(FLOOR IT!) Crop Marketing in a Tariff World. Guest | Kyle Sinclair

[00:00:00] Speaker A: Well, it's been a crazy 10 days or so here. Lots of farmers with lots of questions entering this new tariff world here. As of March 20, with China implementing tariffs on Canadian peas, canola meal, canola oil, and of course, others, farmers have lots of questions we asked, and they sent them in. Join me and Kyle Sinclair from Producer Profit as we try to tackle some of the questions that have popped up here over the last number of days. Hey, folks, welcome to the what the Futures podcast. Quick guide to better farming decisions. All right, folks, welcome to episode 68 of the what the Futures podcast. We are in Lacombe, Alberta, of course, each and every episode brought to you by UPL upl, a big sponsor of the SJHL playoffs. Kyle, are you following the SJ SJHL playoffs at all? [00:00:59] Speaker B: I haven't at the moment. [00:01:00] Speaker A: All right, just put your money on Melfort, okay? [00:01:03] Speaker B: Okay. [00:01:04] Speaker A: Put your money on Melford. [00:01:05] Speaker B: All right. [00:01:05] Speaker A: Next time you're traveling the Prairies, make sure you pop into Melfort. They're gonna. They won it last year and they're top of the division, top of this, the league right now, so. [00:01:14] Speaker B: But it seems like I should be picking an underdog that seems to be. [00:01:17] Speaker A: More than what Flint flown last in the final last year, so. All right. All right. [00:01:21] Speaker B: Yeah, okay. [00:01:22] Speaker A: We'll see. [00:01:22] Speaker B: Okay, I'll. [00:01:23] Speaker A: You can Google some names here. We'll figure it out. All right, folks, this is a little bit different style. I made my way to lacombe here earlier in the week to attend a grower meeting. And of course, this is the hometown of Producer Profit headquarters, just down the street here. And so I thought it'd be fun to meet up with Kyle and come to one of my favorite spots in town, which is Blind Man Brewing. Kyle, it's a beautiful day in Lacombe, man. How's it going? [00:01:50] Speaker B: Every day's a beautiful day in Lacombe, Ryan. Yeah, no, it's been. It's been an adventurous couple of weeks. [00:01:58] Speaker A: Yeah, you could say it has been. [00:02:00] Speaker B: Yeah. [00:02:00] Speaker A: How's your. How's your sleep? Like, my sleep? Like, last night I went to bed like, 11. I was up by five. And not like, I was up because I wanted to tackle. Tackle it another day. Like, are you feeling the same way? [00:02:13] Speaker B: Like, you. You go to bed, I don't know, maybe it's the same for you, but you go to bed with a final glance at bar chart on your phone, and you wake up with a glance at bar chart on your phone, and it seems throughout the night, you tend to be like, I'm going to wake up and it's going to be what? Pick a number. Could be green, could be red. [00:02:33] Speaker A: Yeah. [00:02:33] Speaker B: And then you verify to see if you're. I don't know, your, your lean was right through the night, but it's absolutely like, there's a lot of things swirling here right now. And I think the big part of that makes it exciting. Certainly challenging. [00:02:45] Speaker A: Yeah. [00:02:46] Speaker B: And this is always a job. Like, one of the biggest things that I enjoy about this job is the constant chat. It's always changing. You're always trying to put a puzzle together. Sometimes in the dark, it feels like certainly with Trump, but still a good time. [00:03:01] Speaker A: I told someone the other day, I haven't worked this hard since like 2018 or something like that. I don't know. [00:03:07] Speaker B: Last time Trump was in pretty much. [00:03:09] Speaker A: Yeah. 2018, 2019 or 20, whenever that was. Like, I haven't worked that. Like, it seems like you haven't worked that hard since then, but it's, it's been like invigorating. A chance to make a big difference. [00:03:21] Speaker B: Absolutely. [00:03:22] Speaker A: Right. Like, you know, the bull market runs. As an analyst, you're like, how long can you wait? Because. Right. And then at some point you're like, okay, now it's going down, but. Right. Whereas right now, you know, I've thought about marketing crop in the fall of 2026 just as much as I had the fall of 2025. [00:03:38] Speaker B: Yes. [00:03:38] Speaker A: And 2024. Like, it's been very, very active. So appreciate you taking the time here. And I appreciate Hans from Blind Man Brewing allowing me to come in. Very cool venue here in Lacombe. Absolutely had the chance last year. Me and Uncle Glenn did brew our own couple kegs of, of a blonde ale. I can't remember what we call the crop checking. Crop checking Kolsh or something like that, I believe. And so got the behind the scenes. But thanks, Hans, for, for letting us come in here. All right, man. So we're pre recording this pre recording to the tariff day, March 20, which is Thursday. It is Tuesday afternoon. I want to start off, like, I gotta ask you, on March 20th, the canola market. Again, folks, we're doing this a couple days in advance. Higher, lower, neutral from. [00:04:31] Speaker B: From where we're at right now. So two days early. [00:04:33] Speaker A: Let's. Two days early and let's pick what you pick the month you want. [00:04:37] Speaker B: 585 on July, I think is where we closed. [00:04:39] Speaker A: Okay, 585 on July, 575 on when, lose or draw. Where are we at? Let's say by the close. [00:04:45] Speaker B: Yeah, that's a good one. Thursday. [00:04:48] Speaker A: There's no pressure. [00:04:49] Speaker B: I'm gonna say. I'm gonna say we're going higher now. I mean, I know I catch the. I have the reputation of being maybe a bit of a bull, and I want to. I want to just quiet that a little bit here for just a second. [00:05:00] Speaker A: Okay. [00:05:01] Speaker B: Because we did a presentation in unity, and in that presentation in Unity, I was. I was a little more negative. Maybe you were. That day, you were negative. And so it's not like I always take the bullish side. I just want to. I just want to throw that out there. [00:05:16] Speaker A: And I was the. You were. [00:05:17] Speaker B: You were actually a little bullish there. [00:05:19] Speaker A: Yeah. [00:05:19] Speaker B: But. But. Which was a nice. It was refreshing. But I think that. I think that the tariffs are already priced