What The Markets Are Telling Us At Harvest Time & What We Can Learn From It
22 Nov 2240 min 59 sec

Markets are always a bit volatile but 2022 was more so than average. Corn prices moved up and down by more than 30%, cotton prices dropped by half, and soybeans weren’t always stable. It’s a good practice to look back at what the year taught you in order to make adjustments for greater success in the year ahead. Bryce Guse and Sean Findley with Silveus Financial join XtremeAg’s Layne Miles to discuss 2022 surprises, predictions made right and wrong, and strategies that worked. 

00:05 We had into the end of the year meaning the end of 2022 and we gotta look back reflectively but also with a eye for 00:14 business giving perspective now with what we know there's the only say hindsight is 2020. Well this time hindsight is 00:20 2022. Bags cutting the curved podcast where you'll learn from the experiences of America's most Innovative and successful Farmers as they shorten your 00:33 learning curve increase your yield Roi and profit this episode of cutting the curve is brought to you by Sylvia's Financial the company that offers customized Risk 00:42 Management Solutions for your farming operations. Sylvia's Financial integrates crop insurance with government programs 00:48 and Grain and cattle marketing to achieve profitability for your farm. And now here is your house Damian Mason. 00:57 Alright. Hey, thanks for being here. This is another great episode of Extreme as cutting the curve. We're talking to the Sylvia's guys 01:03 about hindsight's 2022 what the markets are telling us at Harvest Time what things we're seeing now that surprised us what we're seeing now that do not surprise us. 01:12 We got Lane miles of Miles Farms joined us on here because he is a client of Sylvia's we're Sylvia's Financial is a company that merges and fuses together 01:21 three things are very important to your farming operation crop insurance commodity marketing and navigation of 01:27 government programs with me from Sylvia's are my two Pals Bryce goose and Sean Finley. They are risk advisors with the company. In other 01:36 words. They're the two that can help you keep your farm profitable or at least navigate all those things that 01:42 we talked about crop insurance government programs and commodity marketing einstate 2022 what the market is telling us 01:48 now what you're looking at now here we are. We're toward the end of the year. The Christmas decorations are out at the stores serious 01:54 radio is already playing Christmas music. It must mean that sometime after Labor Day. Anyway. What are we thinking? What are you seeing? What do you 02:03 what do you see that right now? You're like man didn't see this coming or wow. Absolutely predicted this coming Sean you go first. I 02:12 would say one of the things that you know, we really didn't expect to see was demand especially for 02:18 you know corn here us almost falling off a cliff, you know, kind of back late last year January to set or January and February we 02:27 were seeing some of the best corn demands in terms of exports that we'd ever seen and I believe the exact number two year-to-date 02:33 is we are almost 600 million bushels behind last year demand demand, correct those 600 million bushels behind what 02:42 the demand picture looked like last year at this time, by the way, if you're listening to this and you're saying yeah, when are you recording us? We're right 02:48 now November 4th. So in other words, even if you're hearing this in December that might be a little different picture. We're giving you our picture as these folks see it today, 02:57 November 4th 2020 to 600 million bushels behind on the demand on corn and that's of course that sounds like a lot but then again we're talking 03:06 that's Of 14 billion bushels a year. What's that amount to that's like 3% How big of a swing is three percent? Well, it's I would look at 03:15 it more in terms of what we typically have for a corn export program. I mean some of the best corn export programs that we've ever had or between like 2.2 and 03:24 2.4 billion bushels. So you talk 600 million behind that and that's danger 25% Yeah. Okay. So by 03:33 the way, my math is very likely off Lane was running his head right there when I said 600 million or 14 billions, like what 03:39 I say it was I said like five percent. I'll do the math right now Lane going to you before we go to Bryce the old man, by the 03:45 way, the new father of the group Lane. What are you seeing right now? The surprise you the number one thing that surprises you from the farm from the combine seat 03:54 from your office there at Miles Farms. Almost Say from the Picker seat Damon. Oh, you know, we're in a we're in a area where we grow cotton 04:02 and you know early in the early in the year. We were looking at a dollar a little over a dollar cotton and don't get me wrong. We took we participated in 04:11 some of that and now it's down down around 80 cents. It's made it's made a run here lately, but you know, it's one of those deals hindsights 2022. 