Interpreting Mid-Season Reports and Managing Volatility
15 Jul 2242 min 34 sec

USDA’s June 30th planted acres report sheds light on the reality of what’s in America’s fields (and decreases the amount of soybean acres by a couple million!). Two weeks later, the July 12th WASDE report gave us another batch of information. Between the two reports, commodities are down significantly from just a month ago. What does this mean for your marketing plan? Is now the time to cut your losses? Should you swing for the fences during the next little grain rally? Bryce Guse and Sean Findley, risk advisors with Silveus Financial explain what’s going on mid season and tell us why now isn’t the time to attempt the home run.

Presented By Silveus Financial

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.

00:00 And we've got the June 30th report that came out. Everybody knows about planted Acres what the USDA says 00:14 how accurate they are. Then we get the farmer whole speculation / argument last year. The 00:20 USDA said this I think they're trying to screw us up. They're trying to game the system and then of course, you've got the wise report which came out July 12th. I've got two guys. They're 00:29 gonna shed light on what this means for you and what you should be doing on your farming operation. I think the key 00:35 here is don't flip out a lot of people do that, but fortunately for you, I've got two flipper outer controllers. In other words. They're like your counselors in 00:44 the commodity marketing game. Welcome to extreme AGS cutting the curve podcast where you'll learn from the experiences of 00:52 America's most Innovative and successful Farmers as they shorten your learning curve increase your yield Roi and profit this episode 01:01 of cutting the curve is brought to you by Sylvia's Financial the company that offers customized Risk Management Solutions 01:07 for your farming operations. Sylvia's Financial integrates crop insurance with government programs and Grain and cattle marketing to achieve profitability for your farm. 01:16 And now here is your house Damian Mason. Well greetings and welcome to extreme acts cutting the curve we're talking today about what the estimates and the reports mean here. 01:27 We are mid season we're recording this mid July. I've got Bryce goose and Sean Finley. They are with Sylvia's Financial. Alright, what 01:36 did we find out here between the June 30th and July 12th report. Either of you take the one lead the other take the other tell me what we heard what 01:45 we found out. I just know that we've apparently did something crazy because the prices have come down. 01:50 Precipitously since about the end of June go ahead Sean lead us off. Yeah, so in terms of you know kind of looking and 01:58 there's actually two reports, you know, there was the June 30th report and then the one that came out this past Tuesday, you know 02:05 in terms of soybeans Acres actually was lowered by over two million Acres from the prior report and corn just raised marginally, you know, 02:17 so on face values, they're really worth that big of changes but soybeans have promptly Fallen a dollar 02:23 bushel and kind of the same with corn, you know, so at least for more than numbers come from, you know, there was actually some fairly positives 02:32 that came out of that report, but the market took a completely different reaction to it right? Here's what's interesting 02:38 to me, you know, we've been around this game for a while. We took the classes at Purdue and and we 02:44 know a little you know a lot about it. I know a little bit about it. I've seen this my whole life of paying attention there's this Euphoria and 02:53 then there's this oh Is always overdone on both the up and the down am I right? There's this. Yeah, we're never gonna have enough food. We're all gonna 03:04 starve Calamity locusts. 40-day floods Good Golly. We're gonna all die. Let's bid these prices up and then everybody's driving around 03:13 like corns gonna have an eight in front of it. And then the next thing you know, oh, you know what we're down to 03:19 six bucks. Corn's gonna have a five minute real soon and it's always overdone on both the up and the down 03:25 am I right? Yeah, I mean just because the markets are very emotional. I mean that's what we've seen mean like what Sean said on bullish news 03:32 for beans. We still sold off a dollar plus I mean for multiple reasons, I mean the kind of the spec Traders the fun managers are starting 03:41 to creep out of Commodities with the inflation talk and one thing that kind of hit on is the US dollar is the strongest that it's been since 2002. So, 03:50 I mean think more people are kind of focused on the demand kind of Aspects that are going on the world today versus what 03:58 the reports brought. I know what Sean mentioned. I mean the US acre change and beans from March to June. That was the third largest drop 04:07 in history with that two point six million largest dropped from what was reported was going to be the acres to 04:16 what the actual planted Acres was that what I'm Yeah Yeah from the March report to the junior report. Okay, so dig this and we're gonna get into all that I want to talk 04:25 about emotion. I want to talk about dollar strength. I want to talk about the chatter that we're all hearing between the the Twitter hashtag 04:32 Twitter whether we're hearing our chatter at the hashtag Twitter or at the elevator or at the diner where we hang 04:41 out or just when we get together and text our friends. I want to hear about all that but more important. Let's go ahead and just go through the numbers in case somebody 04:47 right now is listening and like man, you know what I buckle down so hard on my farming operation. I haven't really heard or paid attention as I recall. 