into the market. I think that there's the possibility that we're also pricing in some of the concern over April 2nd tariffs. [00:05:33] Speaker A: Yep. [00:05:33] Speaker B: That's from the U.S. yeah. And. And I. And I don't think the trade views Chinese tariffs the same way that they view the possibility of U.S. tariffs. And what I mean by that is when China says they're going to do something, they don't usually negotiate and then pause it. [00:05:50] Speaker A: They. [00:05:51] Speaker B: They come out and they say, we're going to do this and enjoy it for the next couple of years. [00:05:57] Speaker A: You're saying China. [00:05:59] Speaker B: China. [00:05:59] Speaker A: Yeah. Yeah, I agree with you on that one. So you're gonna. So you're gonna say we've kind of settled down a little bit. [00:06:04] Speaker B: Yep. [00:06:05] Speaker A: And that the day comes. But, you know, there's no. No China headline. Nothing that really spooks. Well, I guess maybe I'm getting a little bit ahead of myself, but let's just get. So you're higher. [00:06:18] Speaker B: 5, 85 higher if it. I mean, we only got two days to go. [00:06:22] Speaker A: Yeah. [00:06:23] Speaker B: Unless they came out and said something about canola seed. [00:06:25] Speaker A: Well, okay. And let's say that doesn't count. Any, like, change to change to the narrative situation? [00:06:30] Speaker B: Sure. [00:06:31] Speaker A: Yeah, that doesn't count. [00:06:33] Speaker B: I think we've scored our bottom. And I see some positive things on. On the chart. I see some positive things in some of the other markets. European rapeseed, soybean oil. Some positives there. And so for that reason, I think that. I think we're going to see some upside back in our market, which is, you know, how low can it go before you have just tremendous demand coming in to scoop up cheap volume if I'm trying to. [00:06:55] Speaker A: Right. [00:06:56] Speaker B: I'm super thrilled with my announcement. Driving the market down a hundred dollars a ton so that I can buy. [00:07:00] Speaker A: It back cheap, which apparently the rumor is they have done some of that, right? [00:07:05] Speaker B: Yes. [00:07:06] Speaker A: So I'm going to take, I'm going to take the under. I don't like to take the under on this because I don't want lower prices, but I'm going to take the under in the canola market because of the conversations that I've had over the last couple of days here, the last week where there is a fair amount of unsold canola in the price across the prairies, you know, a little bit more than I'd like to see. And I also get that optimism there. Like when I get into conversations, there's an optimism there and I, I appreciate that. I appreciate the optimism. But I, I think it becomes a real March 20th. And with that not saying we're selling off 40 bucks a ton, but I just think a little more negativity creeps in. And I also, this might be cheating, but I have the benefit of a five, what, 70, you know, bottom and then a little recovery. You do have a little bit, I have the advantage. [00:08:01] Speaker B: You have a little bit of wiggle. [00:08:02] Speaker A: Room advantage, Ryan, on that one. So. Yeah, we'll see. We'll see. This isn't, by the time you hear this, we will already know the results. Okay. All right. So I asked growers to send in questions and we got a few. We're going to keep it classy, we're not going to name names, don't want to put anybody. There's some sensitive questions that came in. And so we don't want to put anybody in a tough spot. But I think we could start with some positivity and you know, talk about the wheat market because I had a question come in. You know, if I'm, I haven't done much on wheat lately, I haven't done much on wheat. You know, should I be selling anything here in the middle second half of March, I guess now. [00:08:46] Speaker B: Right. And I mean the guidance that we've been given to farms that we work with has been, I mean you could call it luck of the draw, but really it's the bottom of the market. And so we, we, we had jumped in on some long positions, some three way strategies at the 570 mark. Some guys were fortunate enough to get in a bit lower than that. And today we actually took profit on that between 625 and 630. So we were shooting for the, the 648 level, which is about, you know, obviously 20 cents roughly higher than where we're at. [00:09:11] Speaker A: Yep. [00:09:12] Speaker B: But at the same time this, this rally to me feels a little bit early for the seasonal tendency of the May spike, which is really what we were trying to capture. [00:09:21] Speaker A: Right. [00:09:21] Speaker B: And so on this side of it I'm like heck, we made 50 to 60 cents a bushel on this position. Let's take profit now for the guys that need cash flow. I'm not afraid of making a catch up sale here. That's not terrible. The basis has improved a bit over the last couple of weeks. We had some in Alberta, we had some 870 hard red targets trigger here. Not bad. And that was for lower protein. So I'm not disappointed with that. Some positivity there but I think the best is still yet to come. Like I don't think we're, we're just getting crops coming out of dormancy. The weather concerns are just starting to take shape. I mean you got this little bit of political maybe uncertainty with the Black. [00:09:57] Speaker A: Sea, but it's not like the close was terrible today. Like we're down a penny or two from what I saw. I don't know if it was worse than that after but you know you've got some cease fire, not ceasefire, but something going on between Ukraine and Russia right here. [00:10:12] Speaker B: Which the, I mean the article that I read is that it's going to turn into more of a negotiation around Black Sea cease fire, stuff like maritime. [00:10:21] Speaker A: Right. [00:10:22] Speaker B: And so if that's the case that would relax some of the shipping concerns. I do think right now we're at like as of today, as of Tuesday, which of course by Thursday that could change. [00:10:30] Speaker A: Yeah. [00:10:31] Speaker B: But I do think this is a good opportunity to be. If you need sales over the next three, four weeks, maybe this is a good time to do it. And I wouldn't be surprised to see, don't freak out if your market drops 40 to 50 cents. That's not, it's not unexpected. It's not something that's