04:23 You know, you kind of kick yourself in the butt when you think man. I could I could have had some that dollar cotton. I think that 04:29 you know with the with some of the stuff that we we've heard coming out of Texas and stuff. I think that I think some that's 04:35 gonna come back, but I don't know. Very few times we ever seen that before. Okay. So wait a minute. We talked about 20% price erosion in cotton and 04:43 that's in about a three month time frame two month time frame. Yeah, I would say when you say Brian surprise sometime in the last couple months. I mean, yeah, it's 04:52 probably closer to have Yeah, because I mean I mean at one point we're 125 130 East 22 cotton. 05:02 At one point time this year. Okay, so 145-130 and then you said we're sitting right now around 80, but that's actually after it took a bounce off the bottom. 05:10 Yeah, we come up on the last couple days. But I mean we're sitting at like 80 86 cents today. Okay, the 05:20 the low and cotton was 70 with a 134 High so it almost perfectly have perfectly have. All right, so we're gonna talk about 05:29 protection on that. But that's the surprise we're surprises and we're gonna talk about ways to not less surprises hurt you surprise 05:35 on that lane. You know we talked about it. Obviously Ecom 101 prices are reflection of supply and demand. We 05:43 just produced the hell out of cotton or did the textile mills stop making stuff where they oversupplied because they couldn't sell 05:52 stuff during covid and there's bales of cotton at every textile mill and 05:56 India or Vietnam or wherever our cotton goes for to manufacture clothing? What happened? I got a really good friend of mine. That is a expert in 06:04 marketing. And he happens to be on this Zoom. So I I might have to pass that question out the price. All right, so little horses 06:12 talk about what you do know about you know about production was cotton so good in the United 06:18 States and obviously if you're tuning in you don't know lane lane and his father Matt, that's one of the founders extreme egg there the Delta region of Arkansas southeast, Arkansas 06:27 Arkansas is what the number three cotton State Texas being number one, Georgia. Number two. You guys might be fourth. I don't know but Point as you 06:36 grow up the rest of the states that grow cotton grow the heck out of it or why what do we see on production man really entirely 06:42 especially for our you know, cotton cotton yields were down. I think they were down in Texas too and 06:48 everybody's going to go to Texas just like they go to the Midwest for for corn. 06:54 I I ate it kind of when it started bottoming out, you know, we got one guy here that works with us, and he actually is a landowner virus too. 07:03 He owns about Six or seven hundred acres and every morning he'd come hate cotton Cotton's dropping out Cotton's dropping out and finally gets down to that 07:11 70% marketing. You're like, yeah Lee. Oh, then we get into Harvest and and it's I mean, I'm not gonna say it's completely it was crap, but 07:21 it was it was down pretty good compared to what we we thought we had. I mean, we we thought we had a 07:27 This is going to sound big. We thought we had a 1,800 2000 pound crop based on bull camps. And we're in 07:33 2000 pounds per acre for people that are listening to this because a lot of folks don't keep up a cotton. What's that mean? It's what for us. 07:42 That's what that would be 300 bushel corn for us. Yeah. So it's it's amazing 1800 2000 bushel of Cottons. An amazing number is really good. So production was 07:51 down compared to what expectation was and that's what you're hearing from the other big cot producing regions. So that's not why 07:57 we saw these price issues. We'll go over to Bryce the new daddy in the group. Congratulations. answer me this 08:07 First off about the price if it's not because of an amazing amount of Supply that means demand had to drop even more precipitously 08:13 than than Supply did the whole world make a lot of cotton and the US didn't order the whole world. Stop using cotton. 08:21 And me and Shawn actually just talked about this a few weeks ago before this cotton rally hit. I mean the US Dollars growing stronger in the in the 08:30 demand. I mean the way that this world is heading we're heading into a recession. I hate to say it but when the 08:36 economy and stuff starts going that way, I mean typically We're not going to have the demand that we need for cotton. I mean 08:45 and it's hard to say but then like we me and Sean are even going back and forth. Oh, well, we're not gonna see much cotton next year at 70 cents for next year, 08:54 but his argument was Us planning less Acres how much of a global impact does that cause I know Sean has probably 09:02 some more numbers on that but it's this other outside factors are weighing in the cotton Market instead of just the just as just a simple production standpoint. 