AG Squawk with Davis Michaelsen | DuWayne Bosse | Market Risk Is Not Optional

Corn, soybeans, and wheat end the day higher, but we question whether the rally is real or just a fund-driven pause before August seasonals take over. Dwayne Bosse joins us to break down weather, basis, old crop supply, and the risk tools that keep high cost producers from relying on hope.
• why high cost production changes the marketing mindset
• how end users and buyers shape cash bids and basis
• EPA renewable fuel standard exemptions and what they may mean for biofuels demand
• export inspections takeaways for corn, soybeans, and wheat
• rain coverage gaps across the Midwest and the Dakotas
• old crop carryover and full elevators as a bearish basis signal
• corn chart reversal, volume profile gaps, and fund length risk
• soybean seasonal tendency, head and shoulders risk, and staying hedged
• wheat driven by global headlines and Black Sea export uncertainty
• cattle late-day selloff, fund selling pressure, and risk floors with LRP or options
• hog rally as short covering, then a likely sideways trade
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Futures Trading involves risk of loss and is not suitable for everyone. Past profits are not necessarily indicative of future results/profits. 

Transcript

Market Snapshot And Guest Preview

SPEAKER_02 0:13

Well, it was a pretty good start to the week for corn, beans, and wheat. Cattle Futures took a disturbing late dive. In reflecting on today's corn and soybean market action, however, my guest is giving the upward move something of a side eye. From behind the big blue, bodacious microphone of Ag Squawk, your pal Davis Michelson, the handsome newsman. Pleased to be here with you on a Monday. Hope your weekend was fulfilling, was uh restful, was impactful, perhaps. Hope you had a great weekend. I did. I I took the opportunity to rest, got some stuff done around the house, been putting off some projects in the backyard, got that checked off the list. I'm feeling feeling real good. I hope you are too. Markets were feeling pretty good today. Corn, beans, soybean meal, bean oil, winter wheat, all higher on the day. Livestock, not not quite the same story there. We looked like we were going to be good on the livestock, and then they they took a turn late in the day, as I said from the top here. Hogs kind of you know held the same pattern that they did for the entire session, which was interesting. Uh Dwayne Bossey from Bolt Marketing in Britain, South Dakota will be my guest today in just a moment. And I'm I'm anxious. He sent some charts, he's got some thoughts. He's one of the things that's looming in his mind is the crop condition report, the update coming out. It's it's 2 p.m. Central right now, so we'll get that in about an hour. And you know, I mentioned the side eye just a little bit. I'm anxious to see what he meant by that. We interacted just a little bit before the show, and so we'll get his we'll get his thoughts on all of that. And you know, by the end, hopefully we'll have we'll have had just a little bit of fun. If you're not an AgBull subscriber on our premium side, I'd urge you to check out all of the perks that we have for you over there. Markets, uh, you can get text alerts when the markets move in dramatic fashion. Uh heck you can call one of us if you want to and and just chat about what's happening in the markets, agbull.com or 855-737 Farm. Okay. There's something that's been on my mind this whole weekend. I was mowing the lawn and I I just couldn't shake the thought. And I I gotta say, I gotta say something. And I'm gonna be honest, I've I've written it down here just so that I

High Cost Production And Hard Truths

SPEAKER_02 2:49

this is a delicate topic. But I think it's important to discuss if you caught the show on Friday, I was talking with Jim Wiesmeyer about different policy things and stuff like that. That's you know, that's fine. Tommy popped on and was talking to us about the markets and raised a little bit of ire in the comments section on uh our YouTube video when he mentioned that the one of the functions of the market is to pressure the inefficient uh producer. And somebody pushed back and said, Oh, that that cuts deep. That's the theme was that's not a very nice thing to say. And I understand. I I do. You might see my eyes going over to my notes here because this is the this is the tricky part. I want to get this right and express this to you properly. I would put it a little differently than the inefficient producer, I would call it the high cost uh producer. The subtle difference there, but I think it is important. And understand this end users want to obtain your stuff as a farmer as cheaply as possible. They're trying to make a buck, buyers have one job, buy stuff. But there are ways to at least try to make a profit from your end, no matter what the market does. And and that's why we believe it's so important to work with somebody who understands marketing and how you can protect all of your hard work, all of your expense, your blood, your sweat, your tears, your cashola, your investment. Now, I literally have to say here that there is no guarantee of success, and that is true. But there are other ways to market your crop beyond just waiting for the cash market to turn your way. I'll say that again for those in the back. There are other ways to market your crop beyond waiting for the cash market to go your way. In some ways, the American farmer truly is at a disadvantage because, like I said, the buyer's measure of success is the bottom line. And that means getting the best deal possible from their perspective. Now, yes, Ag Bull does offer that kind of assistance if you're looking for it, but if you've got somebody else that you want to work with on your marketing stuff, that's fine. That's fine. My message is pretty much every farmer is a high cost producer these days. The difference lies among those who learn how to take advantage of the opportunities on the other side of the scale. Folks who put extra financial wrenches in their toolbox. We know it's frustrating. 27 doesn't look like it's shaping up to be any better than 2026. I'm trying to say this as gently and kindly as I can. But we also need to understand the high cost of production puts the farmer at a disadvantage. Information levels the playing field. When people say hope is not a strategy, this is what they're talking about. Find a professional. Let them help you navigate these times and give yourself the best chance that you can have for success. We love you. That's why we do this. It doesn't have to be us, but find someone who knows how to do this and can can help you at least get closer to where you feel like to where you can sleep at night. There, I'm gonna hop off the soapbox now. Like I said, we love you guys. We're here for the farmer. I've known Tommy for a really, really long time. Around 15 years by now, and his heart for the uh the the profession of farming and the industry of agriculture has never changed. It has never wavered. He truly, truly wants to help people out and help them find their way to get as close to success as as they can be. Like I said, I'm stepping out the soapbox. I'm done now. That's it. That's it for the soapbox. And let's get into some news from today. This from Jim Wiesmeyer. He writes the Environmental Protection Agency, that's the EPA, granted one full small refinery exemption and two 50%

