Welcome into the Friday, October 13, 2023 installment of Market Plus.

Joining us now to my right.

Elaine Kub, Jeff French, thank you both for being here.

Don Roose, did we pick on you?

Thank you.

Well, just a little bit, but that's okay, Paul.

This is the I think third time we've sat at the three of you together and we've we do panels different times with different people.

This was the one where I thought we had the most, like.

Back and forth.

And Elaine disagreed with some things.

And you were causing trouble.

Causing trouble, do you think?

I mean, producers hear different opinions all the time.

What should the when they listen, think back to what they just listened to the show and they hear different viewpoints of things.

That's good for someone, right, to have a different opinion.

Well, you hope so.

I mean, that that is honestly like the biggest danger of participating in these markets is if you have one opinion and you only and you only listen to one thing and you just listen to everything that confirms what you already believe and you just lock yourself into that and you don't listen to the other dangers of what could go wrong with your opinion.

So actually listening to things that, you know, challenge you or make you think that's the best that's the best thing you can do for for a grain market.

Is she crazy Don, with that?

No.

I mean, I actually, you know, for every buyer there's a seller in this market, you know, so that's the number one thing.

And so there are a lot of different opinions.

And I tell you, a lot of things can change, Paul, from day to day and week to week.

So you've got to be pretty flexible in the market over history.

And we had to be flexible in the control room.

And I want to say shout out to the control room for following along.

Normally when you watch this show, it goes wheat, corn, soybeans, cotton, you know, into the livestock.

But we went off the rails and it's not Elaine's apologizing.

It's not your fault.

It's me.

I'm sitting here.

I can say, no, we're going to talk about this and this is the way it's going to be.

Don, I'm going to start with you.

Let's start with Mike in Nebraska.

He submitted a question via the ex.

What do you recommend for unpriced bushels If you're 75% sold corn and 85% sold beans on the 23 crop?

And then what do you do in 24?

Well, one thing I would say that's probably pretty you know, if you sold above the market substantially where we're at now, those are pretty good sales.

And you're probably you're probably down to your gambling bushels.

And I would say usually historically to make sales at harvest time particularly is not a good time to make sales in seasonally, the market usually goes up.

We usually get some kind of issues with South America.

And so I think there's more odds going up than down for next year's crop.

I think the same thing, Paul It's a little early to make big decisions out there.

You know, when you're making highs on last year's crop, when they made those sales, probably that was the time to think more in 2024.

So I would say I would be on hold on sales.

Let's see if the market can retrace.

We were in a downtrend for 30 days and our stuff flipped around to the upside this week.

So technically it looks better to us, Paul.

Jeff, you already had a 24 question.

So Elaine gets to do you have any 24 recommendations right now?

No, I think that's that's absolutely appropriate is just think seasonably about what kind of opportunities maybe in the future.

I mean, unless you desperately need cash for some reason.

Yeah, this may not be your best moment.

All right, Elaine, let's talk about weather.

But the dry, the lack of the rain.

This is Mark who submitted us a question.

With river levels so low, can we compete in the soybean market via the Pacific Northwest to China?

Yes, that is that is very much what is happening.

The evidence is that the movement of soybeans has has shifted dramatically to what is a normal pattern.

I think only 25% of soybean exports have been out of the Gulf so far this year.

The rest of them are kind of moving towards the PNW, and you very much see that in the basis levels along the river, like for most of the harvest basis levels across most of the country, they're fairly normal for this time of year.

But you got 50 under 70 under for soybeans in Illinois right along the river in October.

I mean that's it is because of that that drastic scenario.

Jeff, in a former life, you lived a little you were you were more dependent and where you were at about Illinois and the river and the Mississippi.

From your vantage point now, is there any difference that an Iowa mid Iowa producer has versus some of those clients you had in, say, Illinois in relationship to a dry Mississippi?

Well, it's kind of reverse.

I mean, when the river was high, you know, they would have the good basis.

Well, that's kind of gone away this year.

Maybe it comes back with these rains.

But, yes, going back to the PNW Pacific Northwest, the beans are competitive.

I mean, for December delivery, when you're looking at Brazil, we're about 30 under right now, $0.30 under it right now.

So that's the way it is going.

And it's good to see because we definitely need some of that business.

How much longer then, before we hear stories about rail issues or someone in a in a region doing well or are they already out there by the eyeroll I just received?

Well, that's, you know, that's something that's can always happen.

And, you know, I guess we'll deal with that when it comes.

But right now it's, you know, we don't have anything on the horizon right now.

Don shouldn't roll his eyes so much, right?

Well, that's always a risk.

And, you know, and getting fertilizer back up the river, too, that's going to be maybe a bigger problem in the fall.

Yeah, that was a discussion a couple of weeks ago was about the fertilizer.

And then we're talking about the salt for the roads.

And you were having back saltwater issues.

I mean, is this how long does this tale have of being a story?

Well, the good news is, you know, usually we make we compensate for some of these problems.

And I have confidence we will again.

But, you know, the domestic the ethanol plants, the biodiesel plants that are coming on, you know, our export pace I think you have to say we're losing out inch by inch to South America on soybeans and we're picking up our biodiesel demand very strong.

So that's probably the new big demand that you have out here.

Paul Okay.

Jeff Yes.

Greg wanted to know something off of Twitter.

