Moving Iron: Auction Pulse and Inventory Shifts Driving Smarter Dealer Marketing

Welcome to Moving Iron with Casey Seymour and Greg Peterson, the podcast for anyone and everyone involved and interested in the business of equipment. If you want to understand what trends and market forces are impacting the price of your iron, you've come to the right place. Buckle up, it's time to move some iron.

Well, it was an interesting week, Casey. I saw some kind of mixed results, and like you say, you get into late July into August. Our auction price data sort of always shows it's a really good time to be a buyer, I think, because you don't know how your yields are going to come out. I know there's a lot of talk now with the corn crop, with a particular situation happening there, and of course the price of corn dropped the other day, doesn't help matters when you're trying to sell. But if we talk the sale last Wednesday, would have been July 23rd, our friends at Merit auction had for you say H&R Agar and Truland equipment, I thought some pretty good prices there on the combine side. They sold a 22 model S780, 428 engine hours, went for 34,025. It came out of See's, Indiana, so good farmland there. And for comparison, the average auction price going into that sale on a 22 model S780 this year was just over 299,000. So again, 428 engine hours did 34,250.

The highest I'd seen this year on a 22 model S780 was 350. So again, Zach and the guys hit 34,250. On the red side, they had a 22 model 8250, a few more hours on it, 681 engine hours, that did 28,250, came out of Poseyville, Indiana. And again, for perspective, going into the auction, the average price this year on an 8250 was 263 and change. So again, they hit 28,250.

So that was last Wednesday. He mentioned Purple Wave. They had a sale the same day, July 23rd. More confirmation on the loader tractor strength. Of course, you're just getting into this dichotomy of farmer checkbooks out there, livestock versus green. They had a, well, let's see, it was a loader tractor, very late model, 24 model Deere 6R1145. Only had 55 hours on it, so obviously like new. Came out of Texas, so the deep south, but it brought 17,490. Highest auction price I had seen coming in on a 6R1145 was 155 out of Nebraska last year. So I thought that was strong.

The 155, that was, I'm trying to find my note here. It was a year ago. It was June 18th of '24, way in Nebraska. I did not jot down the number of hours on it. It was more than 55.

Yeah.

Yeah.

Yeah.

And then again, you drift into the livestock sector now and there's just strength there. So that was Purple Wave. Now, as we're recording this, yesterday I was at Alex Kurr's auction in kind of West Central Illinois. Very great event. I thought Casey had kind of, in a descriptive way, encapsulated this split that we're seeing in the market right now. So on the one hand, he had a great farmer line, nothing really new on that farmer retirement line, but nice stuff. And he had a pair of 4440s. One brought 40,000 bucks.

The other, pushing 10,000 hours, brought 255.

Went down the line, he had a, I always like Versatile tractors. He had a 976. Was not.

Yeah, it wasn't pretty, but you know, it was solid. And intense bidding on that got up to 22 and a half. But then there also were 8R tractors. Now they had come up a little bit out of the south, which is very common for dealer consignment sales. But you know, some good buys there. I thought it was a 24 model 8R410 that went for 280, so that was a good buy. Right next to it, they had a 23 model 8R370, 739 hours on it. And I had looked at our numbers in the morning, and it was interesting. Last year, Casey, we saw 29 23 model 8370s sold at auction through the whole year.

Coming into yesterday, I'd only seen six 23 model 8370s. So that's that pullback on the dealer side, taking a breath that we have talked about numerous times. The one yesterday, 739 hours, with the bidding fee got up to 333 and a half. And coming in, the average on the six I'd seen so far this year was just over 340. So it got up close. But again, I thought, like we've talked on the farmer side, the midsummer, late summer, early fall, when you don't know how things are going to come out, to me has always been, if you're able, really a unique opportunity to be an aggressive buyer of late-model equipment, I think.

But that was where, you know, you watched the market was really soft. And that one particular day, you saw rain get to the right spot. The price of corn jumped up about three or four days before that and it kind of stayed there. And there was a selling opportunity. I think actually that was the high for that particular year the corn price was. So people took advantage of that and you saw some extraordinary values for that particular year of selling comparatively to everything else around it.

