Will 2025 Bring Commodity Inflation? ft. Shawn Hackett

27:00There will be more. On average, we get three of these during a grand solar cycle. We've already had one. We should have at least two more. If you see somebody that gets on TV and says, in Indonesia, this volcanic eruption just went off and it is a BEI 6, you need to know that weather is going to go off the rails in a major, major impactful way. And you need to act accordingly, whether in the insurance business, whether as a producer, in terms of what you're thinking about in terms of your hedging, cash marketing, or as an end user, livestock producers, your feed needs, locking in, protecting those prices, all those kinds of things, a bell should go off the next time you hear somebody, you know, suggest that that might be happening.

27:45Not every volcanic eruption you hear about means anything. It's got to be VEI6 or higher, which means column height, 30 kilometers, and material in the stratosphere. You need at least 10 million tons of sulfur dioxide to be deposited in the stratosphere or more to have a global material impact on weather volatility. It has to be a VEI6. A VEI5 might have a local effect, but not a global effect. We're interested in the global effects. So the takeaway from this is volcanic eruptions matter and they tend to be much more active during periods when the sun is quiet. Let me ask this, just looking at this chart of the Tonga eruption, is the implication of this research that you're going to see that begin to roll off, meaning you're going to see this returning closer to that baseline as this particular heating effect from this particular eruption begins to subside?

28:44Well, if you notice, we already are starting to see a small retrenchment. If you can see that, we're already starting to see a little give back here. It's going to be a gradual give back. Those water vapor aerosols are precipitating out gradually. We don't think this is a spike back down, but we would anticipate that we would see this a gradual working down, you know, back to, you know, to more of the starting point here. I would give it two to three years. You know, We've not had one of these in a thousand years. So understand that we don't have a model to go by here, Ash. We're trying to figure this out as we go.

29:15But based upon what I'm seeing, I would expect this to be a slow bleed back to something more normal, where we would have been had we not had this Tonga eruption go off when it did. Very interesting.

29:31So oceans matter. Sea surface temperatures matter a lot. And so what we have learned is that we know that the sun's activity matters. Its motion around the battery center matters. We know the moon impacts our oceans. And the earth wobbles around its axis five degrees every 18.6 years. And we know the solar system planets are influencing this entire system. It's called the earth, moon, sun oscillation or notation cycle. And it has the ability to either create downwelling, meaning an overall downwelling of current. Downwelling means that you're keeping the warm sea surface temperatures onto the surface.

30:17Because if you're having downwelling forces, you're keeping the surface temperatures warm. You're keeping the warm topped sea surface temperatures on the surface. You're not bringing it from underneath. There's times that we go upwelling. All this cold, crisp air, water that's below deep in the oceans, when you get upwelling, it brings it to the surface and cools our oceans. These are long cycles that we have a lot of good clarity on. This is simply a chart of the PDO. It's generally a measure of the sea surface temperatures of the Pacific. This is the bottom chart, the measure of the AMO, which is essentially the sea surface temperatures of the Atlantic.

31:00and extreme weather volatility occurs when the oceans are warm or they're cold. That's where you get maximum weather volatility. So as an example, in the 1930s, one of the hottest decades the world has seen up until now, you can see that both the oceans were piping hot. And we had the Dust Bowl. We had, just to give an example, Iowa had 36 100-degree days in 1936, 34 100-degree days in 1934. You know what's the maximum number of 100-degree days we've had in a growing season since 1940? Ten. We haven't come close to this kind of weather volatility on the hot side. And, of course, in the 1970s, we know we had incredible cold temperatures, long winters, early freezes.

31:52we were being told, I was being told when I was five years old that we're going into a ice age during this time. That was the talk of the town at the time that we were going to move into an ice age and that growing food is going to be almost impossible because the oceans were producing such a cold overall weather volatility climate. We've been on the other side of that equation, but it's a 60-year cycle when we go back from hot to cold. Right now, we're peaking on the hot And this brings us to a very important cycle, Ash. It's called the 89-year Gleisberg cycle. Every 89 years, as depicted here and here, is when you get maximum downwelling from all these interactions of the sun, the moon, on the earth, and the planetary arrangements.

