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Tommy Grisafi is the main host and content creator for Ag Bull Media.
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AG Bull
AG Squawk | Davis Michaelsen & Jim Wiesemeyer
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We break down a wild Friday where corn and wheat surge while livestock fights heavy pressure, then zoom out to the real drivers: yield risk, global weather damage, and rising geopolitical tension. We also connect the dots among beef-processing shakeups, mCOOL politics, energy costs, and a new land competitor moving into rural America.
• grain strength tied to export demand and worsening U.S. and European weather
• Why a lower corn yield can flip stocks-to-use into a demand-pull market
• France corn condition and Europe drought as a major production story
• Beef processing expansion colliding with a shrinking cattle herd and plant closures
• What Tyson’s consolidation signals for shackle space and rural jobs
• mCOOL momentum in the Senate and the hurdles in the House, WTO, and USMCA
• Black Sea port strikes raising a lasting wheat risk premium and shifting buyer habits
• Iran, Strait of Hormuz risk, firm crude oil, and a thinner U.S. SPR cushion
• Fertilizer, diesel, and harvest-time input costs as a hidden market driver
• Data centers in farm country competing for land, power, and water
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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.
Well, the Greens posted a sporty end to the week while the livestock were under some pressure. Something's flashing on my computer over here. I got a couple news stories I want to mention, and we'll talk
Grains Jump While Livestock Slips
SPEAKER_04about well, I suppose the weather, labeling, some final thoughts maybe on the WASD numbers, Black Sea tensions, and a shakeup in beef processing. From behind the big blue, bodacious microphone of Ag Bull, your pal, Davis Michelson, here for Ag Squawk in the Afternoon on a Friday. Glad to have you here with us. Heck of a day in the markets. I'm going to bring in Mr. Tommy Gersoffi in just a bit to give us the high points on a very exciting day of trade. And I said the livestock's are under pressure, but man, they made a pretty good effort toward the end of the session there. And uh there were some interesting things going on in the curb trade. I know that Tommy likes to talk about that. Fascinating stuff. He'll be in in just a moment. We are the financial channel obsessed with agriculture. I've been I've been pounding the pavement a little bit today. I'm really excited about some of the guests that I've got coming up. I've been scheduling out a few weeks in advance, and I'll give you more details as we get closer to those dates as to who we've got. But I I just want to say thanks everybody for watching. In case you didn't know, we're on YouTube. Maybe you're listening to us on Apple. Maybe, maybe you're checking us out on Spotify. We really appreciate you all being here and listening to the show and sending your warm regards. We really appreciate that. Thanks everybody. Take us with you wherever you may roam. It's it's so convenient these days. Get us going on your phone. Hello from your phone. It's me. All right. My guest today is becoming something of a regular on Friday. And we're we're certainly appreciative of Jim Weesmeyer's time. One of these weeks, we're we're gonna let him let him off work early in the afternoon so he can get an earlier start on his weekend. But today, as always, I've got a whole list of headlines that Jim put out earlier this week. And I'm gonna I'm just gonna throw them back at him and and see what uh see what shakes loose, see what sticks to the wall. It's gonna be a great conversation, as always, with Jim Weismeyer. May I first direct you to Agbull.com where you can maximize your chance for success with Ag Bull Intel. Take a gander at our premium side. Take the markets by the horns with AgBull.com. Heavens, so inexpensive. $25 a month or $250 for an entire year. 250 big ones. That's two months free for an annual subscription. Call $855-737 Farm. 855-737 Farm or visit AgBull.com today, won't you? All right, let's get into the news. The string of daily export sales continued today. China stepped in to purchase 136,000 metric tons of soybeans for delivery in the 26-27 marketing year. And by my math, this week we've moved around 641,000 metric tons of soybeans and 105,000 metric tons of corn. Not too shabby on the soybean side there for sure. Get this. According to French crop agency Agrimer, just 29% of France's corn crop is in good or very good condition, while 43% is rated in bad or very bad condition. It's hot around the United States here. It has been wicked hot over in Europe, and the crops are definitely beginning to suffer. And just a little bit more news over to the Europe. Ukrainian ministers say they expect that nation to produce 80 million tons of grains, oil, seeds, and other ag products in the current marketing year. But thanks to Russian port strikes, the ag minister believes they will only be able to export around 30 million tons, roughly half of the annual average export figure. And let's get over to some consumer sentiments. I think I've got a slide on that here somewhere. According to the University of Michigan, consumer sentiments sagged as views on current conditions and future expectations came in four to five points below the previous survey. All right, let's get to the tail of the tape. It was an exciting day in the markets. Corn and wheat were sharply higher with the open, with winter wheat gaining 20 cents or more in the first hour of trade. Spring wheat joined in, gaining double digits in early trade. Soybeans added a nickel. Livestock futures fell sharply with feeder cattle leading the charge lower. That was within the first hour of the opening bell. Rounding into the lunch hour, corn and wheat added on to earlier gains. While soybeans held mostly steady, cattle futures recovered somewhat, but remained well in negative territory along with lean hogs. Let me browse over the settlements, but first let me say thanks to plus 500. I've said it before here at Ag Bull. Me and my squad use plus 500 T4 software every single day for real-time quotes and a host of other functions. And you should as well. Plus 500 look to plus 500. December corn up 11 and one quarter cents on the day, 483 and a quarter. Novi beans, 1192 and a half, up 10 and 1 quarter cents at settlement. I've got the bean meal and the bean oil, both higher on the day. Over to the wheats. Heck of a day in the wheats, 689 and a half on your December Chicago wheat. That's up 21 and one quarter cents, gang. 3.11% higher on the day. D C C wheat, 767 and three quarters. That's up, get this, 33 cents on the day. Over to the livestocks. Rough, rough time in the livestocks. We're going to spend some time on some issues in the beef market and just see if any of this has anything to do with it. October feeder cattle down $3.37 and one half, $3.25.42.5 at settlement. October fat cattle, $218.87 and one half all told. Down a buck seventeen and one half. And then October lean hogs, not quite as bad, but lower as well. 37 and one half cents lower on the October Hogs, $81.75 at settlement. Before I bring in Jim Weismeyer, I'd like to bring in Tommy Grasopi and just find out. You know, he was giddy about the markets, the way they closed. He mentioned the curb. This there's there's an awful lot of excitement
Tommy On Wheat Strength And Flooded Corn
SPEAKER_04in Tommy Grasophi right now, and I just want to bring some of that to you. Welcome, Tommy. Glad to have you here this afternoon. Give us a little market perspective, bro. I'm gonna have to unmute you. There you go. Whoop, almost got you. Let me click that. You're still muted. You do it. I do it.
