Episode Transcript
[00:00:04] Speaker A: All right, folks, welcome to episode 53 of the what the Futures Podcast, of course, recorded in the UPL studio. What do we have going on behind me here? I have the fire going earlier.
There we go. All right, folks, we have big episode here for 53. We've got Kyle with producer profit farmers want to know about the canola market. The canola market's been in a roller coaster mode.
It's been. Well, let's just look real quick here, real quick. Up and down, up and down. Canola down 20 bucks up 20 bucks, down 12, up 15. It's been absolutely wild. And of course, in your mind, it's just the rumblings from the folks on the buy side of this. They're trying to buy your commodities, saying, hey, China's going to announce this. They're going to do it. They're going to announce it anytime. They're going to announce it last weekend. Right? We're going to talk about that with Kyle. I also have Quinton with JGL Capital. They're going to join us in drum Heller for two presentations and I'm going to ask him what's going on with Canola and strategies that can help us out here as well. Yellow peas. Nine to ten dollars a bushel for fall of 2025. What is your farm doing when it comes to yellow pea marketing for next year? Or what could you be doing? All right, we got that and so much more. Let's get into it.
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.
All right, episode 53 here of the what the Futures Podcast. The podcast where we talk about crop marketing, farm business for Western Canadian farmers. I shouldn't say Western Canadian farmers. We have listeners in the northern U.S. and other parts of the world as well, but I'm in Western Canada. That's where it. Yeah, let's just stick with that. Of course. I'm Ryan Denis. I am the host of the podcast. I've spent my career working with farmers.
I was a buyer, I was a grain marketing advisor. I can't remember what they called this back in the old day, but I was a coach at one point as well. Led a team of advisors in both Canada and, for a short time, the U.S. it's a different beast in the U.S. actually, it wasn't that fun, if I'm going to be honest. Leading that team in the US it was different than what I'm used to. But hey, here we are. What The Futures podcast. And yeah, having some fun with it. If you could do me a favor, head over to YouTube, hit that subscribe button or give us a like or give us some type of rating or comments. It all works. It's all appreciated and you can go and do that on your, on Spotify or wherever you get your podcast as well. And of course, Ryandini, ca, if you want to get the emails, get some of the grain marketing stuff that we put out there or even just the updates, you can head over to the website and get that. I didn't know you could do this, but there was a comment on Spotify the other day. I'm on Apple most of the time for podcasts, so I. But Yvonne sent me a message. She's like, hey, there was a question on Spotify, did you see this? And I had not seen it. So thank you for the question. It was about flax. What is the outlook for flax for 2025?
Which is a fantastic question because when I do my crop rankings, when I do my little calculations here on what, you know, I call them the power crop rankings, but what thing, what looks profitable for next year? And the highest profit and the lowest profit flax is way up there, way up there for me on the profit side.
And so my outlook for flax in a market that's trending lower is very, very neutral. Very neutral. We had the lowest flax acres, and I think I looked back at 10 or 15 years and I can't remember exactly what the acres like, how low they were in that, but it was on the very low end over the last 15 years. People did not grow flax in western Canada here in 2024.
And do I expect acres to increase? Yes, I do.
But to what degree, I don't know. I don't know if we're going to really push it that much, push it that hard yet in 2025.
I guess we'll see. But my outlook is very neutral when it comes to flax. And I think more importantly, if you're a flax grower here for next year, you're going to get an opportunity in early, you know, in January, February to look at a very attractive offer for your flax acres and offer that with act of God, we'll see how aggressive you want to get, but you'll be able to look at that number, look at that scenario, look at those margins that return on investment and feel very comfortable on what you're doing with your flax in 2025. Those first offers, I believe, are going to be strong and give you confidence moving forward. Okay, we'll see. I don't know. I don't have a crystal ball. I can't predict this stuff. But we will see. Okay, I've got, I've got some conference updates here. Let's. Well, first of all, Canada Post, thank you for the strike. You know, we, we, the team created these nice little while Farmer today called it a glitter bomb went off in his house. But these nice little packages for your tickets and your conference information, we put it out. We want it to be old school. We want you to hold something, not just have an eventbrite ticket or something in your email. Want to go a little old school on this? So we printed some nice stuff. But it's for show. Okay? It is for show. If your package does not arrive in time, you do not have to worry at all, not even one little bit. Just show up in Drumheller. You know the agenda, you know the dates. December 3rd, be there. You're on the list. We'll get you all the stuff you need and we'll get you set up for a couple days of learning at the crop marketing meet. Cool conference. So, yeah, Canada Post, thank you very much. But also, don't sweat it. Just show up. It'll be fine.
Now the Zoom Call, I said this wrong last week. The call is actually on Monday. Okay, so attendees.
I don't even know why I'm saying this. You already know this. You received the invitation already in your email. But the Zoom Call is on Monday. That date is what? November 25th. There we go. That is the day of the Zoom Call. And we're doing a pre conference warm up. We're going to get our stretches in. You know, we're going to talk about, well, all the little questions I get. We'll just clear the air on some of this stuff. It's just so that when you show up in Drumheller, you're comfortable, you're calm, relaxed, you know the plan and you don't have to stress about the little details. All right? My buddy texted me the other day and he said, hey, what do I wear to the conference? And I said, for you, my friend, anything below a tuxedo will be a disappointment. He needs to wear his tuxedo. That is his power suit. He needs that for his confidence. I said, for you, my friend, tuxedo or bust. All right, I'm going to wear something like this. Gonna wear something like that. My jeans will probably have holes in them at times, but I am, I promise you, I Will buy new shoes. I am gonna buy some new shoes. Okay, that is a guarantee. But we'll cover that stuff on the zoom call and just do a little pre conference work as well.
And yeah, that's, that's coming at you on, on Monday. Tickets. Honestly, folks, there are still a couple seats. All the tables are set. We've had some cancellations. Life happens. I've been very, I don't want to say lenient, but understanding and honestly, yeah, flexible. But if you're listening to the podcast this week saying, hey man, I kind of want to go now, my schedule freed up or whatever you want to go, just email me Ryan at DennyFarming. Ca you think I would know this? Denny Farming.com Ryan Farming.com and I will, I'll let you know those seats are still available. There's a couple left though, so if you're interested, let me know and we'll see if we can make those arrangements. And then the other last thing on the for the conference here is that we're going to do a silent auction. Okay.
