Market Plus with Mark Gold

[Paul Yeager] Welcome to the table for the Friday, December 6th, 2024 installment of Market Plus. Back with us again, Mark Gold. Mark. You've done the show a time or two. You've been around the, the markets a time or two? Does this time period, you talked about the you know, this buy off happens or this news happens, this sell off happens. Does this remind you of any time ever?

[Mark Gold] We've never quite seen a time like this that I can remember. All the chaos that's going on in the world. The new administration coming in, and again, president elect Trump brings something to the table that we haven't seen except for in his past administration. And that adds, you know, to the confusion and the chaos. Who, which of his nominees will actually get Senate confirmation? Remains to be seen. But for the most part, I like a lot of his choices. There's been 1 or 2 that are very questionable about, but I think, Secretary designate Rollins for agriculture should be a good choice. She comes from a farm, I think Texas. So hopefully, you know, she'll have the farmers back in this thing. And, you know, we know that the Department of AG has their agenda, but hopefully it's going to be much more farmer friendly, particularly if these tariffs come on. We've got to do something and we've got to get a farm bill done. It's not going to get done, best I can tell. Looks like a year extension. Maybe there'll be some benefit from the Farm Act not the Farm Bill. But still, we've got to do something for the American farmer.

[Paul] I'm sitting here looking at the picture behind you. The, the corn, the, the hay, the livestock that's over here. Farmer just has to keep plugging ahead.

[Mark] Yeah.

[Paul] But there's not much they can do about policy. So it's about protecting. It's about managing risk.

[Mark] Yeah.

[Paul] What else can someone do right now?

[Mark] Well, you know, managing risk in my opinion, has always been the key. You've got to look at some of the alternatives that are out there and some of your spots, even for Friday, they were talking about, you know, keeping up and doing technology and technologies, not only in the computers, in the physical technology that you work with every day. It's about the new tools in marketing that are available to you, and you've got to look at all these new things in order to survive. And we keep losing so many farmers, you know, with $20,000 an acre. If you don't have somebody coming in, it's not real tough decision. If you don't have a family member is going to take over the farm, and we're losing more and more of these farmers and are getting bigger and bigger. I can assure you, these big farm operations are looking at things, whether they're swaps and things that are a little bit more than just the options and futures that can help the American farmer out here. And if you're going to compete, you know, it's trying. It's like, you know, the little phone company trying to compete with the, the old Ma Bell. You're not going to do it.

[Paul] Oh, you opened up… We could talk, deregulation and all sorts of things, but let's talk a little more, fun about South America.

[Mark] Yeah.

[Paul] And the southern hemisphere, Mark, because I want to ask the question, Gavin in Nebraska. How many acres can South America expand before they plateau? That's another thing we have to think about is just how much bigger our competition can get.

[Mark] Well, Brazil can get bigger, there's no question about it. I was reading something today about certain groups coming against these Brazilian quotas on tearing up new land and whether it's sustainable. And it looks like the Brazilians and the people who are dealing with them don't really care. They want the product. They want it cheap. The Real is cheap. As we mentioned, prices are down. So they're going to plant more. There's no question they will plant more. So I view them as a long term competitor. I don't see it going anywhere. You know, I said for 20 or 30 years, one of these days, in my opinion, we could see Brazil planting all beans in the U.S., planting all corn. And they'll provide the beans, we'll provide the corn and we'll see where we go. But there are things that can help the American farmer if we can get some of this sustainable aviation fuel. That's a big market, big market. That is a game changer. If we can really step on the pedal there, if we can get E15 year round, that's a big deal.

[Paul] Even as we cut our numbers driven of miles, we're not driving as much or electric vehicles come into some and take some of that, that demand. So that brings me to ethanol and crude oil for a minute.

[Mark] Okay.

[Paul] We've heard the Saudis might be losing control of OPEC, but OPEC's always out there. But we still pump a lot of oil. We're probably going to pump more in this country. What does a lower, I would guess, price for oil. Because we'll have more supply due to those who count on ethanol.

