[00:00:02] Hey, folks, welcome to the what the Futures podcast, where we break down complex market trends into simple, actionable advice. It's your quick guide to better farming decisions.
[00:00:16] Hey there. Welcome to the what the Futures podcast, recorded in the UPL studio. Welcome to episode number 40.
[00:00:26] The what the Futures podcast is your weekly dose of clarity in the complex world of crop marketing. Of course, I'm your host, Ryan Denny. I've spent my career working with farmers across the prairie provinces. Even do a little bit of work with them today. I was doing some consulting earlier today, but I spent my career working on the grain side of the business. I was a grain buyer for a couple of years. I was a grain marketing advisor. Then I turned into a coach, marketing coach, and from there had my own little thing going and ended up selling that to Farmers Business network, which actually, it's going to be five years here coming up in the next couple days. So always a little celebration in our home at the end of August with that one. So thanks for tuning in to the what the Futures podcast. This episode is a solo one. I haven't done a solo episode in a little while, actually. I can't even remember the last time. Maybe it wasn't that long ago, but this episode, I put a little bit of a shout out, or a call out, I should say, to farmers. Just saying, hey, what questions do you have going into harvest here? What came back was questions about land rental agreements, questions about crop inputs, questions about the rail strike, son of a gun. Even price action on oats, barley, things like that. So I was getting quite a few questions here the last couple of days, so I thought I'd toss it out there earlier today. Got a whole roster of questions to answer, and so we got that to talk about. And I also want to talk about this green marketing seminar conference. I don't know what you want to call it, but I want to run that past you and get your opinion. That's kind of what we have set up for today. Of course, next week we're actually going to Ryan Copathorn on, like, back to back weeks. So we have like a pre recorded thing next week, and then we got to talk about the fall cattle run after that. So you'll get Ryan Coppathorne probably back to back here. All right, now hit that subscribe button, folks. It's just a little thing you can do. You subscribe, you get a notification when we post new episodes on YouTube, even your favorite podcast platform. You can subscribe there as well. Leave a review, give us some stars. Like if you want to give us one star or whatever, three or five. I'm just curious what people think of the show. And of course, you can drive this a little bit. Drive the bus here, you know, for the what, the futures podcast. Just, you know, what do you want to hear about what things are we doing well on the show? What things could I improve on? I take all feedback somewhat seriously, but I do certainly appreciate it. So go and do that for us. So when you get a chance. All right, before we get further down the episode, big shout out to show sponsor John Deere. Now, of course, John Deere. We always think of John Deere as an equipment company, but they've got John Deere operations center. They've got a whole bunch going on, on the technology side. But today I was actually on the phone with Wyatt from Harvest profit. Now if you've been following the show for the last, what, eight, nine months now, I've talked a little bit about harvest profit because I'm a big believer that you need to know your numbers when it comes to your business plan. You guys are operating multi million dollar businesses. You need to know your numbers to start your plan. I do a little bit of consulting as well. I work one on one with a couple of farms. Right. And so today I had to get on the horn with Wyatt. I needed some help getting an account onboarded and set up. And the cool thing is you just talk to the people there. They're a small team and they're easy to get ahold of. So I spoke to Wyatt. We got set up. And again, folks in my consulting meetings, you know, we talk about right now, we're talking about opportunity in a down market in an agriculture recession, you know, and here we are talking about opportunity. But all starts with knowing your numbers. All right? That is step one. So thanks, Wyatt, for the onboarding help today. And of course, you can check that
[email protected]. and of course, you can check out all things John Deere at Deer Dot ca. Okay, so we're going to do some housekeeping. We've got our positive moments of the week. What's cool in crop marketing? And then the mailbag is just a whopper with most of the episode here focusing on the questions that you, the farmers, have heading into the glut of harvest here now for housekeeping. Oh, man, I need to. I'm drinking. I have another rival trade brew here. I've got the, the session ale, the cowboy trail for my late night recording. But these folks over at eggfinity, are you know, they're causing me to drink a little bit here because I was chatting with my buddy Ken the other day, and Ken expected payment from eggfinity in March. Now, you guys know the eggfinity stuff. I've talked about it in the past. It's all over social media. They owe farmers an undisclosed amount of money. It is a big number. I'm only hearing what the estimates are, what the guesses are. But when people are owed six figures and aren't seeing a sniff of money, like, there's a problem here, folks. So the update, I just thought, you know, I came up again on social media. Hey, I better check in and just see if this guy got paid. He was supposed to get paid at the end of April.
[00:06:04] Never mind. It was due early March. They kept kicking him down the road into April and into May. Well, here we are, folks. I'm recording this on August 14. He has not been paid a nickel for his barley yet. Egg finity, I know you're listening, and thank you for listening to the show, but you guys wrote that if someone had done business with you June 1 of 2024, from that day forward, those people are getting paid.
