Welcome in to the Friday, December eight, 2023 market plus Elaine Kub is with us and we flew through some things could have spent the entire time I think you were ready to talk livestock the whole time.

You bet.

Absolutely.

Mean our we have some livestock questions and I always think everybody who does submit everything we do asks usually like Wednesday or Thursday on X or Facebook for your commodity questions.

So let's get to some of them now.

We're going to start with Don in Iowa via Facebook.

Wants to know when is a good time to sell 2023 corn?

Do I wait and see what happens in Brazil and Argentina with their weather or is there no upside?

Well, I'll just say full disclosure.

You know, I farm a little bit up in South Dakota and I am waiting to sell my corn and, you know, DPI programs.

That's what I don't have any beans either.

So they're sitting on DPI and I'm paying however many cents per month to do it.

And it can be a trap.

Like this is a very common behavioral economics trap that you don't want to miss out on something.

So you just wait and wait and wait and then it just keeps on going down and down and down.

But that is what I'm doing and it's for the reasons that he's mentioning, is that there are some reasons to believe that there could be bullish influence from an El Nino winter in South America.

And also, you know, harvest lows are just typically not the best time to sell.

In fact, seven out of ten seven out of ten years is the best time to lock in.

A price for your grain is obviously before harvest.

So the springtime before harvest.

And so for those of us who didn't do that, now we are left in this trap.

And that's that's where I'm at.

I'm waiting, but I'm waiting cautiously.

I'm not waiting for $6.

I'm waiting for maybe a bump of $0.20 or so.

So you're not you didn't put it on DPI and forget it.

You are still actively paying attention, looking for a window.

Yeah.

All right.

So what are you looking for?

Another 20, $0.50, tops.

You can't pick the top of the market.

Or can you pick the top?

No.

And I also here's the other thing I would be waiting for I'm willing to wait for is the January grain stocks report.

I think if we're going to see any sort of a bullish acknowledgment of the drought in Iowa, the ways that that may have damaged a yield that has not been acknowledged by the market or by the supply and demand tables, that's where it may come.

Do you subscribe to the fact we're going to still have a smaller overall national crop come January?

Yes, I, I mean, well, I doubt this more and more when you hear of the harvest harvest reports from everybody who had really good yields.

But if it's going to happen, of course we're not going to see it until then.

We really should ask at the end of the show, show us the picture of your grain pile.

Yeah, because in Iowa you don't see that and you don't hear as much a guy I know, it's like, where's those piles?

Right?

But you're saying somewhere on some of your journeys.

Oh, yeah.

You know, yeah, yeah.

In the eastern Dakotas, certainly there's a lot of grain and piles and bags and that's, you know, that's sort of normal.

That's, that's an industry normal these days.

But it, and it's also a reflection, I believe, of some freight issues and just sort of wet corn issues.

But it is, it is also a reflection of a large crop, a very large crop, lots of acres, certainly.

Okay.

It's not a river or it's not a rail issue.

It's a river issue.

So let's flip quick to Dan in Nebraska, because it's about transporting.

It's a little bit about basis to what effect would it have on grain prices if the river levels go up so that maximum grain can be transported?

It would help.

It would help.

And the other thing it would really help would be getting fertilizer back in the spring.

But, you know, when I was looking at a basis map to prepare for coming on this show, I was struck by a how if you were going to design what is quote unquote normal, it's actually right about their Cedar Rapids is at zero.

Your average countryside elevator in Iowa is 30 under the eastern Dakotas are 89 $0.90 under.

But that is basically normal these days.

Panhandle Texas is like 60 over.

So everything looks pretty normal except for that river basis where it is still pretty.

And we're not going out and we don't get rain in December or January that refills those rivers.

You have to have some snow and then that might only be temporary, but it has been a very dry fall in many areas.

So it's going to take a lot of rain that.

Do you see it in the forecast coming?

Well, for that long term, sort of three month forecast for El Nino conditions does call for more moisture down in the southern part of the United States, but not like you're seeing in the areas the watershed that actually goes into the Mississippi River.

It's for the lower locks of the Mississippi River.

So it's not it's not really that helpful for the basis market.

Let's stick with basis.

You always like to talk.

It's I'm glad when everybody submits a basis.

QUESTION This is Robert in South Dakota.

I've given Elaine enough time to think about this.

Question.

We'll see what she comes up with now.

What would be your advice, he asks, to those of us who live in an area that generally have very poor basis levels?

Yeah, there's not a lot you can do as an individual producer.

What can you do?

Not not much.

You're sort of at the mercy of the overall market.

So the only things to do are sort of big structural things, you know, sell specialty crops.

You know, if you're not selling a commodity crop, you're not so much at the mercy of the market, but more importantly, the things that have changed it for people.

You know, where I live in eastern South Dakota is if you do have more local processing, to the extent that we have more ethanol plants than we did when I was a kid, to the extent that we are now building and seeing the market effect of more soybean processing plants, that's how you fix it.

And you you diminish some of that reliance on only shipping by rail.

