Episode Transcript
[00:00:00] Speaker A: Futures this morning. Canola up a buck 90 at seven 28 and a half off the May contract. We've got soybeans up three cents at 11.69. Spring wheat up two and three quarters at 6.47.
Kansas City wheat's up a penny and a little bit here at 609. Bean Oil, this is the one that I have starred this morning because I've been like freaking out about this blow off top from last month when the war started.
But soybean oil has broken above that. It's the first one to do it in the commodities anyway. Trading north of $0.70 now and that's a new high. All right, so that's exciting. Corn down a penny at 453. Canadian dollar slightly lower at 7,205. And we've got crude up three and a half dollars a barrel. Just under 116 bucks. Spent the weekend in Canmore from drove from Edmonton to Canmore and the range in the fuel price was quite incredible. Now a buck 49 to a buck 74 was the range in that four hour drive. So very, very interesting to see that that spread out there.
We've got Trent Clarenback joining me here this week. We're going to get him going in just a moment. So if you have questions, toss them in the chat here. We do have a couple that were sent in prior to getting started here. So we have some good ones. Headlines this morning.
You guys know what's going on out there, right? But obviously today there's a little bit of a deadline here from, from the Trump and the Trump administration when it comes to talks with Iran. So we'll see how that plays out throughout the day. Obviously putting a little bit of a bid in some of our markets here. Yeah, I don't have anything further on that at this moment. Refresh Axe I maybe we'll talk about with Trent just a little bit. But the tweets over the weekend were just unhinged.
Absolutely phenomenal stuff. Just it's almost like we're in a movie. Wheat crop ratings, they declined the fourth lowest US winter wheat crop ratings over the last 10 years. Those came out yesterday. I think it was like 34% good to excellent, something like that. And you'd think that that that number comes out and it would rally the wheat market the fourth lowest crop rating for this week in April over the last 10 years. You think that would do something.
But it hasn't and I think it hasn't because there are some rains on the way for the western side. Of that US Ag belt for that winter wheat area. There are rains in the forecast for later this week, and I don't want to say that the trend is changing, because when you're living in a drought, it certainly needs to happen. Before you get too excited, the folks in Kansas kind of missing out on the rains this past weekend. Oklahoma got a fair amount. Texas got a fair amount as well, but more on the way, so we'll see. Is this a developing story where that crop rating is? You know, is this one going to be the worst of the growing season that could happen if we get a couple of timely rains here over the next few weeks. The other one that I wanted to highlight over the weekend here was just this Russian cargo ship full of wheat that apparently sunk in the Sea of Azov. Now, I did hear that it got towed in as well, so some kind of conflicting reports there.
But when you have damage, you know, and the reaction by the trade is muted, but when you see, you know, the potential that the war may be, you know, you know, maybe moving to another area or being ignited in another area, you'd think that that would rally our wheat market just a little bit. But, you know, this morning I read, you know, there's ample supply of wheat, so, you know, not a big deal. If this was 2022, the wheat market would have been just rocking and rolling. So we'll talk to Trent about this in just a second here. And then, of course, I just wrote down this blow off top. It's just, it's not news, but it's just something that we can't lose sight on. All right? It just. If we can rally above it, it's a very good sign. If we fail to rally above it, then it scores the high for the future here, for the foreseeable future.
Trent, welcome into cup of coffee, man.
How's your Tuesday morning in Saskatoon going?
[00:04:32] Speaker B: Well, it's a.
[00:04:33] Speaker A: It's a good.
[00:04:34] Speaker B: Good morning so far. A bit of snow up here.
[00:04:36] Speaker A: All right, Trent, we got a pile of. Pile of good questions here to get started with. The first one that I want to highlight here. If this market is bullish, why does it feel uneasy right now?
So I want to throw that one at you, like, what is this market? Bullish. Let's start with that.
Ag markets.
[00:04:54] Speaker B: Yeah, When I look at those ag markets, I just, you know, we haven't made new highs, Right. And a lot of these commodities. So. Yeah. And then we just feel very, very vulnerable to a tweet that could truth. That could really get some Reaction. But you look at these oil seeds are really driven by the price of oil right now and as well as the grains to a certain extent. So yeah, it seems very vulnerable from a technical side.
