Market Plus with Dan Hueber

Paul Yeager: Welcome to the table for the Friday, September 27th, 2024 installment of Market Plus. Dan Hueber is with us. Dan. one thing that was on my mind that I didn't ask that I picked up on your writings this week. I get the sense you think on corn, wheat, soybeans. Now's a good time. It might not be this high real soon. You think we've run out of gas on a lot of these rallies?

Dan Hueber: I think this initial rally is running on fumes at this point. You know, it's had, you know, some short coverings, some weather concerns. All the good elements to get things moving. But, you know, in reality, we have, we have a harvest in front of us. You know, there's going to be some hedge activity that's going to, will start to limit things. And yes, I mean, first rallies always fail. I mean, there's, it's a rarity if you particularly commodities I mean commodities. When you bottom out, it fits and starts. We bounce around for a while. And yes, I think we transitioned away. We probably have a low, but do think we're going to really move away from here rapidly is probably not realistic.

Paul Yeager: It's also the end of September, isn't it? Kind of. Do you do by the whole end of September? Crop insurance, setting a price?

Dan Hueber: Oh. Well, yeah.

Paul Yeager: Conspiracy?

Dan Hueber: It's it's, you know, it depends on the year, I guess, you know? Okay, if it's against me, it's a conspiracy. Okay.

Paul Yeager: Got it. Yeah. All right, let's look at some questions that came in. All right. we appreciate every one of those that make it into our either on X or on Facebook. We ask them every week. All right, let's start with Matt in Iowa. How will the dryness to end the growing season and the ongoing drought in South America affect the markets going forward?

Dan Hueber: Well, the, of course, the the dryness we're looking at through most of the Midwest right now it's probably going to move harvest ahead at a pretty rapid pace, which, you know, we would I would think that would tend to be more of a influence on basis, you know, more negative basis numbers. If we can't handle the crop, looking down the road, if this dryness continues in South America, you know, absolutely I think it could be a real stimulus. It gets to be market moving to the upside later once we kind of get past our harvest glut spot here. But, you know, the late season dryness, there's probably a possibility that hurt bean yields, but I think it's too early to really tell at this point in time.

Paul Yeager: So I had a viewer message today we were going back and forth about how harvest was going. Says it’s good, you know, not as good as we thought, sure. But what he's like he said, I think he said, we're in year six of dry conditions, a strong dry weather for where he lives.

Dan Hueber: Right, right.

Paul Yeager: You said a two-year cycle low on corn. I mean, we're at some long cycles right now.

Dan Hueber: Correct.

Paul Yeager: We've also had some pretty good prices sprinkled in throughout that.

Dan Hueber: Oh, there's always been opportunities throughout those periods. Certainly.

Paul Yeager: What an opportunity moving forward with soybeans?

Dan Hueber: Well you know and again like I say I think this first run up is probably, probably exhausting itself. But I, you know, almost all moves. Again, we just stated they don't happen instantaneously, but they'll unfold in 2 or 3 different swings higher. I think once we back off from this first one, your next move up ideally will carry beans probably closer to the, the oh $10.50 - $10.75 range. And then maybe even a third move up higher than that. But I mean, again, I think it fits and starts here between now and first of the year. So it's January 1st. 

Paul Yeager: Could we be looking at higher prices than today? 

Dan Hueber: I think a pretty good probability of that. You know, one of course, that's really when you're starting to enter the end of the growing season in South America. So we'll know if there's really some significant have have been some significant problems down there or not. So but but but yeah, I think you just every time you get a 10% to 15% rally, you probably want to reward it.

Paul Yeager: So you might answer this question, I think similar you may have just kind of given your answer away. Matt in Wisconsin wants to know how much 24 corn and beans should we be selling here. Let's ask that question first and then 25, if when you get done.

Dan Hueber: The yeah. You know, I hear again, I mean, part of that's going to hinge on what you've got sold already coming into this. But you know, one, you of course, immediately have to take care of cash flow needs. If you have, have, something that has to be met between now and the end of the year, you know, a little bit more aggressive on the rallies. You know, a good rule of thumb, if you're not 50% sold by the end of the first quarter, you're probably, you know, well behind the eight ball. So it, but yes, I think it's, you know, again, once we finish this, this swing, the next rally up, certainly you want to be probably at least 30% sold. If not, a little bit higher here by the end of the year.

Paul Yeager: What about, ‘25 then?

Dan Hueber: You know, ‘25, I'm not overly anxious. You know, I again, if I, going to stick with the track that I, I think we have a major low end here, which I think we do. You let the market come to you at this point in time, I think you can probably not get overly aggressive, at least until we start getting up that February - March period. When you start to talk about acreage again, we have again a little better handle on South American crops. Then it's time to make moves.

Paul Yeager: So we do have a report on Monday. There's always guesses. But this one has potential to always be a market mover. Right?

