Opportunities In Agricultural Commodities | Teucrium's Sal Gilbertie on Grain Stockpiles, Trade Disruptions To Crops, and Ripple (FIRESIDE CHAT)
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The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough. Thank you. Let's close this f***ing door. Very pleased today to be speaking to Sal Gerberdi, founder and CEO of Tucrium, a leader in agricultural commodity investing. Tucrium is a sponsor of the Monetary Matters Network, and this is a fireside chat. Sal, welcome to Monetary Matters. Jack, always good to be with you. Sal, welcome.

What is going on in the world of agricultural commodities? Tariffs have impacted pretty much every corner of the financial markets, stocks, bonds. When it comes to commodities, when it comes to soybeans, wheat, corn, just how much is that impacted by tariffs and a potential slowdown in global trade? The grains are trading on their own fundamentals. There are plenty of grains right now. We should be trading at or around break-even, in my opinion. But

But there's enough tightness, especially in the wheat balance sheet globally, that we really are seeing prices hold pretty steady, probably about 10% or 15% above the break-even price right now. So that's pretty unique. And we had a lot of big down stock market days over the past couple of weeks.

Many, many of those days grains were up. And so I think now we're eight for eight. Our two gram agricultural index, which consists of corn, soybeans and wheat. Since we started that index, I think it was 2012. The S&P 500 has pulled back 10 percent or more now eight times.

And in all eight of those times, the agricultural index, corn, soybeans, wheat, and sugar has outperformed the S&P 500. And three of those times, it's actually gone up. The information's on our website. Yeah, it is very hard to keep track. I think that the Chinese tariffs on U.S. agricultural imports are quite high. Just walk us through, what does that do to the supply chain? Does it cause prices to go up? And also, how much of the corn and wheat, just walk us through, is actually traded internationally and with China? Lots, okay? Yeah.

Lots. So so the thing about corn and wheat and soybeans is they are international commodities. They are grown in in a whole bunch of countries and then sold to a whole bunch more countries. Wheat is grown in more countries, I think, than any anywhere else. Let me put it this way. Wheat is grown and it's grown everywhere, but it's grown in more countries that have a surplus that can export.

than say corn, which is next in line. And then soybeans are very unique. They're really only two major exporters of whole soybeans, soybeans themselves. And that's Brazil and the United States in that order.

Argentina is an enormous exporter of soybean products. So they grind and crush those beans and they create meal and oil and they export that. So if you need soybeans, you go to Brazil or the United States and China will go to Brazil first. Brazil will run out of beans and then China will come to the United States. It's just how it works.

They don't have a choice. And we've seen this whole tariff thing before. And what happens is the price in the United States of grains goes down. If China can't import soybeans, the price of United States soybeans goes down for a little while. Everybody starts buying from Brazil. And now's the time of year, actually, because Brazil's in their harvest. And so they're just tidying up their soybean harvest. And so they've got the lowest priced beans in the world anyway.

Right now, I believe the U.S. might have the lowest price corn in the world, but China, angry at the U.S., will buy all they can from other countries first. The unique thing about grains is we essentially use them all.

In a normal year, you'll have about six months of wheat left over after all growing season and the big pile goes on the ground and then everybody takes from that pile until the next harvest season. There's generally about six months left over in wheat and that's actually headed toward about five months supply right now. It's a little bit tight. Corn, there's generally a four month supply left over.

And soybeans, they vary wildly. They're generally a couple of months. And so what happens is we use what we grow every single year. The easiest way for anybody to understand this is the entire world grows crops. We use all those crops. You don't really store many of them at all. They can't be stored for very long times, like say oil or precious metals. And so

eventually people will come to the United States and buy. So all tariffs do is change the order of buying. They create tremendous opportunities because we saw it last time, China stopped buying beans in the US, bean farmers saw a price of beans go actually below the cost of production for a while, beans and corn. Guess what? That's a buying opportunity

because eventually Brazil ran out of soybeans to sell. China came back to the U.S. So tariffs present opportunities as long as they stay still and you can figure out the math. That's the most important part. It really doesn't matter what happens. You can have an opinion about tariffs are too high, tariffs are too low, tariffs are bad, tariffs are good. It doesn't matter. What matters to markets is a stable set of rules that we can then trade around. That's the most important thing.

So it sounds like you're saying soybeans is definitely the most interesting because it's only grown mostly in the United States and Brazil, whereas wheat is grown everywhere. So China can get wheat from wherever. Okay, so what do you think happens with soybeans? Is that playbook of China buys a ton of soybeans from China?

