Welcome to VCA. Today this Thursday morning, June the 25th of 2020. We're pleased to announce this morning that we're joined by Mr. Robert Harper from the Virginia Farm Bureau of grains division rubbers. And I'll be speaking with us this morning on making some more decisions based on the upcoming june USDA acreage report that will be released on the 30th of this month. And hopefully Robert will be able to provide some updates, maybe share a little bit of light for producers as to what that report may look like and maybe some anticipation as to what we can do to make better marketing plans and anticipate that reports Good morning to everybody to privilege to be able to have a conversation with all of you all today and really appreciate Cooperative Extension. These meetings gone every week. I know y'all that a lot of fixed Seth building community around these mating. I'm glad to be back. On behalf of Virginia Farm Bureau. I'm very, very thankful the hope for today for me to make about 15 minutes of some comment here and then maybe we can get some questions and discussion gone in the route that you, the producers and extension agents would like to see. But the idea is to just take a snapshot of where we are today. As Robbie said, June the 25th. And, uh, my comments are coming from maybe, maybe three points of view on thinking about how do we as marketers reduce our exposure to doubt that price risk? We always use the football analogy of offense and defense. And I definitely lean myself personally, and I know a lot of you here on the phone do as well. We link the defensive side of marketing, where we're constantly trying to protect ourselves from downside risk. And really the key here and 2020, where so much is unprecedented. So many influences on the price that or are fundamental and technical. But so many influences on futures price and bathes price that really don't have anything to do with fundamentals are technicals. It's more of a political type trade in so many way, we really have to temper our expectations this year from a price perspective. And maybe another, a better way of saying that is being realistic in what we're trying to do with our marketing. And ya'll are all good at that, and I appreciate that. But the first thing we gotta think about, talk about futures price. We know we've got all these different groups of participants. The trade futures on the Chicago Board of Trade, you and I care about that manage money speculator and what their opinion is because that's the group that's the participant that is beta_1. Non-price direction, their bet on it big may do analytics is good and better than any body because they're putting their money where their mouth is. And really the most bullish influence, the propri, positive price action right now on the corn market is the manage money short position. They are net short, roughly 270 thousand futures contract. It's the second largest. Short position in history. So they're telling us loud and clear, going into the June 30th planted acre report and quarterly stocks report, that they, thank Christ. Gone lower before, it's gone higher. Now, can manage money speculator be wrong? Absolutely, but we need to know what their opinion. And so they're short corn in a really big way. They're short thought tweet about 30 thousand features contract. So their opinion isn't so bow with wheat and on the bead that of things manage money speculator is long, about 20 thousand contracts. So there look at net domestic demand that we have for soy beans. The, the export demand that we have for soybeans, the less than anticipated acres this year for soybeans. All those things your counter Roland into one. And there's still some premium and the futures price for whether it's August, the month that makes such a difference for being there. 20 thousand features contracts, long beam. So they're telling us price was gone higher before it goes lower. So keep that in mind. Corn, corn back. Money is short. We expect money is short and they inspect money as long. When you when you talk about June 25th, you still even in 2020, we gotta talk about the number one influence on price. And that's whether, and when you, when you focus here, first stop on North America, the corn belt. We know we've got about, according to USDA National Ag Statistics about we're not about 18 date rate, about 95% of the corn and beans with four of whom really Cabinet off. Minnesota, Nebraska, Iowa, in Illinois. When you look at the weather in those 18 state through those four big ones there, the weather has been really, really good at growing seasons. And we don't, we don't have, in my opinion really any weather, cranium and the corn futures price, we still have some in the soybean price, but not, not any. And corn crop went into ground. Really fair, both corn and beans. You all watch the crop progress report, the extension agents here on the phone, they help turn to date in for those crop progress reports. It's still amazing to me. The American farmer can plan about 30 million acres in the Theban day period. Just fathom that. Think about that for a little bit. But the crop, when in fact this year, as it would flow going in last year, kinda like the weather where there's no normal anymore and everything just works to an average. That's