[00:06:35] Why is it that everybody behind that that's been owed money for much longer is not getting anything now or at this time? What is wrong with you guys? Okay, this is madness. And I put it on x here today as well. Like, the stuff you guys come out with is bold. Like, do you want to come on the show and talk about it and tell the farmers what is going on? Because this is ridiculous. That now your policy is you do business with us June 1 of 2024, moving forward, we're going to pay you. But if you were doing business with us before that, sorry, we don't have the money to pay you right now. That is.
[00:07:14] You don't want to know the words that I want to say right now, guys. So this. I'm not going to talk about it anymore, but Jesus, eggfinity, get your shit together.
[00:07:24] All right, we're going to try to spin a little bit more positive here, but other things for housekeeping, man, it's a hard transition off that one. But I do have a playlist going on YouTube. I'm not happy with it. It's what the futures hashtag, harvest 2020 for. Again, brutal transition from having to call those guys out to this. But anyways, I'm trying my best here. So my. My playlist is a work in progress. Okay? It's not great right now. It's a little heavier than normal, and I don't know if it's because I saw Metallica was coming to Edmonton here, and I'm debating if I should go, but anyways, a little heavier. I'm going to tidy it up a little bit. But there's a harvest playlist there for you in YouTube music. And my song of the week is whoop, there it is by tag team. You know that? Whoop, there it is. You know, you get it right, it'll be in your head all day. Now that's my song of the week from tag team.
[00:08:15] Again, I'll tidy it up a little bit.
[00:08:18] Okay. Last thing for housekeeping. I just. Again, I talked about this last week, this grain marketing conference seminar thing. Hey, egg finity, you're more than welcome to come to this. You know, bring your checkbook, but grade marketing conference. I'm working on the outline here, and here's where you can add your input. Okay. You can email me, Ryan, at what the Futurespodcast dot ca.
[00:08:44] Follow me for a minute. So I'm thinking we have this in a town, not. Not a big city. Okay. The town. We need some type of lodgings. You know, someplace to sleep, motel. You know, maybe a hotel, like old school bar has rooms in it. I don't know what it is, but place for people to stay. We need a venue that can host breakout sessions. But pardon me, it doesn't need to be in the same building. And in my estimation, it could be on the same block or close. Very close to each other. Has to be a couple minutes walking distance, right. I'm thinking, you know, maybe we'll get like, I don't know if we'll have 20 farmers out there or a hundred or 200. I'm not sure yet. I. But I'd be curious to see. And you know how back in, like, your college days, you would do that, like, drink a small town bar dry. Like, you wouldn't know exactly where you were going in your college days. You'd. Everyone would pile on a couple of buses and you'd go over to a small town and just have a great time. I kind of want to bring that type of feel to it. So I want to blow the roof off of a few small town businesses. I'm talking about the local bar. You know, maybe there's a brewery there. You know, local caterers, motels. You know, just do a little bit of an injection in that community for a night or two. And so maybe we have, like, you know, for a layout. Think about this. So, like, the night before, maybe we do, like, a little meet and greet, you know, somewhere pretty casual. Do we do a meet and greet? And maybe we convinced, like, Vitera or Cargill to join us that night, and they do their market simulation game, you know, like, I don't know if you guys have ever done it, but they use their contracts, like, their fancy contracts, and it's like a game where you. You have a simulation, a fictional crop year, and you get to pick which contracts you want to use, and you get to use them without any. Any consequence. You get the charts. You get, you know, some of the fundamentals, some of the technical analysis, and then you get to pick these. And usually you do it with your table or with a couple people, and then sometimes they would score you as well. Like, I've been to them where they said, hey, this group sold for the most money, did the best marketing. It's kind of fun, but we do that. And maybe we have just, like, a couple of beers while we're doing it, and it's optional. You don't have to show up to that if you don't want to. Maybe you're already an expert in those. But, yeah, I kind of thought we could maybe kick it off with something like that. And then we spin that into wherever we are into the rest of the evening. Right? We do that for an hour and a half, and then away we go with more visiting and stuff like that. Day two, you know, we wake up, we have a breakfast. Gotta get the cobwebs out. Maybe we do a quick farmer like, roundtable kind of q and a session. And the reason we do that is to try to steer the day a little bit. Like, what are growers thinking about? What are they? What's on their mind? What do they want to get out of that day? So it kind of steers it a little bit, and we. Maybe we record some action items or things we want to follow up with by the time the day is done. And then from there, perhaps we get a merchant from, like, g three to come talk to us about, like, the wheat market to the whole group. And then we get the canola merchant to come out and talk to us about the canola market. And then from there, maybe we get some specialty crop, either analysts or. Or maybe some merchants, some traders as well, and they. And we do breakout sessions. You want to learn about lentils, you go there. Peas is over there. Oats is over there. Mustards over there. You know, something like that, where you go and make sure that you cover the crops that you're growing. You know, on your farm, maybe we do something like that as well. And then from there maybe we get like some of the big analysts out there, the big, the big, I shouldn't say the big guys because there's men and women. So, but those folks come and give us their, you know, market outlook on what they think is going to happen and they throw in some advice and all that stuff. Maybe we put a couple of those folks