Todd Gleson: 00:00

This is the February 20 edition of Commodity Week. Todd Gleeson services are made available to WILL by University of Illinois extension. Well, welcome to Kamada De Week. I am Todd Gleason. Coming up, we'll talk with our panelist, Dave Chatterton of Strategic Farm Marketing and Kirk Kimmel of agmarket.net about the marketplace, and then we'll hear a very special conversation that I held with Jerry Golke of the Golke Group.

Todd Gleson: 00:32

We talked at length about the marketplace. You wanna visit our website to hear all of that at willag.org, where, by the way, you can can sign up today for the all day ag outlook. It's coming up at the Beef House in Covington, Indiana on Tuesday, March. The FarmDoc team will be there. We'll have six commodity analysts, including Sue Martin, on hand with us, And we'll hear from John Reed too.

Todd Gleson: 00:57

He's the director of the Center for Digital Agriculture on campus. Spent twenty years with John Deere. We're going to talk with him about autonomous operations on your farm. We'll do that on the March at the Beef House. The cost is $40.

Todd Gleson: 01:13

Register today at willag.0rg. Now let's begin our conversation with Dave Chatterton and Kurt Kimmel. Dave Chatterton, let's begin with you today. When you take a look at the marketplace as a whole, corn, soybeans, and wheat, how do you suppose the fundamentals domestically line up? And then do they differ very much on the global stage?

Dave Chatterton: 01:41

Yeah, Todd. It's a really interesting question. I think they do a little bit. And right now, we're in The US. We're looking at a situation where you have a very kind of corn versus bean situation shaping up here.

Dave Chatterton: 01:52

And as we look forward here, when we look at our corn stocks in The US, not not overly tied, but certainly, you know, not, you know, not burdensome at this point, where beans are going the other way. When you put that in terms of where we're at in in the world carryout, the world carryout for soybeans this year, looking to set a new record high with record production in South America, pretty much assured at this particular point. When you look at the the global, you know, carryout situation or the world situation on corn and the ending stocks there, particularly when you break it down to the exporters of corn around the world. So The US, Ukraine, Argentina, Brazil, those stocks and those stocks to use ratios are almost as tight as we've seen. I mean, historically, they're, you know, they're the stocks to use ratio that gets you down to a where you just do not have a lot of room for error.

Dave Chatterton: 02:37

And there is the fundamental tie into the marketplace. Funds have been long corn. They've been buying. We've rallied more than a dollar since the since the late summer low. And in doing so, we've seen the fund position explode not to a record high, but certainly to a level that gets your attention here.

Dave Chatterton: 02:53

And, you know, that's been reflected as the the the outside capital has come into our marketplace here. We've had a good exchange with the farmer, but we're now at a point where farmer sales have caught up. And so, you know, if that that flow continues to come, it's favored corn to this point, but we've seen it start to get dispersed into the other grains as well, into into wheat and into the soybean complex. So soybeans are very much tied, I think, on on the upside to what corn can do for them. Corn here is in a situation where until we can assure that, we've we've got a good safrinha corn crop on the way in Brazil and until we've got the acres that the market is asking for in The US here this spring, so somewhere between three and five million additional corn acres that maybe there's not a lot of downside here.

Dave Chatterton: 03:33

So that's the fundamental tie in. I think it's, you know, it's more bullish in corn when you look out particularly on the world stage than what we find in The US and and the ops and in beans.

Todd Gleson: 03:43

Right. You used a word that we'll hear later too, bullish in corn. Do you have upside potential or targets that you're using?

Dave Chatterton: 03:51

Well, I mean, we're at a level here where a lot of people thought, you know, maybe including myself for a while, we would never get $5 in on the spot. And, you know, we've got the summer contracts above that level. We're still not there on the new crop, but those are numbers that all of a sudden bring profitability back into play. We've certainly done ourselves some favors here in terms of where we're gonna end up on the February spring crop insurance price guarantee. It's gonna actually be probably above where it was last year by a little bit.

Dave Chatterton: 04:17

Again, something that we didn't think would happen. So I think the bullish element becomes yeah. I mean, if if we get through that upside, our recent highs or if you go back, you know, into December, that $5.00 8 level, $5.00 5 level, if we can work, we've been very close to that, but we haven't been able to push through it. If you do push through that, you're looking at the market that goes at least to $5.25 and more likely $5.40 if you can get the funds to come in and and start trailing behind it and buy.

Todd Gleson: 04:42

Kurt Kimmel, Dave's talking about some numbers that farmers really want to hear. We use the word bullish. We'll hear Jerry Golke use that a bit later in the program. Are we three three three for three with you?

Curt Kimmel: 04:56

Well, as far as wanting

Curt Kimmel: 04:57

to hear something on new crop, yes, but old crop, a lot of old crops been sold. So, yeah, if we're gonna keep marching higher here, there's some replacement strategies to, be on board. As far as the old crop March, we're watching this five five zero eight. Five zero eight was the May high before we started rolling down into the growing season. Then plus May at five zero eight, that's about 62% back up to the contract high.

Curt Kimmel: 05:23

New crop December corn, our next price, target is, $4.90. But there's just a ton of moving parts out there. Yes. You can be bullish corn, but yet too, we gotta remember, we don't export a whole lot of corn percentage wise as bees, but our best customers are Canada and Mexico. And if these tariffs would happen to really get going in through here, we make our trading partners mad.

Curt Kimmel: 05:49

You know, that could, put a little bit of a dim light on exports, even ethanol into Canada. A large percentage of our ethanol exports can go into Canada. So there's a lot of moving parts out there. When you look at the optimism here, we're in the opinion, come in and put some price floors in in case this thing does not giddy up and go here.

Todd Gleson: 06:10

So tell me about the domestic fundamentals in that case is as you view them because we have now a carryout at one point, what, five five, 10% stocks to use ratio. How much difference does it make that we are at what most agricultural economists would call the midpoints relatively speaking for the marketplace, that 10% stocks to use ratio that is, as opposed to what's happening on the global marketplace?

Curt Kimmel: 06:41

When you looked at domestically, feed usage is high even though feed usage is a miscellaneous category. We're feeding a heavier weight, so that continues to be the big consumption here. The other parts of the ethanol, they've been trying to downplay ethanol, but ethanol, continues to hang in there. So domestic consumption is the key to the corn market. But if you go back in May when we started looking at the current supply demand balance sheet, carryout was 2.2, two point one.

Curt Kimmel: 07:12

Then all of a sudden here this late fall, early winter, we're down to 1.5. There's some ideas maybe we could be as tight as 1.4. So it's significantly tighter than where we, started from last May. Now when you project out to the new crop to 25, if the larger acres keep demand the same, they're gonna start talking two two for this new crop possibly. But if this demand stays good and we run into some weather, watch out.

Todd Gleson: 07:40

Who are the buyers on the world market that we can depend on at this time? Where who who are we looking to buy? Is China in the marketplace? Does the trade issues, that come along with tariffs change who might be in our mix?

