Big Picture Crop Marketing Outlook | Guest: Kyle Sinclair

[00:00:00] Speaker A: Hey, folks, welcome to episode number 39 of the what the Futures podcast. I'm over here at rival Trade Brewing, a Rocky mountain house, Alberta, having a great time. There's putting the finishing touches on episode 39. We've got Kyle Sinclair joining us this episode. We recorded his presentation from a couple weeks ago, and that's gonna be the nuts and bolts of what you're gonna hear today. Thanks to rival trade for having me. Enjoy the episode, folks. [00:00:27] Speaker B: Hey, folks. Welcome to the what the Futures podcast, where we break down complex market trends into simple, actionable advice. It's your quick guide to better farming decisions. [00:00:42] Speaker A: Hey, folks, welcome to episode 39 of the what the Futures podcast. I hope everyone's having an outstanding day. Of course, we usually record in the UPL studio, but I'm on vacation with the family out of Rocky Mountain House. We're camping in a little spot called Crimson Lake and having a great time. One of my little things I like to do while on vacation across Alberta specifically, is when the kids are going down for a nap. I like to hit up the local brewery. They're scattered all across the prairies. And for today, rival trade let me come in and do a little bit of recording. I'm enjoying a couple of different beers. I've got a whole flight in front of me here. They've got some really good stuff. Starting off with the sour beer, making my way over to the orange cream ale. By the end of the episode, I'll be on the ipas. They've got a really nice New England IPA and a lobster pale ale as well. So a little bit different for this week, folks. But I do appreciate rival trade letting me in the doors here to do a little bit of recording. Now, this episode, you know, along with the intro, is a little bit different, of course. My name is Ryan Denis. I'm the host of the Wetland Futures podcast. I've spent my career working with farmers across the prairie provinces, helping them with their crop marketing, and I did that for well over a decade. And of course, we started wet the futures back in November of 2023. And it's been a blast putting on the show. This is your weekly dose of clarity in the complex world of grain marketing. And it has not been more difficult, folks. Declining yields across the prairies as well as new lows in your markets as well. What the futures is going on, right? Alrighty, folks. So this episode is a little bit different because we recorded, we hit up pioneer seed crop tour a couple weeks ago. It's gonna be about ten days ago now. And I had the privilege of doing a short presentation, more of like a pep talk. And unfortunately I said things were gonna get worse. And from that recording to now they, they did. And they're still gonna get worse. [00:03:03] Speaker C: Folks. [00:03:04] Speaker A: I hate to say it but it's still gonna get a little bit worse from a crop marketing side. But Kyle Sinclair joined me that day and so did Ryan Copathorn with cows and control. They all, we were all there presenting to a group of farmers. And so I asked the editor, I went to Augustine and I said okay. I said I want to put this out as an episode. You know, how are we going to do it? And he said you know what? We're going to split up into two. And so for today, episode 39, I believe it's going to be Kyle Sinclair and myself doing our thing. Well fingers crossed that that's what we have. And then a couple weeks Ryan caught my thorn with cows in control. He's gonna be the headliner in probably like episode 41. The way it's, the way it's looking. Alright, so a little bit different. We're still gonna get to some of the regular stuff. I'm gonna have my positive moments here in a second. We're gonna talk about what's cool in crowd marketing and then of course we'll end with eating your veggies after Kyle's spot. Now Kyle, he does a bit of a market outlook, okay. So he does spend a bit more positivity than myself. He's a bit more positive in the market and I'm getting there folks. We're gonna make some lows here yet. But you know, I am getting there as well. Not runaway bullish but you'll see in a few seconds here in why in the cool things in crop marketing segment. But before we get to that, let's just have a quick word here from our sponsor John Deere. Now head over to John Deere C to check out the latest and greatest in technology and equipment. And of course everyone's been working hard getting equipment ready for the field. You know, hit up their, their website. They're great specials on parts right now. Great specials on, on their service department as well. So head over to John Deere CA and I it's going to be one of my positive moments. But I got this one more thing to add about yonder here as well. Alright folks, so as I said, let's do positive moments. Let's do what's cool in crop marketing and then let's turn it over to Kyle and his market outlook after that. So positive moments for this week while we're out camping. All right, we're having a great time. It's, it's cold out. It rained the first two days, but we'll take it. The, the foothills here, they definitely need moisture, and we need moisture in the mountains here as well. But we're at this great spot. First time for us, Cappy and this region. And Willa Mena, I got her her first fishing rod. So we were out here. We're camping with a few other folks as well, on my wife's side of the family and the two little guys having their fishing rods. And I didn't even think that I should be getting a fishing rod for Willow quite yet. It didn't even cross my mind. Just terrible father here, but it didn't even cross my mind. Anyways, of course, they have a canadian tire here in town. So we whipped into town, picked up a great little Shakespeare fishing rod, and lo and behold, shouldn't be a surprise, because I love fishing as well. But my kid is a natural, okay? My kid is out there. She's gonna be four years old in September on the beach, casting this line like 30, 40ft out there. She's got this little whip action. She's got it figured out, folks. So now I just, I gotta catch up here. I gotta get us geared up. We're fishing because it's, it's time. Of course, I grabbed the rod and I thought I was gonna, you know, toss one out there, and I lost the end of the, the weight on the end. So I searched in the water to try to find one thing. But anyways, we got it rigged up again and just. Yeah, it was just cool for to see her casting out there like a true professional. My second positive moment of the week. This is a bit of a selfish one, okay. But I caught an email from, from the folks over at John Deere the other day. Of course, like I said, we're poor cell service here. We're, we're on vacation. And, uh, but an email came through from John Deere and it said, hey, Ryan, uh, you know, we're doing our fiscal planning and we know that our contract is due with you here in the last quarter. Just want to let you know we like what you're doing and we'd like to renew. And, you know, I know this is a little bit selfish of me, but it's pretty cool to where this idea came last summer, you know, of starting up this podcast, you know, releasing it the week of agri trade, like getting it going in mid November there. You know, John Deere was one of the first companies that reached out and said, hey, we caught wind that you're up to something here and we'd like more context. And, you know, for me, you know, I, again, I'm a, I'm a little bit of a homer here in this regard because our, our farm is very green. We run John Deere equipment on the farms. And, you know, my first tractor ever drove us a 40 20, you know. Anyways, it was just really uplifting and rewarding for me to get that email and that acknowledgement, say, hey, you know, we want to stick with you for one more year and we like what you're up to. I don't know. I thought that was pretty neat and definitely one of my quality needs here as of late. All right, folks, you can see I'm highly organized. The most important thing here is the beer. I've got notes scattered across pieces of paper that I robbed here from the good folks out at rival trade. I said, hey, this is going to be a weird request, but I'd like to record somewhere in your brewery. How does that sound? And they said, absolutely. That's not weird at all. Let's get you a spot and get you set up. And of course, I got some beer as well. So this next part, next segment, you know what's cool in crop marketing? It hasn't been super cool lately, and this one's actually not that cool either. But it's important to just continue to acknowledge and talk about this stuff. But you're seeing your harvest pressure now, folks. You're seeing your harvest pressure. And what I mean by that is the green pea market is dropped, you know, a dollar bushel this week in portions of the prairies. Yellow peas are under the gun as well. Harvest is here. And I told that to the folks ten days ago that harvest was here and that harvest lows were coming. Canola dips below 600. Soybeans make a new low again. As of recording this intro, soybeans have made a new low once again, and they are not done. None of these markets are really done yet. They're just going to continue to hit these harvest lows, and we're going to find some lows in these markets over the next 30 ish days, maybe 45. It's a bit of a Yazoo gas out there. And what can change is if yields are better than people expect, you know, as you get into the slug of it, if yields are better, then people tend to sell and we go lower. Okay, if yields are disappointing, then that recovery happens faster, that little rally happens faster. Now, from a crop marketing perspective, on my end, and this is going to be an eating your veggies at the end, but I'm doing a whole lot of nothing right now from a crop marketing perspective. And the reason is that these early harvest results, as expected, the early stuff has not been great, okay. It's been less than