The Big Stage For Small Grain With Jeremy Zwinger

to me a market is psychological in the short term and fundamental in the longer term and and that's what I see in this market hi once again everybody welcome back to the comto channel I'm Maron bowling with you and as always I want to encourage you to like these videos subscribe to the videos all you do is click on that little bell icon down below and share these videos with others as well because they're always full of important information today is no different today I want to welcome to the show uh Mr Jeremy's Winger I've known Jeremy for many years and he is with uh the rice Trader uh also farm and trade Incorporated he's based out of Durham California we used to do weekly updates all the time for many years and he is a specialist on all things related to Rice around the globe here in the US and also in Asia where they crank out a lot of rice in fact you just got back from a trip to uh where was it India yeah I was just in India a day and a half ago okay so I know you have seminars that you attend all over the globe about this um give me a status report if you would on what the status is of rice production and uh rice supplies in Asia right now sure I mean as you know Marlin you know you and I report Watchers these are going to be numbers one day before the report but they're they're a day before the report and they're still important even though the report's coming out tomorrow and the Market's focused on you know hey what's the new report going to say and where are we going to go from there so um but the simple summary for rice is that you have Record Supply I mean ridiculously high Record Supply and as I've been saying in my speeches where I I and Consulting The Growers and stuff you be very careful when the market's record Supply and you're sitting there um with just Ample Ample stocks um I I clock it at 33.4 five stock to use ratio um a a global production of 527 so super high Global Production the high we've ever seen by far so just the underlying piece is very high production and prices have been pushed up by some political mechanisms outside of this very very high Supply and that being of course the Indian export ban um which I find very fascinating because you know being in India we were there just as the election was happening and Modi did get his third term but he got it without a mandate so a lot of the talk in the hallways at our conference was oh he's going to have to lift his van he's going to have to show less restrictions um and the ban is really a somewhat ban it's taken the rights out of the hands of Traders and had the government's hands in it so a lot of a lot of people want the ban the official ban to end even though the flows are equal to pre-ban levels so you know that's a I think a a early summary of rice um there was some flooding in Brazil that's caused a lot of talk um because it's going to leads into some more trade I think about 1.5 million tons it really reduced the Region's ability export to the world um there's been quite a few vessels from Thailand and Vietnam headed to Brazil because of that like six seven vessels we counted but it's really kind of opened up Asia uh to go into Latin America as well I mean I see some vessels going into Mexico some Pakistan vessels going into Haiti um so there is a sh Regional shift for our region as well due to all these you know pieces coming together as well so connect the dots if you would here Jeremy what does that mean for us rice producers over here um I I mean we have our own kind of a market here in the US how does that tie in with what's going on globally um you talk about over supplies there but how does that affect our Market here right now and the availability of uh making a profit in the US well rice has been the good crop if you will I mean the the rice or wheat corn soybeans really fell the last year and rice stayed high and it started to fall and definitely the new crop to Old crop I mean it's a $3 100 way drop from from current crop to new crop so it's a massive massive inversion in the market um so um so how do we connect the dots the US is kind of differentiated left the world rice industry to a point with this Asian Rice coming in it's going to have to reconnect it's been $200 a ton higher than most of the world markets and because of smaller crops and some localized demand some political trade to Iraq it's been able to kind of not be part of the rice Market but be part of the r Price Market with these Asian vessels coming in at you know $600 a ton versus $800 a ton us um it it's going to change the market and I think that's what you're seeing and a point that really struck me last week when I was on stage I said this was that to me a market is psychological in the short term and fundamental in the longer term and and that's what I see in this market it's short term everybody's waiting for the India export ban uh to be lifted as soon as he ends the market will drop dramatically um but really it's a supply demand as I've started you know I'm I'm a supply and demand Economist you look at there's way too much the prices shouldn't be where it is today and you know I would say the same thing for wheat a very very high Global wheed Supply even with concerns very very high um can you justify high prices when there's just ample