 Welcome to the next in a continuing series of webinars delivered by extension agribusiness here at NDSU extension. My name is Dave Ripplinger. I'm an extension economist with NDSU and I'll be moderating it a bit today as we continue. Just some background again so we will be recording this and we'll post it to the Corona Response webpage and if you have any questions please enter them in the chat for this week. We'll answer those as we get to the end of the presentation. We will if you aren't already we'll make sure that your microphone and camera are off to save bandwidth and then finally again use the chat for questions. At the end we will have some quick questions for feedback. One of those is to ask about other areas of interest so we can address them in future webinars. On with that I'll hand it over to Brian Parman. Hey, thanks Dave. So this week I'm going to cover some of the similar topics and just where we updating where we are as far as the macro stuff goes. And so my first slide here, one of the things that's been thrown around words like depression versus recession and I just really quickly wanted to kind of define exactly what they have very distinct meanings. For instance, but the one thing about it I want to say is that the difference between a depression and a recession is not really that clearly defined, okay. Recessions have a pretty clear definition. That is two or more quarters in a row of negative growth, okay. And so they basically end when we have positive growth after that and so they can last quite a while and they can be fairly deep and still not be considered a depression and as I said, the difference is a little bit subjective. So for instance, the Great Recession lasted 18 months. It was six quarters, so a year and a half, starting around December 7th and ending in the quarter of June 2009. Then another example is a double dip recession we had in the 1980s. The first recession lasted six months and then there was another one that lasted 18 months. So about the same timeframe as the Great Recession, July 81 to November of 82. On the other hand, the Great Depression lasted about 10 years and it was deep. So not only was it long, but it was deep in terms of the amount of contraction that actually happened. My next slide kind of highlights some of the differences between recession and depression and one of the big key factors on a recession versus the outcome of a depression is that depressions, well, we've only had one. So we've kind of got a small sample size as far as that goes. But big structural changes occur as a result of a recession. Now people may change or a depression. People may change their behavior somewhat after a recession. And there may be some regulatory changes after a recession, for instance, some of the banking regulations that came out of the financial crisis that happened about 10 years ago. On the other hand, with depression, you had things like the SEC being formed. You had the New Deal from FDR and his administration that happened. Things like social security benefits and unemployment benefits and just sweeping changes and then people that dramatically changed their behavior forever as a result of the depression. So I'm certainly not saying we're headed towards any kind of depression or that we're in one because one of the key things about it is it has to be deep in terms of the big loss to GDP or the loss of jobs. Not only does it have to be deep, it has to last a long time. Two or three quarters is not a long time, even if it is fairly deep. So I just want to make that clear that we're not, when we hear those things in the news, that we shouldn't be throwing around words like depression lightly, economic depression lightly because they have a very, it's a bit subjective, but the meaning of which we're really not anywhere in comparison to what it was like in the 30s in terms of how long this lasted. My next slide does show we are hitting some, we've hit an unprecedented unemployment situation that hasn't been seen ever. If you look at my graph on the next slide there, it shows that we basically had in the week ending March 31st, we had record new unemployment filings, then we beat that best of that record again with 6.87 million, and then the next few weeks, the week after that it was 6.6 million new filings, and the week following that 5.24, and then finally this last week, which ended April 18th, that's when the data ended, we had about 4.43 million new filings. So what we are seeing is that there is a downward trend, at least the last three have been lower than the peak at 6.87 million. So while that's still historically high and every single one of these would have been a multi-fold record for new unemployment filings, it is moving downwards, and so my next slide kind of summarizes some of that stuff, and that is basically that total newly unemployed since the week ending March 21st is 26.43 million new unemployment filings. Some of those folks found jobs, so the continuing jobless claims in the week ending April 11th, which just came out, is about 16 million, so our total unemployment remains around 15.5 to 16%. That's where we're sitting right now. That is considerably higher than the height of the Great Recession, which was 9.9% and higher than the double dip recessions in the early 80s, which peaked out around 11%, much lower still than the 1930s. And again, the biggest difference between now and then, though, is the duration. We were talking about 10 and 11% unemployment for months and months and quarters in a row. It remains to be seen how long this will last, the unemployment rates that we're sitting at right now. But the sooner we're able to come out of this, the better it's going to be. However, I do not think we are going to go to 3.5%, which is where we were roughly right before all this happened. I don't think we're going to 3.5% anytime soon. There are some of these jobs that are just simply not coming back. So another thing I wanted to talk about are home loans. And my next slide kind of shows what's going on with home loans. And this is some data on home loans that are in forbearance. And if you're not familiar, forbearance is not like foreclosure. Forbearance is an agreement between the borrower and the lender that payments will be suspended for a period of time. Usually they'll be rolled to the back end of the loan, but interest continues to accrue, in most cases, if you take out a forbearance. Some people may be familiar with that on student loans would do that same kind of thing. Genie May, 8.2%, about 3% of Genie May loan, home loans were in forbearance as of April 12th. Fannie and Freddie, about almost 5%, independent mortgage services around six, depository services six and a half. And then overall, a week ending as of April 12th, mortgage forbearance at about 6%. So to put that into perspective, the week ending March 2nd, which was just before things really started to turn for the worse. It was at a quarter percent versus 6%. So it's come up dramatically and this likely will increase as the May 1st payment deadline approaches. Cuz most mortgages are paid on the first of the month and we'll likely see around May 1st more mortgages going into forbearance. So I expect this percentage