09:11 I mean that textile mills or apparently caught up and oversupplied or whatever after we didn't buy him any clothes because you couldn't go to 09:20 Kohl's during the pandemic they caught up they made stuff now we're so plenty supplied. They don't have as much need for it and 09:26 they're actually slowing down. We don't know buys me close a year from now is everything You think I would say more like I mean, 09:36 you know just with like you know cotton is really influenced by what happens in China. I mean, you're really starting to see China's 09:42 economy slow down our dollar has shot up as a result of all interest rates Rising. I mean, I've always kind of said cotton say leading indicator. I 09:51 mean, it's not necessarily a follower. It kind of goes right along with the economies and when you see all these Global economies start 09:57 to slow down and pause Cotton's Really Gonna Take the Barona that all right Bryce we didn't get to your surprise. We had to go over and talk 10:06 about cotton which was that's just a big number for me. So Sean surprises corn demand dropped and I 10:12 ran those numbers by the way, 600 million out of a 14 billion bushel yield. That means that's only 4.2% 4.3 percent which doesn't 10:21 sound like a lot but that's four point. Your point was it's not 600 million of a drop in demand from 14 billion is 600 from what last year 10:30 was about four times. So it's one fourth of what the demand on the this time here and this 10:36 this time of year we're talking. Correct year to date. Yeah, okay. Price, what's your surprise? What surprised you now with November 10:44 4th hindsight looking at what's happened in 2020? I would say two months ago. We wouldn't think that we would see around seven dollar corn during Harvest. I 10:54 mean this just this past week March 4th. It was just above seven dollars and Dees 22 tested seven bucks and we're 11:03 our conversations were a couple months ago. We sure didn't think that that was gonna be the case today didn't we have a 11:09 thing where we talked about puts and calls you explained that the to me what those are we talked about Lane was on 11:15 here protecting yourself and then the angle was usually historically we had into fall combine start 11:21 rolling prices decline because nobody's pushing to me and bases bases, you know strength. There's 11:30 nobody paying positive bases because ain't nobody needs a call. We thought we might be like five fifty or something didn't we? 11:37 Yeah, that's what was the downside of Rick's the downside risks that we were discussing with guys was that and then we 11:43 kind of get this narrative and then just like this past week on over the weekend Russian announces the they're not gonna allow exports in the Black Sea 11:52 and then weeds out 15 corns about 15 20 with it. So, I mean, there's just been other kind of narratives that have been helping strengthen corn and give us this good 12:01 price at Harvest. I would say 20 cent run because of the whole Rush of thing and and saying they're gonna blockade green shipments out of 12:10 Ukraine or not 20 cents is 20 cents is not the difference between 550 that we thought it might be seven bucks. So what there's other there's other outline factors. Yeah, 12:19 just with the past wise they reports there. They've been cutting yield each month as well. So with the mix of decrease yield in 12:28 the US and with that we've Been able to Rally during a time. That was seasonally we typically do not. 12:35 Okay, Sean. I'm bringing it back around the horn here to you. Okay. Those are surprises the thing that doesn't surprise you that 12:41 might surprise someone else the thing that you predicted and by the way, remember I get interviewed by media and I always feel smart, 12:47 you know, and then they say things like well, what do you think about there's gonna happen and then you tell now if you are one of those that wants to be perceived as an expert, but not actually taking 12:56 a stand you're supposed to say 40% chance. I read an article about this one. So always think about this guys if you're supposed to be the experts say well, there's about 13:05 a 40% chance. This is gonna happen. So it's more than just happens to ants but it's not saying fully it will happen. And that's the way you cop out 13:14 I never do that. I go Full Tilt and say I'm guaranteeing this is gonna happen. Sorry. What did you guarantee me? 13:21 Brand new year January February the first time you and I recorded a podcast maybe six now nine to ten months 13:27 ago Sean. What did you predict that doesn't surprise you at all that maybe others missed. 13:32 That this year was probably gonna be the most volatile year in terms of price of action that we've seen in a long 13:38 time and volatile means that we would have gone from 350 to eight dollar corn or eleven dollars to 19 our soybeans. We didn't have that. 13:47 Swings come on. Uh, what five to seven fifty I mean pretty much a two dollars to 750 back down to 550. I mean we swung like thirty forty 13:57 percent each way almost. All right, so I I was I was challenging to see if you actually do the numbers. All right, so we did see 30 to 40% swings. 14:07 That's probably not. It's certainly not never happened, but it doesn't normally happen. Yeah it I mean we see some big price 14:16 swings normally especially in the spring in the summer when we get weather. I would say the thing that made this year so 14:22 much different was how fast it happens. I mean when we went to 740 kind of early spring or I guess I was kind 14:31 of yeah right around meish later spring. I mean we went from 7:40 to 550 and like two weeks. I mean, it was just blink of 14:40 an eye two dollars were gone. And that is we were just real quick you saying in may we went from seven? Actually was on June 17th. We 14:50 went from 746 to 568 on July 7th. So in about a two weeks time, we just completely erased almost two dollars a bushel for corn and you you could 15:03 have been on either side you could have felt like a genius you could felt like a dunce depending on which side of that you're on right? Correct. Alright, 15:09 so you're saying that that's the one prediction that you had that was accurate you would if you would have told me that right after 15:15 we rang in the new year you would have said here's something I'm predicting. This is gonna be one more volatile years from a price standpoint we've ever seen price. 