Episode Transcript
[00:00:22] Speaker A: Alright, folks, welcome to the what the Futures podcast, recorded in the UPL studio. I hope you're having a great day. Of course, this is the podcast with your weekly dose of clarity in the complex world of agriculture or crop marketing or farm business. All of the above is what I would say. My name is Ryan Denis. I am your host, been your host now for 22 wonderful episodes, along with a few add ins from time to time.
But I've had a lot of fun putting the podcast together. Of course, I've spent my career working in agriculture, working on the grain side of the business. I am a farm kid from Dormy, Saskatchewan, but I was a grain buyer. I was a farm consultant. I was a, an analyst at times. I led a group of, of advisors in Canada and the US. And here I am now behind the microphone at the what the Futures podcast. So again, welcome to the show, and we have a great show for you here this week. I've got Ryan Coppathorne with cows in control.
Ryan has been on the show a few times now. We're going to talk cattle markets. He's going to talk about this recent pullback in futures and what he expects in, in the near term here. Of course, we'll have to talk about bird flu or avian flu, even though we don't want to. But Ryan does wrap it up nicely with some general market direction and spoiler alert, just a little bit of optimism there as well. So that's always a good sign for our cattle markets. Of course, we'll get to our regular segments. We've got that popular mailbag set segment. We did get a new question this week, of course, that's brought to you by pioneer seeds. I'm going to wrap up the episode with a healthy serving of veggies because it's the right thing to do.
And I'll say for that, that segment, I'm going to talk summer fill urea. So fertilizer briefly. So just hang in there. If you're typically a summer fill type producer, you like to take your urea right after you put it in the ground. You like to fill the bins up, right, right after. Uh, pay attention, uh, to that, that last one. Uh, it could pay dividends here, I guess we'll, we'll find out in a year or so, but it could pay dividends.
Uh, all right. I it's a lot of stuff going on this show. I've got, um, um, some things at the end, some housekeeping. We've got a hockey pool for playoffs, and I've got that playlist going as well. So again, folks, if you hang in here, we'll try to keep the episode nice and tight for you. But there's a lot and some fun stuff in this one.
All right, I'm going to interrupt our episode here for a moment from our sponsor, John Deere. There's a whole new John Deere lineup that's out right now. New tractors, new combines, there's a new air car, all with built in intelligence that keeps getting smarter. Check them out at John Deere dot ca.
All right, folks, let's get after it here. Positive moments of the week.
Well, I spent the Tuesday of this week, I spent it with Hans and Sarah at blind man brewing in Lacombe, Alberta. All right, I got to do a behind the scenes tour. I got to be a part of the brewing process. So we're doing a small batch.
It's a Kolsch style beer. Okay. And I got to pick the, what type of beer I wanted to have created. And so small batch we're gonna produce. They tell me a couple of kegs out of this and I got to go. Like, I showed up there, you know, Tuesday morning, got into the, the experience right away. Got to go and see everything, of course, is a working operation. So got to, you know, try to stay out of the way as best I could, but got to do a whole bunch of stuff and even be a part of the brewing process for this beer. That's going to be. It's going to take about three weeks. It's going to sit in the the system for three weeks. I know they educated me on everything, but it's going to stay in that tank for three weeks, and it's going to come out as a couple of kegs. Okay. One keg is going to a place called beer revolution. That's in downtown Edmonton. And every pint that they sell the money from that is going to go to the Boyle street community services program. So Boyle street, those folks, since 1971, have been helping the homeless and helping with folks suffering from poverty in Edmonton.
So that keg's going to be a revolution.
And then I have another keg, and I'm not sure what to do with the keg. So I know at the end of each episode, or most of them, I've been asking here lately a question at the end. So my question is, what should we do with this last keg? Let's say there's a second one. What should we do with it? And I need to come up with a name as well. So what you can do is you can email me and you can say, hey, Ryan, here's a clever name for you that you can use.
Or you could say what your opinion is. Maybe I just call it with the futures.
And also give me an idea on what to do with this last cake. Like, I was thinking, is there an event that we could be at where we could serve this thing? Is someone gonna host us in a shop sometime this summer? And I'll bring along the keg in the shop?
I don't know. I'm open to ideas, so let me know what you're thinking. Send me an email, Ryan, at whatthefuturespodcast dot catch. And you can see behind me, I've got a little, a little price pack here, put together a little dream machine. That's a great mexican logger from blindman and a really funky hat there as well.
So send those in. I'll pick a winner here in a week, and I'm going to send you some bevies and, and a cool new lid for you. You guys can't see my, my hat collection behind me. I guess you can kind of see them now. They're all stacked there. My wife, I told my wife a couple months ago that I didn't have, like, any hats. And now after starting the podcast, uh, and just working with partners and meeting a bunch of farmers, I'm stacked. I've got, like, 40 hats back there, so I like to switch it up. Even got a new one this week from, from blind man as well. So, uh, switching it up there.
