Episode Transcript
[00:00:00] I feel like I owe you one. Folks, we've had some doozy episodes here over the last month. It's time to review all of the things we've covered here the last month. I want to talk through the strategies, I want to talk through some of the ideas, and for goodness sakes, let's get some of these questions caught up. The mailbag has been swamped with questions since cup of Coffee was launched a couple of weeks ago. A nice short one for you. Episode 110.
[00:00:27] Hey, folks, welcome to the what the Futures podcast, your quick guide to better farming decisions.
[00:00:40] Welcome. It's episode 110 of the what the Futures podcast, of course, recorded each and every single week in the UPL studio. Great partner of the show. And again, folks, the this is the week. This is it. We've made it. Smart Buy Rewards the deadline. If you are listening to the show on February 13, you're thinking, okay, it's Friday. I've listened to the show. I got to be ready for Valentine's Day. I got to get something for the bride for the 14th check done. Get that out of the way. Boom. 15th. Smart buy rewards deadline. There you go. Upl giving you the time to be romantic and then get down to business on the 15th. Now, if you could do me a favor, go and find that subscribe button on YouTube. I really, I. I do appreciate seeing this community grow, seeing it grow with. With the emails coming in, the messages coming in. It's awesome. Like, I now I'm at the point, this is kind of cool where like I have to block off a little bit of time every week to respond to this stuff. I didn't have to do that a year and a half ago. Right?
[00:01:46] So super cool.
[00:01:48] Keep it coming. Wherever you get your podcast, share it with your friends, your farming neighbors community again. If you think there's some value here for them. Yeah, go ahead and share it again, folks.
[00:01:59] Trying to find an edge for you. Trying to find an advantage and yeah, and I hope you enjoy it. All right, YouTube comment came in. And of course, last week's episode, I had the great guys from Global Agris Solutions join me. I hope you guys enjoyed that content. They just honest, open discussion there, which I. Which I appreciate. And SCIC has not sent me any note yet if they're upset with my comments or not. But anyways, I said I'm the least bearish I've been in three years. So the comment comes in on YouTube and it says, well, all it says is it was hard to be bullish. And my Point here is that I never said that I was bullish.
[00:02:39] I just said I'm the least bearish I've been in three years. You know, I explained it. You know, I don't expect a 25%, knock on wood, man. Right? 20%, 15% decline. I think we're in the muck and we're in this path that's a little bit straighter. And you're seeing it.
[00:02:56] You are seeing it. You, you have, you have had to practice patience like I have here the last six weeks in this Canola rally.
[00:03:06] This is a slow Canola rally, guys. Compared to the run up of 21, 22, the decline of 23, 24, even 25 to some degree. Not again.
[00:03:21] Volatility, excitement in the spring, you know, that growing season rally, and then quiet after that. But these rallies are really slow. Look at the wheat market. I was explaining to a farm how there's periods of time. Go back in a chart and look at years where the market move was $0.80 for multiple years in wheat. We're not used to that, right? So we gotta get back to being a little bit patient. Like, I agree it is hard to be bullish. It is. I agree with that comment. It's hard to be bullish. But I also, I'm not bullish. I'm just not bearish.
[00:03:57] And what that means to me is just steady markets. I, I had a chat with, Got some exciting things actually happening in the background with, with some changes here for the lunchbox crew. And it's actually just been a business planning couple of weeks here, just making some tweaks. Anyways, I was chatting with, with Evan over at Simple Hedge. We got a cool project on the go. I was just, you know, telling him that, you know, in my opinion, at this, you know, this time February of 2026, you, you know, I don't expect the pullbacks to be as severe in some of our markets. Like, even when Canola, when it finds its peak here, you know, it's. It's such a healthy, beautiful rally. This Canola market just doing beautiful things. It's getting positivity, surrounded by positivity. The technical guys love it. Everyone's loving this rally, this chart. But even when the pullback comes, I don't expect it to be like, fall off the cliff type action. I don't expect us to sit here and be like, oh, man, I wish I would have done it all at 650. Because now we're at, you know, 550. You can knock on wood that I didn't just jinx us here. Of course, a tweet can change that one way or the other, at least temporarily. But I find that we're in a little more stability. All right, now, I hope you guys are enjoying cup of coffee What a cluster this week. Hey, cup of coffee goes live Tuesday mornings. I hit the button, poof. Alerts pop up, boom, boom, boom, boom. Disconnected. This, this, that.
