USFR Weekly Recap - June 23-24, 2018

June 23, 2018 03:30 AM
 


TODAY ON U.S. FARM REPORT
JUNE 23-24, 2018

HEADLINES

WELCOME TO U.S. FARM REPORT. I'M TYNE MORGAN,  AND HERE'S WHAT'S IN STORE OVER THE NEXT 60  MINUTES.  A TRADE WAR HEATS UP WITH FARMERS FEARING WHAT  A FALLOUT WILL MEAN.  "IT'S SCARY, I WISH I WOULD HAVE SOLD MORE EARLIER IN THE WINTER BUT YOU JUST CAN'T PREDICT SOME OF  THESE THINGS."10:03:33>  WHEN THEY'RE TANKING LIKE THAT, I DON'T EVEN CARE TO  LOOK AT THEM. IT MAKES ME UPSET."> THAT'S AS TRUMP'S COMMERCE SECRETARY IS ON THE  HOTSEAT ON THE HILL. THE IMPACT OF TARIFFS IS GETTING REAL.> AS EPA RELEASES IT'S 2019 PLAN FOR THE RFS, IT'S A  BIOFUELS BATTLE IN WASHINGTON.   THIS ISSUE IS DIVISIVE AND OFTEN IT PITS REFINERS VERSUS  AGRICULTURE.> AND IN JOHN'S WORLD 

NEWS
NOW FOR THE NEWS, TRUMP'S TRADE TARIFFS SPOOKING THE MARKET THIS WEEK. THE STOCK MARKET WIPING OUT ITS 2018 GAINS AND FRONT MONTH  SOYBEAN PRICES DROPPING BREIFLY TO THE LOWEST  POINT IN NEARLY A DECADE.JULY CLASS 3 MILK PRICES  LOSING NEARLY TWO DOLLARS IN SINCE LATE MAY. AS  FARMERS WATCH PRICES FADE, IT'S NOW A QUESTION  ON HOW THE ADMINSTRATION WILL CUSHION THE FINANCIAL PAIN.  THE PRESIDENT  THREATENING AN ADDITONAL 200  BILLION DOLLARS WORTH OF TARIFFS ON CHINESE  GOODS.  IN A STATEMENT MONDAY, THE PRESIDENT  INSUTRCTING THE U-S TRADE REPRESENTATIV'S OFFICE  TO IDENTIFY 200 BILLION DOLLARS IN IMPORTS FROM  CHINA THAT WOULD SEE AN ADDITIONAL TARIFF OF 10  PERCENT.  THE WHITE HOUSE SAYING THOSE TARIFFS WILL ONLY  GO INTO EFFECT IF BEIJING RETALIATES OVER THE  FIRST LIST OF 50 BILLION DOLLARS WORTH OF TARIFFS.  TRADE WAR OR NOT, THE STOCK MARKET AND COMMODITY MARKETS  IN A HARD TUMBLE AFTER THE  NEWS HIT.   <THE NEWS SENT THE GRAIN MARKETS SHARPLY LOWER INITIALLY. THE  SOYBEAN MARKET TRADED ITS LOWEST LEVEL IN A SPOT MONTH CONTRACT SINCE DECEMBER 2008. THIS IS THE NEARBY JULY CONTRACTED  BOTTOM NEAR EIGHT DOLLARS AND 41 CENTS PER BUSHEL. SO ALMOST  INTO SOME FRESH 10 YEAR LOWS SPOT MONTH CORN FUTURES TRADED  THEIR LOWEST LEVEL SINCE DECEMBER 2010 17.IT'S TOUGH TO SAY WHAT PORTION OF THE RECENT  LOSSES CAN BE ATTRIBUTED TO TRADE TENSIONS AND WHAT PORTION CAN  BE ATTRIBUTED TO WEATHER0> THE POSSIBEL TRADE WAR WITH CHINA WAS THE TOPIC  OF A HEARING ON CAPITAL HILL THIS WEEK. AND IN THE HOT SEAT, COMMERCE SECRETARY WILBUR ROSS.  ROSS DEFENDING THE PRESIDENT'S TARIFF PLAN,  WHILE SENATORS DRILLED THE SECRETARY ABOUT  PRICE IMPLICATIONS FOR CONSUMERS AND U-S BUSINESSES.   I JUST DON'T SEE HOW DAMAGE POSED ON ALL OF THESE  SECTORS COULD ADVANCE OUR NATIONAL SECURITY."> 4:56  IT'S FRUSTRATING TO WATCH THE ADMINISTRATION'S TRADE  MOVES LOOK LIKE KNEE-JERK IMPULSES THAN ANY KIND OF CAREFULLY THOUGHT-OUT STRATEGY."> THE IMPACT OF TARIFFS IS GETTING REAL. WE'VE WATCHED THE  SOYBEAN MARKETS START TO COLLAPSE FROM UPPER 9 DOLLAR RANGE TO A MID 8 DOLLAR RANGE. 27 "> I MET LAST FRIDAY WITH A DELEGATION OF FARMERS FROM NORTH  DAKOTA. AND THEY VOICED SIMILIAR CONCERNS BUT THEY AMPLIFIED THEY FEEL THE MARKET PRICE AT LEAST OF SOYBEANS THAT THE MARKET  PRICE DECLINE HAS BEEN EXAGGERATED BY SPECULATIVE ACTIVITY.  BUT EXACTLY HOW COULD TRUMP'S TARIFF'S  PAYMENTS PLAY OUT?  FARM JOURNAL WASHINGTON CORRESPONDANT JIM  WIESEMEYER SAYS USDA IS MEETING DAILY ABOUT THE  TOPIC. AND ONE OPTION IS TO TAP ITNO THE COMMODITY CREDIT CORPORATION - OR CCC- WHICH IS A DIVISION  OF USDA CREATED IN 1933. HE SAYS THROUGH THAT PROGRAM, TEH AGENCY  WOULD PURCHASE SOYBEANS TO HELP SUPPORT LOST  REVENUE, THEN THAT PRODUCT WOULD BE DONATED  TO DOMESTIC FOOD PROGRAMS.  THE OTHER OPTION IS DIRECT PAYMENTS- BUT HE SAYS  THAT METHOD IS MERKY.  <IT WOULD BE VERY DIFFICULT AND THAT'S THE COMPLEDXITY OF THIS, SO  FOR EXAMPLE A FARMER WHO DID RETROSPECT BUT AT THE TIME IT LOOKED  LKE A GOOD PRICE WHEN SOYBEAN FUTURES WERE RIGHT AROUND $10, THEY SOLD. NOW, ARE THEY FAULTED BY SELLING? NOW OF COURSE THEY  DIDNT' SELL ALL OF THEIR CROPS, SO DO THEY GET A PORTION OF IT? SEE  THESE ARE THE THORNY ISSUES, THERE'S NO RIGHT ANSWERS HERE. THEY  WOULD BE FAULTED NO MATTER WHAT THEY DO> HOWEVER, WIESEMEYER SAYS TAHT ISSUE IS MESSY BECASUE IT'S DIFFICULT TO DETERMINE HOW MUCH OF  THE MUTED MARKET PRICES ARE DUE TO CHINESE  TRADE FEARS, VERSUS OTHER FACTORS LIKE GOOD  CROP CONDITIONS.   ALSO IN WASHINGTON THIS WEEK, THE HOUSE VOTING  ON THE FARM BILL FOR A SECOND TIME. THE BILL  NARROWLY PASSING WITH A VOTE OF 213 TO 211.  TEH BILL TIES WORK REQURIEMENTS TO SNAP,  MAINSTAISNS CROP INSURANCE, BUT ALSO DESIGNATES  FUNDS TO ESTABLISH A FOOT AND MOUTH DISEASE VACCINE BANK.  THE SENATE IS EXPECTED TO VOTE ON TEH FARM BILL  LAST WEEK.  ONCE THE SENATE PASSES ITS FARM BILL, LEADERS  FROM BOTH CHAMBERS WILL MEET FOR CONFRENCING,  WHERE THEY'LL COMPROMISE THE LEGISLATION INTO  ONE FARM BILL.  AND THE WHITE HOUSE ULTIMATELY WILL NEED TO SIGN  OFF ON FINAL FARM BILL LEGISLATION.  DURING MY TRIP TO THE WHITE HOSUE THIS MONTH, I  ASKED LEGISLATIVE DIRECTOR MARC SHORT IF THE  PRESIDENT WOULD SIGN LEGISLATION THAT DOES NOT INCLUDE WORK REQUIREMENTS FOR SNAP. < WE DON'T WANT ON TALK ABOUT THE HYPOTHETICALS THAT WE WILL OR  WON'T SIGN. THE REALITY IS WE EXPECT THE HOUSE TO PASS A FARM BILL  WITH WORK REQUIREMENTS THIS SUMMER. WE EXPECT THE SENATE BILL TO PASS THIS SUMMER PROBABLY SOMETIME IN THE FALL WILL BE WHAT'S  CALLED A CONFERENCE REPORT TO TRY TO RECONCILE THE TWO BILLS. THE  PRESIDENT'S VERY EAGER TO SIGN A FARM BILL. HE WANTS TO DELIVER ON  THAT FOR FARMERS ACROSS AMERICA.> AS THE TARIFF THREATS PLAY OUT, THE RURAL MAINSTRET INDEX SHOWIGN THE RATE OF FARM LOAN  REJECTIONS ALMOST DOUBLING AMONG BANKS. FOR A FIFTH STRAIGHT MONTH, CREIGHTON UNIVERSITY'S RMI SHOWING THE INDEX ROSE ABOVE  GROWTH NETURAL. BUT WEAK FARM INCOME IS CAUSING MORE BANKS TO  RJECT LOAN REQUESTS. REJECT RATES RISING FROM  24 PERCENT TO 43 PERCENT OVER THE PAST YEAR. THAT'S BASED ON A SURVEY OF BANKERS IN A 10-STATE  REGION.  THE RMI ALSO FOUND NEARLY TWO-THIRDS OF  BANKERS INDICATING THEIR BANKS WERE FORCED TO  INCREASE COLLATERAL REQUIRMENTS ON FARM LOANS  DUE TO WEAK FARM INCOME.  