He said I sold new crop corn this week because of a tremendous basis.

Should I be happy with the sale and walk away from it or cover it?

And if I should cover it, how should I do it?

It's my opinion.

Absolutely.

You do cover it.

And what we are doing, we're buying the March 530 corn call for 15 to $0.17 that will keep you in the game for the next four months.

$0.15 is the most you can lose.

But if corn wants to move up here, which seasonally I expect that it will, you can partake on any part of that rally.

So, yes, we like, you know, when everybody is selling grain and, you know, that's when we want to buy it.

When everybody wants to buy it, that's when we want to sell it.

So, you know, we're looking to re on the re own our sold bushels here.

Did you learn anything on commitment of traders from today?

That was significant for us.

And speaking of ownership.

Not that big of a switch from funds buying back.

Now that is as of Tuesday this week so that we're not going to get the report action.

So they still remain heavily short.

We need that catalyst to get them out of those shorts here.

Okay, Don William in Iowa has a question for you.

He says, When are we reowning in our 23 soybeans?

Well, historically, we're supposed to buy in October 3rd, third, fourth in that area.

So or when you're 50% harvested.

So I would say you've reached probably both of those.

So I would say technicals turn positive this week.

I would say set back, probably take re ownership with them, probably some kind of an option strategy.

I would buy a call, sell a call, buy like $13 calls, sell 14.

There's no proof we can go over that number yet.

Keep your costs low.

So I would say you're in that window, Paul, right now.

All right, Jeff, little follow up for Mitch then on this one.

What are you doing with unpriced soybean bushels not stored on the farm?

Do you sell store or re own?

So we're not making sales currently.

We do have targets in we got targets.

So you got the 100 day moving average at 1311.

We're going to see if we can get above that and then we will sell in that 1340 to 1350 area on off the November.

If you're don't want to sell and you are going to hold through the winter.

Yeah, absolutely.

We'll buy a 1250 put just keep some cheap insurance enter this market in case we are wrong and seasonally that prices move lower from here.

So yeah, absolutely.

Lock it in.

Elaine I know you already talked about basis, but I have another question about basis that came in this one is from Curt and it came via Facebook.

Is a basis contract a good option now with grain that you didn't have sold or contracted?

So so as I mentioned, I think that the basis is normal, to strong.

And depending on where Curt is located, you know, that would sort of color my answer.

But yeah, I don't have a problem with the basis right now, but I don't know that there's necessarily a big risk that it's going to fall apart either.

I don't know if somebody has a.

You know, I would say historically to set the basis right now usually isn't a good time because we typically you get a rally on the basis going into the Thanksgiving timeframe.

Now a lot of that is because river push for exports where we're not going to have this year.

But I would be very leery at harvest of setting the basis, same as making new sales at harvest.

So I think both of those for me are not an option.

And I think the basis is going to do the work.

I mean, you might not see the board appreciate, especially in this corn.

I mean, guys are putting it in the bin and they are locking the door.

I mean, they're down here at two, three year lows.

They don't want to sell these prices.

So I think you will see that basis do the work to get that corn out of the farmer's hand.

Is there anything that's going to open that door?

I think if they could get 550, 570 cash, I think you would you would get some cash sales there for sure.

I'm going to ask it the other way.

Is it going to how low is it going to have to go before somebody opens the door and says, well, I missed my chance, I better cut my loss now?

I think it'd be a lot lower than we are right now.

I mean, it's they're pretty set on putting it in the bin and seeing where the thing goes.

Well, you know, I think it is different.

We talked about it with interest rates.

I mean, I think time is money and I think you'll have guys a little more faster sellers than they were previous years and maybe reownership in some other way because it's you know, farming is a capital intensive business.

So I think, you know, guys are going to be looking for funds down the road.

We don't have those huge prices that we've had the last couple of years to work with.

And I think we've kind of sucked off some of that money.

Elaine, is there anything that you heard today that makes any one of these commodities wheat, corn, beans, cotton that has cause for setting up, as we'll say, dry kindling and something could spark it?

Is there a market right now?

Let's just not go to 24, the rest of this year.

Yeah.

Well, I mean, even to Jeff's point and to Don's point about the shorts that are in the soybean complex and the weather pattern that's in South America that needs some kind of kindling to get those shorts out of there.

And maybe the weather could be the thing that does it.

Anything for you?

I you know, with what's going around in the world, I mean, you got two major wars happening.

I think wheat down here at 4 to 5 year lows.

I mean, it you know, they're short wheat.

I mean, if they come in and just start buying back their short positions, it could be very explosive.

I think the sleeper in all these markets, soybean meal had a big run to the upside this week, but bean oil is very oversold.

It's undervalued.

The supply demand balance table was positive.

We have a lot of biodiesel plants coming online this next year.

Bigger supplies now, but they're going to deplete quickly.

I think that's the sleeper for the next year.

Don Roose, good to see you.

Thank you so much for your insight.

Thank you, Paul.

Jeff French, Elaine Kub, thank you both as well.

Great insight today.

Kind of fun.

Really easy today.

Just listen to the three of you.

I do it all day.

All right.

Next week, we are going to look at how solar is adding to the bottom line on the farm.

And we get commodity market analysis from Shawn Hackett.

Thank you for joining us.

Have a great week.