Um, I'm also, I'm not drinking a beer today on the show. I'm drinking something called hop water. And, Hans, if you ever listen to this episode, man, you really got to sponsor the pod after this. But it's called wander. It's hop water. It. So my guilty pleasure and my team, my team of advisors used to laugh at me all the time because, like, I'm a, I'm a big dude, I'm a farm dude. And, like, I'm a beer drinking dude, right? But my guilty pleasure is sparkling water. And I'm not even talking about Perrier and pellegrino. Like, I go to the italian center in shore park and I buy the stuff I can't pronounce. Like, I'm a big sparkling water guy. Anyways, I was at the brewery, and they have this sparkling hop water called wander. If you're watching the video, you can see the can.
It's, uh, it's hydrating me. During this, uh, um, allergy season. I'm experiencing, but it's got no alcohol, no calories, zero sugar, zero carbs. Man, it is so good if you're like a sparkling water person like me, but you also like hoppy beer.
This is. This is the one for you. Um, yeah, so, anyways, that's enough of that, Hans. Yeah. I tell you, man, you're gonna have to be sponsoring this thing. Uh, all right, so that's my positive moment. I had a great time at Blindman brewery this week. Uh, my second one is my parents sent me a little gift in the mail. My parents, uh, big listeners to the pod. And, uh, I've always supported me through all my endeavors and all the. The, uh, nonsense and trouble I get into at times, even as an older person now. But they sent me this little John Deere 7720 combine for the studio. I'm going to park it up there, um, maybe by the lunch kit, or maybe it'll make it to the top shelf as well. But this combine, the 7720, is the first combine that I ever, uh, you know, operated. And so all the machinery on the wall behind me, the toys, we've got the 40, 20 up there, we've got the 44. 44,020 is the. The first farm tractor I ever drove with the loader. 4440 is probably the tractor I spent the most amount of time in as well. And now we got the 7720 for the studio. So thanks, mom and dad, for that.
And also my last one, I put it away. Anyways, uh, back in. In the. The pandemic days, everyone started to come up with these new hobbies. And I know my wife, one of her hobbies was creating this fantastic new bread. Um, I don't know. I don't even know what she called it. She doesn't do it as much anymore. Um, but everyone had these hobbies, right? And so during the pandemic, I went and bought, like, one box of hockey cards. And I'm like, oh, I collected hockey cards in 1990. Like, I'm. Maybe that'll be my hobby. Well, I bought a thing of cards. I'm like, jesus is expensive. I went through them all. I'm like, yeah, I'm not really getting in, getting into this. Like, I'm. I don't know. I sent them all to my nephews. You know, they're, you know, turning, like, three, and. And the older ones, five. And so I sent them over to them, said, have fun. I don't know if you guys will like these. Anyways, a couple months ago, I was back in the hobby store, and I'm like, oh, you know, yeah, maybe I'll buy another box. And they said, well, if you buy a box, you get a second box. Uh, when the, the second tier comes out or that second level and Connor Berdard's in that one, I'm like, oh, okay, all right, I'll buy a box. And, yeah, I'll speak for one. Uh, because they're going to be, you know, tight load, low, low supply. Anyways, I know the story's dragging on, but I go pick up this box of cards, and he says, hey, if you pull Conor Berdard, let me know. That thing's worth a bunch of money.
Well, lo and behold, folks, I somehow pulled a Connor Bedard rookie card.
I've sat there stunned, of course. Number one, I'm sitting there opening up these packs of hockey cards like I'm eight years old, right? But anyways, open up these cards, pull Connor Berdard, and I'm like, do I touch it? Like, what do I do with this thing? So I called him up. He's a grind. You come get a case for it. And I said, okay, well, is this thing actually worth anything? He's like, you know what, Ryan? On marketplace, they're selling between $600 and $2,500. So it's like, yeah, they're kind of worth a little bit of something. So anyways, I pulled this Conor bedard card, and that's my third positive moment of the week. So maybe I do need to get into this hockey card hobby thing. We'll see.
All right, folks, enough of that positive moment nonsense for this week, but let's talk about the hot topic of the week. And I've got two. So let's start with the fun one, because it'll spill into the second one a little bit. One's fun, and one's not as fun.
Uh, the first one, though, is the. The demand for canadian, uh, wheat has been so strong all year, right? You guys have heard this time and time again. Uh, but we're starting to see some values here that. That are perking our. Perking my ears a little bit. Anyways, we saw some hard red trade at $9 a bushel, so that would be for, like, a 113 five into Saskatoon, Saskatchewan, $9. We haven't seen that for a little bit now, but we're back at nine, which means Alberta is back in that 950 range. Okay?
And so that demand is awesome to see.
How long will that be sustained? How long will these premiums be sustained? I'm not sure, but in you're eating the veggie section. I'm going to have a call to action here, but it's, it's a hot thing that's out there. The hardware wheat market. The demand for it is very good. Futures suck. Basis is doing all the heavy lifting. But I also want you to take a look around because certain companies are paying premiums over others, which is normal. But there's pretty good demand from like g three s out there, for example, pretty consistent. And they're hitting targets well above posted bids.