SPEAKER_00There we go. I was clicking and you were clicking. Sometimes I should be muted. And I know Jim's back there giggling. Jim. Jim's like, mute him. I was what I was saying was I was very prepared. I got up early. I was very prepared for a very active day in cattle. And I had that in my, you know, like it's going to be busy in cattle. And I thought it would be grains were up a little, up five, corn was up five when I got up, and wheat was doing wheat things. Traded lower last night. And then again, when Europe opened up and everything else, of course, when it's night here, it's morning overseas. And uh a lot of these market moves in wheat have been led by uh European traders, and obviously they have those problems. We talk about the Matif French wheat contract, but all the wheats are uh having problems with a production problem. So, how do you get a market to rally? Supply and demand 101. Don't grow a lot of it or have a lot of people buying it. And some of these grain markets are starting to have both, and that makes for a huge market. And I think, Davis, that's happening in corn and wheat. And you could see here both yesterday and today, corn and wheat had some big updates, and beans are like, yeah, bro, we're cool. We'll just be up four, okay? Let us know if we need to do anything. Because these August rains are mucho beneficial to the bean crop. Whereas I think the damage to the corn crop and the continued damage, I just full note, Governor Braun, or not Governor Braun, is that it? Governor Braun of Indiana. Am I saying it right? Mike? Yeah, I think so. Braun, we can go with Braun. We're gonna say Mike Braun. Hopefully, Jim's shaking his head, yes. Yeah, uh, he's shaking his head yes.
SPEAKER_04Jim says yes.
SPEAKER_00Governor Mike Braun, the the state of Indiana is under disaster, not only from what happened earlier this week up in Illinois, Indiana, Michigan, Ohio, but then we're being inundated with more rains. We have rain on the forecast for the next five days, and we're having rainfall totals. Our very own Craig Solberg put some numbers up, as you saw it on our chat service. 12 inches in some cities for 24-hour rain totals. That's a no bueno here. I don't care that rain makes grain. 12 inches makes a flood. And unless these corn plants come with a snorkel, they're not gonna dig that. So, Pro Farmer Crop Tours next week. I am super excited. Good luck to all the people out there. You better have boots, and I don't mean those little short, cute ones your kids wear.
SPEAKER_04I mean boots because you need mucking boots, mucking boots as well. Yes, sir.
SPEAKER_00And it's gonna be nasty. Real quick, uh, the good folks, Mr. Clinton Griffiths called, they're gonna be live streaming, and he's asked me to join him every morning at about eight o'clock. So they're gonna have uh farmer live, yeah.
SPEAKER_04Yeah, and uh gift of gab is starting to pay off there, brother.
SPEAKER_00Well, yeah, and I don't know what I'm gonna say, but it's gonna be interesting because it's gonna be awesome. They want someone who can just go on and talk live on camera. You believe that, Davis? And the first name he thought of was me. But yeah, taking it from the top, and I'll let you and Jim get in the show. And congratulations to you for six weeks straight, and congratulations to Jim and I. We have an anniversary party, one year of doing Wees Meyer's Perspectives. And I'm telling you, folks, I am having the time of my life. Yeah. Now, Jim's a tough cookie. I don't know what you know about Jim, but he expects everything to be perfect. And if you if it's not, you're gonna hear about it. So I look forward to every Sunday morning. You know, again, Jim sends his notes, and then we load his notes up on the show, and then he corrects his notes as if we messed them up. It's a beautiful thing. I wish you could see it. But uh we're having a good time, and Jim and I will go again on Sunday. And I'll tell you what, the world will look like a different place on Sunday. So all eyes on warm weather. I know that's a term we've been saying a lot, but it's gonna continue to happen, my friends. And just just we'll start next week, Davis. Let's start working the numbers down, and Jim can help us with this, or you can talk about it today. If we're at a 180 yield with this demand, what if by chance the yield goes down to 175? We're talking mucho, mucho to the moon. To the moon. Yeah, it would change numbers. We would go from having too much to not having enough, so keep an eye on that. And I'm sure you'll be back. Have you looked at fertilizer last few days? I mean, oil's at 82. It's probably not coming down much, right?
SPEAKER_04Not really. No, I haven't I haven't seen anything the last couple of days, but last I knew, yeah. And like, you know, your phosphates and such, who have been culprits in the in the rise of overall fertilizer prices are still headed higher. And hydrus wanted to dip down just a little bit, and we had corn kind of coming together. They're moving in the right direction, but still a pretty wide disparity between NH3 heading into harvest. Yeah, yeah.
SPEAKER_00Real quick before we go, and I know Jim likes to end shows optimistic, but I'll leave here optimistic. Cattle digested that info like a pro. Let's go over it all. We were always worried about screwworm, it's here. We're worried about the border closing and opening, it's now open. We're worried about Tyson closing plants. These rumors have been flying around for six months. These rumors are now reality. The market is digesting super negative news. Well, keep an eye on cattle because this market now has both upside and downside. That's it for me, brother.