[Mark] Well it's not going to help it, for sure. But we're still going to be driving. For the most part, we're still going to be driving gasoline engines and the demand will be out there. I think we can drive more than we're doing now. Roads are being fixed and our infrastructure is being fixed. Right now it's a headache in Chicago. For three years, we've got the Kennedy torn up for three years. But once that's done, there'll be more and more people on the road. So I, yeah, oil prices, in my opinion, should go a lot lower. Maybe, you know, can we go to $55 a barrel. Why not? Can we go lower? Why not? Depending on what happens with OPEC. But the fact of the matter is we're still going to drive. We're going to drive more. Could we go back to, gas guzzlers? Can I get my Dodge Charger back and run that around town a little bit? Maybe.

[Paul] If you're willing to pay.

[Mark] If you're willing to pay.

[Paul] All right, let's get to another question here. Mitch in Iowa has a couple. And Mitch always gives us a lot of good things. What's your target for marketing corn currently stored in the bin? You had said, I'll answer it. He already said sell. Would you...

[Mark] But. But by the call that.

[Paul] Well, that's the next question. Would you be carrying put option protection with a new administration coming in?

[Mark] Not at these price levels. I'm not sure that a put’s going to pay. What are you going to buy a $4 put for $0.15 or $0.20? Take it down to 384. I don't see corn going under that, which is why I don't want to play that game. If you've got the corn in the bin sell it. You've got the great basis. Most places take advantage of it by the call. Let's see what develops over time on the upside. But the beans are a different matter. Well, we've talked about.

[Paul] And Mitch has the follow up to you there. Mark, has the ship for the marketing year 24 crop soybeans sailed or are there better seas ahead.

[Mark] With this big Brazilian crop coming in? Potentially. It's probably sailed. I hate to say that, but it doesn't look good. Now we're just heading into the critical weather stage for Brazil, starting, you know, mid-December through January. That's when you're going to make the bean crop in Brazil. Can it turn hot and dry down there? It can. Are the odds real strong that it will? Probably not. But, in the meantime, you still have to look at buying some kind of put protection for the next 2 or 3 months to get through all this.

[Paul] Do you subscribe to the theory? I mean, a lot of seasonality or typical cycles haven't quite been in place the last couple of years. Sometimes there's this rally between Thanksgiving and Christmas. Has that, is that behind us?

[Mark] I don't, I think the corn still got some more upside potential. The beans $10 has been a wall of resistance in the nearby. And until we close over that a couple of times. You know, I think you got to be very careful out here because every day that goes by, we're getting closer and closer to inauguration. More and more tariffs, perhaps, and a big Brazilian crop. That doesn't bode well for the beans in the long run.

[Paul] You got something positive we can end on?

[Mark] Corn.

[Paul] Well, let's. Okay. Let's close with that. Do you. Okay. Tuesday's report. Do you see? You kind of talked about it in the main program. Kind of what your thoughts were. But any surprises, other than the norm.

[Mark] Exports on corn and beans. Hopefully they'll increase those, hopefully ethanol production will be increased. The crush has been incredibly strong. 215 million bushels. 4 million over what the. We're looking for a new record. Those were all positives in the long run. And again, if we can get E-15 aviation fuel on board, those are all positives that could work into this thing. So do I really want to be bearish at 980 beans? No. But there's still risk out there down to 850 with the Brazilian crop coming on board.

[Paul] You were supposed to stay positive at that point. Try try try. All right. Good to see you Mark. Happy holidays.

[Mark] Happy holidays.

[Paul] So much. Appreciate your time.

[Mark] Thank you

[Paul] Mark Gold everyone. A reminder to get signed up for that Market to Market Insider newsletter. It's free. Sign up at Market to Market dot org. Next week, we go back in time to explore the early days of this program, and we'll have the commodity market analysis from Naomi Blohm. Thank you for joining us, and have a great week.

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