Episode Transcript
[00:00:00] Speaker A: I've got canola up five bucks a ton here this morning. May trading at 703. Of course, this is on a little bit of a delay, so you'll want to refresh your own futures quotes here as fast as you can. November trading at 7:07.
I've got spring wheat up about 4 cents here at 6. 14. I've got Kansas City wheat up a penny at 5.75. People wondering what is going on with the wheat market? You know, why isn't it's acting like oilseeds, you know, what's going on with corn. It is up three and a half cents around 4. 49 this morning. Soybeans up nine cents at 1173. Bean oil up about a half a cent here, 63, 22. And the Canadian dollar trading lower at 72, 87. Now, I wanted to take a minute before we bring in our guest to just go over some of the prices, grain prices, input prices that I've heard over the last 24 hours or so.
And of course, before I go on, if you are joining us for the first time, don't forget to hit that subscribe button and catch all the what the futures shows, Tuesdays and Fridays.
So grain prices, some notable ones for me here over the last day, $15 canola triggered for March delivery. Up in Rycroft, Alberta, we had yellow peas. I saw an $8.75, I saw an 885 and we saw a $9 trigger as well. So old crop yellow peas really enjoying that tariff reduction from China. That was confirmed Friday. All right, we've got hard red spring wheat for old crop delivery again. Central Alberta hitting that eight and a quarter level. We've hit that a few times, but we're back there now. We're getting a little bit discounted or robbed on basis because we haven't seen these futures levels all year and we've already seen $8 hard red spring wheat. So something's not quite driving their basis. Not quite. Keeping up.775 for CPS red. So the CPS growers are gonna appreciate that one. And then we've got new crop malt barley making a little bit of a climb here, trading at $6.10 a bushel. We talked about it on the show a couple of times. Sign your production contracts, don't price any if you can help it.
And sure enough, a couple of weeks later, we're up $0.30 a bushel on new crop malt barley.
Now on input prices, Guys, it was a busy weekend. I spent a lot of Time Saturday and Sunday with the lunchbox crew just going through some strategies. Gave them a little bit of homework for Sunday as well. But obviously it got, it's getting a little bit scary out there. Diesel prices, I've got a quote of 97 cents a liter. I got a buck 4, a buck 9, a buck 11, a buck 13, a buck 16, and a buck 21. Now, volume matters here, location matters, but that is a heck of a range. All I'll say on diesel prices, don't forget to do a little bit of checking around because some of these were neighboring locations. And again, timing, volume, logistics, that all matters in your diesel quotes. All right, now, headlines this morning. Before we bring in our guest, the one that everyone wants to talk about here. Agruel has lowered Brazil soybean production to 178 million metric tons, down from 181. So a little bit of a drop in that production or that expected production. We've got. China did reduce the tariff on Canadian canola. That was on Saturday as well, down to 14.9%.
You know, that was set at 75ish. So that came as expected. But was caught in what was happening on Saturday. Canola also, pardon me, trying to also reduce the canola meal and P tariff late last week. That was on Friday. So Friday was that canola seed was on on Saturday and as expected, as rumored, that, that is a good news story. Now, two last ones here.
Now, these aren't really in the headlines, but I still want to talk about them for just a minute. The Middle east handles 12% of global wheat trade and 20% of feed barley trade. All right, that is coming in to the Middle East.
I'm going to butcher this. But the second one here, the Strait of Hormuz is essentially closed.
Iran doesn't have the comment came out. Iran doesn't have the navy to do this, but if you attack a boat or a vessel or two and light them on fire, insurance costs rise and essentially that starts the process of halting traffic. All right, so you do halt traffic in that situation.
Is it closed? Is there a big sign that says, pardon me, we're closed? No, but can you buy the insurance to go through? All right. To get through there? That, that is the, that is the, the issue there. All right. Okay, now let's, let's bring in our guest here for this week.
Quentin. Are you, are you read me, buddy? Can you hear me?
