Markets Now Closes - 9-10-26 Brady Huck, Empower Ag Trading

0:00Market's now is brought to you by Pervantseats. There are wins, and then there are wins that you get with Pervantseats. Big game-changing wins that turn heads and make people take notice. Get started at Pervant.com slash Change the Game. Welcome to Market's now. I'm Michelle Rook with Brady Huck of Empower Ag Traiding, and we closed higher on Thursday in everything in the Ag space with the exception of the hog market. Brady, I want to talk about the grain trade. soybeans led the charge. New contract highs there. And certainly we got energized again by more China sales and talk of even more coming down the pipe. Great. It's good to see these flash sales continue to come. They come and they go. It's nice to put a few days together where you see China in the market and unknown in the market for soybeans. So nice to see those coming in. Energy market certainly helps lead things higher as well here on the soybean front. But we're certainly positioning for that report tomorrow as well. Michelle, absolutely. But let's talk about China because we had another 18 million bushels of soybean sales this morning

1:07between China and unknown 34 million bushels for the week so far. China is trying to buy to ramp up before the September 24th U.S. China summit, right? Certainly looks like it, Michelle. Yeah, that meeting is scheduled for September 24th. I bet we will see if it actually happens. So those things have been canceled last minute in the past. But it certainly looks like they're front loading and getting on good favor ahead of that meeting. And you mentioned soybean oil being higher. Sabine meal was as well, but Sabine well following crude oil, which I think pushed over $100 again. So is there an inflationary by going on there? The energy market is certainly something that we got to pay attention to. It's a big catalyst has been a big catalyst in the commodities in general. And when we get crude trading above $100 a barrel and you've got diesel moving like it has it becomes a problem. To some extent here in farm country is we ramp up the calm lines and fill those diesel tanks up. But it's moving the markets and it doesn't seem like there's an end in sight to the war in the black sea or the middle east.

2:12These things just continue to linger on provides a little bit underlying support for for wheat and corn with that black sea conflict. But these energy markets they can move. You know, there's calls for about $120 crude out there. The weather would get there or not. We will see a lot of moving parts right now, Michelle. Yeah, now that we've gotten into contract highs in the November beans again, where do we project you? Do you go to round numbers 13 50 14 where? Yeah, I think you know, use whatever technical tool you want. I like a Fibonacci extensions and looking at that. When you get in new contract highs, you're an uncharted territory. So got to pay attention to where the funds are at the fund link. There's there's no limit on what they want to how far they want to extend their ownership into this market. Hate to stand in front of a bull market like this and good to see for the farmer. If you have the production and it's not sold yet. What about the corn market? You kind of mentioned a bit. Did corn just follow the rally in soybeans today or was it following the crude oil market in that inflationary play to?

3:19Corn's had a tough stretch here. I think we were down five days in a row there. So I'll pull back coming into the the wasger port pre-report positioning. Certainly a factor as we prepare for tomorrow's reports. You know, I think it's all about what we print tomorrow. Will we see a sub 10% stocks to use number in corn? It will that excite the market got a wonder where we're trading that in if the USDA will confirm or if they're going to disappoint us with what they print tomorrow. But these markets are moving Michelle. There's so much to talk about in them. Yeah, 178.4 I believe is the average trade guests on corn yield. Where are you trading below that though? Don't you think Brady? It's hard to tell I think you know what the pro farmers are certainly below that. Then stone X comes in and drops a 182 number on corn. I feel like we're in the 176 75 area. If you're looking for a yield number that's been thrown around there. I don't think we're trading a sub 9% stocks to use figure.

4:20And if we saw a print where we were you know that that new crop stocks estimate at 1.5 to 8 billion bushel if that's our ending stocks that puts us I believe below a 9% stocks use ratio. I think that could create some excitement if we tighten things up that much the market will get concerned about supply. Where does that put us from the price standpoint? Do we if we get to 9% stocks to use ratio? Do we need to be at $6 corn or above that level? I think you can very much make the case for that anytime you get below sub 10% stocks to use ratio. The market gets excited and you see those parabolic type of runs where we saw in the 2020 to 23 timeframe where everybody screaming at should a sell for $5 corn and then it runs to 6 6 plus and you hope you have some some ownership and are able to participate in that type of rally. But when we tighten that stocks to use ratio up below 10%. I wouldn't want to sign a number to it but we can certainly climb back above 6 bucks. The key here for yield is going to be the Western corn belt the Western plain states like Kansas where you're at.

