Market Plus with Mark Gold

Paul Yeager: Welcome to the Friday, June 14th, 2024 installment of Market Plus Mark gold. Still with us? What's the headline of the week? Because prior, you said it during the show, prior to Thursday or Friday, it was weather. Yeah. Is it still weather.

Mark Gold: A long term long term being June, July and August? Yeah, the weather is still the story. the acres are going to be whatever they are. but that's not what's going to the yield is going to be dependent more on the weather and production and yield as weather. So that's going to be the big story. We sold off on Friday because it put a little bit of coolness into the temps. It put in a little bit of rain here and there, but it looks pretty dry and hot east of the Mississippi for the next couple of weeks. And then we get into the July weather when we will make a corn crop. Now, I think most guys around the country are looking pretty darn good. You can't have a 75 rating on the corn or 74 rating. And I think this crop is in good shape. Now we expect those ratings Monday night to come down. Maybe four, maybe five percentage points. Because, you know, we're getting into a little more real weather here.

Paul Yeager: Like weather I just did a drive to Iowa, Illinois into Wisconsin and a couple of different routes. And what corn was early looked great now, but the corn that was late planting, it's going to struggle. I was starting to already see some some dry spots starting to show up. And I'm sure the drought monitor reversed course this week went back dry. At what point does the all of this data get fed into those trading algorithms? And they they figure that that switch flips because like Elaine said last week, we were all dry for July August and still had a great crop last year.

Mark Gold: You know, it's funny, if you have a hot, dry July and August, you're going to lose some yield out there. No question about it. But are you going to kill the crop? You're still going to have 175 bushel corn. You know, you're still going to have a big number on beans. Sure. But if you keep it dry through the first two weeks of September, now you got a major issue. We haven't really seen that in ages. I can't even maybe 1980 or something. It would go back a ways before we saw it back in September. But, let's give the American farmer credit. Let's give the seed genetics credit. You know, somebody once said they're going to grow corn on the concrete. And, you know, one of these days we'll be pretty close.

Paul Yeager: Well, this brings up a good question from Matt in Iowa. He had one about new crop. And that's kind of what we're alluding to a little bit. So he wants to know have we missed the rally window to price new crop grain.

Mark Gold: You missed an opportunity. Have you missed the whole boat? I don't think so. You should have a scare in July. You should have a scare in August. There will be something. Maybe this Chinese buying will, get things going out here if it stays hot and dry east of the Mississippi, that'll get things going. But as we talked about on the show, we have to pay very close attention to those stocks reports. As the American farmer, they had more grain on hand than I can remember in many, many years. Have they got a out of it or they still holding it? And that's going to be the key to the sustainability of any bull market.

Paul Yeager: Two questions about your conspiracy theories right there about things. Let's go Shamus in Iowa first, shall we Neal? When will the USDA come clean on South America's numbers? And finally, tell the truth?

Mark Gold: Well, I keep wondering the same thing myself. I look at these Brazilian numbers and wonder, what are they looking at? What? You know, is, does the USDA attache no more than the boots on the ground from guys at Stone ax? We've got a raft of people on the ground there. And, you know, they're saying it's 149, or two, 2.5ft, two and a half. A million over from the USDA. I don't think it makes any sense. they've been coming down very slowly, but that's how they do things. They ratchet it down. They're not just going to cut it under 150, but, I think they're wrong. I think they're really wrong on the corn carry outs. I think the usage and the export numbers were so far ahead of the USDA sales on corn right now. They've got to change those numbers at some point. One way they do it. I don't know.

Paul Yeager: When's the last time you saw a report come with dramatic numbers? I mean, Wednesday, it was pretty. It's stair steps. Yeah. There's just not been dramatic cuts.

Mark Gold: We haven't seen it in a while. And, you know, that's not what the USDA does. And, you know, love them or leave them. That's the game we've got to play. let's not forget, their mandate is to provide reasonably priced food and plenty of it for the American public. And are they going to be more bearish in general? They are. They want to see prices cheap in my opinion. So you know I don't think that's going to change anytime soon. When are they going to stop lying to us? You know, maybe, maybe if a new president throws the USD out, who knows? But, that's not going to happen. So it's going to be a while.

Paul Yeager: We have another question about the carryover. This one's Glenn in Iowa. Corn's 30 over the board. Do you believe there is a 2 billion bushel carryover?

Mark Gold: Well, that's a good question. I, you know, I look at it and see such strong demand for our corn domestically and export markets. I think you got to shave it somewhere under 2 billion at some point, but one. Is that going to happen again? You know, we have to wait for the USDA. so I don't think it's going to be anytime soon.

Mark Gold: But if we do get a summer market, they start shaving yield. That'll do it.

Paul Yeager: Another question about Brazil, as we mentioned in the show, is in connection to their president in a tax issue, Ryan in Iowa wanted to know how much impact will we see from the potential new Brazilian soybean tax. You have to first buy the premises. There is going to be one. Then it's the second question of what's the impact?

Mark Gold: Well, we saw the impact the first day meal prices really I think $10 soybeans really 20, $0.25. And that's legitimate. The question becomes, I heard during the week that President Lula was getting so much pressure put on them by commercial grain companies, by farmers, that not to do it. And, I haven't heard that he's changed his stance. But I think what the opposition if it happens, it won't surprise me. So, you know, so many of these news reports that come out, they're good for 24 hours, and that's about it. And they're generally a pretty good fade in the market. But we'll see if this one actually comes to fruition.

Paul Yeager: One more global story to get in. And we didn't really talk about this one in particular. This one is about China. Kevin in Missouri wants to know how dry is China getting.

Mark Gold: Well China has been hot and dry. And it look like in the last 24 hours they put some cooler temps and some rain in that forecast as well. That was another pressure on the grain market here today. Not only our weather but China's weather, but they have been hot and dry. I think it's interesting that they're buying beans. I'd like to see them buy some more corn. that would be a better indication that things are really bad there. And if they don't, they can't count on Brazil. The U.S. is ready to pick up the slack.

Paul Yeager: One last thing about commodities, but not the grains. Let's look at the softs for a minute. The cottons, the Cocos, the lumbers, the cocoa, the thing that's been the story for about a month ago. Is that still an impact right now on any of the grains?

Mark Gold: I don't see it. You know, the cocoa had an incredible run up and a pretty good run down. cotton. I don't see it being a major impact. Milk. I don't see being a major impact. Milk prices have come back and looking better than they have for a while out here. cotton is just kind of hanging in there, but not great. So I don't see those outside markets as having much of an impact right now. We'll see.

Paul Yeager: One last question on beef. And this one I didn't exactly ask either. Scott in Wisconsin wants to know when does this beef expansion start?

Mark Gold: Well, you think with the prices where they are and the demand for beef, guys would want to be expanding in this beef market today? Is it going to happen? I don't know, interest rates are so high. The guys want to buy inputs at these kind of high prices. I don't know. so maybe it's not going to happen as quick as we would think it should. But, you know, I look at this beef pricing. You know, the demand is there. There's no question about it. You would think if things are so bad for the American housewife and where she's going to spend our money, she's not cutting back on beef. Certainly doesn't look like it to me.

Paul Yeager: Mark, good to see you again.

Mark Gold: Good to see you, Paul.

Paul Yeager: Always fun to have a conversation about things around the world.

Mark Gold: There we go.

Paul Yeager: All right. That's Mark gold, everyone. Next week, we are going to profile an immigrant farm boy who advanced to become the secretary of agriculture. We'll also have the commodity market analysis with Kristi Van Ahn Kjeseth. Thank you so much for joining us. Have a great week.

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