going to really. [00:10:48] Speaker A: It'S not going to really alter your opinion. [00:10:51] Speaker B: Right. Yeah, that's actually expected. And I was doing the trading report over the weekend and actually made a note that this market looks like it needs to pull back to 580 on the July futures. And so, you know, 585.90 somewhere in there, that's where. And if it does fall back and you do get the April 2nd stuff going on, you know, I think all of that ties in. You get a lower loony coming into that picture. You got a better basis level and that's why I think the best is yet to come. [00:11:15] Speaker A: Yeah, I'm not going to disagree with you. I, I think that, you know, a little pullback here in March is not a concern at this time, that you look back at history and the next couple months ahead of us are the important ones. But if you're feeling a little undersold here, I, I agree. Like getting a little something done. I'm feeling a bit undersold, so I'm taking a little bit of action here and getting some old crop priced. And like you said, basis levels have improved a little bit, futures popped a little bit and we always need money in the bank this time of year, so. [00:11:48] Speaker B: And there's plenty of uncertainty in other commodities. [00:11:50] Speaker A: Yeah, we're going to get to that. [00:11:52] Speaker B: Taking a win's not terrible. [00:11:53] Speaker A: Yeah. Yeah. I was going to ask on the wheat, have you been taking a look at new crop wheat basis and has it done anything the last couple weeks? Is it staying about the same or is it. Are you seeing a little improvement there too? [00:12:07] Speaker B: I haven't been watching it as closely and the main reason is I view it as, it's. It's very unlikely that a buyer is going to give you their best basis level six months in advance. Yeah, right. [00:12:18] Speaker A: Yeah. Be nice if you did though. [00:12:19] Speaker B: But, but it does highlight, you know, and I'm not trying to promote one buyer over the other because I probably equally dislike all of them the same. But in this scenario, in the environment that you have going on right now, Patterson could be. And not everybody has access to a Patterson and I recognize that. But Patterson's ability to convert the futures over to the Canadian dollar, grains connect also has a basis, a way to lock in the futures and it, it could be a play as well. [00:12:49] Speaker A: Again, four locations. [00:12:52] Speaker B: Exactly. Hard to get those locations to match up. But if you are near one of those, the idea of a lower looney and a higher futures through the spring could really be a powerful dynamic that you could lock in. [00:13:02] Speaker A: Yeah. [00:13:03] Speaker B: I'm not disagreeing on maybe locking in some basis if you can get an adequate level. And the reason for that is I think we're going to grow more wheat. [00:13:12] Speaker A: Yeah, we are. [00:13:12] Speaker B: Right. And if you grow more wheat and you get an average growing season, we're going to saturate that market in the fall and our basis or our futures first will still be, you know, exceptional. Yeah, but you might get clobbered on that basis. [00:13:24] Speaker A: Yeah, I think it's definitely something to monitor on production and what that looks like and what do you know what do the acre changes look like? And we'll talk about acre changes in a second here. But yeah, and so I, I think for, for new crop basis, like you said, six, it's a little too early yet, but there's just slight, slight improvements out there. But if you don't know what we're talking about from a Patterson perspective, reach out to those folks and they'll give you a little education on how they do things different over there. Okay, so we got some positivity out there to start off, Kyle, so that's good. [00:13:58] Speaker B: Yeah. [00:13:58] Speaker A: I got a question that came in about the Canola market, and I can't believe it. Big one. Really? Yeah. So question came in about is it time to go long this Canola market? And I want to just say, folks, again, we are pre recording this. You need to seek the advice of a professional, professional out there. So please reach out to your futures brokers, the folks that are on your team when it comes to these types of strategies. But Kyle, what do you see in the. If you just take the question, but just say Canola futures mid March, are you liking what you see here in the small recovery to start, are you liking that in the maybe a little bit longer term into April? [00:14:43] Speaker B: Yes, I, I do. And, and there's a few things that go along with it and we kind of touched on them already. But I mean, when you have a price that gets to me exaggerated to the downside like we have now, I do think that there's the potential like 5. I think 558 was the low on May futures. I see, you know, the potential for that to go maybe as low as 540. I don't think it can sustain a price down below that level. But I could see, you know, you have to keep in mind, you got that April 2nd reciprocal tariff problem on the horizon here, which could create another. [00:15:15] Speaker A: Dip or get kicked down the road or who knows. [00:15:19] Speaker B: But it's going to loom, it's going to weigh on the market and then maybe it goes away. [00:15:23] Speaker A: Right. [00:15:23] Speaker B: We don't. [00:15:24] Speaker A: Yeah. [00:15:24] Speaker B: To me, that's one problem going into the spring that could add a little bit of downside. But on the outside of that, you're already so cheap in the market. You have soybean oil on Friday had a positive signal that was a bit of a reversal. And then we built on that over the last two, three days. And the soybean crush numbers in the states weren't positive. [00:15:43] Speaker A: No. [00:15:44] Speaker B: So the fact that it's climbing against negative news That's a, that's a good sign. And you have European rape seed testing a support level that, you know, we were watching here and then bouncing out from that and now starting to climb into the green as well. So you have some key markets there starting to drift into the right direction. And I think we're not really getting, you know, an adequate picture from the Canadian data system as far as what's been delayed. Right. And that eastern shipping lane is about to open in the next couple of weeks. So I