[00:05:27] Your guest isn't being recorded. I'm like, what is going on? I was raging. Yeah, I'll leave it at that. There's no cameras, no other cameras in the garage that could capture that moment. But anyways, there's still a little confusion about how it, how it goes on, right? How it happens. So it's 8am Mountain 2 every Tuesday. That's the guarantee. I want to talk about some of the headlines, futures moves, talk some strategy. And I bring in a guest I pull from a bucket on Monday morning. And then I message that, that person, I say, hey, can you join me on cup of coffee this week? Like, would you like to have a coffee? That's. That's the guest for that week. So if there's anyone listening to the show that's an analyst or an advisor, I'd like to get another half a dozen names in there just to get a little more variety going as well. But we've got some great folks in there and that, that's how it goes now. It's, it's inspired a little bit by, by Kill Tony, which is a great YouTube comedy show. It's a little edgy, folks, but I'll just leave it at that. Anyways, so. So through a cup of coffee at the end of it this week, but I threw out that oats were trading north of $4 in Manitoba and a 445.
[00:06:37] Now the, the 445 is like, that one was like top secret information. I didn't know that it was top secret information. But basically that one, if you had a production contract with them before then, that was the offer coming out to those farmers now. Okay, so, so that's the kind of, the interesting thing about that one.
[00:07:01] But I'm reading a text message from Bungie that says new crop values today triggered 4$. $4 per bushel. 2 CW non desiccated applied oats to source. Manitoba, right? September, October delivery. That's four dollar new crop oats, guys. Alrighty. In Alberta, where I'm from, we're not quite there yet, but we ain't. We're not far. We're not far. We're Fishing a little bit under that and we're going to see, see how close we're going to get. So the oat markets, just like a lot of your markets right now are showing some signs of life. So I love, I love when someone calls me out and is like I can't find that. That's baloney.
[00:07:46] Prove it. That's my favorite. Right? And yeah, like those were legit. It's just the one did have a layer there. Now hopefully those guys, you know, they come and, and try to get some more farmers and some more business and get that strong, you know, bit out there. But man, did I think we'd hear that from Bungie out of Cirrus.
[00:08:07] No, but we did. So there you go.
[00:08:11] Anyways. All right, so this is a catch up episode. There's a pile of questions that I want to get through some fun ones as well. Just get through some general thoughts, observations, dive a little deeper into a couple of topics. No guests this week, so it's just me.
[00:08:27] Nice, short and sweet will get you on your way. I don't know about you guys about the month of February when it comes to, to crop marketing. I know like I have the crop marketing checklist here.
[00:08:41] Like February, you know, it's, it's about for me and what I've been involved with here this last week or so from a crop rotation perspective, it's very dialed in. But we are just looking at cereals and deciding some tweaks on there because what I find is that if you're the $4 oat farm or some of the feed barley offers out there, those are a lot more secure and available and feel better planning wise than throwing in a budget for wheat. I was chatting with a farm and apples to apples, their costs, their yields, their scenario.
[00:09:25] Wheat and barley had the same result from a margin perspective. Wheat and feed barley, hard red spring wheat 13.5percent protein number one and feed barley had the same margin. The difference was that our wheat price per bushel was a budgeted number that we still needed the market to Somehow find a $0.70 whereas and the feed barley market was, was, was there, was already there. And so we're sitting at sitting and looking at that. I know barley acres are going to be up this year a little bit but I could see why because there's, there's just a little bit more certainty there. Now do I feel okay about the wheat market? Sure. I had Trent. Trent comes on once a month for their the Lunchbox True crew, Trent Clarenback and to do some technical stuff because, because I'm not, not smart enough to do that. And he kind of made a comment to me because I, I thought, I feel in my, you know, estimation like the Canadian dollar is on a upward trajectory. And I guess Trent has that same feeling.
[00:10:32] And you know, I was sitting here saying, you know, I'm not like super bearish commodities. And he's like, well if you're bullish the Canadian dollar, you're probably bullish commodities as well. Because in that scenario let's assume the US dollar index declines and that's good for US based future. So wheat might have that reward out there yet, but that was the difference. Right. Those new crop basis for wheat, they're junk and not giving anybody confidence in that forward contracting anything. So just that certainty there with barley. So February is a quiet month, right? I've got review your crop rankings, your power rankings, your seeding plans, your crop budget review. We've been doing a lot of that on the farm cost of production update. We've been tweaking that as well. Just dialing that in a little bit better.
