, you started off with saying about that specific level 515 I know it’s very psychological, right, to be kind of sitting around here and it does feel like we might have a bit more upside volatility just because we are still in a weather market. But I think these sentiments are shared by this crew and that ultimately we still got some room back to the downside here on this market.

00:13:25:04 – 00:13:44:15
JIM
So thank you for that, folks. We got to do quick Swifty trivia. And I have to admit, I did not know the answers to most of these. I think I knew one or two. And also just to preface, I could also be wrong. I could have gotten bad information. Always good for that disclaimer, but we’re just going to kind of run through a few of these here.

00:13:44:17 – 00:13:52:07
JIM
And if you know the answers, shout them out. Okay, we’re going to start simple. Taylor Swift. When’s your birthday?

00:13:52:09 – 00:13:54:23
JAKE
On December 13.

00:13:54:26 – 00:13:57:04
JIM
Well done, Jake.

00:13:57:07 – 00:13:59:10
JAKE
Two days for my mother in law’s birthday.

00:13:59:11 – 00:14:01:03
JIM
Oh, right. Okay.

00:14:01:06 – 00:14:02:27
KRISTIN
You know, the time of day she was born?

00:14:03:00 – 00:14:06:14
JAKE
I don’t have that information yet.

00:14:06:17 – 00:14:08:22
JIM
On Monday, we will. And what.

00:14:08:22 – 00:14:09:25
JAKE
Year.

00:14:09:27 – 00:14:11:29
JIM
Is Taylor Swift born?

00:14:12:01 – 00:14:13:18
JAKE
1989.

00:14:13:19 – 00:14:26:16
JIM
That’s fantastic. 1989. That was also the name of one of her albums, I believe her fifth studio album. If the Internet is correct. What year was that album released?

00:14:26:18 – 00:14:27:03
JAKE
Ohhh.

00:14:27:03 – 00:14:33:07
JIM
She’s the bestselling album of that year, according to.

00:14:33:09 – 00:14:34:20
JAKE
2015.

00:14:34:23 – 00:14:36:07
JIM
2014.

00:14:36:09 – 00:14:45:20
KRISTIN
Hold for a second here. I thought you preempted him with all these questions. But I mean, just start to believe that he surely does love Taylor Swift.

00:14:45:20 – 00:15:01:08
JIM
In fairness, Kristen and I are more Kesha people. That’s okay. It doesn’t make us bad people, but it is a swift focus episode here at the moment. So what state did Taylor Taylor Swift grow up in?

00:15:01:10 – 00:15:03:21
JAKE
Oh, you know this Kirsten.

00:15:03:23 – 00:15:05:10
KRISTIN
I don’t know anything.

00:15:05:13 – 00:15:07:16
JIM
I mean, is it.

00:15:07:18 – 00:15:08:07
JAKE
Pennsylvania?

00:15:08:07 – 00:15:18:19
JIM
Pennsylvania? That is correct. I’m going to use Taylor on a on a first name basis. I feel like we’re all very comfortable with her now. What kind of farm did Taylor grow up on in Pennsylvania?

00:15:18:21 – 00:15:20:01
JAKE
The Christmas Tree.

00:15:20:03 – 00:15:22:10
Jake
The best Christmas song ever.

00:15:22:13 – 00:15:36:01
JIM
Well done, Jake. You’re on fire now. In 2010, Taylor performed at the Grammy Awards with another female vocalist. Do you know who that vocalist was, Jake?

00:15:36:03 – 00:15:37:26
JAKE
You know, I don’t. I thought it.

00:15:37:26 – 00:15:58:22
JIM
Might be a little tricky. I tried to find a trick. Everyone said Stevie Nicks. She performed with Stevie Nicks at the 2010 Grammys. So, you know, there’s some. There’s some holes in Jake’s armor there. That’s okay. One of Taylor’s initial singles was named after a country music star was the name of the single and music star.

00:15:58:24 – 00:16:01:29
JAKE
Oh, this seems to be the era that Kristin remembers. You got this.

00:16:01:29 – 00:16:04:28
JIM
One. This is. This is high school, Taylor.

00:16:05:01 – 00:16:11:15
KRISTIN
Yeah, I know there’s a song like this, and I remember hearing it, but I am. I need More coffee? I think, because I know I’m.

00:16:11:15 – 00:16:14:17
JIM
Sitting right here. That would be. That’d be Tim McGraw. Tim McGraw.

00:16:14:17 – 00:16:17:05
KRISTIN
There you go. Oh, yeah, I remember that whiny voice.

00:16:17:06 – 00:16:18:10
JIM
Yeah, Well.

00:16:18:12 – 00:16:21:21
KRISTIN
That’s. That’s.

00:16:21:23 – 00:16:28:11
JAKE
Man, we’re about to get canceled by our clients. And Taylor Swift. This just ended the series.

00:16:28:14 – 00:16:33:08
KRISTIN
I mean, I’m probably going to lose all my clients are not knowing what I’m saying. Sorry.

00:16:33:08 – 00:16:35:15
JIM
Successful, whiny voice is done pretty.

00:16:35:17 – 00:16:37:00
JAKE
Well.

00:16:37:02 – 00:16:41:25
JIM
All right. What is. What’s what’s Taylor’s lucky number?

00:16:41:28 – 00:16:42:15
JAKE
13.

00:16:42:15 – 00:17:10:12
JIM
Yeah, I suppose that should be an easy one for four. And then lastly, what is the what is Taylor’s longest song title? What song has the longest title in terms of number of words and not including And this was one of the disclaimers. I saw it not including the parentheses, Taylor’s version that apparently that’s a thing. Also longest title.

00:17:10:19 – 00:17:12:02
KRISTIN
You see there seems to be this.

00:17:12:02 – 00:17:12:27
JIM
phoning a friend.

00:17:12:27 – 00:17:18:00
JAKE
Cassandra found a friend and she’s telling me all too well.

00:17:18:02 – 00:17:19:00
JIM
No, it is.

00:17:19:00 – 00:17:20:16
JAKE
I don’t think that is, is it?

00:17:20:17 – 00:17:29:27
JIM
We are never, ever getting back togeather, which might be us and our whole client base after this episode.

00:17:29:29 – 00:17:36:03
KRISTIN
And I, that voice is going to be in my head for the rest of the day. So many of them.

00:17:36:06 – 00:17:57:05
JIM
Well, this has been very fun and also insightful to the markets. So hopefully all of our viewers and listeners got a lot out of this episode. So team, excellent work today. A big thanks to Kristen for returning to the show. It is always great to have you and your insights on the other side of the Big River. So thank you for being here.

00:17:57:11 – 00:18:14:23
JIM
We’d also like to thank Korri and the ever Insights crew for their support. Thank you to Paige for her production Magic and thank you to the viewers for watching the grain feed. Just a further reminder, Jake Kingsley is out of the office tomorrow, leaving us for that long weekend of Swifty stardom. Makes one think about karma and the chance that Jake.

00:18:14:23 – 00:18:47:11
JIM
Maybe we are never, ever getting back together. So, Jake, just remember, Band-Aids don’t fix bullet holes. You say sorry just for show. If you live like that, you live with ghosts. That’s all for today. We will see you next time on the green Feed at ever.ag we partner with every corner of the agriculture industry, from dairy to livestock, crops and agribusiness to deliver intelligent supply chain and risk management solutions.

00:18:47:13 – 00:18:57:12
JIM
We are ever.ag every thing agriculture. Learn more at WWW.ever.ag/everything.