average. You know, I'm hearing the odd, very low number in central Alberta. Some of the early stuff, it's normal for the early stuff to be, to be this, you know, the stuff that's just not going to be there from a yield perspective. But now it has me curious and has me sitting patient because I want to see how other yields develop and how other crops come in. I want to see quality. I want to get a handle. Even though I do think markets are going lower, at least in the short term here, over the next month or two, I feel like it's worthwhile now to kind of sit a bit more patient and not do a lot of marketing at this time. Because you have to remember, folks, I've been hyper focused on cash flow and forward contracting. So we've done a lot of our hard work already. We have our green peas sold. We have our yellow peas well positioned. The lunchbox crew, they were drinking water from a fire hose in the month of June because it was sell, sell, sell, sell every day. We were selling something. And thankfully, you know, thank goodness we did, because now we can sit and watch and see how these things progress. Now, the scary part here is our american frames. Spring wheat harvest is just getting going here. Good yields reported so far. Good quality. You know, we're a ways away from corn harvest yet. We're a long ways away from soybeans. But they're gonna, they're gonna harvest a big, big flipping crop here and put more pressure on these prices. But we're going to get to the harvest lows. We can stay patient. The cool thing is here, you should be in a position where now you can stay patient, see how things play out. And I'm not saying, folks, that we're going to be runaway bullish. I'm not saying that at all. But we might find some stability and then a layer, a trading range, if you want to call it that, some type of trading range in here. And, and from that, you know, we'll try to establish what a low and a high is in that, in that range. Okay? So, you know, I'm not getting runaway. I'm not bullish by any means. I'm certainly not runaway bullish here, but we're going to get some harvest lows and we're going to see this heart, these harvest results. The cool thing is harvest is here. And then, you know, let's see how things develop from a market perspective over the next month if yields are better than expected. Yeah, it's going to be a tough winter. It's going to be a tough winter. Marketing, no matter what, that's not going to change. We need low prices to get our exports going. So that's not going to change. But here we are. Harvest pressure is here. Hopefully you've done your homework, you've done your marketing, you are in a good position, and you can sit tight. Okay, now let's turn over to the presentation from Kyle. The presentation that I think Augustine going to try to throw my parts in here as well. It's going to be something that you've already heard from my side, but we'll come back with eating your veggies and we'll wrap up the episode here. So enjoy this one, folks. And I'm enjoying the beer over at rival trade. [00:14:12] Speaker B: We're going to get a little uncomfortable again for just another second. It'll get better. But my brother taught me to make memes last summer. Okay. I've been on like the shelf for about two years. I had to non compete with FBN. I sold my company to them. I had to non compete, so I couldn't really do anything. We have two kids at home. My son's a year and a half old anyways, stay at home dad, right? My son's born in January of 23. I'm hanging out at home with him, waiting for my non compete to expire. My brother teaches me how to make memes. Huge mistake because I'm bored and I can now make memes. And these are the first two that I sent to him. Now, you might not be able to read this, but you got western canadian farmer supporting 2022 farm margins. Excited like my child. Here you go. It was a great year. Then we got 2023 farm margins. Just, you know, trying to suffer, still alive, but, you know, and then 2024 is just down and not good because we were forgetting about 24. All right? Farmers didn't have confidence in marketing the 23 crop. It was all going backwards for so long. 24 was just sitting there like, hey, don't forget about me. Don't forget about me. And here we are in the, in this, you know, nasty pool of water. The second one, my dad did not like this one. All right, he did not like this at all. We have a grave. It says, bull market run of 2021 to 2023. And then I have grain market analysts like Kyle, you know, celebrating this now. Kyle was not celebrating this. I was not celebrating it. It looks like we are. But honestly, as grain marketing, like advisors and analysts in a bullish market, the heck were we supposed to do? Just sit there and say, well, don't sell today. Market's going up tomorrow. We did that for, like, three years, right? Just wait. Just. Just keep waiting. You know, sell a little bit. So, anyways, we're a little bit more excited now because we actually can do something and we can help. All right. Or try to help. All right, this chart is from peak peak trading solutions off Twitter. And anyway, sorry, these memes. I sent these to my dad and my brother last summer. Okay. I've been a bear for a long time. I started to become bearish in my last presentations with FBN, which was March of 2022. That was the last time I was on the road. And I told people, hey, I feel like the highs are here. We got to do a lot of marketing. We got to get uncomfortable. Sell a bunch of grain here. And again, it's how it played out. But I've been a bear for a long time, and I'm still a bear. Okay? There is a little bit of hope at times, but I'm still a bear. Now, this chart is from just the month of June. So these guys, they put this out for all of 2023 as well. And there was a whole bunch of negatives in there. Wheat was on the bottom. Canola was on the bottom. We suffered massive losses in the calendar year of 2023. I think it's a cool chart to look at. I don't like the result, but this is just from the month of June. All right, so the month of June, what do we have on the bottom here? Kansas wheat. Any CPS growers in the building? Right. Not fun. Spring wheat. Chicago wheat. [00:17:27] Speaker A: Oats. [00:17:29] Speaker B: Oh, we're just taking it here. Right? And canola is right here. Lost 8%. Now, you know, maybe the good news is that you did a lot of marketing in the month of May, and you sat here and you looked at June and said, I don't care. I got a lot sold anyway, take a hike. But it's been tough. It's been tough. Slugging. The factors that were supporting the market in the month of May disappeared for June. Okay? And if you listen to the podcast again, some yahoo, you know, trying to tell you to sell grain, we were just like, sell. Sell something, you know? Hey, thanks for tuning in. Sell some wheat. While you're at it. Sell some peas, sell some green peas. Sell everything. You know, keep selling. And of course, June was a very tough month, so July is not going to be quite that bad, but it still has some negatives on there. Now, this is my buddy Carl, who listens to the podcast. This picture is from yesterday. Harvest is here, folks. This is west central Saskatchewan. It's not happening outside of your window today, but it is here. So yellow pea growers feed grains, feed barley. Spring wheat is right around the corner. It's here. So the reason I put this up is that you guys still have some time to do a bunch of really good crop marketing. The harvest lows are not here yet, but they're coming. They're coming for you, and they're coming for you over the next 30 to 60 days. Okay? So if you're sitting here like, ah, I don't have to market anything this fall. I don't have to market anything till after Christmas. Good, fine. But if you're sitting here saying, holy smokes, I need to sell some grain, you got to get to work, folks. Okay, so I'm just going to give a little bit of an idea on what I'm watching in the markets. Kyle's going to go into a lot more depth. I'm going to tell you my crop marketing plan, kind of my ideas, and then I'm going to turn it over to the expert. Okay, so for me, just four points here for you right now. Okay? I expect if I look at history and I look at charts, I expect we're going to get a market bounce here of some sort in August. Now, kyle, while we were setting up, did canola gain any momentum? Did we close? Positive. Okay. All right, so the short covering bounce isn't happening quite yet, but we should get something. We should get something weather related. We should get some type of story that just bounces this market up little bit. Now, here's the problem, is that the bounce that we get is not one that you want to sell. You're not going to sit here and say, well, the market's gone up 40 or $0.50. That guy told me to sell. Like, it's not going to feel good because the prices still suck, but they're going to get worse. Okay? So whatever bounce happens here in the month of August, you got to be Johnny on the spot, and you got to be a seller. And we could talk strategies. I can tell you my favorite strategy for you to use as well. But there's some marketing that still needs to happen here. With this short covering bounce, the harvest lows are still. They're going to be ugly. Spring wheat harvest in the US is 2% done. Winter wheat harvest is almost done. But we've got a record setting corn crop in the US. We have potentially a record setting soybean crop. We have the biggest spring wheat crop in the US since 90 something. 