up on the big stage and see what they have to say. You know, it gives them a chance to promote themselves and what they're doing and have confidence in their recommendations. Right. Maybe there's a few that would participate in that. And then from there, you know, at lunchtime, well, some of this has probably happened after lunch, but, you know, you bring in a lighter speaker, you know, comedian, motivational speaker, something like that to pump us up a little bit. And then maybe we could split off again into groups where, you know, one group goes and learns how to create their crop marketing plan. There's like an advisor team that steps up and says, ryan, we want to come to this and we're going to show farmers how to set up a crop marketing plan. And maybe there's like futures brokers, like RBC says, hey, we want to be there as well. And we'll do a breakout session where you just, you know, learn how to work with your futures broker and the best way to work with your futures broker, like things like that, you know, that's, this is what's all on my mind here. And then everyone kind of comes back together for maybe a crop input presentation, maybe a fertilizer outlook or a fuel outlook. Or maybe we look at purchasing trends or maybe we bring in a negotiator. Like, man, the way I'm talking here, we need more than just a day to get this done or a day in an evening. But yeah, you know, maybe you get a nice little workbook at the start. You get to fill it out during the day and you get to take that home, your 2025 crop marketing plan. I don't know, folks, and maybe we create a little community group after where people can, you know, chat on like WhatsApp or Facebook where they can connect and keep those, you know, connections going or intros going. It's an idea. I don't know, folks, but let me know, Ryan, at what the Futurespodcast dot ca. Like, is this something that you're like, yeah, this is cool. This could be fun. Let me know, all right, because I'm spending a lot of time, as you could tell I am spending a lot of time thinking about this now. Okay, well, we got to switch gears now to positive moments.
[00:14:42] And my. I actually. I'm a positive guy, folks, but, like, we had something happen on the farm last night that is just one of those things that is just such a pain in the butt. Okay? So I need to. I need to pour one out here for our farm, for the 24 crop. All right? I know you're supposed to do that in different circumstances, but we had the big white combine show up on our farm last night, and so this, you know, just put. Let's put this into perspective.
[00:15:14] You know, I get the update that, you know, the. We're gonna roll here Tuesday. Things are gonna start happening. You know, it's gonna be action day, and I'm kind of, like, waiting for my brother to send over, like, the first picture or something of what's going on. Anyway, I don't get anything. And I'm like, dude, what happened? He's like, I rained. You know, we were shut down Tuesday night, like, 10:00 at night, 930. Ten big white rolls through on our pea crop, on our barley. I don't want to sound like a whiner and a complainer and all that stuff, but it's. It's one of those, you know, kicks you right in the gut when you. When you don't. You don't want this hailstorm. You want that hailstorm in, like, late June, early July, something like that. You don't want this one when combines are just about to roll because what came with it was three inches of rain, as well. And again, you know, I'm playing my violin here, but it's frustrating, and, you know, it is what it is. It's not the first time, and it won't be the last time, and we'll see where it all turns out and go from there. So. All right. Positive moments now. Harvest. Harvest is on. Okay. And it's like you might be, like, listening to this and saying, well, geez, Ryan, I've been harvesting for two weeks already, but harvest is on for me as a consultant person. It's on for me because the chaos has started, and I love it. And what I mean by that is there's so many moving parts right now when it comes to crop markets and the harvest results are so important. There's a lot of stuff to figure out, all right? And there's a bunch of stuff that you're trying to figure out before other people figure it out. You're trying to get ahead in certain things. You're trying to figure out quality. You're trying to figure out yield. You're trying to figure out how bad these yields are and why are so many people reporting bad yields. You know, like you're trying to figure all this out.
[00:17:13] Pardon me. And then you're also trying to figure out spreads, protein spreads, grade spreads, light bushel weights, discount schedules. It just, it comes at you all really, really fast. At harvest time, it's chaos. And there's all these scenarios as a consultant, you guys, the consultants listening like they get it. It's just text and call one after the other about, okay, what do I do here? What do I do with this? This is what I'm seeing. And it's a lot of fun. All right. So that, that is my positive moment. Even though our harvest is going to be a little bit of a rough start here, or is, has been a rough start. Other than that, for pause of moments, I think I'm going to leave it at that because I had one more, but I want to save it for next week. So let's move on from positive moments to what's cool in crop marketing this week.
[00:18:03] Now from here, we'll go to the mailbag. And that's the bulk of this episode is answering these questions.
[00:18:12] But I wanted to. And what's cool in crop marketing? I have a couple of things here that I just want to highlight.
[00:18:18] I'll just talk about Mike Lee for a second. So Mike Lee in Russia, if you don't subscribe to his stuff, he's very reasonable. His prices are very reasonable. And he's happy to do subscriptions with multiple people on the subscription. Anyways, he's in Russia and he's come back with his, his russian production numbers and also for Ukraine. All right. And the russian wheat number that he has. And I put a lot of faith in Mike. I followed his work for a long time. He does a good job.
[00:18:49] It is bigger than what is in the USDA reports. Okay. His wheat crop. Russian wheat crop is bigger than is what, what is reported in the USDA reports. That's all I'm going to say for you guys. Again, you should tune into him.