04:56 Back in March we were saying that in the United States of America for only the third time in record-keeping soybean 05:02 Acres were going to outpace your corn Acres. We were going to plant more soybean Acres than we did corn Acres. 05:10 Usually that does not happen. In fact, it's only happened two times ever and one of those times was just like a couple of years ago. 05:17 And of course, it didn't happen. Why did it not happen? Because soybean prices look good. It's cheaper to put in soybeans don't need as many inputs. 05:26 It all made sense to me when the prediction was more soybeans than corn yet. It didn't happen. Is it because Farmers just 05:32 love the plant corn answer me Shawn. I think kind of two reasons, you know, when those surveys are initially sent out in February 05:41 soybeans were trading at some of the highest levels they were and you know the same with corn but in the 30 to 45 days following that corn went 05:50 on over a dollar fifty per bushel run where soybeans really didn't. They maybe rallied 40 to 50 cents. So there 05:59 was a huge dollar Revenue flip from Beans to Corn during that time and then you know, you know, obviously we had some 06:08 of the wet. Wet spring in the late planning but as long as guys could get it in the in terms of net return per 06:15 acre. It really flipped the corn there after the report was surveyed. Well, we're all three of us from corn States 06:21 and we know that there's nothing that farmers love more than in about October getting in that combine and just seeing that corn roll in and 06:30 see it and in that yield monitors just going crazy and then next thing, you know, the the bingers going off that your Hopper is full and it just get some excited. I think that 06:39 I think that they would almost pay to plant corn but I'm probably wrong Bryce. What's your assessment? Oh, yeah, I mean corn is King. I mean that's just 06:47 the facts of it and when we saw that dollar fifty rally, I mean when you're I mean when you're planting and you're seeing it seven in front of that corn number, you're 06:56 feeling pretty confident playing corn even with the higher inputs. Yeah, all of a sudden you're like, hey, wait a minute seven dollar 07:02 and forty six Corner, wait a minute. I can afford this high-pressed fertilize. So anyway, we ended up around like 07:08 88.3 is the million Acres of soybeans. I think it is and the expected yield. Maybe they're still holding that that roughly 07:17 what we did last year 51 or so bushels. Is that over here in Sean 51. Yep. And in the Acres was 88 and that puts 07:26 us about on par with last year. Right? I mean, we're not we have a very by whole hell of a lot on any of the Acres 07:32 or are yield from? Yeah production is gonna be production is gonna be very similar to last year, you know and kind of like Bryce said, 07:41 you know, really the difference and what it's all gonna come down to, you know, looking forward here is what happens with the man, you know, 07:47 what the high dollar you're starting to see economy slow down a little bit. You know, how much does that affect the actual carry out? That's okay. They kind 07:56 of question mark going forward. All right, so answer me that's Bryce on the corn thing. We were at what 90 08:02 and a half or 91 million acres is what we were saying on the June 30 report. Yeah believe so shiny of those up in front of you. It was 08:11 closer to 80. It was closer to 88. Okay, so we were but we're we're under 90 on both. Beans beans was I think beans was right around 08:22 bees was around 90 and dropped to 88 or corn was around. I think 89 and a bumped up like 89 and a half. Okay. So 08:31 so we're both were 90 on both which again then it brings up the point, you know, there's always these speculation with 08:37 these huge numbers farmers are gonna plant more acres to get it and it's kind of like from where where do we get those Acres? We haven't we haven't surpass 90 on 08:46 either of them, right? So so it points out that the acres are what what we got is what we got. Yeah, and 08:52 you'll see that the yield that they have set for corn. It's like think that 177 trend line yield and they and they rarely change that on the 09:01 July report. They kind of just that as the summer months go. Yes, they're basically their Trend lining that based on last year. 09:08 We were in about 177 178 and they're saying we're gonna stick with that but there's a lot of reason and places where we're from to make you think we are going to go down which we 09:17 don't do that usually in the long term, but we'll do it from year to year because the weather Sean yeah to your point Damian in terms 09:27 of yields in seven of the last nine years. The July yield estimate on the USDA report to the final yield estimate in January 09:40 has increased so in seven of the past nine years that yield number is increased, you know, but kind of in the states that were in 09:49 Nebraska Indiana and you know, you know the two other big corn states with Iowa and Illinois, Iowa