Dave Chatterton: 08:01

Well, I think the answer to that is yes. And and and for a big part of that reason, China is really not in our marketplace. They're doing really all they can to avoid it. If you look at how much corn they've taken, not and that's not just a US thing. That's a global thing, but it's been next to nothing.

Dave Chatterton: 08:14

And I think they continue to do that. If you look at the amount of beans they've booked out of South America, primarily with Brazil, but now testing the Argentine beans for their reserves, which is something that historically has been reserved for The U. S, they're making that move. I think when you bring it a little closer to home, when you look at Canada and Mexico, as Kurt mentioned, Mexico are number one destination for export corn. They've booked 40% of our overall corn sales for the year, and they're a number one target for the Trump.

Dave Chatterton: 08:42

You look at other countries like Colombia is the number four buyer. Trump also had to go around with them. We're picking on Canada, and, again, as Kurt mentioned, they're the number one importer of US ethanol and a and a very strong demand. So when we look at what's happened, low prices did their job, Todd. I think they they they stimulated demand.

Dave Chatterton: 09:00

They did it in a different way in terms of it's not all been about China or at least not it's not been about China directly with The US. But we've been able to replace some of those customers and and and particularly on the corn side of the equation. How that's gonna change going forward, I mean, we've seen countries like Colombia, Mexico, China willing to at least engage with with with Trump regarding, you know, a trade deal or regarding these tariffs. And in a way that looks like or gives you the impression that, hey. We can see a deal get worked out longer term.

Dave Chatterton: 09:30

When you look at China, I think you're very much at the other end of the spectrum. They're doing things that indicate they're not willing to negotiate or at least not in the short run. And I think, you know, you you put the simple math to that 10% additional premiums on their imports versus, you know, having to comply with the remainder of the phase one trade deal or as was rumored today, enter a new trade phase one type trade deal this year, it's probably cheaper for them to take the 10% tariff right now. If those tariffs go up, maybe that math changes. But I think China's playing the long game, and so we're seeing a little bit of a rearrangement of those export players on the demand side.

Todd Gleson: 10:03

And so there are a couple

Todd Gleson: 10:04

of things that happened this week with China, relatively speaking. One of them, the Trump administration made an official name change within the government forlay, forays of, for China, now calling it China instead of the PRC or the public, the People's Republic Of China. And then Taiwan, which we have had a, a one nation policy with belonging to China, but an independent, an independent area from it. Taiwan decided that they wanted to be a buyer of US agricultural products. How much difference do you think that both of those things can make?

Curt Kimmel: 10:48

Well, as far as Taiwan being a buyer, they've they've been a buyer in the past. They just need to, you know, be a little bit more of a buyer. You know, we're real we've got plenty of supply to, ship that way. But as far as China goes, one thing is there's ideas we could go back to phase one. They'll come back and purchase that.

Curt Kimmel: 11:08

I don't think so. I don't think China's gonna budge. I think China's got plenty of supplies right now. I think China's got a good, export, system to the Southern Hemisphere right now. So I really don't know if we're gonna see a whole lot of headway with negotiations with China.

Curt Kimmel: 11:26

I think they're just testing the water in through here, and, hopefully, they can try to work something out, but, it'd be interesting to see, how this all unfolds.

Todd Gleson: 11:37

Turn your attention now to the soybean market. Bit of a different creature as opposed to corn. Soybean, as we go through this February, crop insurance setting month, much lower than last year. You can talk some about that. And it remains burdensome, and we still have a supply coming out of Brazil, not quite yet, just beginning really.

Todd Gleson: 12:02

And it'll come to the marketplace in April, May, June, July, probably August.

Dave Chatterton: 12:09

Yeah. I I think the best way to set that is the export window for US soybeans is is pretty much closed or is closing very, very quickly here as we go forward. And that part of that is China has not been a direct buyer, and part of that is the availability of the South American crop, which right now out of Brazil is priced anywhere from 65 to more than a dollar cheaper than The US depending on where where you look. Swiping balance sheet on its own is not, you know, not overly burdensome, but it's certainly not bullish. But if you look at the core relationship to beans on the ratio, you're seeing a old crop at, you know, 2.1 or two point o five to one and new crop maybe in that 2.2 handle.

Dave Chatterton: 12:45

So it's a situation where beans just haven't wanted to get a lot cheaper versus corn than that than those than those metrics. And in doing so, it goes back to the comment I made earlier where I think the upside in beans is actually tied here to corn and what corn may or may not be able to do. Now we may get some help next week or at the end of next week with USDA's outlook for them, and there's, you know, whisper rumors of a 95,000,000, you know, acre plus number in corn, which takes your your bean number down to a point where you're you're 82, 80 one and a half million acres, and all of a sudden you've got a bean balance sheet for a new crop that that starts to look a little bit tighter, look a little bit concerning. And the market is a forward looking mechanism. It's a futures market, and and that will be something that's that's in play.

Dave Chatterton: 13:29

Now that's a what if from the USDA, and we'll have to see where they go with, you know, in in the in the May report when we when we get the first look at new crop acreage. But, you know, there there's a number there, but the bean market, I think, very much tied to the corn market at the moment, Todd.

Curt Kimmel: 13:44

Yeah. The corn bean ratio is probably gonna get even a little bit, tighter yet, but the the the enthusiasm or the outlooks, new crop, as Dave mentioned, we're gonna see some higher corn acres. You know, we're looking at the Southeast, cotton and rice, maybe switching to corn, but two, there's situation where milo or sorghum exports are not eventful. China's not buying any of that, so there's guys in Kansas switching to corn. So, you know, that, first glance here next week's okay, but the actual March 31 is gonna be, quite the event.

Todd Gleson: 14:20

What should producers, you think, do about soybean sales? Not old crop, but new crop because, I don't know, they're probably looking at a loss at this time.

Curt Kimmel: 14:33

Which is the least lost, I guess. Bees is the greater loss right now. But, yeah, basically, we're targeting, well, $10.50 was first benchmark, 11 o 5 at new crops, our next target there. But the simplest thing to do is put a price floor under you and leave the upside open. That way, if the weather guys are right, which a lot of them are leaning towards some weather problems here this growing season, we have some up and through here.

Curt Kimmel: 15:02

Would you be able to to sell higher? But you take, less bean acres and lower that yield a little bit, it could tighten up the supply demand balance sheet.

Dave Chatterton: 15:13

Yeah, Todd. I think you need to be you know, we're in a situation where a lot of the old crop beans have been marketed at this point. For new crop, we're sitting 15 to 20% sold and tapping the brakes just a little bit. That's not to say fall asleep at the switch by any means because you need to be paying attention here. But if if corn has bought itself a little bit of time to see how things develop in South America and and see how the acreage situation looks in The US this spring, that's probably supportive to beans.

Dave Chatterton: 15:39

Does that mean that we're able to sell beans later in the year at a higher value? I don't know, but I think we have have the opportunity to maybe wait just a little bit. So definitely more proactive on getting bean sales off sooner rather than later versus what I would say in corn. But, for right now, like I said, that corn being tied to us indicates that we're gonna be just a little bit patient. If we get that move over '11 and you get 11/20 or November, I think that changes pretty quickly.

