Paul Yeager: Welcome to the Friday, June 28th, 2024 Market Plus Ted Seifried with us. You missed the big debate. Is it buttoned or unbuttoned? I’ve gone unbuttoned for a number of years, but that’s because, Ted, I eat too many cheeseburgers. This market, I guess wardrobe is something we should talk about sometimes when you come to the show. You have this question, and it’s here again this week. Dana in Nebraska wants to know, is the corn hat in the closet for 24?

Ted Seifried: Oh, man, you know, I was really hoping for a very good reason to wear the corn hat today. Unfortunately, the USDA kind of threw a wet blanket on that. but I hope not. I really hope not. I want to feel good about corn. I feel better about corn than I do soybeans. I have very deep concerns about soybean demand going forward. but, man, I don’t know. You know, extra acres, extra quarterly grain stocks. It’s. We got a lot of corn.

Paul Yeager: We do. And I think I ask you the question about, kind of a weight around us as we move forward. There’s a question in here we’ll get to in a moment about the new crop. But is the boat really gone on? I mean, it is going to take a major thing to get any type of. I’m not even talking about a weather rally. I’m just looking for a story that’s positive.

Ted Seifried: Yeah. You know, there are things that can happen. Predicting the future is very difficult, as you know, Paul. I have a saying about that, but we’ll not do that on this. Not.

Paul Yeager: Is that not FCC safe?

Ted Seifried: Okay. yeah. you never know. corn cures cancer, right? I mean, you know, I don’t know. This is the time of year where we look to weather, right? But here we are knocking on the door of the 4th of July weekend. And I got to say, on my drive over here, even though I ran out of daylight, when I got to a little bit past Grinnell last night. But everything that I was seeing in northern Illinois and eastern Iowa and again, just a very linear route, I didn’t stop and do yield checks or anything like that, but, wow, these are some very good looking crops right now, Paul.

Paul Yeager: But what happens if you go east from you?

Ted Seifried: Yeah. So that’s a really good question.

Paul Yeager: How does that matter and how does that fit into this discussion?

Ted Seifried: Yeah. Yeah. So I mean, that is kind of the area of concern. Well, okay. So, I’m actually currently making my decision on which way I’m going to go on crop tour right now. and I was very heavily leaning east because of that. But then we have the flooding in the west, and I now I’m interested about that, too. So I don’t know. but here’s the thing about that, Paul, Sunday night into Monday, we got rain. That was in the forecast. But the confidence on that was really very low. so some of those drier areas actually got, good amount of rain. so I think if you asked me that a week ago, I’d say it’s really concerning. I think today, is a little bit of a different story. I mean, yes, we definitely has, concerns. southern Illinois, but the area of concern is maybe a bit less than it was a week ago. And I think that was very much reflected in the early week trade that we had. And corn didn’t see the light of day this entire week. Right. I mean, we were just down really every day, right? and Friday was because of report, but even before Friday, you know, we were all kind of talking about or expecting or hoping for a fun short covering rally in front of a big risk report. They didn’t do that. And I think a lot of that was based on the weather and easing concerns about, you know, hot, dry.

Paul Yeager: Let’s go to Scheulke in South Dakota on Twitter. X thoughts on the Z4 and N5 carry currently sitting at 27 under.

Ted Seifried: Yeah. Hey, Austin. long time no see, buddy. I mean, look, there should be a big carry in the market right now. We’ve got a lot of upfront supply. Now we have more acres. if you are savvy enough of a marketer, I would very much be looking out further in time because, you know, you still have some pretty good prices. Now, again, as we just talked about, things can happen and we can see sharp rallies in the market. I don’t see that on the horizon. At least, you know, from what we know at this moment. it seems to be that we are getting back into the cycle of really high production, both in North and South America, really everywhere. And demand isn’t growing fast enough. so go back to 16, 17, 18, 19, right? I mean, that’s the cycle that I think we’re headed towards. So I think you take advantage of that, carry as much as you possibly can. If it’s if you are able to if you are inclined to go further out in time.

Paul Yeager: Well, let’s look at new crop here with Paul in Iowa. He also wants to know if I’m behind where I want to be on new crop corn and beans sales that I have to be made that have to be made off the combine. Do I make sales before prices get even worse, or do I hold on to that nasty word of hope?

Ted Seifried: Yeah. You know, I say a lot of that hope is not a marketing strategy. not just me. A lot of people say that, Oh, I gotta I gotta feel like maybe we’ve just put the near term low end for corn. We had a three in front of September corn today, Paul. we didn’t get those there, but side. Yeah. we’re very oversold. We do still have weather risk. I would like to see a bit of a recovery, but, I mean, we are at the point that with extra acreage, with extra quarterly grain stocks, any sort of rally that we get from here on out, any sort of bounce, any technical bounce, you need to be fairly aggressive on making sales, both old crop and new crop. If you still have old crop laying around and you do, because 30 on farm stocks are 37% higher year over year. That is again, I’m going to really harp on that, Paul. That is a concern. Right. Because that means that there’s a very big seller that we all want to talk about how short the funds are and how much shorter are they going to be. This is, you know, about the shortest they’ve ever been at this time of year. Can they keep selling? The answer to that is yes, but are they going to double their position? Maybe not. I think we get too worried about what the funds are going to do when you have this other large entity that’s yet to sell, when you have that many on farm bushels. These are sales that are going to eventually have to hit the market. If they do it $0.40 higher on a weather scare, that’s great. But either way it’s selling pressure that’s going to happen. And if you don’t get that rally, we are in for a train wreck at the end of the, growing season or before we get into harvest, because those bushels will have to move.