think the demand is gonna, is gonna become a little bit more, I don't know, evident, I guess you could say. And, and then with that, I get. Maybe you'll see some better basis levels. But I like, I like the trade. [00:16:26] Speaker A: We got a basis question after, so. [00:16:28] Speaker B: Right. So I like the, I like the level of getting in here. You do have, you know, some downside risk. Try to get that. You can't necessarily mitigate all of that risk. So don't necessarily try to. But you know, if you have a 30 to $30 downside trade here as far as potential draw down and you could get in and see that climb, to me, the target would be around that 640 level on the chart right now. Okay. I mean that's still a $60 win from where we're currently at. That's not bad. [00:16:55] Speaker A: Yeah, yeah. Oh, yeah. [00:16:57] Speaker B: So. And you could manage that with options. There's lots of different ways you could manage the risk of that. [00:17:00] Speaker A: So I do like the other. The follow up that I'll put in there is how often is the low of the Canola market scored from March 18th on. And I know things are challenging right now because headlines can make big market moves. But you look at the fundamentals, you look at, you know, the potential for less acres by how much we'll see. And then we got to grow the stuff. [00:17:26] Speaker B: Yeah. [00:17:27] Speaker A: So like if you find, if you're looking for a low in this market, you know, it's. To me, it's not now, it's later on in, in a year. Right. So harvest time or whatever. [00:17:38] Speaker B: Yep. [00:17:39] Speaker A: Yeah. Yeah. So I had a question come in about basis, Canola basis saying, well, futures have dropped so much. Basis. Basis obviously has to improve. Like, what's your thoughts around basis canola basis getting better? [00:17:51] Speaker B: I think that we still have to weather the storm from the buyer, scooping up all of the fear that's in the market. Right. And there is. I'm, I've had quite a few calls and conversations with farms where, you know, well, what are we going to do now? Right. Because Canola nosedive pretty hard from where we were February 20th when we were in Unity. So, you know, we've, we've slid a dramatic amount and basis level should improve, but. And you are starting to see all of the buyers start to post bids again. Right. The Canola bids are back, which to me is almost, I, I, I'm hoping they actually did farms a favor. [00:18:27] Speaker A: Right. [00:18:27] Speaker B: Like when, when the initial China news came out and the market got destroyed and they all pulled their bids, everybody was freaking out. And I'm hoping that, that, that pause actually gave farms a few days to just, Whoa, I'm not actually gonna, I was gonna pull the trigger. [00:18:43] Speaker A: Yep. [00:18:43] Speaker B: And now, now I'm gonna back off. And they may have actually done the farms a service by doing that, but by not scooping up a bunch of cheap volume. And to me, that's maybe a silver lining in all of this. But with the bids coming back, to me, that's almost an indication that they have demand. They're buying again because they are confident they have export demand. And if that's the case, when I ran the numbers, when the tariff came out, that tariff comes out and we had a weekend, it was an immediate like, okay, we're going to dive into a bunch of data. [00:19:15] Speaker A: And Friday night I was watching Winnie the Pooh with the kids when they came out. [00:19:18] Speaker B: That's right. So, you know, it was an immediate like, okay, let's see, where are we at with everything? And by the numbers that I was crunching, we had maybe 6, 6 to 7 million tons of canola left for the rest of the year. [00:19:30] Speaker A: Yep. [00:19:31] Speaker B: Which is about six months. [00:19:32] Speaker A: And I heard a bunch of sixes, six and a quarter. So right in there. [00:19:36] Speaker B: Somewhere in there now, we've been crushing close to a million tons a month, which means that you don't have any canola left for the export side. [00:19:44] Speaker A: Right. [00:19:44] Speaker B: And so almost by design, you have to see this market slow down to some degree. Now it's going to happen two ways. You're either going to get price rationing where the price is so high that nobody will buy it, or you start to squeeze yourself out of the market like palm oil, or you have to lose, you have to lose business. You could make the argument that we've kind of done that with China. What's going to happen with the US on April 2nd. [00:20:07] Speaker A: And so, but yeah, it's a big one. [00:20:10] Speaker B: But if it doesn't happen. Yep, we're tight and that's good news. So the basis should Improve based on that lower Canadian dollar wouldn't hurt either. [00:20:18] Speaker A: So if the US hypothetically kicks that can down the road again, then basis improves, I think. Right. So I've been getting a few questions come in about new crop basis. And so the. I said it. When it came to the US tariffs, I'm on record saying this, I've said it in front of groups of people this winter, you know that when the news comes out, you know, I think the best thing you can do is, is to do nothing for a week. Like just kind of sit back. Now you can argue with me and say, well, Ryan, I traded this thing up and down enough again. Okay, Right, fair enough. [00:20:56] Speaker B: Rodeo. [00:20:56] Speaker A: But you know, when the news comes out, we usually overreact and then we sort ourselves out and we get kind of fixed and away we go. [00:21:06] Speaker B: We. [00:21:06] Speaker A: Again, folks, there's, there's things you could do if you're very active, but you know, when farms ask me about new crop basis, I'm kind of saying, well, tight carryover. The situation still a bit of a mess. Not sorting itself out yet on what tariff, what they mean, what this all looks like. Less acres even grown this stuff yet. I'm not that anxious to price basis at current levels like amount am I out to lunch. [00:21:32] Speaker B: And this is interesting because we, we might disagree here and normally I'm not a basis. I don't love booking. Like I just said, it's too early for them to be giving you the best basis. Right. However, with the massive uncertainty that we have, because, I mean, according to the Chinese headlines, we're still at risk of Chinese of