EPA RFS Exemptions And Export Checks

SPEAKER_02 6:55

exemptions from the renewable fuel standard for the 2024 compliance year, removing a combined 160 million rins from the affected refineries obligations. EPA denied none of the eligible petitions on hardship grounds, but determined that three other petitions were ineligible. The action covers six petitions submitted by four refineries. So that from from Jim Wiesemeyer, we've been waiting for this announcement. We thought maybe we'd get it on Friday. We got it today, just a few hours ago. You can you can get more from Jim. Like when I talk about the premium side, this is the kind of stuff that you'll find. So so check it out over there. That's Wiesemeyer's coverage of that. Export inspections weekended July 30. Saw corn inspections well above the uh well above the prior week and above year ago. Soybeans and wheat inspections fell week on week with wheat down nearly 20%, both down substantially from the same week last year. With that, let's get to the tail of the tape today. Corn futures were fractionally higher to start the day with soybeans under light pressure. Winter wheat futures were mixed to mostly higher. Fed and feeder cattle were higher with nearby lean hog futures under

Futures Recap Plus 500 Quotes

SPEAKER_02 8:08

pressure. That was right out of the gate this morning. Through mid morning, wheat and soybeans found positive footing as corn added a few cents. Coming out of the lunch hour, cattle futures headed for the exits, reversing this morning's strength and falling well into negative territory. Meanwhile, corn and soybeans and wheat added to early session gains. I've been watching the markets on plus five hundred. We use plus five hundred T4 software every single day for real-time quotes and a host of other features. Plus 500, thanks to the good folks at plus 500. And let's look over to the plus 500. December 26th, corn futures settled out. 472 and a half. I like this a lot. Up eight and one half cents on the day. Your Novi beans at 11.92 and a quarter, up four and three quarter cents on the day. As I said earlier, meal higher, oil higher. Let's go over to the wheats here. Here we go. I've got the Chicago December at 669 and a quarter, up 11 and 3 quarter cents. And your December KC at 7.34, even up 10 and 1 quarter cents on the day. Like I said, livestock were higher earlier today, especially the cattle market. By the end of the day, October feeder cattle down a buck 65, 333. October Fats at 226.72 and a half at settlement, down 52 and a half. And the October lean hog features down to buck 17.5 at 83.67 and a half. But if you look out to the uh February and then out to the April, both of those contracts ended up on the plus side of Unchanged. February contract at 12.5 cents higher, April up 47 and 1.5 cents. All right. Having said all that, wow, that was a lot. Let's just let's just take a moment here and just uh all right. And with that. Let me bring in Dwayne Bosse from Bold Marketing in Britain, South Dakota. Dwayne, I don't know if you need to throw me a life preserver here and get me out of this or not. You know, my point

Dwayne Bosse Joins Risk Talk

SPEAKER_02 10:14

from the whole very beginning is farmers don't need to go this alone. And when we're talking about the markets being tough on the high cost producer, baby, that's everybody. It's a high cost, high cost of production. Am I wrong?

SPEAKER_01 10:28

No, you're not wrong. I'm a producer myself, and what it costs for me to raise one acre of corn or soybeans nowadays just is exponentially higher than it was 25 years ago when I started. So, no, you you're not wrong at all. I was actually nodding my head backstage a lot when you were talking on your first opening there. And markets are one of those things, Davis, that it's so easy to just kick the can down the road or delay the decision or say, well, I'll wait. And a lot of times that's not a good decision. But what we get with so many clients here is I think I just nudged them in the right direction. They they were already in the right direction, I should say. They just need confirmation from me of some risk management tools are a good idea. Yes, you're thinking right, you should protect the price here, this, that. So yeah, it getting some help from somebody doesn't mean you can't do it yourself.

SPEAKER_02 11:19

Right, exactly. Although it's it can feel very big, very overwhelming. There's a lot of jargon, you know, involved in this sort of thing. Honestly, when it comes to my retirement account, there's a chunk of what I've got put away that I said to my guy, look, you watch this stuff all day long, you know what to do with this. You don't need to call me every time you want to do something, just freaking do it. And it that helps me feel feel comfortable. I don't know if that's good for anybody else or not.