32:43Dr. Gleisberg, who was a famous physicist, figured this out. And that's why the 1930s was so hot and dry and droughts were prevalent and why we're seeing sea surface temperatures yet again at record high levels, seeing record hot temperatures, seeing droughts elevated. And of course, the Tonga effect just exacerbated the cycle, which we did not have over here. So what this cycle suggests is that we are sitting here at peak global sea surface temperatures, which then produces peak global temperatures, which maximizes peak weather volatility as this cycle comes to an end. that cycle would come to an end ash um it started in 2020 and it will end around 2030 before the glyceberg cycle effect changes and we go back when we start going into what's called an upwelling phase um on our oceans and this next chart's really clear about how this works this is the heat content we used greenland sea you can you can look at any body of water it pretty much shows the same kind of trends that from 1900 to 1940, we had a perpetually warming sea surface temperature of our oceans.

34:02Temperatures kept rising and rising and rising, reaching a peak during the 1930s. And then that was just the Gleisberg cycle right here. And then we went upwelling, all the sea surface temperatures declined for 40 years, super cold, super volatile in the 1970s, massive weather volatility, price volatility, and then the downwelling forces kicked in again, and we've been seeing these sea surface temperatures rising, and now we're expected to peak as the 89-year Gleisberg cycle reasserts itself with the maximum downwelling forces. I could go back earlier than 1900 in the same pattern holds. Sea surface temperatures determine the temperature above it.

34:47If the sea surface temperatures are hot, you're going to have hot weather. If it's cold, you're going to have cold weather, and it also impacts the upper airflow pattern. So these are the sea surface temperature cycles that are currently causing this heightened weather volatility around heat, drought, along with the sun going into a quiet phase, something that was not happening, by the way, Ash, in the 1930s. This was just a sea surface temperature weather volatility cycle. This one is the oceans and the sun combining, creating a higher order with a volatility cycle to the one that we had here.

35:29So I want to start bringing this into what are we seeing now? What can we expect now? What, you know, what's going on now? So I want to take this little out there. Let's bring it is a little more, you know, what can we expect? Where's the risk points in weather for the next few years in agriculture? This is something called the Palmer Drop Severity Index. It's the lower the number, the more arid the soils are. It's a way of just determining how dry the soils are, typically three meters deep. We drew circles at the last three Gleisberg, 89-year Gleisberg cycles, showing that the one in 100-year drought occurred at each of these important cycles.

36:16We went back further, ASH, and using tree ring analysis and ice core samples, we were able to actually verify a reconstructed Palmer Drought Severity Index going back to the year 955 that showed roughly, if you average all of these together, it's an 89-year cycle. There's some variability. There are a few outliers here that were a little longer than the 89 years, but pretty close to an 89-year cycle, we see this one-in-100-year drought occur in the Midwest. Using the 89-year cycle, the year 2025 would be your perfect statistical year for this to occur. Now, there was a 91-year, there was a 92-year, so we can give it a little leeway.

37:03We could say it could be in this range, but in a perfect statistical scenario, 2025 would be your ideal statistical scenario that you would say your greatest chance for an 89-year Blythesburg, one-in-100-year drought cycle to occur would be this coming growing cycle. I get this question asked to me all the time. How do you know these cycles are going to repeat? The answer is I don't know they're going to repeat. All I can share with you is they have repeated and believing that history repeats or rhymes and that weather has historically continued to show cyclicality. We would expect the likelihood of them repeating to be very, very high.

37:46Is it 100 %? No. Am I guaranteeing it? No. So what I'm saying is the potential for a very significant climatic event in the Midwest over the next few years is probably as high as you're going to get. Deep down, because I love U.S. farmers and I have a bias to U.S. and North American farmers and their well-being, I wish this doesn't occur. I don't want this to occur. It would be devastating to them to occur. My job is not to tell them what they want to hear, it's to tell them what I think might be the risk point and how they could alter their businesses, do different things with crop insurance, handle things with their farm in a way that can mitigate, not reduce totally, but mitigate some of these risks so that they can get through it and get to the other side.