Yeah, there's a lot of vulnerability there. In my opinion. Tonight's going to be a big night to see what happens here over in the Middle East.
[00:05:28] Speaker A: So yeah. Do you find yourself like I know for myself I, at the start I was certainly updating social media a bit more often and trying to follow every move or it felt that way. Now I've kind of, you know, scaled that back significantly I would say. But do you find yourself trying to chase the stories and see what's coming out or are you just looking at the charts and letting the charts do the talking?
[00:05:53] Speaker B: You know, I started really watching more, trying to get hold of what or get a grasp what's going on over there and you know, I, trying to find that information. I spoke to a guy in Dubai, he gave me some, some PO or some contributors on X that were on both sides of the coin there.
[00:06:10] Speaker A: Okay.
[00:06:11] Speaker B: So again trying to get a perspective from the Middle east more than maybe North American resources.
But it's.
Yeah, I mean at the end of the day it's fascinating what's going on, trying to unravel the truths of what's happening over there but at the end of the day only the price pays and you know, if we just focus that and some of these trends you were talking about, the blow off, a blow off top there that you know, hasn't really, I'm not sure you know what your comments are on that were. But really it's these, these trends are very difficult to overcome. It takes quite a bit of energy for them to reverse and I don't think we've seen them on the longer time frames yet.
[00:06:53] Speaker A: So I want to come back to Jordan's question or to Jordan put in a questionnaire I want to get to in a second but I also want to acknowledge the blow off top. So for me, what I was looking at, I was going back and trying to find like when a blow off top happens in Canola, for example, what happens in the days and weeks after.
And in my elementary research and looking back at a few examples and looking at a few different commodities I couldn't find in the short term where we would go and make a new high above the blow off top. I couldn't find it. I couldn't find the example that in the days, the weeks and even the months after a blow off top that we would go and score a new high and continue this trend, keep moving higher. I couldn't find it. All I found was either a steep decline shortly after or when. What we're in right now, Trent, is this sideways movement. Just the sideways pattern, which gives us, in the two examples, weeks, weeks and weeks and weeks to sell right below the top of the market and then cratered after. That just gave us weeks. And it feels exactly like the moment we're in right now. So that's what's really puzzling to me.
[00:08:14] Speaker B: I would agree with that sentiment. Yeah, I.
There's a couple things at play. Like if we're talking canola, for example.
[00:08:22] Speaker A: Yeah.
[00:08:22] Speaker B: Either. Yeah. You're. We're just going sideways consolidating. There's a couple key levels that needs to get above, get below.
But at the end of the day, we're in this longer term average or longer term downtrend. And yeah, it's.
I just, I don't think it breaks out to new highs from here. I don't. Doesn't feel to me like that today. But yeah, there's that thing, what they call the Lindy effect, and it. I'm not sure it really applies. And they does apply in the shorter time frames, but the longer something stays at these levels, the more likely it is to continue. So I'm, I'm doing a, doing a little paraphrasing with the Lindy effect, but it's kind of the way it works. So I'm, I'm just sitting there in this holding pattern, I guess you want to use that term. What's going to happen? We're, you know, this band of highs and these critical levels are getting narrower and narrower and we keep testing them. So it's going to be interesting to see. I don't trust this rally, but we'll see what happens.
[00:09:22] Speaker A: I was going to ask, like, you hear a lot of talk about commodity super cycle, and if you look at the energy markets and you look at metals and things that different markets, there has been some great movement there. But are we in the midst there. Are we in the beginning of an egg commodity super cycle yet, Trent? Like, is there anything on the charts that you sit there and say, all right, like this could, this could be something here, you know, into maybe even into 2027.
[00:09:50] Speaker B: I think it's too early to call a grain super cycle.
[00:09:54] Speaker A: Yeah.
[00:09:55] Speaker B: In the commodity super. Even a commodity super cycle. But we need to make new highs and, and break this.
Start trending higher before we. We're actually in the cycle now. There's a lot of, lot of, we all want to try to get ahead of it and be the first one to call it type of thing. But it's to my opinion it's a bit early for that. But you know, it's, you look at some of these commodity indexes that I look at, some of them have doubled or tripled in, in value since 2020, the last six years. So you know, May, maybe we are in one, but.
And then some of those patterns that are forming from a technical perspective suggest that if we break above them then yeah, it's off to the races.