what we've seen with, with planning progress from 2019 to 2020. So when the crop goes in the ground as fast as they did this year, we know we have big yield potential. And at least two of those top four state, Nebraska and Iowa, excuse me, Iowa and Minnesota. There on cap today for heaven, record yield for corn and beans. So there's very little stress in the western belt. The eastern belt has seen stress but y'all theme the weather forecast than the recent week. They got a lot of rain in Ohio, Indiana In the last week were coming into pollination for a lot of the chord at there and come and week than if you look at the ten day. Whether you look at the GFS weather model or the European weather model, there's good temperatures and good rainfall predicted through pollination. So I'm really interested in and remember the, the USDA puts out a drought monitor, Matt, every week. Yaw can look at that. It's great data picture very well off though. If we can help you get access to that map, just call me, email me, or text me about a typical summer rally. 20 to 40 hit the bushel. And I know we're just come and into the summer, but if you really look at our futures charts and take the nearby features contracted July we've seen I was just doing the math on this this morning. We've seen a 49th rally already on soybean futures that the bottom of the coded restrictions. And we've seen a 23, a bushel rally on corn. That's the bottom of the coded restriction. So technically we've gotten our 20 to 40% rallied, even though we're just now into the summer. So we gotta keep that in our mind and kind of going back to four minutes to go and talking about tempering and education. Remember when we look at South American weather? And it may be hard to say that in one way, but it's true in the other. It's not as important this time of year. I mean, they're they're coming into their fall and winter. When you're, when you're looking at Brazil, they're thick and crop corn is being harvested. When you look at Argentina, they're thick and crop soy beans or be in Harvard. Did they're wrapping things up their plant we for the fall and winter. So whether it's not as big of an impact down there now. And then remember, come September is when now get back to the field with their first crop plant. Things keep that in mind. And one thing to keep in mind about South America, that they're, they're basically fold out of soy beans. When you look at the chat and numbers, China has imported a record amount of soy beans this spring, the majority of which have come from South America. So we know that China's been buying, being here in the US net, helping them keep up to some degree with the phase one trade deal. But it's also out of necessity because the Brazilian in the Argentinian farmer have basically folder beam. We're going to see a lot of competition now come in from Brazil and Argentina on corn exports. When you look at the numbers and the people who are in the export world tell me that corn from down there is now landing it many places around the world cheaper than US corn. So we gotta keep that in mind going forward here in this marketing year for corn, talking about tariffs and trade. We got a real shock at the beginning of this trade week where we saw one of President Trump's trade, it bothers they in an interview that the phase one trade deal was basically all we know, that relation with US and China have weekend with what's going on in Hong Kong. What's happened on China's border with India? There's the other thing But this trait, it bother backtracked on what he said, that he was taken out of context and we've had more information since Monday that the trade deal a fill on even as late as last week when Chinese officials met with American trade officials than Hawaii, China was fully committed to fulfill. And the phase one trade agreement, they're behind schedule, but it's only gin. They got six more months of the year to, to get it done. And we need them to to buy what they said they were going to, going to bad this year to support our futures price. So think about now I'm switching gears. How do we, how do we get a rally in the futures market? We know we can get a rally in price from the supplier, that from production. We know we can get a rally from the demand that whether it's domestic key or whether its export and the way it looks today. And obviously everything can change in a heartbeat. Golf taught me, we all know we're only 21 day away from the worst drought we've ever been in. But where we are today looking at fundamental from a North American production perspective, we gotta say that if we get more of a rally that 20 to 40 thin morality and features price. It's going to have to come from the demand side of the equation, this class out of the equation, as we've said. And as you all know, the crop got planted. Faith that's been under great growing conditions so far. And the weather model at least ten days out, a show in great condition. So let's not look for a supply fog rally that's growing season, obviously that can change, but that's where we are today. We need to see a demand sad rally. And how are we going to get that? We're going to get that from China continuing to purchase and do what they say they're gonna do. We're also going to get