TEASE
THAT'S IT FOR THE NEWS. MORE WET WEATHER FOR THE NORTHERN CORN BELT AND DRYNESS GRIPPING  OTHER STATES. BUT DOES THAT CHANGE? A CHECK OF  WEATHER IS NEXT. 

WEATHER
METEOROLOGIST MIKE  HOFFMAN JOINS US NOW WITH WEATHER... MIKE, I FEEL  LIKE A BROKEN RECORD. AREAS THAT DIDN'T NEED THE RAIN SAW TOO MUCH THIS WEEK AND OUR VIEWERS  WHO ARE DESPERATE FOR RAIN SAW VERY LITTLE.  I KNOW TYNE AND MANY TIMES IT GETS VERY FRUSTRATING. BUT WHAT REALLY HAPPENS IS WHEN YOU HAVE A DRY AREA, YOU DON'T HAVE ANY WATER EVAPORATING INTO THE AIR AND YOU CAN'T GET ADDITIONAL RAIN. WHEN YOU HAVE A WETTER IT'S VERY HUMID, YOU HAVE A TON OF WATER EVAPORATING INTO THE AIR, AND YOU GET MORE RAIN. SO IT'S HARD TO GET OUT OF THAT PATTERN. I STILL THINK WE'RE GOING TO EVENTUALLY START TO SEE SOME MORE SCATTERED RAINS. WE'VE SEEN SOME FROM MISSOURI, BACK INTO THE PANHANDLE OF TEXAS. BUT WE'VE ALSO SEEN IT GETTING DRYER IN SOUTHERN IN NORTHEASTERN TEXAS, ALTHOUGH THAT AREA HAS HAD A LITTLE BIT OF RAIN OVER THE PAST THREE OR FOUR DAYS, WHICH MAY NOT BE FACTORED INTO THAT WILL HAVE TO WAIT TILL NEXT WEEK ON THAT. BUT YOU CAN SEE OVER THE PAST MONTH HOW THINGS HAVE GOTTEN DRY, YOU'RE IN THESE AREAS, BUT IT'S STILL VERY DRY FROM NORTHERN MISSOURI, THROUGH PARTS OF KANSAS, IN THE PANHANDLE OF TEXAS AND OKLAHOMA, AND ESPECIALLY INTO THE FOUR CORNER REGION. AND THAT'S THE MAIN AREA OF CONCERN AT THIS POINT. HERE'S THE JET STREAM. AS WE START THIS WEEK COMING WEEK, YOU CAN SEE A TROUGH A LITTLE BIT OVER THE OUR THESIS, THAT SLOW MOVING STORM SYSTEM IS FINALLY MOVING AWAY. WE SEE ANOTHER VERY SLOW MOVER, THEY'RE COMING THROUGH THE MIDDLE OF THE COUNTRY AS WE HEAD TOWARD WEDNESDAY IN THE WESTERN GREAT LAKES, PRETTY GOOD TROUGH IN THE ISA WESTERN CANADA THERE AS WELL FOR THE MIDDLE OF NEXT WEEK. AND THEN WE KIND OF GO ZONAL FOR A WHILE WITH A RICH BUILDING BACK INTO THE NORTHEAST AND THE EAST AND THE GREAT LAKES AND THAT COULD REALLY HEAT THINGS UP BY THE END OF NEXT WEEK INTO NEXT WEEKEND FOR THOSE AREAS. BUT THIS LOOKS LIKE ANOTHER TROUGH GOING TO BE DIGGING INTO THE WESTERN PARTS OF THE COUNTRY. AND MAYBE IT'S ANOTHER SLOW MOVER HAS BEEN THE PATTERN WE'VE SEEN. WE JUST NEED SOME DIFFERENT AREAS TO GET SOME RAIN. SO HERE'S WHAT WE'RE THINKING THIS WEEK. STORM SYSTEM OVER THE NORTHERN PLAINS WEEK. COOL FRONT DOWN TO THE SOUTH OF THAT HAVE A LITTLE MOISTURE WEATHER BUT NOT A LOT. VERY HOT SOUTH OF THOSE FRONT SCATTERED SHOWERS AND THUNDERSTORMS ALONG THAT WARM FRONT INTO THE SOUTHEASTERN PART OF THE COUNTRY. DRY AND MILD IN THE GREAT LAKES FROM THE NORTHEAST. AND YOU CAN SEE ANOTHER COLD FRONT COMING INTO THE PACIFIC NORTHWEST. WHAT'S COOL AIR ONCE AGAIN, AND SOME SCATTERED SHOWERS NORTH OF THAT. THAT FRONT MOVES INTO THE NORTHERN PLAINS DOESN'T HAVE A LOT OF MOISTURE WITH IT. IT LOOKS LIKE SCATTERED SHOWERS THOSE CENTRAL CANADA INTO THE CENTRAL GREAT LAKES. AND THEN THESE WILL BE THE AFTERNOON VARIETY HIT AND MISS SHOWERS AND THUNDERSTORMS THROUGH THE TENNESSEE VALLEY IN THE SOUTHEAST. JUST A LITTLE BIT OF LATE AFTERNOON ACTIVITY IN THE SOUTHWEST BY FRIDAY. THEN WE'LL SEE THAT FIRST FRONT OFTEN NORTHEAST COAST DEVELOPING STORM SYSTEM. THE HEAT COMES INTO THE LOWER GREAT LAKES AT LEAST SCATTERED THUNDERSTORMS IN THE SOUTHEAST. AND ALONG THAT WARM FRONT AND THEN THROUGHOUT THE ROCKIES, ESPECIALLY THE EASTERN PORTIONS OF THE ROCKIES. MY 30 DAY OUTLOOK FOR TEMPERATURES I'M GOING BELOW NORMAL IN THE SOUTHWEST ABOVE NORMAL NORTHERN PLAINS IN THE WEST AND THE SOUTHEAST BELOW NORMAL IN THE NORTHEAST AND I'M GOING ABOVE NORMAL IN THAT DRY AREA IN THE CENTRAL PLAINS. OTHERWISE NORMAL 30 DAY OUT LIKE FOR PRECIPITATION BELOW NORMAL NORTHEAST NORTHWEST ABOVE NORMAL IN THE CENTRAL AND SOUTHERN ROCKIES AND I'M GOING NEAR NORMAL IN THE MIDDLE OF THE COUNTRY.

TEASE
THANKS, MIKE. WELL, COMMODITY MARKETS TOOK A HARD TUMBLE AGAIN THIS WEEK. BUT IS IT CHINA  THAT'S JUST TO BLAME? MATT BENNETT AND DUWAYNE  BOSSE GIVE THEIR THOUGHTS NEXT.  