[00:11:25] And then of course reviewing, I've been doing a lot of contracts, target reviews, position reviews. That's February. It's not a heavy, heavy month. All right, all right. So grain buyer conversation this week. You can see this is a hodgepodge episode. This does not surprise any, any farmer in western Canada hearing this. This will not surprise you at all. In some areas you can move high protein CPS wheat. CPS red as a, a hard red spring wheat with. Everyone's on, knows it's on. Everyone's on board with it. It's not like someone's trying to pretend it's hard red spring wheat. Like it's a, it's a CPS, right. Everybody knows but if it's 13% protein, they'll put it, they'll buy it as hard red. Okay. I think that's important to note actually for some of you out there. So anyways, chatting with, got a couple of farms I work with and we're just talking through some scenarios and just getting you know, checking the temperature out there and this was really interesting. I'm not going to name names because this is a great, great buyer and I've known them for, for a long time.
[00:12:30] But the merchants are, are very much focused on, you know, hand to mouth. Now it is about getting the cars, seeing what's coming and then buying up that wheat for that week or whatever the commodity is, the barley, the, the peas, whatever it is and moving on. There's not a lot of forward planning going on.
[00:12:51] And this has been the case for the last couple of years. Right? That's why it's not new to you.
[00:12:57] But we were talking through the scenarios and she's like, you know what? We just, we're really focused on next week and the week after and like do you need to move it? And I'm like no, no, we're just checking things out.
[00:13:09] And she's like we have sales on for April, sales on for May. My merchants have confirmed this, so we're going to come back to you. But we just, we, we're just focused on getting these cars filled here with, with what we need. And in my, in my mind I was like, like why wouldn't you with when road bands come get busier in April, like why wouldn't you be trying to get, get that bought now? Like it's going to get more expensive now. I was chatting with a, A, a person that was a merchant and, and is away and, and he's like I remember. He's like I remember those, those days and those, that time where you're just hand to mouth, hand to mouth, hand to mouth and, and per. Like hoping for a rally to knock out all of your targets so that you would have a bunch booked. Like it's like as a merchant, I was also hoping for a futures rally so that I could buy up, hit all these targets and not worry anymore about buying this darn grain and having to get it in right away and fill these darn cars. I don't like it either. But we're in that environment folks. And I just say that. Cause I think this spring you'll. There'll be some interesting opportunities for those that can load trucks in times when you don't want to or you can't. I expect that to, to continue. Two other comments here.
[00:14:37] So Brian with ICL on. On cup of coffee, he brought up that the. And I hope I say this right, Brian will, if he listens, he'll let me know if I said it right or wrong. But the, the supply in the, at the crush facilities for canola is very high. Like utilization is very very strong. There's a lot of supply at the crush plants. It said something about like 90% or 90 something percent. We did throw it in that video. I'll see if I can find his, his note on it. But there's been some like chatter out there that, that the crushers aren't that well covered. And I would just say from, from my side here, that is not what I am seeing or feeling in these bids. Canola stocks at process facilities. So at the crushers he's got the chart up here and very, very strong.
[00:15:32] The highest much. Yeah, significantly higher than the five year average over like 50,000 tons. Anyways. Yeah, I just, I want to put a caveat out there guys that there is a lot of canola on farm yet. The crushers haven't had a lot of competition until recently and so it's, it's not the crush plants that are really going to razzle dazzle you here this spring. It may actually be the line company that wants to buy more canola and, and get gets going the action today.
[00:16:02] I was chatting with the farmer up in the peace region. Of course it's Wednesday, February 11th. They said their facility today had bought north of 25,000 tons of canola. And I had a really good, really good run. So yeah. So big volume day here earlier this, this week on, on Wednesday. All right, so crop rankings guys. I, I just, everyone needs to do this for themselves because man does it get wonky. But I've still got you know, for our farm here, our budgeted price. I'm using 1450 a bushel. I might pump that up a little bit but I've got that in my number one spot right now.
[00:16:39] I, I do have, I do have some of the like, some of the changes here like the, the red lentil market heating up just a little bit. But I've got that moving up in the number four spot. Not like for us. We're not a, we have neighbors that grow lentils. That doesn't work for us or we haven't tried it yet. I guess maybe we don't know. But that was making its way up oats after falling off last week. I said it on the show. I think last week it, it roared right back up and six spot. You know, you throw a $4 number in there for us, maybe a 375 and it roars right back up there.