SPEAKER_01 11:51

Yeah, no, there's nothing wrong with that. And and we do get a lot of people, you know, that that that are trusting that way too. I think what helps a lot of our producers is they know that we're a producer ourselves, you know, what are you doing on your farm? I hear a lot when it comes to marketing, crop insurance, and and if we're doing it, then we know it they know it's not just a selling point or a commission-driven trade. I'm doing if we're doing it on our end. So, no, there's some truth to that, but these markets are complicated. I mean, I'd love to go back to just trading fundamentals, and I think uh every farmer would too, is just supply and demand, nothing else. There is so much more, Davis, in these markets nowadays than just supply and demand, right? I feel like social media really opened us up to the rest of the world. And then, you know, Elgro trading, which feeds off of headlines, drives these markets. And and sometimes you just have to realize like it's okay, markets can do crazy things in the short term, kind of like today, a little bit, you know. But you said I was kind of looking at it side-eyed. And you're right, I was kind of a little surprised with how we finished the day, and I'm sure we'll get into that more. And and sometimes it's just more buyers and sellers and grains today. It can be that simple sometimes.

SPEAKER_02 13:03

Yeah, yeah, absolutely. Well, uh, I appreciate your candor on all of that. Before we get too far in here, let me just give you a chance to where do we get it, where do we get in touch with you? What you've got a website. Can you give that to us, please? I should write this down as we're going along.

SPEAKER_01 13:19

Yeah, absolutely. They can call us directly 605-448-2365, or they can check us out online at boltmarketinglc.com.

SPEAKER_02 13:29

Boltmarketinglc.com. Excellent. There we go. You know I'm writing it down because I'm pausing and getting distracted. Okay, let's do talk about today's markets because man, I sure do like to see green on the screen, especially on the

Rain Map Reality And Crop Conditions

SPEAKER_02 13:45

corn and soybeans. I uh I was uh I mentioned to you, I think a little earlier, I was in Sioux Falls last week and it rained on my drive home, all the way from Sioux Falls down the 29 corridor, almost all the way to Kansas City. And boy, sure enough, you know, they they wanted to sell up. It's nice to see us get some of that back. How did you feel about today's close in the corner at soybeans?

SPEAKER_01 14:11

Oh, I think you might be right. You know, we were selling off last week, right, going into the weekend, and seeing the forecast and the rains that did fall, and that's kind of a two-sided story there. We did have rains fall in the Midwest, some nice rains, um anywhere from an inch to five inches in an area just south of me and eastern South Dakota through central Minnesota, eastern half of Iowa, and most of northern Illinois. Great rains. I mean, that's really going to help those producers in those areas. The problem is where I didn't mention southeast South Dakota, northwest Iowa, southwest Minnesota. That's a lot of directions there. But I think you're following me. That's the area that's been dry, you know, around that Sioux Falls area. And they're the ones that really needed the rain. So I think the market was a little mixed. You know, we started off lower last night, going, hey, look at the rains, you know, big crops just got bigger, but it almost felt like today, during the day trade, maybe the funds started to realize, you know, we we missed some of the key spots. Now, there's still rain in the forecast for Iowa this week. And in general, I'm thinking the market probably wants to go lower with that forecast. I mean, if it's going to rain in Iowa during the month of or first weekend of August, I gotta think that's gonna put pressure on the grain markets, but we will see. That's why today I was kind of a little side-eyed at it, a little surprised with the close. But like I said, it's it's one day. We'll see what happens later.

SPEAKER_02 15:31

Generally, as I moved northward heading toward Sioux Falls, I found that the crops got a lot more even the further north that I got. If I'm not mistaken, you're not terribly far from the northern border of South Dakota. How do the crops look up there, just generally corn and soybeans?

SPEAKER_01 15:52

Really pretty good. If you would keep going up interstate, it looks the same way. Very even, nice stands. Beans are taller than they've been in years up here. We got the crop in and then had the heat, right? Which actually is what it needed. It helped it catch up. Now that's where it stops. If you cross that border that's just three miles away from my office here and go into North Dakota, it'll start to change. Uh, if you go up I-29 to Fargo, say, boy, they haven't had rain in a month, and it's really starting to show. I think the crop conditions will deteriorate in North Dakota again. So it there's an there's areas that are poor, and I should have mentioned North Dakota when I was meant talking about dry areas. A lot of people like to say it's oh, it's not an I state, but North Dakota plants a lot of corn and soybeans anymore, and very fewer acres of wheat all the time. So it does matter up there, and they're gonna pull the average down this year.

SPEAKER_02 16:47

As I recall, the South Dakota corn came out pretty good last year by the time it was all said and done. Is am I remembering that right?