is actually 09:55 the only state of those four that has a higher condition rating than last year and we're still assuming the 10:01 same National Record yield. Right? Right. So seven of the last nine by time we get to January we realize that we we harvested more per acre 10:10 than with the estimates were but two of those years we did not and I believe this is gonna be a third of in the tent. It'll be 10:16 the third and 10 that we go down from the 177 based on pressure problems Bryce. Do you agree with me? Yeah, and on that, I mean June as far as the corn 10:25 belts go it mean it was a third driest June on a record behind 2012 and 1988. Okay. Yeah, right we experienced that here. All right, so then let's go 10:35 ahead and get to that the next thing if that's true. That means that this six dollar Bean or corn number 10:41 right now, July 14th while we're recording this looks like maybe it was an over declined down on the 10:50 downside and I should sit around realizing that eventually is gonna be some fear put back in the market some realization of wait a minute to supply is 10:59 not going to be as great prices are going to go up. I shouldn't sell six dollar corner now. Should I brace? I mean that's what we're wearing with their clients right now because yes, it 11:09 looks bullish as far as the weather aspects side of it goes but no bullish or yield and not for Price, correct? Yeah. 11:18 What's for price because yield falling back? Yeah bullish for yield not bullish for Price. Not for yield. Okay. So what I my point was 11:27 why not? Why wait why sell six dollar corn because it looks like it's over down on the downside. Why not sit around and just hold out because we're 11:36 probably gonna bounce up from here. This is after all a dollar 40 sell off in the last how many days grace Yeah, and the past couple I mean Montu I 11:46 mean, yeah the last 30 days. Yeah, but so then to kind of fight against that yes the US dollar strong one and if we do pick up key 11:55 Reigns in the next 14 days, it doesn't look like that as of now, but if we get a wet weather forecast next 14 12:01 days, which is key during pollination, I mean if you mix that with the strong dollar we could see some more downside pressure. 12:11 What about the July 12th wasde? That's more Global. That's not just the United States that's supposed to be talking about world 12:17 agriculture said apply and demand estimates. That's I couldn't if there were if the letter e was estimates or exports in Sean corrected me. It's estimates. What's 12:26 the wasd that we always talk about? What does it tell you? That's Global stuff man. Let's talk about South America what they call their second crop and all that is what they say. 12:36 For South America, they pretty much less left. Everything pretty much status quo for the most part this 12:42 I would say the biggest key takeaway from the logsd report on Tuesday was that, you 12:48 know, even in the midst of this Ukraine and Russia situation, They increase the world stocks of corn. 12:58 Even in the midst of that with not playing 25% of the Ukraine crop. Purely due to the world using less 13:06 corn. So the wasd is kind of taken an approach that you know economies are slowing down or just using less and as a 13:15 result that increased ending stocks alone. I would say that was the biggest takeaway from the WASP report. Bryce chatter one of the things we prepared our 13:24 outline here. I said about chatter there's lots of chatter. I mean if it wasn't for chatter, there'd be no reason for all the daily market reports. Remember AM radio 13:33 that has it covers Rural America every day at lunchtime. They have to have something to talk about so you got to talk about the markets. What's the chatter? And what would 13:42 you say about the chatter? I feel like the chatter is is guys are looking at the yield looking at the stuff out out in 13:51 the field and not much in the 14-day forecast and they think that corner beans have to go up and that's not necessarily the fact I'm not saying it's not but 14:00 you also have to look around on what else is going on in the world that can also impact prices. I mean, yes, we I mean now we 14:09 are trading pre Russia invasion Ukraine prices. I mean, we already have all of that taking out of the markets so I 14:18 mean and there was even talk talk today of potential agreement next week between those two but we already have 14:27 taken all that risk premium out of the market. Yeah, so no matter what happens and not that we're still callous but whatever happens with Russia Ukraine, it's already cooked into the 14:36 numbers that we're seeing, right? Yeah, the old days old news. All right. I'm just I'm just a guy and let's say 14:45 Talking to any one of our listeners. They're just listeners. They're Farmers their AG people. They don't look at this every 14:51 day. They don't stare at a market screen every day like you to do. What do you see that? They don't Sean 14:58 you know one thing that I would say, you know is really kind of interesting where we're corn is trading right now and you know being kind of for that matter is around the spring price 15:07 levels that we said earlier in March. Yep, you know what some of these other podcasts that we've talked about, you know, making sure guys understand where they're insurance coverage 15:16 is and where they're policies are actually helping them because guys that took