[00:17:19] I got maple peas still showing me some decent potential in the number two spot. Flax in the number three spot. Budgeting 15 bucks. We'll see if that price can, can find some traction.
[00:17:32] But I guess when I look at this as a whole here, the one thing is that barley, you know, feed barley, malt barley has climbed up a little bit in the rankings and wheat has fallen back. You know a few months ago I was saying like wheat's hanging in there. It's looking like it's got really good potential. I'm budgeting a 775 for central Saskatchewan for my wheat. And it's in the number 10 spot. Like it's starting to fall off because the. I got a little bit better malt price. You know, I've got a little bit better feed price. I'm not, don't get me wrong, we're losing money here, guys. At these values. I'm not saying, you know, oh my goodness, we're, we're good. Like when I look at the 16 crops across, across the board here, we are making money in our budgeting process. We are making money on one crop, two crops are profitable, three crops, four crops, you know, like, yeah, like the top five. There's a little bit of money to be made there. And then the rest, you know, you hope that they smarten up and get to that spot. But. So I'm not saying that it's all fixed. I'm just saying wheat started to fall off here, at least in my estimation. Started to fall off a little bit. The barley picked up, the oats picked up ground. And even with yellow peas smartening up here, I don't know if I'm just totally biased towards these darn things in, in a negative light, but my God, yellow peas sitting in second last spot even with an eight dollar number in there now. So, yeah, they, it's not cheap for us to grow peas on our farm. And yeah, that one not gonna, not gonna cut, not gonna cut it for us here in 2026. I encourage you guys work through your own type of crop rankings. It is so variable out there. I just wanted to make note that, you know, feed grains, oats making their way up, we kind of fall back here for this week. All right, we're gonna keep rolling here. Last quick thing on charts here, then we'll get into some questions.
[00:19:54] Wheat's a snoozer. There's a bunch of snoozers here. You guys don't listen to the show to figure out what the market's doing. I'm recording this Wednesday night, for goodness sakes. The markets are going to have moved by the time you listen to this, but just keep an eye on soybean oil. That chart, I like looking at that chart right now. And then obviously the Canola market's doing its thing, having a good little run here. I did, I did reward this rally. Not it didn't hit any level to scare me into a sale, but I did reward it just based off of the, the timing between our last sale and this one, the fact that it did Raise.
[00:20:35] It didn't bring my average down. It kept it pretty close. It was pretty steady. So I, yeah, I thought it was a good spot to get something done and just get the cash.
[00:20:47] Cash flow moving as well. We were undersold, undersold compared to where I'd normally be. So just took a advantage here to get some, A little something done and reward the rally. It's okay to reward the rally and get the cash. Cash moving if you need it. Right. So that's okay too. All right.
[00:21:10] It's been a big like planning just continues right on the farm. It continues. We've been getting our, getting our insurance our ducks in a row on that stuff and just doing some administration. There's some, you know, data entry, tweaking. Anyways, I have to throw it out in the podcast because my brother promised me that John Deere Operations center, all the fields would be, would be updated, the crop plan would be updated next week. So it's.
[00:21:40] We're going into the third week of February.
[00:21:44] He's promised he's gonna have that updated for me. He does a good job of it. He does a really good job of it. And so if he has it done this week, it'll be awesome. And then makes my life really easy because all I do is I hit a button and it pulls that all into harvest profit. So John Deere Operation center, harvest profit, the seamless transition there. And honestly it's probably. I should be the one updating John Deere Operations center on our farm right now, but he said he's gonna. Putney's better at it than I am, so. So there we go.
[00:22:15] Yeah. Harvestprophet.com they do have that 14 day trial. I was chatting with Ben earlier this week. We've got some things in motion there as well that you'll see in the next few weeks. But yeah, they're ready to rock and roll if anyone wants to take it for a test drive during a quieter time of the year.
[00:22:34] They are happy to get people, uh, get people going and, and give them a look there. All right.
[00:22:41] So yeah, check that out. There's some other things going on here with John Deere. Some exciting updates here that came in earlier this week, but I'll save those for, for next week. Of course we appreciate the support that the show gets from John Deere. Now, positive moments for this week.
