Market Plus with Mark Gold

Brooke Kohlsdorf: Welcome to the table for the Friday, March 21st, 2025 installment of Market Plus. And joining us now is Mark Gold, because there's a lot we didn't get to I guess.

Mark Gold: Yeah.

Brooke Kohlsdorf: It's been a busy couple of weeks. We've got some fresh news I guess coming out in a week from Monday. The quarterly stocks report, planting intentions report. How important will those be?

Mark Gold: Well, you know, everybody for the last month has been talking about the intentions report. We haven't heard, really, too much about the stocks report. But the way we're going through corn out here, you've got to think that these stocks are going to come in lower than expected numbers out here. We look at the export figures. They're huge. Ethanol has been a big number. So I think if we're going to see a surprise on the report on the stocks report, it's going to come from the corn. So we could get a bearish acreage number in the corn. But a friendly stocks number we'll have to see. But hedge in the first five minutes. once the report is released is going to be pretty volatile one way or the other.

Brooke Kohlsdorf: Okay. we've got a couple of questions from X that our listeners, viewers have asked. So the first one is coming from Gary in Wisconsin. He's asking, could these tariffs lead to permanent loss of export relations and help South America expand even more, hurting U.S. Ag?

Mark Gold: You know, I'm a free trade kind of guy. I lived through Jimmy Carter's embargoes on the Russians and we never got that business back at force them to grow a lot more grain, which they've done, and they've become a competitor of ours. So I'm not a fan of tariffs at all. And it's going to hurt long term, in my opinion. People that we've been friends with for decades and decades, you know, are going to say, why are you, you know, slapping this on us? And yeah, maybe things have been unfair. President Trump's probably right. There's been some things that need to be adjusted, but to put tariffs on and to start some kind of trade war or we don't know the end of it, you know, it doesn't help. And I think that affects trade long term.

Brooke Kohlsdorf: And that's not news that producers want to hear.

Mark Gold: Certainly isn't.

Brooke Kohlsdorf: Okay. So Ben in Nebraska is asking, have we hit the top in feeder cattle futures for next January? Do I buy puts or LRP?

Mark Gold: Well, have we hit the high? We had this kind of key reversal in the feeder cattle market on Friday. Then we came out with the report with a 92 placement number. That's a low number. I'd be really surprised, even at these high prices, that if we didn't open up at least higher now, are we going to approach Friday's highs and then back off? I don't know, but I would say sometime between, you know, literally Friday's close and next Friday's close, we should make a high. Commodities tend to make their highs either the second to the last Friday of the month or the last Friday of the month, so I just don't see it going on the upside, a whole lot higher than we did this week, with record record prices. And what would I be buying puts or LRP? I prefer the puts because I think it gives you a lot more flexibility. You can roll the puts down, you can roll the puts up. There's there's options that you have there. Once you put on the put the LRP you're kind of stuck with that, that level and that's it. So I prefer the puts. But if you like the LRP that's fine. Risk management, you know you know I'm an advocate of puts everybody knows that. But are there other things out there that are valuable and can help? LRP is certainly one of those things. So hopefully you guys will get some protection. You know, I've seen so many things in the cattle market in the last 51, almost 52 years of being in the business that can shake this market really hard. And I don't want guys to try to get insurance after the barn's on fire. I want them to get that insurance. And if and if I'm wrong and feeders are going to, who knows what price, okay, you're going to lose a couple of bucks on your points, even if you lost the whole thing 4 or $5 and pick up 25 or $30 on a market that explodes out here. Okay, great. Roll those puts up or buy new puts at those levels. But you've got to manage this risk and you cannot let this kind of profitability evaporate on you. because you just don't know what to do. Well, with the puts you still have the upside open the LRP. You've got the upside open. So manage the risk out here. As I would say to anybody in the grain business, I'd say the same thing in the livestock business.

Brooke Kohlsdorf: Okay I'd love some perspective here. So you said 51 years you've been in the business.

Mark Gold: And be 52 years in June. Yes.

Brooke Kohlsdorf: Okay. Well congrats on that. Have you seen a cattle market quite like this in those years?

Mark Gold: Now like this? No. Unfortunately, we've seen the downs like this. there's two words that somebody can utter that would devastate the cattle market. As we saw back in December of 2003 or 4, whenever that was, things can hit this cattle market, presidential edicts could hit this market. Some kind of price limits out here. But we know, you know, as high as prices go, things eventually will work out. Cattle guys aren't getting out of the cattle business, and they're going to use whatever they can to try to expand the herd. At some point. It's a shock that it was only 82% on these placements, but at some point, you cannot ignore the profitability and with high prices will come more production with more production will come lower prices. With high production, you'll have less demand. So you know it'll all work out. But you know, certainly at these levels, you've got to protect it.

Brooke Kohlsdorf: What about locking in feed prices right now?

Mark Gold: Well, I probably wait till the the day of the report to buy some corn futures of corn. I'd buy some corn calls is what I would buy. on the bean meal, I probably wouldn't wait till the day of the report. I probably looking at it next week at some point to try to protect $300 meal, because $300 meal can go to $400 for a 50 meal, depending on what happens. So I think prices historically are relatively cheap out here. And with inflation being what it's been over the last six months compared to what it was 2 or 3 years ago, these prices aren't unreasonable by any stretch of the imagination. Yes, we could have more acres in the corn, but I think that's going to be offset somewhat, excuse me, by the stock's numbers. So, you know, I'd wait till the report they maybe to buy those corn calls. But I wouldn't wait on the meal cost. I'd be buying sometime next week.

Brooke Kohlsdorf: What needs to happen to bring the dollar down.

Mark Gold: Well that's a good question. You know, the dollar's baffled me on different times out here. We've got to see a reason for people, the world to want to unload dollars. It's been the safe harbor for money forever. And people just want to own dollars. If they view that this country of ours is going to go through some changes that aren't particularly friendly, they could get nervous with their dollar holdings, and that could sell off out here. So, you know, if we need to see it under 100, if we can close a couple of days under 100, then I think that opens up the door to 90, maybe $0.85. And those are prices that should attract some more buying. Hopefully that's what we'll see.

Brooke Kohlsdorf: Okay. We haven't talked much about the drought. Is the potential for drought conditions in conditions getting worse already factored into the market or built into the market?

Mark Gold: You know, we sell a little reaction on the wheat market on Friday to that, I don't think we've really reacted much because it's really too early yet. But when you look at that recent drought map and you see all the drought that it is around the country, yeah, the severe drought is in the southwest, but there's a lot of dry areas all around the country. The pattern doesn't seem like it's shifting away from this dry pattern that we've seen. Yes, we had the big snowstorms in Nebraska, during the week. We had a lot of rain and a little bit of snow in Chicago, but it's not enough. And I think that as time goes on and we get enough spring planning, people will be much more conscious of it. If we stay dry. You know that that's a story in and of itself.

Brooke Kohlsdorf: Okay, Mark, we've run out of time. Thank you so much.

Mark Gold: Thanks for having me. Always a pleasure.

Brooke Kohlsdorf: Just a reminder to get signed up for the Market to Market Insider newsletter. It is free. You just have to sign up at Market to market.org. Next week, another data point in the acres debate as spring planting approaches. We'll have a panel discussion with Naomi Blohm, Matthew Bennett, and Ted Seifried. Thanks for joining us and have a great week.

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