those higher level Eco and 15:22 SEO policies. Are significantly more hedge down at these prices than guys who opted not to and you 15:30 know, we're looking at that stuff every day, you know, we always make the analogy that farmers put their insurance hats on for like two weeks out of the year, you know, it's kind of 15:39 our job to step back in and say Hey, you know, this is why you made that move to add this extra band of 15:45 coverage underneath YouTuber text stuff like this. So your advice and I know you don't give advice blanket over a recording like this 15:54 because every situation is different is first off about the chatter price. You'd say don't get too emotional. Don't get 16:00 too wound up right now. It's only mid July. Yes, and depending on where where you say it like what you just said. I mean if you spent the 16:09 money on the insurance, especially this year that insurance wasn't cheap with how high the guarantee was. I mean, that's why you bought it is for this specific time 16:19 and place where it gives you a little bit of leeway where you don't absolutely have to sell cash right now because you already you 16:28 have that floor. If you bought Eco 95% covered at that 591 spring price. Okay. What's that? So what's that means John? 16:37 I was just gonna say it just basically what Bryce is saying is, you know guys are locking in County yields at the spring price level on their 16:46 insurance policy and you know kind of for example, I have a client that is 50% sold on his corn and being through this year. He has the 16:55 Eco and SEO policies underneath him and he is effectively almost 75% hedged. Because Eco and SEO are eliminating almost 17:05 all risk below 550 corn. So that's the big news right? There is that he's got it set so that he doesn't 17:13 he if it goes to 550. He's never gonna get he'll never do worse than 550, correct. And and if he hangs around he'll he might just do 17:22 what the market is which could be seven bucks again in another month. We just get some weather scare get a couple 17:28 of bad wins, whatever all the sudden some favorable news meaning favorable to price usually unfavorable for the supply because that's 17:37 the way it works. We get something like that all the sudden corn bumps to seven bucks. He's not he's not relying on any of the protections he put in anyway, correct. 17:46 Correct. Yeah, correct in like a lot of times when you put it that way like what Shawn said? Okay in my likely to sell corn here when I really only 17:55 have 50 cents of downside risk at this moment when you probably have a dollar of upside at this moment, I'd probably take I mean, so just approaching 18:04 and making sure they're they're aware of the situation that they actually sit in. Yeah. So the advice that you give right now is given that situation you would 18:13 say you've got possibly we go 50 cents lower than this and and even then you're completely protected right is what 18:21 you're telling me and then but why not just Lull through the dog days of summer here for a while and see what September first brings. Is that the answer? 18:30 that or at least structure a hedge that doesn't cap your upside penny for Penny, you know when I kind of look and talk with guys, you 18:39 know, it's if we've if you have 50 cents of risk to where your income basically flat lines 18:47 You know a lot of producer struggle making cash sales that have a greater risk of hurting them at those levels. So we're 18:56 looking at your you know, kind of structuring hedge is Maybe by a put Sell a lower put and then sell a higher call. You 19:04 know, we come we call those put spreads versus a call so that at least the the ranges kind of work. 19:10 They're not instantly against you. Historically you talked about John the seven of the last nine years. January's results versus 19:19 July's predictions. How accurate Have these July and June type numbers been in predicting the future beyond that 19:29 that was just yield but about the money. I mean in other words how accurate have if you made a big decision right now mid July. 19:39 Would you say every year this how it works or is like now how confident would you be in your July information about heading 19:48 into the interior? Not not very good, you know, generally, you know generally yield is understated. 19:57 And but you know, there's also the demand piece that goes into the balance sheet and for corn it's a lot more of a toss-up, but you know. 20:07 So there's a strong history for the USDA to understand yield but like in terms of new crops soybean demand they have a very strong history of 20:16 understating that demand as well. I think it is. I guess I don't know the exact number but it's much greater than 50/50 that the USDA understates new 20:29 crop soybean demand for most people if you think we do that just to Jack with China. Is that what we're doing this? Are we coming we putting bad numbers out there Jack with 20:38 our foreign competition or is it to make these poor Farmers have something to b**** about when they're driving around talking to each other? 