Episode Transcript
[00:00:00] Speaker A: Today we're talking about what's really moving markets this week. Big thanks to Brian Como from ICL that filled in for me here the last couple of weeks. And of course Sarah with Triggergreen, a fantastic guest last week as well. So thanks a bunch, guys. Getting the kinks worked out. We've got Chuck Penner with Left Field commodities joining us. This week's cup of coffee sponsored by UPL Rancona Trio seed treatment that's been all across my social media here the last couple days. It's that time of year, time to plant crops but very soon it will be in crop spray season. So check out products like Batalium or Aquito get more details from your local retail or your UPL rep futures moves this morning, guys, we've got Canola trading unchanged here. I should just refresh. Yeah, basically unchanged. So let's leave it at that. 758, we've got spring wheat down 8 cents this morning at 6. 91. Kansas City wheat down 10 cents at 6.84.
Yeah, a little weakness across the wheat complex here the last couple of days that started last week. Soybeans down five cents at 12:17.
We've got bean oil at 76 and a half cents a pound. Absolutely ripping here once again the last couple weeks. Corn down four and a half cents at 4. 81 Canadian dollars trading around 73 and a half. And West Texas crude oil down $4 a barrel at 102 down here. A little bit after a yesterday, the comment I want to make on diesel here just quickly, is that just really important to do a bit of price discovery right now, get some transparency in your quotes because there's a wide range, there's a big variance right now. Obviously prices are changing, maybe a bit more volatility in those prices. So just check them, do a little homework because I'm seeing a wide range again in offers out there. All right, we got questions today. Number one, we have questions about cattle. Chuck said no go on the cattle side. So Ryan Coppert will join me on Fridays. What the futures episode. Now we've got questions about, you know, how aggressive should we be in crop marketing right now?
Are other crops going to catch up to the Canola rally?
How urgent are you feeling in selling new crop? Can we be patient? So I'll talk about that with Chuck. We also have a question about brokerage account. You know, how far out can you, can a trade be made in a brokerage account? So we'll have some context around that.
Yeah. So lots to get to here With Chuck Penner this morning for headlines. You know, a lot of this is just a crop development or planting pace in the US but obviously if we want to talk war For a minute, US, Iran, they have traded blows here over the last 24 hours. The ceasefire truce is coming into jeopardy. I suppose I don't know if saying that there's no real change is like a fair statement because obviously there is.
It's still a mess over there and the Strait of Hormuz remains closed. Right? So yeah, it's evolving as it always is from there. Let's move over to USDA crop progress report which was released on Monday.
31% of the the winter wheat crop was rated good to excellent as of Sunday. That's up 1% from the previous week, maybe leading to a little bit of this downside. But that crop is 49% headed. The average there is 32%. So it's way more advanced. There are rains happening.
But also the poor conditions, that's also climbing as well. So poor to very poor continues to climb. So is this crop getting better or is it getting worse? I would say a 1% climb is, you know, from the winter wheat areas that are less.
They're not the major players in the space. So I still think this crop's getting worse. But we'll see if Chuck has some thoughts on that as well. We've got corn 38 planted the average there's 34, so they're doing fine. Of course, emergence is up a little bit as well. Soybeans 33% planted versus 23 as the average. So again, emergence higher than the, than the average there too. And Then spring wheat 32% planted verse 35 being the average there. So maybe spring wheat a little closer to, to normal. And then my last thing here, it's not really a news article, but I just wanted to highlight that the spread out planting season specifically in western Canada is allowing some relief on fertilizer logistics. Okay.
Getting product to farms at the adequate time.
You know, I think my brother just sent me a Snapchat this morning. Here we have tremendous water flow, washed out roads. It's a mess in our part of Saskatchewan. We've got up in, in northern Alberta as well with some delays. You know, everyone planting now is doing a great job getting the crop in. This, you know, spread out planting season is just allowing fertilizer logistics to kind of catch up. Okay, let's, let's go see if we can find Chuck here.
All right. Chuck, how's it going this morning?
[00:05:23] Speaker B: Well, I was Just checking the temperature and it's zero degrees. So yeah, so much for me.
But anyway, no, we're doing fine. Can't let the weather get you down for me it's just an inconvenience. Anyway.
[00:05:37] Speaker A: Yeah, yeah, mine is six at our place this morning. So little, little Frosty woke me up on my commute from the house to the studio. So. Yeah. Well, where do you want to get started here? Like, I, I guess I want to talk seasonals first. We'll get to some of the questions as well. But I want to talk seasonals. Are seasonals acting?
And I, I, maybe they're different for each crop, but are they acting as they as expected right now? Seasonal trends, Are they acting as expected?
[00:06:06] Speaker B: Well, you're asking the wrong guy because of course I'm a complete convert.