that when we backup the coded, remember word from coded as far as affecting agriculture. And there are many more. But two words that I would say, demand that structural demand destruction. Remember at the pinnacle of the COBIT shut downs, we had officially 60% of our ethanol plants all flag, we know a third of our domestic corn crop those to ethanol production. And when you lose 50% of it, that you know, that kinda be devastating on price. The good news today that this is great news and we're all celebrating it. We're only off on our ethanol production 20%. So we've rebounded 40% of that production that we lost. The numbers in the weekly EIA ethanol report yesterday showed we ground about 90 million bushels of corn last week for ethanol and pre-coded we were grand and about a 110 million. So from that regard where we're even where we're, we're just catching up wonderfully when you also look at the demand destruction that came from supply chain break up with, with restaurant institutional food organization not being deemed essential bagged government during the shutdown, we know what kind of ripple effects that, that Purdue the supply chain. Great thing. In the backlog Cattle get worked through by processors. We're seeing the backlog of hogs get worked through Murthy and let hog. And really now probably none, no hogged being euthanized were C and melt, they end up not being crack. So we know demand if coming back, and we need to get that back fully in order to help with its demands. That rally that we need to think about here when we're looking at law for demand. And let's talk about new crop features for a second on corn and soy beans. Because you're looking at marketing. A lot of folks had price targets to start marketing new crop corn. When December futures hit 350 and then fell again when December features that 365 we know today were trading at 330. But we might want to revisit starting some new crop marketing before the price targets, which fill at 350 on the soy bean that November be, there's been a mania. Predicts are waiting for $9 on the November futures we've got up into the 80 range. We flip back here before the report. Next Tuesday, we flip back into the 1865 to 70 range. So we might want to even think about looking at locking in the new crop beam here and not waiting for that bed additional $0.30. And that takes us right into the last part of the comment here, I would say. And that's specifically speaking about the June 30th USDA planet acre report, quarterly stocks report. We all know, boy, every week, every month, every quarter. The way the money flow into the futures market is different. But it is such a big deal every year for the speculators to flip the calendar from June to July, their clothes and their books out for the month. They're closing their books out for the quarter. And money flow, it's going to be different in July that it was in June that trade is going to be different. And this report, which I've always thought isn't a coincidence that it comes out on the last day of the month, in the last day and a quarter. And it comes out, wow, the features markets are trading. It's obviously a big deal. Y'all code a thin march. You were going to plant 97 million acres of corn and that you were going to plant 83.5 million acres with a being that was a pretty big shock. It will 97 million acres of corn would be near the all time record in normally, we had gotten in a routine where ya'll were planted 90 million acres of corn a year in 90 million acres of being both the corn up at 97 was obviously problematic for price go. Here's what do you take the, the latest trade estimate for next Tuesday at noon, we're going to see the American farmer having planted nanny 5.2 million acres Born in 84.7 million acres of soy bean. Obviously, price action will be dependent on whether the numbers come in above them or if they come in below those acre numbers. And I've got something here I wanted to run through really quick and just close your eyes if you're not drag and see if you can picture this price action on June 30th, the last five years. And let, lets just take corn though. In 2015, when these acre numbers came out, Corn went up 30% the bushel, the day of the report in 2006, corn went down 14%. In 2017, corn went up 12 from the day of the report. In 2018, a neutral report, Noether Prague with court went up a penny. And then last year when we gotta surprised increase and acres 2019, corn traded down $0.19 a bushel. The Davies acre numbers were released. So the trade going to trade them, they'll come back after the fourth of July that they'll have full light on North American weather from pride faction and full fight on export. But the truth is about the acres that speculators do not like question mark. They can't determine what total production is going to be until they get an acre number. And they can't determine what to carry out or the leftover bushels you're going to be until they get total production. So these numbers that we're going to get on to the breakers basically sets the tone for the rest, for the rest of the year on how the future's going to trade. So I'll repeat them again. The expectation is, you said you were going to plant 97 million acres of corn. The expectation is going to come in at 9.2. You said