And what the question that came up this week was, should the silent auction be for everybody that listens to the podcast and like, should we put this online and get bids from everywhere and from a charity perspective, you know that that is the better thing. More people involved. But yet, like I'm. We wrapped a fridge. Like I have to haul a fridge to Drum Heller. It's not a small fridge. We wrapped a fridge. It looks beautiful. You can check it out on social media channels. I don't really want to haul it back though. All right, so we're trying to figure that out. I thought we would just do in person to keep it a little bit more intimate and you know how it is. It's very small town, it's very rural to be at a silent auction, putting your name down, looking at who is the bugger. That's against me here. What? How can I take them out? It's a lot of fun. So I think we're going to keep it to the group. But all the money we raise is going to go to the Salvation Army Christmas hamper program right in Drumheller. Okay. Farmers helping feed those in need at this time of year. There is nothing more beautiful than that. Right? Come on. So, yeah, I've got a fridge. I've got a curling. The curling broom is one of a kind. Curling broom and bag. I've got hockey sticks. I made a mistake. I made a mistake. We got hockey sticks. I bought really good hockey sticks. I didn't buy a 50 hockey stick. I bought a good hockey stick just to wrap it. You don't even know. I could have bought a 20 hockey stick. You'd have no idea. I bought good sticks. We wrapped those as well. We're going to do those in the silent auction and see what we can raise for some money here for the Christmas hamper program in Drumheller. Again, farmers helping feed those in need. I'm sure your heart's just fluttering as well, just like mine. Okay, what else do we have here for odds and ends?
Yeah, let's leave it at that for this one big shout out to show sponsor John Deere.
Actually, John Deere is buying us lunch at the conference as well, so that's pretty cool. They're going to buy us our Bernie and the boys lunch. Anyways, if you think about it, you've got a lot of connections. Connections to family, the community, your land. Well, here's a connection you may not think about has a connection to your machines. You know, your tractor, your sprayer, your combine. With the JD Link modem, you can easily connect them to John Deere operations center. There you can gain valuable insights into your machines, know where they are and what they're doing at any time, monitor speed and fuel levels, even compare machine performance if you're not already, get connected by heading over to John Deere ca.
Now this. What happened this week in a conversation I had with some growers was I brought up the point. We talked about farm labor and I brought up the point is it is equipment getting, is it harder to run or is it easier to run?
And so we're talking about labor, quality of labor, you know, skill set. And it's actually been a. It's always a big topic in farm meetings that I'm a part of, but it was definitely top of mind here the last two weeks.
And, you know, the farm's comment was that it, it was getting easier because you can track performance, you know, out being elsewhere. You can see how, what speed they're going, the quality of the job they're doing. You can see if you get alert if there's an issue or an error. They said, ryan, it's getting easier out there. And I don't know, I thought that was. That was pretty neat comment.
All right, Kyle, welcome back to the what the Futures podcast. How's it going today, buddy?
[00:13:06] Speaker B: Hey, not too bad. It seems like every time I come on, it's a bit of a dumpster fire in Canola. So here we are.
[00:13:12] Speaker A: That's why I texted You. I'm like, hey, it's your day. Today's your day, man. Let's get on the show. Yeah.
[00:13:18] Speaker B: Hey, notice two big down days on Canola. You want to come on and talk about it? Just great.
Absolutely.
[00:13:24] Speaker A: We're setting you up for success. Setting you up for success over here. All right. I'm just looking at the close. So we lost, like 12 bucks today. We've been in a little bit of a seesaw here.
Down 20. Up 20.
Down 15. Up 15. What are you seeing and what's catching your attention in Canola?
[00:13:44] Speaker B: So, I mean, there's a few things today. Today, the close was not great.
The technicals, and maybe Trent would talk more to it, but I don't love the technicals. We broke through a major support here today, dropping underneath that 640 level.
I kind of had 635 as like, my. My line in the sand for some of the upside positions that I was holding on to.
Now, your next level of support, and I'm going off the March chart here for everybody, so not the January chart, just because I'd rather have some time for the price action to work. Its work itself out, especially after the short scan that comes out in December. Right. Which conveniently is right at your conference. So. Well, time.
[00:14:23] Speaker A: The last day we'll have breakfast. Breakfast over stats can. Yep, that's right.
[00:14:27] Speaker B: Yeah. It'd be exciting. Yeah. So the downside today, you know, the next level,620. 625, somewhere in there, off the March futures. You know, I'm still decently bullish. Canola. I don't see anything in the headlines today that necessarily reverses or steals away the perspective or changes the outlook drastically. I know you had mentioned, you know, when we were talking earlier, just about some rumors out there about soybean oil and China selling off kind of a little bit.
[00:14:55] Speaker A: Yeah.
[00:14:55] Speaker B: Perhaps.
[00:14:56] Speaker A: Perhaps.
[00:14:57] Speaker B: Right. But I don't see it in any of the headlines. There's no major news here about China coming in to kill exports from Canada. So, I mean, I would love for you to convince me why I should be bearish, but I would like to throw at you just some of the fundamentals that we're seeing in the market. A lot of the guys that we work with, obviously, we've talked at length about it, and so they might tune out a little bit if they're listening to the podcast, because they've heard me drone on about it almost daily. But, you know, our export pace is tremendous. Right. I think our exports, as of last week, Exports were at 2.867 million metric tons. So it took us till March. It took us till March last year to get to this level of exports. March last year was 2.977. So you could almost ship no canola in Canada for the next, what, three, four months, the rest of the winter. The same spot as you were last year. Yeah, Right. So we've really moved stuff out. I went ahead and I totaled all of the canola exports that we had to China in the last marketing year. So 23, 24, we shipped 3.995 million metric tons, call it 4 million tons to China.