them coming after the canola seed side as well. [00:21:56] Speaker A: Right? Right. [00:21:56] Speaker B: Yeah. Hanging over your head. [00:21:59] Speaker A: Yeah. [00:21:59] Speaker B: And so when you factor that and you put that in its place and the possibility of all of this uncertainty with the United States, this is one of the years where I, I almost am like, if you could get a minus 15 or a minus 20 basis, I might take it on at least a piece. Just, just. Because if you do lose canola oil exports to the States, if you do lose canola seed exports to China, your basis is going to be minus 50. [00:22:27] Speaker A: Right? Yep. [00:22:28] Speaker B: And that's. I'm like, so that almost like a hedge against the possibility Saskatchewan Crush is. [00:22:33] Speaker A: Going to like a minus 60, minus 70 something. [00:22:37] Speaker B: We're not saying that. [00:22:38] Speaker A: Yeah, yeah, we're not there. [00:22:39] Speaker B: Right. But we're just saying that if you actually can get an adequate basis right. [00:22:44] Speaker A: Now, so maybe more of a historical, historical, give or take five bucks a ton, you're not Willing to risk gaining the 10 bucks versus losing, potentially losing 25 to 30. [00:22:56] Speaker B: That's right. [00:22:56] Speaker A: All right. Okay. Yeah, I can agree with that with, with you. Okay, so we got, I got a question about Ferdinand, one about fuel, but let's keep talking about crops here. Question came in about yellow pea acres. The question was actually yellow peas are $9 in my area for new crop. [00:23:15] Speaker B: Should I price them? [00:23:16] Speaker A: That was the question. [00:23:17] Speaker B: And I mean you, you were going over crop rankings recently. [00:23:22] Speaker A: Yes, I have been going. [00:23:24] Speaker B: And how does nine dollar piece pencil for cost of product? [00:23:28] Speaker A: Well, it, it doesn't pencil. It doesn't pencil, but it might be the best of a terrible situation. So like when I look at China and India have bought the majority of our yellow piece the last couple years, they kind of flip flop. China was the lead, then India came in. Both of them have tariffs on us now. And then you go into the US and they're in our top five as well. According to Chuck Petter. [00:23:52] Speaker B: Yep. [00:23:53] Speaker A: Which friend of the show, Chuck, I asked him and they're in there as well. And then I'm like, yeah, like the uae, Bangladesh, sure, they'll buy more, but at higher prices. I. [00:24:05] Speaker B: And that's right. It's not a great outlook. Like as it sits right now on the, on the yellow piece, on the pulse side in general, the yellow peas really are taking it the worst. [00:24:15] Speaker A: Yellow peas and then, and then maple peas, which are a very small market. That, not, you know, it's only, we have thousands of people planting these, but that is a tough market. The buyer responded to me today and said we hope they carve out a little niche and they remove that from the tariff. [00:24:31] Speaker B: So, so maybe the better way of looking at peas is maybe it can't get a lot better than nine bucks. Maybe. But how much worse could it get? And the reason I throw that out there is if you have how many acres are not going to get, how many acres are going to swarm away. [00:24:51] Speaker A: Well, we're hearing that, you know, some, some acres are, are coming out in areas, but not as many, not as many as I. Yeah, like. And at $9 450 bucks an acre, maybe 500 bucks an acre, it's at that level where people are like, well, you know, maybe that's, maybe that's okay. And it's only on 10% of my acres, so I'll absorb that. So I just, I would like to see those acres come down a little bit more yet. [00:25:22] Speaker B: I do think that time is our friend. Right. I do, I do think that we do Have a bit of time here where the market can try to sort itself out. [00:25:31] Speaker A: Who. [00:25:31] Speaker B: It's a long time. Yeah, it's a long time to see what's going to happen with India, with Russia or with China is how. If. If they're not going to take it. [00:25:39] Speaker A: From us, where else are they gonna get? [00:25:42] Speaker B: Russia. [00:25:43] Speaker A: Right. [00:25:43] Speaker B: Like Russia is going to be the main supplier. They already are. [00:25:46] Speaker A: And that was my fear over the last two years before all this happened was I was watching Russia and as. [00:25:51] Speaker B: Soon as they run out. [00:25:54] Speaker A: So I guess if you're the thing with the lops, often people like to move those for cash flow in the fall. Maybe the. The play is, I'm gonna put these in and these are my. My lottery ticket. Like, these are the ones I'm gonna sit on and I'll sell my wheat and take advantage of the spring rally of my wheat and hold my. My peace. [00:26:17] Speaker B: I agree with that strategy. I would go with that. [00:26:19] Speaker A: Green peas. This definitely pertains to my farm, but I just wanted to highlight that China, you know, again, I reached out to Chuck Penner from left field commodities, and China takes about 30% of our green peas out of Canada. And. And that. That's the only one that would be tariff right now, the only country that I could see out of the list. So it definitely stings, but it does give green peas a bit more hope in the immediate compared to yellows and maples, I would say. [00:26:51] Speaker B: And the other thing that could be a problem for green peas is two years of $18 green peas is going to. Was already going to steal some acres away. [00:27:01] Speaker A: Yep. [00:27:02] Speaker B: From other commodities. [00:27:03] Speaker A: Yeah. [00:27:03] Speaker B: Which means it's not. It's not too hard to saturate that market either with too much supply. So the $18 was probably already a question mark. And if you did lose 30% of your demand, that compounds the problem a bit. So it's not as. Not as dark of a picture, but it's easier to saturate that market. I. I think it still remains a. If you can get a good bid on green peas and an active God on it, go to town and sell away. Yeah. [00:27:31] Speaker A: Yeah. Dallas asked a question a few weeks ago on the show about pricing green peas at 14 or 15. And the last couple years he'd sold too early and the price went up. And I was very clear on the response to get them done. But hopefully Dallas got that