Paul Yeager: And we just put up the November bean chart, and I cut you off during the show. you have a target of Ember. What is it?

Ted Seifried: Yeah. I mean, unfortunately, right now I have to say November beans. 1180 or. I’m sorry, 1080. Wow. 1180 sounds great right now. but, man, I, you know, I don’t know, I, I’m worried that, ten is not going to hold. Right? I mean, you look at new crop being demand crush is going to be there. That’s good. You know, sustainable aviation. Hey, these are all good things, but we need export business. That’s half of our soybean balance sheet. And we do not have the sales on the books for new crop. We are seeing them very slowly trickle in to the tune of 100 and 130,000 metric tons, or whatever we had for the week last week. It’s not enough, Paul. We really, really need to see that. That new crop being sold, sales start to happen. And you really wonder why China’s not buying.

Paul Yeager: Well, that’s how I was going to ask. What if you named them? But what happens if China just says, well, we’ve seen $2 go off the market a little time? Let’s just let it ride for a little bit longer. Well going lower.

Ted Seifried: Yeah. So $2 off. Right. So I mean the price is right. They’ve had their own dryness concerns. The quality concerns about that southern Brazilian crop is, is sort of why they’re buying new crop right now. But why are they not booking more? that’s why they’re buying us old crop right now. Why are they not booking more new crop? They have every reason in the world to do it and lost the demand is just not fair. And something that we’ve been talking about for a couple of years now is that China has really been pushing to try to change their feed rations, to use less soybean meal and to use more corn. They’re getting that corn from Brazil. But what happens if Chinese demand drops 20%? That’s 20 million metric tons. Is that going to. Is that mean that they’re going to buy 10 million metric tons less from us and 10 million metric tons less from Brazil? No, they’re going to still buy the same amount from Brazil. They’re trying to cut us out of the mix. And that is a big concern. And sustainable, sustainable aviation, biodiesel, these are all really good things for the market. Longer term. But in order to actually use them, we need the infrastructure. We need the crushing facilities. And those aren’t it’s not going to happen fast enough to offset a major drop in Chinese demand, if that’s the case. And I got to say, I am very worried that’s the case because, again, they have every reason in the world to be coming in and buying new crop soybeans right now, and they’re not doing that. So that’s a massive concern.

Paul Yeager: Well, I get political. Is that a political issue or is that just an economic one of a lower price, a different supplier?

Ted Seifried: I mean, it’s it’s hard to talk about China and not have a bit of a political conversation. Right? I mean, we’re not the best of friends. They do not really want to have to rely on us because of, you know, go back to to 18, 19 when when, you know, the, the, you know, the Trump administration really wanted to, take them to task, which, you know, by the way, I, you know, in hindsight, we look at that and that was about intellectual property. And I don’t know if that war was won. but look, that the turmoil has not gone away. they don’t see us as a sustainable partner or a reliable trade partner. they’re obviously going to watch the upcoming election very closely. they want to try to push their business as much to Brazil as possible. I mean, that is extremely evident when you look at the, you know, China’s imported a record amount of corn this year. It’s not been from us. It’s been from Brazil.

Paul Yeager: All right. So is there positivity to be had here as we close from something changing with China, something changing with Brazil? Give me a positive thing, Ted.

Ted Seifried: Yeah. No, we were we’re searching for it. Right? you know, I’m going to say I really do feel like even if China is not buying corn from us, their increasing corn demand does positively affect us because of what we call demand displace, displace demand. Right. So, you know, that just means less corn for Brazil to sell to other countries. Other countries will hopefully potentially be coming to us. I see a lot of positive things for corn demand going forward. I just don’t know if it’s going to grow fast enough, for the increased production that we’ve been seeing. So, I want to say my pick of the litter at this point in the grain markets would be corn at this point. And from a demand side of things.

Paul Yeager: But for that, we will still leave the corn hat in the shadows for now. Maybe next time.

Ted Seifried: Oh, man. I kind of wanted to wear it though, but all right.

Paul Yeager: Good to see you, Mister Seifried.

Ted Seifried: All right. Good to see you too, Paul. Thanks for having me.

Paul Yeager: All right. That’s Ted Seifried everyone. Next week, we are going to have an economic discussion stretching from Main Street to rural America. Ernie Goss and Chris Robinson will join us. Thank you for joining us and have a great week.

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