So it takes a little bit of homework, a little bit of checking to see what exactly that number is going to be. But in this environment, you kind of set your target higher, leave it, sit there for a couple days, a week maybe, and then you could scale it back a little bit if you want to because you're trying to pick, you know, where's that level that merchants gonna, gonna hit and pay up for this wheat? They want to start a little bit higher, then work your way back if possible. But it's a good news story and I do think you need to take action on it though, and, and take advantage. Okay. Now my second hot topic of the week is when you look at the drought canadian joke map. And I've got it on my phone here, but the canadian joke map was updated here at the end of March. And it, uh, it's a little unnerving. You know, when you look at it, it's a little bit, uh, it's, you know, a little threatening. You start looking at all the colors they have on here. But you, what you quickly realize is that the prairies, you know, every crop producing area of the prairies, I would say. I know there's one really tiny area that's, okay, that doesn't show up here in any red or yellow color or brown color. But, you know, the entire prairies had a dry winter and are experiencing, you know, drought like conditions.
But it's the whole area. You go up to the peace, it's quite severe up in the piece, even up into that fort St. John in BC. Like it's, it's quite severe there. People looking for rain.
We've had moisture events in southern Alberta here lately. So maybe the drought map improves for them the next time it gets printed or comes out. But, you know, it doesn't matter if you're in Edmonton, Calgary, Saskatoon, Regina, you go into Manitoba as well, north of Winnipeg, you know, there they have a big yellow mark and you say, well, what's the yellow mean? Abnormally dry. You know, abnormally dry so we'll keep an eye on that. The, the hot topic here is for April. You know, if we, you know, they say plant in the dust and the bins will bust. Well, we're, we're planting in the dust, but we've also just gone through 2021, not long ago, the drought of 21. We've also gone through last year's growing season, which was, you know, many areas, many people experienced drought last year as well. And so you sit here and say, geez, this has to turn around here to, to get this crop growing. And, and what I'll say is it's a hot topic because it just shows, in my opinion, how important the rains are going to be this spring, in this summer. All right. We know that soil moisture is, is deficient in some areas and, and we know that we need rain, but we'll be looking at, you know, what happened over the last three days, seven days. What's the forecast look like? Like we'll be paying close attention because we, we need these rains, these consistent rains to come. And, and obviously, as the crop gets bigger, the more important those rains are. So do we have enough to germinate the crop in many areas, yes. Has moisture improved even since this was printed back at the end of March? Yes. For some, moisture has improved. Peace region did receive, some parts of the peace region receive moisture. Some parts of southern Alberta receive moisture. So is it improving in areas? Yes, but we need more of that. We need more improvement. We need lots of rain out there throughout the prairie. So let's keep a close eye on that, uh, as we move forward.
All right, folks, let's go over to our guest here, Ryan Copperthorn. With cows in control.
I'll let Ryan take it away.
All right, folks, welcome back. Ryan Copithorne to the what, the Futures podcast. Ryan, how's, how's the start of your April going? How are things going?
[00:17:04] Speaker B: Well, it's going pretty good. We're just starting to get into calving here at home and we've had a few snowfalls, so our sloughs and dugouts are starting to fill up, which is nice. Yeah, we're hoping, hoping we got enough soil moisture to get a start here, too, but we'll, there's lots of time for that, I hope.
[00:17:21] Speaker A: Yeah, you bet it. Yeah. Early April here. Nice to see the precipitation for sure. But, um, you guys gotta keep it coming here. That's, that's for sure. Um, have you guys always started calving in, in April? Has that been part of the, your strategy for, like many, many years or were you guys calving different times in history or what's the strategy there?
[00:17:43] Speaker B: We've pretty much calved in April for a long time. Like April maybe, uh, we try and get past the winter storms because we're where we are here. We're not touching these cattle like, they got to do it on their own. So we're just out making sure there's no problems or whatever. But at the end of the day, these cattle are doing it on their own, so we try and do it after the storm seasons.
[00:18:05] Speaker A: Very. That sounds pretty smart to me. You bet. And how many do you expect? How many are you calving up, uh.
[00:18:11] Speaker B: Though, at home here? We'll have six or 700 head calves here on the go.
[00:18:15] Speaker A: Wow. All right.
I can see why you want them out there doing it on their own. That's. It's busy.
[00:18:23] Speaker B: Yeah, yeah, I don't do much of that anymore. I'm more of a consultant than a rancher now, but our family is still operating that, so.
[00:18:30] Speaker A: Oh, I'm sure you can go get some mud on the boots whenever you need, right? So. Yeah. Yeah, for sure. Awesome.
Well, kind of on that note here off the hop, I know we got some big topics to cover off today, and there's been a poll back in this market, but I've been involved in consulting for farmers on the, on the grain side, you know, for the last, you know, over a decade, and I've never had a farm come to me and say, we would like to get, you know, into cattle or we'd like to expand our herd numbers.
I've never, I've never seen that, or I've never had anyone ask that or been a part of that conversation until now. And so the last couple of weeks, I've had a few different scenarios, but one was a farm thinking about diversifying and getting into cattle. The other one, they were thinking of adding to their numbers. And the third scenario was that I was chatting with a mixed farm that was thinking of reducing their workload and getting out of cattle at this time. But, uh, it sounds like they're going to stick it out a few more years yet with the way these markets are going. So I going back to the original point, though, is, uh, are we, what do you think of that? Farmers, grain farmers getting back into cattle? Is that a real thing?
