Paul Yeager: Welcome back to the table for the Friday, September 13th, 2024 installment of Market Plus. Back with us again, Kristi Van Ahn-Kjeseth. Maybe we should just change the name of this podcast I keep saying back from the table, right? That doesn't make any sense.

Kristi Van Ahn-Kjeseth: I mean, it isn't much of a kitchen table though.

Paul Yeager” No, it'd be a nice kitchen if you had this table right, wouldn't it? You were on a panel this week up at North Dakota? Yes. With our friend Naomi. What's the sentiment there right now? What are people asking you?

Kristi Van Ahn-Kjeseth: Yeah, they aren't happy.

Paul Yeager: Prices or?

Kristi Van Ahn-Kjeseth: I think just in general, I think that people in general have a lot of crop around that they don't have a home for. I think that a lot of, producers are kind of stuck in this could have what it should a type of a situation. And I think we were at a farm show in early August and we got that hint from there. We obviously knew from quarterly grain stocks there was a lot of grain on hand, but I think you just saw a lot of guys shell off corn at the lows trying to clean out the beans, and now we're trying to move forward and get a game plan. And so I just think people are a little sad. about it in general.

Paul Yeager: It's sad. It seems more anger in a lot of days. But do you, Naomi talks about this a lot, and I'm sure she did on This week. Do you think the harvest low is in now?

Kristi Van Ahn-Kjeseth: Yeah, I, I mean, on corn, I do rate. So could we test 385 for that deep slow again. Yeah. I think with some harvest pressure we could. But I thought that corn showed such resilience out of the crop report. I think that corn is kind of pegged itself to wheat as well. And I think wheat feels friendly right now. So I feel like corn does do really well right now. And not only that, we are just over a 2 billion bushel carryout and corn, and that is a manageable carryout level for corn. It's not great, but it's manageable.

Paul Yeager: Is that maybe why the market responded? Maybe more muted given the increase in the size of the crop? But it's like, oh, that number is something I can handle.

Kristi Van Ahn-Kjeseth: Yeah. So I send out a message right away when a crop report comes out. And I was going through the details and corn started going down seven and you know, now you hear me mumble. And I was like, why is it going down seven? And I think the initial reaction was that yield was so large that you had that panic right away. Oh my goodness. Corn came. Yield came in so much higher than anticipated. We need to sell this. But when everything shakes out and you bring it down the carryout is is still shrinking and I said this earlier, I do think that that might be one of the higher print yields that we see. I think demand has been doing a good job keeping up, and so I feel like corn has done a good job finding that low seasonally. We're supposed to wait a couple of weeks so you could see that. But man, I just feel like it wants to say it was in. Let's move forward. It doesn't mean it necessarily has to rally, but it feels good.

Paul Yeager: You mentioned wheat, which is our first question here that came. This one is from Eric in Wisconsin wants to know Kristi, is the wheat market buying planting acres right now?

Kristi Van Ahn-Kjeseth: I think it's I don't know if that's its main focus as much as it's just putting in, you know, everything that's going on around the world. The dry concerns that you're starting to pop up. But it does need to buy some acres. You know, when you look at it in general, I just feel like wheat is not profitable compared to the rest of the crops. And I also think that guys are continuously having issues with wheat, one form of another. Vom and toxin scab falling numbers. When you talk about spring wheat and all of that, that it makes it so difficult. I would hate growing a crop that you have so many unknowns for it, so that would be tricky for me. But I do think, in general it's building that economic kind of picture behind it with everything that's going on around the world. And to be honest, real quick, the world numbers are decreasing and it's one of the only ones that's really decreasing for carryout levels. So it has that story behind it.

Paul Yeager: You, you had a really good number on corn. Do you have a really good number on wheat where you like this thing right now. Yeah.