ROUNDTABLE 1
WELCOME BACK TO U.S. FARM REPORT THIS WEEKEND WILL I'M EXCITED FOR THIS ROUNDTABLE BECAUSE I HAVE WAIT BOSSE AS WELL AS MATT BENNETT AND NOT ONLY ARE THEY INVOLVED IN THE MARKETS EVERYDAY BUT THEY'RE BOTH FARMERS. AND SO BEFORE WE START WITH THE MARKETING DISCUSSION DUANE WE'LL START WITH YOU IN SOUTH DAKOTA WHERE YOU'RE LOCATED. HOW DO THINGS LOOK I'M IN NORTHEAST PART OF SOUTH DAKOTA. THINGS LOOK GREAT UP THERE RIGHT NOW IS SOUTHEAST OUTCOACHED GOT A LOT OF RAIN THIS LAST WEEK SOME FLOODING DOWN THERE BUT NO WHERE I'M AT I CAN'T BE HAPPIER RIGHT NOW. THINGS LOOK VERY GOOD. NOW WHAT ABOUT IN YOUR BACKYARD. YOU KNOW EARLY ON OF COURSE WE WERE WE WERE PRETTY COOL. I ACTUALLY GOT THE CROP IN THE GROUND IN REALLY GOOD SHAPE THERE IN LATE APRIL. SUPER DRY AFTER WE PUT THE CROP IN THE GROUND WHICH WAS PERFECT FOR THE CORN CROP AND THEN WE ENDED UP WITH ALL THIS RAIN LAST WEEK BUT WE SOAKED IT UP AND TO BE HONEST WITH YOU LOOKING AT MY CLIMATE YOU KNOW AERIAL IMAGES I DON'T HAVE ANY HOLES IN MY CORN CROP RIGHT NOW THE BEAN CROPS STRUGGLING A LITTLE BIT JUST TOO MUCH WATER. WELL AND YOU SAID THERE'S ALSO ON YOUR DRIVE UP I MEAN YOU DROVE FROM THAT PART OF ILLINOIS UP TO INDIANA. TOO MUCH RAIN IN OUR NECK OF THE WOODS HERE AT THE STUDIO AND AROUND SOUTH BEND INDIANA. IT'S BEEN RAINING NONSTOP AND YOU SAW THAT KIND OF WHEN YOU GOT UP IN NORTHERN ILLINOIS AND INTO NORTHERN ILLINOIS WHERE THERE'S WATER STANDING EVERYWHERE. IT'S SIGNIFICANT YOU KNOW DEFINITELY A LOT OF HOLES AND FIELDS OF COURSE A LOT OF SATURATED THE BEANS I THINK ARE STRUGGLING MORE THAN ANYTHING. BUT OF COURSE THERE'S GOING TO BE SOME HOLES ON THE CORN FIELDS AS WELL. WELL SOYBEANS AREN'T ONLY STRUGGLING IN THE FIELD THEY'RE ALSO STRUGGLING IN CHICAGO ON THE CHICAGO MERCANTILE EXCHANGE WHEN YOU INFLATED PRICES THIS WEEK. AND WE SEE THE MASSIVE DROP THAT WE SAW ON TUESDAY. I KNOW WE RECOVERED SOME BUT IS IT JUST CHINA TO BLAME FOR ALL OF THIS RIGHT NOW. NO IT'S NOT JUST CHINA. I MEAN THAT IS DEFINITELY A HEADLINE WE'RE WATCHING ALL THE TRADE WARS IT'S NEGATIVE EVERY NIGHT. YOU KNOW I DON'T KNOW HOW HIGH WE KEEP RAISING THIS TARIFF IT'S 50 BILLION IT'S 200 BILLION NEXT IT'S A GOOD JILIAN BILLION NEXT WEEK PROBABLY. BUT NOW WE ALSO GOT VERY GOOD WEATHER LIKE WE'RE TALKING ABOUT RAIN IN LATE JUNE EARLY JULY EVEN IF IT'S TOO MUCH IS NOT GOING TO REBOUND THIS MARKET. HOW MUCH DOWNSIDE RISK SPECIFICALLY IN SWEEPINGS DO YOU THINK WE HAVE AT THIS POINT. YOU KNOW PERSONALLY SPEAKING I DON'T SEE THAT WE HAVE A LOT OF DOWNSIDE RISK. IT'S REALLY HARD TO TRADE THIS SOYBEAN MARKET THOUGH AND I DON'T HAVE MUCH EXPERIENCE IN A TRADE WAR. SO IT'S PRETTY TOUGH FOR ME TO TELL YOU HOW MUCH DOWNSIDE WE HAVE. PERSONALLY THOUGH I FEEL LIKE WE'VE GOT TO BE IN AN AREA WHERE WE'VE GOT TO HAVE SOME SUPPORT. SURE SEEMS TO ME LIKE THE BEAN MARKET COMING OFF THE LOWS LIKE IT DID ON TUESDAY AND THEN COMING INTO THE END OF THE WEEK AND TRADE AND THE WAY THAT IT DID IT FEELS TO ME LIKE WE'VE SAID A LOW IN PLACE FOR THE TIME BEING. IT SEEMS LIKE THE NEXT TEST WILL BE POSSIBLY. WE'VE GOT THE ACREAGE REPORT WHICH WE'RE GOING TO HIT ON IN A MINUTE. BUT AN EXPERT TEST WHEN IT COMES TO THIS TRADE ISSUE IS IF WE SEE THESE TARIFFS ACTUALLY GOING INTO PLACE AND SO IF WE DO LET'S SAY WE DO HAVE THAT HAPPEN THEN DO YOU THINK WE COULD FALL FARTHER. WELL I THINK WE COULD IN A VERY SHORT TERM. BUT I'M ONE THAT THINKS THAT THE THREAT OF A TARIFF IS WORSE THAN THE ACTUAL TARIFF. I MEAN I THINK WE'VE BASICALLY PRICED IT IN. YOU LOOK AT THE PRICE OF BRAZILIAN BEANS THAT THEY'RE POOR COMPARED TO OURS RIGHT NOW. WE'VE KIND OF PRICED IN ABOUT AS BAD AS THE TARIFF CAN BE UNLESS WE GET THOSE CRAZY HIGH NUMBERS. SO I'M WITH MATT I DON'T I DON'T SEE A LOT OF DOWNSIDE RISK IN BEANS ANYMORE I EVEN WENT ONE STEP FURTHER AND LIFT SOME OF OUR HEDGES THIS WEEK WHICH IS I KNOW A WRITTEN RULE YOU'RE NOT SUPPOSED TO DO BUT FOR CERTAIN CLIENTS I DON'T MIND DOING IT DOWN HERE BECAUSE IT'S I DON'T THINK THERE'S A LOT OF DOWNSIDE RISK LONG TERM I THINK THAT TARIFFS ACTUALLY GET FIGURED OUT COME FALL. AND I THINK WE HAVE A BETTER MARKET THAN I HOPE WE DO. SO MATT WHAT ABOUT THESE PRODUCERS WHO WERE LIKE WELL I WISH I WOULD'VE SOLD MORE OF MY BEANS ABOUT TEN DOLLARS. ARE YOU TELLING THEM RIGHT NOW JUST TO WAIT IT OUT. OR DO YOU THINK THEY SHOULD BE ACTING AT THIS POINT. YEAH TYPICALLY PANIC SELLING IS JUST NOT SOMETHING THAT WORKS OUT VERY WELL FOR ANYBODY. AND SO AT THIS STAGE OF THE GAME PRODUCERS WHO FEEL LIKE THEY WISH THEY WOULD'VE DONE SOMETHING DIFFERENT I'M ASKING THEM CAN YOU MAKE MONEY AT THESE PRICES. AND IF YOU CAN'T MAKE A WHOLE LOT OF MONEY AT THESE PRICES SITTING HERE IN THE MONTH OF JUNE WHY IN THE WORLD WOULD I GET TERRIBLY AGGRESSIVE. I THINK WE NEED TO WAIT AND LET THE DUST SETTLE FIRST OF ALL. SECOND OF ALL SEE WHAT KIND OF WEATHER WE GET. DELL WE'VE BEEN AWFULLY HOT IN THE MONTH OF MAY AND IN THE MONTH OF JUNE IF WE CONTINUE WITH THESE KIND OF TEMPERATURES ARE GOING TO BE TOUGH FOR US TO HAVE A REALLY LARGE SOYBEAN CROP THIS YEAR. I THINK IT'S A LITTLE BIT EARLY TO GET TO BE PANICKING. DUANE IS THERE ANYTHING THAT PEOPLE CAN DO TO REALLY THINK OUTSIDE OF THE BOX RIGHT NOW AND USE THIS MARKET TO THEIR ADVANTAGE. WELL YEAH I THINK THAT'S EXACTLY WHAT THEY SHOULD DO. THEY SHOULD THINK BACK TO THIS WINTER WHAT WE HAD IN MARKETING PLANS AND WHERE WE THOUGHT PRICES COULD GO. WORLD STOCKS ESPECIALLY WORLD CORN STOCKS HELD THEIR DROP IN TAKE ADVANTAGE OF THE MARKET. DUANE WILD SWINGS LIKE THIS YOU SAID EXISTING HEDGES FOR SOME NOT ALL. MAYBE ROLLING DOWN BUYING SOME CALLS OR NOW BECAUSE YOU THINK ABOUT IT. THERE'S A LOT OF WEATHER STILL IN FRONT OF THIS MARKET. I KNOW THE WINDOW IS NARROWING QUICKLY. BUT ANYTHING COULD STILL HAPPEN. YOU KNOW SOYBEAN YIELDS ARE GOING TO GET MADE IN AUGUST NO MATTER WHAT WE THINK. NOW WHAT IF REALLY QUICK. WHAT IF WE DO SEE USDA INCREASE SOYBEAN ACRES NEXT WEEK. WELL OBVIOUSLY IT PUTS A LID ON PRICES FOR THE TIME BEING WITH EVERYTHING ELSE WE'VE GOT GOING ON BUT IF WE GO AHEAD AND LIFT TARIFFS ON THE NEXT DAY I GUARANTEE YOU THE INFRACTIONS ARE GOING TO GO UP. WHAT DO YOU THINK BEAN ACREAGE WOULD ARES WOULD USDA HAVE TO PUT OUT THAT WOULD BE BULLISH. IT'S BUSINESS TO BE BULLISH OR JUST STEADY WOULD BE BULLISH. BUT I DON'T THINK THEY WILL I THINK IT'LL BE ONE ONE AND A HALF MILLION MORE. ALL RIGHT. WELL WHAT ARE THEY EXPECTING FOR CORN ACREAGE BECAUSE THAT WE'RE ALSO WATCHING THAT HEADING INTO NEXT WEEK. WE NEED TO COVER WHEAT AND ALSO WE'LL TALK A LITTLE BIT ABOUT CATTLE SO WE'LL DO THAT COMING UP LATER IN THE PROGRAM. STAY WITH US. WE HAVE MUCH MORE ON U.S. FARM REPORT NEXT. 