15:21 Don't be out done by your coworker. What's the thing that you predicted that you were accurate about? I would say we actually probably both did Sean. I'll 15:29 give you some credit on this. But when the Russian news hit and we were up at 7:47 50. We were pretty. 15:36 Certain and we were pushing guys. We don't see corn above eight bucks. And a lot of people were still looking up looking up and looking 15:44 up for that eight in front of these 22 and just could not quite pull the trigger and I think that was one of the things where we as a company were 15:53 kind of hindsight 2020 about that like hey, look at your profitability. We're very profitable at this 74750. Why do you want to chase the 16:02 extra 50 cents? So you're saying that you and John both predicted? Listen? Yeah. There's a lot of noise in the marketplace Russia crane 16:11 media was talking that there's gonna be starvation whatever and then you said 16:17 don't look seven forty five seven fifties already at home run. If it's not. It's a hell of a nice. 16:25 Triple that drives in two runs stick with take it take the money. You said I predicted that. Yes, sir. By the way, you're not in your 16:34 head. I will remind you that in general podcasts or audio which means they're listening to it. There's not one person that's driving the track right now. 16:40 They can hear you not in your head. Thank you Brian. Well, then why do we have to get all cleaned up for this then? Well, because we also make it 16:46 a video for those that want to watch videos. So thank you for asking. It brings up an excellent point. If you are new to this and someone just 16:52 shared with you cut it is both an audio and a video format. You can see our videos over on Acres TV, but you could also find them extreme egg. Not 17:01 farm. So go there I have been to Miles Farms. I've been to all of the guys Farms. I have been to commodity classic. I've been to farm progress show. I've been to Field Days 17:10 AG PhD and I have taped a whole bunch of stuff. So if you are listening to this and this is the first time you listen to it go back and 17:16 check out all the great stuff. We've done Bryson Sean. I've been out here number of times Matt miles Lane's father's been 17:22 on here before we give you information you can use and also it's intelligent information along with insights and 17:28 the dose about looking entertainment. The one thing that you predicted back in January February, so Lane you've been farming now, you're in your late 20s. You've 17:38 been Farmers like your tenth season, right you're getting to where you've seen enough that you can kind of have some degree of confidence that 17:44 okay. I've kind of seen this before. I think that this might be the case. You still get surprised. Sometimes you you know, but what's the one thing that you were pretty confident 17:53 about in January that you Predicted or saw coming and it did, you know not very often does corn hit. 18:03 Seven dollars or cotton hit a dollar and and beans go to 16 dollars and stay there. I mean, I'm kind of kind of like Sean. I mean, you know that, you know, 18:12 that stuff's gonna you're is coming down at some point time. Oh the hard things to know when where's 18:18 the high, you know all that so, you know, luckily that's kind of what we've got Sylvia here and Bryce here for 18:24 is to kind of help us with with I'm not saying hit the high but but risk management. Hey, you know look a little here look a little there. Let's do this. Let's get 18:33 some call spreads. You know, so so just not necessarily a prediction but I mean it's it's one of those things that you 18:42 know that every year you've got ups and downs and this is been a crazy year. So Mark is gonna be crazy with it. So then the next thing is when we want 18:51 to give the person listen to this some guidance. All right, that's the stuff that surprises. That's the stuff that didn't surprises now. Here we are. 19:00 We look back and see what's going on. There's gonna be some regret there's gonna be some things we're appreciative of that. We did your job 19:10 at Sylvia's Financial is to help these farming operations remain solvent and obviously big goal of big profit. What thing are you 19:19 looking at saying, you know what we're really glad we advise people you just told me Bryce you advise people don't don't think that somehow a 19:25 little bit unrest over in Asia and Europe is gonna make this thing ten dollar corn. Let's not be foolish here. Let's take some let's take our profits and and make 19:34 that what's the thing that you saw Sean or Lane that you're glad you did or advice you 19:40 heated decisions. You made you're like, yep feel pretty good about that. I would say a lot of the decisions that I felt really good that 19:49 I kind of helps to your clients to was some of the preseason planning. I mean on some of these podcasts episodes. We've alluded to like Insurance products