SPEAKER_01 16:55

Oh, yeah, you are, and it's funny, we had a cold, wet start last year, and I thought, you know, there went the record crop. But boy, if you stay wet all summer long, turns out you can still raise a lot of bushels of corn. And actually, Davis, that's that's a story kind of out there too, is how much old crop we still have. You get in the Western corn belt, guys like to hang on to the old crop, and that's what they sell the following summer to generate cash. You know, at least the older time sellers kind of do that. Of course, being a broker, I'm like to get everyone to hedge ahead of schedule a little bit when prices are profitable, things like that, is you know, okay, ramble on and on. But like my local elevator that's picking up our old crop corn from out here, which was priced before, they're like chalked full. And another big terminal right next to me, chalked full. They're only taking grain when trains come in. Davis, we're not that far from new crop harvest, and we've got a lot of old crop in the Dakotas still to move. Now, you get in Southeast South Dakota, it's a little different because nobody's selling their old crop that they have left because they're worried they don't have a new crop coming or not a big crop anyway. So they're selling their new crop or old crop on new crop sales. Sorry, that's a lot of new old going there. What I'm trying to say is our supply and demand table might get a little bit more bearish moving forward because I think we have so much old crop that's going to carry into new crop here, at least in the Western Corn Belt. It was a big crop last year.

unknown 18:18

Yeah, yeah.

SPEAKER_02 18:19

Well, that can't be good for your local basis there if everybody's full.

SPEAKER_01 18:23

Ding ding, right? It's not horrible right now, but we've told everyone lock in your basis, any HTAs you have for this fall, hurry up and lock them in. Cause like you said, that can't be good. I think it's going to widen out even more. And we might just have storage problems in general if we have a nice crop here in this area. Now, basis does a really good job of shifting and moving bushels after harvest to North Dakota where it was a short crop, Southeast South Dakota where it's a short crop, things like that. But right at harvest, yeah, I'm a little concerned.

SPEAKER_00 18:51

Yeah, yeah.

SPEAKER_02 18:52

Well, let's uh I know that you you've got a couple of charts with you there. I think the one, the first one we've got here uh is D's corn. Are we calling it a are we calling it a pretty nice reversal today, actually, in in the December

Basis Risk And Old Crop Overhang

SPEAKER_02 19:04

corns?

SPEAKER_01 19:05

It really was. For the guy who was calling clients today and telling them to hedge and sell, it's kind of reversed on me and made it made it for a total Monday for the bolt office here. But that being said, like I said, I'm still a little curious how we follow through tomorrow. This could be just a head fake by the funds. The funds are long corn right now, and that's kind of out of the normal here. For this time of year, usually their seasonal tendency is we get rain in Iowa over the weekend, we start to sell it off. We start to grind lower, right? This could be them kind of propping the market back up, Davis. That they want us to think, oh, maybe the lows in and a smaller trader start to buy and then they exit their long positions. I still think they're long about 120,000 contracts. It wouldn't shock me at all if crop conditions come out better than expected this afternoon to see them come right back in here and sell it tonight or tomorrow. But we'll we'll see. I mean, I'm big on trade action, and the trade action was good today. Trade action was bullish today.

SPEAKER_02 20:02

Do you reckon we need to explore the depths of that deep V over there yet another time? Or are we over the worst for now?

SPEAKER_01 20:09

That's deep. No, no, that's nasty from here. I I got a lot of stuff working on there, don't I? Sorry, I was just kind of copying and pasting things together. So that the sideways chart, that's the volume profile. I I like to throw those up every once in a while because they seem have a tendency to go back and fill what I would call a low volume profile area. If you kind of look there around that like 455 area, it's kind of lower volume there. So it wouldn't shock me at all for the market to pause there a little bit, fill that volume profile gap, and and then move on. But in general, that's kind of just a basic volume profile chart there. But yeah, thanks. I got a lot of colors there for a guy who's colorblind.

SPEAKER_02 20:50

Well, it looks good. It does look, it does look good. I'm I guess I'm just trying to get my head around the the potential here in in the uh in the Ds. And I mean, uh talk to me about the fund positioning. What where are their heads at right now? What what can what do you believe we can expect out of the funds here in in the corn market?

Corn Charts Volume Profile And Funds

SPEAKER_01 21:12

Yeah, I think I see what you mean by the V there, the the the V being the low that we had a month ago, right? Yeah, the that V shape bottom, I think I I don't know if we go all the way back there, but I think there's a good chance we test it. The funds are along like 125,000 contracts right now, estimated. If they just decide the weather's good enough and they're not worried about North Dakota or Southeast South Dakota, which I that's kind of what they do this time of year, they sell off, get out of those positions, it dives us back down. I think then we make a good harvest low. And Davis, we've been making a harvest low earlier all the time. August seems to be the end of August anyway, a popular time frame to make a harvest low, which is odd because we're not really harvesting yet. But I could see that happening. Now, then you go into 2027 and longer term. I actually am fairly bullish. And let's yeah, hype on that a lot. That way, producers are happier out there. I think we're just ready for a bullish cycle. You look at world stocks, especially for corn, they're near record lows, or at least a 14 year low. And we have the corn here in the US, but this is why our export demand is so strong. So let's say these crop conditions still deteriorate in these bad areas and we come off trend line yield, and then export demand is great January, February next year. This market actually will come out of this nicely. I'm not saying six dollars or anything like that, but I think we can trend up very nicely after we test that V shape bottom again.