[00:19:56] Speaker B: Yeah, it's something I've been sort of anticipating or thinking could happen. And it's interesting to hear you say that because, um, first of all, well, obviously the grain prices are low and cattle prices are high. So there's a, there's a natural market switch there. But the whole regenerative agriculture movement that's going on now, and when you look at that carbon intensity score movement that they're doing in the US now, that requires cover crops and swapping out fertilizer for manure and things like that, these are natural inclinations to want to look at. Like if you're doing regenerative agriculture, you pretty much need cattle if you're growing cover crops or trying to use other sources of fertilizer. So it sounds kind of like a natural next step progression for that to be. And I've been trying to figure out where the next buyer of these cattle is going to be because our ranching numbers, our producer numbers are shrinking. Like, we've cut our numbers down in half in 20 years. And so we're getting really tight in terms of cattle producers. And I've been wondering that very thing, if farmers are going to be the ones that end up being the marginal buyers of these cattle going into this cattle market. And so it seemed very logical that that would be the case.
[00:21:19] Speaker A: It's not a small undertaking, obviously. Like, if you're going to get into this again, it's going to take some planning and take some work to get set up. Like, I think, you know, our farm, you know, I grew up just south of Prince Albert, Saskatchewan, and, you know, we had cows, we had a hog barn, we had horses, chickens. You know, we kind of had had a little bit of everything growing up on the farm, but we haven't had cattle since.
It's been a very long time. It's got to be 20 years, maybe more. And if we wanted to get back into it, like, there's a lot of upkeep, a lot of not upkeep anymore. It's infrastructure that needs to be updated or improved or changed. So it's not easy.
[00:22:14] Speaker B: No. And the business is more complex, probably, than what you remember. And, you know, it's, in a lot of ways, it's still the same old cattle business, but there is a lot more complexity and the red tape and regulation and those type of things always increase year to year. So it's never as easy as you think to get back in. But it is a good cattle and farming are, there's great synergies, like the cattle are very beneficial to grain farms in terms of being able to clean up byproducts and being able to, if you have failed crops, cattle are always a backup and those type of things. So there's a lot of advantages to it, but 100%.
[00:22:57] Speaker A: And I know the one farmer I was chatting with, you know, they have three or 400 head, and, you know, as they were talking about their crop mix for 2024 and what to plant, the cattle came into the conversation and, and they decided to do, you know, a few more cereals. But the crop had, depending on how it was going to turn out, had multiple homes that it could go to to generate value and income. So, yeah, that's been just something that I haven't experienced before, and I thought that was kind of neat and cool, so.
[00:23:30] Speaker B: Well, it actually sets up very nicely for younger producers to be able to work younger cattle producers to be able to work with farmers. Like, if farmers aren't comfortable with running cattle in today's world, you know, I think it would give it some opportunities for young cattle people to get started that maybe can't afford the land, but, but we'll be able to access farmland for running cattle, so I think it could be a good thing.
[00:23:56] Speaker A: Yeah, yeah, for sure. That's, that's something we'll have to keep in mind and maybe circle back on in the future as well. So. Good point.
[00:24:04] Speaker B: Yeah.
[00:24:05] Speaker A: Um, so, obviously, there's, you know, long term excitement in cattle, but let's talk about what's been happening over the last couple weeks here. What's going on with cattle prices?
[00:24:15] Speaker B: Well, like always seems to happen in these markets. We've had a pretty good run since December.
Cattle market had a big dip last fall, and then ever since December, it's just been running straight up until about March. And then just very conveniently, when you get to these good prices again, all of a sudden we get news of avian flu entering the dairy herd. And that's caused us a bit of concern in the cattle business, caused a bit of a sell off in the futures we've had. I guess there's avian flu and dairy herds in six states in the US right now, and I think there's only 16 cases overall. But what really got the headlines is when one of the workers at one of these dairy farms contracted the avian flu from the cow, and the cow contracted it from these migrating birds. You know, this time of year, all these birds are migrating north and they're carrying avian flu. They land in the barns or land in the feed lots, and now it's started to sort of transmit to the dairy cattle. And as far as the dairy cattle, all it does is it sets them off feed for a day or two, and then they're right back to normal.
So it's not a big, serious disease as far as the cattle are concerned, but it's got people worried, you know, well, we're.
[00:25:37] Speaker A: We're hypersensitive out there in relation to all this now. So, um, and I was gonna, I was gonna ask you, like, what, what's the implication here? Like, what is the challenge if, you know, with. And you already answered it with, what happens if your dairy cow gets this? So is this a little bit, um, in your opinion, do you think it's a little bit overdone, then, overblown to some degree, or do you think that we're gonna get more tense about this topic in the next days and weeks?
[00:26:05] Speaker B: Well, I don't like it. Like, I don't like the fact that the news just keeps bleeding new information every single day. And, you know, it. It sounds to me like people are kind of piling on the story a little bit, which concerns me because they can, they can take it way too far.
What's happening now is there's 17 states in the US that are looking at restricting the flow of. Of dairy cattle into their states, like, basically stopping interstate travel of these dairy cattle. And so when you start doing that, then it becomes a little sticky in terms of, you know, it comes awkward for moving cattle around. And then you have to look, as a canadian, you ask, well, if we get it in Canada, will they want to restrict cross border flow? And so that's where it becomes a little scary from our side of the fence. So far, our prices here in Canada haven't moved.