Dave Chatterton: 16:05

But to your point here, locking in a value right now that's below the cost of production for many producers, probably just something that we're a little reluctant to do here in the near term.

Todd Gleson: 16:16

And finally, as we wrap up some of our time here, could you consider what the marketplace looked like in August, September, and October, and how a dollar rally developed within the corn market when most marketers, farmers, analysts alike, really did not see that coming. The first indication that it might really be different, I suppose, came from farmers talking about, you know, harvest a little bit, but it was the November crop and crop report that really changed things some.

Dave Chatterton: 16:56

Yeah, Todd. I think that's a a pretty easy and clear answer. And if you look at what the the USDA did between the November and the January reports to Typically, you throw December out of that process. But they from a supply side standpoint, they made a record reduction in yield, a record reduction in production in terms of beans. On that report, they did a very similar thing.

Dave Chatterton: 17:17

I think the second biggest reduction that we'd ever seen in November report, the NovGA and combined report for corn and really adjusted the amount of available supply that that analysts like myself and, like, Kurt were looking at and all of a sudden changed the thesis. So that's what I think got the attention of the funds. You know, we're at a point now where we're past that January report. We're considered, you know, final production from the USDA. And what can really change now or what's going to affect it is either foreign production and or demand items here in The US.

Dave Chatterton: 17:47

And that's what the USDA has left in their arsenal to change or to play with. The supply situation isn't going to change much, and the USDA, by making those adjustments and doing it in a record way, really kinda changed the narrative of the marketplace. And I think got the attention when the inflation play was ignited following the Trump election. Corn had a story, and beans had a little bit of a story, and that's where we've seen the money flow come in.

Curt Kimmel: 18:12

Yeah. We actually were empty going into this fall. I mean, I don't know if the grain stocks reports right or not, but a lot of elevators cleaned out. And so the end user buyer was eager to buy, and and they bought and they bought and they bought. And and a lot of these end users are covered out to sixty days, and they wanna stay sixty day coverage.

Curt Kimmel: 18:34

So they were there, Biden and Steve mentioned there. The the the report shed a little light on the adverse growing conditions in the Northern part of the Corn Belt, and all of a sudden you had, you know, smaller production numbers. And and and here here here we go in through here. So, as we as we move forward, it's kind of a gift in a way here. Hopefully, we can keep the momentum going here and get out of the red on new crop profitability.

Curt Kimmel: 19:00

So

Todd Gleson: 19:01

at this point, it is important, really important to understand what the demand side of the marketplace looks like and how it might change the balance sheet for old crop because we simply won't know a new new crop balance sheet until May from USDA.

Dave Chatterton: 19:18

Yeah. And I I think there's two things there, Todd. One is that's a, you know, a % true statement, and you throw the tariff and the and the Trump factor into that, and it becomes even more unclear in predicting what may or may not develop on that front next and what sticks and what doesn't and how long it sticks for is, you know I won't call it a fool's errand, but it's nearly impossible. So what we know today is that demand is really overperformed. If you look at US corn and you've got, you know, as Kurt said, let's say 17% is exports, we'll call the other, you know, 37% in ethanol, 38% in feed, all have over performed here to date.

Dave Chatterton: 19:52

Will the the the tariff situation and some front, you know, loaded buying slow that down in the back half of the year? We'll have to see. But I think the risk right now from the numbers that we have in hand is that corn demand goes higher and the balance sheet tightens further. Some similar, but less so in the beans.

Curt Kimmel: 20:07

Yeah. We we could be front loaded here, particularly, Mexico. And the key now from here on out is actually shipments. Now we got till August, but we need to watch the shipments to make sure we, sold what we, ship what we sold in through here. But we've got a year with Mexico.

Curt Kimmel: 20:24

Mexico really didn't have any other source of, corn in a sense. If you look at the drought monitor, it only shows The US. You gotta get the full picture of Mexico. They're still dark red, and they're gonna continue to need corn. But the problem is long term is they figure out another way to source their country of corn from other from the Southern Hemisphere.

Curt Kimmel: 20:44

We're in deep doo doo. Final word from each of you. Before we get to Jerry Golke, who will join us in just

Todd Gleson: 20:51

a minute, I talked to him separately for our commodity week program this week. Dave Chatterton from strategic farm marketing, your final word.

Dave Chatterton: 20:59

Yeah, Todd. I think, you know, we we've kinda covered it all. I think, like I said, we're patient doesn't mean, you know, bury your head in the sand. It means be paying attention here and look for your opportunity. I think this is a year with the amount of geopolitical risk in the marketplace here, and let's just say everything goes right in Brazil, everything goes right with their safrinha crop.

Dave Chatterton: 21:16

We have a good crop here in The US. Definitely gonna be looking at price pressure here through the spring and summer. So make sure you're paying attention right now here in the near term. Keep in mind, you've got less than a month to go to lock in your crop insurance. March 15 is the deadline for that.

Dave Chatterton: 21:29

They've extended the ARC PLC deadline to April 15 this year, but make sure you're talking and looking at where we're at. As we mentioned, you know, corn, you know, spring price guarantee about a dime above last year here at the moment. Beans more than a dollar below. So, you know, keep that in your metrics here and make sure you're planning from that front as well here. Use that first step towards, you know, towards a safety net here for your production.

Todd Gleson: 21:50

And Kirk Kimmel from agmarket.net, your

Curt Kimmel: 21:53

final word? Making farming great again is I hope Don will bring it on, but it's Dave pinned it on there. There's just a lot of moving parts out there. There's a lot can happen. I believe volatility is gonna increase here as we move forward.

Curt Kimmel: 22:09

Actually, you look at new crop corn, we could be as high as $6.06 50 with weather concerns, or we could be down to $3.50 if these tariffs get and that's a wide range. I don't think we're gonna be in this range, but I think we're gonna be one or the other.

Todd Gleson: 22:25

Kurt Kimmel and Dave Chatterton joined us on our Commodity Week program. I also spoke with Jerry Golke of the Golke Group. Here's that conversation. Jerry Golke now joins us from the Golke Group. He and I have had a discussion since, I don't know, October, I suppose, some online, some email, some in person, Jerry, about this marketplace.

Todd Gleson: 22:53

Particularly in the last two months, you have turned really friendly to what I would say might be bullish, this corn market, probably all of the markets, I think. Can you tell me the reasons why?

Jerry Gulke: 23:07

Well, you know, but you can go back to, excuse me, last August 30 when we, really had a, a moment of truth where and we were involved in that where we either had to pay our elevator, 20 upfront to store grain or if we had grain in storage open storage after harvest, we had to sell it or and, of old crop corn. And so, that made some people make a decision that says, I'm not gonna pay the 25¢ a bushel and store it so that a lot of grain got sold. And then, of course, the media was pretty much intact, is saying, well, any kind of a rally we get, you know, $4.50 should stop at $4 should stop at any 10¢ rally. You need to get some corn sold up here because we haven't seen this price in a while. And and we do some technical analysis and some some computer generated things that are kinda like AI, but we don't publish it, you know, formally.