Kristi Van Ahn-Kjeseth: You know I don't really have any projections quite yet. You know, it's kind of tricky because we deal with a lot of spring wheat, which is kind of different than most of the show's audience. So it makes it a little bit different when you see it. But I do feel good. And I would say that you could consistently run a stop, probably on the lows from a couple of days prior. If you're saying, I want to let this run, I have some wine I want to sell. I would treat it as just putting a line in the sand from the low two days prior, and keep lifting that up as long as we rally. I would give it some time, but I would be moving up that top level along with it.

Paul Yeager: Sounds like a strategy you might want to do. I think you were talking about in cattle, too. We have a question. Hold on. You get to get good. Just call. Just two minutes. Just so excited to answer your question, Scott in Wisconsin, is cattle still king?

Kristi Van Ahn-Kjeseth: I think so, I mean, it's so tricky. You know, to me cattle is the one with the most unknowns right now with the stock market. So, we have, interest rate talks happening right now. Next week we're going to have an answer on that. And you know, I think most the market's feeling pretty good with that quarter. And I think as long as we can get that and keep trucking along and see those numbers come, I think in general the economy feels really well. And if you look out at the stock market, it tanked and then came back and we were able to rally, you know, almost a thousand points in a matter of three days off of the low. And so those type of things are really helping it. However, I do feel like the futures market, when you look at the chart has consolidated. and so we really need to see it break out of this zone before I can feel really good about it. but so far cash has been the king of the situation, to be honest.

Paul Yeager: Which which was a follow up that somebody had on Facebook. That question was about, you know, don't you mean cash? Again, let's dive back in there for a minute on the cash versus futures, because that had been a story mid-summer or late summer that had kind of flipped. Do you see it going back?

Kristi Van Ahn-Kjeseth: No. I feel like cash is still really strong, and I feel like it's going to continuously be strong. And I think that as long as you're not seeing, you know, the heifer situation change, I do think that that is going to be what controls this market. And, sometimes it's really depressing to see, the futures board drop off like it is. And then you look at kind of where the sales came in, and they're not all that different. So it has been that unique situation that you almost have to treat them like two completely different markets.

Paul Yeager: All right. Let's ask you about a harvest low. Let's ask Tom's question. Have we reached bottom for prices? So you talked about corn. You think that low might be in. What about beans? What about wheat?

Kristi Van Ahn-Kjeseth: I think we, yes, I can lump corn and wheat together. Beans? I don't know about that one. It makes me a little bit nervous just because we're building so much off of this dry story and, you know, sometimes we have a short memory, but, it's hard to sustain a dry story rally this early in the season. Right. So if you think about our growing season, when we're dry coming into planting, we might get a little bit of attention on it. But there is so much more important time moving forward on that. Now, if we were dry during, you know, pollination for us, or when you're talking about beans, you know, not the best finish for beans. But if we were dry into that August time frame, such a difference story than it is right now. And so it's really hard for me to put all my eggs in a basket. And to be honest, the carryout or the production out of Brazil is forecasted so high that even if we saw some acres not planted due to dry concerns or some yield reduction off of that, you're still looking at a monster carryout, out of Brazil, and you look at the world carryout. That's the one that has skyrocketed out of here. And we really need to come back and focus and say, how many beans does China really want? We know that their appetite is for Brazil's beans. And so I have a problem saying, could we drastically change that? Now you do start to see the extended models for like the three month out forecast start to turn a little bit hot, a little bit dry for, South America in general, but that's so far away. I have a really hard time putting emphasis on that right now.

Paul Yeager: Well, the old saying sounds like it holds for down there. If you plant in dust.

Kristi Van Ahn-Kjeseth: The bins will bust. In mud, you think the crops are a dud.

Paul Yeager: So you think that holds down there too, like it does up here?

Kristi Van Ahn-Kjeseth: I think so, you know, that, sentiment or a line that's been told me since I was little. Right? I heard my dad say it all the time, and I think it's a very true statement. And and I think that's kind of where we got ourselves in trouble this year, bringing it back to the US is that we planted in the mud for quite a bit of people, and I think that they were looking at the situation and said, our crop is going to have such shallow root systems, we're going to need timely rain consistently or this crop is going to be toast. And that's what we ended up doing. We ended up getting timely rains over and over again that it was able to skirt by.