to go up. Now my next slide, I wanna talk about credit tightening. These are some headlines that came out of the news. JP Morgan Chase has stopped accepting HELOC applications. That's home equity lines of credit. They've just stopped accepting them, basically said do not apply for a HELOC, you're not gonna get one. And before that though, they were up about 33%. So a lot of people trying to borrow against equity in their home to make ends meet or get some cash, free up some cash for living. And then Fannie and Freddie has been announced they may start buying home loans in forbearance to help these mortgage firms out. So if you don't know, Fannie and Freddie are government backs since the financial crisis. And so they can buy up some of these loans and be backed by possibly the Federal Reserve or other entities, okay? So continuing with the credit tightening on my next slide, here's some things that information on lending. JP Morgan Chase, from Tuesday customers applying for new mortgages will need a higher credit score. It used to be around 620 or 610 was the minimum. Now at least 700 and you have to put 20% down. And then across the country, the percentage of conventional loans has dropped almost 25% in March. Jumbo loan availability almost 37% and jumbo loans are just over $500,000 versus a conventional. And then USDA and VA FHA so government back home loans down about 7%. Then my next slide I want to talk about real quick on tending home sales. So mortgage applications to new purchases down 31% from this time a year ago. And despite the 30 year fixed rate at 3.5% which is the lowest since it's been being tracked. So in other words, interest rates are really low but folks are not buying new homes. Now refinance demand is up 225% which makes sense because people are refinancing and taking advantage of these low rates. But new home purchases down quite a bit. Signed new contracts which is tracked from Zillow this is not, they haven't been closed on but they've signed a contract to either once a home is sold they move in or some contingent contract. It's down 32% from a year ago. So it is being felt and we haven't, this data remember is backward looking. So we're a few weeks, the last couple of weeks are not included in this data, which I expect will show further weakness in new home purchases and the availability of home loans. Meanwhile, people who are able are taking advantages of the low rates. So finally, I wanted to end on a little bit of good news. And as I said before, new unemployment filings are decelerating. They're still just astronomically high, but at least they're not increasing. So hopefully that show, and the other thing is when you look at the long term unemployment or the multi multiple week filings or multiple month filings. That is not as high as the number of people who applied. So some of these folks have found some jobs or for other reasons aren't needing it. So that's a good sign. New unemployment filings again decelerating. Hopefully that trend continues that and probably a lot of that is because the segment of society that was impacted has pretty much not gone back to work. They've all been able to get in and get filed. And so they're just waiting for their job opportunities to open up. Low interest rates should persist for the foreseeable future. I cannot imagine a scenario in the next couple of quarters, two or three, where interest rates move upward at all. Probably going to last longer than that because I expect this recovery is going to take a while to be fully recovered. And then markets have rebounded some. If you look at the equities markets, it's well off the lows from a few weeks ago. Consumer sentiment is not great, but it's still better than it was six or eight years ago. So there's been some improvement and a lot of that has to do with the hopes on the fact that some of these state economies are going to open. We're going to go back to some semblance of normal, whatever that normal looks like. I have no idea and I don't think anyone else does either. But that's basically where we're at right now. So with that, I'm going to turn it over to our next speaker, which is Frayn Olson. Thank you. All right. Good afternoon, everybody. My name is Frayn Olson. I'm the crop economist and marketing specialist with NDSU Extension. I'm going to try and springboard off of a few things that Brian has introduced or brought to forefront. One of the most common questions I've been getting over the last week or so has been almost everybody I talked to said, well, so when do we think the lows will be in the grain markets? You know, when do we know that kind of those lows have been set and we may be able to start rebounding or start rebuilding from there? And obviously, nobody knows for sure. We're still getting minute by minute new news about what's going on in the marketplace. And so, you know, this is not an exact science. But I do want to take a little bit of a review. Some of the techniques or tools that market analysts and traders use to try and get a handle on, again, price movements or price trends in the marketplace. Most of the time I talk about the supply demand conditions, the fundamentals. Today, I'm going to take a little different tact and talk about a couple of the technical analysis tools or charting tools that we have in our toolbox that also may be able to provide some information and help make better marketing decisions. So on my first slide, I just try and provide a really quick definition of what is technical analysis or a charting tool. What we're doing is we're using, we're looking at historical price movements. We're looking at primarily the futures market, looking backwards and saying, do we see some trends or are there some common themes or some common patterns that appear that we can use to try and evaluate where prices may be moving in the future? Now, technical analysis does not directly consider supply and demand conditions, so a pure technical analyst only looks at the price movements. They're not really concerned about supply and demand. In reality, a lot of the professional traders follow both. They look at the supply and demand conditions, but they also look at what's happening on the charts and between the two of them, they try and form opinions about what they think the futures will bring. So it is common, it's a tool is commonly used for traders and analysts. I want to emphasize most of the time we use this for short-term price trends. We're really looking in the next week, maybe two weeks, kind of looking forward, what do we see as the current trends right now? Do we expect those trends to continue in the short run? So from a timing standpoint, think of maybe one week, possibly two weeks into the future. Okay, and again, we're looking for these turning points. If prices are trending down or if prices are trending upward, it's pretty easy to follow that trend. What everybody is usually trying to ask is, so when are we going to see that shift? When is the low going to be put in and it starts to rebuild? Or when are we expecting a higher in the market and expecting it to turn down? This is also one of the primary tools used by the hedge fund managers and the index fund traders. So again, these are used by a