like 19:58 Eco and SEO. So a lot of what I did kind of before the year started was getting guys lined up with policies like that and then 20:08 tacking on marketing strategies that didn't cap upside just instantly at the market, you know, like so we didn't sell cash right 20:17 away. We protected price with insurance products and options. to give producers better upside 20:26 Lane what decision did you make that you're feeling good about and it could be on your own. It could be just something you 20:35 did. It can have nothing to do with marketing. It can have something to do with what you planted selection organized everything to do 20:41 with what you and the boys from Sylvia's teamed up and did what are you feeling good about the decision in 2022 that Miles Farms did. 20:49 Oh, I mean I can give you a feel good and I feel bad one. I like it. Oh, you know first first off on on 20:57 soybeans and I don't know I'm not gonna say that that Sylvia's necessarily told us that to do this, but you 21:03 know, we both we booked quite a bit of beans that 1250. I mean when I mean quite a bit, I mean, I think Bryson is real close to 50% 21:12 now with me and Dad kind of sit and talked about it and we call Bryson like hey, let's have a meeting and we talked about it and 21:19 you know. Just something we felt like hey man, we ain't seen 1250 in forever. Let's get some we got some we probably got a little too much 21:26 but you know, you can't you can't kick yourself for that the looks like the best thing we did all year. And and 21:33 our we're real weird about insurance insurance doesn't work real good here all the time. Uh, but Bryce come to us and you know about the 21:43 stack program in cotton and looks like that's gonna be looks like that's gonna be a pretty good bang for our buck because we were, you know, we were 21:52 started out didn't think it was gonna be real good cotton prices real good and cotton fell out like we've 21:58 talked about just earlier. Well then Stacks Geeks in I think it's the end of October Tober roughly sometimes when that 22:06 You know when we didn't need it to go back up by the end to be able to capture that insurance will now the first November after 22:12 that date it started going back up. So we're hopefully get double dip, theoretically. 22:18 Yeah, because there was a point in time where they did not want cotton to go up because of cotton went up they made less per acre because 22:27 they were in such they were so far in the money on their Stacks program that it would have costed them for a cotton rally maybe miles 22:36 farms and we've talked about before where programs have the screwy thing where it's it's actually depending on what you're locked in your program. It can be bad for you. If there's 22:45 price appreciation unless it's huge if it's just a little bit. It just takes you out of the money on a program you bought into that's what you're talking about. Right? Yeah, and we 22:54 normally do how that's very much. Sorry. Other than that. How did it end up? 23:02 I think but looks like we maybe price was 15200 AC or something like that. Yeah, we'll see when the insurance the government cuts the check but 23:11 we don't know the official dollar amount until everything settled and you get all the final yields and all that stuff goes but yeah, I mean, it should 23:17 be a very nice looking check. And I'm not making this a commercial for Sylvia's because they're already sponsoring this and everybody listening knows it but two years 23:26 ago, if you weren't working with them, would you have would you have played it that way lane and no, what did it worked out? It would have worked out worse. Yeah. Well, 23:35 I mean, I just I wouldn't I wouldn't have had it. I'll probably wouldn't have known anything about it. The guy here that does the guy 23:41 we work with here in in town is is brilliant. I mean, I mean really it's really he really good we come to him with the stacks. He's like man, I don't know about that. I don't think it's gonna work and 23:51 he come he did some research on it. He's like I'm fixing to get absolutely everybody I can get to you know to go and go with stacks and 24:02 It's it's it was just something a little bit out of our our comfort zone. Yeah, like I said, this isn't really a big Insurance area and that's something 24:11 we talk about every year beginning year. You know with Rises is different Insurance options. Yeah, normally nine times about 10. It's not something we do 24:20 price explain Stacks in 30 seconds. It is basically it was a subsidized put that they had based on the county yield 24:30 and price. So I think this the plant price for cotton correct me if I'm wrong song was like at 105 or something around there was where the floor was and October 24:39 when we slipped down to that 75 whatever continent we were at. Basically they had to put bought at 105. Okay, they were getting all the 24:48 downside from there. Put means the right. To tell that means the right remember we're revisiting past episodes of putting the right to sell and you're saying 24:58 subsidize the government kicked in and bought it so it didn't cost the lane and I didn't look at the miles Farms anything. 