20:45 Yeah, I mean and a lot of this is off of estimates too that I mean just like the acre estimates that we get March that's just based off a surveys too. So, I mean 20:54 if you're one of those Farmers that likes to complain on how far the USDA is off, I mean it starts with 21:00 kind of them then not one to fill out the paperwork and and in February as well where they're not look I mean they're they're taking their best. Yes, 21:09 and obviously they're right 50% of the time and they're not right 50% of the time. So, I mean, it's All right. I tried to come up with the old statements 21:19 and sayings if you've been around this whole industry for your mini, very many years friends. Don't let friends sell in June do this 21:29 until July don't do this. There is some basis kind of like, you know when you know about stereotypes or anything else there is 21:38 some basis for these things. Wouldn't now normally be a bad time. We're recording this mid July wouldn't now only be a 21:47 bad time to make too many big moves because historically July is not the time to 21:53 make big moves or should you do all your big moves in July because you have a chance to ring the bell and nobody else does what's what's the thinking in this time of year? 22:03 Yeah, I mean to even I mean even to go back I know Sean's article just got posted this week kind of about just seasonality in the 22:12 commodity markets. I mean right now seasonally is a time that we sell off and we've seen that even with positive news and dry 22:21 weather. We are still seeing that seasonal sell off by the way Sean. Somebody smart titled your article when the Market's throwing 22:30 your curveballs don't swing for defenses. I don't know who came up that brilliant title. But the point of your article was you're saying 22:36 the markets are on curveballs and just play just go for base hits singles and doubles will win the game for you. 22:46 How is this your different because I think you can make the case that every year has volatility now. Do we have dollar fifty moves? 22:55 In the corn from and two months time. No because there was not that long ago 20 years ago corn was a dollar 86 if 23:04 it moved out of it, but are we really that? Volatile or is it just the old thing of you think it because you're in in it right now, but historically we're not 23:15 any more volatile now than we've always been I read your article twice by the way. Yeah it this year is definitely more. 23:21 One of the is definitely one of the more volatile years that we have seen. I would I wouldn't say it is the most volatile year that we've had but you 23:30 know, these last two weeks, you got to go back quite a way to find, you know, kind of a two-week stretch. It was a small as we seen and you 23:39 know directly to that, you know, when we look at options for clients, you know, one of the pricing components for options is the volatility index. It's 23:49 basically the highest that it's been all year. And what option volatility is trying to do is price uncertainty and markets. 23:59 And you know, it's kind of going directly to what Bryce said. This is probably the most uncertain any of us have ever been all 24:05 year. You know, we're sell we're breaking on bullish news and 24:09 you know it yeah, this is really all right agreement. Bryce helped me out here because maybe Shawn doesn't realize he just said this is the most volatile and 24:20 he's jittery. It ain't even his money. I'm the farmer. It's my farm. It's my farm. It's my future. It's my green bins full of 24:29 stuff and he's jittery. I'm the one that should be jittery help me. Don't don't let me jump off this don't let me jump over this bridge here 24:35 Bryce bail me out here bail out Sean. I mean just at this point in time just like what he said. I mean we wouldn't be surprised if corns 24:44 at five dollars next month or we won't be surprised if it's at seven dollars either. I mean, it's just trying to navigate those conversations with 24:53 their clients right now. Okay, if we break the five dollars how much of Your profitability. Do you want to gamble? I 25:03 would say I mean but like what he said below that 550 if you bought up on insurance right a move to $5 stings. 25:12 But it's kind of showing them the positive. Okay, we go to Five it stings, but that's why we have the insurance and then the other way if we 25:21 go to seven Insurance probably won't pay but we're selling $7 corn. So I mean, they're not saying I want to see five dollar corn, but 25:30 there is positive. ways to communicate to your clients where I mean, you're not gonna 25:38 lose money. I mean it's if we went to five dollars do we stay there, you know because usually you don't move this much in this 25:47 much and then hang around there. You've got some movement but eventually it stays there. Right? We we've 25:54 seen this thing before is the the point is if we go there and stay that 550 you locked in is gonna make you feel like you know, you're gonna 26:03 say well crap I missed that seven a quarter. I could have sold the whole crop for but at least I'm smart. I hung out here and got my 550 here. Do we 26:12 stay there? Yes, and no, I mean there is a the potential too. But what we saw two years ago when we were staring down three 26:20 dollar corn. I mean we were around this time where we we were staring down three dollar corn looking at huge Insurance payouts and we 26:29 were bringing to light guys if this corn Market rallies, you actually lose money. Yeah, the core corn goes up you are losing 26:38 money because you're not getting that insurance payment as big as what you were and it was 26:44 kind of come to like you need to hedge your insurance at this point because if a price rally can 26:50 hurt you. Yes, so there is to a point is that too what's how do I do that? Because you're you know, 26:56 the normal way you're thinking is wait a minute. We we just peeled a bunch off here. Let's say we go to do get down here to 5:50 and all 27:05 someone go back up to seven. Isn't that still good? That's still good for the guy that was protected on the bottom and he can't even worse than 550 who's 27:11 a bad for? But you're not see like you might you might be at the same exact profitability at 550 as you 27:19 are at seven dollars, depending on what insurance that you bought, right. 