SPEAKER_02 22:37

You had mentioned that that you you you were thinking there was a ton of corn planted in the Dakotas. Do you do you foresee some sort of acreage adjustment at least in your area?

SPEAKER_01 22:50

No, Davis, we were just talking bullish stuff for two minutes. Now you gotta drag me back into the bear stuff. You're doing a good job. You're asking the questions you're supposed to ask. Yeah, you're right. That's that's why I'm a hedger and pushing guys to hedge here. I think the funds sell. I think there's an acre adjustment coming. Whether USDA does it in the August report, September, October. I just hope they do it soon. But I do think there's more corn acres planted than what we currently forecast. How many? One, one and a half, two. I I hope not anything more than that, because you know, we argue about yield all the time, right? But you really want to change the S and D table, just change the acres. Then it really changes. But I mean, up here I'm in what's called the fringe area, right? South Dakota, North Dakota. There's a lot of corn planted. There's a lot of corn on corn. I've got clients up in Grand Forks, North Dakota. So that's you know, a couple hours north of Fargo, not far from the Canadian border. They said that there's corn on every section planted up there. There used to not be corn planted up there. So and guys said the same thing during our winter shows when we talked to them up there. They said we can yield our way to a profit in corn. We we can't as much in soybeans. So I think soybean acres maybe are a little bit lower and corn could be higher.

SPEAKER_02 24:07

Are we talking a corn on corn on corn on corn situation for the foreseeable future in your area? Am I hearing that right?

SPEAKER_01 24:15

Man, I think I don't know if my farm can do that, but are all the Dakotas? But I, you know, corn on corn maybe isn't a thin, but uh less spring weed all the time. Beans, I know on my farm, I I just can't seem to get the yield bump. Like I said, farming for 25 years, our yields aren't that different than they were 25 years, but our corn yields are phenomenally better. So you're right. Yeah, I think the Dakotas just raised more corn going forward.

SPEAKER_02 24:39

Yeah. Let's move over to those those soybeans. I quoted the NOVE at 1192 and a quarter, up just four and three quarters, a little less exciting today. In fact, I think they they trimmed just a little bit of the upside today. I

Soybean Seasonals And Hedge Mindset

SPEAKER_02 24:51

think we've got a got a chart for the beaners as well. Let's talk about those for a moment.

SPEAKER_01 24:57

Yeah, that's a very bland chart compared to the other one. I don't know the colors, but you know, we're well off the peak, and I think that's probably the right thing. Same deal. Funds were uh buying the the contracts here, pushing, and they still kind of are. But remember the commitment of traders report that we got on Friday as of last Tuesday. So that's actually back when we were making the highs during that week, is when the funds were that long. I think they're starting to get out of positions, despite China and buying really nicely here. But here again, too, I'm gonna play the seasonal tendency and just think, man, if it's gonna rain in August and our temps look to cool off a little bit, uh, and that's at least what I'm seeing when I look at different weather models. I mean, everyone's got their own guess. I I see this thing grinding lower. It almost looks like you might be forming a head and shoulders there. And if you break that shoulder right shoulder and go down, then it looks like you'll go back down to the last month's lows, which were on that 11 a quarter. I could see us even dropping a little bit further than that if funds want to get out of long positions. But I I guess my summary is be hedged right now, be short, and we'll let the trade action dictate when we need to get out of those short positions.

unknown 26:06

Yeah.

SPEAKER_02 26:07

Should we take it as a good sign that we, you know, we got an overnight gap lower in the crude oils? Currently, right now, I'm looking at the the West Texas down. I mean, the oct

Soy Oil Vs Crude Biofuels Boost

SPEAKER_02 26:18

down about three dollars forty, looking a little further out, not quite so much, a buck sixty lower, buck twenty lower. Just call it a high seven handle in the in the nearby's in the crude. But soybean oil was able to work decently higher today. What's with the disconnect?

SPEAKER_01 26:38

I I don't know. Isn't that great media right there? Great job, Duane. You're gonna get asked right back on the show. It was a little confusing for me.

SPEAKER_02 26:45

Um we're here for the truth. We appreciate it.

SPEAKER_01 26:49

Yeah, next time you might as well just have my mom on and she can tell you about markets or something. She also says we're really good at our job, too. But it was a disconnect today. I I think it could be nothing more than profit taking. Remember, we flipped the calendar over the weekend, it's a new month. There might be new funds, maybe index funds investing in different things for longer-term trades. It's not really the one day that's so appealing to me. It's it's if we can put a series of days together. So I'm gonna watch to see if the oil can do it again tomorrow. Now, there was, and you led off with this, Weesmeyer did. You know, there's some political talk of better news for E15, you know, biofuels, things like that. That probably helped our soyping oil contracts today, too.

SPEAKER_02 27:28

Yeah. Would that have been maybe more of a corn story? Did that get up under the corns just a little bit? Or I guess it it might have been late to get into the market for corn, the RFS news today.