Jerry Gulke: 24:02

But give us a buy signal that and and and and as part of the gap higher in corn we'll start with corn that gapped higher when we went from, September to December when you looked at a continuous chart, and that was because of the, carry in the market. Last year, we did not earn the carry. The market was gone down for about two and a half years. This year, I looked at it, and I said, you know, this is gonna be a year different than last year. We'll probably earn the carry this year.

Jerry Gulke: 24:31

This is the year I should have probably paid 25¢ a bushel to store the grain till till I harvest till I plant the next crop, you know, in the ground in in May of of two thousand twenty five or something. But we we bought some back on the on the, on the futures. But that was the first indication. And when something goes down so long and it gaps higher, that means that sun suddenly somebody who had been selling corn for the past few days and weeks suddenly becomes an owner of that same corn. They wanted to buy it.

Jerry Gulke: 25:00

And you ask yourself, what what happened that would make someone who was selling corn for so long suddenly wanna become the owner of the same stuff they didn't wanna own two weeks ago, two months ago, or whatever. And we saw corn take off. And then I looked at the charts and I said, you know, for the last two and a half years, oddly enough, our highs have been in October, November when we harvested the crop, and then we never went higher after that. So if we could ever take out the October, November highs, we might be on to something, and we did that in we did that in December. And December actually closed at the high of the month in December.

Jerry Gulke: 25:35

We haven't seen something like that for a long time. Corn closed at the high, to end the year. And then January, it opened and went higher from there versus last year on January 2. We gapped lower and went south and and never we rallied up to fill that gap again, all through the whole, crop year of 02/2425. And so that kinda alert us as to it.

Jerry Gulke: 25:58

And then we have some technical things that tell us what when when the if nothing else, it tells us, I may not wanna go long here, but I don't wanna be selling grain any longer until that system turns. And I've used that since 1982, and it's worked fabulous. May I pay for the farm using that because it it it keeps a person honest. You know, if you have an idea in mind, you have to look at yourself and say, at some point in time, I might be wrong. What's gonna tell me that I'm wrong and use some parameters to do that?

Jerry Gulke: 26:25

And when we close above the previous month's high, that tells you something because that market digest weekly reports, a a WASDE report. And in January, that's a pretty good report in January 12 or eleventh that tells us that now all of a sudden we're going above that level and making new highs for 02/2025 as we're going along. And the market is acting as if a while back and eventually, you know, I preached that sermon on I'm gonna be wrong one day and we're gonna see the top. But it sold us quite some time ago that, this is a bull market that very few people see. And I've and I made that comment on top producer and DTN.

Jerry Gulke: 27:03

I said, you know, this is the I said most people that I listen to on TV and radio and and read wouldn't recognize a bull market if they saw it walking down the street, and that's pretty arrogant or pretty, politically incorrect to say that. But that has become a fulfilling prophecy for me to see that. And then I say when the masses start to see that, oh, yeah. Oh, yeah. Well, you know, these these tariffs aren't so bad.

Jerry Gulke: 27:27

And look what happened two days ago or three days ago. Thailand came out and said they were gonna proactively buy grain from The US to circumvent, any problem with the tariff to make things more equal and not buy from the people they used to buy from, whether that be Brazil or whomever. So we have that scenario coming around that's a positive for tariffs, and it just keeps feeding on itself. And they say that, you know, a bull market needs to eat every day, and I've heard that on radio for a long time. And and you gotta take advantage of this because any minute now, the spec is gonna sell.

Jerry Gulke: 28:02

And, all summer last summer, we talked about when is the spec gonna get out of his short positions. He got out when the last dog was left town probably, and now he can stay along for a long time. We've got the speculator, large spec buying, and we've got index funds buying as well. And, of course, it's scenario as well. They can't stay long forever.

Jerry Gulke: 28:23

Well, it's been my experience. They'll stay along the market until every hedge you're out there has been blown out, and then they'll finally start selling. So that's kind of it in a in a short story and a long version, but there's an awful lot of things that have happened along the way that were signals that, you know, I always use the analysis. If something isn't doing what I was supposed to do, I gotta reanalyze my thinking or what am I missing that the market is going up day after day after day and week after week at a corn has, especially new crop corn too. What what what's going on that I'm missing?

Jerry Gulke: 28:54

And then you have to take a reevaluation of something and and and selling a little bit here and there is never wrong, perhaps, on an upmarket. And but buying puts to put a floor under things has been very expensive. And been my experience that in a bull market, I've done that in the past. I paid my dues. I bought puts and I rolled them up, bought puts and rolled them up.

Jerry Gulke: 29:14

And pretty soon, about the time I needed the money to buy the final put when it was up was out, I was out of money or I was mad at my broker or mad at somebody because I've been throwing this money trying to put a floor under things. It works. You spend a dime to make 15¢, but it's it's ill gotten money that if you don't have a good outlook, you may get yourself caught in that. And that's that's kinda what I've seen happening along the way. And and it's encouraging because I think there's been a paradigm shift in agriculture to a different way of thinking that's gonna take some time for a lot of people to realize what's happened.

Jerry Gulke: 29:47

And by that time, the ship has half sailed.

Todd Gleson: 29:50

So just just to be clear, you and I were talking last fall. I have soybean crop only from last year to to market, and I have a corn crop to market this year. And we were just talking after the fact. You and I had both made sales, I think. You I I don't remember

Jerry Gulke: 30:06

about everything out of the combine.

Todd Gleson: 30:07

Yeah. Yeah. Yeah. Out of the combine. I did not sell everything off of the combine.

Todd Gleson: 30:12

I did finish my marketing for soybeans too early. I did that in late December for what had been gone to the elevator, a mistake on my part, both for sending it to the elevator and second for marketing too early. However, in this last month again, that's when you really turned bullish. What technical signal did you see there? I I understand the the gap higher, the October, the October experience where you had the monthly closes higher.

Todd Gleson: 30:44

Why do you suppose this market will continue to climb after, moving a dollar to the positive side?

Jerry Gulke: 30:52

Well, you you look at it, and I sent you some charts. You look at a monthly chart on corn and wheat and even soybeans. We're we're a long way from where we were two years ago now. That there there was a reason why we were there. There was hype about the war and and problems in Brazil and so forth.

Jerry Gulke: 31:08

But I think, this one is if you're looking for a fundamental reason, it's if you look at the stocks and global stocks, and I think some of your guests have talked about it, the global stocks of wheat are very tight. The lowest globally ex China. If you take China out of the equation, corn and and and and and wheat are the lowest stocks they've been, stocks to use ratio or the lowest absolute stocks that we've had left over in the world in, what, ten years? Some of them thirteen years. So you've got a situation there where, if if if people wanna make nice and get along, and if you think about it, a lot of people are worried about the tariffs, but Trump's only got, well, less than four years left.