Supply and you can buy every day and rice is even worse because you're you're you're seeing this coming crop an early Monsoon plenty of water everywhere a move to higher crops the US crop is bigger like I said the only flashy point was this Brazilian uh piece which has passed kind of away of okay that's interesting but you know India is going to increase their crop by 4 million tons and they're carrying 40 million tons you know they could they could export the whole world trade there's a waterfall rice coming at this Market at some point and it's going to really affect things and so that's what I see shortterm psychological longer term fundamental and they come together kind of as we walk towards the future so what is it that holds up the price in the US here is it just the dollar value or how does that work anyway there used to be not as big a spread maybe $50 a ton and everybody said it was a quality thing but with these hybrid varieties that are very very low hybrid varieties not not welldeveloped the US quality's Fallen dramatically Asian quality I would call better at this point um and so it's not a quality premium it's just been tariffs other thing that's kept Asian race out of Mexico our key Market in Haiti but like I said that's being busted by the release of tariffs the the scheduled opening of markets um and during Co again these these countries started to say we don't want expensive food they opened up their tariff structure Brazil took all tariff away from any rice last week so now you have real competition so it's been tariff it's been politicized you know and it's a lot easier to rail in a rice rough rice from the US to Mexico then to take it all the way from Thailand and all the you know to unload it and and M rice versus you know the mills in in the in Mexico which just buying Patty um so there there's some of these long-term things but like I said I think you've opened up the Asian Asian equation with vessels coming here it's a lot easier to stop at two parts it's a lot easier to send a second vessel um I think it's open and so I think you're seeing something historic where the US and it's it's been we don't care about the world and we don't care what our quality is and and now it's coming together with Asia saying oh fine we we we have way too much rice we're going to find at home and so I think that's what's happening is is this the the Asian players really never were interested in coming here too much it kind of left us with just Uruguay and Brazil and Argentina competing against us a little bit and now there's real competition so I I mean when when in a market you say that lower quality is 30% higher than a different different quality of any Market whether that's gold or you know what coffee sugar it just doesn't happen very often does that change the way that us producers should be approaching their marketing right now then I you know I've said it often Marlin I I I think even in India we had quite a few Growers from India there and and they're very unhappy and they would just take the mic and go for 20 minutes and and there were some normal conference etiquette that I guess is a little new for me as as somebody who grew up in the farming community of you know you decide to give a speech and you're not going to give the mic away um but even girls there I tell me look you got to manage your risk I mean you've had good years for a very long time and the Market's screaming to you I'm going lower you know it may you know as you know you're very keen Watcher of the daily moves daily moves are daily moves and you you can get caught if you don't understand the Futures Market the daily moves but the Market's screaming hey I'm going lower I may go higher a little bit but I'm telling you on overall grain market you're going into a 1980s type style over Supply situation and no matter what anybody says those stock to use ratios have always held you might get away with it a little bit okay uh we we We snuck in because Ukraine and the issues in the Middle Middle East have have masked how over Supply the world is but pre pre-war levels of trade almost coming out of Ukraine I think it's a little lower Russia is way higher than then uh pre-war levels on grain and so the overall flow of grains is higher and so how can you make if you're going to sit here and make the case that the market should be higher well how there's way too much Supply and we got another big crop coming and there's no you know insect issue or water issue that's going to decrease Supply I see real record crops and everything other than like you know a few localized stuff like this Brazilian piece you know it'll it'll on average happen everywhere but the the rice just to come back to it you have the biggest crop in history by 10 million tons I mean it's it's so much bigger and so much greater than the consumption increase that you already had record ridiculous you know stocks 33% stock to use ratio and you're going to grow that level so how do how do you how do you get through that you you have to burn through it with you know high prices of the solution of high prices you'll get your supply you'll get more production because the grains were down and rice didn't go down so you got a big crop here big crop throughout the world and you know the market will do what it always does it'll