[00:10:39] Speaker A: I'm just looking at a longer term spring wheat chart here just on a weekly nearby and, or just for reference, if we can break above some key levels just ahead here, then yeah, you know, there's, there's something that builds but then we gotta go through the, the next one as well and that's not that much further above like it. Yeah, we might look back and say okay, yeah, it kind of was the start but right now like it doesn't matter to me if I look at the canola chart in a longer term, look at the we chart in a longer term.
We're up against some resistance here and we got to break through that to really get this thing going. So.
[00:11:21] Speaker B: Yeah, well uptrends are defined by higher highs and higher lows and on the longer time frame we haven't made those higher highs yet. So.
[00:11:29] Speaker A: Yeah, so. So Jordan puts, you know, this question in here the other day about, you know, if the war ends sometimes this, this year or the straight opens up again, is there going to be a big correction in oil prices, fertilizer prices etc is or is there going to be a hangover effect keeping them higher based on all the infrastructure damage and other consequences from the war? I have kind of an answer I've been thinking about there. I don't know if you want to add anything right off the hop to that.
[00:11:59] Speaker B: Yeah, well, I think you look at the forward months and the futures contracts and they're considerably lower than the nearby in oil.
That might give you some indication of where the world thinks its price is going to.
There's a research put out by Citrini and I didn't read the entire thing, but there's ships moving through the street at levels higher than published in western media or in the media. So if that is accurate then there's, there's definitely some, some oil moving more than, yeah, more than what we think there is.
[00:12:33] Speaker A: So it's never as bad as what it's never as bad as what they say. It's also usually never as good as what they say. But it's, you know, the markets are very, are very resilient and, and, and the markets find ways, that's what they do. They find ways to, to get product moving and all that stuff. So. And Jordan, what I would add to that is what we'd want to watch here is, you know, the correction lower, at least in oil in the short term, that would be a pretty fast one. But I think for fertilizer might take just a little bit longer as, as they assess the repair timelines on some of these facilities.
So that's gonna be the really interesting one. Like if you wanna talk about commodity super cycle and higher markets and all this stuff, you know, everyone is now looking at fertilizer saying, oh man, like we're good in the Northern hemisphere right now for this spring for the most part. But what happens in the fall time? What happens in, you know, South America, in Australia, in the short term here as well. But so that fertilizer one might take a bit more time as they try to figure out timelines on fixing some of these facilities and go from there. So hopefully that helps a little bit there, Jordan. Trent, I wanted to ask, so Robert put in, you know, what would your, your, this is changing topic here, but what would your swing acres be for this spring? Like if you, if you're chatting with farmers, I know you chat with a lot of farmers, you know, know, what are guys planting this year? What would the swing acres be? Is there any crop that has just been top of the discussion discussion channel with you lately? Like, is there just one crop? You're like, man, everyone just wants to talk about this one crop.
[00:14:16] Speaker B: Well, probably canola. I don't have the same, the levels of, I don't talk to have those same levels of discussion you would, Ryan, on swing acres. But yeah, you know, canola's been a bright spot until recently maybe, and wheat is too, but Canola continues to be the bright spot. So I've had some guys tell me they're going to push the rotation with Canola.
They don't really have much option. They need to do that. So I think money just follows money. Right? That's what I'm hearing anyways of Canola. But what are you hearing?
[00:14:50] Speaker A: Well, I'll just give a quick another nod here to the lunchbox crew. So where I told them I wouldn't share the results. I'm not going to share the results on, on the show today. But, you know, 70 farmers spread across the prairies, and I just said, hey, guys, you know, let's. Let's just talk this through. So I put every crop in, everyone had to vote, and we got a really good handle on what the.
That group's thinking anyway. Yeah, it's pretty powerful stuff. Like, when I looked at it, it was pretty powerful stuff. Now, I think overall, if I got to look for a swing acre or something that may come out of left field to show some better returns, I think oats are an interesting one. Oat buyers have done a terrible job of securing acres. Now, Mother nature might change that. As it snows out my window again today and it feels like the dead of winter out here, maybe those oats will go in because we get late planting, but oats are a very, you know, surprising one. And then I think maybe a little bit on the yellow pea side and, yeah, maybe a little bit on yellow peas, they could kind of show some momentum here. But I think, I think pulse acres are climbing a little bit just based on, on some economics and.