So far, we're at 2.168. So we're just over the halfway mark, halfway through November. This is off last week's data. So, you know, you've. Even if China was to come into the market and say, we don't want any more canola from Canada, you know, that might happen. It hasn't happened yet. You know, there's some different people out there that want to say it's happening every day and eventually they'll be right.
[00:16:32] Speaker A: Every day, right? Exactly. They will be right One day. That one day they will be right.
[00:16:37] Speaker B: Today's the day. That's right. And so far it hasn't happened. And maybe that day comes, but maybe We've moved already 3 million metric tons of canola. Right. So if that's the case now, we only have a million tons to go. And, you know, I would note that last week on the export sales, some, you know, Belgium kicked in as one of the destinations. So, you know, we're picking up some European Union stuff. And you had the UAE kicking in with another chunk of volume there, too. So we talk a lot about the European rapeseed futures versus the canola market converted to Canadian dollars just to make it apples to apples. But that spread that's in the market and, you know, you're looking at today, this was just before the close, so maybe it's a little bit different after the close. But comparing canola futures, the January canola futures, to the February rape seed futures, it's $156 a ton for a spread. Right. And then if you go to the March futures, it's a little bit less. It's 143. But before the rail strike and before the concern with China, I viewed $80 a ton as kind of the level where Canola maintains some level of competitiveness in the global market. Right. So.
[00:17:47] Speaker A: So super competitive.
[00:17:49] Speaker B: It's super cheap. So even if China came in, like, let's walk through that a little bit. Let's say China does come in and say we don't want any more Canola. Now we've already taken, let's say they've taken 2.5 by that time. At that point, if canola drops, if the other markets don't, it's only going to increase more demand on Canola. So I guess the unknowns that maybe you could throw at me to bear me down a little bit would be what if Statscan comes out with 19 million tons?
[00:18:19] Speaker A: Oh, come on, come on.
[00:18:22] Speaker B: Maybe they pull some number that's not accurate. I can't believe stats can, would do that to us, but I think accurately we're probably somewhere in the 17 million ton mark. I'm not sure what your thoughts are on that. I expect Stat Scan to come out with something in the 18th is kind of what I guess. Yeah, right. So if that's the scenario and you look at the World Agriculture Outlook Board and they've, you know, they've kind of slowly been dwindling down our beginning stocks a little bit here.
[00:18:52] Speaker A: Roy, I was going to ask you about ending stocks. Yeah, so.
[00:18:56] Speaker B: So I think it's tighter than what was initially reported or believed at the start of harvest or the start of the marketing year. It's come down maybe a half a million tons. Reuters now has it, I think at 1.64. I could be wrong there.
[00:19:08] Speaker A: Boy, that's tight.
[00:19:09] Speaker B: That's, that's tighter. Right. But let's say, let's say it's two.
[00:19:12] Speaker A: Right?
[00:19:13] Speaker B: Let's say ending stocks were. Or beginning stocks, whichever way you want to phrase it. But let's say it's 2 million tons, right? And then let's say that we have an 18 million ton crop. So you got 20 million total use. You've already crushed 3.3 million metric tons as of last week. That's, you know, 220,000 tons more than we did last year at this time. So our crush pace is ahead of schedule and that's expected to happen.
[00:19:36] Speaker A: Right.
[00:19:37] Speaker B: You got another, what, nine months, we'll say, of demand. Of crush demand. So maybe there's. And it's supposed to maybe increase in the spring, summer, but we'll probably also lose a little bit towards the end of the marketing year for maintenance and shutdowns, whatever. So let's say we continue at this pace of a million tons a month on crush. So now you're going to chew through another, let's call it 9 million tons. You've got 3 million tons that we've already used on Crush. So you're at 12, you've exported 2.8. By the end of this week it'll be 3.
[00:20:12] Speaker A: Right.
[00:20:13] Speaker B: So you're at 6 million between crush and exports and 9 million of crush needed for the rest of the year. Right. So you're at 15 million tons already. Now if you wanted to keep your ending stocks really tight, maybe we just hold back a million tons, right?
[00:20:28] Speaker A: Yep, yep.
[00:20:29] Speaker B: So, so now you're at 16. You have 2 million tons, is my math right on that? 2 million tons, I think left.
[00:20:37] Speaker A: Well, I came up with 4.
[00:20:39] Speaker B: 4. Okay, so we got 20. That's right.
[00:20:43] Speaker A: Yeah, yeah, 20. Yeah. I added the 18 and the 2 to get to 20. That's right.
[00:20:47] Speaker B: So you got 4 million tons left. Now China's going to take another 1 to 2 million tons one way or another, whether it's through the UAE or whether it's directly. And because canola is already so cheap relative to other markets, you're still going to move a bunch probably into the European Union, Mexico, maybe Japan picks them up. You got some other markets there when I look back. So, you know, because obviously the big threat here is China. And if you have 4 million tons left, you know, let's call it 450,000 tons a month are available for export. So I went back, you know, over the last six years just to see. And that includes, you know, when they arrested the two Michaels and we arrested Bang Wanzu and all of that stuff. And they kind of shut us down already during that timeframe. There was only, I think three months there that during when they originally came after us, that our exports were under 450,000 tons. So the odds that we're going to export less than that or run out of Canola. The only way you can limit your exports is by increasing your price.
[00:21:57] Speaker A: Yep.
[00:21:58] Speaker B: Right.
[00:21:59] Speaker A: And even layer in some currency in there as well. Like we're. I don't know if you're bullish at Canadian dollar. I'm not.
So that, you know, cheaper to export stuff there as well. So. Yeah, I agree.
[00:22:14] Speaker B: I think the election results in the US kind of put a nail in the coffin of the looney. Like the odds that it's going to recover to with any significant degree is very low.
[00:22:26] Speaker A: I've got some reports I was reading where, you know, 65 cents, like farmers are asking questions about if I need to do something equipment wise, am I better off to do it now at $0.71 or weight. So, you know, things like that. But yeah, so we've Got new business from, from countries like Belgium, you know, that's not that it's new, but it's maybe new for this year compared to last year or the year before. And there could be others. If our canola seed is going to be that cheap, there's going to be others that pop up, I would think.