broad base across the futures market. And again, it provides some insights into the market psychology. Again, what are the attitudes? What are the perceptions? What are some of the key pricing points? So I'm going to start with corn. My first slide is looking at what's called the Relative Strength Index, or RSI. You can see in the top half of the chart it's the historical futures market trends. On the bottom, the blue line is the one that I'm going to talk about. Now again, I pulled these charts last night after the markets closed. So this morning, I do have a little bit of updated information and I'll try and talk about that as well. But if you look at the black line, you can see that in corn, this is the May corn market, which would be for old crop corn. New crop corn November is going to look very, very similar. You can see the definitive downward trend. And so the question everybody has as well, given that spike down to about $3 on the futures market with a quick rebound, is that signaling that we're in a low? And one of the techniques we use is again this RSI, Relative Strength Index. This is a measure or used as a measure of overbought versus oversold. So it's a ratio. It's a relationship between the number of up days we've had in the marketplace versus the number of down days we've had in the market, in the market, looking backwards again. If 50% or 50% is considered to be neutral, or a ratio of 50% is considered to be neutral, up days, down days are about equal. When we get to the upper blue line, which is denoted by that line at 70, that's considered to be overbought, meaning that the buying pressure is really reaching an extreme level relative to the selling pressure. On the bottom side, a 30, a ratio of about 30 is considered to be oversold. And as you notice that the blue bar, the calculation, is been hovering around that 30 mark for quite some time. And if you look back in that August to September time period, you notice we have a gap or a range that would be very similar. So what this is signaling to me is that we have been in an oversold market for a while now that the selling pressure has been pretty intensive. It doesn't yet look like that particular indicator is starting to turn up yet. We need to have a little bit more of a rise over several days to be able to turn that heavy blue line upwards to signal that, yes, we're now in an upward moving market where this oversold pressure is starting to be released. The next slide to look at the same information a little bit differently is the MACD, it's Moving Average Convergence Divergence. It's basically a measure of not only price direction, but also how rapidly is it changing. So it's looking more at momentum in the marketplace. We know that prices have been moving downwards, but is that a strong downward push or is the momentum starting to wane? And again, we're looking at the relationship between two moving averages, which is the blue line and the green line. I really want to focus on those red bars, the histogram part. If the bars are below zero, it shows that we're in a downtrend. The height of the bars, whether if they're a really big bar or a small bar indicates how rapidly is the market changing. What is the market momentum? So as you can see right now, today the downward pressure has been pretty fast, pretty rapid, but it looks like that downward pressure is starting to wane, that it's starting to stabilize a little bit. So this MACD indicator is telling us that this downward pressure may be waning a bit, and as I look at the numbers today, it looks like again, it's kind of flattening out. So the question is, is this a turning point? We're going to start to turn positive where we see some upward movement, or are we going to be in kind of a holding pattern here for a few more days or into next week? On the next slide, again, the question that a lot of people ask as well, if we've seen these dips, if we're looking at a low, how high will prices recover before we start running into pressure? And again, this is a technique that I talked about a little bit earlier in previous recordings. These are support and resistance levels. So I'm just looking for price levels where prices have spiked down and then returned up or spiked up and then fallen down lower. And I put in those lines, again, this is a bit subjective. I guess in my viewpoint, you know, that $3 low that we put in recently, that where it spiked down and rebounded, that low was a long-term low. We had seen that a few times in the past, once back in 2016, and again, another time in 2009, that $3 price level seemed to be a really critical, what we call a support level, where prices will stop falling. Now the question is, if we're moving upwards, where's the first resistance level? And if you look at the charting techniques that $3.35 looks like the first major resistance level. So the question is, if prices start to rise, is there enough upward momentum? Is the new information in the market strong enough to convince the buyers that a price above $3.35 would be a good value? And again, we really don't know, but psychologically $3.35 is gonna be that first test, that first kind of barrier to say, is this recovery a weak recovery, or is this strong enough to be able to really move prices higher? On the next slide, we do basically the same thing only for soybeans. If we look at this RSI, or this oversold versus overbought ratio, it looks as though it's still an oversold mode, but not quite as oversold or not quite as negative as it was for the corn market. Again, it looks as though that RSI that is starting to hook upwards, which again would signal that maybe this oversold position might be starting to reverse or come back to a higher level. The next slide, if we look at the MACD, again the MACD, what this is signaling to me if you look at those red bars, is that we have been a pretty aggressive downward trend. The downtrend still seems to be holding, but it's obviously weakening considerably. So that downward momentum has really started to slow. And if I look at today's numbers, the downward trend is still there, but it's again slowing. It's kind of questionable in the soybean market whether we could really consider this a low. And again, if you look back into that mid-May time period, or March time period, excuse me, we did see some prices that are on average are a little bit lower than what we see today. When we look at those resistance support and resistance levels, which is the next slide, we see that really that first, if this is a corner and we start to see some increasing prices, 870 on the May futures is really that first benchmark that we're looking at to say, is this rally got enough momentum to really push things upward, or is this just a slight updraft that we're seeing on more of a short-term basis? On the next slide, we look at the RSI for spring wheat. This is again May spring wheat. This one is signaling at least it looks as though the downward pressure on wheat prices, spring wheat prices, at least right now, it looks like that will continue. We're not at that 30% level, but we're drifting in that direction. But again, the trend line or the movement for this overbought, oversold indicator is that we still have a lot of