38:33And so that is something we have our eyes on, Ash, for the next few years is looking for signs that we're developing this kind of a cycle here in the United States. so that is one thing that could be impacting our markets as early as next summer for example to narrow this down a little bit Ash we went back to 1895 and this is the Palmer Drought Severity Index going back to 1895 we looked at all the major droughts that have occurred the lower the number the drier the soil every single one of them occurred when we either were in a neutral or in a La Nina state. Neutral to La Nina state. We never had a major drought in an El Nino.

39:23These are the sea surface temperature anomalies in the Central Pacific. That's how we determine El Nino, La Nina. So we know if you have El Nino, we're not expecting a major drought. So what do the next two years look like? Are we fitting into the mode where we might be able to see one of these occur? I mean, are we looking at El Nino? What are we looking at here? And so I want to share some of the work and how we do this. So this black line is the exact sea surface temperature anomaly of the Central Pacific to the present day. You can see we're in roughly a neutral mode. if you take the best correlation coefficients and you are going back to 1950 and you match it, it shows that we are likely going to remain in a neutral negative, maybe moderate La Nina going out into next summer.

40:23So this says that we were not likely going to have El Nino next summer, which means that at least the possibility that the Gleisberg cycle drought could be in play is in play if this analysis is correct, because we won't have an El Nino next summer. In fact, we don't think we're going to have an El Nino the following year. Our work says the next two years, we'd like it to remain in a neutral or neutral La Nina environment. So that's supportive of the potential for a major drought in the United States, because every drought has only occurred if we've had a neutral La Nina state. So that's that.

41:01One other thing before we move on, Ash, is this. These are the sea surface temperatures that occurred in the two worst years of the Dust Bowl. 34 100-degree days in 1934, 36 100-degree days in 1936. These were the sea surface temperature anomalies that occurred in each of those years. I want to be looking for May, sea surface temperatures, that show something close to one of these two patterns to give me confidence that the same upper airflow pattern that occurred during these two incredible drought years might repeat. Notice both of them were neutral phases of and so on. so the other thing i'm going to be looking at is every major drought in the united states that has ever occurred you've had a dry spring and a hot may so you know i'm just not going to go blind and just predict it i'm going to be looking for these signposts yes no checkbox yes checkbox so we did the same thing with our frost forecast for brazil we laid out signposts if we get this then we go and we and we kept going down that path that we laid out on real vision during then.

42:19And we kept checking the boxes and we got the frost. So this is not about saying, I know for sure this is going to happen. This is about saying, this is what we're looking for. This is what we need to see. Here are the check boxes. Each one we check off, we're getting, we're increasing our confidence about something like this happening. So that's something everyone needs to be watching for the next couple of years to see if this materializes in the United States. The United States remains the number one or number two exporter of soybeans and corn, number four exporter of wheat, number one exporter of cotton.

42:53We matter a lot to the supply-demand equation of the world. If we get into trouble, prices are going to have to adjust to account for that reality. And that's what makes watching Midwest weather and whether this scenario plays out extremely important. And Sean, let me pick up on exactly that point where you talk about the supply-demand equation relative to commodities produced in the American Midwest and North America more generally. Talk a little bit about the implications for price and how that analysis that you've done from weather works its way through the system from a supply-demand perspective.

43:33Well, I think it's very important to know your choke points. I call them choke points, probably the better term for it. The US is a choke point, meaning you have trouble with production there. The whole ag food chain gets disrupted. Brazil is another choke point. They're number one, number two, and just about every ag market. Coffee, sugar, corn, soybeans, cotton, you go down the list. Another choke point. Russia, Ukraine, another choke point, especially for wheat, especially for corn. Another choke point. So we have these choke points that we focus on. We could have very, very ugly weather in Australia.