That South Park sale by Sullivan Auctioneers. Yeah, I think you're right. Like 10 years ago, all the auctions I've ever covered, that was one of the most amazing ones because, like you say, the conditions were not positive at all until that little rain and the bump in the price of corn. So, I mean, you plan these auctions out, you've been doing this for 35 years, you can't control. You just, there's nothing you control. Will it rain? Is it going to be cold, snow? Does the price of corn drop? Does it go up? But you know, if you boil it down, I mean, the market is never wrong. It just tells us that day in that area. That's why with our auction price data, we've always put the specific day and the specific location and the type of auction on every piece of equipment. So you can kind of triangulate, oh, corn dropped that week, or oh, beans went up, cattle dropped, whatever. It's the brutal honesty of the auction market.

Right. Right.

It was interesting on the Kurr auction yesterday on the farm retirement line. Let's see, the guy's name was Todd Cook. Super nice guy, and you know, he's a little bit younger than I am, mid-50s, but just kind of retiring. And the two 4440s, his dad and his uncle bought them, and they had the one pushing 10,000 hours, one owner, and then his uncle literally won the lottery in Illinois, and as part of his.

He won the lottery. I don't know how, I didn't ask how much. I'm a Minnesota boy. I seem polite, but.

So he bought it.

Bought the lowest powered one. No, he actually bought two of them, he said.

Todd was telling me, and one of them had 1,000 hours when he bought it. So this was back a number of years ago. And I did a little digging and I said, "What'd you pay for that one with a thousand hours?" And I think he said like 40,000. And I said, "You know what that'd be worth now?" And the other one he purchased sold on the auction now, 362 hours, and it brought 40.

"Hey, your tractor's worth X less than it was this time last year."

And the other side of that too is, yeah, we're getting, there's a lot of rain in the forecast, but a lot of the places that are getting rain in the forecast have gotten a lot of rain already. So now you start looking at some flash flood issues and those kind of things that come into play. There's just a lot of problems out there.

We had something happen, Casey, in the meantime. It was at the, it was time Morgan was speaking at the Alex Kurr's pre-auction event. Also, Bridget Rele came down from Fargo with WDAY radio. It was a great, great night. Alex and Gina do an awesome job putting on these pre-auction events. But they had some local folks there and they did the pre-dinner prayer. And late, here we are, late July, and in the prayer, you know, "Please, Lord, turn off the faucet, please." And it's like we kind of, afterwards we were kind of chuckling, like I've never heard that before this time, "Please turn off the faucet." But corn looked really good down there. Now, tassel wrap issue, a big one, but yeah, it just is what it is. But I'd really be curious, we've talked about it the rest of the summer, how aggressive dealers will or won't be. Now, maybe interest rates will drop. If the Fed drops that off, maybe that'll give dealers a little more cushion. And the inventory situation is so much better than it was a year ago.

And bottom line, we've seen so much less one, two, three-year-old stuff off the dealer lot hit the auction market, and that has helped the prices kind of find that footing. So now we'll just have to see the rest of the year, through the summer anyway and the fall, if that holds.

That's why we see like that Merit auction last Wednesday again, whether the red or green side, 780 or 8250, and they both, you know, sold I thought very well. So a function of less of them, less competition out there versus last year, there was an avalanche, they were everywhere.

Yep, contact page or hit me on Facebook, Twitter, Instagram. Always fun to get out and visit with people. And yeah, folks, don't forget to come up and visit Casey and I in Rochester, Thursday, August 21st for Yield Academy and a crop tour up in Rochester. That's going to be a really fun day. People were asking me about that down in Illinois, Casey. So they're.

They'll be waiting for us, I think.

You're going to set the academy on fire, man. We're gonna have fun.

Not the last, the first of many. It'll be great fun. Crop tour obviously with that tassel wrap like you're talking about. It's going to be really interesting, the findings as always on the crop tour. But then again, great day, Thursday the 21st. Come up and visit us, folks. We'll have fun.

I think we're good. Back to cleaning the market and touch base next week, huh?

You bet. Have a great week, Casey.