5:26Are not going to have near the crop they did last year and so right now you've got some good areas in the east that have to make up for that will that happen and will it show up in September because USD is usually pretty conservative. I think that's my biggest concern Michelle is that we slow play that adjustment and that this takes longer to really shake out what that total production figure is going to be. It's no argument that we haven't had the best of finishing conditions out here and the West has certainly had some problems but like you said can the East make up for there's some doubts out there that these can make up for it sets up an interesting basis environment for. Or producers across the whole nation and basis is something to keep your eye on here as we progress throughout harvest and maybe something that helps you decide whether you sell cash flows or if you put them in the bin and waiting around for this thing to to shake out a little bit more. The week market was back up here today we're chasing those black sea headlines on any given day do you feel like the market is fully respecting the export losses that we're seeing in the black sea areas or could see moving forward if this thing doesn't change.

6:37I don't think so I think you know the there's a lot of drama over there it hasn't gone any away you know two weeks and here we are what how far we into this thing that it just continues to have new headlines new bombings and the grain corridor export situation has not improved if anything it's deteriorated so I don't know that the market is fully respecting the situation there but they have gotten the grain out in the past. And we'll we'll see how it all shakes out against Michelle. At these price levels are we going to see more acres of when we'd be planted here I know we have to get a little rain before we can even get a crop up in some of those areas but what's your thought. Anytime you have an eight dollar handle on the wheat market I think that's a good thing that gets guys a little bit more excited to put some in the ground we've got some moisture and more prospects for some more moisture here in wheat country. That'll excite guys to get some seed in the ground and plant some more acres if it stays dry you're going to see acres back off but if we get some of those rains I think you'll see some of it get get sewn into the ground.

7:43Yeah we it's a cash crop it does a lot of things for a farm's balance sheet that influx of mid year income in July time frame really helps balance sheets and farms keep some sound and extends that operating note it's an important crop to have in the mix out here. And I think we'll see maybe a little little increase in those wheat acres versus years past and maybe some in double crop areas more in double crop areas to good point yes hearing some talk as you manage inputs and manage cost of production the wheat and then following it with double crop beans or double crop situations. That's catching a lot of eyes and attention for managing that cash flow managing your input cost and trying to stretch the stretch the balance sheet I guess in this farm economy. Before we move to cattle I have one big overarching question about the grains we talked about the inflationary trade here with crude oil going over $100 and the funds being record long and core near record long and savings do they keep pushing this thing you see money continue to come into the grains.

8:48So you need to come into the grain space because of the inflation concerns. You got to be cautious when you have funds and manage money as long as they are right now in the grain markets they can liquidate faster than you can react and send this market going the other direction that being said if you look at the COT data in that 2020 to 23 stretch they can get embedded in a long position and these markets can continue to climb higher. I wouldn't want to out guess where they want their money parked and how long they want it there but it certainly feels like the inflation problem isn't going away and some of the tools and tactics that we're using to solve it may actually be pouring a little bit of gasoline on the fire per se. Agreed. Petal market up here today is that all technical that we're seeing here or are we trying to price in some higher cash. Yeah I think cash market supportive of the cattle market and then you got to cut out doing a little bit of work there to to support things.

9:54We've had a nasty 60 70 days here in the cattle market just downtrend so hoping that we're carving out a bottom in this market pivoting to a sideways trend would love to see an uptrend again I'm a producer myself so I'm always wanting to root for a higher market in your cattle complex but yeah good to see the last few days put things together the close outs in these fat cattle right now are really rough. That could hinder how aggressive a feed yard wants to go chase calf prices and stalkers to refill those pins and inventory but we're not seeing that cash market on calves or. Particularly the calves cool off anytime soon and we'd like to see that fat market rebound and rally a little bit here to. Yeah that's a good point where do you think technically you have to see a close in either live or feeder cattle futures to confirm the bottoms in and that we can build on this. I always like to look at you know retracements and then key moving averages the 50 day moving average you look at the 330 level in your October type contracts you look above 220 in that area in your decent and October fat cattle contracts but watch that 50 day moving average across the board.

11:08If we can get a close above that that could continue some momentum to go chase down the hundred and 200 day moving averages. We just got to get all these headlines to quit coming right. This it seems like every day there is something new that comes out of somebody's mouth that can send this market in a in a tizzy so I think if you're in the grain market you've got to be cognizant of that we've seen a nice run here and you've got tremendous amount of headline risk long liquidation risk. And the cattle side of things there's still room for funds to sell this market and liquidate some of the length that they have. But it can go the other way to and that's what I'm hoping for on the cattle side of things. Well I'll hope that thanks so much Brady hug with empower egg trading and markets now you can just pegged toward the anticipation before the big moment the band playing be a drunnel and flowing the confidence that you're about to hit the field and simply dominate. Now you know what it feels like to plan a field of bravant seeds because when you choose bravant seeds you're not looking for a simple win.

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