44:09Nothing against Australia. I love Australians, great people, great farmers, but it's not going to change the food chain, the plumbing, as we call it, in agriculture to a degree that's going to impact price to a major degree. We need to have weather volatility occur in Brazil, US, Russia, Ukraine. Sometimes Europe can get into the mix as they're a prolific wheat and corn producer. Obviously, China is very, very important, although the problem with China is we have a kind of a black box over there. We don't really get good information. We don't really know how to analyze that information. So harder to get a market to react to a black box than countries that have more transparency like the areas that I just mentioned.

44:54So we try to focus only on those choke points and what impacts a good crop or a back crop could have on the plumbing of the supply demand in agriculture and what that might mean for prices and what that might mean for how prices might need to react to balance that out, depending on the extremity of the weather that we're talking about. And that's just a function of the concentration of where those commodities are produced. Is that right, Sean? That is correct. That is correct. You know, Russia has become the number one exporter of wheat in the world. Europe is number two. We're number four. We're actually not in the top three for wheat exporting.

45:36We're number four. It's about concentrations, just about where the focus and the concentration has been in particular commodities. Coffee, Brazil dominates. Vietnam dominates. Cocoa, West Africa dominates. In wheat, obviously, Russia, Ukraine dominates. In corn, Brazil and the U.S. dominate. In soybeans, the U.S. and Brazil dominate. In cotton, it's the U.S. and Brazil and India that dominate. In rice, it's India and Southeast Asia that dominate. So every market's got their choke points. They're dominating areas that weather can have a greater impact to supply and demand equations. And it's important to know the market you're in.

46:20So for example, a few years back, we were very high on the cocoa market on Real Vision and mentioned that we thought there was a choke point there that weather volatility was going to reach some pretty unsavory levels that we could see a significant readjustment to the upside. And as anyone has been following the cocoa market, it's reached all-time highs here over the last month, over the last year, two times higher than it's ever achieved in history. The choke point, the historic weather volatility that in fact was verified in West Africa, these are the things we look for and look for the signposts to tell us it's happening or not happening.

46:57and it's very important to know that. Know what matters, know what doesn't matter because I think a lot of people in the ag market space try to make too much of countries that don't matter and don't pay enough to the countries that do matter. And we try to emphasize, don't pay attention to the back crop here. It's not really going to move the dial. But if it happens here, you know, cowbells ring. So. Very interesting. So I want to move to Brazil. I want to talk about something that's happening right now, real-time, actionable thing happening right now that is an offshoot of everything we've just discussed.

47:36Hopefully, you'll understand the gravity of what could be about to take place. We talked about volcanoes, solar cycles, sea surface temperatures, and deforestation are the four variables that throughout history have caused increases in weather volatility. We believe a major human-induced microclimate change has occurred in Brazil that is permanent unless we go about reforesting the Amazon. through expansion of agriculture in brazil they have used 20 of the amazon for agricultural production mostly livestock grain production that sort of thing and so this very very white area is means there's no amazon left it's gone and this green beautiful area saying that the amazon is alive and well doing pretty good and there's been a lot of studies that have shown that what has happened with the 20 % reduction in the Amazon is that you've ruptured the natural atmospheric river mechanism that supported the Amazon monsoonal flow that kept the northern half of Brazil in almost a rainforest condition into perpetuity.

49:01We've said that we feel that they've killed the golden goose. They've gone too far. Their expansionary plans have taken too far and they've created themselves or boxed themselves into a permanent microclimate change unless they do something to reverse it. They have been slowing down this reduction in the Amazon deforestation, but they're still deforesting it. One of the ways that we're measuring this, Ash, is this is the total rainfall from September 15th to June 1st. That's their entire growing season. It's a long growing season. You can see very steady rainfall, steady rainfall, steady rainfall, steady rainfall.

49:39and then a collapse of 50 % in rainfall in center northeast, center north, center west, Brazil. This has never happened before. Going back 150 years, we have not seen anything like this. No one can explain this other than the deforestation of the Amazon to the degree that has been done. We know looking at the Amazon monsoon, it's just not active anymore. If you look at a satellite picture today of Brazil, there's not a cloud in the sky. Last year, the Amazon actually did not fire up for the entire growing season for the first time in history. Something's going on here. Now, I think there's enough evidence, Ash, that we can start connecting the dots that what's going on here is something very, very serious and long-term in nature.