selling pressure going on, which would push prices lower. If you look at the MACD, we look at the momentum in the marketplace. Again, those red bars are below the zero mark, so it's showing that we are in a downward trend. That downward trend seems to have pretty good momentum yet. And it may take a while before we actually see again a bottom start to form in the spring wheat market. If we look at where the next slide at that, where the support and resistance levels, you'll see that we're right now touching some of those key levels at about $5. The futures market right now is trading at $4.99 and a quarter for May. So I'm really hoping by the end of the time period here, by the end of the close today that we're gonna be in a position where that $5 psychological support will maintain and will hold. And again, hopefully that will be the bottom and then we'll be able to start moving prices upwards from there. So I just wanted to provide a very quick summary of some of the analytical tools that are used by a lot of the market traders to get an idea of not only overbought, oversold, what's the momentum in the marketplace? And then more importantly, what are some key pricing points that you need to be looking for for either support or resistance? So with that, I'll turn things over to Tim Petrie or to Ron Hogan, excuse me. Good afternoon. My name is Ron Hogan. I'm an extension farm management with NDSU and I was gonna touch on some legislation that's ongoing. I'm just gonna talk a little bit, give you an outline of the agriculture appropriation from the CARES Act. We have kind of an outline on that. This information has been out for a week or so now, but I just wanted to give you an outline of where it is. And also there was some legislation that was signed into law this morning and I was gonna touch on that. So my first slide shows a couple pie charts here. And there was 19 billion that was authorized in this program is called the Coronavirus Food, Coronavirus Food Assistance Program. There's always acronyms. And of that 19 billion, three billion was supposed to be used for product purchases and the rest they're calling direct payments. And that other pie chart shows the breakdown of the direct payments. And they're gonna be by commodity and cattle, 5.1 billion, row crops, 3.9, those are the two highest. Now they call it row crops, but that includes wheat and other types of crops as well. Dairy 2.9, hogs 1.6, other specialty crops 2.1. And then there's a little slice of the pie that's a half a billion. Now, the USDA has authority to if part of those pieces of the pie are the money isn't used as much, they can move it over to other pieces or other commodities if there's a bigger demand and other pieces of that pie. So next, I was gonna talk about, one thing I wanted to mention, there was no line items for lamb or sheep or horticulture. They were talked about when the bill was debated, but they didn't show up here. So I just wanna make a note of that. In regard to that 3 billion of product purchases, the plan is for the government to purchase $100 million per month of fruits and vegetables, $100 million per month of dairy products and $100 million per month of meat in continuing until they use that up that $3 billion that was planned. Next, here's a chart that actually got from Farm Bureau, that looks like a pretty busy chart, but it's kind of an interesting chart to look at. This is the impact from the COVID on the various commodities. And you can see there that hogs took has taken the biggest hit, minus 53%. Wheat is the least hit, minus 4%. Most of the commodities are around that 20% mark, F at all, not very good either, minus 33%. So that shows you the impact on the prices of the various commodities. And I'm sure when we get to the direct payments, they're gonna use some of this data. The next slide, I'm gonna talk about the calculations and how these direct payments are gonna be done. The producers will receive a single payment using two calculations. So the first part of the calculation, the price losses that occurred between January 1st and April 15th, and that's a little easier to define, because that's history. The producers will be compensated by commodity for 85% of that price loss. The second part of the payment will be the expected losses. Now, this is where we're projecting losses here from April 15th through the next two quarters. And 30% of those expected losses will be a part of this payment. So there's still some question marks on what price data we use and the data set that's be used to calculate this information. Next, there is a payment limit, however, of 125,000 per commodity, and there's an overall limit of 250,000 per individual or entity. Now, the qualified commodities must have experienced at least the 5% price increase between January and April. Now, the bill, the outline here has to be reviewed by OMB. They've got the outline and that takes a while. And then after that, the USDA expects to sign up for the new program in early May, which is getting very close, early May, and try to get the payments to producers by the end of May or early June. I'm predicting early June. It seems like it always takes them a little longer than they project. Next, the next thing I'm gonna talk about is the CARES supplemental legislation that was passed. The technical name for that is the Paycheck Protection Program and Health Care Enhancement Act. And what they did, they propped in some more money into the CARES Act. And so that 349 billion of the PPP program that ran out of money, they put in another 310 billion, they replenished that. But there was a stipulation of that 310, 60 billion must go to small lenders. In effect, smaller lenders, they're assuming I guess lend to smaller businesses. So some of these mom and pop businesses that got shorted last time when the big dogs took most of the money, hopefully they can get the funding and hopefully the funding will go to the people that really need it. And they also had some clarification language and I'll just read this to you, it's right there in the yellow. The SBA clarified that when you make the certification on this loan, borrowers must take into account their current business activity and their ability to access other sources of liquidity sufficient to support the ongoing operations in a manner that is not significantly detrimental to the business. And what that big sentence is saying is that if you can get loans from other sources and if you really don't need this loan you really shouldn't be applying. And I think the first go around, there's a lot of people that may have not needed those loans that got the money. The next part of this supplemental act was the 500 billion that went into the idle, the economic injury disaster loan from SBA. And those have always been around those idle loans and those are for any SBA borrower and now anyone with economic injury can apply. And there was another 10 billion into that idle grants they call it. And that is actually a $10,000 grants that you can just get, okay? Now, it's for farmers and ranchers. They finally made it clear that it's okay for farmers and ranchers to apply for those EIDL loans. And they also stipulated that you can get money from PPP and the EIDL