JOHN’S WORLD
A MAJOR MERGER IN AGRICULTURE IS COMING WITH A NAME CHANGE.  JOHN PHIPPS HAS MROE IN THIS WEEK'S JOHN'S WORLD.  JOHN.  AS PART OF THE ACQUISITION DEAL, THE GERMAN PHARMACEUTICAL  GIANT BAYER, WILL DROP THE NAME MONSANTO.  MONSANTO IS  ARGUABLY ONE OF THE MORE TOXIC COMPANY NAMES AND EVERY  ARTICLE I READ ABOUT THIS MOVE QUOTED SOME CRITIC AS SAYING THE  SWITCH WOULD NOT LESSEN THE ANIMUS AGAINST THE COMPANY. I  DISAGREE. NAMES HAVE MORE POWER IN OUR MINDS THAN WE THINK.  RESEARCH IS AMBIVALENT ON WHETHER CORPORATE NAME CHANGES  INCREASE COMPANY VALUE, BUT THIS TYPE OF NAME LOSS LOOKS LIKE A  WINNER TO ME. WITHOUT THE FAMILIAR TITLE TO CONNECT CONSUMERS TO  REAL OR IMAGINED OUTRAGES, OPPOSITION CAN BECOME UNFOCUSED. ADD IN THE RELOCATION OF CORPORATE HEADQUARTERS FROM THE US TO  GERMANY, AND I COULD SEE PROTESTS IN THE US LOSING STEAM. TO  BE SURE, THE BRAND NAMES LIKE ROUNDUP WILL LIKELY STILL ATTRACT COMPLAINTS, BUT IT WAS THE MANUFACTURED IMAGE OF AN UNCARING  AND GREEDY BUSINESS ORGANIZATION THAT PROVIDED A TARGET FOR  MONSANTO OPPONENTS. WE MAY GO THROUGH A PERIOD OF REFERRING  TO THE "COMPANY FORMERLY KNOWN AS" JUST LIKE WE DID FOR THE  FORMER SOVIET UNION, BUT OVER THE YEARS, I THINK THIS MERGER WILL  DEFLATE SOME OF THE OVERBLOWN HYSTERIA AROUND GMOS AND  PESTICIDES. I AM NOT SAYING IT WILL RESOLVE ANY OF THE VERY REAL  ISSUES AROUND MONSANTO'S TECHNOLOGY, BUT LOSING THE NAME WILL  HAVE AN EFFECT. IT'S JUST NOT THE SAME WHEN THE ADVERSARY WHOSE  NAME WAS USED AS A TRIGGER WORD RETIRES FROM THE GAME. THANKS, JOHN. 

TEASE
STILL TO COME, A PASSIONATE TRACTOR COLLECTOR FROM THE CHEESE STATE.  

TRACTOR TALES
HEY FOLKS WELCOME BACK TO TRAKTOR TALES. THIS WEEK WERE IN  WESTERN WISCONSIN. AND WE'VE GOT A TREAT FOR YOU HERE WITH BILL  MEYER. NOW BILL BEFORE WE HOP IN AND TALK ABOUT YOUR BEAUTIFUL JOHN HERE 60 HERE WE GOT TO TALK ABOUT JOHN HERE GOES BACK TO  THE VERY START. WHY DON'T YOU TELL US ABOUT THAT PIECE OF HISTORY.  YEAH IT KIND OF STARTED ON DAY ONE. MY DAD BOUGHT A NEW B JOHN DEERE THE DAY I WAS BORN. WOW WHAT A DAY FOR YOUR DAD. YEAH  GOOD TO BE DEAL I THINK. TELL US ABOUT YOUR BEAUTIFUL 1954 JOHN  YOU'RE 60. MY GRANDPA BOUGHT THAT TRACTOR BRAND NEW IN THE SUMMER 54 AND MY DAD DROVE IT HOME FROM THE DEALER AND HE  PUT IT IN THE TRASH MACHINE AND AT THE END OF THE DAY THE FRONT  TIRES WERE WORKED INTO THE GROUND SO IT WAS THE FIRST TRACTOR IN THE AREA THAT HAD FACTORY POWER STEERING. AH SO THE NEIGHBORS WERE  VERY INTERESTED. SO THE THRESHING CREW KIND OF WAS CHECKING IT  OUT. AND THIS TRACTOR STAYED IN THE FAMILY. MY DAD OWNED OR FOR JUST A FEW YEARS AND I'VE HAD IT FOR 38 YEARS 38 YEARS. NOW I  KNOW BILL YOU'RE YOU'RE BIG INTO THE TRACTOR RIDES IS THAT CORRECT?  YES GREG YOU EVER TAKE THE 60 OUT ON SOME RIGHT. YES. WE WHEN WE FIRST STARTED THIS IS WHAT WE TOOK ALL THE TIME. I WOULD  SEE THAT TRACTOR COULD HAVE 2 TO 3000 MILES ON A TRACTOR I'D GET  AN OLD TRACTOR AS YOU WERE MENTIONING THAT YOU'RE NOT REALLY MUCH FOR THE SHORT TRACTOR RIDES. NO WE LIKE TO GO ON THE LONGER DISTANCE ONES. WHAT DOES THIS  TRACTOR MEAN TO YOU MEAN THAT IT'S BEEN IN YOUR FAMILY ALL THESE  YEARS. WELL IT'S PRETTY SPECIAL YOU KNOW IT WAS. OTHER THAN THE B  IT'S THE FIRST TRACTOR I DROVE AND WHEN MY GRANDFATHER WAS STILL  CUTTING GRAIN YOU KNOW HE'D BE ON THE BINDER AND MAYBE DRIVE THE TRACTOR. IT WAS KIND OF A UNIQUE DEAL. SO THE 60S WILL NEVER  LEAVE THE COLLECTION NO.  

TEASE
GREG WILL REJOIN US LATER IN TEH SHOW AS WE HEAD  ON TEH ROAD TO FRONTIER AG & TURF.  BUT UP NEXT, IT'S A BIOFUELS BATTLE THAT HAS OIL  AND ETHANOL AT ODDS. BUT WHAT WILL IT TAKE FOR  GAS STATIOSN TO OFFER E-15 YEAR ROUND? THAT'S  NEXT.  