[00:19:04] He, he's got the numbers and it's quite accurate from there. You know, when we come back closer to home here, I see yields coming in across the provinces. And I, you know, with the heat that we had and when the tap turned off here, we had phenomenal potential, phenomenal looking crops, as reported from a few folks, even myself as well. Like I was sitting here saying crops were looking phenomenal as well. And they were like, that wasn't baloney. They were looking really good. But nothing, it's, you know, it's not over until the crops in the bin, right. And even at harvest time, you know, the wrong events happen at harvest time. You can see yield losses like, I think back, you know, many years ago with some of these darn, you know, windstorms and stuff, but all should knock on wind for that. Anyway, it's not made until it's in the bin and it's weighed and that's when, you know. Right. But yields coming in across the prairies so far, early on, there's a couple coming in at average, you know, or as expected, but there's quite a bit more coming in below average or quite a bit lower than expected. Okay, and so where are we going to finish off the year? I'm not, you know, I'm not going to put a stake in that quite yet. But I do believe that we are going to see some reductions here in production totals in the December. Stats can, I'm not sure we'll get it in the September, but I think we'll get it. We'll get it in the December. But that's what we're watching is how are these yields coming in and how is this progressing? And so far, you know, we're hearing some light bushel weight out there as well, some small seed size. You know, I can't really speak to anything other than that on, other than that for quality right now. And we'll see as harvest moves further and further north, how things look. I expect, you know, on the eastern side of the piece of region, you know, central to east. It's going to be very, very good there. Like, that's where I expect above average. I expect above average in a good chunk of Manitoba. I'll be curious about northeast Saskatchewan, where they fall in here. There are going to be some very good crops out there. But, you know, I was looking at the weather maps today and, you know, Saskatchewan, I was looking at percent of average rainfall for the last 30 days and the last 60 days. And the entire province of Saskatchewan, I think, was under 40%.
[00:21:35] Yeah, I don't know if that's the exact thing. I looked at a bunch of stuff. But anyways, it was dry. You guys know, it was dry. So anyways, folks, we're going to keep an eye on these yields and that's going to set the stage for crop marketing. Now, I also want you to just remember, though, is that there's the production from 2024. And there's also the carryover. Okay.
[00:22:00] So if you've carried over, you know, the most amount of barley we've ever carried over, that supply is available.
[00:22:08] You know, if the canola carryover number, which is now, you know, rumored or hinted to be at north of 3 million tons from last year.
[00:22:19] Was it my number? Three to three and a half. I thought it was. Anyways, I have to look back, but, you know, there's that extra carried over. So it, remember, folks, it's production plus carryover here, what's available for supply, and it's going to come up here in the mailbag in just a second. But yeah. So keep that in mind when setting the stage here for your crop marketing. All right. So that's what's cool in crop marketing in a way. It's not cool, but it's relevant input prices. So I'm a believer that obviously we've been in a downtrend, you know, that's just kind of common sense right now. But I'm a believer that your, your inputs are going to follow that to a certain degree. Now, you know, the price of canola seed did not go down. All right. I, I'm sorry if you didn't know that already.
[00:23:10] It didn't go down. I heard actually not any, they're not affiliated with the show, but I heard that one company specifically has a, has a big price increase, but the ones affiliated with the show, not as big. So keep that in mind as you get your quotes. So I believe input prices, though, you like fertilizer and even to some degree you could look at fuel. Now from a chart perspective, I'm not seeing it in the, in the, in the crude market. But when I look at fertilizer urea, I look at, you know, some of the, the other inputs, you know, the seed, the chemical, that sort of stuff, you know, like it comes down as well, or at least holds. And, you know, I finally caught wind here and read that, you know, some of the larger fertilizer analysts out there, you know, they weren't sure what to think about the fertilizer market. Everyone's scared it's going to go higher, and it certainly can.
[00:24:06] But a few of them are acknowledging now that, hey, you know what? If corn is going to be 325. Yeah, you know something? This market's not going to hold inputs. Fertilizer urea is not going to hold it. Current levels. All right. So anyways, folks, input prices, I'm still a believer to keep your money in the bank account, right now and not spend it at this time again. I don't know if that's the right thing to do. That's just my thought at this moment. All right. Last thing here for what's cool and crop mark and I just wanted to open the curtain here a little bit about like the farm meetings that I've been a part of over the last number of days here and what we're talking about in our consulting meetings. And so, you know, when I sit down with a farm right now, I tell them like, hey, we're going to get together but I just want to give you a heads up. We're not going to talk a lot about selling and marketing crops. Like we're not really going to talk about that on in the middle of August because we've done our hard work already. Now there may be an option strategy that we need to visit and put an exit strategy in place or you know, we might review grain contracts. Well, not we might. We do review grain contracts, but our meetings right now are about execution and executing on what we already have contracted. So, you know, we sit down and we figure out a what we have sold. How does that match with cash flow? And today specifically, I asked what month do we run out of cash?