50:37and it's something that's having a huge impact on their ability to grow grains and ag products. Many will ask me, well, Sean, well, how come they haven't had problems with production up until now or just recently? Well, they produce so much rainfall here, Ash. You could lose some of it and you're still getting enough rainfall, but we're now getting to the point where we're not generating enough rainfall to produce a good crop. One of the ways that we can measure this is something that is put out by the satellites. It's called deep layer subsoil moisture that goes down three meters deep. You can see on the bottom chart, these are percentiles.

51:26These are percentiles going back to 1948 that all this almost black color here. I should have drawn these slow but you can see you're in the lowest two percentile in many cases where it's black the lowest sub-cell moisture ever seen for this time of the year ever really that's very problematic because they're about getting ready to plant the way the growing season works down there Ash they start planting soybeans in mid-September or they would like to start planting soybeans in mid-September. If there's no subsoil moisture, you can't plant crops in dry soil. They won't germinate. They won't come out.

52:11You're not going to get anything going on. So you have to wait for moisture to come. The longer this drought goes on, the more it gets delayed and it gets delayed. Last year, they were heavily delayed in their planting because of a severe drought was nowhere near as severe as this. The way this works, Ash, is if you get to October 15th and soybean acreage plantings are behind, you're going to have a late planted crop. There's no way to overcome that. The way this works is you plant the soybean crop and you plant the corn crop in behind the soybean crop in February. If you plant the soybean crop late, you're going to harvest it late and you're going to plant the corn crop late, which means you're not going to plant as many acres.

53:02And the later you plant the corn crop next year, the more it gets pushed into the dry season, the lower the yields come down. We saw that last year. Corn production last year was down over 15 % because of lower acres and lower yields because of a late planted soybean crop. One tentacle leads to another tentacle. Another important crop in this area is sugar, which is grown right here, and coffee. And oranges, for the orange juice crop, are grown right here. The problem with coffee and orange juice is they are flowering. They're flowering, right? In what's called the flowering season, where the trees flower, produce either fruit or cherries in the case of coffee.

53:46And you have to have moisture. You have to have moisture to have a flowering, and then you have to have follow-on rains to then allow that flower to then set, produce the fruit, and produce the cherry. Last year, we had record hot temperatures and a record drought during the month of October. It destroyed the flowering and created a very, very poor crop. And coffee prices have rallied from$1.40 a pound. I don't know exactly where they're trading today, but they've been trading around 230 to 240 a pound. And we're now entering the next flowering season, and we have a worse subsoil moisture profile by an order of magnitude from what we had last year.

54:31If rains do not show up in the month of October, we're going to have another extremely poor orange crop, a very extremely poor coffee crop, and we're going to have another late planted soybean crop and a late planted corn crop. You can see what's happening here. Everything leads to the other, leads to the other. And this Brazil represents in most of these markets, Ash, the number one or number two exporter of these products in the world. Choke points. Brazil has, if this becomes their one in 100 year Gleisberg cycle drought, just putting it out there. If this is their drought that is induced by weather volatility through Tonga and through the deforestation of the Amazon, this is going to be felt across the globe for years with an S, not just a few months, because they are a critical breadbasket to the world.

55:25And all I can express to you is that what typically will bring rain into northern Brazil in this area that's so much needed, what typically brings rain is to have a La Nina. Having a solid, strong La Nina is what can create the ability to get some rainfall into this region. Sean, let me ask you this. Yeah. Because you broke out a couple of key commodities there, soybeans, orange juice, corn. Talk a little bit about the potential price implications that what we're looking at right now may cause into the future and what the probability of those price fluctuations might be based on your analysis.

