AG Bull
Tommy Grisafi is the main host and content creator for Ag Bull Media.
The Ag Bull Podcast showcases agriculture's top talents in a long-form video format. The Ag Bull Trading Podcast is a deeper discussion of trading with analysts and key players in agriculture nationwide.
AG Bull
From Hulk Hogan to Harvest: Markets, Weather, and USDA Reorganization
Ag markets face challenges as the USDA erroneously announced Chinese grain purchases before retracting the statement, creating unnecessary market volatility while farmers cope with tight margins and high interest rates.
• Breaking news on the passing of Hulk Hogan at age 71
• USDA's credibility questioned after false China grain purchase announcement
• Good growing conditions across the Northern Plains with regular rainfall
• Spring wheat tour shows good quality but not record yields
• Spring wheat futures contract issues causing trading confusion
• Cattle markets hitting new all-time highs with excellent pasture conditions
• USDA reorganization moving thousands of employees from DC to regional hubs
• Closing the South USDA Building and Beltsville Research Facility
• Northern Plains facing severe harvest basis with corn potentially -80 cents
• Interest rates remaining high, affecting grain storage economics and equipment sales
Call our hotline at 1-855-737-FARM to share your thoughts or questions. Sign up for the FarmNet News newsletter at rrfn.com or email don@rrfn.com.
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Thank you, Tommy G
happy friday everyone. Tom grisafi with ag bowl trading, ag bowl media we got the one and only don wick sitting in the back here. Just want to give you a heads up. Next week I will be traveling up to ag phd field day and that's a heck of an event. There's all types of field days going on, but on the 31st I'll be traveling up to Baltic South Dakota. With that, this is your week in review. Let's bring in the star of the show, mr Wick. Don Wick, you and I chit-chat before we hit record and I didn't think we have a lot to talk about. But I take that back because you have breaking news. Breaking news breaking news.
Speaker 2:We lost another great one today, didn't we hulk hogan? We lost hulk hogan 71 years old. Of course I'm from the midwest, so he started back in the old awa and wrestling out of the twin cities and then, of course, went down to uh uh m uh McMahon and the WWE. So, yeah, big name. It's been a kind of a tough week for baby boomers. You had Hulk uh, theo Huxtable and Ozzy Osbourne, so it's kind of a trifecta there.
Speaker 1:You're. You're making me feel old and bumming me out. Speaking of bummed out and losing, uh, usda shutting office, usda saying China bought grain and corn but they didn't. What's going on over there? What do you know?
Speaker 2:You're telling me about it when I went on with you this morning. It doesn't make a lot of sense for USDA to make an announcement like that and then reverse it. Certainly it had some market implications. China news got people excited right away in the morning, thursday.
Speaker 1:Yeah, yeah, we blowing up the markets and then you know we sell off. But we can review. Not a lot to talk about. In grains there's no. Corn was up, Beans were down, Pretty quiet, Cattle doing cattle things. I think we'll go more. What's going on with politics? What's going on with farm bills and cutting bills? And then you said the USDA is closing some offices. But I am terribly disappointed that the USDA put out that China bought corn and then they take that statement back. That upsets people. People traded off that information, Don. If you did that as the Red River Farm Network, I think that would be bad.
Speaker 2:It's all about credibility and when you're releasing that type of information, like you said, this is a dollar and cents issue. It doesn't make a lot of sense for that to happen.
Speaker 1:Yeah Well, farmers aren't too happy with the price of grain right now, although they think there's big crops coming. My friends and family up in Mayville said they got another rain. How are you guys doing on moisture there in the valley?
Speaker 2:It seems like we've been getting showers every other day here. It's been pretty decent showers as well as far as amounts. There was a good two-inch rain that came through early Thursday morning. There's more showers here on the way and kind of humid, sticky conditions going into the weekend. So some really good corn growing weather. If nothing else, We'll see what happens if that moisture continues and helps us make soybeans in the month of August.
Speaker 1:Yeah, and here in the Midwest I am filming this today from Valparaiso, indiana. Show everybody where that is Right there. That's where I am today. In Valparaiso, indiana. We are 93 degrees, incredibly hot. Feels like Florida, but we're not. In Florida. There's no ocean. But when you go outside from inside, you go whoa, whoa and then, once you're out there for a while, it's fine if you don't mind sweating, but if you were all dolled up and didn't want to get soaked, it's definitely a two t-shirt day. Here in the Midwest Are fairs going on Porter County Fair, typically, don. When the Porter County Fair is going on, grains are trending down. I feel like they've already trended down. I feel like the corn market is enough. People have thrown out this 186 number. I feel like the corn numbers traded a big yield. What are you hearing when you talk to analysts and experts all day?