message before that came out from China. All right. The one market that is giving me just kind of spinning my head around here a little bit is the Feed barley market, you're a little bit more dialed in in that market, I would say. What's the latest on old crop feed barley? New crop feed barley prices to me are holding. They're not really under pressure here, but. Yeah. What's, what's your state of the feed barley market? [00:28:14] Speaker B: The barley market, especially on the feed side is chaos. Right. And that it was chaos before China. [00:28:21] Speaker A: Okay. [00:28:22] Speaker B: And it's chaos after. And the main reason is because we don't know what the US Is going to do with their tariffs. Right. And there's so many different ways that that could impact the market. You know, if, if all of a sudden you get heavy tariffs going on Mexico. Well, Mexico is the number one corn buyer. So are they going to respond by trying to cut that? And now all of a sudden that's going to come over. The corn market would be saturated. Then in the United States, they'd be looking for an exit. We could do the same thing on corn, but that could push it down. What's going to happen with cattle? Right. [00:28:55] Speaker A: Beef coming north. [00:28:59] Speaker B: And, and to me, I think that if you're, when you're crunching your numbers at home and you're going through your break even points and you factor in, you know, average crop, if it's making you money, I think you, I think you got to do something there. Maybe you don't get too carried away, but to me, this is a year of, with all of the uncertainty going on, this is a survival year. Like we're trying to, we're trying to make good decisions, but not get too carried away on the bullish side of this. This market's going to go to the moon. Because while you could still have all of those weather concerns coming in and supporting your market, you, you can't be guaranteed of those for sure. And you definitely have chaos when it comes to the supply and demand side as far as the tariffs and the politics. So when it comes to peas, if it looks like it's going to make. [00:29:45] Speaker A: You some money, do not cost you a whole bunch or not lose you. [00:29:49] Speaker B: A bunch, maybe do something. Yeah, you know, same thing. It's across the board. Wheat is maybe that one that's like this one could be a strong performer, but barley is, to me, it, it could get better. [00:30:01] Speaker A: That's what scares me. [00:30:03] Speaker B: Gambling. [00:30:04] Speaker A: When we talk about wheat being the shining star, like I told Susan Stroud the other, you know, a little while ago, that we lose money on it, but we, we do it because we love it. And I'm like, and now this is our shine. Something has to be the shining star, but it does. [00:30:18] Speaker B: And guarantees in the market are the scariest thing because it means that you're probably wrong. [00:30:22] Speaker A: My thing, I'll add on barley is I sold some barley the other day because again, when I looked at barley and oats that haven't done a darn thing through all of this, I'm like, all right, it's profitable. I'm going to do a little bit of barley here. [00:30:35] Speaker B: Yeah. [00:30:36] Speaker A: And even I did a little tiny bit of oats, which I hope bites me in, in the, in the behind, because I wasn't super excited about it, but it was profitable for the farm, so we did some oats. [00:30:45] Speaker B: Has been remarkably boring. [00:30:48] Speaker A: It's like watching paint dry. [00:30:50] Speaker B: It's terrible. [00:30:51] Speaker A: And, you know, I sit here and I also look at oats and I'm like, yeah, like, the US Buys a whack of our oats, but I don't believe the US farmer is going to respond yet. On, on planting a bunch in 2025, I think maybe 2026. They do, potentially. I don't. It doesn't make me lose any sleep from a tariff perspective. [00:31:12] Speaker B: Yeah. [00:31:12] Speaker A: The old market is, it's. [00:31:14] Speaker B: The oak market is less of a concern. They can't. They're gonna have to buy it from us. Like, that's one that I don't think we lose demand on. [00:31:22] Speaker A: So we talk about year of surviving. And I agree with you. I, I, you know, I scared the crap out of this group of farmers and Lacombe. So if you're listening to the show here, you know, I apologize. But when I left the room and you could hear a pin drop, I, I know that it was a tough, A tough one. Year of surviving. Like, what does that look like to you? Like, when you think of them about that statement? [00:31:47] Speaker B: To me, it's like, I have a presentation coming up here pretty quick as well. And, you know, oftentimes you get asked to do a market outlook at presentations. Right. And a market outlook this year is useless, in my opinion, because it changes daily. Weekly for sure. And to me, it becomes more of a. What. What does the farm have as a, as a strategy to manage all of this risk and uncertainty? And what's your plan for taking advantage of opportunities when it comes? Right. So if you do get a pump on Canola, and now you have basically your July and November almost even. [00:32:23] Speaker A: Yep. [00:32:23] Speaker B: Right. And so if those markets do climb and you get a 14 or a $15 opportunity on canola, we should be. How can we Take advantage of this. And how can we maximize the price for that we're putting in place to protect us. Right. Stuff. [00:32:39] Speaker A: Floors. Floors. That's a big. Yeah, put some floors. T shirts made this year. Putting in them. It's putting in those floors. [00:32:45] Speaker B: Too much volatility. There's too much uncertainty. And so when you get this. This would make me money. Then let's do something. Yeah, we can always. And I mean, we harp on it. I harp on it. The trading account is the. Might be the most important tool right now with the flexibility that it adds for the farm like it is. How else do you navigate this? You're just gonna cross your fingers and hope that tariffs don't happen or that the politics like. Or that you'll get the best growing season ever. Like, you gotta be able to manage some of the uncertainty here. And it's. It's chaos without it. [00:33:20] Speaker A: Yeah. Like I would say, going back to putting in those floors. So I gave a farm a scenario the other day and I said, this is how. This