[00:22:58] I. You thought I, you thought I missed them, right? No, I got them here. I got positive moments now when, when people, when I run into people at a conference or a meeting or something. Like, that they tell me that they listen to the show because of positive moments, so I can't forget them. But anyways, last week I had a. A dad win. All right? I had a dad victory because it was the, the RV show in Edmonton. And we have never gone to the RV show. We go to the. We've. I've been to the home show.
[00:23:30] I've been to, obviously, all the farm show stuff. We've been to farm fair. We've been to the pet expo. Like, all this stuff. Anyways, I tell Chantel, I'm like, hey, I'd love to go the whole family to the RV show.
[00:23:45] She's like, what? She's like, we're not buying a new rv. I'm like, no, no, no, no, no. I don't care about that.
[00:23:52] I want to go and I want to see, like, the gear for the site. I actually, I was in the. I'm in the market for a generator. So I'm like, I want to look at the generators and I want to look at the gear and I want a different tent for in the campsite. And I'm always looking for stuff. Right? She says, fine, but the kids aren't going to have fun. And I looked at her and I said, the kids are going to jump in 200 campers, test out 200 different sets of bunk beds, eat popcorn, watch a dog show, have their winter coats off, their winter boots off. They're going to be living the life. She's like, no way. She's like, that's not happening. Sure enough, we're driving away from the RV show. She looked at me and said, nice one. That was awesome. And the kids were wiped. They, yeah, it's popcorn all over my truck, but they were wiped. They did jump through 200 sets of bunk beds. They did see this amazing super dog show. It was awesome. And there's way more that there's like 2,000 trailers in there. I don't know what it was. It was crazy, but it was a great time. Did we buy a new camper? No. Did we tell the people that were buying new campers we'd like to see what they were trading in? Yes.
[00:25:06] But you know What? Our camper's 10 years old.
[00:25:09] And honestly, like, the layouts on a trailer, like, yeah, there's some slightly different layouts, but we walked out of there. My wife said a salesperson asked her, what's your favorite part of the show? And she said, the appreciation I have for my current camper, like, the thing's 10 years old. But man, do we ever love it. And nothing here. It's new and it's nice, but nothing. There was nothing that really knocked our, our socks off. It was just a really good fun event to go to. So I had a good time. Did not find the generator though. I for some reason taking £135 out of the box of the truck and back into the box of the truck. I don't know guys. I just, it didn't seem that appealing to me so I got to keep looking. Anyways, other thing. Olympics are on, right? Go Team Canada. We will have had at least one men's hockey game by the time you listen to this. So fingers crossed for that one.
[00:26:01] We have loved watching the speed skating, the 500 meter relay, 16 people on the ice, absolute chaos, crashes all the time. That one lady from the U.S.
[00:26:14] we watched her race three times. She fell all three times. They need to sharpen her blades, guys. Right. Anyways, we watched the Canadians pick up silver there where we love the Olympics. It's a, it's a, it's a great time and looking forward to. Yeah. Seeing how curling gets going. The men curling team one today.
[00:26:35] Yeah, we're getting into it. Right. Lots of fun stuff to watch. Last thing, for positive moments, I am heading out April 21st. I'll be in Toronto, Ontario for the Ontario Securities Commission Conference. It's OSC Dialogue 2026. It's called Competitive Edge. We'll throw the link in the show notes here, but this, the organization. Organization reached out to me, asked if I would come on a panel. I'm on the next gen capital markets disruption, DIY and the race race to stay relevant. They, they've been great, great to work with and I'm learning some stuff too. Right. They're planning a professional conference and it's just cool to learn how they do it and how they approach it. Very, very cool. But I'll be in Toronto for that. And the reason I bring it up is that I like, I get asked to do like market outlook stuff. Right. I don't get asked to do this type of stuff. And so I'm certainly, I'm like a fish out of water here with the group of people that are, that are there.
[00:27:43] There's some really, really cool, incredible folks that I'll be, be joining. But just to be contacted for this and have that opportunity, I'm looking forward to it and it's something completely, completely different for me. So yeah, so looking forward to it. But that's it for positive moments here for this week. I want to get into some prices here from the prairies and get into some of these questions, get into some of the nitty gritty I wanted to highlight. Old crop Malt traded at $6 a bushel here in central Alberta. That was a target that got picked up. Old crop malt value is finding some life. I think some of you would like to hear that, which is why I'm bringing it up that your malt market is. There's a little demand here for late winter and you might find an opportunity if you've got malt in the bin that is not committed anywhere.