94. Right. There's a big crop that's just about to be harvested. So when I look at your prices today, if I don't, if your hard red's at like $7 or just under that, whatever it is, CPS, six and a half. Those numbers are going down another. [00:21:16] Speaker A: Dollar. [00:21:17] Speaker B: Right between now and the harvest low yellow peas are going to go from 1075 to, like, something with a nine in front of it. Now, canola is a wild card because with the heat and the dryness, canola was the most impacted canola yields south of you. I know you grew pioneer seed. You're at this meeting. You guys are going to have the best crops in western Canada, right? But everybody else and those that didn't grow pioneers, see, they're, oh, it's not looking good out there for them. So canola, we might get a little bit of a better recovery or faster recovery, but again, you're not going to get that excited when canola goes to 550. And then I sit here and say, well, we might recover back to 650. You're going to say, well, Ryan, we didn't even sell it at 650. We were just there. It's not going to be great. Okay. The good news is I'll try to be a little positive. You know, the beer's cold as well, so that's a positive. But there is a demand story, and we're going to move a lot of product. Anybody work for CN or CP here by chance? Probably won't put your hand up anyway, but don't screw it up, okay? Move this damn crop so CN and CP, don't screw it up. There's going to be a demand story. Okay? We're going to move a lot more canola out of the country. We're going to move it to southeast Asia. We're going to move it, in a weird way, to Europe. So that's positive. But again, that's next year. And also, it's because of low prices, low prices, lower prices, increased demand to work ourselves out of this mess. It's going to take time. All right. I believe that we're in a zombie marketing trend for a while now. It's going to be a crappy winter, Kyle. Try to spend it positive, though, if you can. But it's going to be a tough. It's always tough marketing in the winter unless something happens in South America, you know, a drought of some sort. But you know what those buggers did? They just put out a record production estimate on their next crop that's not even planted yet for soybeans. They said, hey, 151 million tons. Next year we're going to do 170. Like, you didn't even plant it yet. Like, come on. But we're going to be in a zombie market, guys. It's not going to get easier this winter, not for a while. Not till next spring. And next spring, we need a weather scare. We need something to rally us. This drought, this heat, the first cut of hay was massive, okay? There's lots of hay. There's lots of feed stuff out there. I'm not worried about feed. Ryan Coppathorne, are we worried about feed? [00:23:56] Speaker A: No. [00:23:56] Speaker B: Okay. We're not worried about feed. The cow guy said, we're not worried about it. We're not worried about peas. Peas were a little far advanced. The heat didn't bother them as much. We're not worried about spring wheat. We're not worried about CPS. We're not worried about oats. We're just a little bit worried about canola. That's about it. Okay. What else do I have for today? Oh, yeah. Crop marketing plan. Now, this is my last slide, but you need to. If you don't have a plan, you gotta get like, let's write down some thoughts. Even together today. Let's just write them down. We'll go to the side. I got paper. We can write down your crop marketing plan, but you need to have a plan, okay? If you just say, I'm gonna ride this into harvest, figure it out this winter, and sell when I need cash, that's not good enough, okay? That is just not good enough. You got to come up with some type of plan. When do you need money? What contracts are you going to deliver on to fill that bank account? So the banker stays off your back, right? You need to come up with a plan. Okay? Make a plan. Write it. I don't know. You have a big whiteboard in here yet. We can write it out somewhere. But make a plan in your shop, in your bathroom, wherever, in your office. Make a plan of what you're doing with your grain this year. Okay? You guys have some really good looking crops out there. Knock on wood. Really fast. Okay, so, you know, let's get those to the bin. But you guys have something to market, okay? You got something to work with here. Make sure you do that. Okay, let's all say it together. No basis contracts. One, two, three. Hey, that was really good, actually. I could tell the beer is already working perfect. Kyle, do you have basis contracts? As a recommendation? Okay, good. You're in a market, a carry market. There is no bullish signal. You are not allowed to do a basis contract till next spring. Okay, we're gonna move a lot of crop out of this country, right? Basis is gonna get better, it's not gonna get worse. It's bad right now, because your grain buyers, they've all penciled in record crop across the prairies, you know, we're all full now for September, October. There's crop everywhere that's changed, but they're not going to change. They'll be the last ones to change. Okay, basis gets better as we move this product out and as futures drop, how do we get farmers to sell? Basis has to get a little better, right? Has to hit magic numbers. Cost of production. I don't really care about 2024, to be honest with you, for your cost of production. But for 2025, you gotta start writing this stuff down to make your plan, because you should, over the next couple weeks, take advantage of the carry in this market. You should look at spring wheat for next fall of 25 at 650 or whatever it rallies to. Maybe it gets back to $7 for futures I'm talking about. And you should be locking some of that stuff in your crop. Marketing plan for 2025 is now. Well, it was a couple months ago, but if you didn't do anything, it's now. Okay? And lastly, I talked about this in the podcast back in December. No matter how hard we try today, we cannot turn back the clock. We cannot go back to the prices of 21 and 22 and 23. I can't do it. Can you do it? Damn it. Okay. We can't do it, folks. You gotta forget about it and just look forward now. Do the best you can with what you have in front of you. From a marketing perspective, we can't go backwards, all right? And the Americans grew a hell of a crop this year. The european, the french wheat crop is kind of junky, but all this stuff is kind of in the market. But we have our american friends who grew a massive crop, okay, we gotta work our way out of this and we're gonna grow a pretty good crop in Canada as well. Like not what it could have been. We're not getting the cherry on top. You guys might be getting the sprinkles. Most people are just getting, like, the cake, maybe a little bit of frosting. You guys are getting sprinkles. No one's getting the cherry right. That's the podcast. I am pouring beer all afternoon from blind man, the crop checking coal. She has my own creation. Well, I stood there while they threw everything in the tank, but I was there for it. But, yeah, keep your cups. They are limited edition cups, which just means that we did not maybe bring enough. And they are all unique because our stickers aren't straight on any of them. So they're all unique as well. Okay, anything else? That's it for me. Okay, I'm going to turn it over to the smart people now. That's it for me. Follow the podcast. Hello, everybody. You can hear me? [00:28:46] Speaker C: All right. I'll try to speak loudly. Don't buy rope. I think that's the summary from Ryan. We'll get into some different information that maybe is a little bit different than the doom and gloom that we just heard, although there are certain aspects of that that certainly are true and we're going to want to pay attention to. My name is Kyle Sinclair. I am with producer profit. We work with farms on the marketing side. So working with you at an individual level, big advocates of trading accounts. Just before I get into this show of hands, how many farms have a trading account, use options, anything like that? So to be fairly new stuff. So we'll kind of dive into that a little bit, but we'll kind of move into this. All right, so we are market advisor. We're 100% independent. We're not linked to anybody. Yeah. So we're 100% independent. We're not influenced by a buyer. We don't get any kickbacks. If we're telling you to sell to somebody. Our job is to provide you with information to help you make your market decisions to benefit the farm. So we're on your side. We fight against the buyers. A lot of the buyers don't necessarily love what we do, which I think is a reflection that suggests that we're doing our job appropriately. So just kind of touch into that a little bit. We are giving away a yeti cooler. So make sure you fill out a slip, and we'll see if we can swing by at harvest with a flat of beer, some beef jerky, and a yeti cooler for you. And you also get to see some of the information that we put out to farms. Here over the next 30 days. So if that's something that interests you, head over there. After. We'll jump into some of the data here. Now, if you want, text us. We'll be around. You can find us. If you want to talk about different market strategies individually for your farm, we're going to go over some stuff that's maybe a bit of a blanket information for you, maybe something that you can implement, and then just want to give you guys some details as far as what's going on in your market so that you kind of can be prepared for some of the pops that might come along here along the way. So diving into the market outlook, we'll start with canola. Canola has been the most active commodity here over the summer. I think when you look at the chart your July month, we started in June. The tail end of June, we started at $600 a ton. Then we moved all the way back up to 660. Then we fell back down to 604, I think was the low. Then we went back up again to 680 just last week. And now we're back down to 608. So back and forth like an yo yo. How do you handle that on the farm? What is your market strategy? Kind of similar to what Ryan is saying. You have to be prepared and disciplined in your sales, know where your break evens are in your cost of production. But what we want to look at is when we look at the kind of the upside potential in your market, what is there that is going to drive your market higher? You want to look at the export demand that we've had. Now, if you talk