Jerry Gulke: 31:51

In four years, he's gone. So you you make nice for a while, and you try to appease things so you don't screw things up too bad, with The United States. And we're a big big dog in a big pond, so people will some of the people will listen. If four or five or six or 10 small countries start to buy something from grain from us. And Trump has said the European Union, is not buying much grain from us.

Jerry Gulke: 32:14

They buy they don't even buy our cars. And, I just had a guest here that would travel to Europe recently. I said, how many American cars do you see in Germany? He said, none. I said, how many Mercedes you see in Illinois and California here?

Jerry Gulke: 32:26

He said, a lot of them. And I said, there lies the road. So if you're bugging Europe about you don't buy any of our grain. Well, you buy a little bit of grain, and then you you and it doesn't take much. When we're talking 1.5 carrier, 1.53, I think we're a hundred million too short in exports already.

Jerry Gulke: 32:43

And that fundamental fact was that each the last two or three years, our our exports have increased over the previous year, which two years ago, that was an easy task because we weren't selling much. Then we increased it. Now we're increasing it again another 20%. And even in in beans, we're selling grain without China. And I wrote a number of articles for top producer about the big gorilla in the room.

Jerry Gulke: 33:04

We gotta get rid of that big gorilla and rely more on smaller, more countries buying from us and domestically improving our domestic demand through biodiesel and all that stuff that we're trying to do. So if a few of these people do that, countries do that, all of a sudden you gotta carry out probably about one five or maybe one four or five, and that looks to be now carrying it out into 02/2526 as well. Because you've got three, four more years left of the Trump administration. And do we really think that if he gets people to buy grain from us, that next year where they're gonna say, well, we're not buying anymore from you. We we kissed your feet at State and Maine, and we're not doing anymore.

Jerry Gulke: 33:43

No. They're gonna continue to do that to make doggone sure he doesn't, pull something on him again. Right or wrong, we gotta live with the that environment, and that's pretty bullish for agriculture. And so what you were looking for, what may change my mind technically, well, there's an old saying, if if you close above the previous week's high, especially in a week that has a an important event that happened that could affect your bottom line, you have to take notice and say and ask yourself, what do I know now that I didn't know a week ago? Or what is the people buying and I'm selling into this market?

Jerry Gulke: 34:15

What do they know that I know know that they didn't know two weeks ago? On a monthly basis, anytime you close above the previous month's high, you gotta you gotta be concerned. And especially starting a new year, if if January is better than December and February is better than January, we're seeing that now, and we got a lot of a lot of a lot of, commodities out there that are, about to make new highs for 02/2025. That's serious consideration that if you're bearish, you you gotta you gotta have a moment where you come and reevaluate yourself and say, what did I do wrong? And I tell the guys that that work for me in the brokerage business and and analyst, my son-in-law, Jamie.

Jerry Gulke: 34:55

I said, we gotta constantly look behind us and say, what's coming up behind us of which we know not what that's making the price of this grain go higher? And, if I'm so smart and wanna sell a 10¢ rally, why am I wrong 20¢ later? What did I miss? And you and then you start to look for things. And, of course, with the experience that I've had for decades, I've I've paid my dues.

Jerry Gulke: 35:16

I've learned the hard way to not ignore some of those things, and we're seeing that now. And, and, I think the question lies now, are we gonna get it by enough acres of corn to make it so that when when the end users look at this thing and they say, okay. You got four more million eight, acres of corn or four and a half. Looks like you're gonna have a carryover 1.9 again. That takes the pressure off the upside.

Jerry Gulke: 35:43

But for right now, you gotta be concerned that we carry in a one four. Now what? You know? We gotta have a pretty doggone good crop on whatever acres we produce to meet the demand that we're call it artificial or bait a browbeating or whatever you wanna call it. Trump has said a couple of different times in the last week even, I think farmers are gonna be happy with what happens with the tariffs.

Jerry Gulke: 36:06

And so he he owes us something for putting him in the office, and I think he's gonna he's gonna help pay up for that. And, of course, technically, you know, you have all kinds of things. You have moving averages, and we do some things on our computer that we don't we don't publicize. We use them ourselves because I don't wanna educate the competition so to speak. But, that that help.

Jerry Gulke: 36:28

I mean, you just don't ignore things when when things give you a buy signal. Whatever parameters you use, whether you're, whomever, you have to have some kind of a parameter that says, what is it that's gonna happen to make me wrong? I'd mind I don't mind being wrong small, but I don't wanna be wrong big. And being wrong big was selling a number, say say, $4.40 or or, I mean, $4 corn or $4.04 and a half dollar corn. Now we're at 5.

Jerry Gulke: 36:58

If you're that level, you have to sell that you sell that and you say, what? I don't wanna leave all that money on the table that's, that that may be coming down the road aways because marketing is both ways. It's selling on the way down and and buying on the way up and buying in a bull market is very difficult. It's very even though I feel we we probably have a lot more to go, and we were discussing it today. We have a little corn sold that we sold for then we have about a 20¢ loss in it when we were saying, well, you sell something here and hope you're wrong.

Jerry Gulke: 37:29

Well, now you're wrong, and you're wrong by 20¢. And now what do you do at $5? Is this just the beginning? Or do I take a thousand dollar hit per contract and say, I don't wanna be short here because the upside looks like it's just now opening higher. It it's not it's not as easy as you you can talk about it but pulling the trigger is two different things.

Jerry Gulke: 37:49

So, all I'm saying is that you got have to have an outlook before you can make some kind of projection and just breaking even or setting, you know, even setting targets for, you know, I go through it. I go through, my my p and l statement of what I should plan, what I shouldn't plan. The market doesn't care if I'm gonna make money or not. I'm trying to make maximize my profit at whatever my cost is. I'm gonna farm whether I like it or not because I've got the land.

Jerry Gulke: 38:18

It's gonna be flat into something, and I need to maximize those profits, not minimize my losses by selling my first load at breakeven. I can go to McDonald's and make $20 an hour and and more than breakeven. I get insurance for that. That's not the reason I got into farming fifty years ago. Is to break even.

Jerry Gulke: 38:35

So without an outlook, you have to know your risk and and reward, and that the charts really help you with that. And charts are nothing more than money flow that sells where's the money going? Where's the money? Where's the where's the guy putting his money that's responsible for a billion dollars worth of investments in an index fund? He makes Jerry Galki look like spit in the wind.

Jerry Gulke: 38:55

And so he's got a lot more at risk, so you have to digest his his what does he know that I don't, that makes him smarter than me, that he's long the market, and he and he bought my grain when I was selling it or me or who whoever else it is. So there's just a lot to marketing that, is not just, trying to break even and set targets. You have to know why you're setting targets. And if we're looking at a technical chart, you go back and look and, like, now we're back up to last May highs. We made some good sales in in cash sales last last spring.

Jerry Gulke: 39:30

Every one of our cash sales we made now since May is at or above what we sold it at, and we thought we did a wonderful job in marketing. But you look at the price of grain, and anybody that hedge grain last May and June has got a margin call. Isn't that interesting? So you ask yourself why is that going? That should have never happened if we're all if we're all so smart.