We're still sitting at the highs here. We haven't moved. Whereas the only thing that's really come down is the futures prices. And so eventually, these cash prices will follow the futures market lower, but they haven't so far.
[00:27:16] Speaker A: So the restriction of movement.
And I don't want to bring up, you know, past nightmares, but we'd go back to a situation like BSE would be the last time that we saw that. Like, yeah, yeah.
[00:27:34] Speaker B: And I don't think it'll get there. I really don't. But it's, you never know, like, the way these. The way people can overreact sometimes. You always have to be cautious. So, you know, this is why we do risk management, even in bull markets. I mean, I really believe that we're still in a very strong bull market. But bull markets don't go up straight. They go up in zigzags, you know, and I think we're in a zag right now.
[00:27:58] Speaker A: Yeah. And they definitely don't go up in a straight line, that's for sure. And. And then, you know, there's usually opportunity here involved with this, like, opportunity to make a decision or opportunity all around the zag or the zig, depending on what's coming at you, so.
All right. Okay. So anything else in regards to this avian bird flu situation, I agree with you. They're gonna overdo it. The media has a tendency of doing that, overdoing this darn thing. But anything else that we need to know about?
[00:28:33] Speaker B: Well, I think in regards to that, like, the pullback that we're in with the futures, it's. It's corrected now, like, 50% to 60% of the gains that it's made since December. So it's at a level right now where it's done a significant pullback. So there's a chance that if it finds ground here, then we're away to the races. That was the correction. But I can tell by the news flow and the way the futures are acting, I don't think it's over yet. It just. It's got a very soggy feel to it. So I'm expecting that these futures markets could possibly go to the December lows and, which is, you know, another couple, $0.20 below us, and it's $0.20 below us, basically. And so there's a possibility of that happening if this thing stays weak. But, you know, that would be a pretty extreme case, I would think.
[00:29:29] Speaker A: With. With it being spring. Now, from a futures perspective, do cattle futures, do they tend to relax during this time and pull back anyway, or are they usually higher during the spring and summer? Like, what's that kind of look like?
[00:29:44] Speaker B: Yeah, that's a good question, because with the feeder cattle, I've been waiting for weakness. That usually happens about now, March, April is usually kind of a low point for feeder cattle, and we never really saw that. Like, we had that big rebound since December, and we never saw a pullback. So this is actually a very seasonal time for it to play games like this. But usually from May to September, that thing starts to rip again. And so I'm having, you know, my expectation on seasonality is that we're probably going to have this bird flu as an excuse for a pullback here in March, April, and by May, we'll be off to the races again, and by September, we'll be at much higher prices.
[00:30:25] Speaker A: Yeah. All right, so what you're telling me is build my infrastructure real quick here and get ready for the next round. I got a couple weeks all right, sounds good.
All right. What about other market stories that you're watching or other things to take note of here on the cattle market?
[00:30:46] Speaker B: Well, one of the more bullish things to look at is these cull cow prices.
Cull cows are generally like our cows. When they're processed through the meat system, they end up being lean beef. They're 90% lean beef, generally. And so that lean beef goes into sort of the lower cuts, it goes into hamburgers, but it's also used to blend with the steers and heifers that are fed to much higher levels, where they got a higher percentage of fat. And so there's been a shortage of cows, which has driven the price of cows, cows to a very high level. And it's also driven the price of lean beef to a very high level. And I look at lean beef prices as kind of like the barometer for what the overall meat prices are doing. And the fact that they're so high is a very bullish thing to me. And it just shows you that we're really running short of cows. Like, in the US, we're down to 1950s levels. Here in Canada, we're down to 1980s levels. Like, we're at very low numbers. We have high productivity. We're producing lots of beef from those low numbers. But at the end of the day, those high cull cow prices are demonstrating that the shortage of cows is starting to appear.
[00:32:06] Speaker A: And the demand side of this equation, the consumer, any thoughts around their trends right now, or obviously with warmer weather? I know my barbecue has been fired up a lot here lately, and we had, you know, burgers a few times, but the consumer continues to buy, for.
[00:32:26] Speaker B: The most part, like, yeah, yeah, it's amazing. They. They do continue to buy. I just got back from the States. I was down in Palm Springs, and just to see the wealth down there, you know, to see people, what it costs to eat in a restaurant, and people are. The restaurants are all full. Yeah.
But when you look at the beef prices in general, like, the retail beef prices are still making all time highs, so they're still climbing. Maybe the volumes might be dropping off a bit, but the prices are still climbing. And what we're actually seeing, though, is some substitution. We're starting to see what they call the choice select spread. And choice is basically your high quality, highest quality beef in the US. And select is kind of like the regular quality. And we're seeing select prices actually be more than the choice prices, which means that retailers and food marketers are actually looking for the lower quality cuts, they're actually paying up for lower quality cuts, which is also why those kolkow prices are high, too. So we're seeing a bit of substitution now to lower end cuts rather than the stakes and the high end stuff. But at the end of the day, demand is really strong.
[00:33:37] Speaker A: Yeah, you bet. Awesome for the cattle guys, for sure.
[00:33:42] Speaker B: Yeah.
[00:33:44] Speaker A: So I was looking at the.