to a buyer and call it December, January, February, it was pretty bleak. And I'm not, I'm not saying that they were, you know, lying through their teeth to you. Exports were a bit slow, but we've certainly caught up on that, and we're actually going to end the year slightly ahead of where we ended the year as far as ending stocks go in a good way for you guys. So I think the, the analysis says, or the data, we're going to be somewhere around 1.49 million metric tons as far as ending stocks go. And we started the year with one, 1.51. So we've used up all of last year's crop between crush capacity, local use and the export. So really strong demand there. Obviously, the heat was a big impact. Now, I built a lot of this presentation last weekend, and the market's not the same anymore. So the market changes really quickly. And that maybe demonstrates or illustrates for you guys how quickly your outlook can change and how you need to be prepared either to execute a market strategy or be able to adapt to a changing outlook, because it's going to happen again. We're going to get some output or some, some upswings in the market. The hard part when the market starts to rally is, how do I sell into this? Because, well, it's going to keep going. On the weekend we thought we were going to see $700 canola, maybe 720, and now we're right back to 600. So you want to be prepared for that. And whenever the market's down in lows, what's the bullish information that can push it up? And when the market is kind of down or, sorry, up at the top, what is the negative information that is going to push a market back down, reverse that market and cause it to crash? High prices cure high prices and low prices cure low prices. So you want to be prepared for that. We do have problems in the Black Sea. European production is expected to drop. There's some headlines this week that talked about Ukraine's late crops are expected to drop 15% to 30%. As far as yield goes, that's a positive for you guys. I do think that your canadian crop has suffered to a certain degree here, certainly over the last three to four weeks. On the canola side of things, there's a lot of debate about what your yields are going to be. We're out of Lacombe, so we were in the heart of that and talking to guys in central Alberta, it had a lot of hints of 2021 to it. I'm not saying it's as bad as 2021 and I'm not that optimistic, but I do think that there's certainly some yield reductions that happened there. Some of the buyers were thinking that you're maybe leaning more towards a 20 million metric ton canadian canola crop. We put in less, slightly less acres than last year, so we're probably somewhere around that 18 million metric ton mark here. Now, I would say you've lost probably 2 million tons off the total yield. And so the really bullish guys will think that you're somewhere around 16 million metric tons. Somewhere in there is probably the truth, so keep that in mind. The other thing that we really want to keep an eye on is your palm oil futures. And palm oil right now is expected to remain tight as far as supply goes. Indonesia is in the works of trying to get 40% into a biofuel blend over there and they're looking at changing their export policies. That's something that could drive palm oil higher, which allows for more demand to come into other oil markets. So keep an eye on that. You also have just this week, obviously, kind of a, maybe a shorter term fundamental for you is the Middle east. Right. So you have increased conflict over there and that is surging the crude oil price, which we're not noticing it here right now, but it should provide a little bit of support to your oil markets. So that is the bullish side. Now, just wanted to key on the exports that we've seen just because the buyers were so adamant that you weren't going to be able to move your crop similar to what they're saying about the crop coming in. Oh, you're not going to be able to get this out. Well, we seem to move the crop every year, so I called B's on that. But right here, this is canadian exports of canola by country. The purple line or the purple bar is your china exports. And going towards the right side of the screen there, if everyone can see that, what you're looking at there is China buying basically at the highest level that we've seen in maybe four years. And they've caught up on a lot of the exports that we were missing on. We were dragging through Janfeb and now we've caught up to that. So looking over now, this is another export kind of graph for you. And this is by month. And so this starts in January, it goes to December. And so that red dot in the middle, if you guys can see that, that is kind of where we were on the weekend. So again, really terrible through the winter, but your may and June were the best we've seen in five years. So your export demand is great. That should improve your basis level. It's going to keep things tight. And I also think that you're going to see some better crush demand as well, some more local use as well. That kind of supports your market going into the next crop year. So hold out for that a little bit. Not saying don't sell, but just look for bounces. And then this is the last kind of supply and demand chart there. These are your exports through the marketing year. The light blue kind of teal line there, that's this year's exports. And so you can visually see the exports catch up. The yellow line is last year's exports and we're basically right there. So when you look at the data, crush data, I think we were at 10.665 million metric tons this year, which is almost a million tons more crushed than last year. And the expectation is that we're going to crush a million tons more than we did this year. So if we're going to crush 12 million metric tons of canola and you're going to export, you know, call it 6 million metric tons, well, that's the entire crop that you guys are probably going to produce. So we should see some better support, if not in the fall, because there's going to be a lot of question marks about what's going on with yield. I think that you start to see that improve. So keep that in mind. As we drain the supply in the country, the futures have a tendency to climb. All right, so the negative side, as Ryan mentioned, the big soybean production down in the States. The state's growing season is probably the first time I've seen it in eight years where we haven't killed the US crop to some degree. At least once in a growing season. We killed black sea crops a little bit to start the year, but we thought we were going to get some heat. Some high pressure ridges coming in over the midwest that was going to hurt the corn crop in July. Didn't happen. Now we're looking to see if that's going to happen in August. Still hasn't happened. And right now, the weather forecast that changed over the weekend. That's why you saw your canola market start to tank and it's starting to show some cooler weather. There's a big rain event that's supposed to hit Alberta here on August 4. If that happens, the trade suddenly becomes very confident in the production that you guys have, and they may be overconfident, thinking that one rain event is going to fix all of the damage of 35 degree weather and no rain for four weeks. So that's what we're looking at. But that soybean production in the states has got another problem, and that's Brazil and Argentina, the combination of those two countries. Last year, Argentina was hit by a drought and they only produced 25 million metric tons of soybeans. This year, they recovered and now they're around 50, 51 million metric tons. So they rebounded back to where their normal production was. Right. Brazil's production came in at 150 million metric tons, below what everybody was kind of thinking. The USDA might still be a little bit high at 153, but the combination between Argentina and Brazil, there's 200 million metric tons of soybeans there that's going to move. And of course, they got really good friends over in China that are gobbling that up. The other big problem here for us on the canola market is going to be politics. That's going to also impact the market to a certain degree. The trade China buyers are certainly worried about Trump 2.0 and the potential for that. Obviously, the trade war created problems. And so everyone's wondering what's going to happen if Trump gets in again. Are we going to see a bunch of trade conflict? China is already not buying soybeans from the United States for that purpose. So they're going to wait and see what happens in November. I mean, it could also change. All it takes is a 03:00 a.m. tweet from Donald Trump saying that he's not looking to destroy China with a trade war. That's all it would take. And you'd see a bunch of premium come right back into the market. So jumping into the charts, which I like charts, I think they have a lot of tremendous value for you. So this is your canola chart. Now, this is the chart that I, I kind of looked at on the weekend, and I didn't want to change it just so that we could really get a good picture of exactly how quickly your market can change on you. So this chart from the weekend, I was planning on talking about a potential bounce as it cratered on Friday, and maybe a move where it's going to go up to 700 to 720, maybe. And that would give us a really good pricing opportunity where we could lock in 50, 75% of your production, manage the risk of that, and it was going to be beautiful. That didn't happen. So what we got going on here is we have your blue line over there. That is your european rapeseed line chart. The white line chart down at the bottom, that is your us soybeans. And then, of course, the bar chart in the middle, that is your canola futures. So it's important to kind of know, broaden the lens a little bit, not just from your local market. Now start looking at global supply and how competitive your commodity is against other markets. And so european rapeseed, I didn't see where