We're also using 18 as the number for the crop, which there's some folks, some folks are as low as 16 and change. 16.2, 16.6. Yeah, it's a, it's a light crop. It's one of those crops that, you know when you go and empty a bin and you're like, Yeah, I got two loads in this bin. Well, it's like not quite two. It was like one point, 1.8 of a load or two. You know, like, it's just not quite so. Yeah. Again, what will stats can give us? Who knows? But if you want me to counteract this on the bearish side, when I, when I've talked to farmers and the lunchbox crew guys, you know, I've told them I'm feeling more bullish on all the stuff that matters, but yet this China headline thing is just that limiting factor. The thing that you can't predict on when it's going to happen, if it's going to happen, how it's going to happen.
And then the administration, the new appointments in the US and the impact to the biofuels market or the demand for veg oil, what's all coming out. There's pretty big biofuel announcements and changes that will happen in the new year, but that doesn't mean they're all bearish. There's actually some bullish stuff in the mix as well. And on Friday, you know, the, after a couple of down days, the market popped up and, you know, we saw a headline about China reducing the. Or some type of rebate. Rebate in regards to exports.
[00:24:45] Speaker B: Cooking oil.
[00:24:46] Speaker A: Yeah. So, you know, like, there's, there's kind of both sides of the biofuel policies. It could be, it could go any, any direction. But I think the market's been digesting the headlines as negative right now. I, you know, I still have, I'm going to review my predictions probably next week because last January I made predictions about where prices would be here and I talked about, you know, another decline for the year. And I still think that we are in a general market decline.
When you take 12 months and you take the big picture, I still think we're in this commodity slide. Doesn't mean that There isn't rallies in there, but I still feel like we have another. I don't know if it's 5% or 8% or what it is, but another year of slide. I know some people have said two years of downside yet again. We'll see. And then I also know, and I don't want to speak for Trent, but, you know, I subscribe to Trent's what he's. What he's putting out there. And, you know, his sentiments changed a little bit. He's turning a bit more bullish in. Not in the short term, but more in the long term. So.
[00:25:57] Speaker C: Right.
[00:25:58] Speaker A: Fun, interesting times, for sure.
[00:26:00] Speaker B: Yeah, it is for sure. And spoiler alert a little bit for the. Aside from today's trade action on rapeseed, when I was building the presentation there, just for fun, last time European rapeseed was at these levels, Canola back in, this would have been early 2021. Canola was trading at $950 a ton. Right. So obviously there's some different economic dynamics that are going to be part of that and certainly different situation. When we had come, we'd already realized how small the crop was in Canada. But, you know, there's a big problem in Europe with their rapeseed production and with their wheat production. And, you know, when I look at that chart, there's some similarities there. And you could, you could make the case that there's some similarities to this year on Canola. Again, not saying this is 2021. Right. As far as, you know, a rallying market like that.
[00:26:55] Speaker A: Whoa, easy, easy.
[00:26:56] Speaker B: I know.
[00:26:57] Speaker A: Get everybody pulled up. Let's pump the brakes a little bit.
[00:27:00] Speaker B: But I could make the argument that based on how fast we're exporting it, you know, if our numbers like. I gotta believe that at some point farms that we work with that, you know, are relying on us to help them with marketing there, I would like to think that we're getting accurate information from the farm. You know, we're not getting necessarily the coffee shop talk. We're getting this is our real yield so that we can work on the marketing side of that. And when you consider what farms are saying, it's smaller. Even in some of the better producing areas where, yeah, they still had, you know, over a ton an acre, it's still down 20% from, you know, what they would have expected to come off the crop. So you factor that into stats. Can and I can't see. I can't see how 18 million. 18 million tons is aggressive. Maybe, maybe the one area where we're we're being cheap is, is on the ending stocks Maybe there was 3 million tons but I struggle with that as well. Just with how strong we finished the marketing year with China buying so much that was available. So. Yeah, I'm, I hear you. I also think there was an article today, maybe you saw it as well, but it was just discussing low profitability on wheat and Russian. I know we're mainly focused on canola here but as far as that long term downtrend goes, I've been kind of bearish corn for quite a while and that's not really working out for me.
[00:28:25] Speaker A: It's turning here. Yeah.
[00:28:27] Speaker B: And where's the next corn supply coming from? That's going to take till June when Brazil's second corn crop comes off.
[00:28:34] Speaker A: Right.
[00:28:35] Speaker B: Like because the first corn crop isn't really for export. Maybe that's 25% of their production. So you know, maybe Argentina has some. But the US is going to, they're going to control that market for quite a while here. And if it's not dropping now, I can't see why it's going to necessarily free fall out of the sky over the next four or five months. So just because of some of the demand, maybe China, some of the Trump stuff, maybe. But it seems like $4 is a solid support there and you know it. So you factor in profitability and break even points. And the article in Russia was saying that farms are going to pull back massively on acres, not necessarily because of the drought that they've experienced, but because they're not making any money on wheat anymore. So they're going to put more pulses in and more oil seeds. So we'll see if that actually happens. Yeah. You know, to me it's when farms start losing money, you know, it's the low prices, cure low prices kind of thing. So are we at, are we low enough I guess is the question for that to happen.
[00:29:36] Speaker A: Do you think that we're like. I, I believe that we're entering a more not a traditional pattern but I, I believe that we're going to have tighter trading ranges moving forward. I don't think we're going to have as big of declines and as big of rallies. That's kind of dumb to say, but I think we're tightening up and I think farms, we're entering a time frame where you don't want to fall asleep because all of a sudden, bang, bang, there's an opportunity to do something and then it goes quiet for a little bit.
It doesn't drop a Whole bunch, it just drops a little bit and then all of a sudden it pops up again. Bang, bang. Like, I just, I think we're in a bit more of a sideways pattern here for the next while, until the next weather scare, which is again, just a baloney statement, but I think that's where we're at. Yeah.