FARM JOURNAL REPORT
EPA AND USDA LEADERS WERE SET THIS WEEK TO ANNOUNCE RENEWABLE VOLUME OBLIGATIONS FOR  2019. BUT THAT WAS DERAILED AND DELAYED, WITH SOME  REPORTS POINTING TO OUTRAGE FROM THE OIL  INDUSTRY ABOUT WHAT THE ANNOUNCEMENT WOULD  DUE TO REALLOCATED BIOFUEL OBLIGATIONS.  BUT IT'S A BATTLE OVER BIOFUELS THAT'S BEEN  BREWING ALL YEAR. AND THAT'S THIS WEEK'S FARM JOURNAL REPORT.  IT'S A BIOFUELS BATTLE INGRAINED IN CONTROVERSY.  AS RENEWABLE FUELS GROUPS PUSH FOR THE TRUMP ADMINSTRATION TO ALLOW THE SALE OF E-15 YEAR  ROUND THROUGH AN R-V-P WAIVER. <THE FUEL REGULSATONS CHANGED ON JUNE 1, SO THEY COULD HAVE  DONE AN EMERGECY ORDER, AN EXPIDITED ORDER AND ALLOWED 15  PERCENT ETHANOL BLENDS THIS SUMMER>  . NEWS RIPPLED THROUGH THE AGRICULTURE SECTOR  EARLIER THIS MONTH THAT THE PRESIDENT PLANNED  TO RELEASE A BIOFUELS PLAN THAT ALLOWED E15 YEAR-ROUND, BUT THE RUMORED PLAN ALSO WOULD  PLACE RENEWABLE INDENTICATION NUMBERS, OR RINS-  ON ETHANOL EXPORTS.  AFTER AN UPROAR FROM PRO-ETHANOL GROUPS, THE  PRESIDENT PAUSED THAT RELEASE. AGRICULTURE  SECRETARY SONNY PERDUE TALKING TO U-S FARM  REPORT THE MORNING AFTER THAT DECISION. WELL THE PRESIDENT TOLD ME LAST NIGHT HE WAS NOT GOING TO  SIGN ANYTHING THAT FARMERS WEREN'T HAPPY WITH IT. YOU KNOW  THERE'S BEEN SOME CONCERN OVER ATTACHING RINS TO THE EXPORT CREDITS THERE. AND I TOLD HIM AND COMMUNICATE HIM THAT WAS  GOING TO BE A LACK OF JOY EVEN WITH THE E15 WAIVER. MUTING THAT WITH THE EXPORT RINS WAS GOING TO REALLY CANCEL THE PARTY.> <I THINK THAT'S AGAIN A SUPPORT THAT HE'S TRIED TO GIVE OUR FARMERS ALL ALONG AND FULFILL HIS COMMITMENT TO RFS HE MADE DURING THE  CAMPAIGN.> IT'S THAT COMMITTMENT FROM THE CAMPAIGN TRAIL  THAT HAD THE RENEWABLE FUELS ASSOCIATION  THANKING THE PRESIDENT IN THIS COMMERCIAL.  <FAMILY FARMS ARE THE BACKBONE OF THIS COUNTRY. WE ARE GOING TO RPOTECT THE RENEWABLE FUELS STANDARD. THANK YOU MR PRESIDENT FOR  YORU LEADERSHIP.   AS R-F-A AND OTHER GROUPS CONTINUE TO HOLD THE  PRESIDENT' ADINSTRATION TO THAT PROMISE, PERDUE  SAYS SUMMERTIME E15 IS STILL IN THE WORKS..  WE DON'T NEED TO LAY OUT THE PATHWAY NECESSARILY BUT WE WON'T STOP. IT'S IMPORTANT WE THINK IT'S THE RIGHT THING TO DO. WE  THINK TO GIVE CONSUMERS A CHOICE OF HAVING THAT ON A YEAR ROUND  BASIS. SCIENTIFICALLY THERE'S NO REASON NOT TO DO THAT, BUT WE'LL  HAVE TO SEE HOW WE GO FORWARD WE'RE NOT GOING TO STOP  WORKING.> WHITE HOUSE LEGISLATIVE DIRECTOR MARC SHORT  TELLING U-S FARM REPORT THAT WHILE THE ADMINSTRATION UNDERSTANDS AGRICULTURE'S DESIRES ON THE R-F-S, AN R-V-P WAIVER MAY NOT  COME WITHOUT CONCESSIONS.  < THIS ISSUE IS DIVISIVE AND OFTEN IT PITS REFINERS VERSUS  AGRICULTURE. WHAT THE PRESIDENT WORKING ON WITH SEVERAL MEMBERS OF CONGRESS IS TO SAY IF WE WERE TO PROVIDE E15 FOR 12  MONTHS A YEAR AS A RULE , THEN COULD WE ALSO PROVIDE SOME RELIEF  TO REFINERS THAT ALLOWS THEM TO GET CREDIT FOR EXPORTING RINS, WHICH IS REALLY PRETTY TECHNICAL, BUT WE THINK THAT WOULD HELP  BOOST DEMAND FOR ETHANOL, DEMAND FOR ONE WOULD HELP FARMERS.  WE THINK THAT'S A WIN WIN FLORMULA.>  WHILE CONCESSIONS MAY BE INEVITABLE,  SHORT SAYS  THE BIOFUELS' INDUSTRY'S VOICE IS BEING HEARD.  I THINK SOME ETHANOL LOBBIES ARE PRETTY STRONGLY BELIEVE THEY  WANT TO JUST GET E15 12 MONTHS WITHOUT ANY CONCESSIONS TO THE  REFINERS. SO I THINK THEY'RE PUTTING A LITTLE BIT OF A STOP ON THAT. BUT  I'M SO OPTIMISTIC WE'LL GET THERE.> ONE ISSUE CREATING WAVES WITHIN THE  ADMINSTRATION IS EPA'S RECENT WORK TO GRANT SMALL REFINERY WAIVERS, WHEN IN REALITY, COURT  DOCUMENTS SHOW THOSE WAIVERS ARE GOING TO  LARGE OIL REFINERS.    WE'RE FAIRLY FRUSTRATED ABOUT THAT, HONESTLY, AND I VIEWED IT  SORT OF AS A CIRCUMVENTION OF WHAT THE PRESIDENT HAS INSISTED  OVER THE 15 BILLION GALLON. I THINK MOST IN AG INDUSTRY AND ETHANOL  INDUSTRY FELT THE SAME WAY. > IT'S THAT ACTION THAT TOOK OVER SENATE FARM BILL  DISCUSSIONS THIS MONTH.  . <RECENT REPORTS INDICATE THAT THOUSANDS OF SMALL REFINERY WAIVERS  AHVE BEEN GRANTED TO LARGE REFINING COMPANIES, EFFECTIVELY  REDUCING THE 15 BILLION GALLON TARGET FOR THE RVO, THE RENEWABLE  VOLUME OBLIGATIONS. TMINNESOTA SENATOR AMY KLOBACHAR WITHDRAWING HER BIOEFUELS PROPOSAL FROM THE SENATE FARM  BILL, BUT SAYING IT'S A FIGHT SHE'S NOT GIVING UP.  <RECENT REPORTS HAVE NOTEDT HAT THE EPA HAS ALREAD ISSUED 25 HARDSHIP WIVERS SO FAR THIS YEAR. I'M NOT ASKING FOR A VOTE, BUT I  WILL CONTINUE TO WORK TO ASSURE THAT ADDITIONAL ACTIONS AREN'T  TAKEN TO UNDERMINE THE RFS AND MINNESOTA PRODUCERS> KLOBACHAR ALONG WITH IOWA SENATOR CHUCK  GRASSLEY SENDING A NOTE TO THE EPA IN APRIL TO  LET THE AGENCY KNOW THE WAIVERS ARE BAD FOR  THE INDUSTRY AND THE R-F-S.  <PRUITT WAS IN KANSAS AND THE NEWS REPORTS SAY THAT HE SAYS THE AUTHORITY FOR WH EN WAIVERS ARE GIVEN FOR THOSE GALLONS THAT  AREN'T MIXED BECAUSE OF THAT WAIVER, THAT HE CAN REALLOCATE. WELL,  HE OUGHT TO BE REALLOCATING> ETHNOL GROUPS PETITIONING EPA THIS WEEK TO  CHANGE ITS REGULATIONS TO ACCOUNT FOR LOST  VOLUMES OF RENEWABLE FUEL..   MIXED MESSAGES FROM EPA ADMINSTRATOR PRUITT  HAS BEEN A VOCALIZED PAIN POINT FOR IOWA SENATOR  CHUCK GRASSLEY.  S <IF PRUITT CAN'T DELIVER, I WANT SOMEONE ELSE IN THERE WHO CAN DO  IT> GRASSLEY SAYS EXCEPT FOR THE WORK FROM PRUITT  ON THE R-F-S, HE'S HAPPY WITH THE ADMINSTRATOR'S  RESUME AT THE EPA.  BUT IT'S THE ISSUE OVER THE R-F- S THAT'S THE REASON GRASSLEY IS ASKING FOR HIM TO  QUIT. <ALL I CAN DO IS ASK FOR RESIGNATION OR SAY HE OUGHT TO RESIGN. OR  SAY THAT I'M THROUGH WITH HIM. BUT ONLY THE PRESIDENT CAN FIRE HIM  AND RIGHT NOW I DON'T THINK THE PRESIDENT IS INCLINED TO FIRE HIM> GRASSLEY MADE THOSE COMMENTS IN MAY. AND JUST  LAST WEEK, TRUMP TELLING REPORTERS AT THE WHITE HOUSE THAT HE'S NOT HAPPY WITH CERTAIN ASPECTS  OF THE ETHICS AND SPENDING SCANDALS INVOLVING PRUITT. BUT ADDED THAT PRUITT HAS, QUOTE, DONE A FANTASTIC JOB RUNNING THE EPA, WHICH IS VERY  OVERRIDING, END QUOTE.  AS PRUITT FACES MORE THAN A DOZEN FEDERAL  INVESTIGATIONS FOR CONTROVERSIAL ACTIONS, IT'S  QUESTIONS ABOUT OVER THE R-F-S FARM GROUPS  HOPE GET CLEARED UP SOON, AS CORN PRICES ARE IN  A FREE FALL, NOW BACK BELOW BREAK-EVEN PRICES  ON THE FARM.  

