Welcome to the Friday, September 22, 2023 installment of Market Plus.

Chris Robinson continues with us.

Chris, I should I hit record earlier I set you up with the question.

You were saying something.

Okay.

Before we get into that, sorry, I need to go back for a minute.

Set the table this week in Chris's newsletter, he held out and I gave him a hard time about shouting in his newsletter about some things.

He basically held up his work.

He showed his work to say, I've been saying this.

We had a couple of questions about how come you're market analysts?

We never put up their predictions.

Well, Chris, let's bring it to you first.

You put up your predictions out there.

What were you so adamant about earlier this week that you were trying to tell people that, yes, this is where this is what I was saying.

What were you saying?

Let's talk about the cash shell that I made.

Well, you were talking about how how things had gone cash sell it to year lows.

Why would you do this right by calls at least half of what you sell?

Yes.

And I was right about where I said at 1330, sell beans.

Right.

I do that because when you're wrong in this business, at least my business people like to point it out, too.

So when you're right and you know, what was important about that is I think that what I've tried to express with my clients and anybody that reads my letter is you've got to be willing to sell in to one year highs.

I know it's hard to do because your natural inclination is, I want to get long because everybody we're at one year highs.

That's what happened with with 2024 soybeans.

We hit $13, 13, 13.

We were right up at one year highs, right above $13.

And I was like, oh, this is an interesting is probably a good level to do a little hedging like that, not sell the whole crop and you know, call the top and pund on my chest just like Tarzan but just, you know, sell something or hedge something.

And lo and behold, I had a big pushback from a lot of guys telling me if I what I want to do that I want to do that.

So it was kind of a kind of a shout out to those guys who had said, No, thank you.

And again, this this 2023 was a year where you had to be willing to sell into rallies if you want to do a better job marketing.

And that's, I think, the takeaway from this.

If you've learned nothing from 2023 as you continue to market as a farmer, I don't care if you've got a year left or 50 years left.

You've got to be willing to reward rallies with either sales or hedges.

You were also saying that 23 is different than, what, 21, 22 and to an extent, 20 have the last two years put us into some bad habits?

Absolutely.

Because you have to remember, if you go back to like 13, 14, 15, 16, we were in these narrow trading ranges where we didn't move very much and you could get by without making decisions.

When you have a market that's, you know, we had explosive rally from 2020 low to, you know, eight year $8 corn and then back down and then back down.

I think it kind of teaches you to do the wrong thing, which is wait and see, wait and see.

And a lot of the drivers that gave us these multi-year highs in commodities, the whole COVID thing, the printing, the money, the big inflation that may be going away right now.

And I think that's started to happen now with the Fed saying that they're going to continue rates higher for longer.

They really want to squeeze inflation away.

If that happens, you're going to have less money that wants to be in commodities.

The same people that were falling all over themselves 20, 21, 2022, we got to own commodities.

We have to go in commodities.

They're going to be looking for something else to do.

So as a farmer producer, that's was a tailwind.

Now I'm not and I'm not saying it's 100% that I'd be, you know, holding this back, but it's not going to help if people are like, maybe I don't want to own commodities.

So, okay, that's my cautionary tale for 2024.

You can weave in some of that again as we answer your questions that came in.

Let's start with Bradley in Nebraska, who also doesn't believe the weather forecast this week.

And then he did get some rain.

He's asking, could the lack of soybean export sales be the result of an empty pipeline or low Mississippi River levels preventing beans from reaching the Gulf?

Yeah, and in general, our exports have been, you know, I guess you call it par for the course, nothing great, nothing terrible, but certainly not what people thought was going to be coming, especially after the Chinese started printing money again, that I think is maybe front loaded.

They printed so much money trying to re stimulate the economy that may end up coming down here.

And they're pretty good traders.

They they may be waiting to see what happens with soybeans as well.

I know they're looking at corn at two year lows.

There's some talk that they may come back in.

So if they come back in, I think that's a that's something that could help us.

It could definitely help.

Soy soybean demand moving along, soybeans have the most bullish fundamental picture of all the grains.

All right.

Yeah, you said discrepancies earlier in analysis, but I'm going to go conspiracy theory farther.

There's a reason, according to a couple of people that watch this program, that the river levels are a false narrative out there about It doesn't matter.

There's no one to buy our products.

But why?

But there's something pushing our prices down because there's always that thought something's pushing the price down What is pushing the price down?

Well, for soybeans, I mean, we're still in pretty good shape.

I mean, we're we're not down to 1130 where we were.

So we had a really good rally.

I think the people the reason we had this dollar break was people were kind of pulled up, especially after that USDA report.

People were thought that the yields were definitely going to be lower.

And as the first stories of guys going out and cutting beans, they've had way better yields than they thought they would.

That's what this is.

This is people saying we got to get out.

And again, now the next two weeks, we'll see if that continues.

But you know, even when we settled today of beans, bean beans where they are, yeah, they're not at $14, but they're also not at 11.