So yes and no. Though I would say this was a year that I was really curious how seasonals were going to play out because we produced this record crop. We produced 10 million tons more crop than we ever have before.
And you know, there's all of the doom and gloom and all of those kind of things about the market and early on in the season everybody was saying, you know, it's just going to be really heavy and you know, you know, on and on and on.
So I was curious, are the seasonals going to hold this year? And for most crops, yes. I mean there's a bunch of crops like Durham and oats and mustard and whatever, where their highs were. Their highs tend to be like months ago. So no, they're not moving higher and, but that's not surprising.
But for wheat, for canola, for red lentils, for a whole bunch of crops, even though we had a record wheat crop, a record canola crop, they're still moving higher seasonally.
That's great because they tend to be peaking within the next two or three weeks. And so that's the big heads up that I would say is don't assume that just because markets are rallying now that they're going to keep rallying. They're going to top out. I can pretty well guarantee that they're going to top out within the next few weeks and then they'll head lower in the summer and everybody will freak out because, well, what's wrong with the markets? Why are they going lower? And well, they just do that in terms of pricing decisions and all of those kind of things. It's either for old crop, it's kind of, you know, either price it now in the next couple of weeks or you wait until we're into after the next harvest because that's when they start to come back out the other side. So, yeah, don't wait too long. Now, that would be my message, is don't wait too long. Now you might forego a little bit of gain, but they're not going to just keep going higher forever.
I mean, we can talk about the wheat crop and all of those kind of questions too, but yeah, I think it's gonna, I think we're gonna be seeing a downturn.
[00:08:05] Speaker A: So, Chuck, there's, there's all this talk about this commodity super cycle and the impacts of the war in, in the Middle east. Fertilizer for next year. Like, do you think, you know, like a super cycle gets thrown around a little too often right now? And I'm not smart enough to say those words together out loud, but you just did.
[00:08:25] Speaker B: But.
[00:08:25] Speaker A: Okay, I know, but like, I can't speak to it, right? Like I'm not smart enough to speak to it. So, like, do you think that there is higher price potential into next year where you kind of sit here and say, you know what, like, maybe super cycle is not the right way to say it, but you're not overly scared or completely bearish, as bad as it's been the last couple years?
[00:08:50] Speaker B: No, you know, when I say there's a seasonal downturn, it may not be a, it may not be a large drop and I think there is some really good rally potential once we get into, once we get past the next harvest.
So, yeah, for the most part I'm pretty bullish. Like, don't ask me about canary seed because that's just doomed for the next two or three years.
[00:09:12] Speaker A: But
[00:09:15] Speaker B: for the major crops, when you look at the wheat markets, I think, for example, about the International Grains Council, they put out their forecasts and all of that kind of stuff and they're calling for a 22 million ton drop in the global wheat crop.
And that was even before some, some other stuff. And that's just saying we're going to come back down to average yields and that sort of thing and that's going to cause a 22 million ton drop in the global wheat crop that doesn't even allow for problems, like real problems with the wheat crop or in the case of Australia, they talk about, you know, reducing wheat acres and all of that kind of stuff. And it doesn't account for the El Nino effects or anything like that.
So yeah, those kind of markets, especially when you see headlines that saying people are getting out of wheat. Getting out of wheat. Well, okay, if you want to do the opposite, this would be a good time to do that.
[00:10:13] Speaker A: Getting out of wheat. Like, you had an article the other day that you shared. I believe it was Kazakhstan. Was it Kazakhstan, where they were putting more barley and less wheat?
Same thing in Australia, same thing in Canada. Like, globally.
[00:10:25] Speaker B: Right.
[00:10:25] Speaker A: Like, we're. I was going to ask you, like, what am I missing in. In barley here? Like, is, do we need that much barley? Like, it looks like we do, but am I missing something or should I be more bullish?
[00:10:37] Speaker B: There's a. There's a bit of a risk in barley in that a lot of the.
The bullishness that we've seen in the last. In the last. Well, throughout this year has been related to Chinese demand.
So if China grows a bigger corn crop, a bigger wheat crop of their own, and they may or may not, I'm not saying that they will because they might get hit with El Nino stuff too, but if they do, a lot of that demand evaporates. Like, we had a massive global barley crop this year.
The trend yield is like this. And in 25, it went like that.
So we had a massive barley crop. And yet China and Saudis as well were really, really strong buyers. Are they going to do that again next year? Not sure.
So there is a bit of a risk in the barley market.
But the good news is, if everybody else is getting out of wheat, I mean, it's kind of late to change your planting plans now.
Getting close anyway.
But I don't know.
I'm a bit of a contrarian myself. Just ask my wife and. Yeah, that's. So that would be my take on it.