TEASE
ETHANOL IS ALSO THE TOPIC OF THIS WEEK'S CUSTOMER SUPPORT LATER IN THE SHOW. BUT FIRST, WE NEED TO TAKE A QUICK BREAK THEN  WE'LL HAVE A LOOK AT LIVESTOCK MARKETS. DUWAYNE  BOSSEE AND MATT BENNETT ARE BACK IN TEH STUDIO  NEXT.  

ROUNDTABLE 2
WELCOME BACK TO THE U.S. FARM REPORT. WELL LET'S HIT ON CORN FIRST DUWAYNE AND MATT. YOU KNOW WE'VE HAD SOME ANALYSTS ON THE SHOW THERE SAYING YOU KNOW THINGS ARE JUST DIFFERENT THIS YEAR WHEN YOU LOOK AT WORLD DEMAND YOU LOOK AT STOCKS. THERE'S A STORE THAT'S POSSIBLY BREWING FOR THE CORN MARKET YET YOU KNOW WE'VE SEEN SOME PRESSURE AS OF LATE. SO DO YOU THINK THAT'S TRUE. DOING. OH YEAH I THINK IT'S A TOTAL DIFFERENT YEAR. JUST ALL YOU GOT TO DO IS GO BACK AND LOOK AT THE WORLD STOCKS. AND WE TALKED ABOUT IT THIS WINTER MATT AND I DID A LOT TOO AND IT KEEPS GETTING A BETTER STORY ALL THE TIME. REMEMBER IT'S NOT JUST THE U.S.. YOU KNOW IF CHINA HAS PROBLEMS WITH THEIR PRODUCTION THAT ALL'S IN THIS WORLD STOCK GETS EVEN TIGHTER. I THINK WE GOT A RECORD DROP IN WORLD PRODUCTION YEAR OVER YEAR. SO NO THERE IS A BULLISH STORY OUT THERE AND I DON'T THINK THERE'S A LOT MORE PRESSURE. THE DOWNSIDE HERE IN THE CORN MARKET WE'RE ASSUMING LIKE A 180 YIELD RIGHT NOW ARE WE THINK SO ASSUMING A 1 IN THE YIELD ON ONE ACREAGE. WELL I THINK THAT I THINK A LOT OF PEOPLE IN THE MARKET HAVE KIND OF TICKED UP THEIR ACREAGE EARLIER IN THE SPRING YOU KNOW BECAUSE THE PRICES WERE A LITTLE BIT HIGHER BUT BOY I DON'T KNOW IF I WANT TO JUMP IN THAT BOAT JUST YET AT THIS POINT. I'M STILL FAIRLY CLOSE TO 88. I WAS ORIGINALLY A 180 GUY OVERALL BUT I'M NOT SO SURE THAT SOYBEAN ACRES ARE GOING TO BE ABOVE 90.  KIND OF LIKE DUWAYNE'S SUGGESTING IF THAT'S THE CASE. YOU KNOW I THINK IT'S PRETTY HARD TO GET CORN A WHOLE LOT ABOVE THE 88 THAT WE'RE TALKING ABOUT RIGHT NOW. SO WHAT THEN. WHAT I'M ASKING THE SAME QUESTION I ASKED FOR BEANS WHAT ACREAGE DO YOU THINK THAT USDA WOULD RELEASE. THAT WOULD BE BULLISH FOR CORN STEADY OR EVEN ONLY SLIGHTLY HIGHER WOULD BE BULLISH FOR CORN BECAUSE EVERYONE'S THINKING THIS MILLION UP BUT I KNOW MATT AND I ARE AGREEMENT. WE DON'T THINK IT CHANGES IN THE BIG BULLISH STORY. WHAT IF THEY ACTUALLY DECREASE THAT ACRES JUST A LITTLE BIT. YOU THINK THERE'S A CHANCE. I MEAN THERE'S ALWAYS A CHANCE THAT I REALLY DO. I MEAN JUST DOING THE MATH I ALWAYS STRUGGLE TO PUT ACRES INTO CORN BECAUSE WE KNOW COTTON GAINED ACRES. WHAT IF WE EVEN ADDED A MILLION ACRES ON CORN. LET'S SAY WE SAY TREND LINE YIELD. WHAT WOULD THAT DO TO BALANCE SHEETS AT THE END OF THE YEAR. WELL THE BOTTOM LINE IS IS THAT BOTH FOR OLD AND NEW U.S. AND WORLD STOCKS ARE SHRINKING. AND SO IF YOU HAD A MILLION ACRES OF CORN YOU BETTER HAVE AN AWFULLY ROBUST YIELD. BECAUSE IF YOU'RE IF YOU'RE IF YOU'RE TALKING 88 WITH NORMAL HARVESTED ACRES YOU NEED ABOUT 183 ACTUAL YIELD JUST TO KEEP YOUR CARRY OVER THE SAME YEAR ON YEAR IN THE SPRING. ADD ONE MILLION ACRES AND YOU'RE STILL GOING TO NEED OVER 180 AND NEEDING A 180 TO KEEP STOCKS THE SAME. IT'S PRETTY FRIENDLY. YEAH. OH I COMPLETELY AGREE. I THINK THE ONLY THING IS IF THEY DO ADD A LOT MORE ACRES THAN MET AND I THINK YOU PROBABLY JUST DON'T HAVE US BACK ON THE SHORE AS SOON AS NORMAL. YEAH NO COUNTER EGGS BEFORE THEY HATCH. WELL OUR CHICKENS BEFORE THEY HATCH. SO IF WE LOOK AT YIELD WE LOOK AT ACREAGE WE LOOK AT ALL OF THESE ESTIMATES LET'S SAY WE DO SEE A MILLION INCREASE IN ACRES OR LESS. REALISTICALLY WHAT ARE WE TALKING ABOUT FROM PRICES THIS YEAR. WELL THAT'S GOING TO DEPEND ON WHETHER THE LAST COUPLE OF MONTHS HERE. MY THOUGHT IS JUST LIKE WHAT MATHS AND I CAN ALMOST SEE HIS SPREADSHEET IN MY MIND AS HE'S TALKING YOU'LL THAT ENDING STOCK IS GOING DOWN NO MATTER WHAT. THROW ONE IN THERE. SO I SEE HIGHER PRICES IN THE FUTURE. IS THERE A WORLD STORY IN WHEAT RIGHT NOW. I WOULDN'T SAY A BIG STORY BUT THERE IS A STORY THAT RUSSIA IS GOING TO HAVE LESS OF A CROP THAN LAST YEAR AUSTRALIA MIGHT HAVE PROBLEMS. EUROPE STARTING TO GET REALLY HOT NEXT COUPLE OF WEEKS. THERE COULD BE A BULLISH STORY IN WHEAT. NOW WHAT WILL PROBABLY DO IS WILL JACK UP THE PRICE WAY TOO FAST IN OUR PRICE OURSELVES OUT OF THE EXPORT MARKET. IS THAT WHAT HAPPENED LAST TIME? YEP. WHEN WE LOOKED AT CATTLE IS THERE ANY STORY RIGHT NOW IN THE CATTLE MARKET. THINK THERE'S A BIG STORY I THINK THE INVENTORY OBVIOUSLY IS RATHER LARGE I THINK YOU KNOW USUALLY WE HAVE FAIRLY GOOD DEMAND THIS TIME OF YEAR BUT I LOOK AT THE CASH CATTLE MARKET AND IT'S PRETTY DECENT COMPARED TO THE BOARD OF TRADE WE'RE STILL RUN AND OVERS IN MOST PLACES SO YOU DON'T LOOK FOR CATTLE TO RALLY SHARPLY BY ANY MEANS BUT I'M BY NO MEANS BEARISH CATTLE RIGHT NOW. WHAT DO YOU THINK KEEPS A LID ON THESE CATTLE PRICES. IS IT STILL SUPPLY. IT'S STILL TOO MUCH SUPPLY BUT THIS WALL OF CATTLE IS NOT THE BIG FEAR THAT EVERYBODY THOUGHT BEFORE. SO I'M WITH MATT GENERALLY HIGHER PRICES MOVING FORWARD. WHY IS THAT NOT THE BIG FEAR THAT EVERYONE THOUGHT I DON'T THINK IT'S AS BIG OF A WALL AS THEY THOUGHT AND CATTLE TEND TO CLIMB WALLS OF COURSE SO I KNOW IT'S JUST NOT NOT AS HUGE OF AN INVENTORY AS WE THOUGHT A COUPLE OF MONTHS AGO BUT IT LOOKS LIKE DOMESTIC DEMAND MAY HOLD ME NOW AND EXPORTS ARE GOOD. WHAT ARE WE UP 21 PERCENT YEAR OVER YEAR ON BEEF EXPORTS. THAT'S VERY GOOD THAT'S WITH YOU KNOW IN THE FACE OF ALL THESE TARIFFS ON THEM BUT NOT ENOUGH TO REALLY MOVE PRICES THAT MUCH. I DON'T THINK YOU'RE GOING TO SEE ANY STORY ANY SHARP RALLIES BY ANY STRETCH OF THE IMAGINATION. ALL RIGHT WELL WE NEED TO TAKE A QUICK BREAK AND THEN WE'LL BE BACK ON THE ROAD WITH MACHINERY. THIS TIME WITH A TRIP TO WISCONSIN. STAY WITH US. 