[00:30:32] Speaker B: Well, and I do think that that's a bold statement for you to make with the Trump administration on the horizon that we're going to have a tighter range. But, but I do agree, I think that outside of black swan, political events, war, that sort of thing, the market, I think is going to consolidate. And you know, you think back before 2020, you know, we, we would fight for a nickel or a dime in a market.
[00:30:53] Speaker A: Oh, yeah.
[00:30:54] Speaker B: And now, now it's like, ah, it's within 30 cents, just let her go kind of thing. Right. Not that we want to be, you know, of value, but it's just the market has been moving so much that we've become almost numb to what it used to be like a 5 cent day. And wheat was like, okay, well, should we consider something here? What's going on? You know, and you would fight for the top of that range. So I do think we end up a little bit more sideways and farms need to be on their toes a little bit more when it comes to marketing, for sure.
[00:31:24] Speaker A: So I'm going to switch gears to the conference here because we're just about out of time. But. And I appreciate all the, all the perspective on Canola. You're going to come hang out in Drumheller. I got a text message today from a farmer and he said that his grain buyer was not happy with the what the futures podcast, Kyle.
[00:31:45] Speaker B: I can't believe.
[00:31:45] Speaker A: Wasn't it? I know. I was like, what am I doing this for? If it's not for the buyer in Western Canada, I can't get them on my side. What the heck? I'm doing this all wrong.
You got an interesting presentation coming up, Kyle. Give us a little Coles Notes version, nothing crazy. We don't want to give it away.
[00:32:05] Speaker B: What do you got for Coles Notes building that one? It's a tricky one because we're talking about beating the buyers and how to optimize success for the farm.
[00:32:15] Speaker A: So there goes my ratings again. Thanks, Kyle.
[00:32:18] Speaker B: I'm sorry about that. Now it's very easy when you talk about market strategies and some of the tools that are available to really, you could hone in on buyers and some of the conversations that farms seem to have I'm going to try to avoid that as best I can. I'm sure I'm going to fall into a few rabbit trails and go down some discussion points during the presentation. But, you know, I think more than anything, the whole tone behind what you're trying to do with this conference is helping farms better learn how to improve their marketing on the farm and just be realistic about it. And so, you know, I think we're going to discuss some of the different things that farms can do to be more accountable and more responsible when it comes to their marketing, because these strategies are available, but the strategies are only good if you understand the concept of when to use them. And you know, there's a lot of times where we use them at the wrong, wrong window. And so we're going to talk a bit about that and I'm pretty excited for it, so we'll see how it goes. But yeah, looking forward to the conference and hanging out with you.
[00:33:21] Speaker A: Yeah, I am looking forward to that presentation as well. And I've been asking everybody, do you have a walk up song in mind? Oh, Kyle from producer Profit. We summon him to the stage. What is blasting through the speakers.
[00:33:39] Speaker B: Boy, I'm gonna have to think about that one because I'm not gonna throw it out there just yet. I'm gonna actually put some time into that because, you know, an entrance song that's important. You know, like Jake Paul, he kind of missed the boat there, I feel on that on the Netflix special last week. But, you know, maybe I'm gonna, I'm gonna put a little bit of time into that. We'll see what I come up with.
[00:33:58] Speaker A: If you roll down the aisle in the same car that he was driving, I'm gonna have some questions for you, all right?
Okay. Kyle, thanks for joining me this week, man. Appreciate it. We'll see you in Drumheller.
[00:34:09] Speaker B: You betcha. I appreciate it. Thanks, Ryan.
[00:34:16] Speaker A: All right, my positive moments for episode 53.
I got a couple here like I usually do from a family perspective. Number one, I feel energized this week. Last week I hit peak energy on like Wednesday. By the weekend, I don't know what was wrong with me. I was completely exhausted. Thursday, Friday, Saturday were painful, painful days for me. Even mentally, they were, they were painful.
I was, I was exhausted and just in that, that gloom, you know, kind of in that gloom as I got towards the end of the week, I also felt like I didn't get a whole bunch accomplished last week, which is, which is not what actually happened. I got a lot Done. Just my energy was in different spots. It was really weird for me last week. So feeling really energized this week and excited. It's been a really strong week here with everything we've been. We've got going on in the background, the conference and other stuff. I've. I've had some fun this week with the kids. We hooked up the sleigh. I ended up getting a sleigh here at an auction this summer, right? That's when you buy your winter stuff in the summer when nobody wants to buy it. So I got this really great. I don't know, it's like. I think it's Arctic Cat on it, but it's one of those big sleighs that you pull behind a snowmobile or whatever. I don't have a snowmobile. Where I live. You can't just jump on your snowmobile and go anywhere. You could do a bit of ditch riding, but that's it. So anyways, we've hooked it up behind the 1025R, the Little John Deere tractor that we have. And we've been cruising around the yard. We had just a little bit of snow. I know on the farm they got a lot of snow, but we have a little bit of snow. We've been cruising around, got it decked out with Christmas lights now. And we've been doing a little twinkle tour, going to see other homes. Anyways, it's been some fun cruising around, checking out lights at night and putting some hours on the little tractor. And then lastly, from a farm perspective or a consulting perspective, the farm meetings that I've been a part of here the last little, you know, last week or two, the conversations have been. They've been, I would say, like some hard work. Like it's. It's been meaningful, thought provoking, deep conversations about.
About plans next year, three years out, five years out, some really deep stuff from a business perspective, not an emotional perspective, but from a business perspective. And I know you guys are all out there and you're all getting even. I feel bad talking about it at times, about you got to know your numbers and you got to save money and you got. You don't buy anything. My brother was on a crop marketing guru's market outlook thing this week. And don't buy equipment and don't buy any farmland. Well, all right, okay, easy there. But I, you know, I get it. The numbers have to make sense. The numbers have to make sense. And we're entering times here, tough times. I'm on record of being A bear. Yet I still think the market drops a certain percentage between 5 or, I don't know, I shouldn't put my thing out there quite yet. But I believe that we're heading lower. Maybe it is another 10%, but we're heading lower year over year. I still think we're heading lower. Weather changes it, but we're heading lower in my opinion. You know, everybody's out there and it could be overwhelming. All right. And so when I circle back to these farm meetings, you know, our meeting I had, you know, we had nine action items that required work and follow up and resources and time to dig into some of these answers we seek. Nine, all right. Out of our meeting. And those answers are going to come and help the farm moving forward. They're going to drive decisions moving forward and it's great to be a part of those. I've had a lot of. It's always great to talk farming and talk strategy, but we've had some deeper conversations here the last couple of weeks that's for way different than in 2022 and 2023. All right. If we want to take a second just to cover off what, you know, what's kind of cool here in crop marketing at the moment, actually I really want to change that segment name. But anyways, the crop marketing stuff on my mind for this week, top of mind still remains that wheat basis is not what it seems. Okay.