it closed at today, but this morning when I looked at the market, we were about $100 ton spread lower compared to european rapeseed. As long as we maintain $80 or more, you have an advantage in the canola market. So I could make the argument right now that we could see a 50 cent increase in canola Bushel without really doing anything just to narrow that spread back up to $80 a ton. So that's a positive for you guys. But the US soybeans, I also think, could be possibly undervalued. But until the US can find some export demand, it's going to stay there. And we might have to struggle through that. There's still August weather that's going to come. That's something that I think is another kind of coin flip there that could provide some upside for you. And so watch for that for the United States, because obviously that's a very sensitive month for soybean production and you could get some additional upside there. This is now the chart that we're looking at. It's a little bit more red than that. We fell a bit lower here recently, today. So again, this is going back. We're sitting around, I think, on that day, 650, and now we're all the way down to, I think we closed at 608 today. So a completely different look on the technical side. If I was looking and trying to play this from the bullish side, from the upside of the market, what can I expect in this market? And so what I would look at is, are we going to make a double bottom right here and provide a bit of a bounce? If this thing does want to continue to go lower, it's got to break through really significant support there between 600 and 590. If it breaks below 590, buckle up. We're going to go down to 550. Now, you're looking at the way they're applying basis to your prices right now you're looking at 1250 Canola. That's not going to make anybody happy. But what we're looking at here is still that major support level right around the 600 mark. So at 600, even if it wants to continue lower markets generally don't go in a straight line to one side of the market. They usually bounce their way there. And so a technical analyst would say, well, if we move that much, we're probably going to get $40 to $50 a ton back into the market. So from 600, maybe we can get back to around that 640, I think is very reasonable. That's your 50% retracement value, maybe up to 600. And 5660 is the old ceiling in the market that we're going to run into a lot of trouble to get up to that region again. Certainly 700 now seems out of the question, so we'll put that in the back of our mind. We won't plan for that anymore. But if you're undersold for the farm and you're thinking, heck, I'd sure like to get, you know, a little bit of maybe some storage risk managed, maybe I'd like to get a little more cash flow, some bin space, something like that. I'd be targeting that 640 to 650 range as an area that you can price. Now, I do advocate for trading accounts for farms, mainly because it's a way for you to be flexible in your marketing plan. It allows you to undo sales. It allows you to maybe not commit physical production when it's too risky for you to do it. I know down south everybody, of course, doesn't know what their yield is going to be. They were shooting for 60. Now it might be 40, it might be 35. Maybe it's 50. But of course, if you want to go 50% sold. 50% sold of what? And that's the big question going on a bit further south. I think you guys are maybe a little bit more confident in what's going on in the field. But either way, that 640 to 650 mark, I would watch for that. If you're undersold, that's a solid spot where you could make some sales if the market kept going. Choose who you're selling to. We have Cargill. Not that I want to plug buyers, but Cargill and Vitara have different strategies and pricing tools available to the farm where you can recover market upside. Or you could buy, put options and protect crop that you don't want to sell, or it's too risky, in your opinion, to sell right now. So if you don't have a trading account, consider buyers that offer you tools and strategies to be able to maneuver inside the market or inside your marketing plan. So that is. That is kind of the outlook on canola. We'll move over to wheat. Like I say, if you guys do have questions, feel free to come up to me after you want to discuss where you're at with your position for the farm. Happy to talk about that. But over on the wheat side, and there's going to be a lot of similarities between your cps and your hard red, obviously, but there is some different nuances there. So we'll take a look at that. But obviously, Russia, Ukraine conflict. Most of the trade is bored of this headline, but there's still the opportunity for the market to do something to rattle the market, shake it loose, and we could see that happen here. We'll watch for that. Obviously, dryness in the northern hemisphere, maybe not so much over here, but there has been a little bit that's creeped into things in parts of the canadian prairies. Now with the heat and dryness, there's a lot of debate. I was just this. Earlier this week, we were at egg smart down in old, so we talked to farms across western Canada, and everyone's a little shy on saying what they're going to expect in the field as far as a yield goes. But I think the bigger problems are going to happen over in the Black Sea. And we started the year, we started the spring, with your wheat market shooting higher on dryness and drought concerns in Russia. That was the main reason Russia started with initial projections of a 94 million metric ton crop, and that was cut all the way down to 80 million metric tons. Bye. You know, Icar and Sovicon recently, they've adjusted their yield estimates up to around the, I would say, 84 million metric ton mark, depending. There's slight differences between them, but they've recovered a little bit and it's stabilized. The russian government saying that there's no damage done seems weird because Ukraine in the same week is saying that their crop is suffering massively from hot and dry weather that's come through. And honestly, black sea weather is just a mess right now. There's parts of Russia, not the main producing areas, but parts of Russia that are way too wet. Same with the parts of Ukraine. There's other parts that are getting cooked right now. The selden region of Russia, that's where the main wheat rally generated from. And when that rally came in, they haven't really seen significant rains in there. It's remained hot and dry. You're still seeing the summer crops now face yield reductions as well. So that's a positive for you guys. And if they don't receive rainfall over the next 30 to 45 days, they're going to be planting a winter wheat crop into dust. And the other thing that I would argue with Ryan's bearish outlook is if you have really low prices, I think you're going to get a squeeze on acres as well. If you start to limit the acres going into the ground, you start to generate a little bit of support for the market, maybe try to drive that a little bit higher. I was on the podcast with Ryan, I think, a couple of weeks ago now, and we briefly mentioned the harvest rally. And so just want to get into that a little bit here in a second where it's going to show you kind of the tendency for that and something to maybe look forward to with your wheat marketing. On the bearish side, of course, you got, theoretically, some improved canadian production here. You do have turkey banning imports. That was the catalyst that when wheat was roaring here in the spring, Turkey came in and banned imports. And Russia is a main exporter into Turkey. And so the big question mark for the market was, well, where is Russia's wheat going to go if Turkey's not buying it? Well, there's the possibility that India is going to step in and buy 9 million metric tons of russian wheat and then Turkey is going to come back to the market. Turkey wasn't banning imports because they had such a tremendous crop. They were banning imports because they wanted to protect the local farming community there and protect the prices from being saturated from crops from pretty close to black Sea region. So it was kind of a protectionist type of a policy that came into effect and they're planning on lifting that, which means russian wheat is going to flow right back into Turkey and we're going to continue to draw down those stocks. And that demand coming into the market is something that could create some upside. So it's temporary and keep that in mind and could lift going into October, November here. Obviously, the US is struggling to find export markets. It creates some problems here for us as well. Already mentioned the russian wheat crop starting to rise here. And lastly, Argentina is expected to see an increase in acres because of the economic policy as they make it more profitable for farms to grow wheat there. So we have more acres going in. But at the same time, they are also seeing some dryness concerns there right now as well. So the harvest rally for Ryan, we talked about this briefly, but the green boxes are roughly kind of like a mid August, early September is where they start. And they kind of go, I would say, on average, maybe into December. There's some exceptions there, obviously, but this is going back to 2013. So that's an individual crop here. Every time you see a box. And so ten out of the eleven years, we got some form of a rally in the market. As bearish as it looks, there's the potential here for your market to recover 40% to 50% of what we've lost already. And so if you were to look at a Kansas chart, which is where your CPS pricing comes from, you look at that. We've fallen from, let's say 750 a bushel on the futures, down to 550 a bushel here, up a little bit today. But 550 is kind of the low. So if we've lost $2 a bushel and we're going to get 50% of that back, that means that potentially 6650 on the futures would be an idea place where you could maybe execute some more sales for the farm. Get