[00:11:45] Speaker A: So we came through a question in the chat here and certainly appreciate the questions coming in, but he asks, and this is a bit of a spin here, but how much have seeding intentions changed since December? My seeding plants have changed significantly. And I'm not sure where Wheat King is coming in from specifically if I guess I'll be completely wrong. So you talk to a lot of people, Chuck, are seeding plans in Western Canada, have they changed quite a bit the last few months?
[00:12:12] Speaker B: Oh, since December? I would say so, yeah. You know, and probably the two that would affect the wheat market, for example, is we've seen wheat acres migrate into Canola, but then we've seen some Durham acres migrate into spring wheat.
That's what we're expecting anyway. Right, okay. And barley, you know, I'm not sure how that'll probably be up as little as. Well, peas might be up a little bit, but Then what loses acres. You know, what, where did those acres come out of? And so I would say that some of those have certainly happened. The wheat, the total wheat number may not change all that much because you're pulling some out here and you're putting some in here, and the total might not change all that much.
[00:12:52] Speaker A: Yeah, I'm kind of, unfortunately looking out kitchen window and it's impacting my thoughts on this a bit because, like, right now we had a discussion yesterday about tweaking our plans a little bit more. Like we have entire quarter sections covered in water. And so a couple of our pea fields. I'm like, well, we're definitely not putting peas there now. Like, it's still looks like a lake. So I'm a little bit skewed because our plans are kind of changing. But when you look at the prairies, are you seeing most of the prairies in pretty good shape to plant as per normal, and just the north being impacted here or how's. How are things shaping up?
[00:13:30] Speaker B: Yeah, I mean, I'm used to. I'm used to fields out here because it's flat as a pancake, you know, seeing big chunks of land underwater and that's mostly drained now. All the culverts opened up and water's moving off and that sort of thing, and it's just waiting for the soil to warm up for the most part in most places, I think. So we'll get into it in a bigger way. But, yeah, the guys up north and in northeast Saskatchewan, you know, those ones are.
[00:13:56] Speaker A: Yeah.
[00:13:56] Speaker B: Are going to have to scramble, you know, as you get closer and. And we'll push those. And the thing is, then the statscan June acreage numbers might still not be the final word because there's still planting going on while they're surveying. And who knows?
[00:14:13] Speaker A: Well, fair enough. So some of the themes here. So Ryan sent in the question, if I want to clean out my bins by Christmas, how aggressive should I be on wheat and canola now or should I wait for July weather concerns?
I'll loop that in with, how urgent are you feeling to sell new crop? Can we be patient like Ryan talks about wheat and canola so we can tackle those two first? But I have an answer to that as well. But I'll let you start us off.
[00:14:39] Speaker B: I'll give it a shot.
When we look at new crop price behavior, like on average, over the last bunch of years, what we see is that even the new crop bids tend to peak in May. June. That's kind of when the new crop Bids tend to peak. So that's kind of your horizon. I don't see anything disastrous enough yet. You know, fingers crossed, touch wood, all of that kind of stuff. I don't see anything disastrous enough. Like we're not in a 2021 situation.
Aside from 2021. There weren't really any years where prices just kind of kept going up, you know, through, through July and whatever. So May, June would kind of be my time horizon for, for getting something done.
Because even then, like even when you see, you know, the old crop wheat, I've always used a wheat seasonal for well, the canola too. So the old crop tends to peak in April, May and the new crop bids kind of follow that along, usually at a discount. They follow that along and then they tend to drop off maybe a little bit later, but they do tend to follow that same pattern more or less. So once the old crop tips over, the new crop will struggle to keep rallying as well too.
In terms of the question about December, cleaning out the bins and things like that again, for getting new crop priced, I would say the next, you know, the next four weeks or so might be your, you know, and you might wait for a bit of a spike or a bump and you pick that off.
But then there's another seasonal rally again once you're through harvest the old crop markets, there tends to be a, a bit of a peak in November. Ish.
[00:16:27] Speaker A: So yeah, yeah.
[00:16:28] Speaker B: So pricing, you know, price some new crop, may, may generally if you're going to price old crop, you know, of course avoid the harvest lows and all of that kind of stuff and, and try to be patient till November.
That would be my suggestion anyway.
[00:16:43] Speaker A: Well, and everyone's got a kind of a comfort level, right. I'm willing to do five bushels an acre or 20 or whatever it is. So you kind of focus on that and then like for me I know that within the next month, maybe a bit sooner, I'll have some farms 100% hedged on canola and wheat where if it goes up, that's great, it can go up. But if it does pull back, we, we've got some protection in. And so I would just say like this is a time where you can go and think outside the box with some different strategies that protect worst case scenario. But don't subject you to a buyout because as, as Trenton puts in here, you know what a buyouts typically look like for new crop canola that was contracted after a crop failure. I'm not quite following it. Trenton to, to the exact there. But I, I will say like, you know, you sell a crop, the price goes up, you don't produce it. Like that's a painful situation, but it doesn't have to be that way. And you don't necessarily need a brokerage account to pull this off either. I'll try to get into that. Maybe a bit more on Fridays with the futures episode. We got a few more coming in here, Chuck. So Chris is asking when should we start selling new crop wheat? Been holding out because of weather in the US Switching some acres from oats, so volume is going up. And that oat comment, Chris, is not alone. I'm hearing a few more oat acres coming out. So anyway, perfect.