Jerry Gulke: 39:50

You know? We we and and, we shouldn't have we we shouldn't have to be dealing with that. At some point in time, we're gonna turn around, but I think the funds will stay along a lot longer than we than we what we think, and then now we we start watching that. And, eventually, like some people say, the door is not gonna be wide enough for the market to, let everybody out at the same time. But we if you do do due diligence and watch the signals that work for the last forty years, then you understand when that happens, yeah, I may not wanna be long the market on paper.

Jerry Gulke: 40:26

And if I'm long in the bend, maybe it's time to start selling something. And and when we get that when we get that action, we will do that. Like, we since the bottom, we'll also be able to sense the top within probably two or three weeks before the market actually turns south. And we've got the spring to go through yet, you know, and any kind of weather. Think what happens in in May if it's too wet to get the crop in for some reason or we get a hot spell in July, and we're sitting here with a carryover of 1.45, we'll say, carry in to next year, it makes next year's yield awful, awful important.

Todd Gleson: 41:03

So you talked a little bit about the moving averages. What do you follow in moving averages? I tend to have the 20, the 50, the hundred, and the 200 up. What do you follow?

Jerry Gulke: 41:13

Well, I'll tell you what. I've I've listened to all that, and, and some of my guys will look at and say, well, you know, we haven't we haven't been above the two hundred day moving average for a long time. Well, what happened when you went above the twenty day moving average? Or we I use the three five and nine on a daily basis. When the three and the five cross the nine, if I'm short grain or maybe I'm speculating or, got a hedge, I'll probably get out for a day and see and see what happens.

Jerry Gulke: 41:40

It's managing that risk or get out of some. If I'm short 40%, I'll probably take 10% off or something. But that three five and nine, pretty soon, I'm listening to guys. Well, you know, a twenty five day moving average and a fifty day moving average, all of a sudden, I've watched the market go up to almost a two hundred day average, and I'm still short. And and all these averages have been blown right on through.

Jerry Gulke: 42:01

And and and now I'm not now I'm at one that now what do I do? I I've I've left. I've got a margin call of 40¢, and now I'm at the two hundred day average. About the time, I'm so disgusted that I don't even wanna look at a hedge anymore. I wanna get rid of it and get it out of sight, you know, even if it's wrong and I buy the top.

Jerry Gulke: 42:19

That's the most important part that comes in. So I I make a decision much sooner than what the majority of guys out there who who I will say never

Todd Gleson: 42:27

Because you're following shorter.

Jerry Gulke: 42:29

Yeah. Much shorter. Shorter. And then there's

Todd Gleson: 42:32

Like like, overnight tonight, we're half a cent from the 50 moving across the 200. Yeah. Just just a half cent short of that, and it'll probably go through that tonight. I I can't imagine that wouldn't be the case, or it could bounce.

Jerry Gulke: 42:45

Well, you know that are on the farmer farm forum. What's that gonna tell us next week? You know? Are they gonna see as many acres as some people think there's, you know I think FCSO is thinking it could be as high as wouldn't be surprised if it'd be four and a half, maybe they're two and a half. I think Pro Farmers thinking to no over 2,000,000 acres.

Jerry Gulke: 43:04

We're doing our crop survey, and, we don't have a lot in yet because we just started it. And I'm looking at it, and I am shocked at how many people in Illinois and Iowa are pretty happy with the rotate rotation. You know, I'm gonna stay with the rotation. And if corn goes up, it'll probably drag beans up with it too. And, you know, we get into that, not rut, but we get in that where it works good for us, is it is a, a 10,000 acre farmer that's raising fifty fifty.

Jerry Gulke: 43:31

Is he gonna jump an extra 5,000 acres and go to a % corn? You know, maybe some might, but, boy, that that is a come harvest, they're gonna they better be ready for that. So you just don't move that much. We're we were kinda looking for something that, if we could see a 5% increase in corn acres by everybody, whether they're farming a thousand acres or 5,000 or 15,000 acres, then that tells you that the general sentiment is is kind of that wave is and we've seen that before a couple times in the last forty years. And when you see that, it's pretty easy to predict it.

Jerry Gulke: 44:06

Well, 5% of of 80,000,000 is 4,000,000. There you go. It could be 7% more. And, but to get, to get a five five million acre switch or four and a half million and a good good yield, it may be what's needed in order to assure that you don't you don't run into a runaway market this summer if it gets hot. So we look at that, and, and and what I've what I've what I've watched for the first time, and I noticed it this morning, and I we had a conference call.

Jerry Gulke: 44:36

And and I said, did you notice that our buy and sell signals I call them buy and sell signals. It's it's nothing more than that. But, we we had we had sell signals in July corn a while back, I wanna say, two weeks ago when things kinda petered out. And the momentum kinda stopped going up and things kinda kinda kinda felt negative and so forth, and we had a trigger point. And while when while that technical system was negative, corn prices went up 18¢ a bushel.

Jerry Gulke: 45:04

It's rare that we ever see that. And I and I recall from the old days thinking, if the market doesn't go your way when you have a technical signal or whatever you use as a, a trigger point to say, I've gotta do something even to sell a semi load just to see if I'm right. And it doesn't work. You you you it it may be not working this time. And I went back and looked, and I'll be doggone if if soybeans didn't back off a little bit, and it's been the kinda negative.

Jerry Gulke: 45:29

And I'm thinking, well, this might be it because everybody knows a big crop in South America. Lo and behold, that Tucker didn't go getting we didn't get a a five or a 10% correction or a 40 or 50¢ correction. We we barely had enough room for somebody who was looking to get back in the market. He didn't have a lot of time to get into corn. It wasn't much of a pullback.

Jerry Gulke: 45:49

And now we're getting the point where it's almost going along again right at the point where there's no reason fundamental reason in the world that we know of right now that tells us that we ought to be owning $10.70 corn soybeans. That's acinine. And yet here we are. And we got a farmer farm form coming up. What are they gonna say at 07:00 in the morning one day and saying, you know, we we don't see much of a change.

Jerry Gulke: 46:13

Holy cow. Then then corn could get pretty exciting, and that'll drag beans up with it probably.

Todd Gleson: 46:18

What technical targets do you have for new crop December corn at the moment? I'm assuming four ninety, which is resistance kind of level. But if you go through there, $5 is easy. There's, a gap back a day in the daily chart in January of last year. That's around 5

Jerry Gulke: 46:37

Okay.

Todd Gleson: 46:38

18 or so. But but where where where are you putting your targets?

Jerry Gulke: 46:41

Well, I will use my system short when the time comes. I don't have a target, but I know, brokers and and people that have some technical knowledge, but no fundamental knowledge. We'll look at that and say, well, it was here before. And I I look at that, and I I'll ask you the question. What was the fundamental situation back when that we had that gap or when we had resistance at $5 before?

Jerry Gulke: 47:04

What was the fundamental reason that caused corn, we'll say, not to go any higher? And that there was a fundamental reason on last May, it was because we were talking about a 2.1 carryover or more back in May. Okay. Now are we talking the same is it same fundamentals today existing that says $5 is high enough? Knowing what you know today, is there been any changes?