SPEAKER_01 27:39

Yeah, well, it sure isn't a bearish news item, is it? You know, so no, it's good. I think it definitely helped the market. You know, it's just one of those things you you get enough bullish stories together and it kind of just helped the corn market rally back. And you always got to look back to be like, well, where were we last week? And yeah, we had a lot of pressure going into the weekend. So it combined some positive news, some profit taken, and all of a sudden we had a nice day today.

SPEAKER_02 28:00

Yeah, yeah, absolutely we did. And it's nice to see my guest today is Dwayne Bosse from Bolt Marketing, boltmarketinglc.com if you're interested in what they've got going on over there. Let's let's just we don't

Wheat Headlines And Black Sea Risk

SPEAKER_02 28:13

need to spend a ton of time on the wheat here, but I've got I'm double digit digits higher in the Chicago and the KC wheat here, and I sure do like the sound of that. Oh, poverty grass, you know, found a little life on uh on a Monday here. Any idea what got into them?

SPEAKER_01 28:29

Yeah, I well, I hear that term a lot up here, that parvity grass thing. Uh it's been a frustrating crop lately. Everyone wants to raise it, but you know, it turns out we need to make money, or the banker says we can't keep farming, so it's been a little tougher lately. Uh, we right now is really a global market. We're trading headlines, we're trading overnight stuff, you know, war in Iran, even the war in Ukraine and Russia. Russia over the weekend kind of announced that if things don't change, they might not export any wheat out of the uh the Black Sea. Well, that's your number one global exporter. So them saying stuff like that is worth the market going higher today. And and really, you know, I talked about being confused that corn and soybeans went up. Maybe wheat is the story. Wheat was just high enough, brought everything else back with it. And but like I said, be careful, it's a global thing. And you know, the Russia story over there, the bombings in the Black Sea stopping exports. That doesn't change the global supply, Davis. So, you know, if things calm down, they start to export and move, you know, the wheat's still there. It just has to find other ways to move about. And I mean, it's still a bullish story, but it the global supply didn't change. Now, I will say spring wheat up here, it started off looking great. We had a nice cool summer going, and then we got really hot and fairly dry. I think that did take the top end off, the spring wheat yield. That's another crop I think we probably lose a little bit more acres on, and the yield probably trims down from here too.

SPEAKER_02 29:54

Yeah, absolutely. If you were going to sort of summarize your your thoughts, I don't even know if I'm asking if you're gonna tell the future or not, although you can if you have any ideas. We're coming into August right now, seasonally for corn and soybeans. Maybe the maybe we're talking about a different animal than we are when with wheat, but I especially want to talk to the corn and soybean growers and and make sure that that they because I feel like we're gonna kind of need to ride August out just a little bit. I'm expecting a lot of volatility, and in the wheat too. What what are your expectations for this month? What do the seasonals tell us?

SPEAKER_01 30:34

Yeah, I think I'm riding the seasonals pretty hard here. And the seasonals are for these markets to go down. Wheat maybe has bottomed, and it's easily should. It usually bottoms as you get the winter wheat harvest done. But corn and soybeans, if you've got good weather right now moving forward and you can't hurt the crop, usually take whatever weather premium you have built into the futures market and you start to take that out, and then we'll make a harvest low. So in general, I think it's the time of year to be be hedged, you know, whether that's put options, sold cash, straight short futures. I do like being heavily sold here for a while. Myself on my farm, we prefer selling straight futures and not locking in any cash contracts. We we like to use our storage and then capture carry, things like that later. And I mentioned before I am bullish longer term. Global supplies have cornered are down. I China, I don't think they're gonna buy a 25 million metric ton, but if they do, or if they get close to, or the market thinks they're going to, we could have a pretty good rally this winter. So, but bearish in the short term, and that doesn't mean I think the yield is way high. I know there's people out there going, our yield's lower, it's gonna have to rally. Markets don't have to do anything. Actually, in the short term, they can do whatever the heck they want. So I'm looking for it to grind lower here for a while and then find a nice harvest low, and then hopefully we can buy some bushels back and see a better year in 27.

SPEAKER_02 31:55

Yeah, nice, nice. I just pulled up a spring weed chart. Look at the D's up five and a half all the way up at 720. That's that's pretty cool. The sept right here, the front month that ate 695, that's not bad. Up five and a quarter of its own there. Even the uh even the spring week got in on the action today.

SPEAKER_01 32:13

Yep, and a high enough price to sell even if it's still not profitable.

SPEAKER_02 32:18

Fair enough. I I've got a question for you, and I saw this come over the newswires, and I don't even know what's going on with it, if it's confirmed or if it's not, but the commitment of traders reports have typically come out once a week, and I've heard rumblings that they're

COT Report Twice Weekly Debate

SPEAKER_02 32:31

they're considering releasing that information twice a week coming up, I believe around the first of the year or something like that. Have you heard anything about that? Any thoughts on that?