25:04 Well, I costed him some money. I mean it was still it's still not mean it's depending on your area. I mean, 25:10 it could be upwards of 15 20 bucks an acre for some of those products. I mean, they said that I 100% got it. All right so decision you 25:19 made and then Lane you said you gave us to the one I guess you're saying was you're kicking yourself a little bit. You sold beans a little bit too low, but also what are 25:28 they always say you farm can't go broke taking a profit. So 50 was a little low compared to where it looks like now hindsight being as it is, but you're 25:37 kicking yourself that you with 50% at 12:50. And now the remaining 50% you're a dollar your dollar averaging up on those bushels though. Right? Right. Yeah 25:46 1250 1250 for my farm agree with some of the highest means I ever sold. Right, right. So so 25:54 What? Okay, we said surprises. Yeah thing that you predicted that was accurate decision you made that was that was good. This isn't 26:03 with me was bad leanor to give us one. Is there anything on the Soviet side that you're saying? Yeah, you know what here's something that I wish we had advised people 26:12 do this. If you're if you're being honest here, there's probably a couple things that you know, you take back if you 26:18 could I would say pride in the middle of that Russian rally Lane pry was with me where he where he wasn't appreciating the 26:26 daily Margin Call email that they were getting in the account but hindsight, that's one thing. I want to bring up like what Sean was saying? Yeah, they sold 26:35 1250 beans but they also didn't sell as much five dollar corn because of the of the pre-position that we got them 26:41 in but one thing that was positive is yes, we rode that all the way up where he wasn't liking Martin calls at 7:47 50, but as 26:50 we work back down we ended the year in a positive position because we didn't get emotional and we didn't panic and run and jump out of that position too early. 26:59 We waited for the for everything to calm down. We got out of the position. We sold the corn at a good price and it ended okay, but that's what 27:08 I know. We've preached on this podcast a lot turn out to get emotional and that was like the perfect example where they didn't 27:14 Panic they didn't like the marketplace every day what it worked out and difficult not to get emotional. 27:19 Extra money though. So the end all on that was it was a little bit painful, but but the end you're happy Lane 27:30 with where things end up on corn. Yeah. Yeah, I mean it's first year I've ever really done any kind of 27:37 A market Spirit called, you know spreads like that. You know, I've just learning and you know, we made a little bit of money. I mean we didn't we didn't knock it out the park 27:47 but but compared to where we were we knocked it out of the park. Yeah, right cool. All right decision. You 27:55 made good and bad. We just kind of went through that Sean. You didn't tell us one. You didn't tell us a decision or a piece of advice you gave you wish you 28:01 had or something you wish you could take back everybody get smarter. When you remember just like every athlete gets better the more 28:07 years. There are away from their companions for we have these calls a decade from now Lane will have been all state number 59 there 28:16 number 57. I'm sorry. There you go. Never outside linebacker for the McGee Tigers. I'll I'll see how else 28:25 and we talk to him another another decade. He'll have been the best athlete that God McGee High School ever produced and he'll have he 28:34 ran a four two forty. He bench pressed 285 routinely as a 16 year old, that's how it works. So remember the further away 28:43 from me is Get the better you were but right now let's admit we're just screw up. Where'd you make mistake? Where were you wrong? 28:51 I would say the biggest mistake that I made out here, especially in the western part of the belt is Basis has 28:57 made a Monumental change compared to where we normally see here. I mean here in central Nebraska at Harvest Time guys normally so 29:06 corn for like 30 under basis right now. It's 30 over and if you go about two hours West it's almost a dollar over so guys 29:15 are seeing basis swings 50 cents to a dollar fifty differential and they normally do I mean part of that's been the drought the last couple years in 29:24 Kansas, Texas Oklahoma, but we also have that huge hail storm come through Nebraska. So I mean just the combination of all that has led to some wild basis wings 29:33 that I mean people who is gonna be wild but not quite that yeah, that's hard to predict. Okay. So the person that's tuning in for the first time ever to Extreme as cutting the curve they 29:44 like what they're hearing from the service Financial Group and they're like man I'm digging on this these guys can help me stay solvent, but I'm 29:50 embarrassed to ask. I'm only 19 years old. I'm new at this whole thing. What the hell's basis. So go ahead and just do the quick just like we had 30 seconds of explaination from Rice explain basis 29:59 positive and negative to the person that doesn't want to ask but wants to be more clear on the subject. 