Paul Yeager: Okay this is the bearish view of many things. But this is this is, I guess the realistic. And we all have to do our jobs just to make sure we talk about this question. junior in South Dakota on line on X. How long until we see sub 350 corn and $8 beans.

Kristi Van Ahn-Kjeseth: So if we're talking cash, you know, some areas are 350 ish right now. but as far as that goes for corn, I don't know. I don't know if you're going to see that $8, you printed in the eights in North Dakota earlier, into this like a month ago or so, you were putting eights, and I looked at that, and I have a feeling that's probably why I'm as I was, as aggressive as I was. I'm being marketing over this last couple weeks. It was a I do not want to sell in the eights for beans. Like I don't want to do it, I don't want to do it. And so I really made that mantra to say, hey, we're not going to do it if we have the opportunity and if we really need to buy a call. And so I feel like that's really aggressive. But there's a lot that can change over the next four months for beans that I would say if you were saying could corn do it or beans do it, I would say I'd be more keen that beans could have a print.

Paul Yeager: Yeah. That's what I've taken from you. If I've taken anything away today, it's been your love of you're not love of beans, cotton. this the deep South rain, but not necessarily in cotton growing areas, right. Still a lot of drought down there, too.

Kristi Van Ahn-Kjeseth: Yeah, and I think cotton is trying to build off of that. I think that cotton wants to do something, but it seems like there's that resistance point around 70 bucks that it just has not been able to. I think if we could come in here and see some, continue to export demand, we could see, trying to be a bigger player into it. You could break through that, but I would lump, as I say, if I had to pick two markets that I feel like quarter one of 2025 could surprise the market and really do something, I would put wheat and cotton. So I think you could put them both together on that.

Paul Yeager: Hole that I got to write this down. Right. And, okay. What about crude?

Kristi Van Ahn-Kjeseth: Yeah. So crude oil, if you look at a chart. Right, it's well beyond two standard deviations away from linear regression, a lot of it. But what it's saying is that we've really dropped off. Right. And so you're starting to see that trend. What we do know is there's a presidential election coming up. And typically crude comes into the election starting to drop off. So it can be a talking point for the current administration. And I think you're seeing that one thing that I will say surprises me is that we haven't started to rebuild that supply, that reserve, since we've gotten as far as we do. And so maybe there's a little bit more to come. But given the world dynamics happening right now, I'm surprised that you haven't seen more movement. Overall. But we will be looking at some form of ownership moving forward in the near term for crude oil just to kind of cover those needs in the spring and summer. it could be as simple as a call spread crude oil, but we will be doing something just because where it is at on a chart compared to linear regression.

Paul Yeager: This is a borderline political question. Sometimes we see this when the stories start to be written more mainstream about maybe we've hit peak driving or peak oil use. Does that change any of the old way of thinking with crude, traditional way of thinking? Not old way?

Kristi Van Ahn-Kjeseth: You know, I think one thing that surprises me the most about crude oil is how far it's dropped off. How far Rbob has dropped off. And I don't feel like we've really seen that at the pump so much. So I think there must be some sort of disconnect there. There must still be that demand there for the driving side of things. Because to be honest, it took us in Iowa to be able to see it to, we're still having a lot of threes for our gas prices. And if you look at charts, they've drastically dropped off. So I think you can talk about that. You can say that the demand is decreased. but we're not seeing that on the cash side of things. Kind of like that separation cattle right. Cash futures. They're not correlating to me right now. When you look at crude oil and unleaded gasoline.

Paul Yeager: Well, time to fill up the car and head back home. Kristy, good to see you. Good to see you. Thank you. Kristi Van Ahn-Kjeseth. Next week we will look at the attempt to solve the problem of safety when entering the grain bin. And we'll also have the commodity market analysis of Don Roose. Thanks for joining us. Have a great week.

Trading in futures and options involves substantial risk. No warranty is given or implied by Iowa PBS or the analysts who appear on Market to Market. Past performance is not necessarily indicative of future results.