SPEAKER_04Right on. Tommy Grassapi. Thanks, buddy. Have a great weekend. We appreciate the heck out of you. Good perspective, bro. Well done. Well done. All right. And by the way, you may see me sipping on this here. I'm not drinking a beer. This is a fire brewed craft soda. Honey crisp apple. And I'm not kidding, it tastes just like a honey crisp apple. I'm not going to tell you what it is because this is not an endorsement. But man, this is really good. It's German. I got it at Aldi. Gotta love, gotta love that German fire brewed craft soda. Jim Wiesweyer. Now stepping
Yield Risk, Europe Drought, And Demand Pull
SPEAKER_04into the big blue spotlight of Egg Squawk. Jim, glad to have you this afternoon. Have you got a little something to sip on as we will afterwards?
SPEAKER_01After glow drink, always. I do like a German drink, half a Weizen, wheat beer. I love wheat beer. Half a Weizen. Half a Weizen.
SPEAKER_04I'm gonna half a Weizen try some of that.
SPEAKER_01It's a mellow drink, and I like it Friday afternoons.
SPEAKER_04Let's, you know what? We're gonna jump the track because I told you we were gonna start someplace with a headline that I love and we're gonna get to it. But Tommy brought something up. What if what if we dip below 180 here on this the corn yield there? Ton of damage out there in in Indiana, central Illinois. It just looks insane over there, Jim. Take us to the week. We thought of 180.7, was it in the WASD? 180.7.
SPEAKER_01If you drop below your stocks to use ratio, goes into demand pole markets, you'll have more than a few countries will front load their their imports, their buys, and it'll it'll be a fledgling bull market, five dollar plus.
SPEAKER_04How significant is that news that I brought in at the at the front about France's corn crop going to pot?
SPEAKER_01The market is finally. But I think you're spot on. Europe's drought has become a major production story. Uh France's corn crop uh could fall up 35% or more, with some analysts warning of uh losses approaching 50%. And although the weather is going to get finally cooler next week, it's still going to be very dry. So you can have cooler temps, but they need pre-sip and not much as in the forecast. So we're having an accumulation of fundamental weather news, not only in the US on the uh corn side, but also in Europe. And then we'll get into it with Russia and Ukraine. That now it's got it's got staying power. The market's now realizing that some of the recent rumors were flagrantly wrong that they were gonna come to an agreement. And even if they did, Davis, people tell me it's gonna take quite a long time, months, not weeks, in order to correct some of the damage that both countries have done to each other's ports logistics. So things are accumulating here, as we just uh you know detailed.
SPEAKER_04It's gonna take more than a coke and a smile to repair that uh situation. All right, let's let's get this one. Is hot off the press, Jim. You we have talked about it before. Just you are the energizer bunny of journalism, and you just keep giving and giving and giving. And just when I think that I've got my handle on the the favorite headlines of the week, you you throw one at me right before the show. Beefpackers built for a capacity shortage, and then the cattle disappeared. Post-COVID expansion collided with a shrinking herd, a closed border, and too many hooks. Big news at the end of the week. Here's we're losing some shackle space, Jim.
SPEAKER_01Yeah, very, very much so. They they the you know, hindsight is always good, but it it sometimes it's not fair. But when you look through some of the expansion that the uh uh uh industry went through in the in the you know, not too many from 2020 through 2022, beef processors. I did the tally announced new plants and expansion that on paper at the time could have added as much as 20,000 head per day of kill capacity. Now that's according to former Iowa
Beef Plants Expand Then Cattle Vanish
SPEAKER_01State University livestock economist uh Lee Schultz. I think he's now private industry uh ever. But some projects were subsequently delayed, canceled, or scaled back, but others were built. So let's let's look at the cycle. The timing is striking of that expansion that occurred because the warning light uh on the cattle cycle was already flashing. The USDA's numbers show that the cattle herd peaked at 94.7 million head in 2019 and has subsequently been contracting. So you know, the cattle cycle warning wasn't hidden, but yet the beef processing companies have added to kill capacity. And so it's it's it's it's it it there's a number of reasons why we're not getting the the uh cattle into the right categories because of the of the expansion. It's not the only reason, of course, we've got the border closed and you know things like that. So yeah, I I did the major report today trying to connect the dots number of JBS was adding capacity. Remember, they announced in June 2021 that they were investing more than 130 million dollars in its Grand Island and Omaha. Nebraska plants, the new greenfield plants took the bet even further. I could I go on and on of what the industry expanded. Now they're feeling the pain because they got caught in in the cycle. I'm not quite sure what the the board of directors at these beef companies, why they didn't ask more questions at the time, but that's uh might be a follow-up question for later on.
SPEAKER_04Feels like they got got out over their skis just a little bit. I'm gonna I'm gonna pull just a little paragraph here from your article. Sure. On August 13, Tyson announced it will end its operations at its Joslin, Illinois beef plant, close its Eagle Mountain, Utah case ready facility, and seek a buyer for its Pasco, Washington beef plant. And then an interesting thing that you mentioned here is where the processing capacity is going to. Tyson intends to concentrate its beef operations around Dakota City, Nebraska, Holcomb, Kansas, and Amarillo, Texas, all toward the middle of the country there. Jim?
SPEAKER_01Yeah, that tells you if they think that they can move their operations to those alternative facilities, and they are, that means they've got too much shackle space chasing a cattle herd near a 75-year low. That's that says a lot right there. And and I feel for the Pacific Northwest area, I think they're gonna up to 90 days in order to sell it. I hope there's a buyer because that's a significant draw for the you know PNW area and Canada too. Sean Haney said this morning that that uh that that uh he'll be watching that.
SPEAKER_04Well, not to mention the rural job loss with uh the loss of all of the shackles space. It's uh that's a lot of people that are gonna be looking for work.