[00:18:06] Speaker B: So again, the contrarians put oats in.
[00:18:11] Speaker A: Yeah.
So, yeah, I guess we talked about it a little bit. But your urgency for wheat over the next few weeks would be heightened as well.
[00:18:18] Speaker B: Yeah, that would be the case. I mean, in terms of the US Crop situation. Yeah, it's not good.
And if you isolate the states where the hard red winter has grown, those conditions are a lot worse yet and dropped like Kansas dropped, especially in the last year, it's been dropping. And so Kansas is the heart of the hard red winter crop. Within the next few weeks, that's kind of going to be known. So there's no new bullish news there. So again, you know, if you, if you talk about spreading some risk out, getting some price ahead of time and as you said, if you have a futures account, well, great. You know, there's all kinds of additional options you have to get stuff priced and so on.
So I would still say new crop pricing, you know, the next, you know, four or five weeks or something like that is kind of going to be your target?
I don't think the wheat market is going to just keep rallying right through summer because the US crop is only one of many crops out there.
It's an important one, but it's, it's only one of many.
[00:19:23] Speaker A: Yeah, yeah. And I believe Russian crops from all counts look pretty decent from for the start, so. And then Clayton kind of adds to this as well, and he's talking about old crop now, but when should we get old crop sold? Is it still by the end of May? And I think you've kind of answered that, Chuck, but yep. Yeah. So, Clayton, we should have you covered off there. All right, the buzzer did go.
So we are, we're overtime here for a second, but is there anything else, Chuck, that's kind of catching your attention, that maybe the rest of Us are missing.
And by the rest of us, I mean me specifically.
[00:19:59] Speaker B: Well, I was just, I'm writing my commentary for, for lentils today and yesterday and, and one of the things that I noticed, I mean we're seeing red lentil prices continue to firm up and strengthen and things like that. But prices in overseas markets have already done the tipping over from, they leveled off and they're starting to head lower. So that fits with the seasonal tendencies for red lentil prices. April, May is kind of your highs. So I don't think there's much more upside. And there could again we'll see the seasonal dip. But then of course there's all of the questions about El Nino and what that might do especially to Indian crops and you know, might hurt their summer crop, but it also might hurt their, their winter crop. And, and I think I just saw a chart. I, you know, don't want to whatever plug my reports, but I put it in this week's report showing that El Nino, the last six El Nino years in India, the, the rainfall has been, the monsoon rainfall that they depend on has been, I don't know, 85 to 95% of normal. So, so there's, there's risk there. I'm not a big weather, you know, I believe in the weather, but I believe in the forecasts, not so much. That is a, that is a real possibility there too. The thing is, is though, we won't see the effects of that until like late 2026.
Late. Like we won't see a, we won't see Indian prices spiking in case the monsoon doesn't happen. We'll only see it once the crop, if the crop fails and so on. So don't count on it causing a
[00:21:38] Speaker A: short term spike in prices in this 20 minutes. We've built a case for factors that would come in and support prices into 2027 without saying commodity super cycle, blah, blah, blah. Like we've talked about things that you look and say, hey, you know, next year could, and we need it to be with where costs are going. We need higher prices next year. But yeah, I will plug your report though. Are you still doing 30 day trials during like seeding? Like does that happen? Always do. Okay.
[00:22:09] Speaker B: Yeah, always. We, we always do. We don't want people signing up for something if they don't know what they're getting.
[00:22:14] Speaker A: And where, where can they get that, get that link, Chuck.
[00:22:17] Speaker B: Just go to left fieldcr.com and it's right there on the homepage.
[00:22:23] Speaker A: All right folks, well this week's cup of coffee was brought to you by upl. Teleron is a brand new fungicide. Thank you. That can be used on your cereals, pulses and oil seeds. Find out more by contacting your local retail.
I'm out of coffee. So that's it for this week. Thank you, Chuck.
We'll see all of you Friday on what the Futures. I've got Ryan Copperthorne with cows and control Tyler Uremchik to talk NHL playoffs. And while we're at it, why don't we do some nitty gritty crop marketing, including some tractor cabin math. You're going to do tractor cab math this weekend with the what the Futures? Podcast.
All right, I'm out of here.