[00:25:47] Because to tie this together a little bit, someone asked me the other day if I was scared of these crop markets, of these prices. I was like, thats a weird question. No, im not scared of them, but they, they, they're terrible. Like it and they're gonna get worse. So yeah, like I'm, I'm not scared of them but it's kind of a weird question. But then I had a farm tell me that, hey, I need to sell something for cash flow in September.
[00:26:17] And that scared me, you know, and I was like, oh, okay, Ryan, remember your training. You know, what do we do here? And anyways, you know, trying to figure out here's the crop mixture growing. Which crop should we hold, which one should we sell? You know, what, what tools are available to us? Can we be bullish on basis at all? To what degree?
[00:26:42] Between now and September? Like all these things, right. And I'm like geez, that, that scares me when someone says, hey, I need to sell something for cash flow in September, October. Yeah, that's going to keep me up at night. And so with the consulting meetings right now, we just, we talk about delivering on the current plan that we have and then setting up, you know, when do we need to make that next sale from a cash flow perspective. And the cool thing here is that most of those discussions are well into the new year, which is good. But again, in our meetings over the last couple days here, hey, I want you to be x percent sold. 50. Well, you said 50%, soldier. You know, for example. Well, that now has turned into 60 or 70 or 80, right. And we, we don't know yet. We don't know the yields quite yet, but we're making some guesses on a yield reduction. And again, with the heat, we're a little bit further sold than what we thought. Now, hey, I've got no qualms with it. I have no problems when someone says, oh, man, like now, instead of 50, I'm 65% sold. Oh, but I'm a buck 50 or $2 ahead of the market today. Like, totally fine with that. We can market around that and navigate around that. Alrighty. Okay. What do we got next year? It's like a marathon episode because there's no cutting to commercial or cutting to break. It's just stay, stay hydrated and keep grinding. So mailbag segment sponsored by Pioneer Seeds, our last month, this is our last month of giving away that wonderful three gallon bucket cooler and breakaway speaker, Bluetooth speaker, last one we sent up north. This one will draw for here at the end of the month. And whoever wins this should have it for a little bit of harvest, I would think. Yeah, even the folks in the south, I think, are still going to be grinding away for a while. So there we go. All right, first question. So this comes in. Some of these are anonymous. Some of them have a name. And there are basically 1234, let's say five questions and then a couple I need to kick down the road. But the first one is how would you approach landlord discussions and opportunities?
[00:28:58] Now, in this scenario, new ground is being offered to the farmer. Okay. So farmer is retiring and offering it, you know, 1st, 1st persons getting a chance to do this. And so, like across the prairies, your rents are, they're all over the place, right? Like there's some stuff that I can't even speak for, what the lowest number would be and what the highest number would be. And that's not my point in answering this question.
[00:29:33] What I would do is that I would try to get a one year deal done and you sit there and say, ryan, are you nuts? We want security. I want 3510 years of security here. I want to know I'm farming that ground. But just hear me out for a second.
[00:29:55] If you have now reached the current peak land rental values, like, are you willing your farm, are you willing to sign the next five years up at this number, at this peak now, will land rental values be higher in the future? Yes, without a doubt they'll be higher in the future.
[00:30:19] Right. But could there be a little pause in, in land rental values? Could it make sense again, depending on who you're dealing with on the other side here, but to go to your landlord and say, hey, we're in a bit of a transition year, from a commodity perspective, we're coming off the highs. We're still trying to find these lows. No one has told me exactly where these lows are. So would you mind if we did a one year contract, see how this works out and have a discussion next year? And if things smarten up and my returns are looking good, perfect, you get a raise, you know where we can maybe do something more long term? But if I'm still searching for a bottom in this market, I'd like that flexibility to have that conversation again. Some of you might be falling off your chair right now saying, this guy is nuts. Like, no one's doing this, but just think about that for a minute. Like if it were me being offered ground at the highest rent that I've ever paid, and I have to do it for five years or seven years, I don't think I want that action right now because I might have three or four years really, really tough in there, I guess on the seven year deal, that's only halfway, but like, I don't think I can recover those losses. I don't know, folks. It's just like, that's what I thought about was just short term deal one year, you know, because I, you know, we all dream, you know, when you're renting ground, you all dream that your landlord phones you up and says, hey, let's write a contract up where commodity prices, your returns, your margins drop, my rental price drops, fit goes up, my rental price goes up. Like in crop share, that kind of happens at times, but not really because crop share, you know, if you're going to do 2025, 30% crop share, like some of these got pretty crazy guys, you know what I'm talking about? You know, like there's, anyways, there is some risk shared there, but it's still, you're paying a pretty steep premium. But if you could get a landlord to buy into your farm and what you're going through, I don't know, it's far and few, but that's what I would do. I try to do something short term and then again, in good faith, negotiate next year and if things are worse economically, then hopefully that's represented in your deal. Okay.
[00:32:51] Now I would love to hear feedback on that if you are willing to email me and say what you really think about that. All right, now here's a fun one, impending rail strike. Any thoughts on how space will be allocated?
[00:33:07] As I said, fun one here. I probably, yeah, that was a little insensitive. Not, rail strike is not fun.