And it's one of my big stories of the week here, but I was looking at the latest drought monitor for the prairies. I know you talked about the sloughs being full and some moisture events lately in your backyard, but any thoughts around the drought map and the weather and its impact to cattle or cattle prices?
[00:34:07] Speaker B: I don't think we're out of this thing yet. I think, you know, it's these snowfalls that we've been getting out west here have been nice, but they're not, they don't seem to be universal across the province. I, I still talk to people that haven't had any moisture and, and I don't know, it's, you know, we, we could sure use a lot of moisture yet. Like, we've just kind of filled some of the sloughs and stuff, but I don't know if our soil moisture's back to where it should be yet. So, yeah, I think there's a ways to go. We, I. But it does feel different. Like, it, to me, it feels a little bit better than it has in terms of spring moisture. So let's. Let's hope for some spring rain here.
[00:34:44] Speaker A: Yeah, for sure. You bet.
All right. Anything else before we, before we let you go this week? Anything else you want to add?
[00:34:51] Speaker B: No, I don't think so. I think we kind of covered, covered most of it. I think we're still in a, in a big bull market. These bread prices are very strong.
You know, maybe they. I don't know if they're too strong, but they're very high compared to where they have been. And we're seeing, like, bred cattle at $4,000 now, which is, you know, seemed unheard of a few years ago. So, you know, there's a lot of bullishness in that sense, and I hope it maintains. And so I'm hoping this is just a pullback that we've just seen the most of and that we're ready to take off to the races again.
[00:35:28] Speaker A: Yeah, you bet. Okay. Well, I appreciate your time.
Thanks for joining. Good luck with calving here this spring. Have a.
I don't know how to, how to say it, but not a safe calving, but a productive one, I guess, right? Yeah. Yeah.
[00:35:44] Speaker B: Every. Those little critters is worth lots of money now, so we got to make.
[00:35:47] Speaker A: Sure they survive, keep them alive. You bet.
[00:35:50] Speaker B: Yeah.
[00:35:50] Speaker A: Awesome. Thanks, Ryan.
[00:35:52] Speaker B: Okay.
[00:35:52] Speaker A: You bet.
[00:35:53] Speaker B: Thanks.
[00:35:54] Speaker A: Always great to have Ryan on the show covering the cattle market for us. Lots going on in cattle these days, obviously. And still lots of excitement out there, too, which is good.
All right, moving along here now to the mailbag segment, which is sponsored by pioneer seeds. We are giving away one more bag of p 516 l this month. So you're gonna get that.
We'll draw for that later in April. The kind of last episode is per normal of the month. And we'll get that to you in short order, because obviously, it won't be long until you're planting canola. So we're gonna do it one more time. And then Maggie over at Pioneer said, you know what, Ryan? Leave it with me. We're gonna switch it up for the month of May and come up with something fun and.
Yeah, so we'll leave it with Maggie to figure it out for May forward. But again, folks, all you have to do is email Ryan at what the Futurespodcast Dot C. He asked me a question.
You've seen the examples before. We've had all sorts of questions come in. Farm business related is best. Crop marketing related is great. I'll get my friends involved if needed. But for this week, we have a question from Alden. Only the one came in, but it's a great question. And he says, why is there so much spread on the basis from old crop to new crop?
Hard red is a dollar less for new crop. And canola, about $0.50 less.
Fifty cents per, more per bushel. Oh, more. So that worst basis. Yeah. So $0.50 on the canola. Is this common, or is this quite, quite a bit of a spread?
All right, so basis is a bit of a representation of what's happening locally in your market. Obviously, futures are traded globally. Basis is part of what's happening in your backyard. It also has a global aspect as well. You're seeing it right now on wheat, the demand for wheat and those historic great basis levels across the prairie provinces here now. But, uh, let's talk about wheat to start with. So, back in the day, um, back in my. My earlier days, in my earlier career, um, I was told by merchants that when it came to demand for wheat, no country or buyer was really sticking their hand up a year in advance. Like, hey, I want to buy a whole bunch of wheat for next year. It was kind of just a few months before hand where they'd say, yeah, we're ready to buy now or we want so many tons.
And so, you know, what we see today in wheat basis old crop is, is phenomenal. And we know what that demand looks like. We, you know, we're actively as a country as these line companies, they're, they're selling this, you know, each and every day right now and so on and so forth. So you've got strong demand. You've got strong, you know, buyers out there and historic great basis level for new crop. Basis levels are, they're okay with that low canadian dollar, they're fine, but there's not a whole bunch of demand out there yet. And so you kind of sit there and, and we also don't know what the crop looks like. We know that farmers across the prairies, you know, mace may see that few less spring weed acres. We don't know how many bushels there'll be. Nobody's panicking though, and saying, oh, we're in a shortage. We got a, you know, buy what we can gain market share or keep our spot in market share. They're not really willing to improve basis levels at this time. They're also not seeing the demand come across yet. So the basis levels for new crop, I don't want to say that they're fake.
They're not fake. But, you know, could you see basis levels improve into fall, you know, 100%? Could they get worse? 100%? Both scenarios can and will happen, but they throw a number out there that, you know, in my opinion, for new crop just kind of goes back to historics or goes back to a number that they'd feel comfortable trading.