[00:28:35] Now's your time. Now is your time to shine. All right, that bid is up 25 cents in just the last week.
[00:28:42] Red lentils, 24 cents a pound. Boom. Wiped out a bunch of targets. 25 cents came and now is went. We're at 26 cents a pound on red lentils in central Saskatchewan. Again, it's not blowing your socks off, but it's going the right way, guys. And I wrote faba beans at eight bucks, but I don't think anybody really cares about that. So let's get into some of these questions.
[00:29:05] So farmers, again, you're, you're asking great questions. Lots of good stuff coming in. I'm going to continue to work on these. We did some of them on on cup of Coffee. We might do some again on Tuesday here. But just wanted to get into a couple of of the interesting ones. I'm going to paraphrase because there's some very well written emails, but I'm going to paraphrase and try to do it justice as best I can.
[00:29:31] Sheldon asks, are producer cars still a thing?
[00:29:35] So basically talking about how cars are just in and out, in and out, in and out.
[00:29:41] And asking if producer cars are still a thing, I was looking at Friday, I was looking at just grain commission stats and I just happened to look at the producer car tab and I think it was 1400 ton that week. So what, 14 cars or something like that?
[00:30:01] Producer cars are still a thing.
[00:30:04] If anyone has any further knowledge on this, like where I'm, where the farm is, is located Wheatland Rail. Is there producer cars.
[00:30:14] We'll go on Wheatland Rail.
[00:30:17] There's a couple elevators there that load cars. Lots of oats going down into the US from there. Same thing up by Melfort, right? There's some over there.
[00:30:27] I, I do believe that, Sheldon, you do have to get tied in with something like that. Maybe like a Battle river railway line, like one of these short lines like you have to get tied in with them and see what the opportunities are. But yes, the, the short answer to it is yes. Producer cars are still a thing. I just don't know how it lines up and what the margin would look like or if you're able to grab that. So, yeah, I've heard amazing stories about producer cars from back in the day. One car or two cars, you know, sitting on the tow field siding for like a whole year getting loaded just sitting there. Anyways, there's been some dandy, dandy stories. I want to bring this one in now from Jordan. I want to reward this Canola rally. I have a Nexera contract with Bungie for June to August 2027.
[00:31:20] They won't let me price it. Have you run into this before, Jordan? That's a great question.
[00:31:26] And I had a farm I work with as Nick, Sarah as well. We were trying to do the same thing. Now the delivery period just prior to yours though, and they told us to put in a target.
[00:31:39] They were going to charge us five bucks a ton to do it, but if the market traded at that level, they would fill, you know, fill those futures for us and we'd have a contract for our nexter. Of course, our basis is locked in. You do have some open interest in July of 2027.
[00:32:00] And so you do have a shot here, Jordan, to put that target out. So it's going to cost you five bucks apparently. But there is open interest going out to Nava 27. There's the, you know, I didn't look at volume here today, but if there's some trading happening, you just gotta get that target in there to, to make it happen. So, you know, there's still some carry in this market. Jordan's staring down, you know, something between 690 and 700.
[00:32:28] But yeah, I just talk to your buyer. I don't know what they called it specifically, but we could, and I'm assuming that you can as well, or they'll tell you the date that you can. But I would think with that open interest there, you should have a chance. All right, there are pricing rules, internal pricing rules with, with these grain, you know, grain buyers, you know, you look at the bid sheet and you say, well, geez, there's nothing past November or whatever it is.
[00:32:57] You know, these companies, they, they also are, you know, may not have, I think Next Air is fine. But you know, they may not have that wheat sale on or may not have some of these sales on. So they're not comfortable putting pricing that far out. Now the Other thing, Jordan, if you have a trading account, if you have margin and some dollars in your trading account, you could tackle it yourself, talk to your broker, talk to your licensed individual and say, hey, I have this, I want to protect it. What can I do? There'll be some interesting strategies. I guarantee you they're not going to tell you to go that far out to price those futures. They're going to suggest something a little closer and explain why that is. So Jordan, if you do have that available, check that out. In the meantime, you should be able to put that target in with, with your line company. Garth asks if I sell a May 685 call, how do I defend this trade in a rally? So writing a call now, this, this is, I talked about this a few weeks ago that you could sell a call, receive that premium and just kind of top up that sale. So how do you defend it? Well, Garth, you defended by buying futures. Like if you sold a 685 call and maybe you got 15 bucks for it. Let's say in this example, you know, at 700, you'd buy those futures and that would offset that position.