[00:33:15] But I texted some buyers, some people working at grain elevators, and the response that I got, well, number one, it gave me a bit of hope here on price recovery. And number two, it was interesting, the differences at different companies. Okay, so how is space going to be allocated from a, if there's a rail strike, poor rail car movement or no movement, I guess. And so, like a grain elevator. So for, you know, back when I, a long time ago, I was a grain buyer, and so we'd get the plan here in like July, and they'd say that cans canola, that cans CPS, wheat or feed barley, these house bins, the big ones, are going to be hard read by this protein and grade, you know, and this is what we need to get to Vancouver.
[00:34:10] And then you, you always needed a bin to turn things and to keep things some flex, some flexibility, right? It didn't have to be the biggest, the biggest bin. But like, if I'm a grain company and there's going to be a rail strike like Vancouver, what Vancouver needs, what I have. Like, there's no guarantee that that will stay the same. So you have to be a little bit cautious here as a grain elevator and what you're going to take in, I think. But anyways, here, here's the responses I got. I'm going to do this anonymously because these folks were kind enough to share their opinion.
[00:34:49] I have this question for the podcast. What do you think? Impending rail strike, we'd have September delivery contracts. How will space be allocated? And so he says, we will be elevator number one. We will be allocating with a priority on existing contracts. Makes sense. You have an existing contract, you're the priority. Now, that being said, if someone calls and starts harvesting with no contract and guys that have contracts aren't phoning, they will get to haul. Right? We have good space going into harvest right now. We may take spot grain, but we're also going to be careful so that we can honor existing contracts. Hopefully the strike doesn't last long and we can get shipping before we get plugged up. We will make sure grain priced for August and September gets priority, especially grain committed to us weeks and months ago versus grain priced in the last week. So if you contracted a long time ago, you are going to get a priority with this company. We have space for peas. We have space for feed barley over what we have on paper right now. So they can buy more peas, they can buy more feed barley.
[00:35:58] Alrighty.
[00:35:59] So what I caught out of that too, though, is they have some capacity to buy in September. Like, that was my biggest light bulb. And that's what every one of these buyers told me is they have capacity to buy in September. You know how I was talking about the sold out sign going up?
[00:36:19] I usually don't put too much stock into that, but there's a few locations I thought, geez, maybe, yeah, maybe there's something there. But, you know, it's just nice to know that there is capacity and there is space to do some contracting because that, to me, is positive for basis levels to potentially improve, especially if yields come in below expectations. All right, so that was elevator number one. Elevator number two. Hey, great question. I'm sure this is looming on a lot of producers. Mine's coming down to crunch time. We got CN to bring another train on Monday, so we're pretty much cleaned out in preparation for the strike. We have made sure not to over contract anything as well and have room for everything on the books. All contracts will be brought in first and any room remaining will be first come, first serve. Our prediction is the strike won't last more than a week and hopefully have things rolling end of September again. Anyways, so here they're empty. They're going to honor their contracts, and contracts will be brought in first and then anything left. Yeah, you'll be able to contract and go in again. Another elevator, different area, different company with capacity in September. Okay, now the third one, I'm gonna, I'm just gonna say, I'm not gonna read it word for word because it's, you know. Yeah. Anyways, I'm just gonna say from, from their perspective, elevator number three, from their perspective, there were lots of moving parts. And what I'll say about elevator number three is they, like, in years where we had a really tough harvests and years where we had quality stuff issues, like, they work pretty hard to kind of keep a lot of people going and flowing and they do a good job of that. Like, just to not put favors towards one person, but just kind of leave, you know, leave things going or get thing. Everyone kind of lined up together. Like, I didn't want to say, like, we bored days where everyone had to haul so many tons. But anyways, I feel like they do a pretty good job. But anyways, for them, their circumstances were evolving. They, the one thing they said is they don't expect the strike to last very long, but even a week delay would cause ripples into November for their company in their facility. All right, so one week will cause ripples into November. And they said, like, yeah, you know, we're going to honor contracts first, but, you know, is this someone that's just contracted with us for the first time on Monday and, and to buy space or is this someone that we always buy grain from? You know, like that would come into play. You know, they, you know, from a quality perspective, what do we need? You know, certain people may get priority based on they have what we need. You know, think things along those lines, which also made sense. Right. And so, you know, they're going to try to navigate what's going to happen here and line up with Vancouver as well. But they also had capacity to buy in September. And like, this is from a different province than the other guys that I talked to. So anyways, I messaged about ten different buyers and I'm not going to go through all the responses, but those are, those are the ones, you know, that are pretty, pretty telling, I thought. And as a farmer in this situation, this gentleman has a lot of September and not a lot of extra bin space. So movement is very important. And so it's going to come down to communication being in touch with that buyer. You know, you might have to do a contract somewhere else. As you can tell, there is capacity. But, you know, like when, if the rail goes on strike, obviously it's gonna be crippling.
[00:40:31] It's gonna put a, throw a wrench in the gears for sure for, I don't know how much time, but for amount of time. And, you know, if you're a 30, 40, 50,000 ton facility, that's all you have.