Yeah, we'll see. But I think yellow peas, if canola had a really bad 20, 25, so did yellow peas. And it's starting to work its way out of it. If India can back off on the tariff, then that would certainly help. But I kind of like oats.
People are taking their specialty crops, putting those aside, saying, I'll do some lentils, I'll do some peas, but maybe not as much there. They don't like wheat. People don't like the setup in wheat. Everyone's excited about barley. Feed barley, not malt barley. The malsters are in deep doo doo here. The malsters, they're sitting there trying to figure out how to, you know, secure their acres with a price that is barely above the feed price. Like our, our feed barley market in north of Saskatoon. Trent, for our farm and the malt price, the first malt price we got offered basically the same. So.
[00:17:01] Speaker B: Oh, wow.
[00:17:02] Speaker A: The malsters are. They're just out to lunch here right now.
One last one for you, Trent, because we are coming up to time here, but is the wheat market, is it showing just Kansas City wheat? Just. I'm playing my position here. I got a little short on for Casey. Is that market showing cracks yet or is it showing some pretty decent stability and maybe some more upside here for that wheat market?
[00:17:30] Speaker B: Yeah, well, Kansas, I felt it's been the most had the bullish chart, most bullish chart set up here for a while now. I got a feeling there's one more rally in Kansas. But it looks vulnerable to me. Like I, I can see it losing 20 cents a bushel easily enough. But I think all these things are really, really vulnerable. All these crops, right? All these.
Yeah, I think, yeah, I just, it looks better than some of the other charts I look at, but it's, it looks vulnerable to me.
[00:18:00] Speaker A: Yeah, I got a little excited. I got, I'm trying to stay disciplined on the trade trend, so I got my short on, but I also put in my exit. I'm not looking for the world here on a pullback just a little bit.
And so I've got that strategy set up. But we'll see, we'll see how this plays out. We talked about canola already. I think you put a piece out on urea the other day. Is there anything else? I'll just throw it back to you, Trent. We're out of time. But anything else that you want to bring up?
[00:18:28] Speaker B: Well, the urea chart looks interesting, the Gulf futures chart to me. We're approaching seeding time and we're approaching the 700 level, or we are at that on urea, which is a Fibonacci level. So it'll be interesting to see.
It'll be interesting to see if we get a reaction and a pullback at this fib level coinciding with North American seeding here. So see what happens.
[00:18:52] Speaker A: You bet.
[00:18:53] Speaker B: But yeah, as far as that, I'm just keeping an eye on that oil price, looking soybean oils every day, trying to see if canola's going to follow bean oil. There seems to be a little bit of divergence happening the last week or two. So I think canola is very vulnerable. But yeah, that remains to be seen.
[00:19:10] Speaker A: So I, I agree with you. I. The one day crude was up like 5 or 6%. Canola was up half a percent.
[00:19:19] Speaker B: Yeah.
[00:19:20] Speaker A: Bean oil finally trades above this blow off top. Nowhere near.
Yeah, yeah, it's.
Yeah, don't sleep on it. I guess, folks, what I, what I want to say here for Rapid Insights is if you have a moment yet before it gets stupid busy and crazy busy, it's just make sure you're organized right. Know, know what you have contracted, know your percent sold.
Maybe tweak your cost of production here a little bit if it's been impacted and then of course, review your strategies because it could be the silliest tweet or headline that changes, changes this market's momentum in the short term. And then, and then it's about weather and it's about planting and it's about what type of crop are we going to grow. And yes, the fertilizer stuff will be there'll be a talking point all spring, but just make sure you get organized right now is what I would what I would focus on.
So that's it for this week. Thank you, Trent. CLARENBACK CA Is that the website, Trent, or where can people find your work?
[00:20:18] Speaker B: Yeah, Clarinbach CA I'm Fairly active on LinkedIn and X as well. CLARENBACK CA Sounds good folks.
[00:20:25] Speaker A: And if you are looking for an analyst to come and speak at your event this next year, don't sleep on it. Trent's schedule fills up quite quickly so reach out to him and get him on your on your agenda. He does a dandy job.
All right, guys, that's it for the cup of coffee segment. I'm out of here and I'll see you guys Friday on what the futures.
