A Review on Dairy Risk Management, a Soybean Outlook and Investor View on AI

Today we focus on an UpLevel podcast that reviews dairy risk management options. We also get a soybean forecast (hint=China plays a role) and how investors are looking at big tech AI.

Transcript

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Hey everybody, welcome to Chat BDC. Back today with another look at egg business news across the ag and financial markets. Today's Tuesday, May 5th, 2026. Today we're going to look at risk management in the dairy market, looking at an updated soybean outlook and how artificial intelligence is affecting Wall Street. So let's get to it. Today I wanted to start out highlighting a podcast from my friend Peggy Coffeen at Up Level Dairy. Peggy interviews dairy risk management advisor and economist Katie Burgess of Ever Ag about making dairy risk management simpler and more accessible. Burgess shares her Wisconsin dairy farm upbringing, her ag business education, and path from UW extension into EverAG, emphasizing that effective risk management doesn't require predicting markets or mastering jargon. She explains the main dairy insurance tools, which are dairy revenue protection and LGM dairy, highly highlighting DRP's daily availability, quarterly coverage, and fit for class three and four and high component milk, versus LGM's Thursday only availability, class three focused and single or two-month coverage, with a coming USDA change expected to allow using both in the same quarter. They discussed today's volatility, export dependence, strong global supply, opportunities in milk and cattle values, and the farm lesson make hay when the sun shines. Be sure to find the Up Level Podcast on any of your podcast platforms or visit the Up Level Dairy website to listen to that podcast. Switching to soybean markets, any climb in soybean prices in the second quarter will be contingent on China, says terrain crops analyst Bree Batz. For new crop sales, anything less than 25 million metric tons of U.S. soybean exports to China will lead to rising stocks, which will put pressure on prices. In her latest soybean outlook, Bots emphasizes the key role China continues to play. Global demand for bulk soybeans remains volatile and questionable. She states that it's becoming less likely that the U.S. will see additional old crop export sales to China near eight million metric tons, as previously promoted by the U.S. administration. She says that based on the actual export sales pace this crop year to date, the current USDA export sales forecast is still a hundred million bushels too optimistic, and expect ending stocks to rise accordingly to 450 million bushels, despite China's purchases totaling 12 million metric tons. On the demand side, Bots says closely watch actual old and new crop export sales actively from China, especially following the mid-May meeting between the U.S. and China. Unless China's purchases of U.S. soybeans exceed the 25 million metric tons for new crop, prices will lean neutral. If you'd like to read the full outlook, visit the terrain website or look for the link on my Black Dirt daily newsletter. Finishing up in financial news, Wall Street wants more proof that big tech's enormous spending on artificial intelligence will pay off. Largest U.S. tech companies are on a spending spree to try and get ahead in the AI race. Amazon, Alphabet, Meta, and Microsoft continue to spend hundreds of billions of dollars on building infrastructure to power the AI boom. These four companies are collectively set to surpass $700 billion in spending on AI this year as they compete to become leaders in the industry. But now investors are scrutinizing spending plans that don't have tangible results. It's been a shift in the making as spending on AI has skyrocketed in recent years. Wall Street last week had a look at the company's first quarter earnings. Market reaction underscored the scrutiny. Alphabet shares jumped 10% after the company reported earnings. Meanwhile, Meta shares sank almost 9% after the company reported their earnings. Alphabet announced plans to raise its AI spending, but also exhibited an ability to monetize AI through ad revenue and demand for cloud contract services with a backlog of deals valued at $460 billion, according to the company's earnings results. Meta also announced plans to raise its spending on AI by at least another $10 billion, but Meta didn't display the same evidence of it paying off. Meta doesn't have a cloud business like Alphabet or Microsoft, leaving it without that revenue stream. Going forward, Wall Street is looking for clear AI winners and losers as opposed to betting the rising tide will lift all votes. Well, that's all for now. As always, thanks for tuning in to ChatBDC. If you found this useful, subscribe and share and tell all your friends.