SPEAKER_01 32:43

Oh, I I would love it. The only thing bad about it coming out twice a week is we need to come it out about three more times a week. It's probably one of my favorite reports because how much have I rambled about the funds here in this conversation? I think it's very important to know where they're at. I look at it every Friday and I talk about it in my commentary every Monday morning. Twice a week, that's good. That we're shortening it up, you know, cutting it down by half, that's great. I would love to see that release at the end of every day. And with electronic trading, Davis, why can't we? I think everyone knows who is trading and where, or at least CME does. And I think they could release that data a little bit more, but I think they're fairly smart too, and kind of wonder who who pays and makes the most trades. And maybe they don't want the commitment traders report out that much. But so there you go. I'll jump off my soapbox now and say that I would love it released as much as possible.

SPEAKER_02 33:37

Okay, good. Information is always good. I'm one of these information guys. I may not know what to do with it or always necessarily how to read it, but at least give me a chance to see what's going on. Give me the information, and uh that it it makes me feel makes me feel included, Dwayne. It really does. Let's go over to the livestock. We were headed higher, everything was fine, and I left and and got a bite to eat, and I came back and and we're in the red, both the feeders and the and the fat

Cattle Selloff Hogs Sideways Outlook

SPEAKER_02 34:06

cattle. What the heck got into them that that turned them back so hard all of a sudden?

SPEAKER_01 34:13

Yeah, I I'm right there with you. I I thought I kind of had my thoughts wrapped up for a cattle in the day. I was gonna talk to you about the seasonal tendency. We made a nice low last week, we're ready to go higher, and then boom, like you said, it I don't even know it was the last hour, maybe the last half hour it turned around and went lower on us. Yeah, probably just ran out of steam for this little leg higher. You know, we've got a pretty big downward trend set up in the charts. I do like where we found support. I do like the cash cattle were traded about two and a half bucks higher last week. Box beef was up five dollars at midday. Everything was looking pretty good. I think we just kind of ran out of buyers at the end and markets sold off. Some sellers jumped. We got to remember those funds are still long in the cattle market. There I go, talking funds again. And I think they generally want out of those positions. So I think we've rallied enough that the last half hour of the day they hit the sell button. And when you look at volumes of like corn and soybeans compared to cattle, cattle are just a fraction of what grains are. So when the funds hit that sell button, the market moves. And I think that's what will happen at the end of the day is the funds just hit the sell button hard.

SPEAKER_02 35:17

Man, I was really excited when the August hogs got up over 100 bucks and kind of held there for a little while. But then, you know, word is well, yeah, we're starting starting to look a little toppy there over 100. And sure enough, now the August, yeah, we're you know, the front month, whatever. But we're down to 97, you know, out to the oct, we're at we're at 8365. I would I I feel like the cattle have a better chance of coming back than the hogs do. But can the it I guess it's it's not necessarily a guarantee that if the cattle go higher, that the hogs will as well, is it?

SPEAKER_01 35:59

No, in fact, they have op uh opposite seasonal tendencies this time of year. Right now, you usually see cattle start to rally up into Labor Day, one last push for grilling season, and hogs actually tend to go the other way here a little bit. So no, you're actually a fairly good prediction of the markets here moving forward. And you're right, hogs, man, they were so bearish for so long. Uh, funds got massively short. And recently, I think they decided we don't want to be that short. And man, did they rally this market back as they were exiting short positions? But remember, exiting short positions and actually buying the market is two different things. It's not what it is. Let me try to explain. They're not buying into the hog market because they're bullish, they were just getting out of short positions because they thought $75 was too cheap and they're right. So now, you know, I think that rally's over, and now we're looking at a sideways pattern in hogs here for anyone listening and wanting to know what hogs are doing, but it's gotten to be just a quiet market in general, a little bit more difficult to trade. So look for more sideways pattern there.

SPEAKER_02 36:58

Yeah, okay, good. So so not to panic here if we don't recover right away. I like the sound of that an awful lot. Any anything else that you want us to keep in mind on either the livestocks or the grains? We're gonna move on here in in just a moment, but I do want to make sure that you you have a chance to say your piece. Anything we didn't quite get to that you wanted to make sure and bring up to us, Dwayne?

SPEAKER_01 37:21

Yeah, uh on the cattle front, everyone likes to sell the high, right? And feeders did get up to that 375, 380 mark, and now we're just you know 330 to 340 area. That's still a really good price. So I'd remind producers of that, my cowcalf guys out there, feedlot guys, you know, if you get stuff in, it's just so much capital. I think you have to protect them anymore. You know, LRP insurance put options if you're bullish. That just puts a floor in the market and it can go higher. Back to the whole asking somebody for some help. You know, I when you're talking feeders above levels we've never seen before, you know, it's worth protecting no matter what you think the outlook is for the market. A lot of times I want our clients to be like, I don't care which way it goes from here. I'm protected either way. That's something we need to do in the cattle market here.

SPEAKER_02 38:08

Interesting. All right, very good. Well, we're gonna move on here. I believe I saw a weather map that had rain over you earlier today. Did you get a little rain just earlier today?