27:24 Without giving specific advice the person that's looking out the window you and I just talked about it price where you 27:30 and I live and work in Northern Indiana. We had 1.2 inches of rain in the entire month from Memorial Day till July 4th, it averaged about 90 degrees 27:39 and we had 15 mile an hour winds. It was like a light convection oven situation out here. There was 27:45 no subsoil moisture. In fact, I don't think there's still this. That was scared me the the 27:53 product the crops hang around that's a testament to genetics and the research that we've done to make these crops resilient, but I 28:02 could make the case I would have right then said okay, I can't be sold on very many my bushels. I'm not gonna have very many bushels. I'm gonna be collecting Insurance on some 28:11 of this. What else would I have been thinking then and here we are mid July am I feeling any better about things or am I 28:17 still jittery and what your advice to me? I think most people are feeling worse about how things right now. Yes the crop wasn't looking good. But we 28:25 are at seven plus dollar corn now corn is not looking great. And we're staring at six dollar corn a dollar difference. Yeah, so it's like it's a craziest 28:34 thing the conversion didn't make it like oh God, we're gonna be rolling in record surpluses and then all so we peel a buck and a half off of this thing. So what gives 28:46 I should have sold everything 750 is what I'm hearing. Sean yeah, but guys were well and guys were shy too. I'm pulling trigger. So if you like what what you said, well Bryce, 28:55 I don't know how much I'm gonna have to sell. I mean that's where we kind of come in. You don't have to sell the physical bushels. We can set a floor 29:04 or get some protection under you in place on paper. So I mean if so, if you don't produce those bushels, okay, you're not on I mean 29:13 you're not hanging out to dry on those. Kind of sold everything at 750 but you know what? I know that hindsight is 2020. I've learned this with every business 29:21 dealing I've ever had I am way smarter and make the best decisions Ever After the time has passed for the decision to been made 29:30 Sean you concur. At hindsight is undefeated, you know and kind of going back to what you're you know, what you're talking about earlier with the ups and 29:38 downs and Market. It's a constant tug of war between greed and fear. You know, there was a lot of greed at seven dollars 29:44 and there's a heck of a lot of fear. Especially we were trading south of six and I think guys just kind of have to recognize that and when they're looking at their own 29:53 operation just make sure they're making decisions on numbers and not emotions. Global turmoil 30:02 rights Sean says it's already baked in. We already know that Russia Ukraine's a disaster and it's got It's not gonna make any impact. We've already priced all 30:13 that in I say not so fast. I've seen this for you know, many many years. There's gonna be some new surprise. There's 30:22 gonna be some new crinkle. There's gonna be some new war. There's gonna be some new announcement. There's gonna be some thing. 30:29 What do you think when you look at the global situation since we are a global Marketplace? We are 30:35 not the only producer of corn and soybeans and wheat, what do you see that? Maybe others are not seeing. 30:43 Yeah, and I agree with Sean. I mean it's kind of baked into it. Yes, I mean, but I mean we're back to 30:49 like what I said earlier free Russian invasion of Ukraine, but that doesn't mean if there's some kind of peace agreement or something happens 30:58 that we don't have any emotional sell-off. I mean when people hear that news, there's gonna be fear selling where Farmers like, we'll shoot we're at six hour 31:07 corn if that news breaks. Oh, we're we're for sure going to five dollars and you're gonna have the market still sell off because of fear, you know, 31:16 one thing that I has been I think part of the reason that we've seen the sell off it would definitely come as a surprise that would not be baked in 31:25 was if China were to kind of step back in you know, they've been that cancel or of soybean purchases over the past three weeks. 31:34 So for the past three weeks they have canceled old crop purchases of purchases of beans that would 31:40 definitely be a global macro issue that is not priced in if they were to come back in if prices got low enough that we're attracted to 31:49 them. price right now we're talking about mid July. Um, you see the charts and you see this stuff way more than I do but here as a somewhat guy if 32:03 I'm the farm operator, I'm gonna I'm gonna do nothing other than just make sure you have me protected against big huge declines because I 32:12 think that right now based on where these numbers are. There's upside and I want to sit around and capture that am I doing the right thing? And I know you're gonna 32:21 say well depends on your wrist profile. Am I doing the right thing? 