ON THE ROAD WITH MACHINERY PETE
IT'S A STATE THAT'S MADE HEADLIENS LATELY FOR DAIRIES DISAPEARING. BUT IT'S THE DIVERSITY IN  WESTERN WISCONSIN PAINTING A DIFFERENT PICTURE  FOR THE LOCAL DEALERSHIP FRONTIER AG AND TURF.  THIS WEEK WE'RE ON TEH ROAD TO NEW RICHLAND,  WISCONSIN WITH MACHINERY PETE.  <SO FOR THE BIGGER SIZE HORSPOWER FOR THE 24 ROW> AS MIKE DORWIN LOOKS OVER HIS FLEET, HE'S  THANKFUL THIS EQUIPMENT IS NOW PARKED, INSTEAD  OF RUNNING ON ALL CYLINDERS IN THE FIELD < WE WERE VERY FORTUNATE THIS WE HAD A LATE APRIL SNOWSTORM  WHICH WE THOUGHT WAS GOING TO REALLY PUT US BEHIND. AND WHEN  THE WEATHER TURNED IT IT TURNED BEAUTIFUL EVERYTHING DRIED UP AWESOME. > HE SAYS ON APRIL 14TH, 13 INCHES OF SNOW COVERED  THESE FIELDS. BUT THINGS DRIED UP, WARMED UP, AND  ON MAY 4TH, THESE TRACTORS WERE ROLLING.  WE WERE DONE IN ABOUT 12 DAYS. HAVFE YOU EVER PLANTED THAT  FAST? NO, JUST 2, 24 ROWS AND LIKE I SAID, NO RAIN DAYS SO IT WAS  NICE THAT WAY> WITH LITTLE FORCED DOWNTIME, THEY WERE ABLE TO  PLANT 12 DAYS STRAIGHT... .AND WITH EQUIPMENT SLIGHTLY USED, IT'S HOW DORWIN FARMS PREFERS TO  OPERATE.  HOW WE ROLL EQUIPMENT. OUR PREVIOUS ONES ARE 14  SO IF WE DO UPGRADE TO THESE NOW WE'RE GOING TO BE GOOD FOR YOU KNOW TWO  OR THREE YEARS. SO, WE'RE TYPICALLY RUN UP TO A THOUSAND HOURS  AND THEN ROLL THEM  IT'S THATNEED TO UPGRADE THAT DRIVES EQUIPMENT   PURCHASES IN AN AREA PREDOMINATELY DRIVEN BY  LARGE AG.   < TRACTOR SALES FOR THE MOST PART HAVE BEEN SOUND OUR FOUR WHEEL  DRIVES HAVE BEEN SOLID. OUR INVENTORY IS IN GREAT SHAPE.> RUCK SAYS HALFWAY THROUGH 2018, AND IT'S BEEN A  SURPSIING PERFORMANCE FOR EQUIPMENT SALES.  < WE'RE LOOKING TO SEE SOME STRENGTHENING IN IN SOME OF THE USED EQUIPMENT VALUES SO WE'RE LOOKING FOR THAT AT ALL. THAT ALL LEADS TO  SOME POSITIVE MOVEMENT FOR US. > A STRONGER START THAT'S SHOWING UP IN MORE THAN JUST WISCONSIN.  <  IT KIND OF STARTED AGAIN LAST  NOVEMBER WE START TO SEE AN UPTICK IN AUCTION PRICING. AND I  THINK THE UNDERLYING ROOT CAUSE HERE IS JUST PENT UP DEMAND. > PENT UP DEMAND SHOWING ITS FACE ON DEALERSHIP  LOTS AFTER TWO TO THREE YEARS OF A SLOW-DOWN.  <I'M KIND OF SEEING IT ACROSS THE BOARD THE STRENGTH OF IT'S NOT ISOLATED TO ANY ONE PARTICULAR AREA. I WOULD SAY THAT THE HOTTEST  SEGMENT IS CONTINUING TO BE THAT THE 10 TO 20 YEAR OLD EQUIPMENT  IN REALLY GOOD CONDITION ALMOST WHATEVER IT IS. NOW THAT'S ALWAYS  BEEN A TRUTH IN THE U.S MARKET BUT IT'S REALLY ACCENTUATED RIGHT  NOW. > MACHINERY SAYS THIS TIME OF YEAR, EQUIPMENT VALUES TYPICALLY SHOW A DIP, BUT NOT THIS YEAR.  MARKET. THE LATEST ASSOCIATION OF EQUIPMENT  MANUFACTURERS REPORT REVEALING COMBINE SALES  JUMPED 50 PERCENT DURING MAY,  RISING FROM 213  MACHINES PURCHAED, TO 323. AND SO FAR THIS YEAR,  COMBINE SALES CLIMING 26 PERCENT.  <THAT ECHOES EXACTLY WHAT I'VE SEEN SINCE NOVEMBER ON THE  NEWS COMBINE MARKET. AND I THINK THE AUCTION MARKET AGAIN TENDS TO SHORT EARLIER BUT YOU KNOW USE COMBINED VALUES LIFTED  LATE 17 AND HELD HERE THE FIRST TWO QUARTERS OF '18. SO THAT'S BEEN  A GOOD SIGN. > THOSE EARLIER DECISIONS LEADING TO A 30 PERCENT JUMP IN COMBINE PURCHASES AT FRONTIER AG SO FAR  < THAT'S NOT A HUGE NUMBER FOR US BECAUSE WE'RE STILL DIVERSIFIED  BUT WE'VE SEEN SOME EARLY PURCHASING AND COMBINES THAT WE HAVEN'T OVER THE LAST COUPLE OF YEARS. SO YEAR OVER YEAR WE  DIDN'T EXPECT THAT MUCH PROBABLY. SO IT'S A BIT OF AN ENCOURAGING  THING FOR US COMING IN THROUGH THE SUMMER AND FALL> AS COMBINE MARKETS CLIMB, DAIRY EQUIPMENT IS  FACING INTENSE PRESSURE.  < OUR CROP OF HAY STILL YIELDED GOOD AND THE QUALITY WAS FAIR.> KEN SCHEPS SAYS WHILE THE HAY CROP LOOKS GOOD,  < WE DO ALL THE CROPPING, ALL THE CROPPING WORK. > MILK PRICES HAVE STRUGGLED...  < WE CONTRACT OR HEDGE MILK FOR PROBABLY THE LAST 11 YEARS SO IF  WE CAN BREAK EVEN ON A BAD YEAR, THAT'S A GOOD YEAR > AND WHILE THINGS LIKE MILK PRICES ARE OUT OF  SHCEPS CONTROL, HE WANTED TO BE ABLE TO MANAGE  WHAT HE COULD ON THE FARM. SO HE PURCHASED HIS  FIRST FORAGE HARVESTER A DECADE AGO.  <WE WERE GETTING MROE ACRES AND MROE ACRES AND WE JUST WANTED TO HAVE MORE CONTROL AND WE AHD A CUSTOMER OPERATOR  WHICH HE DID A FINE JOB, BUT IT WAS JUST LIKE WE HAD ENOUGH HELP  ON THE FARM AND IT JUST IT WAS A FIT FOR US> < THIS UNIT WILL HANG ON FOR I WOULD SAY IS ROUGHLY FIVE HUNDRED  HOURSS. RIGHT NOW WE GET TWELVE FIFTEEN HUNDRED DOLLARS ON IT WE'LL PROBABLY UPGRADE. > FRONTIER AG & TURF SAYS THEIR CUSTOMER BASE IS  50-50-- HALF ARE CUSTOMER HARVESTERS, WHILE THE  REMAINING HALF HARVEST THEIR OWN FEED.  < FORAGE HARVESTER SIDE THAT CONTINUES TO BE A CHALLENGE FOR US  WITH DAIRY BEING WHERE IT IS AND THE COSTS OF IMPROVING THAT  EFFICIENCY. THAT'S GOING TO BE OUR BIGGEST CHALLENGE TO THE BALANCE THE YEARS THE FORAGE HARVESTER SIDE. BUT MACHINERY PETE SAYS IT'S THOSE CHALLENGES  THAT CAN CREATE OPPORTUNITIES IF YOU'RE IN THE  POSITION TO BUY.  < TO ME IT'S AN OPPORTUNITY AREA. YOU KNOW ALL YOU HAVE TO DO IS LOOK AT OUR WEBSITE THERE'S THERE'S QUITE A FEW SELF-PROPELLED  CHOPPERS AVAILABLE. AND WHEN THEY SHOW UP AT AUCTION YOU  KNOW AGAIN IT'S A GREAT OPPORTUNITY IF YOU'RE ABLE. > FOR BOTH DORWIN AND SCHEPS, IT'S ADDING  EFFICIENCY WHILE TRIMMING COSTS WHERE THEY CAN,  HELPING THEM WEATHER THE UNCERTAINTIES OF  AGRICULTURE THIS YEAR.  