SPEAKER_01Absolutely. And you know, Wednesday, I first caught on to the rumor on on Tyson, and we checked it out, and I had good people telling me, hey, they're they're gonna they're they're gonna announce something, but then I don't know whether they decoyed me or not, and they said, Well, we're actually hiring people. It's Tyson, you know. And then all of a sudden, yeah, all of a sudden, Thursday afternoon, I started to get the emails and calls, and I thought, uh oh, here we go. And then they announced it officially. Yeah, they did what they really had to do, they were losing millions of dollars. Yeah, losing now they're they're good in chicken. We all know that. You can look at their last earnings report, and that's where they made their money. And now their existing facilities, I think, are are okay. But look at the draw that's going to go through into their Amarillo uh plant and things like that. You had a lot of cattle from the eastern belt went into the Jocelyn uh Illinois facility, and that's closed, period. It's closed now. So there it's it's quite an impact. And I was told in my research yesterday, Davis, this is not going to be the final announcement of a company. Is that right? Yeah, yeah.
SPEAKER_04Wow. More more to be able to get well, and this as beef imports, skyrocket. We we're short cattle,
mCOOL, Farm Bill Hurdles, And WTO Risk
SPEAKER_04we're importing we're importing beef, and I talked with Bill Bullard from RCAF USA yesterday. You know Bill, don't you? Oh yes, yeah. Yeah. We were talking about the M Cool stuff, mandatory country of origin labeling. Now it did advance on August 6th, but but Jim, uh maybe I'm overly pessimistic on the farm bill, but as I understood it, mCool is part of the farm bill, so we don't get we don't get this advanced any further until We get a new farm bill.
SPEAKER_01Yes, the yes, the House doesn't have the MCOL language. They don't have any MCOL language in it. But the Senate, as you said, approved it so far in their tentative bill. They approved it 17 to 6, you mentioned on August the 6th. That's the biggest congressional advance in years. And I know that's what uh you know Buller told you. The amendment would require a WTO compliance system that identifies the U.S. born, raised, and slaughtered beef. But what I'm hearing is that I don't think the Senate language, I think a portion of the Senate language will be in any final uh uh Farm Bill 2.0 if it gets that far. But it'll probably be modified to what I like to call m-cool light, trying to deal with Mexico and Canada's concerns. So that's a prediction on my part. But look at the look at the battle we still have to go through. When the Senate comes back in mid-September, they're gonna take up the defeated Farm Bill 2.0 again. Whether or not the vote goes through, if Mitch McConnell is back from Kentucky, it'll clear the committee, but you still need 60 votes on the Senate floor. That will depend when Senator Amy Klobuchar, she's the ranking member on the Senate Ag Committee, running for governor of uh Minnesota, and she'll get that post. Listen to her when she comes back to Washington in mid-September. If she works a deal with uh John Bozeman, Senate Ag Committee Chairman, then it'll it'll be approved on the Senate floor, but you still have the hurdle of the House because there's other things in the Senate bill the House does not like. So what I'm just telling you is we have additional hurdles to go through, but I don't want to kill it. I don't want to kill it right now. I've got to see if the Democrats want an issue or a bill. And also I want to see if there's any give on the part of the White House to tell Bolsman, okay, you can offer a little bit more to Clovachar. I I'm doubtful of that, but that is a possibility, but we're gonna see. What I just went through is there's a lot of hurdles remaining.
SPEAKER_04Well, and then you know, my concern is and and Mr. Buller did answer my question, but I'll throw the same one at you. If the WTO kiboshed it before, what's to keep them from kiboshing it again?
SPEAKER_01They will that they they will do it, and that's why the house is gonna say, hey, we've got to put language in here that we're gonna have to deal up front to temper what we know Canada and Mexico is gonna do. You can talk about, oh, it'll take years for the for the WTO to to do anything. Well, there's also USMCA, by the way.
SPEAKER_02Right.
SPEAKER_01We can be taken on under, and that's an accelerated uh uh uh uh grievance guidelines there. So yes, I I think that's a formidable question to have to deal with.
SPEAKER_04What's the what's the next deadline? What's the next timeline we should be looking for on MCool here? Uh well what will be the next box to check, I guess.
SPEAKER_01Well, mid-September to see whether or not it gets out of the Senate AG Committee, okay. Then to see Klobichar to see if she gives any more, because then you can you can at least predict that it could pass the Senate floor uh when the bill goes to the full floor. If not, this this bill's not gonna move. So uh it's really gonna depend on the democrats in the Senate whether or not we're gonna have farm bill 2.0 or not. So we'll know. See you in September.
SPEAKER_04See you in September. All right, when the summer's through. I got Guillermo texting me here. He says he wants to pull up a chart quick. Let's have a look at that. What do you got there, buddy? Plant locations position near the livestock. Well, yeah, we're going back to the uh to the different uh process, moving to the middle of the country, and there's that one. Yeah, look at that. Like a sore thumb in Washington.
SPEAKER_01That's where they'll move to.
SPEAKER_04Exactly.
SPEAKER_01All the way down, pipeline all the way down to Amarillo.
SPEAKER_04Yeah, yeah. Yeah, well done. Shout out to Guillermo. Come on, appreciate that, buddy. Okay, let's let's move on. I want to talk about the Black Sea. You wrote a headline port war, tit for tat strikes on grain hubs
Black Sea Port War Reshapes Trade
SPEAKER_04put world wheat trade in the crosshairs. When we're talking about the weather in France and the crops in Europe really, really struggling and beginning to show some some signs of damage. And then we bring in the other W. That W is war. This, like I said earlier, it's gonna take more than a coke and a smile to put this together. What's the latest?
SPEAKER_01Now it's got staying power. For for now, the the traders are starting to see some trade, uh, maybe not initially in the US, but uh, but elsewhere, fearful that they're not going to get the Russian or the Ukrainian grain that they thought. The Black Sea grain fight now is a two-sided port war. Uh both the Ukraine's Odessa export corridor and and Russia's facilities have been under attack, and it's going to take months for that to be resurrected. Ukraine's August the 12th strike forced all three major Russian grain terminals to heart to halt loading, Davis. And that temporarily took about a little over 26 million tons of annual capacity offline. So Russia's wheat exports had already been slowing. The August shipments are forecast at 3 to 3.4 million tons versus a five-year average near 5 million tons. So now the numbers are starting to add up. Ukraine's situation is even more severe. Shipping disruption disruptions have pushed exports sharply lower, with the Greater Odessa effectively shut to new vessels. So Ukraine's grain export forecast has been cut from 64.4 million tons. That's a big exporter, by the way, to 29.6 million tons, with wheat and corn exports both sharply reduced. So I did have a analyst email me today, Brian Grady. You know, Brian. Oh, yeah. He told me Ukraine's exports are about two-thirds coarse grains and one-third wheat, and Russia's exports are about 83% wheat and 17% coarse grains. So Russia matters for more than Ukraine on wheat shipments, and Ukraine means far more than Russia on coarse grain shipments. So that's just perspective that that that uh uh I like.