Farm Journal is going to hold the first-ever Yield Academy for 2025. It's going to happen August 21st in Rochester, Minnesota. Listen to this group: real advice from folks who've walked out in the fields. Ken Ferry, David Hoola, Randy Dowy, and we will get some market outlook from Dan Bosi at a resource as well. Get the latest on what's working in agronomy, equipment, and marketing today. And that is the last day of Crop Tour 2025.

So stick around for the final meeting that night in Rochester. Just Google Farm Journal Yield Academy and that will take you to the homepage for the event.

Well, there they are mocking you.

That weedy area that's got you thinking, "Man, I hate that spot. Wish I'd sprayed better." Get the last laugh with a sprayer upgrade from John Deere. Precision upgrades that can increase your sprayer's performance, like ExactApply advanced nozzles to give you more control at more speeds. It's just one of the many precision upgrades you'll find at johndeere.com. Now, let's see who's laughing.

Hey, good. Casey, how you doing?

Yeah, you got a lot of moving parts in there, Casey. At the heart of the matter is, you know, the mentality that rain makes grain, and there's been plenty of rain around. In fact, you know, many areas in Illinois, they've had six to 10 plus inches of rain just in the month of July. Iowa, it's even greater than that, eight to as much as 15 inches of rain just in July. So about twice of what is normal or more. So in the market's mind, rain makes grain. And that is probably true. It's hard to talk up a case other than, you know, severe flooding obviously along rivers and creeks. It's hard to talk up a case of too much rain hurting yields in corn. But there are a couple things there. I mean, you mentioned how low is low. The cure for low prices is low prices. We are starting to see a pretty nice uptick in demand in here. Had several days, you know, not for a couple days, but Thursday, Friday last week, Monday of this week, quite a few new flash sales. So our exports are good. Our ethanol numbers are strong. And unfortunately, some of those heaviest areas of rain also brought with it a fair amount of wind. So, you know, you kind of have this fight going on, is how big is big as far as yields go? You know, are we going to be well above trend line at 181? There's people out there thinking that, you know, or 183, 185, maybe even 187. But in the same breath, you've had some wind out there, more wind than we've had for a couple years, that's going to take some yield off of those areas that receive that. Our demand's pretty good. And then you've got this tassel wrap thing. I know we talked about a week ago. I think the market's still trying to figure that out, too, and just how widespread that is. And, you know, it's really hard to figure out how big of an influence or a yield reduction that might be. So, got some pushing and pulling here. The market actually acted fairly well today, but, you know, it may just be a little bit of short covering going into the end of the month in here. The funds had a pretty healthy short position built up in corn already. So, interesting market shaping up. On the one camp, you've got this attitude that it's massive yields and we've got a lot lower to go. On the other hand, we have traded a big number, probably well over trend line. At a certain point, we'll have the biggest crop digested. Demand's good. How much, you know, do we have to take back off the top because of wind storms and this pollination issue? So, it's shaping up to still be an interesting couple of months in here as you get, you know, closer to harvest and, you know, upcoming, you know, Pro Farmer crop tour coming out here in about three weeks. And that'll be as closely watched as it ever is to maybe get a better feel for really how widespread this pollination issue is out in fields this year.

Yeah, it is crazy. I mean, really unprecedented bull market, really, as far as how far we've gone and the length we've been rallying. You know, we're going on two plus years of a bull run in cattle. As you mentioned, you got several bullish things. First, the Cattle on Feed report last Friday was wildly bullish. You know, well under most, you know, even the lows as far as placements go and on feed. And so that was friendly. You know, we've got the tariff issue on Brazil right now. We import quite a bit of beef from Brazil. Obviously, the Mexican border is closed to feeder cattle. So, friendly there. And then you've had corn dropping. So, you know, feeder cattle are, you know, essentially walking corn. The cheaper that corn goes, you know, the more expensive feeder cattle become. And, you know, in the same breath, the cheaper corn becomes, you know, then the cost of gain is cheapening up. So, a lot of friendly stuff there bubbling under the surface in cattle, but it's long in the tooth as far as the bull market goes. The other thing, there's always kind of a, you know, two sides of the story here. We've seen a pretty healthy correction in box beef prices. So, and then there's some rumors out there that packers maybe can't get as good a clearance on some of these cuts of beef as what they have been used to. So, you know, are high prices starting to chew into demand is going to be the question. And that's been the question for, you know, 12 plus months is how long can the consumer continue to buy beef the higher that it goes in here. And, you know, maybe this setback in box beef is, you know, maybe some warnings that the consumer's backing off a little bit, but certainly you have all the bullish fundamentals out there that we've had, and, you know, you can argue that they're as bullish as they've ever been. You do start to see some signs, which again is bullish feeders in the short run, some signs with good grass. Some of, you know, we mentioned in the corn segment about all this rain around. Well, we've had, you know, some of the best pasture conditions, particularly out into Oklahoma, Kansas, some of those areas that.