Brazil until stockpiles run down there and then the price goes up. And also, Sal, to what extent do you think tariffs have caused depressed prices in agriculture already? And when I say tariffs, I mean Chinese tariffs on the US. And also, a lot of these agricultural commodities are

you know, pretty flat on the on the year. Do you think if there is a deal done and US lowers tariffs on China, but also China lowers tariffs on the US, that there could be a upward price in the move when these onerous tariffs are lifted? There could be right now. Again, it's kind of odd because grains are beating to their own drum. Soybeans are probably a little bit cheaper than they would be if we weren't talking about these tariffs. But it

But really, I mean, corn's break even is around $4 a bushel right now. Generally, if you look at futures continuation price chart, Bloomberg says corn's break even is $3.75 over the course of the last couple of decades. Well, since 17 years, since 2007 when the Renewable Fuels Act came and reset the price of grains permanently.

But if you look at it, the futures equivalent price of corn break even is about $4 right now. Things are going up, fertilizer prices have gone up, all that. But we're in the 470s. I think as we record this, we're in the high fours. So again, we're probably 10 or 15% above break even on corn, which I find odd. There's plenty of corn in the world. So something is going on. People are nervous about something. And I honestly, we keep track of this stuff every day. We still haven't identified what that actually might be. Yeah.

Soybeans are in the they're below eleven dollars. They're above ten below eleven. Breakeven for beans is between nine and ten in the United States. So, again, you're the same way. You're running about 10 or 15 percent above breakeven. I do think that.

We might be a little bit higher than that if it weren't for the tariffs because China isn't buying from the U.S. Now, understand these cargoes get booked. They buy in cargo sizes. It's a lot of beans. You have to do it well ahead of time. So a lot of beans moved out of the U.S. to China and are still going there. They set dates that they're right around now, I think, where the beans you have on the water were exempted from the tariffs and then new purchases would be affected by the

tariffs. Literally, we're just ramping up the United States, just starting. As the planting season progresses, we see the beans and corn get in the ground in the Midwest. And there isn't much planted right now, but the rate is really good because it's dry and they're able to get those tractors in the field. I do think beans and corn may see a little bit of short-term downside from here. Tariff or no tariffs. I think people will just be comfortable that the crop's in the ground and you have to bet, of course, that things will be normal and

and we'll get plenty of corn and bean production. That said, you will get nervous in June. Happens every year when you can see out the last half of June, you watch these markets. Every year that there's been a drought, the last half of June starts the bull market because it's really critical. The 4th of July, a couple of weeks before and after 4th of July for pollination. If it's too hot and too dry, you can run into some problems. And again, in drought years, those years when

Corn has doubled. And it's worth pointing out that corn has doubled three times in the past 17 years from the same number. So just call it $4. Call it between $3.50 and $4. Corn has gone to between $7.50 and $8 three times from the same number. So if somebody said to you, I've got an asset that goes to X because that's its cost of production. And every few years, and generally four or five years if you do the math,

it goes to 2X and then it goes back to X. And it's done that three times in the last 17 years. You're probably going to say next time it gets back to X, let me know. Well, it's corn. Okay. Corn at $4 a bushel is something you need to pay attention to. It's like oil at under say $50 a bushel. Corn at $4 a bushel is like oil approaching $40 a bushel, a barrel. And so, you know, a lot of people will put oil in their portfolio when oil gets underpriced in their mind, because they know it's only a matter of time before it goes back to 60 or 80 or $100 a

Corn's the same way. You see corn at $4 or less. It's only a matter of time before it doesn't rain in the wrong places or right places, depending on how you look at it. And you're going to see corn head back up toward, history tells us corn will head back up toward that $7 to $8 a bushel rate.

So corn is the cost of production is $4. Now it's at $4.70 roughly per bushel as we record. You said soybeans cost of production is $9 to $10. It's currently at $10.40 as we record roughly. How –

do these things ever go below the cost of production and you're saying when they're at or below their cost of production they're good buying opportunities and then also tell us when do you know when you know it's it's time to uh sell these products and they're likely you know trading well above their cost of production or is it the type of thing where you know corn at seven dollars actually is

could also be a buy just because there's tons of geopolitical instability and the like? That's a great question. So let's put it this way. We had an advisor come to us one time and he said, look, I love your corn fund because I like to buy it when corn is at break even. And he just watched the futures price. And he said, when corn got down below four, closer to 350, he would layer it into his portfolio. He would weight it into his portfolio, W-E-I-G-H-T.

Then he would wait, W-A-I-T, and then there'd be a drought and he'd get out. So he said, wait, wait, drought out. We thought that was clever. We used that. And he said, look, if I put 1% of my portfolio in an asset, in this case, it was corn, um,

And it's at cost of production. And it might go down 10%. You know, it could temporarily. And a client walks in my office. It's affected his portfolio by one-tenth of a percent. It's down 10% on 1% of the allocation. He said, and I tell him it's there for diversification. And I show him how grains zig when the stock market zags. And they're fine. And he said, in those years when I get the double, when there's a drought and suddenly that 1% is 2%, he said, I'm a hero. I just turned my 8% or 9% target portfolio into a 9% or 10% target portfolio.