[00:05:12] Speaker B: I can hear you. How's it going, Ryan?
[00:05:14] Speaker A: It's going pretty good, man. It's been a while since You've been on the show. How's everything going? How's life? What are you keeping busy with?
[00:05:21] Speaker B: Life's good. Keeping busy. Just family. Daughter, she's turning one year right away here in a few days. So other than that, just working away and. Yeah. Trying to keep track of these markets, but, man, it's challenging.
[00:05:33] Speaker A: Well, very happy birthday to your daughter and I'm sure. Are you doing the cake smash or what's the.
[00:05:39] Speaker B: Oh, yeah, yeah.
[00:05:40] Speaker A: Nice, nice. Gotta do it. Awesome. So, Quinton, each year, obviously you're. You're over with the JGL capital. You're talking to farmers each and every day.
A comment came through X yesterday, just talking about quote, unquote, margins just got a whole lot worse for farmers in 2026.
I wasn't feeling that way when I read the comment. What do you think about that statement?
[00:06:05] Speaker B: Translate like as prices, which is what I'm more focused on canola prices. I mean, they're moving in the right direction, but I think they're pointing out at diesel fuel costs and then fertilizer to move up. So I. That I track a little less than just the straight, you know, canola futures. But it sounds like it was much more punitive on the inputs, this event over the weekend than, you know, the futures benefited. So.
[00:06:33] Speaker A: Yeah, yeah, for sure. And I forgot. I forgot to go over urea. I.
I'll just throw this in here real quick for folks tuning in, but urea, 1100 bucks a ton. That was yesterday. Quote, in, like, southern Saskatchewan. I saw 11:40 up in the Peace region. And then we got some. No, no offers or no guarantees of movement, so I forgot to throw that in with diesel prices just a little bit earlier there. All right, so how's the mood out there? Chatting with guys? Are they.
Is it. Is it feeling a touch more optimistic on the margin side or.
I guess maybe it's too early to tell, but how is the mood out there?
[00:07:12] Speaker B: There's a lot of interest in putting some edges on or discussing how can you expand sales without taking on a bunch of physical risk. So it's been busy for the last little while.
Since Sunday evening, the phone's been very, very active and a lot of guys reaching out and trying to come up with some strategies on canolas. For sure. Also kind of having a peek at wheat poking in there. But yeah, just a lot of trying to manage that physical risk or that production risk without.
And. And also achieving that price protection. So.
[00:07:45] Speaker A: Yeah, yeah, yeah, for sure. That's been a lot about what I've Been covering the last couple days here as well. Were you surprised by how steady Canola was on Monday? Like, it didn't really have, you know, sharp. It had a sharp move higher initially, but it just kind of held. Did that surprise you at all?
[00:08:03] Speaker B: Question?
No, I don't think it surprised me. It's been. It's been doing a lot. I feel like pushing up and then it falls back, you know, earlier morning and then just finishes the day seemingly strong lately. That's kind of a pattern. I feel like I've tried to pick or picked up.
That's kind of what it did, you know, gave a little bit of a chance, but it's. I'm surprised that. I'm a little bit surprised it didn't push really, really hard at the end and move and, you know, finish up like crude and some of these other things did. So it's just steady and the funds are just buying in. And you're kind of seeing that across the entire space of veg oils and obviously energies. Like, you know, I'll comment quickly on. There was a question about crude. The link. Crude and canola oil or crude and canola. I would, you know, track probably heating oil a little closer than I would track the crude in that relationship.
And that number is definitely not like a fixed peg number. Like, for every 1% of heating oil movement, you get half percent or something. Nothing like that. It moves and it gyrates.
But, yeah, there's a large correlation between the veg oils and heating oil and their relationship with bio diesel sort of.
Yeah. Components there. So, yeah, that's the one I would focus on.
[00:09:12] Speaker A: It's interesting because the. We've had this beautiful rally since, you know, the end of 2025, this beautiful canola rally. We caught some, you know, I call it a little bit of, like a demand story on clarity around trade with China, clarity around biofuel policy.