SPEAKER_04Yeah, yeah, that's interesting. Give a shout out to Brian. Do you want it? Do you want me to? Who's where did that come from? Who's the come on? Shout out to Brian Grady, Comstock. That's Comstock.com with two M's, Comstock.
SPEAKER_01Now, not counting today, Chicago wheat is up roughly 15% since late June, and that reflects the growing Black Sea risk premium. Here's your market shift. The Black Sea risk is no longer just about Ukrainian exports. Russian wheat loadings are now vulnerable to, even if a truce eventually reopens the ports, because we've had errant rumors to that effect. Some displaced buyers may continue sourcing from Australia, Romania, and other origins because creating lasting demand outside the Black Sea. You they can't count on them. Those that the grain's not going anywhere, it's still there, by the way. So eventually that could become a wet blanket on the market, just not now.
SPEAKER_03Yeah.
SPEAKER_04I don't know if you know the answer to this question. What about fertilizer shipping infrastructure? We talked about grain loading facilities. Do we know is any fertilizer going to be able to move out of the little, little?
SPEAKER_01You've got that plus uh added with the uh stalemate that we continue to see in the at Strait of Harmooz and elsewhere. And what what we always say, uh diesel, look at right talk about bad timing as we get into harvest time here. Diesel prices continue to uh be firm to uh much much higher. So yeah, the the there's a fertilizer angle, and I write on fertilizer and the input cost every day uh on yagboldmedia.com in my updates fertilizer and other inputs. Bingo.
SPEAKER_04So let's let's stick with this current W, the the big W of of war. I heard a rumor, and I don't know if it's true or not. I hear all kinds of stuff, Jim. You're a good guy to bounce these ideas off of because you know everything, as far as I know, anyway. Uh as near as I can tell. And I I heard that there is some talk rather than relying on the Strait of Horn Moose, that some Middle Eastern nations are looking into building more pipelines so that we can avoid the the dominance of Iran over that little stretch of water. Is there any truth to that?
SPEAKER_01If you're in that effect, I think I think there's some. They've already been doing it to a degree years ago, but yeah, I think they'll accelerate those plans for for the future. Yeah, you don't ever want to rely uh longer term on on uh uh Iran. And so yeah, I think that they're hurting themselves longer term as well. So and so you've got both sides Iran and the US at the the pressure points, they're they've changed their
Iran Tensions, Oil Prices, And The SPR
SPEAKER_01strategy. Iran thinks time is on their side relative to the November 3rd elections, but what happens after our November 3rd elections? You know, there that's high risk for Iran, too. I just don't believe uh both sides. It's the fog of war. I just think that uh Iran's gonna continue. What it's clear now that Trump doesn't want to do the militaristic angle, so he's gonna squeeze them economically, and that's gonna take a while. You know, remember Trump promised six weeks it would be over. Now it's been six months. Yeah, but they're economically squeezing, and they just upped the ante the Trump administration this week, and that'll hit hard next week. So I think Iran's eventually gonna have to buckle. That's just what the numbers start showing me.
SPEAKER_04Yeah, interesting. All right. Looking over at the WTI crude, we're up a we'll call it up a dollar in the front end of the market, 82.29 in the sept, the oct at uh 81.38. And here's Nove at 79.99. Call it call it 80 bucks per barrel. Let's stick with the crude oil here because we have we've drained our strategic strategic petroleum reserve. Easy for me to say. The SPR. SPR. 300 million barrels as well, as Iran more drains U.S. cushion. We've been talking for years, I think clear back into the into the middle of the Biden administration. They were already talking about, well, no, we got to get this refilled. And if we get to a certain level in the in the market, well, then we're gonna we're gonna buy some oil. And I don't don't see it happening at all. And now here we are, sub 300 million barrels. As far as what we should have, how low is that? How concerned?
SPEAKER_01Well, is it it's it's down about six million barrels in a week, and it's below 300 million, as you said, for the first time since 1983. Yeah, continued releases, they're gonna try to continue to release this to cushion the the the Armo's disruptions, and but it's leaving the U.S. with a thinner emergency buffer. So even if the Middle East supply loosens, okay, you're still going to have a uh uh uh uh a shortfall due to the uh lack of uh uh available uh reserves as as part of the SPR. So I think if the Middle East supply does, if the losses deepen, however, that's going to increase the potential for energy cost risk for uh diesel, fertilizer, transportation, and agriculture. So you've got all this writing on it, and so that's why, even when there's been errant, I think, talk about a possible agreement or talks between the US and Iran, the oil price sometimes have has not gone down. It's because now we're at the level where even though we've got somewhat decreased demand, the cushion of supply is also down. So it's changed. That's been changed over six months where we did have a cushion. We don't have that much of a cushion anymore.
SPEAKER_03Yeah, yeah.
SPEAKER_01What I just told you is energy. If I think the season, I mean the the average price of gasoline was 407, I think, the other day. Uh it could go down, but not that much.
SPEAKER_04Yeah, yeah. It was interesting. I'm looking for for one of your earlier stories from from this week here. I'm not finding it. I'm just gonna say the title because I wrote it down here. Data centers move into farm country, the rural opportunity and the agricultural cost. This was a fascinating read, Jim.