The posted bids out there, if anyone's taking a posted basis for wheat, I am a little bit, I'm just a little bit sad for you. Just a little bit sad.
We had a bunch of futures first contracts that we had done this summer. And you know what's really, really cool is when a buyer tells you that you. So the we throw, we've been throwing basis targets in there and they've been hitting these targets, converting these contracts into, you know, a net price.
And some of this stuff is well north of $9 a bushel. And what's really cool is when the buyer says, hey, I haven't seen that one this high yet this year.
As a farmer, you got, you got to feel pretty good in the moment about that, right? A little confidence booster in your crop marketing plan. But wheat basis is not what it seems out there.
Exports great, demand strong, buyers underbought. It's not a secret out there. Farmers didn't sell it, buyers didn't buy it. Everyone's got to work together now to move this stuff over the winter. But buyers are coming, saying, hey, we got weak cars coming, we got more Cars. We have a December special. Nah.
Anyway, we're not going to go down that today. But it's not what it seems. Let, let your merchants do. Give them something to aim for. Okay. We've got, you know, basis targets for, you know, December and parts of Alberta at 250 a bushel. Is the market there at a plus 250 a bushel? No, it's not. It's a 215. It's a 220. We got a 235 yesterday.
Getting close to that 250 though. Right. And the 235, that wasn't posted anywhere either. Okay.
Anyway, it's not what it seems. Give your merchants something to aim for. And as Quentin said, let's get this wheat market going. Let's get wheat to make a move here to the upside. The other thing on my mind is just continuing to look at 20, 25 budgets and plans and, you know, the yellow peas from Vitera. And I'll.
Yeah, I didn't look at everybody else, to be honest with you. It just, I was alerted in the Peace region that yellow peas were $10 and it just worked back to Vitera.
Then I started looking elsewhere and I'm like, hey, Balgoni, Saskatchewan, come on down. You're like nine and a quarter for new. New crop. Yeah, new crop next year, yellow peas.
And so those prices are above my, above my goal, above my target, my average price target.
And so I like being a seller if you're profitable at those levels. But one of my crop marketing rules is that if you are at a negative margin, I really, really, really, I really try to sit back on my marketing. Like, think about it. Like you sit here not knowing what you're going to get for yield, not knowing what you're covered for insurance, and you're going to go and pre sell a loss like you really have with 100% conviction. You have to sit there and say, price is not getting any better no matter what happens. Great. So I just don't do it or I do it to the minimal amount that I can.
And you say, or Ryan, you're bearish. You think the market's going down. Like you, you try to do your best to lock in the worst or the best loss on the farm.
Maybe I just don't think about it that way because one of my biggest crop marketing learnings of my career was that a June, early June rain does not make the crop.
And things can happen. Biotes hurt. Oh man, they hurt. And yeah, got some June rains. Thought the crop Was going to be set after that.
Twas not set. What's not? And I learned a lesson. What else stands out? You know, pulses. There's lots of good pulse stuff out there right now. Old crop, pulses, green, peas. It's.
Yeah. Anyway, maples, greens, some good stuff out there. Nothing else really stands out. And I'd say we are in a little bit of a soft area right now from a crop marketing perspective.
Lots of geopolitical stuff. You guys all know that. If you can figure that out for me, let me know, help me out a little bit. But we've got a lot of stuff going on here with now with the. With Trump winning the election, stuff that is not positive or bullish. We're kind of in between crucial parts of the growing season.
You know, between Northern hemisphere, southern hemisphere, there's always stuff happening, but it's just a little bit of a quieter spot for us here.
And so, yeah, crop marketing right now, I don't know, it doesn't feel like it's a lot of fun, does it? So let's leave it at that for this week.
All right, folks, I've got Quinton with JGL Capital joining me here once again. Quinton, how's your week going?
[00:44:32] Speaker C: It's going good. A little volatility here in Canola, but overall it's not so bad. Nice to see wheat pick up again. It's kind of been a dog for a little while, so.
[00:44:40] Speaker A: Yeah. Yeah, it. On the cash side, it's been. Not that it's been exciting, but basis moves. Targets are hitting, you know, cash sides. Okay. Futures, though. Oh, man.
[00:44:52] Speaker C: Yeah, futures been tough. And even the ca. Even the basis, like, when you take into account the currency, I mean, it's definitely attractive still and stuff, but it's like, okay, well, a lot of the. How much more demand is there right now and what is it signaling? I guess it's sort of hard to yank out of there because it's been led by the currency for sure.
[00:45:07] Speaker A: Yeah, 100%. In your conversations with growers, I know you talked to a lot of people. Any panic out across the prairies at all on the Canola aside or our farms? Just saying, hey, I got. Got my stuff in place and I'm. I'm going to just get to the end of the year and see what 2025 brings.
[00:45:25] Speaker C: I haven't heard much panic. No, I haven't heard any panic is what I should say. I haven't heard any panic. Just normal conversations. Where do you think it's going? I think some people I've been discussing, like, some of the risks involved for sure in the market with. There's a lot of political things out there, like multiple different topics.
[00:45:40] Speaker A: Incredible.
[00:45:42] Speaker C: U.S. biodiesel and mandates and Indonesia was the thing for a second there. So, yeah, I think a lot of this was expected. And then you have Brazil. You're staring down the barrel of that. So I don't think there's a lot of surprise or panic yet. It's just like, hopefully we do get another shot of some higher prices again sometime before new crop.