as well. Now at this point, now there is no tie between the other government programs like ARC PLC and any of these other programs. Also within this act, there were 75 billion for hospitals and which were badly needed and 25 billion for testing as well, which is badly needed. So with that, that's kind of a summary of the legislation that was signed into law this morning. And next I'll turn it over to Tim. Afternoon, everybody, Tim Petrie extension livestock marketing economist. My first slide and I'm just gonna repeat, this is Ron, yeah, this is Ron's slide. So I'm not gonna repeat it, but you know, everybody's wondering, do we qualify for the 5%, it was our 5% loss, what's gonna be paid so on? So go to the next one, I'll try to cover that a little bit. Nobody knows what data set USDA is gonna use, as Ron said. I'm just doing some guideline here, kind of some cowboy arithmetic to kind of give you some guidelines. USDA does have a lot of data sets and we assume that they're gonna use their own price data set to determine losses that you won't have to say okay on January 1st, my auction market or wherever you sell depends on the type of livestock you had, had this price and then I sold whatever a month later and you may well have to prove that you sold livestock, but most likely it will be based on a USDA data set, but that isn't for sure anyway. So just some guidelines here, start on the upper left, slaughter steer prices, USDA attracts and they even forecast into the future of what the five market area fed steer prices will be and then here on the blue line is the history on that these are weekly here, but the week of January 1st, we started off at 124, 21 April 15th, ended up at 102, 28, so there was a 2193 decline, which is more than the 5% and again, the payment as Ron said is based on 85%. So I don't know how much money they're gonna have and if they run out of money, but there's an 1864 per 100 weight on fed cattle, which runs into money in a hurry and then for feedlots over 500 to 600 head sold, they're gonna hit the limitation, but anyway, there has been some variation in prices there, so you'll go back there to the end of March, beginning April prices did spike up and so if you sold on that week, does that mean that they're gonna take the higher price off from what it was January 1st? I don't know or they could just say, we pay everybody they average that it went down, that's all to be determined, no one knows and we'll have to wait a couple of weeks for that. Go to the slide, no, just stay on this one, excuse me, but yeah, go to the right, to the right is the five to 600 pound steers and again, here I'm using a USDA agricultural marketing service data from the Southern Plains because USDA does like to use Oklahoma City as a base point for feeder cattle prices, whether they're gonna do that or not, I don't know, but this shows you would be a proxy, what 550 or 500 to 600 pound calves have done, this is the Southern Plains, again, you see they generally went up in January and February because that's the seasonal pattern for light calves with the demand for grass cattle, so there weren't any damages really occurred there until March and then they fell out of bed but then came back in April a little bit and settled and so if you strictly go from January 1st until April 15th there's about a 10 and a half dollar per hundred weight loss there times 85 is about $9 down in the bottom, then to the left is the heavier weight, yearling steers have generally went down the entire time they did come back right at the first April had a nice jump and they did that in North Dakota as well and then they backed off for the entire time period again, I'm not sure if they're gonna want receipts of when you sold and then take that day on their price data and determine how that changed from January 1st but about at 21 and on the cow side there's a lot of different cow market classes from cutter to canter and everything else and this is just one again the Southern Plains for the lean 85 and 90% lean these would be more cow cows actually are higher and all I didn't even compute it because you have to show a 5% loss and there's on this chart at least there wasn't one of them the big question obviously is the intent of the rule I think was to provide money for cow calf producers for cows even though you hadn't sold anything but how do you measure that and so that USDA will have to determine if they're gonna pay on cows and I assume they are but that may not be valid and determine how to pay that because cows are calving so we're not selling them this one here would be cold cows and not sure they'd even pay on slaughter cow prices even though it's a market class so go to the next slide please and here another thing the Chicago Mercantile Exchange has a feeder cattle index and this is all seven to basically 900 medium and large one and two steers sold by all the markets reported by USDA I've talked about it before you know four of them in North Dakota and 27th in South Dakota and all down all through Texas and everything else and so then I'll show you the spreadsheet in a minute but the CME comes up with every day what the CME feeder cattle index a proxy of the cash market and this is what the futures are settled out on there's no delivery on a futures contract so this is what the feeder cattle futures would be settled out so it's a proxy for the cash market you know shows I bought the identical thing that I showed in the previous chart for the seven to eight and this is seven to nine of about after the 85% about a 21 so go to the next slide and here is the April futures contract then with that cash settlement price shown on there and just have highlighted on the right hand side in red there to show you that we have kind of found the trading range here after hitting a bottom in early April and all the volatility we had there from about the second week in March all the way all the way through March and part way into April is just limit down or limit up and then so we have traded you know more in what would be a normal trading range which you know makes us feel a little better I guess although it's quite a bit lower than you know when we were up there at 150 back in February when things were going great guns so on the next slide people continuously ask me of you know where is that CME spreadsheet and how do they do it and so this is the one from April 15th which was the last day of the period and so this comes a new one comes on the CME just go to the CME or Google CME Peter Cattel index and you've got to go through a couple buttons there to get to the spreadsheet but it's all transparent there's nothing hidden as some people think that they try to maneuver this it's actual markets with actual number ahead they sold in the weight and the price they average it up for that day on the bottom on the 15th the average was 1838 but then it's a seven day moving average so every day they added the new date and drop off the previous seventh one so the average was a 114.56 which happened to be kind of a low of that entire period so go to the next slide and wanted to just mention a little bit about how we're pulling back on slaughter and a lot of numbers here that I'm not gonna go through a USD