SPEAKER_01 38:21

You know, it's funny you mentioned that because I put out to a few other brokers that I talked to that, you know, yep, there was green on the screen on the radar screen. There wasn't much falling outside the bull marketing office there. I'm right in the northeast part there, and it was kind of disappointing actually. It was one of those rains, like the radar looked good, but the sidewalk barely got wet. Yeah, we have some small sidewalks in South Dakota. But no, it was a bit disappointing. You know, we did a crop tour this morning talking to different brokers in each state. I gotta say, Ohio, Indiana, Illinois, all of them are like, boy, we got better over the last week. Iowa was, of course, split. Eastern Iowa's we got a lot better over the week, and northwest Iowa's, you know, hurting for a rain. And they think uh yield will be pulled off enough to stop Iowa from record yields. But remember, Iowa crop conditions last week were 80% good to excellent, Davis. It's it's just hard to rally a market in August if I was rated that good in the crop condition scale.

SPEAKER_02 39:17

Yeah, absolutely, for sure. Well, I uh I want to move on to the National Weather Service short-term forecast here. Here we go. Extreme heat continues across the southwest as temperatures may top

Weather Forecast And State Crop Tour

SPEAKER_02 39:30

120 degrees. The heat may expand across the west and south central U.S. into the middle of the month. Severe thunderstorms capable of severe wind gusts and large hail will be the primary hazards today across the northern plains into the upper Midwest. Rainfall could be locally heavy across the eastern uh United States today. And with uh with that, I wonder, Duane, if I could interest you in some items of mild interest. I think I lost my camera there for just a little bit. I hope uh Guillermo maybe pulled your picture up while we were doing that there. But uh as we continue, I've got some items of mild interest. Can I interest you mildly for just another few moments?

SPEAKER_01 40:10

Probably.

unknown 40:11

Very good.

SPEAKER_02 40:12

Well, it was on this date August 3rd in 1492. Christopher Columbus sailed from Paulos de la Frontera, Spain with the Nina Pinta and the Santa Maria. Started off on his famous journey. There I am again. Hello in 1940. It's the birthday of Martin Sheen, American actor, who is quoted as we are not asked to do great things, we are asked to do all things with great care. That's a quote from Mr. Martin Sheen. 1946, Santa Claus Land, the first modern-themed amusement park opened in Santa Claus, Indiana. That's right here in the US of AR. And that brings us to today's Egg Bowl Injustice.

SPEAKER_00 40:58

Your Honor, I object.

SPEAKER_02 41:01

I'm going to commit it a an injustice on you, a bit of a bit of a bit exploitive, if I'm going to be honest with you, Dwayne. We do this on every show.

Items Of Mild Interest

SPEAKER_02 41:09

I ask my guest a question that I would not have been able to answer had I not looked it up on the interwebs. But that's just what makes it an injustice. So if if you're ready, I'm going to throw today's egg bull injustice at you. Are you ready?

SPEAKER_01 41:25

Sounds good. I think you already hit me with six questions I didn't answer well during this interview, but sure, let's try another one.

SPEAKER_02 41:31

You're doing great. You're doing great. Okay. Arachnophobia is a fear of spiders. Aerophobia is the fear of flying, and acrophobia is a fear of heights. Okay? Okay.

Ag Bull Injustice Phobia Trivia

SPEAKER_02 41:47

Here is a word that describes a phobia, and I wonder if you can get it. I didn't know this until this morning. The word is this hippopotamonstrous esquipt allophobia. Which is the fear of what? I'll say it again. Hippopotamonstrous esquipt alliophobia. The fear of what? I can give you a hint if you like.

SPEAKER_01 42:13

Well, I think I'll just take a shot at it. What it what it sounds like is you're uh afraid of a hippo, but I have a feeling that the second half of that word, which was about two miles long, and it has some sort of twist in there that you're gonna tell me about.

SPEAKER_02 42:29

Well, the Roman poet Horace first actually used that word in the first century BC to criticize long-winded writers. One might say the word itself is frighteningly long, it's the fear of long words. And that was today's uh I object injustice. I would I hated to do it to you, Dwayne, but you're a heck of a good sport, and I appreciate you. Brother, I'm gonna let you go from there. I'll cut you loose. Thanks so much for spending some time with us and for giving us your thoughts on the markets. There's uh you you helped us kind of get our feet under us heading

Wrap Up Thanks And Where To Listen

SPEAKER_02 43:06

into August here. It's gonna get, you know, it's it's almost go time here, and so I appreciate it. Dwayne Bossi from Bolt Marketing in Britain, South Dakota, boltmarketinglc.com. I sure appreciate you, buddy. Thanks, man.

SPEAKER_01 43:21

Hey, thanks for having me. All uh love talking anytime of a markets, Davis.

SPEAKER_02 43:26

Outstanding. We'll have you back. Uh also thanks to TradeThe News for the view behind the quotes. Look to trade the news. And of course, may I direct you to AgBull.com where you can dig deeper with Ag Bull Intel. Take the markets by the horns with Ag Bull. Visit Agbol.com or call 855737 Farm for the details. Thanks for watching, everybody. Jed will be back first thing in the morning to start your Tuesday, and then I'll be talking with Ben Renchi tomorrow afternoon about corn, soybeans, and well, life. I'll see you tomorrow for more Ag Squawk, everyone.