And then, you know, we kind of get to the. I don't. I don't want to say the end of that news cycle or that. And then we get this war event, you know, energy cruising higher, being oil cruising higher. Canola along with it. So it's. It's getting us into a space here where, you know, we break above 700 canola, and now even the technical guys are like, oh, this is. This is really good. This is awesome.
Know, we have a little bit more Runway here to go with. And of course, it's a little trickier now with. With war events, so. All right, so for. On the. On the Canola front, Is there any strategy or anything that, that really kind of dominated your conversations yesterday on, on how to protect this canola market? Was there anything that really stood out?
[00:10:20] Speaker B: Two main strategies I would say number one is just straight puts. And the reason kind of doing that is just implied volatility is fairly low. So selling the option of whatever side you might want to sell it on, you're not getting the biggest reward because implied volatility is lower. So just a straight put is kind of nice today.
The other thing that you could do is I've had a fair bit of discussion around is just selling futures and then you could just buy a higher up call just in case you get that crazy drought.
Just buy that insurance call kind of higher up in case things really start to run. Yep, a lot of. I've had a, quite a bit of discussion on that topic with guys as well talking about protecting margin and things like protecting margin calls. You know, that's what that calls for.
So those are the two conversations that I've been having around those type of strategies. Yeah.
[00:11:13] Speaker A: All right, awesome. Now I want to switch gears to wheat.
So you know, the, the wheat markets have looked a little bit better on the future side. We've had a slow momentum but we've seen some gains and then some pullback and some gains. It's been a pretty nice little climb here, just not as significant as oilseeds.
Do you feel like there's a bit of a bullish story developing on wheat or is this a time where we need to be even more cautious in taking advantage of this little bump?
[00:11:47] Speaker B: I really hope wheat rallies
[00:11:51] Speaker A: for this
[00:11:51] Speaker B: rally for a while.
I suppose I'm a little surprised. Like Friday it was quite, it was up a fair bit. I'm surprised it didn't follow through on Monday.
Yeah, you know the store, I, I'm not finding the most bullish stories on we around like Russia and things like that. I don't think they're that interesting yet. The funds have sort of shifted. They've started buying back their short positions and hopefully they, I'm hope crossed fingers crossed that they end up going long and pushing this thing higher.
I'm hopeful we, you know, I'm not pushing for major sales and weed or anything like that yet. I, Yeah, I think sharpen your pencils, set some targets, watch the futures like basis for example, new crop, not very nice right now. Brutal. Yeah, brutal.
So you know, keep an eye on those futures. What's December 6th, 5th D, something like that.
[00:12:43] Speaker A: Yeah. 650 ish.
[00:12:45] Speaker B: Just over you know, that's not awful, to be honest. Just future standalone. I think it, you know, I'm hoping to get more out of that. So. Yeah, sure. And keep an eye on that. I don't know, 670.
Hopefully we see a seven in front of him.
[00:13:00] Speaker A: Yeah, I.
The question came up last night about setting targets on. On wheat. And, you know, the. The big thing here is that basis, the time of year and the. The length that we have to get to harvest. So there's certainly not a true representation of basis out there yet. So, you know, just something to take a look at. But, you know, setting some targets at, you know, for us on our farm is. Got to start at break even. Unfortunately, we have to start at break even because there's just not much in there from a margin perspective at this time. So we start at break even and then go up from there, hopefully. All right, I wanted to switch gears here to crude, and we are getting close to time here, but a lot of, you know, a lot of firms asking if they should fill with diesel. And so here's the interesting thing. So on Friday, the Friday quotes, you could take advantage of those quotes with many companies until Monday evening.
So you had a Friday diesel price that didn't have that Friday full effect of the, you know, the war. So we were. We were busy making sure that, you know, reviewing how much to fill and all that stuff.