32:25 I mean, yeah you I mean if you didn't pay up on your insurance, you need a floor below you at this point in time because with what the 32:34 inputs are at, you can't really afford a fall down to five bucks. If you didn't buy up on insurance. You have to have at least that floor set. I'm not saying that 32:43 you want to go and sell all your cash at six bucks. It's not an attractive price, but at least you need a pocket 32:49 of protection up underneath you talked about inputs six six bucks. I'm breaking even right? 32:58 yeah, so that's I mean if you're buying puts at six bucks at least to kind of 33:03 secure your bottom line. So where if we fall below that you can live to see another year. I mean, I mean, you don't want to gamble that I mean you at least 33:12 want to stay at that break Break Even level, but also you want to give yourself a chance of some upside. I mean, you're gonna put up some money to do that, but that might outweigh what 33:21 upside that we have potentially. Would you encourage me to just chill for a while if I was your customer or would 33:30 you encourage me to make big moves? I would not encourage you to make big moves because a lot of times when people make big moves they're based on 33:38 emotions. So there's time to is there a time to make big moves July 14th, you're saying don't make a big move. Should I be considering a big move comes September when 33:49 the combines are rolling and things look a little different. Going forward it, especially for the next two or three 33:56 weeks. It's really gonna depends. What markets do based on the weather, you know if these forecasts 34:03 Verify and continue showing the this heat and dry. You know chances. Grains probably should see a little bit of a rebound 34:15 from here. Yeah, but just kind of like Bryce said earlier if those models flip. 34:20 We probably haven't seen the low yet and I think clients just kind of have to understand that and you know kind of going back to your question. What should I do? 34:29 You know, I just think you kind of have to say okay if corn goes the five dollars can I stomach that risk? If not? 34:36 Probably sell enough to get yourself comfortable with that just to avoid that. And Bryce if I was your client, I would 34:45 have I would have probably looked around when things were in the low sevens mid-7 said sell it all or at least protect me 34:51 all on that and you would have told me but Damien what if it goes to 10? 34:55 And I would have said I would never been there before. I'll take my chances that we're never going to go there at least not anytime soon. 35:01 What do you think about that? How would you counsel me? If I had told you that one month ago when I could have gotten in at 7:25 740? Yeah, 10 was a 35:10 stretch and we kind of that's the way that we would pitch some guys too. Okay, if you sell this at seven dollars or you gonna be upset that you sold 10 15% of 35:19 your corn at seven bucks more at 10 when you still have more to sell not necessarily you'll be a little bit kicking yourself 35:25 and not as much as you be kicking. If we're at five even if you're making moves, you know, you gotta in response to what you think the market could do 35:34 you have to respect that it could make the opposite move. So whenever you're making these decisions, you know, just make 35:40 sure it's on you know sound reason and not emotional decision where you're trying to out guess where this Market's gonna 35:46 go because you know, just kind of like we talked earlier. This is some of the biggest moves and corn we've seen in quite 35:52 some time and this market and short time. Is a very short time frame soybeans though soybeans not as big as big a moves over 36:01 a short time. But also it's moved quite a bit, right? Yeah, I mean, yeah, I mean we're I mean, what's the spring price on being shown 14 something? I mean we are I mean 36:10 we're we are below the crop insurance Spring price on beans here. I mean which means it's moved by it's moved by two to two and a half books. Yeah. I mean we were staring 36:19 at 1560 to 1580 beans. We're down at 1340. I mean we've seen a big move there too. We moved over two bucks on those things. Yeah, you 36:28 heard two to three weeks on weather. Is that the next time we don't look at this we just we just Not pay attention for the next couple weeks. If you're 36:36 sitting here 70% hedged, then you are probably more able to okay I think corn is going up. 36:45 It's okay spending some money on some call options. But if you're not to that 50 to 70 percent, you can't really afford to go out and go even more 36:54 long the market because like what we've said, there is a chance that we if this 14 day weather forecast or some other news hits. I just 37:03 completely flips the market to even break new lows. You can't afford that to happen. So it's It's emotional. You want to get along the market here a lot 37:13 of guys do but you have to sit back and realize if it doesn't what that causes you're you know what I'm Mickey Mantle. 