0:05
Rather than reacting to anything that the USDA is saying or coming out with, like some of their weekly reports or their weekly progress reports of the or the production reports, things like that, it’s really is just kind of banking on and going off of a lot of what other people are reacting to and what they’re thinking.

0:23
So, but we still don’t even have some of that other data like the commitment of traders reports, all of those are all still government funded.

0:31
And so there’s just a large gap, a dearth of basically any information then in order to be able to kind of look at some of this outlook.

0:42
So where are we at for harvest?

0:44
I’m going to give you some ideas on some of this based off of what other what we have as far as for some surveys and things like that, what we have for exports.

0:55
We have some inspection rate ports.

0:57
But also recognize that next week, November 14th we will get.

1:02
They did actually come out and say that they will actually publish the progress and the USDA WASDE report. When this happens, basically because it’s been almost two months of a time in which we tend to pay a lot of attention to those markets at this time, to those reports at this time.

1:21
There’s going to be two months of data just kind of dumped on the markets at that time.

1:26
And so there’s going to be probably some significant volatility leading maybe a day before and certainly a day or two afterwards because I think there’s going to be some bigger adjustments.

1:36
So let’s kind of get into what we see a little bit on some of this information as we look at soybeans. First and foremost.

1:46
So first again, I can’t really create any of mine because I don’t have that data.

1:51
So I am basically pulling information from other sources that I have.

1:56
So this is basically a a graph that was created by the Brock Associates using some of their data that they have when they complete their surveys and so forth.

2:08
When they’re looking at that, it basically is kind of saying that you know, given the weather where we’ve been in the US, it’s been mostly dry, mild.

2:18
We’re going to see it some way in that way we should be able to.

2:22
We were like last week, we were looking at it as far as for the as far as for harvest, we were around 84% complete when we would be typically at that time about 89% complete.

2:35
So we were a little bit behind when we think about it from the year before.

2:39
But if you note in the shaded area, we’re well within still that five year average of where we’re at as far as for harvest.

2:47
Given the weather that we’re going to be looking at right now.

2:49
When we look at the Bloomberg estimates in the service that they’re getting out right now, we should probably see soybeans at about 96 to 99% harvested by this weekend.

3:00
So we’re pretty much done with the soybean harvest.

3:04
Then when we look at it then as far as for where we’re at as far as for supply, essentially this is where we’re kind of saying, okay, this is this is still where we were as of September based off of what the USDA said in that.

3:23
When we still continue to look at like a lot of the kind of the flurry of those private estimates that’s been taking place here in the last few days.

3:33
We’re going to probably see that yield estimates are going to land probably in that 53 bushels per acre.

3:42
So a little bit lower than what we were expecting or what USDA was saying before.

3:46
That’s going to lead us like about that 4.25 to about that 4.3 billion bushels soybean crop.

3:55
So, so that’s, you know and that makes the assumption that the USDA isn’t going to actually reduce the acreage which was in September where we were saying it was going to be 80 million acres harvested.

4:10
So again, we’ll probably see it’s a little bit lower when they come out with some information just based off of private surveys.

4:16
But that’s where we’re sitting right now.

4:18
As far as for the for thinking about what’s going to happen for supply. When we’re looking at exports, then excuse me, where we’re looking at.

4:31
You know, this is kind of one thing we’ve had here in the last couple of days, some optimism based off of of it just due to the recent conversations with China.

4:43
And I’ll talk about that in just a minute.

4:44
But there has been a little bit of there.

4:46
But what we need to also think about is that this is a very, it’s South America’s coming on very fierce, right?

4:56
Brazil’s had a record crop, Argentina’s basically their tax holidays basically allowing China to come in and source beans there too.

5:06
Where we’ve changed in the last decades is that Brazil now represents 60% of the world’s soybean market.

5:15
So to think about that. The other thing to think about when we’re looking at this is that recognize that China is helping to build all that infrastructure in the Mato Grasso area, which is the Northern Brazilian area.

5:28
And, and their intention of building that is for the sole purposes of being able to get corn and soybeans to the area where they can export it then more easily.

5:37
So, so China has a very vested interest and because of some of the ways in which they’re do, where they are investing into Brazil, that it’s just the market that they tend to go to.

5:47
And that’s the market that they’re gonna look at.

5:50
Where we tend to look at them too is then when we think about this, you know, right now the, there’s a lot of favorable weather here in Argentina right now.