So it's still a good price.

Okay.

We're going to continue on then.

Let's go with Phil in Ontario, Canada.

In Dresden, grain markets continue their bearish malaise over the last week, even the November Jan soybean spread grew to $0.17.

Corn and wheat are at levels I look away.

Do we sell on price corn this fall and store the beans or vice versa?

I think if you sell, you got to re-own it because we could get a recovery rally.

If you're going to store it, I think you have to keep a floor under it.

And if you're again, you've got to be very, very careful.

We've got to make sure that if you store it, that you take the steps to capture the carry, don't just store it, don't do anything.

You've got to set the hedge after you store it.

So that's that's my answer to that.

Okay.

If you're going to store it, please keep the floor under it.

All right.

Let's go to Doug in Iowa.

This is a simple question I probably should have asked.

This coming out of what you just said before is the market waiting for more harvest data on current U.S. corn?

Absolutely.

There's still an argument out there as to how much this heat hurt the final yields, especially in the states.

So that's why the next two weeks are going to be really, really big.

And I think that's why we've kind of been sitting here at this 475 level waiting.

Yeah.

If you look at the chart that's on the screen right now, it is it is just stuck in that narrow range.

So I guess what changes us from breaking out of a narrow range in the next 3 to 6 months.

A definite drop in the yield and increase in demand for corn.

You know, we need somebody besides Mexico buying our corn.

Just put it out there.

You know, right now theyre our steady buyer.

So in that case, we don't need the Mississippi River high.

We can put that on a rail.

That's right.

And so that goes back to that theory and why there's some that think that way.

All right, let's go.

Dominic in North Dakota I haven't heard from Dominic in quite a while.

Thank you for this question, Dominic, via our Facebook page.

Why is nobody talking about spring prices?

If soybeans come up shorter than what the market expects, then in the spring, when corn have to bid for acres who would plant mid to low $4 corn when you can get $15 beans?

You know, I've been working with farmers now for 12, 13 years.

I always answer that question.

But farmers like to plant corn sooner or later.

If if they get a chance, they like to watch it grow.

They like it's just they like they'd rather plant corn.

So we'll see if we get an acres issue, it's going to take soybeans pulling corn up, I think, to get that.

And again, like like I said, just a month ago, we were at one year highs.

So if you look at the lay of the land, 2024 soybeans are still in pretty good shape.

I think if we're going to have a bull market next year, it's going to be because we're going to be led by soybeans.

William in Iowa is asking about exports.

How are we going to improve exports?

You talked about getting somebody else other than Mexico.

Do we have to fall that we're as cheap as everybody else?

No, I think the other thing we've got to watch, too, as U.S. dollar U.S. dollar is at a six month high now.

People look for reasons to not you know, export.

At the end of the day, I think it's supply and demand.

If we have tighter supply, the price will follow.

And I think that worldwide, you know, there's some concern that, you know, the rest of the world may go into recession.

I mean, China is really fighting a recession right now.

That's why they're printing all this money.

You know, if they can if they can catch their economy back on, I think that will help our exports tremendously.

One more theory, and this one is about crop insurance.

This one is from Mitchell or Mitch in Iowa wants to know what impact will the crop insurance guarantee price have on corn markets in the month of October?

Are you holding on to bushels If an insurance payout appears likely.

Hold on to him, but keep it for under him.

There is a there is a conspiracy theory out there that we will have a rally so that there will be less of a payout.

I've heard about it, you know, my whole life.

Sometimes it happens, sometimes it doesn't.

You know, and how do you play that?

Well, if you are worried about losing that insurance premium, the calls are cheap right now were a two year lows.

And and you buy the call that way.

If we go up, you know, get insurance, you'll get paid off on the the call option.

So that's how you play that if that's in your playbook.

I shouldn't call it conspiracy theory.

It's just a theory.

It happens sometimes, right?

Absolutely.

Especially when you're down to two year lows.

Everybody's short.

It doesn't take much to catch fire.

And who has to set the narrative about the size of the corn crop?

I mean, we're already hearing that size of the bean crop story because you can read pretty easily.

Someone says, oh, it's better than expected.

Again, theory, that's a whisper campaign.

I think if you look at some of the larger, large, more largely followed services where they really survey a lot of producers and you really get if you start that'll be the first one.

But that at the end of the day, the USDA is going to be the final say.

So you can hope and pray, but boy, we need some some some tighter carries to turn it around for the especially for the corn complex and also to the not to mention the last last report.

You know, they found an extra 700 million acres.

Okay.

Now we've gone off the tracks.

I'm not going to get you in any more trouble now.

All right.

Chris Robinson, good to see you.

Thank you so.

Much.

Thanks for having me.

All right.

That's going to do it for Marketplace next week.

We are going to look at that volatile fertilizer market and we'll have commodity market analysis with Ted Sanford.

Thanks for joining us.

Have a great week