is worst case. This is how angry you're gonna be at me. I said, I come to you Canola rallies. I. I said 600 November. I said this, let's use 600 because it's not that far away. So let's say I go and I ask you to sell 600 and you do that. I said, remember, this is as mad as you're going to be at me. So the market, we sell and the market goes up. A headline comes out, something happens positive. The. The market shoots up. You're going to be upset because you sold and the market's going higher. But I'm going to call you and say, oh, oh, yeah, this is great. This has changed things. And now this is the strategy for upside. I said, you'll be mad because it won't be perfect. It won't be dollar for dollar. Like I'm gonna. I'm not gonna be able to predict that headline. But I can get you in to turn something from 600 to 620 or 640. I can do that. But I have never figured out how to go backwards to turn, you know, a 550 back into a 600. Like, I've never been able to do that. So I said, that's how mad you'll be at me. That's the worst you can be is mad. And they're like, well, I wouldn't be that mad with you. Exactly right. They say that, yeah, oh, yeah, you'll be mad. But. [00:34:44] Speaker B: But if canola screams higher, but it's recognized and it's kind of like going back to that 20, 20, 2021 rally. Right. And canola started to break higher and everybody was falling over themselves to really sell $12 or $13 bushel canola back then because China had been mad at us and you know, the first time we'd seen those prices in I think two years maybe. And the sale wasn't the problem, it was the we're going to sit on our hands and do nothing after that. When the market breaks to a higher range that we haven't seen in six years, to me that's the, it's okay to make the sale. It's just what's your strategy in the event that the outlook changes? [00:35:21] Speaker A: Yeah. [00:35:21] Speaker B: Or if, or if you're not going to make the sale, how are you protecting that price? Because I feel as farms we're always. We do a really good job of managing production risk but not a great job of managing price risk. [00:35:33] Speaker A: Risk. [00:35:34] Speaker B: Right. And so how do you manage your price risk? Because that's the dollars and cents for you. [00:35:38] Speaker A: Yeah, right. And you know, going back to floors once again here, like when you can set some of those floors up that put yourself in a break even to positive situation for margin on your farm. Like that is the name of the game right now. When we desire shining star like that is the name of the game and, and making sure that we are there to survive into those next years. And we will guys like we'll get through this. But just getting those floors in place, you want to take that call. It's coming in from a long ways away. [00:36:09] Speaker B: So it'll be. We'll get back to that. But. And I think the floor prices are the big piece in a year where you're trying to survive. You can put a floor in and guarantee that you're not going to take a massive hit. It leaves the upside of potential there. There's always that potential to recover or average higher. Yeah but like you're saying, it's really. [00:36:29] Speaker A: Hard to get something back and like barley, peas, you know, lentils, it's all, it's more challenging. There it is. But this is the year where you know when you have those act of gods, you have a path to margin and profitability. I know you want to swing for the fences and make sure those acres are the top but yet I don't think we can afford to do that. I think you grab that margin when it's there and you protect it because markets kind of go in the same direction. It's not all together, but over a couple months, half a year, they all follow each other. So. [00:37:05] Speaker B: Yeah, absolutely. [00:37:06] Speaker A: So I had one come in on fuel and fertilizer. You know, I'll just, I'll just say on those decisions from a fuel perspective, you know, we're at the lower end of the range. They're talking a lot of fuel with the lunchbox. Screw the last couple weeks, we're at the lower end of the price range. You know, having that supply for spring, I'm totally fine with that. And then leaving yourself another buying opportunity like us recession talks, things like that to me make me pause and to say, let's have another chance at this. [00:37:40] Speaker B: I agree. I think that you're. In most scenarios, staging into a market is great, whether that's selling or buying. And I think that this is one of those scenarios where there's still a lot of dynamic elements to the market on the fuel side that could come in and like, you got the reciprocal tariffs, you got higher conflict in the Middle east again, what's going to happen there? Yeah, and I mean, the back and forth and the exchange that's going on, we have. We're still yet to see what's really going to happen with Carney and the new, you know, liberal leadership thing. What's going to happen. Snap election. [00:38:13] Speaker A: Yeah. [00:38:13] Speaker B: All of those things are going to be, I think, to a certain degree, a little bit dynamic for the market. So if it's like you were saying while we were chatting before, it's not a terrible price at the moment. [00:38:23] Speaker A: Yeah. Right. [00:38:24] Speaker B: So that's, that's a win. It's taking wins. We're just trying to collect as many little wins. It's. [00:38:30] Speaker A: Yeah. [00:38:31] Speaker B: Not a year for home runs. Singles and doubles are just great. [00:38:34] Speaker A: Yeah. And I think we should probably skip the fertilizer question because it's so. That's so brutal right now. Fertilizer prices, you know, like urea, I thought should be coming down a little bit. It isn't. FOSS is exposed to tariffs here potentially. Like, if you have to make that call to buy fertilizer right now, it is terrible today. It's going to be terrible in two weeks and terrible in a month. So I don't know what to do on that one. [00:38:59] Speaker B: Well, and they have to ensure that those big corn acres go in and that's a hungry crop. Right. And that's. That's going to keep just North American demand elevated. [00:39:10] Speaker A: Linville said here on. I was listening to Dan Aberhart's podcast for Monday, and Josh Linville Said that, you know, the application is, is on now, like this started. So if you're, you