5:59
There’s some expected for heavy rains in Brazil for the next week, but it’s still not having huge impacts of what we’re looking.

6:07
The other part is like when we think about last year’s harvest for Brazilian or this this ’26 early part of ’26 harvest for Brazil, you know, probably we might end up seeing the USDA rot revise upwards what the estimate was for that harvest at some point.

6:25
Because there’s just such a strong still export coming out of Brazil that more than likely that they have more beans than what was anticipated.

6:35
Where we’ve seen here in the last few days when we’re looking at it is the premiums.

6:40
So Brazilian soybeans were at a premium.

6:43
Now they’ve been falling fast.

6:45
So they’re making those a lot more competitive here with with US.

6:50
And given the fact of this recent deal then with soybean with China, we’re still at a premium there, but it could make us a little bit more if we actually see this coming to fruition in China, and actually taking this onto it.

7:07
It could be that we get basically back to to status quo.

7:13
So when I look at the soybean exports, you know where I’m going with this is that the Trump administration, you know, is they just reached that where they’re going to say China is saying that they’re going to buy 12 million metric tons of soybeans by the end of January.

7:29
Alright.

7:29
And that brings us back to where where we’re looking at for USDA is exactly what the USDA would be saying that we should be doing.

7:38
The thing is though, that’s still lower than what we had been.

7:42
So it’s just it’s back to status quo.

7:45
It’s not zero, but it’s certainly not helping any.

7:48
It’s not like it’s this huge bullish news in some ways.

7:52
Alright.

7:52
So although the market reacted positively, it’s gonna adjust to it a little bit and I think it has already a little bit today on some of that of that news.

8:01
The next is that, you know, when we’re looking at that, apart from the that they’re buying those, China is still announcing and they said yesterday that they’re going to maintain that 13% tariff on those imports.

8:14
Alright.

8:14
Now just to give you guys some recognition of this, what that means is that that’s similar to what the rate was during the 2024 time frame.

8:24
And so we were still there.

8:25
So it’s not as if it’s a huge disadvantage, but that 13 percent is there.

8:29
It’s not like it’s a it’s, it’s, it’s just again, taking us back to that status quo.

8:34
Alright.

8:36
When we look at the soybeans and compare soybean prices between that and Brazil’s, you know, the recent rally in prices that we’ve had and then the decrease in there.

8:46
If if the US price of soybeans goes up too much, it will bring about some additional concern of whether China’s actually going to meet those volume commitments that they’ve said that they’re going to deal.

9:00
So that that’s a little bit concerning on here.

9:02
If we go too much just simply because already the differential between Brazil and soybean prices.

9:09
Alright.

9:09
Now when we talk about crush here is crushes basically where we’re looking at it.

9:15
It’s kind of the bright spot that we have in some ways. It’s for soybeans, you know, and, and when we’re looking at it, it’s because of the where we’re, we’re going here, we have a lot of this and we have a, the other part we’re going to look at is when we’re looking at renewable diesel, that’s the bright spot.

9:35
Other than this, those those funds are basically covering when we look at meal and we look at oil, there’s a large, large spot especially for soybeans meal that is overbought.

9:49
So previously we’ve been, you know, what that means is that the market in those that are speculating they’ve been buying it up and they’ve probably bought, bought more than what was necessary.

10:00
That means that when they start turning around that net and offsetting those contracts, we’re going to see that decline a little bit.

10:07
So that’s a little bit of a concern.

10:09
But in the meantime it’s been because of that overbought capacity and they keep buying that.

10:14
That’s the bright spot there. When we’re looking at capacity growth

10:17
then for US biofuel production, it did slow in 2024.

10:23
The Energy Information Administration did find that production capacity rose though still by 3% between the start of ’24 and the start of ’25 on that.

10:37
And so the slow down is basically just due to the deceleration of the production of the renewable fuels and the biofuels.

10:44
So this is where we’re looking at, where we need to be paying attention to.

10:48
And this side is the upcoming decision that we have from the EPA on the small refinery exemptions and what that’s going to have because those can have great implications then for what is the capacity in 2026, where we go with that. When we’re looking at

11:05
let’s switch to corn here just briefly.

11:09
So again this morning corn prices were down, some primarily being pulled a lot by soybean and soybean meal.

11:18
So the other part that we’re thinking about is that it’s being pressured because of the the forecast that we have.