TEASE
UP NEXT, JOHN BREAKS DOWN THE ETHANOL DEBATE IN CUSTOMER SUPPORT.  

CUSTOMER SUPPORT
THE EFFICIENCY OF ETHANOL HAS BEEN DEBATED FOR MORE THAN A DECADE. BUT IT'S A DEBATE THAT HASN'T  STOPPED. HERE'S JOHN PHIPPS.  <WE HAVE A QUESTION ABOUT ETHANOL THIS WEEK: "ETHANOL IS BLENDED INTO GASOLINE AS ADDITIVE TO HELP REDUCE OUR  DEMAND FOR IMPORTED OIL. WITH THE ONSLAUGHT OF NEW DOMESTIC OIL  DRILLING, WILL ETHANOL GO BY THE WAYSIDE?" THAT'S FROM BENJAMIN REIF, IN FRANKENMUTH MICHIGAN BENJAMIN, THANKS FOR WRITING AND YOUR QUESTION. THE FRACKING BOOM HAS INDEED CHANGED OUR OIL IMPORTS IN A VERY BIG WAY. AS  YOU CAN SEE FROM THIS CHART, OUR DEPENDENCE ON FOREIGN OIL  HASN'T BEEN THIS LOW SINCE THE 1980S. THE BIG LOSERS FROM THE FRACKING BOOM HAVE BEEN IMPORTS FROM OPEC COUNTRIES. AS YOU  CAN SEE ON THIS TABLE WE ARE ONLY IMPORTING 10 PERCENT OF OUR  DEMAND, AND CANADA AND MEXICO SELL US ABOUT HALF OF THAT. ETHANOL WAS TOUTED AS A WAY TO REDUCE DEPENDENCE ON FOREIGN  OIL, BUT THAT CLAIM IS DEBATABLE, SINCE ETHANOL BACKERS ADMIT WE  ONLY GET ABOUT 30% MORE ENERGY AFTER ACCOUNTING FOR THE ENERGY  USED FOR PRODUCING IT. BESIDES, OUR DOMESTIC DRILLING BOOM  MAKES THIS ARGUMENT ALMOST POINTLESS. ETHANOL CANNOT GO AWAY  THOUGH BECAUSE IT IS MANDATED TO BE MIXED WITH GASOLINE REGARDLESS OF ECONOMICS. SOME EXPERTS, LIKE OUR OWN CHIP  FLORY, THINK ETHANOL COULD STAND ON ITS OWN AS AN OCTANE  ENHANCER AS IT IS CHEAPER THAN COMPETITIVE PRODUCTS TO GET GASOLINE UP TO SPEC FOR NEWER ENGINES. CORN GROWERS ARE  RELUCTANT TO HAZARD THAT PREDICTION, AND FIRMLY DEFEND THE  MANDATE. IT GETS MORE COMPLICATED. ETHANOL IS AN ARTIFICIAL MARKET CREATED WITH ARCANE RULES SUCH AS THE MANDATE, SO YOU  CAN'T JUST LOOK AT OIL PRICES AND GUESS WHAT WILL HAPPEN.  UNFORTUNATELY, THOSE SAME COMPLEX RULES HAVE LOOPHOLES THAT OIL PRODUCERS ARE CONSTANTLY EXPLOITING AND ETHANOL PROPONENTS TRY  TO CLOSE. THE RESULT IS A POLITICALLY DRIVEN MARKET THAT SEEMS HAS  SOME RISK OF SHARP CHANGES DEPENDING ON CONGRESSIONAL OR ADMINISTRATION ACTIONS. THE CHANCES OF ETHANOL GOING AWAY MAY  BE SMALL, BUT THE CHANCE OF ITS MARKET SHARE CHANGING ABRUPTLY  IS CONSIDERABLE.>   THANKS, JOHN. AND IF YOU HAVE QUESTIONS OR  COMMENTS FOR JOHN EMAIL HIM AT MAILBAG AT U-S  FARM REPORT DOT COM.  

TEASE
WHEN WE COME BACK, PHOTOS AND VIDEO FROM THE FIELD.  

FROM THE FARM
ZACH SAYS ANOTHER WHEAT HARVEST IN TEH BOOKS WITH NO BREAKDOWNS OR WEATHER DELAYS IN KANSAS. BUT HE'S HOPING THE RAIN IS ON ITS WAY.  HERE'S SOMETHING YOU DON'T SEE EVERY DAY -  TOM WIEBESIEK {WEEB-UGH-SICK} IN DAVIS, SOUTH  DAKOTA TAKING A KAYAK OUT TO HIS FLOODED  SOYBEAN FIELD AS RAIN CONTINUES TO FALL. UNFORTUNATELY, THERE'S MORE RAIN IN THE  FORECAST OVER THE NEXT COUPLE OF DAYS.  THAT'S IT'S REALLY SAD THAT ALL THE RAIN KEEPS HITTING THE SAME PLACES AND MISSING THE OTHERS. EXACTLY. THAT'S WHAT I WAS JUST GOING TO SAY. DOES THAT PATTERN CONTINUE? OVERALL? YES, BUT WE SEE WE SEE MORE CHANCES IN THOSE DROUGHT AREAS COMING UP OVER THE NEXT COUPLE OF WEEKS. AND SO WELL, SO WE'RE HOPEFUL THAT WE START EATING AWAY THAT DROUGHT A LITTLE BIT. FROM ALL OF US. SO US FARM REPORT. I'M MIKE HOFFMAN AND I'M TYNE MORGAN. THANK YOU FOR WATCHING. BE SURE TO JOIN US AGAIN RIGHT HERE NEXT WEEK AS WE WORK TO BUILD ON OUR TRADITION. HAVE A GREAT WEEKEND, EVERYONE.

CLOSE
IF YOU HAVE A PICTURE OF VIDEO YOU'D LIKE TO SEND  IN, SEND THOSE TO MAILBAG-AT-U-S-FARM-REPORT-DOT- COM OR CHECK US OUT ON FACEBOOK AND TWITTER. 

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