SPEAKER_01Well, I've been doing a lot of research on that. 67% of U.S. facilities now in development are planned for rural areas, just 13% of existing centers now. So they're just starting in rural America.
Data Centers Move Into Farm Country
SPEAKER_01So, what's that mean? Actface is a new resource competitor. Let me tell you, I know about the resource competitor because I'm in the number one county for data centers, Loudoun County in Virginia. Is that right? Yeah, I'm not saying I'm against them, but they do raise costs. Yeah, data centers increasingly will compete with farms for land, electricity, and in some regions, water. The data centers use enormous amounts of power. They used about 4.4 percent of U.S. electricity in 2023 and could consume about 6.7 to 12 percent in a few years. So these big projects, however, and here's the other side, can bring billions of dollars in capital. So that's why some rural states like it too. Yeah, and major construction employment, not too many jobs, by the way.
SPEAKER_04But it seems like they kind of fudge the numbers just a little bit to get up to that. Isn't the magic number 20 in order to get uh some sort of approval or funding or something?
SPEAKER_01Yeah, they do, they do. It your your county and state commissioners are very important to whether agree or disagree. But some farm owners, think about it, could see major windfalls. Why is that? Developers usually pay well above agricultural value for any land that's near a transmission grid, fiber and power infrastructure. Sounds like uh windmills, doesn't it? Same thing. Neighbors can pay the price, however, tenant farmers may lose acreage, and younger farmers are gonna face higher land prices as development push prices higher. So I can talk both sides. Farmers are gonna face higher utility rates, I'll guarantee you on this one. If the grid expansion costs for data centers are spread across existing customers, that's what happened in Loudoun County. We're paying a lot for electricity now. Water could be a flashpoint, especially projects in irrigated or groundwater constrained areas, and because they're going to be directly with agriculture for water supply. So this is going to be a growing story in rural America now that the data centers are looking at land that's more easily obtained and near the electrical grids in rural America. So communities are gonna have to measure the net benefit, roads, utilities, emergency services, and and tax incentives, and it can reduce the value of a headline multi-billion dollar investment. Just they they better do their homework. Already states are tightening the rules. Texas, I went through this in my special, Texas, Oregon, Minnesota, and my state, Virginia, have moved toward policies that make larger users bear the more of the cost when that's good. Agriculture's preferred policy approach is to protect farmland and water, require data centers to pay uh grid cost and elevate agricultural impacts. And I think that's the right approach. So they can strengthen the rural tax base, though, and infrastructure. So the the bottom line, let's bottom line it. Rural America is already getting data centers. The policy battle is over who captures the benefits and who pays the cost. There's your key line.
SPEAKER_04Well, and a running theme this week sort of emerged all on its own, completely organically. I spoke with Maxi Field on Tuesday about H2A workers. I spoke with Paul Shadeg from Farmers National on Wednesday about farmland and farmland values and stuff like that. And then, of course, Bill Bullard yesterday from RCAF USA. And in all three conversations, though, from completely different aspects of the ag world, succession and what happens to the land in the next generation came up. And you know, you've got bills and things to pay, why not just sell it to a data center? My feeling is once you put a data center on that ground, that ground is gone. You're not gonna grow another corn plant, you're not gonna grow any more sorghum, you're not gonna graze any more cattle on that land ever again.
SPEAKER_01Yeah, I remember growing up in small town Troy, Illinois, where when we played wiffle ball in our backyard, I used to hit the ball in the in the in the cornfield. Well, now it's a subdivision, yeah. And that was black earth, by the way. Black earth there. So yeah, now we're amplifying it. But this also means the hopefully continued development and progress in genetic traits for both corn and soybeans. And I have great faith that that's going to continue. So I'm I'm not as dire on production levels for the year and decade ahead. I'm just not because I believe in technology.
SPEAKER_04Yeah, absolutely. Absolutely. Good. Well, thanks for that. Yeah, we'll end on a we'll end that conversation on a on a high note there just a little bit. You you'd let's let's hit the WASD here just a little bit and make sure that we've you've got your thoughts in on that. We've had a few days now. Real tendency, rounded up rule. You talked about eight out of the 10 years, corn, beans, or wheat have have bottomed in August. If I read read what you were saying correctly, and boy, howdy, we've been we've been higher here to end this week anyway. How much of the how much of that WASDI report figured into this? Or is is it just okay, this is out of the way. Now we're back to trading fundamentals.
SPEAKER_01Yeah, well, two things. Uh NASA's the crop production that's based on surveys, demand estimates are really the WASD. So I always like to differentiate between the two. NASA's crop production, the world board, the WASDI report is on the demand side, and they do the carryover estimates, exports, feed utilization, etc. What the report showed me is that it's out of the way. The they they reduced the corn, as we keep saying, to 180.7. That helped reinforce the idea that August frequently from August into mid-September makes a seasonal low. Probably the low was set in late June, it's going to turn out to be.
SPEAKER_03Okay.
SPEAKER_01But uh USDA raised harvested acreage enough to keep production near 16 billion bushels for corn. So that means that whether export demand and final yield confirmation is still going to decide whether the low holds. I think it will. Soybeans is really an August time frame, but so we'll stay on corn. But also look what they did to corn. They dramatic sorghum, they dramatically lowered the sorgh sorghum production. Why do I bring up sorghum or milo? Because that's going to make more draw for corn in in the southern areas. They cut sorghum exports too. So this was just not a corn and soybean phenomenon on
Weather Scorecard And Market Meaning
SPEAKER_01here. There, there were some other aspects to it. But now that we've got it, now all the crop tours are going on. Our good friends at ProFarmer are gonna have theirs. You had you have Ag Resource, our good friend Dan Bossey is out there in, I think, Illinois yesterday.
SPEAKER_04Iowa right now, aren't they?