11:24
Again, if you look at what the Brock Associates were saying that last week, they said that harvest was approximately 73% complete compared to about 81% last year. Where we should be given the clear forecast and everything,

11:41
again, these are private estimates from the Bloomberg with the sources there that we’re saying that the corn harvest should reach about an estimated 94 to 96% by this weekend.

11:52
Alright. When we look at the flurry then basically of the the firms that have been releasing what their estimates for yields will be then for this year, it’s averaging right around that 185 to 185.5 bushels.

12:08
So that is 185 is 1.7 bushels per acre less than what the September USDA forecast was.

12:17
So that’s still that’s still quite large mind you, but it is a little bit less.

12:22
So we’ll probably see that you’ll be declined in when the USDA reports some data next week.

12:29
So as I said, the yield’s here, but when we still consider that production was where we were at there because if you recall the number of acres that were planted for corn, we hadn’t seen that number of acres since the 1930s.

12:45
So there was a lot of corn planted this year.

12:48
So when we look at all of that combined, if we have that capacity there, we’re looking at a stocks to use ratio that’s about 13.5% which is quite which is quite high.

13:00
So there’s not a lot of opportunities there unless something dramatically comes in which isn’t being shown in those private estimates that the yield is that much lower. When we look at exports for corn,

13:15
couple of things just again, so recognize that we we are seeing inspection pace for it that’s that is of still available.

13:25
It’s just corn inspections, but we don’t know what’s actually being shipped or anything, but the inspection pace would indicate that we should be at about 3.1 billion bushels of corn exported this year.

13:38
And as a reminder, the USDA’s September estimate was 2.975.

13:43
So this is very helpful.

13:45
However, recognize that that’s still only barely covering basically what would be the decline in what we’re using for feed given the smaller number of of beef animals that are on feed this year.

14:00
The other part we have to think about from exports is that water levels have been dropping quite significantly.

14:06
And because of that, barge rates are increasing.

14:09
And so there’s been this flurry to be able to get corn down the Mississippi at this point.

14:15
And that’s going to be something that we’re going to need to watch to see if that ends up bogging down and the water good levels get too low that that has a bigger impact. When we look at ethanol

14:28
then just to give you an idea.

14:30
So for the week of October 31st, we basically set an all time record of 1.2 million barrels per day.

14:44
So when we’re looking at the four week average, we’re up about 1.8% relative to where we were at a year ago.

14:52
And when we’re looking at for a longer term, we’re about 1.7% where where we were at from a year ago.

15:01
So ethanol production is quite strong and doing well. Overall

15:09
by the end of the year, if we keep at this pace for the entire year, we should be up about 3%.

15:17
There’s obviously a lot of time yet still in the marketing year. We’re going to have to get some information from the USDA.

15:25
But what it is, is that that even though we’re up, that’s still going to be less than what the USDA was estimating.

15:34
Alright.

15:35
So that when we see this report come out, we’ll probably some see some revisions downward as far as what USDA was saying we were going to be using.

15:47
When we look at the stockpiles of ethanol, they’ve been coming in, they came in last week at about 22.7 million barrels.

15:56
So they’re down about from 22.4 million barrels from the previous week.

16:02
We have been having some exports of about 130,000 barrels per day.

16:08
And so in that case when we look at the margins, they’ve moved slightly higher over the more recent weeks ending with about $2.63 of gross margins when we’re looking at for just the Eastern Corn Belt processors.

16:24
Alright.

16:24
So again, that’s helpful.

16:27
And we may still continue to see some increase in production, but we’re not going to be anywhere probably near what the USDA expected increase would be.

16:38
And so we’ll probably see that revised to downward.

16:42
Where are they going to go?

16:43
Where are prices going to go?

16:46
You know, the biggest thing we have to think about is what’s going to happen with the government shutdown. As I started with this is where prices are going to go is, is there’s going to be volatility of once we start getting data again next week, because there’s been basically two months of not data and there’s a lot of expectations of what that data will go.

17:07
We’ll probably see even greater volatility than normal.

17:10
I mean, this is a time when these reports every month we, we see markets react to those reports when we are getting them weekly and monthly.

17:19
Now that we haven’t had them for two months, there could be some huge surprises.

17:24
That’s the biggest thing that we have.

17:26
And so I think, you know, if you’re looking and talking to people or things like that, it’s kind of like, well, let’s let’s anticipate between now and when this comes out, what could be some different scenarios.