[00:34:25] That's, that's how you would, I would, would look at that. Otherwise you've got that sale on at 685. That call is sold, your upside is, is no longer. If you want upside, then you'd look at that. You could look at a call option as well. Buying a call.
[00:34:40] But yeah, it's a little, I don't know, that doesn't feel, I guess it would do it, it would help you defend that, that trade in a rally. It would increase in value and, and offset the call that you sold to some degree. But buying futures, that, that would be the way to do it.
[00:34:58] You know, again, be cautious though, you know, have, have some futures targets in mind, you know, where you feel that, you know, if we go above this level, that is, I, I need to defend that, right? I need to defend the sale. If we go above that level, maybe it's 700, maybe 705, I don't know. But just keep that in mind. Brian talked about feed wheats and barley a little bit. Barley outlook. So Greg asks, you know, what's next year's barley market look like? And I would just say, Greg, it's, it is a little friendlier now.
[00:35:32] There's opportunity to lock in some barley values here that are, you know, maybe close to a break even for some farms. Not far off, hopefully.
[00:35:45] But I just say like we are gonna, we are gonna plant more of it this year, the way it's lining up, that's my expectation.
[00:35:53] And you know, the ratio still favors corn in the US as well, planting corn. So you know, we, we are going to do our darnest here to add to our feed grains. And so you know what, I sit here and say I'm getting bowled up on a, you know, a barley rally this year. I'd say no.
[00:36:13] But I also think you can kind of set your own destiny up right now. If you can make money or be close to break even at current values, then yeah, you get started. You get started and you can get after it. Right. So I'm not bullish barley. I just think there's opportunity here now or closer to now anyway.
[00:36:35] All right, just do one more. Brian covered this a little bit, but Curtis wrote an email in here on Sunday and he said, borrowing from the finance world, I'm curious how to measure success in terms of grain marketing. In finance we lean hard on benchmarks such as the index like the S&P 500 and just meeting the benchmark is viewed as a success. And agriculture producers I talked to may measure success relative to the crop insurance price, which I thought was interesting, or perhaps relative to their break evens. Everyone has different cash flow requirements, so it's not totally straightforward. However, I'd still like to figure out a better way to measure success.
[00:37:21] Wondering if your guest may have thoughts on this. Now, Brian talked about, we talked about like what to consider when hiring a crop marketing advisor or analyst.
[00:37:32] Brian talked about trust, like a really fun exercise and I've talked about this on the show before but is to ask for the track record if you are considering hiring somebody or an organization asking for a track record because it is hard to get.
[00:37:54] It is hard for someone to hit the print button and say these are my recommendations for the last year or the last two years or whatever the history is that you want.
[00:38:04] There has, there's some out there that will provide it.
[00:38:07] But I, I was chatting with one grower and he worked really hard sourcing a new analyst and a new partner for crop marketing and he couldn't get, he asked some very common groups to share like you know, companies to share where. Show me what, how you've done.
[00:38:29] And he couldn't, he couldn't get anything. Very little information coming back.
[00:38:34] And, and as advisors and analysts, we'll feed you a line of, of baloney as well.
[00:38:42] Like the line of baloney is that. And there's truth, there's a pile of truth to it, but it's like, well, you know, these are my recommendations, but I work with a bunch of farmers. Everyone's got different cash flow needs. And I'm going to have a range within that. It's. That's a true statement. You are going to have a range. Right. But you still have spots where you took your shot and you, you made your sales. And anyways, those, though, when you look at those, when you get those numbers, they aren't, they aren't that exciting. They aren't jumping off the page saying, oh, my goodness, this guy's amazing. This person's amazing. This company's amazing.
[00:39:22] I gotta, I gotta give them money and participate with them.
[00:39:26] There are outliers. There are outliers where there's some really cool moves. I had them. I remember you'd have like your highlight reel of moves and you'd be like, oh, man, remember that day? And we did this and it turned out to be amazing. And it was a buck 50 better than the market. Yeah. Like, you have your highlight real, but like, when you look at it and you get the averages and you sit there and say, man, you know, that's, that's not as exciting because this is hard.