SPEAKER_01Yeah, there the Illinois yesterday, and I think Iowa today. And so we're gonna see. I like the boots on the ground, the pro farmer tour. That's clearly boots on the uh ground, and a lot of of them. So we're gonna have a little update on that, but we can go into the weather that that central Indiana, as you said, was hit by catastrophic flooding. And what what uh Tommy said localized totals above 11 inches, that's flood, and that raised concerns about uh drowned crops, nitrogen loss. Disease and but I don't I I want to look at other areas too because we're not just corn and soybeans. Heat and dryness remained entrenched the further south and west you go with elevated wildfires and rangeland risk. Look at the livestock sector as well. So we've got an uh just a plethora of uh weather and crop related issues going on, not only in the US, but as we said before, in in in Europe. So yeah, we're we're in a weather market for sure. We don't know for for for till more into uh August for soybeans, but I think you are for corn.
SPEAKER_04Yeah. Yeah. The old saying goes, uh, if you don't like the weather, just wait 10 minutes. This is sort of a situation where if you don't like the weather, just drive a couple hundred miles in any direction and you'll find something that you hate worse that's completely different. Yeah. I was talking to Bill yesterday and I asked him to just look out his window, tell us what his local weather was like, and he had one word for it, and it was hazy. I didn't realize there were wildfires moving into Montana now. This was a huge story up in Canada, and then in the Washington state, and Oregon, and in Colorado, and in the southwest. Man, we got fires on one side and we've got flooding on the other side, and and just terrible heat kind of in the in the upper and lower regions of the nation. It's it absolutely is a mixed bag of woes here in the United States. I feel like we've got it lucky here in Kansas City. It's only like you know 95 degrees today. It feels like a cool wave has to run through. It's been crazy hot down here.
SPEAKER_01Yeah, let me tell you, I'm trying to see. I asked our good friend from Canada, Sean Haney. I noticed canola was up a lot. He said canola is up $36 per ton on the week. Acres are record high, but the heat through the flowering stage is creating yield concerns.
SPEAKER_04Wrong weather at the wrong time, sounds like again.
SPEAKER_01Yeah, the rise he said was driven primarily by strong spillover support from the global energy and vegetable oil markets. So, again, this is wherever you look, you're you're seeing some budding uh either supply or demand pole markets, which I think you're gonna have as we get into September. I really see a demand pole market.
SPEAKER_04Yeah, yeah. Well, let's uh let's start to make our way toward the exit here, Jim. Um the weather where you're at right now, I don't think we ever got to that. What's it like? What's it like in DC?
SPEAKER_01We've been getting rain, we've needed rain, so my lawn has never looked better for this August. It usually looks like a uh uh uh gra dry grass at this time. So no, my I've never seen it look this nice in August. And my flowers are flowering, I don't have to water as much. I'm saving some money on my irrigation system because I haven't been able to haven't needed to turn it on, so that's good. And my cannas, one of my favorite uh plants are cannis because my mother loved uh cannons, and they're just having a great year. They're they're getting tall, they're getting tall.
SPEAKER_04You had mentioned that last week as well that you're that your flowers were having a good time of it this year.
SPEAKER_01And they're even more robust, yeah. Really, I love I love flowers, dry flowers. Uh you name it. I I like the flowers.
SPEAKER_04Glad to hear it's going well for you. I'm glad to hear you're the bright spot in the nation, Jim. You really are. Your backyard is is the nation's bright spot. Yeah, we got you. Let's go to the National Weather Service. Is this Layla or Lala? May become a hurricane.
SPEAKER_01Oh, I don't know. I've probably Layla. Well, let's let's hope the song Layla. Layla. Yeah, yeah, Layla. That's a good song. Got me begging, please.
SPEAKER_04Eric, yeah, may become a hurricane, expected to impact Hawaii this weekend.
SPEAKER_01Oh, yeah, that's the big one in Hawaii, up to 20 some inches, I think.
SPEAKER_04Yes, I heard that too. Yep, yeah, a lot of rain headed for Hawaii. Heavy rainfall, strong winds, dangerous surf, localized flooding are expected in case you plan on traveling to Hawaii in the next couple days. Heavy rainfall, flash, flooding concerns from the mid-Mississippi Valley, Ohio Valley, into the central Appalachians continues. I can't tell you how many times I've said that in the last two weeks or so, with the threat shifting toward the mid-Atlantic later this weekend. Record heat continues for areas of the south. Our friends up there in uh in the Dakotas looks like they're cooling down nicely. Shout out to the hefty boys there, and still still got a nice blob of red there over Oklahoma, Kansas.
SPEAKER_01Yeah, they need precip though. You know, each day on the my updates on Agbol Media.com, I I have at the very end of the file, we I talk weather. But today was two regions, opposite problems. Carn Belt, too much water, southern plains too little. And and then we go into the market read at the at the very bottom where we go through. Okay, what's the the weather market scorecard? As I think we call it, the carn belt, less bearish, but flood risk is building, you know. Soybeans two-sided, mildly bearish. The week two pattern for the carn belt is the flood premium. I think we're going to see more evidence of the of these floods. Hard red winter wheat in the southern plains, supportive later. And 20, it could be a 2027 crop story because now they're getting pre-sip at the wrong time. So, and then cattle and pasture, it supports feed, hay, and livestock cost. You know, cotton, it's a bullish risk if the heat persists. Extreme heat through the reproductive development and bowl or grain filling leaves dry land acres very much exposed, and irrigation fields face escalating water demand. So, look each day in my updates where we try to put a market significance of the weather. We just don't give the weather outlook. We say, okay, one the heck does it mean? Because the Carnival story has flipped from rain adds bushels to flooding and lodging risk. So that you know, you got to know what time period that you're you're going through.
SPEAKER_00And Davis, where's the egg timer? The egg timer. He's going long.