and these aren't real numbers these are estimates and it takes a couple weeks for them to check all the meat inspectors to see exactly how many went through but we are definitely pulling back on slaughter of everything and starting with cattle there today's estimate was to kill about 84,000 and last year we'd have killed 121,000 and so we're way off and on the bottom then is the same for the period all Monday through Thursday compared to last week and we're off 138,000 there and then go to skip calves and go to hogs there again, we're really, really off on hogs about already down about 300,000 this week from last year and we've got a record we got quite a few more hogs this year that we needed to kill and so really, really backing up there and just someone asked on the chat I think of what's been hurt worse and hog prices have been hurt the worst simply because we got a lot of them and we're backing off slaughter more on them and Ron's charged that too on the pictures that they have been affected the worst go to the next slide here and on the feeder cattle side then we did have fewer feeder cattle around at the beginning of the year because we had a lower calf crop last year so we're expecting a few less auction receipts and that was the case but then again when the middle of March hit and the prices collapsed the people didn't sell and held back a lot so we really took receipts off and then they did back up into April some and now again it backed off so the last month or so and more on that in a minute but we have backed off feeder cattle receipts so go to the next slide the today at two o'clock which is not far away there's gonna be a new cattle on feed report comes out and these then are how many cattle were placed in March how many were sold in March and then on April 1st how many cattle did we have on feed and so this is just an estimate that earner Barry puts out the actual report will come out so you can check on it but as you see there in the top middle column there and placed that were the average of what the estimates are are to be about 18% down on placements and about 12% higher on markets so we marketed a lot in March and we placed a lot less so that's one of the reasons why we are still able to merchandise feeder cattle in North Dakota at least for the given the circumstances somewhat respectable prices because feed lots are down or our cattle on feed probably be 95% and again, two o'clock you'll find out on the bottom then here are some of the people that are questioned and to make up the average and you see in the highlight there in North Dakota State University is one of the participants you ask who that is if these estimates that any issue makes are close I made them if they're a long ways off frame made them so go to the next slide that's a joke, by the way we are marketing cattle at the auctions reported by agricultural marketing service in North Dakota this week we sold 5,668 compared to 3,370 last week so sold a couple thousand more so they're moving and I just highlighted the 758 because that's what I've been talking about every time here right in there that mid 135 last week and about the same prices this week so cattle are the good news is we can still sell cattle and there's a demand feed lots in Nebraska have I mentioned the corn like I said before so I think that's my last slide and if so, go ahead to Dave Great, thanks Tim Dave Ripplinger, Bioenergy Economics Specialist in East Extension just some general quick comments although I could speak at length on what's going on in the oil market specifically ethanol looking for like silver lining or that good news that Brian was kind of alluding to the corn ethanol industry in the US is actually really getting really close to equilibrium which would I kind of say is like we're getting to the end of the beginning in terms of the response in that industry to COVID and declining gasoline use primarily the biggest news in the last week or so it actually came out yesterday is that ADM is going to temporarily idle very, very large corn ethanol plants one in Columbus, Nebraska one in Cedar Rapids, Iowa each are over 300 million gallon capacity facilities so combined they're about three and a half percent of national capacity ADM says they expect that they'll be offline for about four months which given where we were before this will actually be a little bit short on production relative to use which is a good thing because there's stocks to use up in terms of oil I'm sure that most of you have probably caught wind to some extent of what happened on Monday of the last trading day of the May crude oil contract and going not only into a place where the price was negative but substantially negative which occurred for a number of reasons I'll just touch on a little bit briefly on the fundamental side this imbalance between production and use primarily petroleum is really looming large and we're getting closer and closer to that point where the lack of working space will dramatically impact the oil markets a lot of folks thought on Monday that that was being driven primarily by fundamentals and maybe at the start of the day it was but it was more of a poker game and a standoff as those prices started to decline and not really connected to fundamentals later probably one of the biggest things to look at right now was this breakdown among these price relationships within the petroleum complex crude prices across the country crude versus refined products and it's really starting to come to a head and kind of showing that these storage issues and these local supply and demand issues are really starting to impact the market first slide I have is just showing ethanol days and storage and if you can actually see this last week and these are numbers from EIA through last Friday so a little bit dated we actually had a decline in the number of days of storage from about 54 days to 53 days which is still near a record 54 was the record but it shows we're kind of going in the right direction and we had production fall a bit and we had use rise a bit and it ended up impacting days and storage clearly a long ways to go before we eat through that excess supply what's in stock but with ADM's announcement we're much closer to that in that space than we were yesterday before they made the announcement just to talk a little bit about what happened on Monday with the made crude futures contract there are bearish fundamentals going on clearly weak demand lower gasoline use lower diesel use now is definitely coming on board or is expected relative to what it was a few weeks ago and then obviously these storage concerns and so there were a lot of bearish there's a lot of bearish sentiment in the market but for the most part what happened was and I don't know if I've ever seen one before but this is essentially a long squeeze the opposite of a short squeeze there were a lot of folks who were bullish thought the prices had gone too low had taken a long position primarily using an ETF which is kind of unique historically these types of instruments didn't exist lot of long positions the ETF there's about three of them they simply didn't unwind fast enough and were stuck on Monday needing to get out of those positions because