have had multi-year droughts, they're really getting healed up, and so there is some indication we're starting to retain some heifer. So obviously in the short run that tightens up the feeder cattle supply even more, but maybe prices are high enough and we're kind of getting far enough past the drought conditions with better hay, better grass conditions than we've had in a long time that we are maybe starting to slowly rebuild the cattle herd out here. And again, that's not an overnight fix. That takes quite a bit of time, but there are some signs out there we're starting to do that. And eventually, you know, the old saying, we've said it before, they don't ring the bell at the top and let everybody know and give everybody warning. It's only after the fact that you realize it, but the first stage of this is demand destruction. And you can argue that maybe box beef is telling you that maybe that's starting to happen a little bit.

Well, we have seen a little bit of an uptick in crude, to your point. We've, the last couple of days here, you've seen some stronger markets. And that is because, you know, President Trump kind of shortened his timeline as far as, you know, the line in the sand as far as Russia goes. He moved that up. That's coming quickly. There's a lot of talk that there's going to be a lot of sanctions. There's some hope that China gets behind that. I don't know whether that might be misguided, maybe in my mind just a little bit, because it seems like China's maybe okay, you know, more of an ally of Russia. But if there is a world coalition to kind of sanction Russia and not buy their crude oil, then maybe you have an argument that we can push up north of 75 back towards $80. So I think there's a lot of uncertainty there. We kind of got back into the middle of the recent range in here. So, they're going to make it hard on everybody trying to predict what, if anything, is going to happen with these Russian sanctions and, you know, what that might mean, and that can be explosive. And always, you know, there seems like this Iran thing is still bubbling under the surface as well. I don't think, you know, probably in our lifetimes, Casey, that's ever going to go away. And that seems like it's just every week or 10 days there's just, you know, another little story that pops up that says, 'Yeah, Iran's not going to go away quietly and they're going to do everything in their power still to, you know, try to acquire a nuclear weapon if they don't have one already.' And, you know, President Trump has said, 'Well, we could go back in there again just as easily as we did it last time.' So, that's always bubbling under the surface. And, you know, you never know when something, you know, really fires up like that again. That can really put a bid underneath of us. It has breathed some new life into ethanol margins. You know, soy crush margins are as good as they've been in 10 plus years. I just saw a story today that jet fuel demand is really as strong as it's been in a long, long time. So obviously these new biodiesel plants that we've brought online the last few years, that, you know, if crude oil does keep creeping higher, that's going to be even more added profit to those new plants. So that's a good sign from a demand side on beans, and we kind of need that with this push under $10. We haven't been that low for quite a while, what, six, seven months anyway in the bean market. So that directly relates back to the energy markets as well because, you know, without China being there for our big exporter in a lot of ways, you know, the bean market now is kind of more of an energy market with this biodiesel situation we've got. So to your point, we ought to keep one eye on, you know, the energy markets at all times because they are very closely correlated to what's happening on the grain side of the equation.

Yeah, just give us a call at the office, 309-550-7213. You can also look us up on our new and improved website. That's www.blereef.ag.

All right. Thanks, Casey.

Looking for more accuracy, more productivity from your current planter? Let's get exact with precision upgrades from John Deere. Start with ExactEmerge and get accurate singulation and spacing at 10 mph. Or choose ExactShot to promote early root growth and cut fertilizer costs. And with FurrowVision, save time by verifying seed depth right from your cab. Visit johndeere.com/planterupgrades and see why nothing runs like a Deere.

Terrific, sir. How are you?

Finer than frog hair, perhaps.

shtick.

...and in between do a grain cart, an auger, and a header.

Harvest ramp up.