Obviously Argentine weather is creating huge production headwinds, but perhaps the more important question is when will Argentine producers be willing to let go of their bushels. Keep in mind Argentine inflation is ripping higher and there's a ton of political uncertainty. So, holding their bushels makes a ton of sense and offers them the best protection. If they remain tight-fisted, Argentine crushers could be left high and dry and the market still underestimating the upside potential.
We also have to keep a closer eye on the Brazilian currency and political landscape. Brazil is clearly a country that is in the midst of a political and economic crisis. Even though Brazilian exports have been record large, that could change in the blink of an eye depending on the direction of politics and the Brazilian currency.
And not to be forgotten, there's just a lot more pressure being put on the U.S. producer to plant over 90 million acres, yielding an average of 50 bushels per acre. I think the acres are going to get planted, but the verdict is still out on a 50-bushel-per-acre yield. Weather, weather, weather will be the key.
As a producer, we currently have about 50% of our new-crop price risk removed at good levels, which makes me comfortable seeing how things play out. I certainly understand the bullish headlines that are in play, but also respect how quickly things could change if trade agreements take even a short-term turn for the worse, or if U.S. producers really get aggressive with bean acres.