Welcome into the Friday, November 17, 2023 installment Marketplace.

Joining us again, Naomi Blohm.

I want to correct a record just to make sure I'm not accused of stealing any lines.

Our analysts come on after they've written commentary all week.

And the person to my right did write the words Debbie Downer on one of the markets.

It's her line, not mine.

Just wanted to make sure you said it, not me.

Thanks, Paul.

Okay.

Any Debbie Downers in the market this week for you?

Besides what we talked about in beans?

Oh, um.

Well, no, that was primarily the one with the setback that we had.

So just not enough bullish news to get us over that technical resistance hump.

So we've got we we have, of course, the soybeans back on track.

So that's great news.

Our crush numbers are fantastic.

We have an open, crush report this week that was just again hitting it out of the park for demand there.

And the market seems to be content to be in a range right now with the March contract, like $14 resistance and support near, let's just say 1350.

But where we finished today is on support.

And so Sunday night's market is going to just be based on that South American weather.

And there's potential there.

There's absolutely potential for the soybean market, but it's got to do some weather watching here In the short term.

That's a big thing for you.

Finishing on support, hitting resistance.

You really watch that a lot.

What does that tell you?

It helps me with a road map.

So for me, it's like you remember those old school.

Choose your own adventure books, okay?

Or you're looking at a map in front of you.

So when I look at the technical charts, I can base my opinion of, okay, this market's either going to we can get some friendly news.

Here's why we could go a dollar higher to helps me set cash targets to the upside.

But also if we get negative news, I can project to the downside where we're going to go.

So I know in terms of like if people had bought puts, where do we want to put our profit orders at and things like that.

So it's is a very critical roadmap.

But the fundamental news ultimately guides things when everything is said and done.

Yeah, okay, that was I mentioned it.

I just it just dawned on me.

So sorry for throwing your curveball, by the way, for homerun.

We should probably say touchdown.

We're in football season or three pointer for the NBA or something like that.

All right.

Let's start with Tony in Nevada.

He has a question on X that came to us.

He says, Naomi with Mother Nature wreaking havoc on planet Earth and no end in sight, do you think $13 beans and $5 corn are the new normal?

And the answer is no.

And I'm a.

Both.

Yeah, yeah.

I think back to 2012, 13, 14 when we had high grain prices and everybody's back then said $5 is the new normal for corn and boy, did we get egg on our face, right?

We're s markets can go wherever they want and they can do whatever they want and there is no normal.

So at some point it wouldn't surprise me if in a few years if the weather straightens out, why we could have $3 corn in a couple of years just like we did years ago, because markets like to go to places that they've been.

Or to his point, if the weather is not fantastic, there's reasons why in the longer term prices could go back up.

So never, ever say any never say anything concrete in this industry, that's for sure.

Especially if you recorded on camera and can go back and play it off the Internet.

Paul in Wisconsin, we have a couple of Wisconsin questions for you.

Do you think the weakness of the dollar will continue?

If so, isn't that a positive for exports and higher grain prices?

Okay, so let's back up the truck one component.

So this week we had really good news.

CPI and CPI numbers came in less than expected.

So those are measures of inflation at the wholesale level and at the retail level.

So the good news is that inflation is going down.

So what you can take away from that is that the Fed's aggressive interest rates hikes have worked and demand is starting to slow down a little bit when there's no threat of higher interest rates on the horizon.

That's what's making the dollar retreat.

And the dollar has come down nicely.

And I think that was a good reason why we have some nice export sales this week.

So that's it's very welcome news.

Do I think it's going to go down further?

I do.

It's going to chop and zig and zag along the way.

But really there is this attitude that at least the feds are not going to raise interest rates anymore.

But usually what they do is they'll hold them steady for six months to a year and then they're going to see where the chips fall before they start any reduction.

So I don't see that they're going to reduce interest rates, but at least the hole in the steady and when there's no story to tell, then we'll probably see that dollar continue to go lower, which yeah, absolutely.

That's great for us ag exports and that helps, you know, with with a demand story.

Because is the dollar kind of like what when we talk about in commodities, if there's no fresh news to feed, we usually go backwards.

So you're saying the same thing for this?

Yes.

That it's definitely the same component.

Okay.

Occasionally I listen.

Sometimes not always.

Let's ask Scott in Wisconsin.

He has another question.

Is the bull sleeping in the cattle market?

The bull has been slaughtered, I think I'm sorry to say it like that, but that it's two things.

So the technical damage has been done on charts.

But also, again, the notion that, you know, the herd obviously not rebuilt back to where it needs to be or where it could be, but this imported cattle part of the equation has made people say, okay, it's it's going to slowly fix itself in terms of more production is coming and we're out of the woods in terms of just this dire situation of a smaller herd with feed prices coming down.

You know, that's another reason for our producers to get a little bit more current.