Speaker 2:It does seem like we've got a pretty big crop out there and the weather's been picture perfect for getting a crop in. On the wheat side we've had that Wheat Quality Council, spring wheat and Durham tour going on this week. Bustles aren't exactly they're not forecasting the same kind of numbers we had, say, a year ago, but the quality of this crop looks to be really good. Talking with Dave Green, the executive vice president with the Wheat Quality Council, you know they use this really as a training exercise for some of the scouts that go out on this. They bring in grain millers and university types and such, and for many of them it may be the first time they actually get out into a wheat field in this type of situation, this type of scenario, and they use it for a training type of situation. It's hard for them to find scab, some of the disease issues, because the crop's just been very clean, not a lot of weed issues, so the wheat crop looks very nice. Bushels may not be exactly what people had anticipated, though.
Speaker 1:And I feel like the markets know that we're dealing with our wheat market. There's three wheat markets border trade, kc well, the Miami. You know, don, there's been some problems with where the heck do I trade spring wheat anymore? You've talked to analysts about that or anything but CME listed a contract. I'll raise my hand and say it failed. It failed miserably. The Miami exchange has a contract, but options are not trading on it at all, or not well, and we've really taken a step back. I'll just say my name's Tommy Grisafi. It's 2025. Where the hell do you trade spring wheat Like? People don't know what ticket to click, what the rules are.
Speaker 1:I had a friend try to do a block trade. They did the trade. It executed, the exchange broke the trade. Then you got to go back. You tell the client hey, you're filled, you did this. Then you got to tell the client no, you didn't do that. This is another example of us going backwards here. Technology is supposed to be our friend. I did before you and I went live. I went on X and I asked Grok a question and it answered it and then asked me a follow-up and asked me a follow-up and asked me another follow-up and it was writing a bio, uh, for my wife and I. You know I know you of all people how particular you are about writing, have you? Uh? Do you feel in some ways we're going backwards, but yet we're moving at the speed of light?
Speaker 2:Oh, with the whole world of AI, it's gotten pretty easy to just throw up some things and have it spit things, you know, spit some verbiage out back to you. So great tool, but you do have to check the accuracy on it as well.
Speaker 1:Right. And so we got the USDA putting out bogus stuff. We got you know that. Where do we trade? Why can we not have a Minneapolis wheat contract that trades like a normal right? Let's be optimistic, positive. How about those people who ranch and cattle? What a time to be alive in the cattle market.
Speaker 2:Well, I tell you there's just so much grass. I was out in uh the Bismarck, uh Washburn, North Dakota area, central North Dakota, last week with an event with the Winfield and the cows are belly high with grass. They're in heaven right now with the good quality grass, and that's not something we normally see this time of year when we get into the western Dakota. So that's very positive to have all that green and, of course, a lot of green going on in this marketplace as well. When we keep talking about new all-time highs, it's it's pretty amazing every day.
Speaker 1:If the cattle pits were opened on, you know what they'd look like? They'd look like this, this is what they would look like. But we don't have pits anymore, folks. We just have people like me sitting in. Uh, like scott the cow guy says that's tommy sitting in his mom's basement and uh, it's funny because I put on a dress shirt to do this interview with you, and a vest and stuff. I'm wearing shorts. I'm literally wearing gym shorts, so not everything looks like what it seems right. Uh, objects, uh, it's just it's. It's a wild world we live in. Okay, moving forward, dc. Any, what type of stuff? I'm big, beautiful bill fsa money, buy a bigger hat, get it in that mailbox. You're giving away money, correct?
Speaker 2:The one story I would say coming out of USDA is news of reorganization. The Ag Secretary out with an announcement of a plan for reorganization. They're going to relocate many of the Washington DC-based staff. Right now there's about 4,600 staff members in the DC area for USDA. With this reorganization plan they're going to move to five different hubs across the country, places like Raleigh, north Carolina, indianapolis, kansas City, salt Lake City. They're going to move out to those areas and we'll be seeing about 2,000 people in the DC area. The rest will be relocated if they desire to have that happen.