comfortable with that. Maybe it doesn't happen before harvest, but it could happen usually when we see the rally start to take place, it's when the September futures expire. So usually that's mid August, end of August. After that, the futures seem to take off. So somewhere in there, when you guys are busy in the combine, your prices are going to rally and hopefully, you know about it. Right. So that you can take. Take advantage of that. So that's where you might want to do it, as Ryan says, maybe execute just a futures first contract. So, if you guys are familiar with that, just lock in the futures price. You can't do it with every buyer, but you can do it with g three, you can do it with Vitera, you can do it with Cargill. P and H will also do it. Or, no, not P and H. Patterson. Sorry, but you can't do it with everybody. But pick a buyer that allows you to do that and push that sale out if you can. And I to December or January, where harvest is done and that basis is likely going to improve. All right, so those are just some. Some different ideas that you could have on the wheat side. I think if you were to jump in, you know, kind of around that. That 650, even $6. But going off of. I did. I'll try to remember my notes here because they're a little far away and I can't read it with the microphone. But basically, if you. If you averaged 80 bushels an acre on your wheatley, and we just said that wheat cost $500 an acre for the farm to grow, right? So that puts you at a six, six and a quarter. Six and a quarter was the number. That's your break even point on wheat. Okay, well, if we can get a rally back up to 6650 and we get a dollar 50 basis, we're looking at eight dollar wheat that's profitable for the farm. Gives you about $100 an acre profit. However, if your yield falls down to 70, if you drop ten bushels an acre, your cost, your breakeven point, jumps almost a dollar to $7.14 a bushel. So, obviously, the breakeven points, the cost of production. That's important for you guys to know. As Ryan mentioned, it's not 2021, 2022, where the market just stuff your hand in your pocket, sell as little as possible, and just wait. And whenever you need to sell and get money again, the market will be better. We can't do that as a marketing plan anymore, so we have to know the farm details a bit more. So be aware of that. And if the sale is profitable, consider making the sale. And if you're worried about the market continuing to go higher, consider getting a trading account, because bins are a tool that we love on canadian farms because it allows us to store tremendous amounts of grain and then it allows us to just wait out a market. Wait out a market. Wait out a market. The only reason crop stays in your bin is because you think the market's going higher, right? So the farm inherently is always bullish. We always want the price to go up. But there's cost of money involved in that if you're going to. And we'll get into it in barley. But if you're going to hold onto a crop from fall all the way to the spring, what is the cost of it sitting in your bin? If you have an operating line that might be costing you ten cents a bushel to carry that month to month to month, you might hold onto that for seven months. Well, there's seventy cents a bushel. Are you going to get that value back by the time you get to spring? Alternatively, we could make the sale in the fall and then we could wait for a good opportunity to execute on a paper trade, which is the exact same thing as you're doing right now. The only difference is that now you have liquidity back into your farm, you don't have storage risks. You're not paying cost of money on everything sitting in the bin. And if the market goes up a buck, you can participate in that. It's a way for the farm to reposition itself, but still take care of a bunch of infrastructure problems that can come up. So that's a little bit of a speech on the trading account, but I think it's something that's very useful for the farm. So this is your Kansas chart. This is from the weekend. It hasn't changed a heck of a lot, so I didn't bother redoing it. But essentially we're still sitting right near the bottom there. The market's just kind of dead, not a lot going on. I do think that just because of the time of the year, you did get an earlier start to a lot of the winter wheat harvests across the northern hemisphere. And so because of that, we could also see harvest come to an end a bit earlier, which could usher in that harvest bounce maybe a little bit sooner than we normally see it. So that could be an opportunity as well. If the market breaks below here, we're in trouble. It's probably going to drop down another fifty cents and head to bucks. If it holds here, you have the potential to jump back up to 6620 somewhere in that range, which would be a decent enough area where we could start to get some sales on the books again. Basis is atrocious right now. It's horrific. What the buyers are suggesting to you guys is a slap in the face ultimately. We haven't seen basis levels like this. I think going back to 2016, this past year for CPS, for example, some of the best basis levels that we saw was probably around that two, let's say 240 to 260 a bushel. And right now you'd be lucky if you could get to $1.50. It's one dollar, twenty cents to one dollar thirty cents. And that's considered a good basis and so I think it's laughable. I would also note that last year we saw basis level was quite terrible and that it improved as we got through the marketing year. So be patient with it. Consider a futures first contract. If you do need to get something on the books and move something, if you do have to lock it in, if you do need to take a flat price, then again, that trading account comes in and allows you a way to re enter the market, at least recover some value, or at least a chance to recover value. So that's how I would kind of tackle your CPS there, moving over to spring wheat. All right, so maybe the nuance here with spring wheat is maybe the protein issue. Ryan mentioned big crops down in the states. North Dakota crop tour just finished and they, they figure that's the best crop they've ever seen. However, the crop tour did note that there's a lot of disease pressure. They just don't know what that's going to mean. So is it all going to be able to make, you know, grade and go for export or is it going to get shuffled off or blended? What's going to happen there? So there could be some potential disease pressure there and maybe some quality issues, but protein could be something that is worth considering for you guys. I'm not sure exactly how north of image we do have some guys up here, but it sounds like for the most part maybe not quite as much crop stress on spring wheat as maybe we've seen south of Edmonton, right. And then pushing east. So perhaps your protein levels won't be as strong as they normally are. And if you guys do end up with lower protein, I would recommend broadening your lens as far as where you look for your buyers. Because if we have really good protein in central Alberta, there's a good chance that we also won't be discounting for protein. [00:57:23] Speaker B: Right. [00:57:24] Speaker C: So if you end up with low protein wheat and they're going to hammer you at a local buyer. Maybe it's worth driving a little bit further to avoid that discount. Depends how bad it is, depends how that spread goes. But it's been a while since we've seen really, really egregious protein discounts. But that's something that could come up this year. There's big global protein issues, so we should be able to get top dollar for it if we have the protein. The China Australia relationship, this is going to apply to barley as well. But I think two weeks ago, maybe it was last week, Australia came out and accused China's kafka, which is owned by the government, of price fixing the australian markets on their futures. Now, there hasn't been a big rebuttal from China yet, but that is something that could carry some weight. Obviously, China never likes being called out for anything, and usually when they do, they go after the agriculture sector, which of course we've all noticed and felt and maybe doesn't make us happy because they're trying to punish a government that doesn't care about a voting base out here. So I won't get into politics. But anyway, there is potentially some upside there on politics with China and Australia. We do have very crisp demand when it comes to your spring wheat supply. A little less on the CPS side, I would say. But, you know, we've seen tremendous basis levels when it comes to spring wheat. Up to $3 this year in different parts of the province. 