American Ag Today- 11/8/24

Welcome into a new episode of American Ag Today produced by the American Ag Radio Network. I'm your host Jesse Allen. Thanks for joining us. Well, earlier this week, I sat down with Tanner M. Key with co-bank to discuss the overall picture in the grain and oil seed markets during the Moving Iron Summit in Nashville, Tennessee. We talked about the overall demand picture, some about the elections and more as we talked on Election Day. Here is that conversation with Tanner M. Key.

from Cobank.

We really brought this crop in very fast. The other thing I'm hearing from our customers is how dry the crop is. It's obviously been quite dry across the Midwest. And so the positive here is if we've got these growing grain piles out of the countryside, it's dry. And so the amount of shrink on those piles is going to be smaller. So I think that's the silver lining here of having such a big crop and a

It's such a dry harvest is that storing the crop is going to be pretty easy. They're a lot easier. You're not going to have as much shrink. You're not going to have as much rot, much rot. It's going to be easier to keep it on the farm. It's going to make marketing a little bit easier for the farmer. The problem, though, is that with a very dry crop, you do lose a little bit of yield. That is the downside. And they're a little bit of give-and-take there to join us.

Well, I'm thinking about storing it on farm potentially, especially let's talk corn first. You know, thinking about and I've been watching basis spreads, we've had good demand. You know, how much of this product is going to have to move to town? Because I know that there are some end users out there who are looking for corn specifically right now.

Absolutely. I think that's the big positive story here is the demand side for corn and soybeans. And wheat is very strong. And college is a function of the marketplace. The market is going to scare up demand with low prices. That's just kind of how it works. And that's absolutely happening right now. We've got strong ethanol demand, historically strong ethanol demand.

strong feed demand out of the Western Plains. You can see that base has been really coming up for corn out in the West, like Western Kansas, for instance, very strong. And that's helping pull up the basis for the rest of the country. The ethanol bins out there are very strong as well. And now you got this very strong

exporter bid so you got the trifecta here so yeah yes we're swimming on court the demand is showing up and I think that's the positive here and we're seeing that on the country that's one thing the farmer can hang their hat on is that we're going to anticipate strength in the basis going forward now flat price different matter that's really going to have if we're going to see strengthening in flat price going forward it's going to have to be led by the cash market

We're seeing that happen right now. So hopefully potentially see that continue into the new year. Now there's a lot of uncertainty there about the election today. There's that argument that a lot of this demand, especially from the export side, has been front loaded because of fears of trade wars. And that would potentially happen more so under Trump than on Harris administration. And so that concern is that

The strong export bid we're seeing today is going to go way later on because of all this front loaded demand. But I still look at the market and say, Jesse, the market's doing its job. It's attracting demand, peeking through low prices. And so I think the demand is going to be sustained.

because of those low prices. And we're seeing that in the basis right now. And I think this momentum will carry forward. Now, we're not going back to the days of $6 or $7 corn. Don't misunderstand me. I don't want to get anybody's hopes up that much. But I think the market is doing its job through stronger basis bids. That's going to create that environment for a stronger flat price going forward.

I'm hearing a lot of folks that are maybe more friendly, the corn market versus soybeans right now, especially you think about South American producers. I mean, Brazil, they've caught up substantially with soybean planting, a lot of talking a big crop there. So I feel like you get corn that's pushing for 20 and lead mutt futures, whereas soybeans can't really break the 10 handle with lead mutt futures right now.

I guess, what's your perspective? Are you more friendly, corn versus beans right now? What do you think, Tanner? I'd say that the story is going to be stronger. Corn going into next year, because we've got that sustained biofuel advantage here with ethanol. Most margins are very strong. But I still am positive on soybeans as well. We're going to have to get through the South American growing season first. And there will be some weather scares.

in South America, with Brazil and Argentina. And that's going to create marketing opportunities. But we still got to look at those numbers down in South America. Right now, well, we got some big crops coming, assuming normal weather. And we got 169 million time soybean crop in Brazil. That's going to be hitting the market sometime probably February. The only other thing I'd add to this, Jesse, is that because of the delayed planting progress,

what that is going to translate into I think is going to be a delayed harvest season and what that means and is we're going to have an elongated marketing window for soybeans and corn both okay so you know the Brazilians have been expanding acreage they've been increasing their market share they've been increasing their exporting season because of this delayed planting progress I think we're going to push their

opening window further out, instead of late January, we're going to be starting to see that more pushed into mid-February, perhaps. So that gains us a few more weeks of export window for Swiss. We're talking with Tanner Mke from Cold Bank, and you made a great point there that I think needs to be reiterated for producers is

being nimble at these price levels and taking advantage of marketing opportunities. I think that's so crucial right now. A hundred percent, yes. And I think as it is here in the United States, when we have a weather scare in the spring, there's your best marketing opportunities. Same thing in Brazil, in Argentina. You've got to watch that weather down in Brazil. For those weather scares, and that's when you've got to capitalize on it.

If you had a final thought, we've got about a minute here. What do you want to really remind producers as they're looking at their grain marketing right now? I think he said it earlier, you've got to be nimble, and you've got to be forward thinking. It's going to be hard to sell without a plan, being reactionary these times. It's never going to be good on your stress level, and so you market for the margin, not for the price.

And so it goes back to running a business really. I'm like, I'm telling people how to run their business. But you got to know your cost, you know, which margin is. Know what an opportunity looks like when the market presents itself. And everybody's situation is different in some way, shape or form. So you got to know your margins and do what is best for your operation. As always, fun conversation. Appreciate the insights. Tanner M.C. with Cobank. We'll look forward to seeing you again. I'm sure down the road real soon. Thanks for joining us today. Thanks for having me, Jesse.

Once again, talking markets with Tanner M key from co bank at the moving iron summit at Nashville, Tennessee on election day Tuesday. That is going to do it for this episode of American ag today produced by the American ag radio network. Thank you for joining us. I'm Jesse Allen. Have a great rest of your day.