And I have to tell you, I have been driving around Wisconsin and my drive here and there are a lot of cattle out grazing pleasantly across the hills in Wisconsin.

Well, just more than I've ever seen before.

So I feel like things are things are starting to shift in certain areas, not everywhere.

I've got clients in Missouri who are still struggling and I've got clients in Nebraska who are struggling from the standpoint of of the herd is still smaller, so it must be regional.

That's the only thing I can think of.

But I, I think those high prices are behind us.

We'll get we'll get a recovery bounce.

Well, we'll we'll go back up.

We need to do fills a couple gaps on the chart but I don't think we're going to go rocketing higher anymore.

Okay.

So if we're not going to rocket higher and we bounce back, what keeps us at that level and what knocks the legs out from under this, is this an overproduction story that could be told in a year or two that knocks this thing down?

Well, I think it'll be a slow grind.

So I see more for this upcoming first quarter, more of a sideways trading range as we start to try to really establish, okay, where are these numbers going to be?

Has our export market picked up another dollar's dropping?

Where is the domestic demand?

We have holidays coming in.

We have still football, so plenty of tailgating and Super Bowl parties to come yet.

So the demand story I think is going to pick up a little bit, especially with prices maybe coming down.

So that's what makes me think we'll probably go into that sideways trading range and then probably 2025 if the path continues for the notion of herd expansion, then we'll start to see it go down in 2025.

Fair enough.

Austin in Iowa wants to stick with the cattle thing, but with a different commodity.

Any reason to hope for bullish news in corn?

It would be the South American weather situation with that suffering a crop.

If there is if it's planted late, it's going to struggle.

So that is something to watch.

But that doesn't really happen until late March, when that is a topic to talk about.

But I think that you're going to see our export market actually pick up just a little bit, and then there'll be the entire competition for Acres conversation that we'll have to have, because right now everyone's thinking there's going to be more beans planted next year, which.

Really because it's not you don't subscribe to that was the roundtable discussion more corn?

Oh no.

I think they'll be more beans next year.

Oh, yeah.

Because of the 14, 15 dollars you're talking about.

Yes.

And so the thing is going to be, though, the producers need to make sure that they're aware of that seasonal pattern where prices push higher into the first part of January.

And then we take a look and see where's the South American weather at?

If things are improving, prices come down.

So you have to be ready and on your game in early January to be thinking out not only if you have any remaining beans at home, but the thinking about the harvest of 2024.

Because then if we have an increase in supply, it might be something where that being priced, it starts to dwindle.

Lower beans continue to be the leader in the complex.

Um, and I think there's, you know, with all these more crushing plants coming on, it continues to be the friendly story.

Yeah, I think there'll be more beans next year than corn.

Okay, this is off topic.

Tiny bit, not South American weather, but our weather in the fall.

The last few falls, we've had a recharge in a lot of the grain growing regions.

That rain has gone other places.

I know, I know.

They'll tell me in Michigan I'm wrong, but they've had much more rain.

But there are parts that are not going to be recharged.

Does that give you any cause for extra bullish jolts to corn and soybeans if we don't have we have dry soils?

Yeah.

Oh, in April, May.

And I actually I'm glad you brought that up because we haven't had the soil recharge of winter.

I saw the winter forecast and not great if you're in a snowmobiling or downhill skiing.

So it's going to be a struggle.

So then the question is, yeah, if we start the season with depleted soil moisture next year, that that could be another factor for a summer rally next year.

So because I still hear from people who are like, I don't know how that crop was as big as it was given the the less moisture that we had.

But that's another thing I want to thank Austan for his question.

I kind of covered a little bit, but I want to move to Bruce in Iowa here to wrap up our market plus here.

And Bruce wants to know, Naomi, with a lot of feeder cattle coming to town early, right off the dried up pastures and record slaughter cow sales, what quarter will the markets find?

Some ground for new highs?

I know you already said we've slaughtered the cattle market is still thinking that you can change your mind in 3 minutes.

Well, we're going to get the recovery bounce.

And so from a technical standpoint, you know, it could be like ten bucks.

I mean, there's some technical recovery that needs to happen, maybe even a little bit more than that.

But I don't think we're going to go back into anything to where we've we've been the just the perception has really shifted.

So just when you see the recovery rallies, those are opportunities for for producers to be able to make some cash but tied to rearview.

Yeah.

Yeah.

All right.

Enjoy your drive home.

Good to see you.

Watch for deer.

Lodge.

For deer.

Happy Thanksgiving.

Happy Thanksgiving to you.

All right, Naomi Blohm, everybody, thank you so much.

That will do it for Marketplus.

Next week, we're going to check economic conditions on Main Street as well as the fields of America.

And we'll also have the commodity market analysis with Chris Robinson.

Thanks for joining us and have a great week.