[00:46:02] Speaker A: If we didn't have to talk about geopolitical stuff, if we didn't have to talk about soybeans, if we didn't have to talk about palm oil, we'd just be. We could just be a bullish canola. We talk about China, we could just feel bullish. But we got to talk about other stuff into play.
[00:46:18] Speaker C: So, yeah, yeah, it's hard to price that stuff too. It's hard to figure out what the outcome will be.
[00:46:23] Speaker A: So I got a question from a grower that I attempted to answer last week on the podcast. I'm not sure if you, if you were able to catch last week's podcast. I know you tune in once in a while, but it was about a bull call spread.
He was asking, you know, what, what that strategy looked like and what I thought about it. Bull call spread. Was I on the mark, off the mark last week?
[00:46:46] Speaker C: Yeah, I thought you nailed it. Bull call spreads just, you got two calls, you're long one, you short the other. Typically, the one that you're long is in the money or the strike is lower, you pay a higher premium for it, and then you're going to sell another call. It's typically out of the money or got a higher strike on it, and you're getting less of a premium back for it. Your total exposure is the nets between those two. You spent. Let's just pretend you spent 30 bucks and you sold that other call for 15 bucks. Your max exposure there is 15 bucks. It's a net long strategy, typically. And that's how you know, that's how. This is why it's always a long strategy with a bull call spread. You could do a bear call spread too, as well.
Yeah, it gives you exposure. One thing that's fun about is you have the ability to lag in and out of things. You know, you can put it on and then you can just take one off. That's always, you know, oftentimes we think of strategies as one in and out, but you can Dance around with each leg if you wanted. Yeah, that pretty much sums it up.
[00:47:47] Speaker A: Awesome. Sounds good. You know, when it comes to your desk this last week or so, is there anything that stands out strategy wise right now that you're looking at or I don't know if there's anything you can share with us or not on this episode, but anything stand out?
[00:48:03] Speaker C: Yeah, for sure. So this last week I would say there was just been a lot of volatility. So individuals that have been interested in trading around that volatility, which can be nerve wracking and having a, having a solid strategy to do that can sometimes be difficult. But we were able to and lucky to have a little bit of luck with trading around some of that volatility this week. You know, kind of get, you know, you might get bit by it if you're. If you were trying to be buy things, you know, yesterday at the end of the close and then now you're down another 12 bucks today. So that's why playing in that volatility can be, can be scary. But as long as you're willing to hold through it, I suppose or sort of have some sort of disciplined strategy where you take a stop and put that somewhere, then you can go ahead and do that. Other folks maybe producing some collars or doing stuff something around a collar, which is where you have a short call and you're long a put. Some of those guys, you know, just protecting some of that old crop grain, like a march contract or something green. Those guys are probably feeling pretty decent right now. We're doing all right right now based on happy they had the hedge on, I guess is how I should word it. Obviously you're always wishing the grain price just went higher and higher and higher, but.
[00:49:10] Speaker A: Yep, yeah, oh yeah, that's what we'd love to see for sure. But this isn't 2021 or 2022.
[00:49:17] Speaker C: So I almost wish I could just take 2021, 2022 and put it off my. Take it off my charts because it's, it just messes with all my averages and all my, my other stuff. It's just sort of so anomalistic. But yeah, looking back at those.
[00:49:30] Speaker A: Wow. You hear it all the time on crude oil in 2020 with COVID how people are like, just take. I got to take that off because it was totally, totally off of.
[00:49:40] Speaker C: Yeah, it messes with things. It messes with depending on sort of numbers you're looking at or you know, analytics you're trying to do. It messes things up.
[00:49:49] Speaker B: Yeah.
[00:49:49] Speaker A: All Right, Quentin? So you guys, JGL Capital, you're coming to Drumheller to the conference?
[00:49:55] Speaker C: Yes.
[00:49:57] Speaker A: You guys are the only one. The only ones. Well, I'll be on stage the entire time, I guess, but other than myself, you guys have two spots. You've got two spots, one each morning. Because farmers filled out these applications and I don't know if it's 100% or it's high 90s for sure. People want to hear from JGL Capital. They want to hear from you and they want to talk about strategies. They want to talk about brokerage accounts. Yeah. Without getting into the nitty gritty, how's the, how's your preparation been going in the presentation side and anything you want to highlight for us pre conference?
[00:50:41] Speaker C: It's been going good. I've been doing a lot of back and forth with the team. We wanted our first drafts done by start of November, so we've been sort of sending different decks back and forth, making sure we're trying to bring value and target. Like, I've been listening, listening to the podcast here and just making sure, like, the goal is to educate. So, you know. Educate. Yeah, we're going over sort of opening an account and how you work with a broker and what we're looking for, what we think a farmer is looking for. And that can turn into a bit of a discussion even. And then the other thing is sort of a strategy showcase, using an option strategy and a typical situation a farmer might find himself in and how he would use a, an option or options in Canola. It'll focus on Canola.
[00:51:25] Speaker A: Yep.
[00:51:25] Speaker C: To protect his price and protect his situation.
[00:51:27] Speaker A: Yeah, yeah, perfect. I. That process of, like, how do you, how do you, you know, how do you get acquainted with your broker and how do you work together? You know, you have the process of opening up the account as well, but also how do you move forward? How do you communicate week out, a month out, a year out? So, yeah, that's great. And then strategy, we have all sorts of different levels of growers coming from a comfort level on marketing, and that's been loud and clear as well. People want to see what you're, what you're working on, what they can work on and take away the conference. So that's great.
All right, So I wanted to, I've been asking everybody, have you thought about your walk up song? Okay.
[00:52:13] Speaker C: I knew this was coming. No, I haven't decided on one, but I was, I was thinking about that this morning as I knew I was coming on the podcast. I need to Finish. I need to figure out a walkout song because he's gonna ask me.
[00:52:22] Speaker A: Yeah, yeah.
[00:52:23] Speaker C: I haven't thought of something yet, but it'll probably be some rock and roll.
[00:52:26] Speaker A: Of some kind if it's at my discretion. Shoot. If I had to pick something for you.