And, you know, when I look at marketing wheat at this time of year and in the scenario we're seeing, I don't know if demand continues into the fall, but I'm willing to take a bit of a shot at it to see and locking in my futures and leaving my basis open.
And the other thing too is I go back to that drought map from earlier and are there going to be some scares across the prairies? Is there going to be an issue with production and some areas, how big of an area, you know, I leave my basis open for some of that and see what happens there. I'd lean towards today a slight improvement in basis due to lower canadian dollar due to the strong demand that we're seeing a few less acres. Weather is a question mark trending on the drier side overall. So you leave that basis open, and you may be locking your futures when you're doing that. So again, always seek the advice of a professional. The canola ones, really, really interesting. Okay. Because I was just looking at a few scenarios, and, um, what you would expect is to see, like, a great basis here in May.
You know, the, everyone's planting a crop, no one wants to deliver canola. So you'd see a great basis in May and your best price. And then maybe June, July, August, your prices drop a little bit, and then for fall, your prices drop even even more. But futures have carry, so futures are higher the further you go into November.
And so, you know that. We haven't seen that the last couple of years. That's a sign. It's one sign of a bearish market as well, is seeing that carry. They're paying you to store that canola later on.
But we're, we. I noticed, you know, even at why bungie, they're the best price for canola between now and the end of the year was in November.
You know, that's a bit strange to see that. I looked over at g three and Saskatoon, and their price was basically flat from today all the way to the fall. Now, futures are climbing. That means their basis levels are worse for fall. And that's what you would expect, right? You'd expect basis levels to be worse, but that carry prices are kind of. They're remaining flat there. So anyways, um, basis levels for fall on canola, you'd expect them to be worse because that's when there's farmers want to move canola, they're harvesting it. They want to move some of it. You know, it's easy to buy basis levels traditionally, much better in the spring when it's harder to buy. And summer is a bit of a toss up this summer, you're. Unless we have a severe drought. That's a caveat here, but you're not gonna see if you're gonna carry over 3 million tons. Some of you have to carry the canola over that. I've never or haven't carried it over before or in a very long time. So you may not see that big basis appreciation this summer. I would venture that you won't see that basis appreciation this summer. And you're gonna see a peak here of maybe, and then you're gonna see that fall off for June and July. And then some of you will sit here like, if you're in bungee, Fort, Saskatchewan, you're gonna say, well, I'm not gonna get rid of this in August. I'm just gonna hold it now and get the higher price in November. Right. So it's part of it. It's all part of this carryover conversation as well.
What else do I have to say on canola basis?
I think. I think that's about it.
Hopefully that helps out a little bit, Alden, and provides a little bit of clarity around that. But I. I hope I explained that as best I could.
All right. Um, okay, crop prices segment. Our next segment is crop prices and news.
And we're getting close to the end here, folks. But there's going to be a USDA report. By the time you listen to this podcast, the USDA report has already happened. So we won't touch into it, talk about it a whole bunch here. Um, but we've got that going on this week. Conab also, I know they dropped Argentina corn production on Wednesday, um, but we'll see how that sets direction. If there's any big implications here. I expect this, this. I expected this USDA report to be a bit of a quiet one, but I guess by the time you listen to this, we'll already know. Uh, so let's talk about some different pricing action out there. Uh, peas, lots of, uh, support in. In p markets.
And I just want to just clarify here, like, for old crop, you know, I guess you could be the last one holding out. Like, if you haven't sold your green peas at $20 for old crop, you're the last one, you know, holding, holding out. But don't be. Don't be that one, because once demand goes away, the price drops to 13 or $14. So take the 20, call it a good, you know, good day, and walk away. Same thing with your maple, maple peas. They go from 25, 26 all the way down to 20.
Again, I don't want to see you lose $5 a bushel. All right? And yellow peas is basically the same thing. Not quite as extreme, but $13 to $14 for old crop yellow peas, a new crop or ten to 1150 or in that range. But pea prices have picked up a little bit of strength here this week, which is great. And I haven't seen anything worthwhile for new crop that has me wanting to make additional sales here at this time. But like I said last week, looking to see what India does, they're, you know, they're already talking about how even though they're just harvesting, wrapping up harvest of this year's crop, but how weather patterns suggest that they're going to have a very good monsoon season and bigger crops next year. Anyways, who knows? Um, I want to be more of a pea seller here as well. Uh, because there's incentive globally to plant more peas.
And, uh, there's some question marks still around that chinese demand. So, anyways, folks, uh, just pay pick, close attention to those pea markets right now. We've got green peas, you know, $14 picked up on farm with act of God was quoted in a few areas. I've been a seller at that level for new crop green peas, new crop yellows, uh, up to that 11, 11 50 delivered with act of God. That's, you know, something to take a peek at as well. And then maples, $19 to $20 there.
All right. I wanted to touch on old prices as well. Not, they're not that exciting. They're firm. They're not doing much of anything. But they did climb a nickel in Alberta, so I thought the special they said last week was 475, but now they're 480 and still seeing lots of 450 bids for old crop oats in Saskatchewan. So not much new there, but just letting you know it firmed up a bit. And, hey, keep an eye on this weather market. If there's going to be some action here, it's. It's around the corner. And then barley prices, feed barley prices did pull back here again. I talked to a few growers with some barley left to sell. And.