[00:40:46] That's it. And you want to make sure that what you have in store is what you need for your export program as well.
[00:40:54] And the whole export program, you know, those vessels, they're going to wait and basis levels are going to be bad and really bad. You know, until this smart ends up, companies may put up a sold out sign and say we're just not contracting, but as you can tell, they have room to contract. So basis, right. It might not be that pretty. And so anyways, the whole system here gets jumbled and it just take, it's going to take time to get sorted out. If, when the strike happens. Okay, so communicate. If movement and cash flow are, is that, you know, priority number one for you, just be in communication with your buyers and say, how do I fit into the plan? You know, I'm going to be harvesting these days. Like, what can we do? And you might, you know, you listening here?
[00:41:51] You know, like, let's say you're a farm that normally, you know, harvests and then on a rain day fires up the trucks and does a bunch of hauling. Or maybe you don't have capacity to haul off the combine. It may be worthwhile if they're giving you the delivery opportunity to make that delivery happen, even if it results in a little extra cost for trucker or something like that. Like if cash flow and movement is that important to you, I'd be like making sure that if I get allocated something during a strike, I'm filling my allocation no matter what, even if I have to shut the combine down for a bit because Bam WX has told me that the forecast for September, October is warmer and drier here. So hey, might, might have a nice harvest window. All right, moving on now. So what is your outlook for oats?
[00:42:44] And, yeah, what is your outlook for oats that comes in from Darren?
[00:42:49] All right, here's what I found interesting about oats. So even with like old crop, the buyers had premiums on in August. Like in Alberta specifically, I can't speak for, I didn't notice it anywhere else but in Alberta specifically, they did have premiums for August Oats over the last couple weeks. And so to me that was a good sign that carryover is not going to be super burdensome by any means.
[00:43:23] The interesting thing on the ocrop for me from an outlook perspective comes down to quality.
[00:43:30] Are we going to see, with the heat, are we going to see some light bushel weight out there? Are we going to see oats not make milling quality?
[00:43:44] Because if you start to see that as an issue, then the price gains are going to be a bit more advantageous. Right now, carryover, I'm not super concerned about acres were not that high, you know, yield, though. Manitoba, northeast Saskatchewan, peace country. How many oat acres are in there? You know, there might be some good, a lot of good quality oats out of those regions with that extra moisture. Right. So I'm certainly, I don't know exactly where to turn on this now, but I feel that if you take your oat and put it in the bin, it's going to appreciate in value.
[00:44:28] But as I've been talking about with a few folks.
[00:44:32] I'm not expecting those extremes. You know, if you take your feed barley and put it in the bin, I'm not expecting a huge gain into next spring. Same thing with oats at this time. But if we have a weight issue, if we have a quality issue, that price will pick up a lot faster. And hey, I'll be curious to see how it all plays out. I'm not. Production does not scare me to lower price even more. Lower corn prices, soybean prices, you know, us markets, that, that is a weight that hangs over the markets. But Darren, for you on your oats, you know, I would think that price appreciation is definitely in the cards. And if there's a quality issue, you know, we're going to see some gains. I just don't think we go from $4 to five that quickly. But hey, next spring and summer might be a bit exciting without if we have quality issue. So kind of answering, half answering that downside I'd say is limited though. Next one came in on barley Outlook. So will much lower barley yields and lightweight rally the feed barley market by the new year?
[00:45:45] My short answer is no, it will not rally the barley market by the new year because we've carried over too much feed barley. Alrighty.
[00:45:54] Too much. Really good quality feed barley.
[00:45:57] So we also have this corn problem where the US is going to grow a record corn crop. And we're very versed, we're very good now at bringing corn from the US into Canada. We've done a lot of it over the last couple of years. And I, I think barley is a crop that can appreciate in value slowly, but from an interest rate perspective, from a money perspective, to hold your barley well into, into next spring or summer, I actually don't even think that will pencil out at the end of the day. Like I again, the heat had a big impact on barley. I have to see more harvest results. But I think barley is crop that I pick. My cash flow gap, November, December, whenever that is. I set a target, I get my barley sold and I move on. And I don't think it's worth stressing over into next spring.
[00:46:59] Of course, if we're in a drought situation next spring, so on and so forth. But like, we have a lot of feed grains around and I was chatting with my father in law the other day and his same acres of hay year over year, his bales are. He's got 40% more bales this year than last year. Again, it's just one guy in one spot. But you know, we do have a pretty, pretty good hay or feed availability across the prairies. Anyways, from the barley side, it would be one that I just pick my cash flow month. Now, if it's malt, that's a different story. We need to figure out the small story yet. But for feed barley, pick your month, fill your cash flow gap, and just get your barley soldier. Don't, don't fire sale it off, like tomorrow, but, you know, get through your harvest low here, and then, you know, make your game plan from there.
[00:47:52] All right, last question. I'll answer. I'll kick the other ones down the road here. What crop would you store and which would you move by Christmas for cash flow? Well, I answered that on the barley side, I would definitely move barley for cash flow. But what crop would I store? Would be canola.