Oh, man. You said rock and roll. Hey, and I could probably go. I don't know, could we do, like, maybe some Bob Seeger in there? Like, old school rock and roll. You want to go a little bit newer, probably.
You're a lot younger than I am, so you probably have something current where.
[00:52:51] Speaker C: You go with Bob.
[00:52:52] Speaker A: Yeah.
[00:52:52] Speaker C: We can try something there. Yeah.
[00:52:54] Speaker A: Oh, I got a bunch of. Oh, I got some Dr. Dre that wouldn't be rock, but we got some Dr. Dre we could try to sprinkle in there.
[00:53:00] Speaker C: Maybe my initial thought this morning when I was thinking what this was. I gotta listen to the Moneyball soundtrack.
[00:53:06] Speaker A: Yeah.
[00:53:07] Speaker C: And then see if I can pick out a song from there that complements the. That, you know, does what we're trying to do here.
[00:53:13] Speaker A: Fair enough.
[00:53:14] Speaker C: That'd be funny.
[00:53:15] Speaker A: Good stuff. Good stuff. Okay. Anything else you want to cover today, Quentin?
[00:53:20] Speaker C: I think that pretty well covers it. Yeah. Let's hope that things find a bottom, start working their way up. Especially wheat. Like, wheat is due for a little bit ago.
[00:53:29] Speaker A: Do something, Wheat. Just do something.
[00:53:32] Speaker C: Yes, exactly. Yeah.
[00:53:33] Speaker A: Yeah. Cool, man. Well, I look forward to seeing in your senior and Drumheller and looking forward to a lot. Cool. Thanks, man.
[00:53:39] Speaker C: Yeah, will do. Absolutely. Okay. Cheers, Ryan.
[00:53:41] Speaker A: Yeah. See ya.
All right. A little eating your veggies this week, because, of course, eating your veggies is the right thing to do, so why not try to do that in your farm business as well?
Another three for this week. Number one, we're gonna get touchy feely here, and. Or maybe not touchy, but we're gonna feel some emotions in these ones, I think. Or you should. But number one, in the month of November, maybe we talked about this already this month. But reflect, take the time.
It's a great exercise to reflect on your successes in 2024. What did you do?
What decision did you make? What circumstance was very positive and successful?
You know, harness that, try to take that to help you with decisions moving forward. And on the flip side, what were your challenges of 2024? What were your struggles? What decisions did you make that did not turn out how you had hoped?
I'll share a quick one for you. On. On our farm, we got to the fungicide decision on Canola.
We got to that decision.
And we did not apply fungicide on every acre of our canola.
And it is disturbing.
Disturbing. How much yield was different in at harvest time based on what we applied, where we applied, where we didn't. Now you're gonna say, well, Ryan, that's a different thing every year. Those are different situations, different weather, different stuff.
But for us, it was, it's actually the decision tree around why we did and did not.
And the decision tree needs to change for our farm on that process.
And some of us have to look inward a little bit as well and work on some development and some growth because we just weren't satisfied with how those decisions were made.
And there's some personal stuff, personal growth in here as well, because, yeah, next year you don't know the conditions. But the decision tree side of that has to change. So that's what we're. One of our challenges. We're working on. Second thing, market biased. How often do you check your own market bias?
Silly. It's silly to sit here and think, well, why Ryan? Why would I do that? Why?
I know what it is all the time. But seriously, sit down. The crops that you have in the bin that are unsold, what is your bias towards the direction of those markets?
Okay, you're going to lean bullish. But really think about it and write it down because you might, you might actually, you might actually sit there and surprise yourself with what you come up with. And then you sit there and say, huh, okay, now how do I take action?
But are you bullish? Why?
Why not? And how can you market based on that over the next few months? These heavy cash flow months, Crop marketing in December, January, February, some of the most stressful crop marketing of your, of your year. Because those bills, they're due or they're coming due very quickly. It's very stressful time. Prepare yourself with market buys. And the last thing, we talk about this all the time, but hey, we got offered nine and ten dollars yellow peas for next fall. Higher than anybody's predictions on where the average price is going to fall next year for yellow peas.
10 bucks in parts of Alberta. 925 in parts of Saskatchewan. 950 in other parts of Saskatchewan. Are you making money? If you are, the decision to sell some is easy. Would I sell $10 yellow peas? 100% I would if I'm making money right.
Put down some average yields, figure out my margin goal.
So check a few boxes. I'm a seller. If I can't make money at nine and ten dollar yellow Peas.
Then why am I going to grow them next year would be one question, but cost of production or a budget at a very minimum. Hopefully. You've done this already.
I know many of you haven't, but you're going to get offers like this every week moving forward. Someone's going to phone you up and say, hey, I got oats at 475 for next fall. What are you. How much do you want to do? What's the plan?
Hey, I got some. Like I said a few weeks ago, I got wheat at eight and nine dollars. What's the plan? Right? Green peas, lentils, it's all coming, folks. Figure out your budget, do your cost of production.
All right, that's eating your veggies again, folks. I appreciate you hanging out with me to the end of the episode. I. I know that I joked with Kyle about the buyers and stuff and buyers. I appreciate each and every one of you that listening to the show as well. And I want to renew my, My statement, my. My pledge, my invitation, my invitation.
Merchants, buyers, come hang out on the podcast. Let's. Let's talk it over. Let's talk some of this stuff over. It really. It brings me joy that you squirm a little bit in some of the stuff I say. So it does bring me joy. It brings me joy when I hear a buyer out there is a little bit upset with what I said. It's a lot of fun. All right. But I respect many of you out there and just come, let's talk it over. Let's. Let's have some heart to heart on the podcast. Come join me. All right. If you found this episode useful, please share it with a friend, neighbor, colleague in your. In your local ag community. It could be as easy as being like, the other day they were at Bumper to Bumper in Vagaville Farmers. We're in line talking about the podcast. As easy as that to spread the word to other farmers. And I appreciate it. Prices may change by the time we record and send this out. Things happen, right? And Wednesday recording with a Friday release, stuff happens. It's crop marketing. Have a good weekend, folks. I'm out.