Yeah, again, folks, it's a tough market out there. The $5 bids for feed barley or, you know, picked up Saskatoon or the 525 we saw picked up on highway 16 here around Edmonton. You know, nothing to get too excited about. But they have pulled back here as well, that you usually get this little rally in the spring.
The, the trucks, you know, the feedlot sits there and says, I need. I need some barley. Like, it's not coming in as fast as it was. But we're just not seeing that. We're not seeing that shortage that typically happens. I'm just. Yeah, it's just not out there.
So not fun for barley growers now. All right, eating your veggies. Next segment. Eating your veggies because it is the right thing to do. Three things to focus on. Number one, before you get busy planting, and I know some of you are already, but if you get a chance here, I'd recommend you sit down. Now, I told you, asked you to take a bit of office time here around Easter, and hopefully you did that for yourself.
But important to just review your old crop inventory and store that somewhere. If you have a program, great. If you don't, maybe it's in your phone somewhere. But you store your inventory, and the reason you do that is you have your numbers close at hand, because what happens if you're underneath the drill? Your phone rings, you answer it, and they say, feed barley, $6. You know, it's up $0.50. Well, you got to jump on it. What. What do you got for bushels? If you have it right there, then you can make that decision. It's not a time of year where you want to say, hey, I'm going to get home tonight. At some point, I'm gonna try to sleep for six, five, 6 hours, you know, maybe, and I'll try to remember in the morning, and hopefully, I can figure that out for you. But if you just have that done, it's in your phone, then you can make a decision and act on it. And the same thing is you can write down right, right underneath it, just like your new crop marketing plan. Do you have some targets in mind, some bushels in mind, and just write that down. Take a moment this week to write that down for yourself. Okay.
This was my favorite time of year as a grain marketing advisor because I would call, I would tell farmers, hey, like, when I'm calling you this spring, like, do your best to get back to me as soon as you can, because stuff's happening. And often it was for pricing grain for even the next year, 2025, or in this scenario, be 2025, but marketing for next year or taking advantage of deals that were popping up. So it's a great time for advisors out there, for sure. All right, second thing, old crop wheat. We already talked about it, but get after it, you know, while the cooking is good, go in and fill your plate here. Get some. Get that sale done. Does it mean to take a basis contract?
I want to say no. I hate doing a basis contract, but if you look at the time of year and the seasonals, I guess you can take it under consideration.
But, uh, you know, if you were hoping for nine in Saskatoon and nines there today, I. I just take it myself. If you want to play bushels on bass is fine, but, uh, get after it. Get that old crop wheat tidied up. Uh, demands good out there. And then the last one, number three, is, um, if you're a candidate for filling bins of fertilizer this summer, um, James Mitchell, he'll be on again here next month, but he was on a few weeks ago, and we talked about summer Phil being maybe in the fours for urea. Well, that expectation has changed now, and James will. He'll give us an update here next month. I'll let him talk about the latest. But I did hear rumors that that number could be in the threes now. So urea at 399 a ton or less. Okay. Is that going to trickle to. Trickle through to liquid 280, zero or ten hydrous?
I want to say no, but we'll see. Maybe it does.
But, you know, if there's going to be some cheap urea around here, it sounds like canadian retailers are putting their hands up for some of the supply. It's just not going to get here till after seeding and. But it's going to be severely discounted compared to the last number of years. So, you know, lock it in to here. Tune into here and we'll talk about it as we see it, folks. That's what we do at the what, the Futures podcast.
But if you're a candidate, just make sure that you, you're aware that you're a candidate. Number one, that you want to take fertilizer in the spring and summer, and then all you have to do is, you know, pick up the phone when that call comes at you or make sure you stay in tune with that market. Okay.
All right, folks, housekeeping. Now, just a couple things. I do have a 2024 playoff hockey pool set up. It's on office pools.com. Of course, you'll find it in the show notes. The league is what the futures, and the password is limit up. It's.
Pardon me, the password is limit up. All one word.
All you have to do is check off boxes on who's going to be the top scorer in each section. It's really easy to do. And we're going to have surprises here as well. I'm not going to announce surprises until after we get you signed up, but there's a deadline on there. I think we got about a week or so to go on that. But come join the what the futures playoff hockey pool. Again, it's on office pools. You'll find it in the show notes as well.
I also have a playlist going on YouTube music called what the futures hashtag plant 24. And this is my little music, my cure curated playlist for planting a crop here this year. And, you know, will it lead to a successful crop? I'm not sure.
Will it entertain you? 100%.
It's there. My top song right now in the playlist is when doves cry by Prince.
I've had that one going quite a bit here the last couple days, so I hope hopefully you enjoy that playlist. Again. It's on YouTube. Music what the future is, hashtag plant 24 is where you'll find it. You just have to search that, of course. Folks, thanks for tuning into the show. Subscribe to our YouTube channel. Follow us on social media, Instagram, Facebook, X, LinkedIn, all that good stuff. If you can like our stuff, share it. I appreciate it. I've got new hats coming. And that's it for this week, folks. Have a great weekend. Stay positive out there. Have fun, stay safe. And I'm out.