270 has been easy to get a lot of the time based on a, you know, 113.5 spec. And again, your fall basis levels are absolutely. It's horrific. So again, don't book the basis levels right now. I agree with that. That statement that Ryan made, you want to wait if the futures pop up, just lock in the futures, wait for that basis. Push your delivery out as far as you can. Make sure that you still are taking care of the farm needs as far as cash flow, bin space, that sort of stuff. But for what? You can push that out, that delivery further out, so that you can maybe get a better basis on that contract, because I think that's going to improve for you guys. And then, of course, more countries looking to increase their food security. So big us crop, we won't bang on that drum. Argentina, Australia, wheat again. Australia hasn't seen any major weather concerns so far, but that can change. They are forecasting another shift to La Nina here that favored Australia last time we went through it and really hammered South America. So we'll see if that happens. But as it sits right now, there's a little bit of a weather concern in Argentina, but not enough to rattle the markets. And then, of course, Ryan talked about rail. I disagree with the article that was in the western producer. I think we'll move a crop just like we always do, and you guys will be able to get better basis levels. I don't think elevators are just going to be plugged up. I think we've moved past that since 2014, I think was the last major time we had issues with rail to a large degree. The canadian crop, 3 million metric tons bigger than it was last year. However, when you look at the supply and demand estimates and of where we're going to start the year, to where we're going to finish it, as far as your ending stocks go, even if 33 million metric tons is accurate, and I think that that's maybe a little bit large given some of the heat and dryness that's impacted. And, you know, I talked to some people over Manitoba, Saskatchewan, earlier this week, and they have two wet problems over there where they think their yields are lower. Some disease pressure there as well. So I don't think it's as big as maybe everybody thinks it is, but if it is, we still have the demand in place that we're going to draw it down. So again, some more positivity there, Ryan, maybe not the worst thing ever. So what I would say about your wheat in general, this is a crop calendar for the world. So this is the northern hemisphere, and then down at the bottom, you got the southern hemisphere, and this is their crop calendar. Right. And so this is worth recognizing for the farm when you're building a marketing plant for your wheat. And, and the reason for that is we've all seen the wheat market just hibernate from December until March, maybe longer, and it might start even a little bit earlier than that, where all of that volatility just dies off. And this is the reason for it. So you have your harvest pressure that comes in. Obviously, it starts kind of in, I would call it June mostly, but you get harvest pressure starting in June and then pushes all the way to probably the midpoint of October, and then harvest is done. Now, the world knows exactly how much wheat they have in the top five major exporters in the world between Russia, Ukraine, Europe, United States and Canada. So we know our balance sheet for that. And immediately after that, you have your planting. That happens in Russia and Ukraine and the United States as well, Europe as well. And so not only do we know exactly how much volume we're going to have, we also know how much potential volume we have coming off the winter wheat crop for next spring, early summer. So the trade can just go to bed. It doesn't have to worry about wheat supply. Anything that's already been factored in outside of black swan events like Russia attacking Ukraine, maybe NATO gets involved, something like that, but you're not going to get a lot of volatility there. So I'm not saying don't deliver your wheat in the early winter months, but maybe don't sell it in the early winter months because it's probably not going to be a great price for you. If you need to make sales and have deliveries during that period, maybe you're too busy at the fall. You got other stuff that's sold, then sell it for that period. When you get that harvest rally, look for the basis to improve, but don't actively look to sell crop in February and March expecting to have great prices. It's probably not going to be there, and this is a large reason for it. So your spring week chart, and again, this is done on the weekend, it's a little bit different. So I'm going to nerd out a little bit here on you guys. But technically, what we're looking at here is you have a shoulder here, then you have your head, and then you have your other shoulder, if you guys can see that. I'm not sure how well it shows up for you, but that is called a reverse head and shoulders formation. That is what a technical analyst would look for on the chart as a major reversal formation. Now, this, this ellipse I had drawn the week before, before the price had gone there. So it followed that obediently and did exactly what it was supposed to. And then when we came back down, I was hoping we were going to park right around there, but we've kind of come back down to the, to where the head is that low, the major low. And so it kind of negates the whole theory of that swing count that's going on. But what it does, it still holds as a reversal signal known as a double bottom. So as long as that main support level holds there, you're still in good shape to see the market reverse and get some short covering in the market. And I'll just wander off point here for a second. The funds are massively short, your commodities, right? Whether it's soybeans, corn, your wheat futures, they are betting big on the downside. And one of the tremendous benefits of that, as bad as that sounds, that it's really hard to maintain a perfect crop, right? So when they start out with the best crop ever, it's really hard to keep that throughout an entire growing season. So if we're considering that on the soybean crop in the United States, there's really only one way for that to go. They either get perfect weather, which as farmers, you all know, is not easy, very rare, or we have to take some yield out of the equation and that provides support. And you have to pencil that back into the market to the same degree here with spring wheat. We're penciling in a massive North Dakota crop, massive northern plains crop in the United States. We think we have a big crop in Canada here, but it's been record setting heat through parts of the northern plains here recently. Drew Lerner is one of the weather sources that we subscribe to, and he's saying that yield stress is going to continue through that area over the next week to ten days. So you could be taking some of that yield off that the crop tour just went through and declared the best ever. And that would lead to support coming into your market. So certainly going to be interesting going over the next 60 days here, whether the markets can completely get destroyed, as Ryan's may be predicting, or whether they're going to find some life here on a harvest rally and push its way back up. So, lastly, moving over to barley, and I really should have done barley first because I feel like I was a little bit more optimistic on the other commodities. And Barley's terrible. It's really bad. We'll try. So Barley acres in Canada bled to other commodities, so we have less acres in. So that's good. You have smaller crops in the EU and Black Sea. That's supportive to the market. You maybe have some political issues over with Australia and China. If that actually develops into something that would be really good and it would actually change the outlook, that has enough influence in the market to actually do something. And you do have kind of a shift to more greener energy policies. Depending on the president that wins in November, you could see potentially more of a shift towards the ethanol side, which would increase your corn demand, which then would help your barley demand here. But that's about all we got that's good for barley. Right now. Barley is losing market share to the US. The US is losing market share to Brazil. You have tremendous crops in Brazil. Looks. I can't make a good reason for why you're not going to have a great crop in the United States. They've escaped July without any major weather concerns. Somehow the USDA last month managed to make it so that us corn was under 2 billion bushels for ending stocks. I don't know. I don't think that's going to 3 billion reins. We're going to three. Oh, my gosh. Oh. Three minutes. Yeah. So it's not good. Barley is trying to swim with concrete around its ankles. Still going to be maybe some slight pops. What I would throw at you guys for a strategy on barley. Again, it ties back to that trading account being a very significant piece for the farm. But if you can get profitable barley, know your break even your cost of production. If you can sell your barley for profit and make some money on it, I would consider consider liquidating that, taking the value from that, taking a chunk of that, putting into your trading account and turning it into canola. Canola is a much more volatile market. Right. Gone up and down $80 a ton three times in July. So you can make money going up and down in that market. And it escapes you trying to make twenty cents a bushel on Barley for the next seven months. So that is how I would approach barley. It's not a pretty outlook and it's something you can kind of move into. This is your corn futures. It's terrible. Possibly going to head down to $3 a bushel. Really hard for it to head back up to 450. So it's not great. It gets worse when you consider that the interest rate is likely going to change for the United States, which will pressure the us dollar. So you pressure the us dollar. That might make corn futures climb a little bit. But the problem with that is that it's going to make the canadian dollar go up, which means makes it more accessible for southern feeders to bring corn into the market and steal more of your market share. So even though I'm trying to put a positive spin on it still turns into a negative. All right, lastly, so calls and long call options and long, long positions, they are betting on upside in the market. Put options in short futures, outright positions, they are betting on downside in the market. Making money on a market going down is fantastic. You're the only guy in the coffee shop that's happy that the price is crashing and you're comfortably sold and you're not worried about it. However, all of that is to kind of jump into the triple play. And this is a strategy that we've worked with, with farms for the last three to four years here, and it's worked really well. So there's a few parts. So Ryan's going to have to bear with me a second on this. But basically what we're going to do. So if you had zero sold for the farm and we wanted to execute. But maybe you have hail risk. Maybe you're worried about late harvest. Maybe. Maybe wait till it's in the bin. Maybe this is the best we could do, is to get you to 25% physically committed for the