Because there have been some processing plants closer to you than closer to us here right in North Dakota, South Dakota.

And one was canceled, I believe, close to the border.

Right.

I mean, so those are coming on.

Oh, yeah.

Do they have good long term impacts in changing crop intention, tension plantings for some people.

Time time will tell.

But I mean, from the soybean market perspective, I think there's a lot of reasons to believe that that they'll be successful.

Okay.

Let's get into livestock now that we've taken care of the basis issues.

Cannady Farms in Oklahoma, I have a question for you.

Is the correction in the cattle market warranted?

What's the short term outlook, Q1 and long term outlook for 24?

Okay.

So is the correction warranted?

I think you could argue that a correction would be warranted.

You can't just have one price level that you trade at forever.

There will always be some moment when you know, market bears get some power and that that moment is occurring when you have boxed beef prices sliding that fine, you know, like you get a moment in a market will take a breather like that.

The futures volatility, I would say, is not warranted.

And it has sort of become a self-fulfilling prophecy that the volatility itself has attracted algorithmic traders, let's say, bots or whomever that are going in there and just trading and trading and creating even more volatility.

So to that extent, no, but that you would have, you know, sort of a pause in the bullishness and particularly at this time, even in the feeder cattle market when you've got all the cattle coming into the sale barns, like of course this is the moment when you have a low, that's fine.

I had a comment this week written down.

Extreme downward volatility gets more difficult to explain by each passing trading session.

Do you buy that sentiment?

No, I think it becomes easier to explain, but it will the end eventually, probably.

Famous last words.

But, you know, markets just are never static.

That's the only thing you can rely on is that they will eventually change.

Well, they do change.

And one thing that's changed corn has been ethanol.

Gary in Wisconsin asked us via Twitter here, with ethanol margins tightening, could we see a slowdown in ethanol production in the spring?

I don't I don't think that there's well, certainly in the US, as was you, that that wasn't a projection.

And I, I wouldn't worry so much about the overall volume of ethanol being produced.

Part of the reasons why the profits are looking a little tighter is because oil prices and fuel prices are lower, which is generally been supportive to the to the economy.

But it's really interesting to note that that the oil prices globally are sliding because of the US oil production.

U.S. is the number one oil producer, a record large one at 13.2 million barrels a day could continue going up and up and up.

So that's that's helpful for folks in the agriculture industry that are, you know, purchasers of fuel and probably not too bearish for ethanol or corn.

Or crude has been kind of on a downward spiral for price.

I know it traded below 70 at some point.

The WTI, you know, are we looking at a level below 70 soon?

I yeah.

I mean, I don't see there's no magic reason why I couldn't go below there.

It's the nicer thing is that the diesel is coming down too or moderating.

I think the nationwide average diesel prices $4.14.

So could be a lot worse.

And and actually it's it's really amazing that we haven't had more of a spike from, you know, something crazy going on geopolitically in the Middle East.

So the fact that we're a little more insulated from that by our own domestic production, that is helpful.

Is that an opportunity to lock in fuel or other inputs?

Boy, I mean, the timing of it is tricky.

I think folks typically like to be locking in inputs and grain prices at the same time.

But there's no reason you have to do that.

I mean, it's certainly something to consider.

And it's something that's usually done.

There's a lot of locking in that happens these last two weeks.

Yeah, good points.

Start looking at their tax implications and whatever it is.

Okay, let's let's let's close with one Joe in Wisconsin here and he's wanting to know which 2023 crop has the better upside after this report and why.

And then I want to add, what is the better upside And 24 start with 23.

Well, I mean, you have to from that report, the only thing that really changed was the drop in Brazilian soybean production.

So you'd say soybean prices, but soybean prices in the futures market are really looking more at the day to day forecast changes rather than USDA is sort of conservative changes on a supply and demand table.

So it really depends on what the weather happens when when we come back on Monday.

You already talked about holding on your corn and trying to figure out a time to sell January type thing.

Those are signals you're looking at.

What what am I looking at for beans in the early couple of months of of 24?

What am I watching?

Great question.

I, I think I'm sort of in the same place.

I think they're largely going to move in the same schedule.

You know, we're we're if you're not going to get more damage to the South American crop in the next, let's say, 2 to 4 weeks, it's too late.

So don't don't yeah, don't just cross your fingers and hope past, let's say, January.

And so what you're saying, following the schedule, we're looking at the way the things used to be in, say, 2019 and 2018.

The way the pattern.

Yeah.

Instead of what we have had the last three years.

Yes.

And way off season.

And and it gives us these weird anchors in our head that we should be seeing for $14 beans or $6 corn.

I mean, we have to realize that that those are not guaranteed for us every year.

Well, guarantee is it's always a good time when you come.

Good to see here, Elaine.

Thanks Paul Elain Kub everyone.

Thank you.

Next week, we are going to take a look at USDA's effort to increase the practice of double cropping.

And we'll have the commodity market analysis of Dan Huber.

Thanks for joining us and have a great week.