it'll it'll it'll tell you when you're off so my my answer to the Growers is you got to manage your risk it's it's a it's a universal answer when the Market's screaming something to you listen to it because it the market knows and it is screaming I'm going lower I'm going lower I'm going lower and a lot of guys aren't listening and this is a different time than probably the last 10 years I think you're moving into a real 80s type mentality where you're got to manage the over Supply risk make profits where you can it's I'm not saying it's easy for The Growers the last you know seven plus years but it's been easier than when I grew up in the 80s where you just mitigated how much you lost and I think that's what's coming like a real understanding of okay you had to put away your nest EG for the the tougher years when there was an over Supply and now you have that over Supply and um and maybe you get a little bit out of a hopeful farm bill that probably won't be passed until next year but you know you're going to have to manage your risk i' like to remind everybody that you actually are a farm kid you grew up in the dtas on a wheat farm right and it was interesting when you were talking about um Modi and the fact that he was limiting exports of rice out of India I believe that applied to too didn't it yeah and the real issue in India is wheat I mean they they had to have some real issues in wheat so the worry was that during the election you know what was the universal rule politician always wants to get reelected he'll do anything to get reelected you know and so he didn't want the food price for the consumers to go up so he was willing to burn the Growers keep the price down for The Growers a little bit to keep the Consumer Price down because he wanted to he wanted to you know socially everything to be happy that was really about was behind this mind you there were some issues in the weak crop um that got pushed away but with the irrigation that they put into India the the crops are big and there's very little even drought risk they they have a their irrigation system is amazing really so you know mody did play his political card now the elections are over for quite some time you get back to normal um the overall food supply is very high in India with you know some concerns of wheat wheat stocks are lower than average right stock rice stocks oversee that dramatically so um but it was really a wheat issue is was the piece that was real in in addition of it just being over supplied but you always have a a wealth of information if our viewers out there in the audience want to check out more about what you work with in the rice industry and and some of the other markets too how would they find out more information sure I mean I I I I own several different little brand companies the rice Trader as you said the they know me and rice my local I also buy rice and and almonds and wets from growers in California I broke her for a lot of parties um that's just J International so if you search Jeremy you can usually find me I'm the only Jeremy zwinger due to my unique name so anybody can find me unfortunately so um but yeah you know I I've had a unique walk I I grew up on a farm I spent some time in Washington DC and kind of learned the political game you know I've traded grain I've been all over the world I consult to a lot of countries and on their trading and how they should trade um and I'm blessed with some real good friends that are leaders in the world uh grain industry so sometimes you you don't have to be too smart when a smarter guy can tell you what he thinks is going to happen so so yeah I I have a pretty pretty different view than a lot of people because I've had the whole experience from watching vessels to being a harvester and picking rocks for God's sake now that was a job I I I did never want to do again and but I appreciate those who do it so um but yeah I love the World Trade I love that we're in the M of of feeding the world and that the world doesn't understand so much why our industry is important they're focused on electronics or Bitcoin or chat jbt um they don't really understand the underlying um stability that's come from people growing the food transporting the food you know getting it to the shelves um they take it for granted and although it's an over Supply situ ation no Market stays in an undersupply situation or over Supply situation too long and it's been decades since we've had a real Global Production issue someday that'll come too and remind the world like almost like Co did just a little bit that where you get your food and how you get your food is very important so I think we're in a great industry well Jeremy thank you again for the time Jeremy's Winger with us here and that'll do it for this episode thank you so much for tuning in I appreciate that a lot and again thank you for your support as we continue to be one of the fastest growing a podcasts out there well for producer Brienne Hendrickson I'm Marlon bowling we'll catch you next time right here on the comto channel thanks for joining us on our comto YouTube channel don't forget you can also find us on Facebook and Tik Tok as well Futures Trading involves risk the risk of loss in trading Futures Andor options is substantial and 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