farm. So we sell 25% to your favorite buyer. Now, this was done last weekend at 700, when I thought we had a chance at that. So $700 a ton. We sell 25% of physical production. That's 15.88 a bushel as a floor price. We're not including basis in this right now. Then we take 25% of that trading account value, and we're going to buy 25% of production at 700. Okay. Those are going to cost you maybe $45 a ton, call it a buck a bushel. Now we're sitting at 1474 for another 25% as a floor price. We're not promising that 25%. We're just protecting the price on it. And then lastly, and this is kind of the crown jewel, I guess, in the strategy is short the futures outright position of 25%. And this is for those of you without a trading account. Happy to explain this in more detail, but essentially what we're doing is with that piece now, we are 75% price protected on the farm. So we could do this at 670. We could do it at 650. You know, if you're undersold, we can execute this on different volumes, obviously. But what we're doing is we're going 75% sold in this scenario, with a. With an average price, I think of. I think it was 1550. I did the math. Is the average price for the farm, that's the worst we could do on 75% of the total canola grown on the farm. We're only promising to deliver 25% of it right now. The question is, well, what if the market keeps going higher? And if the weather had held true and we were hot and dry for the next ten days, as they promised over the weekend, we would actually be reviewing that. But essentially, the reason why this strategy works so well is because you can undo that 25%, that outright short position at 25%. We can reverse that. So say 700 was the level that we got into this, and 720 is your ceiling that you're like. It could go to there, and I'm fine if it does, but if it closes above that and when we go back to 2021, everyone had great crops in June. And for the first time in two or three years, because China wasn't ticked at us. We had canola prices go up to $12 and $13 a bushel. And looking out your window, it was the right idea to sell your crop. But when it climbed above 550 a ton, that was your old ceiling in the market. That was your warning sign that you were in trouble. And that's where you wanted to jump in. Buy, call options, go long the market, undo your sales. And what this does is it allows you to undo the sale. So you go from 75% price protected on the farm. And just by reversing that 125 percent short position, you are now only 25% exposed to the market. It washes out either the put option or the contract that you sold. So that is the triple play strategy. Happy to walk that through with you guys. This is where we would have executed it. I know I'm out of time, so if you guys want to talk, we'll be over there. [01:12:10] Speaker B: Yeah, that's it. [01:12:16] Speaker A: All right, folks. Kyle had a lot of stuff to put out there in his market update. And I hope you're able to capture some key highlights from that. Now let's wrap up the episode here with eating your veggies. And then let's go over. Yeah, let's go over eating your veggies and get things wrapped up here for today. So three things. Number one, this is a tough one because the diesel prices are starting. They bottomed out. Now they're starting to climb here a little bit. So like the eating your veggies. Pardon me? Eating your veggies. Sponsored by the lunchbox crew. The lunchbox crew. They got a notification to buy diesel here the other day. So I'm just. I think that's still something that is important. Even though diesel is still in a downtrend with the us recession and old talks around that, I still think that a diesel purchase here at the end of the day, it's harvest time. Your tanks are probably full anyway. But I. We've been trying to time a diesel purchase over the last couple weeks. So we're doing that. Second thing for eating your veggies. Patience. On crop marketing, there's going to be outliers. You know, out there. From a crop marketing perspective, I'm trying to think of what crop you would still want to eagerly price. You know, if you had a green pee offer in the $14 range, you might take a look at that. You know, maybe your yellow peas at 1050 or better, I'd still do some of that. Again, I think the damage here from a crop perspective has been on the canola, from a heating dryness perspective, was on the canola and on the barley, some of the later barley, some of the. Maybe some of the oats as well, the later seed of crops. Right. Whatever that was on your farm. I think peas are going to hang in pretty darn good, though, overall, same thing with wheat. So there might be a little bit of something to do there. But I'm kind of preaching patience for most of crop marketing and just dial into your harvest now and quality, like, keep your ear to the ground on what you're hearing for quality and stuff like that. But, you know, if someone offers you a premium, you got to take a look and say, why? You know, why am I getting a premium right now? What's going on? [01:14:29] Speaker C: What's the bigger picture look like? [01:14:31] Speaker A: And I'll do my best to get those for you as well, to relay that information to you throughout harvest here. So patience is my second thing in eating your veggies. And number three, I put this over on Twitter the other day. So I dream a dream here, folks, of hosting what, the futures podcast hosting. Well, number one, local events. And thank you to Taylor, who emailed in and said, hey, Ryan, we'd like to have you in unity this winter and let's get together and figure something out. We're gonna do some, some smaller local events as well. But I'm also thinking of doing just a crop marketing conference. Like, think about it this way. You commit to a day. I think it's a day, you know, up for debate, but I think it's a day. And you bring in a couple of merchants. You bring in someone who's trading a lot of wheat globally, someone who's trading some pulses or something like that. You bring in a few of those folks, and then you bring in some of our bigger analysts out there. Maybe they're behind a paywall, but maybe we can convince them to come and say hi and give a bit of a spiel or presentation. Maybe there's a canadian analyst we bring in. Maybe there's a us analyst we bring in. Well, we've got some grain merchants, the people trading this stuff. Then we have the analysts come in and do their thing. And then from there, maybe we have, you know, some fertilizer outlook. Maybe we bring in some type of fertilizer broker or a fuel broker as well. Talk about how on some of these big inputs we can save some money, or how can we get organized together to have volume buy some of these inputs. I'm not sure yet, but bring someone in like that. And then maybe you just have a few advisors and consultants around as well, hosting seminars on how to create your crop marketing plan. You know, maybe there's a futures broker or two involved, but basically, as a farmer, you show up to this thing, you spend the day, you go and learn about the crops that you are growing on your farm, and you want help in marketing, and maybe you'll leave with some type of high level crop marketing plan. Maybe it comes with some things, you know, and then you leave with some type of plant. And my goal here would. Would be that it's farmers in attendance, not industry folks in attendance, but farmers in attendance. Right? So farmers with other farmers getting some expert analysis, expert knowledge, taking that, making an actionable green marketing plan from that. And I'm trying to put that together in my mind here. I'm starting to take some notes down. And what I want from you is, number one, hit me up. Is this a good idea or not? Is this missing in western canadian agriculture or not? Right. Let me know. And also, where could we host this thing? And I don't want to go to a big city. I want to go somewhere small, a smaller town with a great venue and support a rural community or two. Hey, maybe we do one in each province. I don't know. Maybe we do two in Alberta, up, one in the peace, one in central Alberta, southern Alberta, one in Saskatchewan, Manitoba. I don't know. I'm all ears on what this could be, but I want to have it, you know, be somewhere small that needs, needs that business. [01:18:05] Speaker B: Right. [01:18:05] Speaker A: I don't want to have it in downtown, wherever. I know from a flight perspective, so on and so forth. It's easier to get speakers in and stuff, but I'd love to support a hotel or venue in a smaller town. If you have any, any ideas what that could look like, hit me up as well. Ryan, at what the Futures podcast Dot C. That's my email and comments on Twitter, comments on our YouTube channel. You know, let me know if this is a good idea or nothing. And I'd love to just see if we can make this a reality or a vision. [01:18:37] Speaker C: Okay. [01:18:38] Speaker A: Make this vision a reality. All right. I didn't get any questions in the pioneer seed mailbag this week. Of course, our last prize went to Riley Emerson up north in the peace region. So we sell one more month of giveaways. If you have a harvest related question, send it to the pioneer seed mailbag. Ryan with the Futures podcast, CA let me know what that is. I don't have to see your name, but if you have a harvest question, send it in. I'll do my best to answer them and help you help navigate harvest here as you crop merchant plan through harvest. Okay. And that's it. If you've made it this far in the episode, folks, thanks for hanging in. Of course. Tell your neighbors, tell your friends about the what the Futures podcast. Give us a subscribe on YouTube or on whatever podcast platform you tune in. I'll be back in studio next week for episode number 40. So thanks for hanging out with me today. I certainly appreciate it. And let me know what you thought of today's episode. Alright, folks, that's it from me. I'm out. Cheers from rival trade brewing in Rocky Mountain House.