SPEAKER_04No, he's he's doing fine. He's adding perspective. We have been going on a bit. I'm yeah, yeah, I'll I'll just sort of out of bourbon in my glass. Ding. All right, there we go. Let's quick get to some items of mild interest. Thank you, Jim. One of the things I really appreciate about you, and this is this is part of your expertise as a journalist, is you you don't just tell us the
Wrap, Newsletter Pitch, And Next Shows
SPEAKER_04you don't just give us the facts, you give us the so what. Yes, you you you give us the significance, you give us, you know, and sometimes you'll even kind of handicap it. Well, yeah, this is this may go this way. Oh, yeah, this is definitely gonna go this way. That's one of the things that I I really appreciate.
SPEAKER_01You know, coming from ProFarmer and Merrill Oster in the early days, he used to tell us if you're just putting the story out to fill up the page, what's it mean for Grundy County, Iowa, corn farmer? And you tend to listen to those things. Yes, okay. What's it mean? What's it mean?
SPEAKER_04Yep, yep. Well, let's get to some items of mild interest and then uh and then for the day. 1945. It's the birthdate of Mr. Steve Martin, a professional banjo player, a banjist, you might say, and apparently he's done some movies and some TV as well. Here's a quote from Steve Martin on his birthday. He says, quote, be so good they can't ignore you. Jim, I think that's this that's kind of this the story of your career there. Just be so good that they can't ignore you. 1945, Japan accepted the Allied terms of surrender in World War II. The VJ Day was today. It was August 14. And finally, Jim, I'm not gonna sing to you this time, but I am gonna quiz you. Let's talk about the number one hit song on this date in 1965. Are you ready? I'll give you a lyric and I'm hoping you can name the song for us. The line goes like this so put your little hand in mine. There ain't no hill or mountain we can't climb. Number one this week in August 1965.
SPEAKER_01I it sounds familiar, but I it's I got you, babe.
SPEAKER_04Oh share Indian man.
SPEAKER_01Absolutely, absolutely.
SPEAKER_04Well, Jim Weismeyer, thanks so much, buddy, for being with us again this Friday. And and viewers, if if you're thinking that there's nothing more that that Jim and I could talk about, you are not correct. Jim and Tommy will discuss a whole nother we'll have a whole nother maybe even revisit a few of these on Weissmeyer's perspective.
SPEAKER_01Unlike Japan, you mentioned Japan, what in 45. There was an unconditional surrender. We're not seeing that with Iran yet. Okay. That's one thing we might get into. Wouldn't that be nice?
SPEAKER_04Although they are due to either flare up or quiet down again. It's Friday, uh almost Friday evening.
SPEAKER_01Yeah, they'll keep me going Saturday. Yeah, we'll have a whole list of issues. We're gonna talk. Tommy and I haven't even given him my list yet, but we'll talk about the crop tours. We'll talk about they extended, by the way, the uh Jones Act waiver, so we'll talk about that again. That's good for fertilizer movement. That and many other things coming up in Wiesemeyer's perspective sometime Sunday.
SPEAKER_04People love their Sunday news shows, don't they?
SPEAKER_00Yes, this is the voice from the tomb. What if people don't get your newsletter?
SPEAKER_01You tell them how to get it.
SPEAKER_00Yeah.
SPEAKER_01Bring it.
SPEAKER_04Come on in here, Tommy. Tommy, he's he's dying to get back in here. Contact us.
SPEAKER_00Tommy Christmas, everybody. Give him a hand. I miss you guys. This is horrible. Might as well. You might as well keep making it. No, honestly, everyone, uh, if you're not getting Jim's newsletter, go to agbull.com. That is agbullagbull.com and go on there and say, I want Jim's newsletter. Keep up the good work, Davis, Jim, and the whole Ag Bull crew. Shout out to Jed, too. He's doing a great job. But uh, Jim is going to move to the premium side, and there's a reason why. And it's so important that Jim keeps getting the news out on an independent format, not bought. And so this show will be sponsored by you. Jim's work will be sponsored by the American Farmer. We're gonna send out a coupon. I think that's the way you say it. Gina says I'm saying it wrong.
SPEAKER_04But did she say coupon? She's a coupon. She's a coupon.
SPEAKER_00Yeah, yeah. Don't even you don't even want to know how you said pillow. I mean, we get in all types of arguments over here. But so, but Jim, talk about being independent and what that means. And this is very serious for news and media moving forward. What are you doing moving forward?
SPEAKER_01It keeps you it keeps you as honest as you possibly can be. You're not beholden to anyone. That's been my whole career. Profarmer was never at we never had advertisement in ProFarmer, and I love that on it. And you mentioned that my I it's going to be brought bought by farmers. I would say up that by the ag sector, of course, farmers, but also the affiliated, all the industries in this business of agriculture, crop insurance agents, grain merchandisers, ag bankers, etc. That's who I've given my whole 50-year career to in the understanding. And by keeping it subscription-based, yes, risky, but yet you don't have to count on one or two sponsors who could pull the rug uh out from under you if they don't like something. And I think there's your secret right there of having uh subscription based. That's that's fair. That's fair. Not too many hundreds of dollars. No, I don't agree with that.
SPEAKER_04Yeah, yeah.
SPEAKER_01It's coming.
SPEAKER_04At any price, Jim. At any price, absolutely priceless. Wait, did that make sense? At any price, it'd be priceless. I don't think that makes sense. No, it'll be worth it. You will not be disappointed, folks. And and it's not going to start right away, but but you're definitely going to want to be in early. We'll keep you keep you updated, keep you posted. Jim, I've taken up way too much of your time today.
SPEAKER_01After glow drink is coming, and thank you, Davis. And we'll see you all, Tommy and I, um Sunday, sometime Sunday.
SPEAKER_04I need to spreck and see another cider here, too, really quick. Thanks to Trade the News. My whole squad uses Trade the News. Speaking of news, you can use trade the news is news you can use. Use trade the news. It's news you can use. And go to agbull.com, check out all the lavish premium services we've got for you. Agbol.com, 855-737 Farm 855-737 Farm Jed Sidwell to set you up bright and early Monday morning, and then I'll have a conversation with Dan Huber from the Huber Report on Monday afternoon. Have a great weekend, everybody, and we'll see you on Monday.
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