Dan Hueber: Well stocks reports are, you know, that's really going to make some adjustments on our carry in figures. I mean that's really where that one. And it's a double check on what we had for usage, particularly in the livestock sector over the last quarter. I don't think because of everything else happening at this time of the year, that is going to be unless, unless there's a real shocker that it was going to be much of a mover. But you don't tend to get major shocks on grain stocks reports.

Paul Yeager: But we've seen movements I won't say stair steps, but we've seen cuts and nibbles and tweaks all the time.

Dan Hueber: Right. Right.

Paul Yeager: Do you anticipate some of those tops coming off?

Dan Hueber: Oh they're looking at you know, and again I think one of the, one of the trade estimates is it will take corn production, last year's corn production, down a few million bushels. You know, if you have more than a few million bushels adjustments one way or the other, I'd be pretty surprised. So.

Paul Yeager: And questioning their accounting.

Dan Hueber: Now. True. True. But you know we've got to make adjustments here in there.

Paul Yeager: That's all right. All right. Let's, we've talked a little bit about this, but Matt has a question about size of the crop. Am I the only one in the camp that our yields are very close to last years. And the 180 plus corn and the 53 plus soybeans just isn't realistic because of those last 60 days of weather that we've had. So what if you are in Matt’s situation and it's not quite what you thought it was going to be?

Dan Hueber: Then what do you do as a seller?

Paul Yeager: As a seller.

Dan Hueber: You know, granted, you have to keep in consideration and if you are isolated case, you know, if you think everybody's going to be that way, I guess you can hang on to your beliefs and stick it out that way. I don't think you want to necessarily count on that, but some of the yields I've been hearing out of northern Illinois, which really suffered that same dry, dry conditions in, later part of the year. Beans, pretty average, you know, 68 to 70 bushel range. But I've been hearing about a lot of 250 bushel corn coming out of the field. So, you know, certainly nothing to be ashamed of. A little stronger than last year. So, I would tend to kind of put my own yields aside and, you know, just market with what the market tells you to do so that, you know, we good yield, bad yield markets. It doesn't really, necessarily reflect what's happening in your farm.

Paul Yeager: And it's always like in the middle of June, or May. Oh, nothing's planted around me. We all deal with.

Dan Hueber: Sure.

Paul Yeager: Backyard-itis items is one term I use. Okay, let's talk converse about moisture. Bradley in Nebraska wants to know is potential hurricane damage to corn, bean and cotton crops already factored in.

Dan Hueber: I don't know if I would go as far as to say he's totally factored in because we don't know what the damages are at this point. You know, that probably put a little risk element into the markets is they anticipated that this week. You know, some of the southern states, they mean that's where you've seen the majority of your progress already. So they've got a bit of a head start before this really came in. But yeah, I think we got to look at the next week before they make any determinations on really how much damage happened into the Carolinas, Georgia in that area.

Paul Yeager: So and we need to see some moisture make it to the Ohio Valley.

Dan Hueber: Oh, sure.

Paul Yeager: I mean, that has been ridiculously dry there in southern Ohio up to Pennsylvania, but also for the fact it needs to fill back into the river, the Mississippi River. What about the basis? Does the basis ever have any type of reaction to where a hurricane like this one goes?

Dan Hueber: Oh boy. I mean, it would really have to cut to the West to make much of a. I mean, the Ohio Valley is going to be the most logical one at this point in time. But, boy, I don't know if the rainfall is going to be that significant that far north to really help out the river levels that much.

Paul Yeager: Okay, fair enough. Let's talk the dollar before we leave.

Dan Hueber: Sure.

Paul Yeager: That is something that is always a back and forth right now that, when we close at the dollar should look.

Dan Hueber: Just a bit over par.

Paul Yeager: Just just a bit over there.

Dan Hueber: Yeah. I really think that could be one of the sleepers with markets as we move out of this next year. And you look over the last two years as we've been in the down market, it's not that the dollar has been charging higher that entire time, but it's been at elevated levels. I mean, when we get to this power area, we seem to find support and rally back away from there. And I think we're really kind of sitting on the cusp of seeing it teeter over that edge. And once it does, I mean, I think we are probably down for months. I came from you and necessarily say how, how cheap? Maybe back to where we were 2016, 2015 and that neck of the woods. But I think that, psychologically at least, would become one of the supportive factors we need to sustain rallies in the corner that would be in markets and wheat markets moving forward.

Paul Yeager: Interesting. The sleeper. I may have to put that on the Twitter.

Dan Hueber: All right

Paul Yeager: About that. All right Dan good to see you.

Dan Hueber: Likewise. Thank you.

Paul Yeager: Thank you so much for the time.

Dan Hueber: All right. My pleasure to be here.

Paul Yeager: All right Dan Hueber everyone. And next week we are going to have another influential government report. It arrives right in the middle of harvest. We'll ask the farmer, Matt Bennett and Ted Seifried. He'll discuss, along with Matt, the impact that that report had on the commodity markets and what's going ahead. We'll also have some updates, and we also have more behind the scenes information that's available each and every Monday in our Market Insider newsletter. Make sure you subscribe on our website to stay in the loop. Thank you for joining us and have a great week.

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