Jerry Gulke: 47:26

And you can say, oh, yeah, Jerry. The the the the target carryover that we were looking at a year ago in May or three month four months from now, three months from now, be a year, was much greater than what we're seeing now. So what what value in in April and May and June do I have to discover on the board of trade, we'll say, such that I can ensure that we'll get enough acres planted such that my carryover will be 2.1 or 2,200,000,000 bushels next fall, and I don't have to worry about feeding my cattle $5 corn or $6 corn or whatever. So and and so whatever happened a year ago is just a dot in the chart. And when we had that January 12 crop report in January, and that changed the world, a lot of people were surprised by that.

Jerry Gulke: 48:15

We weren't because we've been talking about the Nas had overstated the stocks for ever since last March by about 700,000,000. They finally come back to got religion and got it back back by hook or by crook by raising exports and and obvious things. So the to me, the fundamental outlook going forward from here is almost totally different than what it was the last time you were at $5 and had a gap to fill. So I I made statements to my guys that were watching. I says, anything that happened prior to January 11 when that report came out to be direct, I said, throw it out the window.

Jerry Gulke: 48:51

It means nothing to us anymore. The world changed on January 11 because it was a shock, and the government's trying to put in more demand than what's what most people think is gonna be there because they're predicting the future based on the past. And, of course, that's pretty radical to say that, but sometimes you gotta you gotta hit somebody over the head with a with a with a with a glove or something to get a get them to notice to say, what changed? The whole world changed in January.

Todd Gleson: 49:15

That that tells me that you look back and you say, well, those highs and I think this is hard for farmers to get hold of. Yeah. Those highs from last year when we were looking at 2,200,000,000 bushels in a carryout,

Jerry Gulke: 49:28

Yeah.

Todd Gleson: 49:29

Are they mean very little going forward when we have a 1,500,000,000 bushel carryout. You can't compare one to the other based because

Curt Kimmel: 49:38

Right.

Todd Gleson: 49:39

Because that high was coming off a really high high. High. Yeah. Really high high. We were we our supply and demand were not in balance.

Todd Gleson: 49:48

Today, the 10% tells you maybe they are in balance, but there's something that the marketplace sees. Yeah. That's what you're saying.

Jerry Gulke: 49:58

Yeah. And It has

Todd Gleson: 49:59

and is driving this market higher.

Jerry Gulke: 50:01

Yeah. And and and we will see it fulfilling, and that's why they always say bull market needs, good news every day. We hear that coming through whether it's the the Thailand thing and even some of your guests this past week have have mentioned the fact, you know, why why and you've asked excellent questions about why are we at where we're at. Well, it could be because maybe the crop isn't as good in Argentina as we think, and it keeps coming down a little bit. And it could be that maybe there's some buying out there, and exports have been strong.

Jerry Gulke: 50:31

They're 20% better than we're last year, which was 20% better than year before. We're on a trend, and they've even heard the words, and we're doing this without China buying corn from us. What would happen if they bought a little corn and Trump and and China made nice? Are they are they fulfilled their 50,000,000,000 that that that Biden didn't force them to, take? And they now say, you know, you're gonna fill that.

Jerry Gulke: 50:52

Otherwise, you're not getting TikTok back or whatever. So, you know, here we're starting to hear those reasons of why something should happen and why it could go forward when none of those things were even a figment of imagination six months ago. And and yet the yet the market was pointing that the the low was over and we're we're gonna we're gonna march higher right on through in in the December and January even in spite of farmers selling. And we kept hearing, and I kept calling elevators, and you did too, and you've mentioned it. There had been a massive amount of farmers selling.

Jerry Gulke: 51:26

You know, there's semis lined up, yet the market blew right through it. That's quite a bit different and and our base is a little wider, but this time of the year, elevators like to seal the grain anyway. So but at any rate, so when when we see all that farmer selling, it transfers it from the weekends, which if you talk to a big speculator, he says, you know, I don't wanna buy any grain of dairy and his friends are holding 80% of the crop. Because I don't know when Jerry's gonna say, you know, you need to sell some grain here and all of a sudden they sell, 20% of their crop. I can't handle a billion bushels of grain sold any one year.

Jerry Gulke: 52:00

I'll buy that grain to sell later at a higher price once Jerry and his friends have washed out of it, and it's in ADM, Cargill, and Dreyfus and whomever, elevators hands. They buy grain to sell for a profit. We grow grain to sell for a profit and, and, but you never know when when when all of us are gonna get together on one accord and say, I don't care what anybody says. Sell 30% of next year's crop. The market can't handle that one day.

Jerry Gulke: 52:26

You get it done, and then they and then they will buy it. And the the the then it's in strong hands. And, speculative, he says, I I know what ADM and Cargill are gonna do if they're gonna find a, importer that wants to pay more than what they paid for it. Sometimes they get burnt doing that in a in a in a down market. But, the other thing we're probably running out of time is that this thing about CFTC and the large specs, correct me if I'm wrong, but I think the the board of trade or the price discovery system as we know it, is a net sum zero game at all day long, which is like playing playing poker.

Jerry Gulke: 53:00

At the end of the day, you buy and I sell, and I may sell something to you.

Todd Gleson: 53:04

Buyer has to have a seller.

Jerry Gulke: 53:05

Yes. I know. So the question that you ask yourselves and and and and people that you have on air that talk about it are worried about the, speculators selling one day. When they bought that grain, somebody had to sell it to him, and it was a farmer that probably sold it to him or an elevator that sold sold hedges or whatever, had some stuff off. So somebody had to buy it.

Jerry Gulke: 53:26

Now when he gets his belly full and he sees the end of the end of time coming for them, they will slowly start to get out of it. And that's when you watch the CFTC reports and say, what has he done? Every other week, he'll probably buy a long week. I think he he bought I think we're gonna find out the last three or four days. They they added to their long positions again.

Jerry Gulke: 53:47

The index fund, as I heard today, was bought another 35,000 contracts of corn. So, if they're buying, somebody's selling it to them. And, and and we're chewing right on through all the farmers selling that we could possibly possibly muster. And, I don't know how much corn we got left in farmers' hands, but I doubt that it's much more than 15% of the of last year's crop. And, and the ones that aren't selling, they're pretty well healed if they haven't sold it by now.

Jerry Gulke: 54:17

So that that's something that nobody talks about is that is that for every buyer, there's a seller and and and and that's I I look at it and say, why why am I why am I lined up at the elevator dumping my grain and this guy's out buying it and he never grew a crop in his life? What does he know that I don't know? He's speculating, but he's speculating in a big way. And that's reason for concern, reason to reevaluate, what we're thinking along the way. And, once in a number of years this happens like this and bull markets are very hard to handle.

Jerry Gulke: 54:50

It is very difficult to talk somebody into who has sold their grain perhaps and and and what they thought was a great deal. And now I say, you know, you need to buy some some $4.80 corn because here's the reason why the technical reasons I can I can tell perhaps? Yeah. That's all witchcraft. That's blue sky stuff.