37:21 Mickey Mantle led the league in home runs one of the years in 1950s. He also led to league and strikeouts. You know what everybody likes again swings for defenses you 37:30 might strike out but by God, you also press the chicks with your home runs. Why when am I allowed to swing for the fences? I would be more apt to swing in for more than a double 37:39 if we break corn hard and we are seeing large Insurance payouts and hedging against that I mean, I think that's the 37:48 biggest thing is it has to be where I look at my profit Matrix and I actually lose money going from 37:57 like five to six dollars. I mean in order for me to go for a home run by calls and do that that has to be the risk that 38:06 I'm looking at where if it goes down. I make more money if I go up I lose money like getting into that 38:15 situation is where I think that you can swing a little harder and by the way, that's a lot of navigation right there. That's 38:20 Bunch of navigation on the insurance thing which is why we always talk about you guys at Sylvia's integrating insurance with commodity marketing 38:29 with government programs because there's nobody in their sister that would understand how you can lose money by a commodity price going up when you are in the business 38:38 of selling commodities. How in the heck does that happen? Basically the price running up and kicking 38:44 you out of insurance payments, you know, and you know, if you're locked in at 5:50, and we're sitting at 480 corn you're looking at a 70 Cent payments. 38:54 Forever for a crop insurance and all of a sudden profit here we run up to six dollars, you know. Yes the market rally, 39:00 you know a dollar but you lost 70 cents lost 70 cents of insurance but I gained 50 cents on my bushel price Accord. Yeah, so, you 39:09 know down 20. Yep, and if you have some already sold, you're not feeling that jump in price on the bushels that are sold we're on insurance. You're 39:18 feeling it on a hundred percent of your bushels. The reports are accurate. I get I get asked this question a lot. 39:24 And what I tell clients is it doesn't really matter if it's accurate or not. That's the numbers that we have to deal with, you know, so regardless if we agree with them or 39:33 not, we have to we have to live and work with them until they change again. That's the old I mean not like 39:39 these cards with the ones I got. Okay makes the grain markets is people not really believe in it that they're accurate or if they are. I mean 39:48 that's what makes the markets move by the way. That's that's the most that's the most astute statement of this entire. 39:54 Ordering that we just did is if everybody believed all this there would be no movement at all. Right. I mean, it's got like my buddy. The 40:00 attorney wants someone was you having beers and can you get sued over this looking surely. He says how the hell do you think we have one fourth 40:09 of the world's lawyers? Of course, all of the questions you've asked me that's what makes these courtrooms full and Torx like yes. Yes. He's 40:19 like and he's just but isn't to come down and just my word versus there. She says again, that's why lawyers have 40:25 a business. It's what you just said. That's why we're all out here looking at these markets because somebody thinks now I disagree 40:31 with that and someone says absolutely oh on that. You've made me really kind of amused about that Bryce, you know, what any more words of wisdom on the way out the door. 40:40 That that's all I got Sean. It's on you Shawn. It's on you your final words of wisdom on the way at the door. You already said if it doesn't matter, it doesn't matter whether I believe or not 40:49 is the numbers we got to go with. So, why don't you give me the best words of wisdom if I want to navigate this and I need a partner because I 40:55 know I'm not a smart enough to do it myself. How do I find you? You can find us on our website. You know, we're 41:02 on Twitter Instagram Sylvia's You know, I just think the advice that we would give people is, you know, make sure you talk to your insurance person your broker, you 41:11 know people that you trust and make sure you understand where you're sitting in this to make sure that you're 41:17 making you know, the decisions on those numbers versus the one that I fear. The one that I love your pointed out was just 41:23 because a market press goes up doesn't mean it's actually good for you because it depends on where your heads and what your numbers are locked 41:29 in at so you might actually pull the trigger in a different direction because you actually maximize two programs and that's where you guys 41:35 come in maximizing the output of come out of the program marketing along with insurance along with government programs, and it will be no government programs this 41:44 year. I think that's a fair statement, right? Yeah, okay, you guys both agree with me on that. We've never had a deal. We're at a unanimous decision before were you 41:53 guys agree with anything that I said? So I appreciate his name? Sean Finley. The other guy is Bryce goose and I'm Damian Mason until 41:59 next time thanks for being here. These are the cool news facilities Financial go to sylvia' to see what they can do for you till next 42:05 time. It's cutting the curve that's a wrap for this edition of extreme AGS cutting the curved podcast brought to 42:11 you by Sylvia's Financial Sylvia's advisor show business minded Farmers how to integrate government programs with crop insurance as well as crop and 42:20 cattle marketing to achieve positive Financial outcomes. Learn more at Sylvia's