56:12all the variables that we look at, Ash, and we're talking about the period from right now through November, okay? Because from here through November, we're going to set the planting for soybeans. We're going to set the flowering for coffee. We're going to set the flowering for orange. The deed is going to be done by November. We don't believe we're going to have a major La Nina by then. We think it's going to remain, as we showed in that prior chart, it's going to be mostly neutral, negative, but not a strong La Nina, which means I don't believe we're going to get that to create rain in the northern half of Brazil.

56:42The monsoon issue, because of the deforestation of the Amazon, I mean, that's a permanent feature. That's not going to go away. We know that there's something called subsidence. That is to say that where there is dry soil, it perpetuates dry air above it in a cycle until a climatic event comes along so powerful to override that subsidence. So it's known that where you have dry soil, you're likely to perpetuate a drought for, you know, it's a higher probability cause of perpetuating drought in those areas where you don't have good soft soil moisture. Other factors that I will throw into the mix, there's something called the Antarctic Oscillation, which is a measure of how amplified the jet stream is in the Southern Hemisphere.

57:27It's been extremely negative. Negative means more amplification. A negative AAO tends to produce ridging or a high pressure ridge in the center north of Brazil, which would perpetuate drought. Our work says that's going to perpetuate through November. And the last thing that gives us confidence is the tropical South Atlantic, which are the waters just south of West Africa, have gotten super cold. And that super cold sea surface temperature regime tends to produce a teleconnection of a very dry northeast Brazil. So everything says to me that the drought that we're in is likely to at least perpetuate into November, which means the deed will be done for these commodities that are really in arm's way during this time.

58:13And I would anticipate that markets would have to start factoring in, they call it adding weather premium in as we get further along into the system. I believe mid-October, if we're trying to put a kind of a dot on a map, mid-October is really a very important time. If we aren't getting rains by then, coffee flowering isn't going to play out. If we don't get planting in time by October 15th, the planting of soybeans is not going to play out. It's really important that we have to get some meaningful rainfall in here, Ash, by the middle part of October, or else I think the markets would have to react to this because of how important Brazil is to the supply-demand food chain for the world, for these markets that are so important in the production here in Brazil.

59:05Sean, I'm mindful of time here, and I want to make sure that you have enough time and opportunity to wrap up and contextualize everything we've been talking about here. I've got time for maybe one or two more slides. Talk a little bit about how you think folks who've been watching this conversation can start to apply and think about what they've learned here today. Well, I think when I mentioned weather volatility, everybody always thinks only on the up. it's also on the down. Volatility means up and down, right? So the volatility means that you're going to have those years. Let's say this turns out to be what it is.

59:45A 1-100-year drought result. We're going to have a significant upside volatility event. But when prices get too high, production comes back. They get a good year at some point. No country is going to have a bad year every year. You're going to get a crash. So look at the grain markets. We had that big surge from late 2020 into 2022. Prices went through the roof. And we're now sitting, in most cases, 50 % below where we were just two years ago. Weather volatility means price volatility means it's not a one-way street. You have to be mindful of the timing of weather, when it's impactful, and how that equates to the demand.

1:00:26Because everyone says, oh, supply, supply, supply. Yeah, but there's also me and you buying it, right? And if it gets too expensive, we're going to pull back on that. And that's a very important part of the equation that seeps into the market that the market gets surprised with. And so you have to remember,$100 corn is not going to happen. We're not going to go from$4 corn to$100. There's a point where no one is going to need the corn at a certain price level, and you reach a plateau. So just understand that while I think overall ag price inflation is generally going to be your trend for the next decade because of weather being more adverse, it doesn't mean it's a one-way street.

1:01:06It doesn't mean you just buy and hold and it's straight up. It just means that generally speaking, I think we're going to be in a volatile uptrending type of market.

1:01:19john any other points you'd like to add before we conclude here today um the only other area that i would like to highlight real quick because it's a it's a now thing is russia ukraine we talked about another choke point especially for winter wheat choke point um corn for especially for ukraine because they're the you know they're big corn producers Europe especially for winter wheat and corn the way winter wheat works just for you know Ash is that they plant the winter wheat crop in September and October it goes into dormancy during the winter time it comes out of dormancy in the spring and then they harvest it in June, July for the most part so they're getting ready to plant the winter wheat crop if it's dry you can't really plant the winter wheat crop or if you try it's not going to come out or it's not going to come out in good condition it's not going to have a good stand is getting more vulnerable to susceptible to frost risk.