you were going to plant 83.5 million acres. The beam and the expectation is going to come in at 84.7 million Cato, which in a year here again, what about quarterly stocks? We're going to see that today as well. That's what within the ban on June the first, we're looking for an expectation of 980 million bushels of wheat. That would be down slightly from 2019. Corn, we're looking at 4 than billion bushel than the bin. That would also be down slightly from 2019 and we'll come back to that in just a second. And soy bean, We're looking at 1.3 billion bushels in Ben as of June the first. That would also be down from 2019. We obviously, we want to see the numbers lower. That's positive for pride. And hopefully if they can come in lower than what the estimates are that I just read would be great for price action in a positive way on Tuesday, the bookkeeping in where surprise might come in on Tuesday. If then the corn number, the expected 4.9 billion bushel than the bend. We know corn for ethanol has been off dramatically, to put it mildly, like nothing ever seen before since March when the ethanol plant started clothing. If we get a big shock and surprise, quarterly On to the I think it's going to come in the Stocks number for corn. And that number being higher than 5 billion bushels. And Ben. So keep, keep your eye on that as well. And clothing here with the marketing, remember, look at the bushel that you know, you have to move on to talk in new crop. But bushel that, you know, you have to move this harvests, whether you're moving them because the storage reasons or because the cashflow locally, the bushels you want to focus on. And remember when we're talking about temporary and expectations, we're talking about managing downside risks, playing defense like look at Priceline some of the bushel before the report comes out on Tuesday. If you have back, that's the storage. You can also look at playing defense. Bob pride thing. 20-20 corn or 20-20 being production and deferred month. As you all know, there's a lot of carrying in the corn board. For instance, the timber corn at the 330 geoloc horn, is that briefly before we could fill 2020 corn in deferred month and capture that Carrie and still help put a floor under your average price for next year. He'll keep, keep your outlook carry and focus your attention today and tomorrow and Monday as you're thinking about making a new crop failed decisions. Before this report comes out, focus your attention on the bushels that you have to move that harvest. Or if you're fortunate enough to have your have storage. So to fit on telling them cash bushels in a deferred deferred months. If you have old crop bushels in the band, which I know a lot, a lot of us do. We need to make it fiercely about pride thinks some of those bushels before the report comes out as well. Theme, if you've got bake this contract, we either got to roll or to price those July features by Monday. And medical questions will come up here now and we can talk about that specifically, but they're all the i gets prepared comments head and I'd be glad to help with some discussion. They're crowding if there are any questions y'all might have and appreciate your attention. Thank you, Robert. We really appreciate you joining us this morning and Sharon, a great update holding the market and hopefully give us some light as to maybe what we can expect here coming up next week. So thank you so much for joining us on that. Robert. I get daily emails rather texts from Old Dominion growing in. It peaked. I'm looking forward. It picked it picked it 350 on Friday, 1213 days ago. Since then, it's been falling very steadily. What is this Assange or something? What does it tell you here? You probably are you looking at the deep Ember features, contract like that? What they among the trap corn. Nice new grab. Columbus, September features. Okay. Okay. Yeah. A great question about it. Your charts and technical So when we're when we're looking at a feature chart now obviously people think in terms of nickel and a lot of times we get technical resistance at Nicole break, whether it's three forty three forty five or 350. A lot of producers have open orders then with brokers or wish orders and with fires, like you mentioned, all Old Dominion grain at those fats, that break. And we do get a lot of resistance when, when futures contracts or cash prices, whether you might be taking a 345 futures price and a fab over bait for making a 350 delivered price. We do have a lot of resistance at those levels than when we can see pull back, whether it's pulled back from a buyer or pull back from a speculator. When we get to learn that, the problem with corn, remember that? Hold in corn back it number one, the American farmer saying they were going to plant a near record acreage of 97 million yen. The expectation is that because of some prevented clan acres in North Dakota and because of some farmers switch and acres to being that we're not going to see 97 million, we're going to see 95 million. That, that weighed heavy on the features. Try remember the planted corn acres last year in the US were 89 million. And even if we come in at 95 million this year, if we get a trendline yields that purchase on par for 15 billion bushel corn crop when we're yeast to