know, if you think that it's not spring, it is in parts of the world and they are. [00:39:29] Speaker B: That's right. [00:39:29] Speaker A: They're getting after it. So. All right, Kyle, I appreciate the time here in, in Lacombe. It's great to get out to Blind Man Brewing as well and such a great little town here. I want to, I just want to, you know, went through some, some positives, but a bit of a tougher conversation as well. But do you have a positive moment for the week? Anything the last week that kind of stands out for you as a lot of fun or. [00:39:52] Speaker B: Yeah, I, you know, I'm not going to take the easy road on wheat because I think that's the, that's the easy one. Wheat's been great. [00:40:00] Speaker A: Strategy worked. [00:40:01] Speaker B: Yeah, wheat strategy was damn near perfect. But to me, the positive moment is honestly for, for me working with farms and, you know, there's, there's a lot of farms that are getting into that trading account and seeing how those market strategies work. [00:40:19] Speaker A: Sure. [00:40:20] Speaker B: And, and this has been not super fun, super stressful to some degree. [00:40:25] Speaker A: A lot of education happening, but wicked. [00:40:27] Speaker B: Education and like, for farms to see because, like, I'm not going to lie, we had long positions on before Chinese tariffs, right? [00:40:33] Speaker A: Yep. [00:40:34] Speaker B: And that, that was, that was bad news because the market's closed. What are you going to do? Yeah, fortunately, our entry was still okay. And, and we, we kind of have held on to those long positions, but we've offset it with a short position on the July futures. [00:40:48] Speaker A: Okay. [00:40:49] Speaker B: To kind of pause our position. Not the. I always say to farms, when you get into a position, what are the reasons for why you got in and has that changed? If it hasn't changed, then maybe you don't need to abandon the position, but maybe we need to still protect it because the market's doing something unexpected, which is what happened with China. [00:41:09] Speaker A: Right. [00:41:09] Speaker B: And so to me, just that the learning curve for farms to see how fluid that market is and, and that it's not this gigantic, scary thing that. Oh, trading accounts, those are terrible. No, no, it's manageable. Even when you get rocked with a headline that happens while the market's closed, we can still manage it. And I, that to me, is my positive. [00:41:29] Speaker A: I think that we often, we often look at. When you have a position on like, you have two different positions on like, are you insane? But no, there's a reason behind both of them. And, and you know, it's to manage risk. And, but that is just the one is as our minds, we think about, oh man, like what's going on here. But yeah, like sometimes email or headline comes out on Friday night at 7:30 or whatever and changes your world for a moment. [00:41:58] Speaker B: So it's. Yeah, yeah. [00:42:00] Speaker A: All right. That's awesome. I guess I'll just say for my positive moment, throw one in there from a farm perspective. I think I'm just going to go with the, the energy and excitement and I know you're feeling this too, but the energy and excitement of making a difference. And not that we solved everything in the last week, but I, I believe we made some very good decisions and we haven't put ourselves in any bad spots here heading into the growing season and just talked through a lot of different scenarios and gave everybody just a bit more confidence and energy to tackle what's ahead. So that's a long goal. [00:42:44] Speaker B: Yeah, I think that, I think that farms are, you know, it's a very uncertain time. And so for farms to have someone that they can have that conversation with just for peace of mind. [00:42:53] Speaker A: Yeah, right. [00:42:54] Speaker B: Like, hey, it's not like we're saying the situation's all roses, but here's some different strategies and ideas and I think that that can take away the edge of this because if you don't have that sounding board that, that can get emotional real quick. [00:43:08] Speaker A: Yeah, we said focus on floors, so we did. [00:43:10] Speaker B: Yeah, focus on floors. [00:43:11] Speaker A: Yeah. All right. What was one last thing? Oh yeah, of course. So you're in lacombe, buddy, but how do folks get a hold of you? What's the best way to get a hold of producer profit? [00:43:22] Speaker B: So yeah, we go on, go on the good old Internet, producerprofit.com. if they want click on there, there's a get info button. If they want, shoot us an email, phone number's on there too. And so, you know, give us a shout, text, email, whatever and then we can get back to you if you're looking for more information. [00:43:41] Speaker A: And, and I'll add in there too. You're, you know, you're out of Lacombe, but you, you're prairie wide, like you got advisors in each province. [00:43:48] Speaker B: So yeah, it's been, it's been a bit of growth for us here and so yeah, all the way to Manitoba really. So it's been a bit of a. More of a learning curve for me certainly. Just because you're handling different marketing environments. Yep. But love that challenge as well. And no, it's. Yeah. If farms, farms have questions to me. The it. This is an uncertain time, and we're happy to. Happy to try to help. [00:44:10] Speaker A: Awesome. Yeah, Sounds good. All right, folks, that's it for episode 68 of the what the Futures podcast. You guys know how to get a hold of Kyle? You know how to get a hold of me? Please share the episode if you found it useful. If you think there's a neighbor, a farming friend, somebody in the industry that needs to hear this, please send it over to them. Thanks again to Blind Man Brewing for hosting us today. And yeah, that's it. I'm out. [00:44:38] Speaker B: Thanks again. [00:44:39] Speaker A: Do you ever watch Brides Bridesmaids? So she does a speech and they're like. Each one's trying out the last word. So it's like. So, like, you would be like, yeah. And anyway, I just had to say, it's such a great. See, they go back and forth. It's so awkward. It's strange. [00:44:57] Speaker B: Nobody wants to end it. [00:44:58] Speaker A: Nobody wants. And that's all, folks. [00:45:00] Speaker B: For me. [00:45:00] Speaker A: And for me. Yeah, that she comes back. It's so good. Sa.