[00:39:59] It's hard. And you might get it right with, you know, some fun things every once in a while, but it's hard. And the results you're looking for aren't. They're just. They don't jump off the page.
[00:40:13] In my experience. I'd love for someone to, to come at me on that one and say, wrong. Look at how amazing we are.
[00:40:22] It just doesn't happen. Right.
[00:40:24] But I'd love for someone to do that anyways. It's hard. Now, Curtis, what I want to say to you, this is my favorite way to benchmark. All right?
[00:40:35] Now you can do it to a degree with your accountant as well. Like, you can go to the, you know, your accountant and say, like, where am I at? And they'll look at everything. But they tend to be able to pull some of that information out. That's a very strong one.
[00:40:51] But I would reach out to my, to my grain companies and I would say, do you mind?
[00:41:00] Could you pull me the average price of all your wheat contracts for like the month of September, October, November, or could you pull it for the year? You know, back in the day, I had really strong relationships with these buyers and they would pull this information for me and I could say, hey, the average farmer in, you know, let's say Edmonton, Alberta, for these months sold at this price, and then compare our average to that.
[00:41:31] And that was really fun. Like, that was a really fun exercise and a very real number, because that was. People sell grain every day, right? So you. You got the. You got the high in there and the low in there, right? Like, you got it all in there. And so that was a really, really fun exercise. Now, if you have a comment on how you. How you benchmark yourself, how you measure success in grain marketing. I thought crop insurance was interesting because those numbers are not. Are not always accurate. So I thought it was a great question, Curtis. And. And then what else do we have here? How do you pick a broker? I'd be curious in a recommendation now. I'll write back to you on that one, Curtis, but you. You gotta. We're actually. I'm having this chat with a client right now where the broker farm relationship is just not jiving.
[00:42:24] Actually, I'm having this conversation with three farms right now, and it happens. It happens.
[00:42:30] Your dad's broker, your grandpa's broker, your kid's broker.
[00:42:35] You know, like, we're all different people and we all click in different ways, right? You're not. I think someone told me once that, like, 10% of the people you meet automatically, they just. They don't like you at all. No matter. Like, anyways, we're people. So I would just. I would just say that it's about, you know, interviewing the brokers and analysts and those folks and just seeing what that fit may be. There's people out there that will despise my style. There's people that will like it, and there's people that say, this guy's insane. Right? Or, I don't like how. I don't like the sound of this guy's voice. Or I don't like how he writes or whatever it is. You know, that's what happens. And so, yeah, you gotta go figure out a track record, figure out a relationship, how you're gonna work together.
[00:43:28] And, Curtis, I will send you a couple of recommendations here as well. Big thanks to show sponsor Brett Young.
[00:43:35] They've got that canola early book bonus. Don't miss out on that one, guys. Deadline February 27th.
[00:43:42] Book a minimum of 16 bags of Brett Young canola. Earn a $20 rebate per bag. And don't forget, they are giving out. Is it one, is it two? No, it's three chances to win a $5,000 Air Canada or WestJet vacation voucher.
[00:44:02] I got my fingers crossed. Erica. Brett Young. I got my fingers crossed, man. I'm really hoping to win one of those because my wife tricked me. We are not going on vacation. We're going to Toronto in April for our family vacation.
[00:44:17] All right, Eating your veggies for this week. Just what I said earlier. Guys, let's update our crop power rankings. Do some work on your cereals, figuring that out. Update your budgets.
[00:44:28] See how you're feeling budget wise, where those numbers are coming in, especially if you are buying fertilizer now and then. Just review your contracts. I man, I'm just living in it right now. Contract review, target review. Lots of information, lots of numbers. Just making sure that when you get busy, this stuff's taken care of. You don't have to worry about this as much. You can get busy planting a crop because it'll be here before you know it.
[00:44:55] In fact, it's already here. It feels like it's already here across the prairies. All right, guys, thanks for hanging out again this week. If you found this episode useful, please share it with your neighbor.
[00:45:08] Again, looking for a guest advisors analysts for a cup of coffee? If you have any suggestions for the what the Futures podcast, love to hear it.
[00:45:18] Want to bring in as many cool guests as we can?
[00:45:22] Yeah, that's it for me, guys. Have a good weekend for the what the Futures podcast. My name is Ryan and I'm out of here. Take care.