17:38
The other things that you should be maybe paying attention to is a little bit is like what are the spreads?

17:43
What is basis changing and all of that and that might give you some feel then too on for what production or what demands going to eventually look like. That’s giving

17:55
that’s basically where where a lot of the private analysts are coming from is just by relying on what that basis and that spreads going to be.

18:02
So there’s going to be some volatility expected how long that will last,

18:07
I mean, we typically see this is a volatile time of year, but expect at least a couple weeks of volatility as we adjust to that market coming back out and just where we go from there.

18:20
Alright.

18:20
So when we’re looking at soybeans and the factors that we need to consider as far as what’s bearish and what’s bullish. Recognize, you know, all the bearish thing is, you know, we have a large productions, we have those export limitations, tariffs, just basically prices the the ability to get it from Brazil.

18:42
You know, on the technical side, we know that we have decreasing open interest and that we know that meal is extremely over bought right now.

18:51
So those are all bearish signals.

18:53
Alright.

18:54
When we look at a bear, when we look at the bullish side of it, everything we know that’s bearish is already built into it.

19:01
You know, could there be more bearish things that come out when the markets are released next week?

19:06
Yes, but right now there’s a lot more potential for something bullish than there is for for bearish.

19:14
The thing is though, remember is that markets react faster and quicker to bearish news than they do to bullish news.

19:23
So you need more bullish news to get the market to actually go up then the bearish rumors.

19:28
Alright.

19:29
So what we have seen though is the Chinese agreement, if that does help, if they do actually adhere to and keep that volume, that’s going to be helpful.

19:38
We are seeing basis levels stabilizing and increasing it when we look at it, it’s been improving them when we look at national basis levels.

19:47
So all this and then as I said, we’re going to likely see some production estimate decrease in those production estimates when the reports resume.

19:55
But remember is that if we don’t see it, so even if they keep it as if the exact same, because the market’s already anticipating that decrease, it’s almost as if they would have said then that it’s an increase.

20:08
So if we don’t see that one bushel per acre or more decrease next week, that’s going to end up turning bearish.

20:17
Where we’re looking at as far As for the current trend is that it’s sideways probably for the most part until we get that market news.

20:28
And then after that, we should probably be looking for it to increase until about that February time frame.

20:36
So we’ve got that seasonal component and much of this bearish bill is already built into it.

20:41
When we’re looking at corn, the same thing bearish talked about, we haven’t seen acreage that we saw for corn since the 1930s.

20:51
That’s how many acres we had and we have a large production on top of that.

20:56
When we’re looking into the next year, the one thing that we have is that even though we have this extreme high amount of corn planted and yields, there has been an a very large amount of anhydrous purchased already this fall.

21:10
And that’s kind of giving an indication that producers are still planting, are probably planting right now of of planting corn and the corn to soybean ratio indicates then basically that we should still continue to have large acres in 2026.

21:26
So that’s the bearish side.

21:28
When we look at the bullish side, what we have is we have very high on, on farm storage this year.

21:34
There’s not a lot of incentivization.

21:37
Farmers are typically they’re, they’re able to basically cash flow it, they have the storage.

21:43
So there’s not incentivization right now in order to be able to move it to the market.

21:46
So then what that means is that those local areas are going to have to bid up that price and that’s where we’re seeing some of that basis improving.

21:55
Alright. So that’s your bullish side there.

21:57
All that bearish news is already built into the market.

22:00
We have strong ethanol production that’s that’s bullish.

22:03
But on the other hand, it’s not as strong as what USDA said.

22:07
So usually USDA isn’t going to revise that in one big swooping motion.

22:13
And so we probably won’t.

22:16
If they if they do that, then it’s going to have a huge impact on the markets.

22:20
But I’m guessing that they’ll still try to ease that change in that demand of of corn use for ethanol in their reports over the next few months.

22:31
They might not really even focus too much on it and they might just really be until like that January or later times.

22:37
So, but we should probably be looking for that eventually. Harvest yields

22:42
then when we’re looking at that again private estimates are coming through and saying that they’re just slightly lower than what, what the USDA is estimating.

22:51
So current trends

22:52
then again same way with soybeans sideways essentially through November 14th, long term up until February given everything that’s there, but we should see improving basis for both corn and soybeans.

23:08
That is what I have.

23:10
If you have questions or comments, I’ll be here as well

23:13
through the rest of this webinar.

23:16
Thanks.