[00:48:11] Even the scenario came up today. I had a grower say, hey, I have a load left. Do I dump it against my September contract or do I sell it now at current prices? And my thought was to put it against the September contract because, you know, that load, I don't know what he'd be offered today, 13 something.
[00:48:33] You can dump it on the September contract for 15. And by holding your canola into next year, I could definitely see the scenario where you get another sniff at $15 canola. And so I think here, even though we have a little higher carryover production numbers, I just, again, jury's out right now, but it looks like canola is going to have been impacted the most here by the heat. The way it's looking to me, and I'm just. I think we tighten up pending stocks for next year. I know the soybean side of this equation is negative. I know most of the news on veg oils is negative right now. I'm not saying that we're going into a screaming rally, for sure on the canola market, but that is the crop I would store.
[00:49:17] I'm probably marketing wheat, especially with the russian number being higher. The way that I look at wheat marketing is very simple, but obviously, Argentina, we can keep an eye on, and there's some importance there. But I find marketing wheat during the, during the winter is challenging. You've got the northern hemisphere wheat crop in the bin. You've got the next crop planted. If nothing comes out of that, that's significant for a rally. I just. I find it challenging. So I. I like moving wheat, especially if you produce something that is in demand that maybe other people didn't produce. Like if you produced a, a number 214 protein, and early on in the year, there's that demand for that. Someone's paying a nice premium for that. Well, yeah, I'd like to move that. Or if you produce something with, you know, 312 and the discounts aren't that bad, well, then I like moving that, too. Right. But I just think wheat, the appreciation and wheat prices, it can happen in the spring and in the summer. For sure it does all the time. But if it's between now and Christmas, I'm a wheat seller and I'm holding canola. So that's where I'm at on that. The next questions, I'm just going to kick them down the road because I'm just, I'm talking a lot and losing, not losing my voice, but it's starting to get scratchy here. So we're going to talk fall cattle run in a couple weeks with Ryan Copperthorn. I have a question about agri stability and government support group, government support programs. I'm actually going to circle in. I'll bring in a banker or somebody like that in a future episode to tackle that. So I really appreciate you guys sending in those questions. I hope that was helpful. Anyways, I appreciate all those questions. Keep them coming. Rhino with the Futurespodcast ca the mail leg mailbag is sponsored by pioneer Seeds.
[00:51:12] All right, let's wrap this thing up with eating your veggies, brought to you by the lunchbox crew. I head over to Ryan Denis CA to check out how we can work together and collaborate.
[00:51:25] Three quick ones. Number one, cash flow review. That was a big theme in today's episode. Review your cash flow. What month do you run out of cash? When is it? When is it zero or negative?
[00:51:40] When do you fall behind? Okay.
[00:51:43] Number two, which crop are you going to sell to fill that cash flow gap or to fill that month? That's step two. Or number two for eating your veggies. And number three, I think that you should get some wheat targets out there. Okay. September wheat targets again on theme with some of these gaps here, I know rails there, but some of these gaps companies looking like I would set a wheat target, I would set at a minimum $0.50 above the market right now. Fifty cents. Sixty cents in there. I would set those out. And as I told the grower the other day, you don't have to do a thousand tons. One load gets you an email, a text message, or a phone call saying that this thing hit. And then you can add a zero to the contract if you want. Right. You can say, oh, cool, that hit. That's a number I need. Let's do more and put them at a few different companies. See who bites first. I don't know. It's just starting to feel a bit more competitive out there. And I'm just on wheat.
[00:52:47] Hard red spring wheat. I would dangle a few targets out there.
[00:52:51] I take a look at it. I think the wheat crops did the best out of all this dryness. I think Russia's crop is fine. Our crop is going to be pretty big on wheat.
[00:53:01] Us crops going to be pretty big as well, obviously for spring wheat.
[00:53:06] I don't know, folks. The more I think about this, geez, we might have to sell even more wheat before Christmas than I was thinking.
[00:53:14] All right, if you found this episode useful. I know it was just me today solo for episode number 40. But, you know, share it with a friend, a neighbor, a colleague, someone in your local ag community. Spread the word about the what? The Futures podcast. I would appreciate it. Of course. Strategies we talked about, prices, we talked about everything can change. Please seek the advice of a professional. They're out there. Go seek them out. If you'd like to be a guest on the show, email me or head over to Ryandini Caddy. Have a good weekend, folks. This was a grind of an episode. If you made it this far, I should actually, at the very end of these episodes, I should throw. That's where I should throw. Like my, my prize stuff. But what should we do here?
[00:54:03] Okay. Yeah. If you've made it this far, if you've made it to minute 57 of episode 40, send me an email.
[00:54:13] Let me know you made it. I don't think anyone really made it this far. I can't see it being many. Anyways, send me an email. I don't know. I'll put together. I've got some rival trade brews I can put together.
[00:54:27] I got these lunch kits I'm filling for the lunchbox crew for harvest. I'll think of something. Email me. I'll think of a little prize pack for you for sticking it out to minute 57. I'll put everyone's names in a hat and see what we can come up with. Alright, folks, I'm out.