grow and 13 billion bushel, and that's just heavy headwinds are negative pressure on the corn price. So I think that's what we're seeing. Great question about. Kind of hit net feel. And they're around three bit b for September. Deliberate corn off the December futures contract. It's just the head when there, because the demand destruction from COBIT and because of the farmer's land there, wanted to plant so many acres when you click on that question budget thing. And two, when you look at a lot of these productivity indexes that are, that are computer-driven model that factor in planning day genetic than the, the'd, whether that one of the models currently have the average corn yield today at a 179 bushels per acre that would be erected. And if we get a near record acres than a near record yield, obviously that's going to be really devastating for pry going forward. And that the thinking, and you're thinking about a to locking in some new crop chord here before this report. Because if you look at one that of the coin, if y'all do clan or record acres, if we do get above a trendline yield, if 20% of the ethanol plant they offline if Canada has been back corn, sorghum or ethanol. And the biggest way we've ever seen price going to be lower for corn and harvest than it is right now that I'm making any that theta like it. Yes, sir. Yes, sir. Embolic. Completed So weren't Where did I got a question? Where did that, where does that leave you? At the producer? And you're thinking about looking at caught the production and average yield and how that worked out to a break-even. Did that make you want to lock the men before before the or, or go out paths that wonder, I'm being grateful now that I could've. So zone 350, I did not think it's scared to death that down and it's good to death. It knew they were going to get some news is going to make it drop or I'm scared he goes, yeah, yeah, I well, Robert, I thank you again for your time this morning. Thank you. Covered a lot of ground. Hopefully answer a lot of people's questions may maybe give them at least something else to think about. So know all anticipating a record coming up next week. So we'll try to remain optimistic and hopefully things will be okay, but certainly something to consider as Mike was saying. So thank you again, Robert, we really appreciate you joining us this morning. Thank you for your time and we appreciate you in Virginia Farm Bureau. One other quick go ahead, Robert Nozick. Fake they thank you. And any time that I can help or Joe, the more my counterpart at Farm Bureau and the grain division just give us a call and glad to let people know to if they don't. Virginia Farm Bureau has a blog called plowed and politic. And Jodi and I do a video that we turn out by 430 on Friday afternoon that Canada, a market recap for the week. And if you do go to a search engine and put in Virginia Farm Bureau clouds and politics. It's called the merchandise or minute. And you'll be at around 430 on Friday afternoon. Alright, thanks, Robert. We really appreciate that. So if you're interested in taking a look at that, Robert has given you the information where to find that. So or you can contact Robert cheat to get those links. So thanks, Rob. It We just appreciate everybody joining us this morning. Feet few closing remarks. I'd like to make. One, if if you have not had a chance in the past, or we ask that you please take a few minutes to complete a brief survey that we ask folks to do. It's an evaluation to help us hopefully improve. These programs also give you an opportunity as participants if there's a topic in mind that you really would like to see featured or would like us to do a sectional and we'd be happy to hear that feedback. So you see the link there in the chat box of where that can be l. But also we're trying to send that out and posted with their recordings as well. So next week our speaker will be Thursday, July the Second. We're hopeful to have Dr. Michael Flexner back to speak with us on weed management throughout the summer, primarily in our soybean crop. Also touch base on some of the over the top di gamba court rulings that occurred earlier in the month. And, and just provide some feedback as well as some alternative options or other C trait and herbicides chemistry packages that producers may be able to look at in the future. So if you can we invite you to join us for that next Thursday morning. Same here on VCA today and share that with the folks that you feel may benefit from that section. So thank you again to everybody for joining us. Just like take a quick second and thank the team of agents that make this effort possible, Laura maxi nay, and her summer intern, Shelly Underwood, and Hanover County. Mike broadest and Caroline and King George counties, Trent Jones in North Amazon in Lancaster County, and Stephanie Rommel check and her summer intern scholar sworn in Westmoreland County. So thank you all for all your help making these efforts. Passport and we thank you all for joining us this morning and hope everyone has a great rest of that Thursday evident in stay safe and hope everyone does well and hopefully we'll all farewell through the report next week. So Robert, thank you again for all your time this morning. We really appreciate you joining us.