Speaker 2:Part of the thing they talked about for employees would be the cost of living is a lot easier in those type of places. A lot of things that that was part of the message. But they're also looking at closing some facilities as well. If you've been to DC you've got the Jamie Whitten Building, the headquarters for USDA, and across the street is the South USDA building. It is one of the biggest office buildings in all of Washington DC. That's being turned back to the government, to the general administration services, and we don't know what's going to happen with it. It's not going to be under the purview of USDA any longer. They also plan on shutting down the Beltsville Research Facility in Maryland. That's been a big research facility for USDA. There's a number of other facilities, particularly again in that DC area, that are going to be closed down as part of this reorganization.
Speaker 1:Well, I can say if you want something positive, if you need to make money, go become a moving company and get your butt out in DC, because people need to move. I will also say that I've always felt like the USDA is totally disconnected from what's going on in rural America, because they had that large concentration of people in DC. Get some boots on the ground, let's get some feet walking through some fields and get some people in the Midwest which they did a few years ago branching out to was it Missouri, or to Kansas?
Speaker 2:They did do some of that under Purdue. They were looking at doing more at USDA in Kansas City. But this is a major move that they're talking about in this one and just what you're talking about, tommy. Getting closer to the farmer is part of the discussion points with the USDA. In this announcement that we've had. There's like four pillars that were part of it. Part of it is trying to get rid of some of the duplication that we've got in USDA. They want to, of course, make some fiscal responsibility here, but a big part of it was getting closer to the, the farmer, uh, be more farmer facing than what they have been in the past all righty anything else in uh on your uh docket um want to talk interest rates yeah, what's going on?
Speaker 2:and as far as interest rates, what?
Speaker 1:are you hearing, tommy? They're not going down the 10-year 4.45 today. Uh, they're not going up, but they're definitely not going down, folks, as you got to operating. Or if you talk about storing grain, this is a little marketing grain 101. There is a cost of carrying grain. There is a cost of using borrowed money to finance a product. There's a cost even if you are wealthy, as all could be, and when God needs a loan he comes to you. There's a cost of not having that money in another market. The stock market just made new all-time highs yesterday, today, all the way out through the week here, new all-time highs here in the stock market. And it's not free to store a depreciating asset or an asset that's not moving like corn. So keep an eye on interest rates. This is definitely hurting equipment sales, new equipment, used equipment, et cetera. It's affecting the whole landscape in agriculture. Don.
Speaker 2:It's going to be interesting in this area because we're going to need storage for all of that as well, and that's prime situation with the damage we had with some of the storms last month here in North Dakota.
Speaker 1:I think I saw a bad quote come out from the governor. Yeah, we know there was like $10 million in damage and everyone's like that number's like $100 million or $200 million. Maybe it was just a bad. He may have just said something and he was off by a zero, but everyone kind of definitely noticed the internet blew up. Did you see that quote?
Speaker 2:I think maybe what he's referring to is the state is putting together some funding to rebuild some of that infrastructure. It was close to that total that you were talking about there.
Speaker 1:Okay, maybe we all read it wrong as, hey, we got 10 million coming your way and then people are like, yeah, we need 100 million more, but we are low on bins and we are long on grain. I think the Northern Plains farmers holding grain from last year and they're still sweeping bin bottoms with not so much soybeans but there's corn still in the countryside and wheat. You can notice that out in the basis. The difference between the cash and futures Going out to central North Dakota a dollar under for beans at harvest Don I'm embarrassed to say this Corn basis already in part of the North Dakota. The difference between the cash and the futures we're 420 futures minus 80 cent corn basis at harvest. That's not going to work for anyone. 340, 350 cash grain. If the market drops and the basis drops, you could see 299 cash grain at harvest in the northern plains.
Speaker 2:Yeah, that's not what anybody's looking for at this point.
Speaker 1:No, but give them the good news. How do they sign up for the Red River Farm Network? Monday special edition.
Speaker 2:Our newsletter, called FarmNet News, comes out every Monday morning. You can sign up on our website rrfncom or you can drop me an email. My email address is don at rrfncom.
Speaker 1:All right, everyone, this is Tom Gersoffi. Don Wick, this is your weekly edition. We've skipped one or two of these. I've been traveling, you've been traveling, but we'll get back on board. Maybe we'll do two next week. If you ever want to get a hold of me, folks, this is how you do it right here you get a hold of me 1-855-737-FARM. That phone rings directly to me and we'd love to talk to you with that. Mr Don Wick, have a great weekend. It's warm out there, and that's a good thing, and rain makes grain. Folks, if you have a comment or anything, drop it down below. This video will be posted on YouTube and, of course, our friends at Acres TV. But if you need to get a hold of me or shoot me a text, I'm a pretty easy guy to get a hold of. Thanks, Don. Thank you, Tommy.