30:04 Basis would be the difference between the Futures price and the cash price you receive at your end user. So if the board's a seven 30:13 dollars and you get paid $650, you have a 50 under basis. I always kind of explain it as a function of supply and demands of 30:22 the local markets. So the point is normally in the fall when the combines are running the Chicago Board of Trade. I guess it's called the CME Group now 30:31 would say yep seven dollar corn but in your local Vader in Nebraska, they're like, yeah, it says seven dollars on the CME Group website, but we don't need any 30:40 more corn because everybody's bringing truck clothes to us. We're gonna pay you six 20, we're 80 cents 30:46 under a negative minus 80 basis is what we're saying, right and what you just said that so surprising and this is whether and Supply related Supply because of weather right Shawn. 30:56 Yeah. Yep, and we're actually paying positive basis right now, which is very very rare for being as big of a corn Surplus State 31:05 as we are. Yeah, generally at this time of year. If you're in a state that grows corn. There's no such thing as a positive basis in November and you're saying now there is price going 31:14 to you and we'll come back to my man Lane. What do you got? What what do you look back now and like, yeah this kind of this kind of 31:20 caught me off guard and I guess it shouldn't have because she's seen this coming. 31:24 I think it caught everyone off guard is when corn went from 750 to 550. I mean, we didn't expect that especially like what Sean said in a two three weeks span. We were 31:33 not expecting that the same with Cotton Lane can intest of this. We weren't thinking 70 Cent cotton when we're out a dollar 31:39 25 plus and just because if you happen to be watching the video here and not just this in the audio Bryce was like this when I bring 31:48 up my Sharp scientific calculator El 531 s that I got in 1988 when I went to become a freshman at his alma mater Purdue University because he has 31:57 this is an antique to him but just for fun. I just punched it out. That's a 26.6 a 27% swing and corn 32:03 prices that happened in. Two weeks three weeks two or three weeks with Sean said, yeah. 32:10 You know, what's interesting is did that did that thing on if you looked at graphing it did it happen exactly. Would we see a 26% swing on soybeans 32:19 and wheat to correlate at the exact same time. We really didn't did we maybe on beans but on wheat, right? We which is a different monster this year because of the Russian 32:29 stuff as well though. I mean, I bet weak tracked with it somewhat, but it's just been I mean One little tidbit of news on Russian wheat 32:38 and wheat takes off 50 cents one one way or the other. We peaked earlier, too. All right, what you missed Shawn. What did you miss or think most 32:47 people missed and maybe you didn't what what thing is looking back. It's like this should have been obvious and somehow a bunch of us mister. 32:53 And I mean, even though I said that you know, I expected volatility. I mean, I just think that sheer speed that it moved 33:02 caught a lot even stuck people like softguard. I mean, you know when you're walking through and talking markets with people, you know, you're you're thinking 33:11 of you know, okay if corn moves fifty cents, this is what we do. Yeah it moved. Well, I think it moved it the equivalent of two limits and 33:20 one day at one point. We're a traded limit up and actually traded limit lower that same day. So I 33:26 mean just the sheer. Yeah. It's about volatility within the same day limit up and limit down all the same day. That's that tells you that somebody's making money. Somebody 33:35 should be making a whole lot of money on that day. You I would say more people lost money on that day, unfortunately, but we get all three. All 33:43 right. So back to you anything that anything you're looking back at Lane. You're like, yeah, you know what I should've seen this coming. oh, I don't know if I'd been over Scenic scene coming that 33:53 Damian and it's not necessarily, you know in in the market but You know, just our our you know in our 34:00 local market of we had a we had. a lot of a lot of rain this this Harvest and we ended up with a lot of damage and in our local market our due 34:11 to damage we seen well over a dollar dockage from our from our damage and damage scales that were readjusted because they they couldn't take what we 34:24 had and they couldn't just just take five percent five percent would have been six cents. Well now it's a it's a it's over a dollar. Yeah. So 34:33 you're looking at a dollar swing just in something. You can't control. Yeah. And if that part is that dollar could very well be your 34:39 margin. I mean, it's yeah times when 25 cents might have been your margin in a bad year. And so, you know 1150 really quick. Yeah get you back 34:48 to using your borrow money. All right last thing one thing that you think 2022 taught you made you better make you stronger has altered 34:57 your decision making for next year. One thing that you're like Hey, we're all still learning no matter how many years you've 35:03 been farming and however yours you've been in the risk advisor category like Sean and rice one thing that you're saying 35:09 this is this is something from 2022 that I'm gonna make sure I put in the in the Noggin and Very forward and help out help myself 35:18 or my clients in the future. John leveraging crop insurance and options to build your starting marketing strategy, you 35:29 know kind of like Lane said a lot of guys sold cash early in the year because they thought that they were good prices and they were locking in profitability which 35:38 that is not a wrong thing whatsoever. But you know just kind of like you said when beans go to 1250 to 1550 that things a little bit, you know, so a 35:47 lot of what we did was bought up on good insurance products and bought, you know, some type 35:53 of option to kind of put the floor in and they just be patient to wait Mark at the crop in the volatile spring and summer months. 