Do you go over any strategies on the crude oil or the heating oil side? Like to. If someone buys and, you know, the crude oil falls apart or heating oil falls apart, you know, bought too high or. Or I don't want to buy, but I don't want to pay more. You know, is. Have you done any strategies around that lately?
[00:14:34] Speaker B: Yeah, I haven't done any strategies in the futures account for anyone really. The contracts are very large, so they're not super usable for. From farmers.
What I. I had actually quite a few of those questions flow through as well yesterday. And I was using the terms bite the bullet. A lot of those folks, you know, you're bringing up that they had sort of these prices from Friday.
Yeah. After they told me the numbers, I was kind of saying I think I probably would just in case, you know. Yeah. You might end up. This thing could. It's a war event, could turn into nothing and we could drop down, but you'd really not feel good if, you know, oil was up. If we were, things were up another 40 cents. So I feel like, yeah, get that. If you can get that Friday price, just probably go for it. And move on.
[00:15:20] Speaker A: Yeah, that's, that's what I was doing as well. And the thing about it, like, if you want to, if you really want to finesse it at some point, you buy it.
If it goes up, you've bought it. So you don't have to worry about it going higher. But if you really want to finesse it, then you can dig in on a strategy to just lower your, your cost of your fuel. Like it's the risk, it's not as scary. And you can say, okay, well I got this thing. If it goes up, whatever, but here's a strategy on how to just pay a little bit less.
I've been working through those examples in the background, not executing anything yet. We're working on that in the background.
All right. Q. We're getting close to time here. Anything else on your mind? I, you know, I look at the, the events in the, in the Middle east, you've got energies raising the canola side of this equation.
You've got worry about how are we going to move cereals, grains into the area.
Feeling. Anything else you want to add before I let you go?
[00:16:20] Speaker B: You know, it's hard to predict all that others, all the events. So one thing I think that's interesting for folks to keep an eye on is in the wheat world with the spread between spring wheat and Kansas or Chicago, really those spreads are starting to get tighter and tighter and that allows for the potential to use the Chicago or Kansas options like puts as a price floor because you generally don't have that available to you in just the spring wheat market. The, the options are so thin, it asks spread, it's expensive, it ask spreads are too wide. This is not really a usable contract yet in terms of the option side of it. So when that spread gets tighter and tighter and it's at $0.24 today with the Kansas for December, you know, that starts to become interesting, starts to potentially become usable. If we get more of a rally, it's something to sort of double check, keep an eye out for because it might be a solution in the future. That, that's something that's interesting to me and it's kind of rare, so, you know, might end up using that later on this year. Haven't used it yet, haven't done anything yet, but.
[00:17:24] Speaker A: All right, all right. Awesome. Awesome, Quinton. Appreciate that. Just some rapid insights here, guys. Before we let you go number one, you know, review your, your portfolio, your crop marketing portfolio. Review your contracts, your targets, review your percent sold, review your brokerage statement and book a meeting with Quinton. All right. Book a meeting with Quentin to review your position and review what you got going on on the farm.
I hope that's all right, Quentin, but absolutely. And then from there, folks, work hard on strategies right now because there's no guarantee on where these markets go. So work hard on protecting your bottom line. Just think about if you hedged yourself last year between 720 and 750 canola. You could have done that, right? And some folks obviously did, but it felt pretty good after when the markets were dipping down. I also want to bring attention to the no price established contract at a company like Cargill where you can protect your worst case scenario without being subject to a buyout. You want to reach out to those folks to review that, though. But we did them last year and they worked well. Maybe I'll talk about it more on on Fridays with the futures. And I'll steal a quote here from Susan Stroud that I picked up on Sunday night when markets pay you for uncertainty, take them up on it. All right.
All right, folks, that's this week's cup of coffee. It was brought to you by egg i3 precision insurance that fits your farm and and holds up when it matters. Check that website out, www.agi3ai. And they are out and quoting right now. I'm out of coffee, folks. Thank you, Q from JGL Capital for joining me. That's it for this week and I will see you all Friday on what the futures.
