Panelists
- Dave Chatterton, SFarmMarketing.com
- Curt Kimmel, AgMarket.net
- Wayne Nelson, L&M Commodities
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Transcript
Todd Gleason 0:00
This is the May 23 edition of Commodity Week.
Todd Gleason Services are made available to while by University of Illinois Extension.
Welcome to Commodity Week. I am Todd Gleason. Our panelists for the day include Curt Kimmel with AgMarket.net. Wayne Nelson joins us again from L and M Commodities. And we're also joined by Dave Chatterton at Strategic Farm Marketing. Commodity Week is a production of Illinois Public Media. It's public radio for the farming world, where you can listen to our podcasts any time you like including Commodity Week, the Closing Market Report and the Illinois Nutrient Loss Reduction podcast from our website at willag.org. Let's get a quick list of items that maybe we ought to take up for this Thursday afternoon as we're recording before Memorial Day weekend. Curt Kimmel, what's been on your mind?
Curt Kimmel 0:57
Well, the main thing is what do we do now? We've got the help we've wanted. And also to we were in this situation where we got a three day weekend and a full moon.
Todd Gleason 1:09
Dave Chatterton, the full moon returns. The last time you were here, we talked about full moon. I think it must have to do with you.
Dave Chatterton 1:17
Here we go. Yeah, but no, I mean, you know, look, we're into the situation now. We're marketing from a, let's say, percent sold perspective, Todd. I mean, you should be caught up to a comfortable level. The next step. Where do we go from here and what's going to go on? Seasonally? We've got a small window here where prices could continue to go higher, particularly for corn, maybe a little longer window on beans. But it's weather, weather, weather and the weather focus has been a little bit more outside of the US to this point. So the Black Sea region and the wheat crop in Russia and Ukraine and in South America, with the flooding in southern Brazil and the corn, you know, disease in Argentina. But now it's back to the US. We're in a situation where the plant planting is getting there. We can see over the horizon those producers are either very close to being done, maybe have a day or two left or actually done, and now it's about okay, how is this crop and develop. I would suspect when we come out in early June, we're going to have some pretty highly rated crops because of our moisture situation. And you know, where is this summer going to go and what does that mean for prices in terms of how you manage your risk on the farm?
Todd Gleason 2:17
And Wayne Nelson historical context or current things that you've been thinking about?
Wayne Nelson 2:21
Well, I think, you know, the one thing always that comes up is the weather. You know, we've got a couple of things going on. We see some delays because of some heavy rains. We looked around that way. But I think the weather, how it's been in Russia, in China, you know, even in the Ukraine and everything, we've got some other problems around the world that are really popping up and looking at this stuff. So and then I think the biggest thing that probably we've got to think about and look about now is what how many acres actually got planted when it's said and done, when the prices were down there and then when it rained and put people on a while, did they cut back a few acres or did they go ahead and plant full bore?
Todd Gleason 2:57
So I do want to talk about acreage and planted acreage. But in terms of at least something that maybe should be dismissed at this point, replant or acres that might be replant, because a lot of producers, many others will be thinking, hey, we're hearing about all this replant. Surely that means something. But it's a little here and a little there. Does it is it okay just just to dismiss that as a an issue, at least up until this point, unless we get a whole lot more rain next week? The following week as well, I'm going to say, yes, everybody agrees. So we'll move on from that. Now, what happens then if we do get slowed down next week, especially in Iowa and parts of the Western Corn Belt?
Curt Kimmel 3:45
Well, I go back to 93. The market really didn't care until the levees broke in July, down oh, Mississippi. Then the market took a attention to it. As of prior to this recording here a week ago, we had about 7 million acres in the east and 5 million acres in the west to be planted. Yep, the forecast can get a pretty good window here for the east to get caught up visit with guys in Iowa. You know, they're coming down to having to make a decision here because they're going to get another round of rain here. My question to the crop insurance guys here today is, okay, we get down to it. What's the guy's feelings? Prevent plant? There's not prevent plant. But that's mainly the Dakotas and they're pretty far along. But is it economical to take prevent plant these prices?
Dave Chatterton 4:32
Yeah, it's a very it's a very individual decision and I think in most cases what the first thing I would Duane's point, the first thing I would say is that traditional road crop producers and in the ice states are very low, they're very adverse to taking prevent plant. It has a number of different applications. It can affect your EPA, you can do different things. It's a number of different rules and pitfalls that you can follow. In terms of are you planning a cover crop and are you saying raising it? Is it going to be harvested for grain? And all these choices that go along with it doesn't mean you shouldn't consider it average prevent point. Right now for someone who's in an 80 to 85% R.P. crop insurance policy at a 466 frame price is probably 350 to $500 In most of the states, closer to that 500. So cash rents in those areas certainly will say north of 300. And, you know, maybe there's a little bit of meat on the bone there, but it's a last resort. Keep in mind that just because we get the last planning dates for corn in these areas that we're talking about typically are June the fifth, May, maybe the 31st out in parts of the Dakotas, but Illinois and Iowa, June 5th. Beyond that, you're losing 1% of your revenue guarantee per day for the next 25 days. So you can plant past that late period. But as you said, Kurt, it's a it's a tough decision. I think the other decision, as you know, is it's not just prevent plant or nothing. It's prevent plant or another crop prevent plant or a cover crop prevent plant or a crop that I might you know, I might lease the ground out. I might, you know, hay it and graze it. So a lot of lot going on there. Make sure you're comfortable with where you're at before you make that decision and talk with your agent.
Todd Gleason 6:06
I'll stay with you for just a moment because there will be this discussion related to the late planting of the acres that are still available to put in the ground. The decision to change acreage to, for instance, soybeans generally, we talk about it, Darryl Good would say not happening very often. What about this year?
Dave Chatterton 6:29
Yeah, it's not that common, particularly in our particular if the years that we're talking to an answer of central Illinois, central Indiana, we just don't see a lot of it. You know, nitrogen could be down, there could be, you know, things that prevent that from happening. That being said, if that's going to happen, we have the recipe for it to happen this year. But you're talking, in my opinion, anyway, about a swing factor of one or 2% and just not enough to move the needle and, you know, one or 2% in the areas that are where that may switch. In the overall big picture, you get that watered down to a point where I don't think it's a driving force in terms of h...