Jerry Gulke: 55:10

But yet that's nothing more than a pictorial representation of what money is doing. And it boils down to that price discovery system that says at the end of the day, we all vote, we find out who won or lost, and when the prices keep going up consistently day after day after day, and and what I watch is weekly closes. I wanna see the week a new highs for the week, perhaps, but certainly new high closer for the week. And if not by if not by a big amount, certainly not very much lower than the previous week to sustain that rally, and we've seen that right along. And, and and that's, you know, that's that's more than you ever wanted to know about marketing.

Jerry Gulke: 55:50

It gets too complicated. It I I did a article on DTN. I said I think I I read where it took a poll again. Only 11% of the producers use futures and options. So we've transferred our risk management over to RMA and crop insurance, and I and Jamie, my son-in-law that works with me sells crop insurance.

Jerry Gulke: 56:11

And you can buy enough crop insurance now. And I've seen guys do it that farm ten, twelve, 14 thousand acres. You buy enough crop insurance and someone to spend $40 or $45 an acre, you won't lose. So we've transferred that whole system to risk management. And twenty years ago, I gave a seminar to RMA at the at the forum in Washington, DC about risk management.

Jerry Gulke: 56:33

My risk management was like you and I talked about letting the market tell you what's going to happen. There they wanted to hear something about the crop insurance, and I didn't present that. And to me, that wasn't risk management. Their crop insurance got if if if if, Musk gets a hold of that, he's gonna look at it and say, who in the world allowed this to happen? I can't sell every car that I produce at a profit.

Jerry Gulke: 56:55

No matter if if I say, alright, I'll buy insurance and I'll and I lock in at 80% of my my growth, I'm still gonna make money. I'll produce every every car I can possibly make and sell it. If I can't sell it to to Todd and Jerry, I'll sell it to the government and they'll pay me. Nobody else has this kind of a deal in hand.

Todd Gleson: 57:13

Yeah. The the problem with that, Jerry, of course, going away is that that risk is tied up in the capital expenses within the land.

Jerry Gulke: 57:24

Oh, yeah. Yeah.

Todd Gleson: 57:25

And and it it has a enormous impact on the tax base for local school districts

Jerry Gulke: 57:32

Oh, yeah. Yep.

Todd Gleson: 57:33

And local fire departments. And it it it disappears so fast. And the economy just the rural economy is tied up in the value of farmland.

Jerry Gulke: 57:46

Oh, yeah. I I know full well. We had we own a lot of land in North Dakota, and when they decide to build a whole new school district a whole new school building, torn down good ones and put up new ones, they said nobody's gonna come to live in Allendale, North Dakota if we don't have a school system. It took forty years for that to happen. And and who did who paid for that school?

Jerry Gulke: 58:05

The the farmer that owned the land because the land prices, land taxes went up and that helped. They don't they know where to get the money from. And, one other thing that I'm looking at that's maybe piqued somebody's interest, and I'm I'm I was I was around when when Reagan was in office, and I remember the worst recession in my lifetime was after he decided to free the market up to free enterprise, and he pulled the rug out from under me and my payment limitations and so forth. I went from 200 and some thousand dollars to 50,000 a year, and there was a day of reckoning for me. I mean, I've that was a a a lot of people went broke in the eighties as you know.

Jerry Gulke: 58:40

And, of course, we had higher interest rates, but we had $3,000 an acre land, not $15,000 in acre land. So it it it may be close, but, I I remember that happening under a, under a a cost cutting type of thing that we're we're seeing and, with with Trump trying to rectify a problem. I remember the the results. And so I went back and looked and studied the nineteen thirties, and I said, you know, what was it about the marketplace, the market gurus like we would have on TV now, CNBC or Bloomberg and stuff? Anybody that owns stocks thinks it's a wonderful economy.

Jerry Gulke: 59:18

And I said, what was it that that missed that they that we that they missed back in that missed that stock market crash and so many guys lost everything. And the bottom line was they the the the conclusion of the researchers that I found said the big failure was that they failed to recognize the plight of the middle class and common man. They didn't realize how bad it was on Main Street once they got away from New York, Wall Street, and other places. And lo and behold, today on CNBC, one of the, guys I listened to, the young guy, forgot his name, and he announced that it for eight years, he's been researching the the stock market crash of nineteen twenty nine, and he's gonna put out a book in October of all times. And he said he's he's looked at memos.

Jerry Gulke: 01:00:02

He's looked at letters between people in the stock market, what they were saying, and and and analyzing the marketplace and the the future. You know? My parents grew up in that, and they, you know, they they were dancing in the good times. They were they were having a great time. And and he said, it is uncanny, he said, as how similar it is today than what it was in 1929.

Jerry Gulke: 01:00:24

And, I I've sent chills on my back because I've been preaching that to the guys. I said, I don't know if the people in the stock market and the and and the index funds and and, the, you know, the those people that have a lot of money in the stock market. I have friends in California couldn't be happier. The the their common theme is that if Trump would be president now, he'd say, how how could you get it any better? Look at the stock market.

Jerry Gulke: 01:00:48

Look at my equity. Look at my housing. Everything that we bought, and, and and and if you look at somebody that's we'll say under 55 or under 50, they haven't had a bad day in their life. They graduated from school. It's been pretty decent all the way up, and they don't know what hard times are.

Jerry Gulke: 01:01:08

So if we're gonna reset it, reset the economy, I'm a little concerned that the guys that know how to do this are old guys yet. And and a lot of these guys that are in office, the way they the way they curved inflation in the seventies and, was, you get unemployment higher and then you get labor down. And, I don't know if we can do that any longer. So I'm watching it like a hawk. If I get sell signals in the stock market, I I'm out of here.

Jerry Gulke: 01:01:36

My four zero one k's will go to cash. And if you look at the stock market, take a look close look at it. I think for the last four months, and you talk about new highs well, new highs for the move or new highs for the recent move, but we've been four months trying to break out to the upside. If we do it in in March, be careful that we don't take out the previous month's lows. If we make a reversal in the previous month's lows, that'll probably give us the first cell signal we've had for a long time.

Jerry Gulke: 01:02:03

And, then it says be wary because, and we'll find out probably in the next thirty days just how well this new administration is gonna do.

Todd Gleson: 01:02:11

On that note, thank you very much. You said we could probably talk a half hour. We talked forty five minutes. I appreciate it. Thanks, Jared.

Jerry Gulke: 01:02:18

Oh, boy.

Curt Kimmel: 01:02:19

Well, I don't that's okay.

Jerry Gulke: 01:02:20

You can you can

Todd Gleson: 01:02:21

No. No. No. We'll use it all, on not maybe on the radio, but but we'll use it all in the podcast. Thank you so much, Jerry, for taking the time with us.

Jerry Gulke: 01:02:30

Appreciate it. Yep. Thanks again. Yep. Bye bye.

Todd Gleson: 01:02:32

Jerry Golke, of course, is with the Golke Group. I'm University of Illinois Extensions, Todd Glisson.