clearly they had no interest in getting into the physical market and that led to these dramatic declines of prices that did reverberate throughout the market again it was futures are supposed to be somewhat helpful and terming as a hedging tool and understanding or providing some light or shedding some light on what's going on in other markets and that obviously broke down severely on Monday and it's still a little bit shaky now we'll talk about them on the next slide focusing just a little bit on storage and on Cushing Oklahoma so Cushing is in some respects in the middle of nowhere but it's also the hub of the U.S. oil industry at least that's where WTI is priced and so Cushing is really just this location with a number of pipelines crossing and a few tanks but it is kind of this middle ground between a lot of markets and the movement of oil from Texas, Oklahoma and elsewhere to the Gulf and refining what we saw last week was again this continued build up in storage going from about 60%, excuse me, about 70% storage now to 76% of the working capacity's taken up about 5 million barrels of working storage and Cushing have filled which means we're getting really, really close to that area where there's not enough space to work new analogy, just talking about how it's you don't keep hitting 100% before you're really in trouble Sunday afternoon I made burgers for the kids my three year old daughter took a giant bite out of her hamburger and couldn't chew and of course that's just an analogy for this it's like we don't have to get to 100% before we're in trouble we're already in that zone where the ability to move oil within the pipelines to utilize all the tankage is really getting limited and Cushing is at the far extreme of this if we look nationally there's a lot of places a lot of other markets especially at the pad level where there's enough space but Cushing here it's really coming to a head quickly not enough to support what actually happened on Monday but this is one of those fundamental or logistics issues which is definitely driving the market and it's clearly now gotten the attention of a lot of folks one of the big things I wanna talk about and it's really important here with North Dakota being an oil state is that we've really seen a breakdown in the pricing relationships that existed even to and through Monday morning and so typically we do have these relationships a spread between different physical commodities or between futures and spot prices for the most part that's really broken down between WTI futures and WTI spot that relationship is kind of decoupled the relationship between WTI and other domestic crude has really broken down we can see that with the prices that we've seen here in the Northern Plains and North Dakota and Montana CHS Billings has been quoting oil at basically a dollar for a week now which has not moved in any relationship with WTI which again is that North American benchmark then finally talking about North Dakota we saw North Dakota light sweet was negative end of business on Monday rose to a dollar on Tuesday then 425 on Wednesday and then 750 yesterday but again not really moving in tandem with WTI which would typically be the case and that's just one example of the many types of crude traded in North America other than W than that other than that West Texas blend at the same time too we've seen a big change in the crack spread the difference between crude oil prices and that of gasoline and diesel up here we've seen a dramatic decline in oil prices but up until this week it really hasn't been a strong relationship what we're seeing at the rack the last 10 days we've actually seen gasoline prices here in Montana and the Dakotas is lowest 10 cents a gallon which we're not seeing at the pump but again there's this continuing disconnect as refiners are trying to figure out if and how they can do business and how they're going to market and move their refined products to market again a really big concern right now there's been a lot of sentiment in the market that right now a lot of the shale players are simply going to be out of the money and not be profitable for quite some time and that is driven in large part from these larger fundamentals but also with these local supply and demand imbalances so with that I'm just going to we'll turn over to questions here pretty quick I will make a quick plug for a webinar series that is being delivered by NDSU extension in partnership with USDA FSA we're having the last webinar this Wednesday this upcoming Wednesday on the 29th at 11 a.m. we're going to talk about ARC PLC and some other related issues with that you can visit our farm management webpage to register and join and we do have recordings of the two previous webinars online right now with that I think we'll move into some questions and the first one I'll do is John to use the Q&A tool with Zoom I'm asked will cowl calf producers that calve in the spring and sell calves in the late fall be left out of these payments out of these CFAP payments? Okay this is Tim very good question the intent of the I think the congressional intent was to provide money for cowl calf producers how that's going to be done I don't know but the intent certainly was there and how USDA is going to come up with that I don't know but there was an intent to provide relief for cowl calf producers but it didn't show up in the in just the sketchy things that we got it was more on that they had to show at least a 5% market loss really no answer there but the intent was to provide money to them and there's another one while I there's another one about how we'll kill plants catch up and the answer to that is it's very difficult for them to catch up because more and more plants are having troubles but thank goodness Dakota city plant for cattle is still going and it's ends up kind of being a regional thing said before the hog industry has really really been hurt in the Nara area up here we're really really hurt because our two closest plants in Sioux Falls and in Worthington are both closed down so you know no bids for hogs up here so while in the Eastern Corn Belt they're still going and have plants but you know every day there's more announcements but going to be very very difficult to catch up it'll be a long-term backlog because we had a record amount of hogs ready to kill and we're not doing that. Great thanks Tim I think a question for Frayne any new information on MFP3 how would it be implemented and how would farmers qualify in 2020? There's likely not be what's formally called an MFP3 the market facilitation program was really targeting financial losses due to the U.S.-China trade war and now everything has been switched over really into trying to measure or capture or support economic losses due to the COVID-19 so I think kind of the common lingo is that this MFP3 payment or this next round of financial support even though it's not tied to the U.S.