1:02:15So for example, we had one of the worst frost events in Russia, Ukraine in May last, this past year of all time at a time that the winter wheat crop was in poor condition. One of the reasons why their crop was down 15 % year over year. This is another choke point to watch as you move into this September, October, November timeframe because they don't get that crop planted or don't get it planted in time. And wheat feeds the world, so does rice. It's very important that these two areas produce big crops. And it's another choke point that is manifesting a lot of these weather volatility cycles that we've been talking about.

1:02:53And so from a present action standpoint, the last slide that I'll leave you with, Ash, and I think it's very important to end on this. this is corn, soybeans, and wheat relative to all ag markets and relative to all commodities. I view this as the PE of a stock, the price to sales of a stock, the price to book, pick your ratio, Ash. But this is telling you, are grain markets cheap relative to everything else? Because nothing trades by itself. Everything trades relating to everything else in this world. And so when you look at the green box, you can see there's only been a few times that grain markets have been this under.

1:03:45In fact, they're the most undervalued they've ever been at this moment in time relative to all other ag markets. They're the third cheapest they've ever been. This is going back to 1945.

1:04:00This is the third cheapest they've been relative to all commodities. Just because an asset is cheap doesn't mean it has to go higher. You need to have a sufficient catalyst to change the value of that asset relating to everything else. But appreciate that we are in a rare situation of undervaluation. Historically, we've rarely seen before and historically has led to changes in trend. I feel strongly that what I've shared with you today with the sun going quiet, you see temperature reaching peak from the Gleisberg cycle, potential for a 1-100-year drought in the U.S., the current 1-100-year drought going on in Brazil, and the significant drought going on in Russia Ukraine, that there's sufficient potential catalysts here over the next 6-12 months, that if any one of these were to generate that catalyst of less supply, these undervaluations would likely have to be altered to something more normal, or even look where we were just a few years back where you're on the high side of valuation.

1:05:06So to me, that's the opportunity that I see is someone looking at the grain markets, somebody looking at grain ETFs, a producer wanting to know, should he be cash selling his grain right now? A livestock producer wanting to know, should he be buying his feed right now? I think this is something that I would be looking and saying, I think this is probably a buyer's market. And those that are on the cash buy side that are interested on the buy side, I think that there could be, this could be a very interesting window of opportunity for, you know, for markets to do, to change trend and potentially change trend fairly violently.

1:05:51lean. That's where I currently see the most undervalued opportunity. The opportunity in coffee, for example, though, I have to end on that one. Stocks to usage ratio are the tightest ever seen. If that flowering were to fail or not have a good flowering over the next couple of months, and we get into a supply squeeze scenario, like we did in the orange juice market, like we did in the cocoa market, there's potential in coffee to do something there to the upside that it's not done before, meaning exceeding its potential highs from the 1970s. Not a guarantee it's going to happen. Obviously, if the rains come and the flowering goes well, the market can have a significant setback.

1:06:36But that's the opportunity I see for those that are looking for a market that has momentum in coffee and for value buyers or for those looking for value in the grains, depending on where you are in the spectrum, that's where I see the opportunities right now. Sean Hackett nicely and crisply summarized there at the end in terms of the actionable intelligence. Thank you so much for joining us. Always a pleasure when you come on Real Vision. Always a blast, Ash. Thank you for having me. And hopefully we can do this again real soon. Thanks for watching. Thanks for listening. Have a great afternoon, everybody.

1:07:14It's a brilliant, brilliant event, and you'll come away with lots of new ideas and a better understanding of this incredible exponential world.

1:07:27You get to speak to the smartest people, people like you trying to figure this out, but also the people on stage. They're the experts.

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1:07:50see you at token 2049

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