Kansas Wheat Crop Update

(Jamie) Thanks for staying with us! Let’s catch up with Duane and Mark at the Wichita Farm and Ranch Expo during the Market Shootout IX.
(Duane) Duane Toews joining you once again from the Wichita Farm and Ranch Expo, Market Shootout IX, a program that KFRM provides to around 500 producers across Kansas that take in the event. An opportunity to catch up with the analysts specifically to talk about one commodity and an opportunity to catch up with Mark Gold. Mark you drew soybeans and maybe as much volatility there that we see as of late. But looking to the future, further into the fall and on into next year, give a little opinion on how you think the soybean market may react as we move forward. (Mark) Well we took a hit today because of the report, but when you look at the world supply on the soybean number that came down, a little over 2 million metric tons. Which is a little bit positive out here. Now the question is, is the amount of corn and wheat that we’ve got gonna keep dragging the beans down? I’m not so sure. One of the reasons the beans have made new lows in here is because we’ve had rains in Brazil. There’s been a lot of talk about El Nino. So far it really hasn’t developed all that strong particularly in Brazil because they’ve had some rains. But this is like talking about rains in April in the United States. We’ve got the whole summer in Brazil to see what’s really going to happen there. And because they are looking at raising so much grain this year, predominantly beans that if they lose 10-20 percent of their crop for whatever reason you’ve got a bean market. So, do I want to be bearish down here at $8.50 beans? You know I’ll let somebody else try to get the last 50 cents that might be there. There’s some people that think six and half dollar beans are out there. I disagree. I believe that something is going to happen between now or June or July that will give the American farmer for the 2016 crop the ability to sell both corn and beans at profitable levels. I’ve been in the grain business over 40 years and I’ve never seen a year yet where we didn’t get one opportunity to sell grain at good prices. But right here at the lows, are we gonna do it down here? No. Hopefully we’re gonna see some kind of rally. (Duane) This year a bit of an anomaly so terribly late with a crop…the corn obviously but that pushed bean planting back as well. Some of it didn’t get planted at all. But we had an unbelievable summer and a great fall for those beans to finish. (Mark) No question about it when you look at basically a four billion bushel bean crop. It’s a big crop. Record yields, record production out here. So, the beans had it better than the corn did. We still had pretty good corn yields considering what happened in Illinois, Indiana, Ohio, in Missouri. But the fact of the matter is, the American farmer has the ability with today’s genetics to grow unbelievably big crops. (Duane) We saw what those yields can be. This fall, beautiful fall harvest weather. And they came out maybe on record pace, compared to some years. And they got to do that without firing up the driers or anything else. (Mark) Well, that’s been the good news is they’ve been able to save some money on these harvest costs. Guys got through these fields very quickly and the drying was just really minimal out here, so it saved them a little bit of dough. Now, hopefully we’ve been doing this a long time. And hopefully the farmers have listened to some of the recommendations that we’ve made. That if they were putting grain in the bin, that they need to be trying to capture some carry that’s out there, re-own it with call options and I still think for the ’15 crop that makes a lot of sense. There’s virtually no carry in the bean market, very little in the corn market. I think you have to ask yourself why are you storing it? Well, if you’re storing it for higher prices that’s why you buy the call option. So again, there’s been some marketing opportunities on the ’15 crop. But I’m looking forward to ’16 when we get that hopefully one good rally that will be able to use some options at a very effective pace. (Duane) Our thanks to Mark Gold, Top Third Ag Marketing joining us at the Market Shootout in Wichita at the Farm and Ranch Show.
(Jamie) Thanks, Duane. Folks don’t go away, next up Duane visits with Tom Leffler about the cattle industry.

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