36:02 Mmm, playing or Brian's what's going next Lane you go something 2022 taught you that you're gonna absolutely put in your in your 36:11 in Your Arsenal for next year. See my truck. Well, we'll go to Fry's price something 2022 bought you this Gonna Change altar or make you stronger 36:21 next year. I would just say patience in general just Things got so volatile so quick and it would it was so easy to just go ahead 36:34 and flip the switch and go the opposite direction and it's like what Sean says when we're in a limit up they go to a limit 36:40 down. You can very easily oh crap is out 20, let's buy and then 10 minutes later you're already underwater and it's just being patient 36:49 and letting the market do what it's gonna do because you cannot predict it. 36:54 I mean take away from 2022 that you're gonna put in your in your in your mental and your mental Arsenal and use in the future 37:03 something you learn from. Something's Gonna Make You Stronger. I spent the probably one of the best hours. I've 37:08 spent all year. I spent an hour talking to Bryce about and I and I pump Bryce up. He's not that cool but he's all right. He's the 37:17 only one that smart enough to where his company is logo on the screen to make sure that then the people can see that he's out here. Yeah, tell 37:26 my arm but I got it not had John has it on his on the side. He has turned sideways to talk to see it. Anyway. So besides pumping up Bryce. What's the the hour that you 37:35 got and what you got out of that hour? I've spent an hour with Bryce about talking puts and calls call spreads the basically 37:43 the the podcast we did a month or two ago. I did. Five months ago and then we got into start doing some of those options. We got to we got the Margin 37:55 Call emails. We lost the money we sold we sold out of them. We bought some more we made a little bit of money. We kind of broke us 38:04 even a little bit plus made. I think I think we made like 2900 bucks by the end of it at one point time. We were down pretty pretty solid. 38:10 Oh just to see the difference in how things can go for the good how things can go for the bad and not to be not to be terrified. 38:20 It's okay to be scared, but not to be terrified for you know, trying to do any of those those spreads. 38:26 I like that statement. I think we can end it there and I would like to point out Bryce's big point was about patience. And remember 38:32 I could be very patient. And unemotional with your money also and I mean that's really the big takeaway here. The price is making 38:41 that when it's somebody else's money. He's very patient. He doesn't get emotional because it's not his and that right. 38:47 But you've seen the way that Matt looks I wouldn't really want to piss him off. So I tried to still it's still not maybe want to do that. Then. Yeah. Matt 38:57 miles is a is a is the toughest guy in the extreme AG group Temple and Kelly are both like a little roosters running around the Barnyard to think 39:09 that they're you know, they think they're they're strutting. They're strutting cocks around the you know in the chicken yard and there's 39:15 and there's Matt and Matt just actually like he's like the turkeys like, okay little chickens. He's like the bowl. Okay. Oh, yeah. 39:24 You're right. You're the toughest. You're the toughest pouree. I'm the bull. That's Matt miles. All right, 39:30 we're wrapping it up. If you want to learn more about this stuff Sylvia's Financial. That's where these guys work. 39:36 They're both risk advisors. Hey obviously want you to be profitable because they learn something a long time ago. If they can't help your business remains all but you're probably 39:45 I'll keep giving them your business and that's why Out there working for you. They want to learn more about this Sean Price where they go. 39:52 Service financial.com and we're also on Facebook Twitter Instagram old main socials Google share this episode 39:58 with somebody that you believe can glean value from it. And that's most anybody that's in a farming operation because there's lots of good information here. His 40:07 name is Lane miles. The Bull's son as we might say out of McGee Arkansas and and again number 57 200 pounds 40:16 of streaking anger as the McGee as the McGee high school house Friday, by the way, we're recording this right now and you know, he'd be shooting up right now if he wasn't a farmer. 40:25 My name is Damian maze until next time thanks for being here guys good information until next time it's extreme ice cutting the Curve. 40:31 That's a wrap for this edition of extreme AGS cutting the curve podcast brought to you by Sylvia's Financial Sylvia's advisor show business 40:40 minded Farmers how to integrate government programs with crop insurance as well as crop and cattle marketing to achieve 40:46 positive Financial outcomes. Learn more at Sylvia's financial.com.