-China trade agreement is really the material that Ron was trying to cover and we're still a little bit fuzzy on what those payments might look like so again I think it's a terminology thing but this new CARES Act and the support that's coming from that for farmers is we're keeping an eye on it and that's really what a lot of what Ron was trying and as well as Tim was trying to support now in some private conversations with some other I guess leaders in the ag policy area there's been indications that this is just a first round that the material or the funding in this CARES Act is really just the first round of multiple rounds of support so again keep your eyes and ears open we'll have to wait to see how this plays out. Great, thanks Frane. Question maybe for Ron about WIP Plus if you heard anything. WIP Plus is still ongoing. You could sign up anytime. I'm sure FSA would want you to come in and get going on all the paperwork. As you know the offices aren't taking any people you have to do it all electronically or by mail but yeah I know everything is a goal there. I don't even know if they even have a deadline set and when you need to get it done but you might as well get in there. They've got most of the information already downloaded from your crop insurance so you can get going on it. Great, thanks Ron. As a follow-on to that if I could Dave there's still some I guess uncertainty on how the WIP Plus program is going to make any adjustments for quality and I know for the corn guys that might be listing light test weight corn was obviously a big issue but the crop insurance and the discount factors they use in the crop insurance program really doesn't follow what happened in the marketplace very well. So the WIP Plus was and did include some quality adjustment parameters. Again, I know USDA is working on that behind the scenes trying to figure out a process and a methodology to be able to come up with a number that would be representative of the loss. So we still, Ron is absolutely correct that the first step is to go in or to make sure that you have your paperwork filled out so that you identify and you raise your hand and say yes, I want to apply for the WIP Plus program let's check that I'm, whether I have qualified or not qualified, but we really don't have a very good read on what kind of payments will be received yet. So I just wanted to emphasize the quality adjustments for WIP Plus are still a work in progress. Thanks, Frank. A question for Tim. Should ranchers consider holding back their heifers and market them as bread heifers? Well, that's a very difficult question to answer now because we don't know what's going to happen. I would not change my marketing plans from what I had before and at least drastically and wait it out. I would not, if you were going to do it before and that's what you do, probably okay to continue but don't completely change a marketing plan at this time would be the best that I could say because it's we're in unknown territory. And then Frane, I think there was a question about what prices are, what crops are the prices telling growers to plant? Well, if, oh boy, talk about loaded questions, right? So if we, right now today, cause the markets are closed if we look at the relationship between November soybeans and December corn, that price relationship's at 2.5, right on the smack dab middle, which means that the market right now today is not signaling farmers should, there's no incentive to increase or decrease your corn plantings or planting intentions. Now again, I do think there's some folks based on the perspective plantings reports that came out and some of the price adjustments now that have occurred due to COVID-19, I do think we'll see the corn acres back off from the perspective plantings report. But right now today, the market is not signaling for farmers to change or to switch between corn and beans. There is still a slight advantage for looking at the corn wheat ratio. Again, 1.5 is kind of considered neutral or typical. Right now at the close today, it's 1.56. Again, not really a strong incentive to look at additional spring wheat acres. But again, that price relationship is signaling maybe a weak preference for some more corn, for more wheat relative to corn. But I'm also in the camp of, or the perspective that Tim is bringing. Right now, there just doesn't seem to be enough strong enough signal from the marketplace to make any big dramatic changes in your planting intentions. Again, and I know a lot of the times, yes price relationships make a difference, but this is also about managing your rotation systems, managing weed control, managing your labor requirements. And so I guess I'm of the same belief with Tim that if you went into the spring planting season anticipating you're gonna plant a particular relationship or ratio of crops, I wouldn't start dramatically changing that. To tweak it here and there a little bit, fine, but I wouldn't really try and change anything to chase the marketplace. Great, thanks, Strain. Any last questions, and you can enter them via chat. You can also use the question and answer tool. As we're getting closer to the end, I just remind everybody that we do have three quick questions. If you can go to the URL on the screen, really helpful to let us know how we're doing and what we can cover in the future. And then as I mentioned, a recording of this and previous webinars is available at the two websites on your screen. So Dave, there was just really quick one question that I didn't wanna try and address. It was coming back to those charting techniques about the oversold versus overbought. And the question was, is that relative to, like our grain stocks or what's going on there? And no, the relationships or that overbought versus oversold discussion or that terminology really refers to the buying pressure versus the selling pressure in the marketplace. So what is the number of sellers and the price levels that sellers want to receive versus the price level and kind of the amount of buying interest there is in the marketplace. So it's much more about the number of buyers and sellers and how interested they are at pricing at different levels. It really has nothing to do with the underlying supply demand conditions. So I just wanted to clear that up to make sure everybody understood. Thanks, Rain. Another question came up. How do you apply for idle? Okay, that would be at either the SBA office or talk to a lender that handles SBA loans and they can put you in the right direction. And another question is, how do you define small lenders for PPP? Okay, I was trying to, I saw that question in the chat. I tried to, I was trying to look it up in the language of the law here, trying to read the legalese, but it appears that of that 60 billion, 30 billion was supposed to go to lenders that were between 10 and $50 billion in assets and the other 30 billion was supposed to go to lenders that are less than 10 billion in assets. So the even smaller lenders. Great, thanks, Ron. One question for all the panelists after hearing the other remarks from the other panelists. Do you have any comments or anything that you wanna add? Well, if not, I wanna thank everybody for joining us this afternoon. Given ongoing discussion and the turbulent situation, I'm sure that we'll be meeting again next week. Again, if you have any questions for us, feel free to reach us via other channels. We will have a recording of this webinar up and we'd ask that you provide feedback with the URL on the screen. Thanks everybody.