So that, you know, that's how to look at it. To your question of how long does it stay below break even? Yes, it does. All commodities will trade temporarily below break even. If you look back on a chart and take out the six months during COVID when corn traded below 350, if you look back on a future spot continuation chart, that's the best way to see any trade.

commodities break even because every farm is a different break even. But futures is kind of the mechanism that everybody uses. So just use a futures equivalent price if you have an effective deliverable futures contract like all the grains are. And so if you look back, I don't believe there's more than six consecutive weeks

barring the COVID six month period when corn traded below 350. So corn got to 350 and you bought it. You might have had six weeks where it was between three and 350, a little bit of pressure. But again, if you put a proper allocation in there, that's not going to hurt you. And you do have, you know, history has shown us it has that upside and it did.

It's on our website. You can look at it. There's something called the golden grain cycle. If you search that, an article written by Jay Canley, our analyst, will come up. It explains it all. It shows you exactly how the golden grain cycle works, which is ags trading at their break-even because they're subsidized by governments around the world. So the natural thing for ags to do is trade at break-even. And in this case, just call it corn. It trades around $4 a bushel, maybe a little less. When you see that,

It's only a matter of time before there's some weather related interruption where it pops higher. And so the stage one is when it's you're accumulating your portfolio because it's trading sideways at its cost of production, which is the natural state of affairs for for agriculture. Then it's on its way up that stage two. And then every farmer in the world plants and things go back to normal and starts raining again. Stage three is when you head back down towards that cost of production.

So there are three phases. If you look at historically the chart, you can see in the golden grain cycle materials, it's an amazing pattern that repeats. We need to have put that chart up. It's really important that there's the cost of production at stage one where the

That's where corn trades. Then there's events. Stage two, it spikes up. And so there kind of is a floor for these commodities. And so soybeans at $10.40, you're saying the floor is kind of maybe $8 to $9. So there is a maybe margin of safety, perhaps?

Correct. I mean, farmers will just stop planting. I mean, historically so. I mean, you know, great. You know, everybody says, well, oil went below zero. Yeah, but that's different. OK, you can't shut an oil well off without harming it. You can just stop growing something pretty easily. You just don't plant it again. And so, yeah.

Grains are really unique in that once you get to that cost of break even floor and you can just see it on the price charts on the spot continuation charts, they do. They have historically had you know, we're not supposed to predict the future at all, so we won't. But historically, they've had very limited downside. They have repeatable patterns because you get towards that that area where they have limited downside, that break even economic area.

And then there's always a supply disruption. And let's face it, we always say, if it doesn't rain in Kansas where they plant a lot of wheat, no one in New York skips their bagel. You're still, you know, Jack, I've met you for bagels at breakfast. Yeah, it's so in New York City, we've done that. You don't skip your bagel even if it's not raining. And the demand is steady. Demand since 1960, the combined use of corn, soybeans, and wheat globally since 1960, every single year is either a record

Or a second highest record, second highest ever use since 1960. The combined use of corn, soybeans and wheat. That's because population is growing, because we use these things in a variety of ways. There's all kinds of reasons for that. But demand just keeps rising. And production luckily has risen over the years to kind of meet it. But there are years when production is less than demand. In fact, for the last five years globally, we've used more wheat than we've grown.

So the wheat balance sheet is shrinking a little bit and there's plenty, don't get me wrong, there's no cause for panic, but wheat is a tightening balance sheet for the last five years globally. That means if you were to have an event, particularly a weather event in a large wheat growing area like the upper Midwest of the US or Australia or France or Western Canada, you can have a problem.

Or Russia. Russia's number one exporter of wheat is Russia. And Sal, I think some people watching this, there's a little bit of market volatility. You're saying if people are holding on to cash, why not just...

deploy a little bit of that into agricultural commodities and just kind of see what happens. And also that's for the individual investors. And also, I think for registered investment advisors, I think this is the type of thing where if they put it in now and there is market volatility, which everyone on TV, when they say market volatility, what they mean is bear market and stocks going down. This is the type of thing that you could look pretty smart to your clients, right?

Well, go back to that two gram agricultural index. OK, the two gram agricultural index and that that data is on our website, too. I'm not sure if we've updated through this eighth down move, but it's got this first seven on there since 2012. It it outperforms sometimes very, very significantly the S&P 500. So, yes, grains are a proven diversifier. They have very low correlation to the to the stock market. Granted, on the extreme days,

Okay, everything goes down. That's for one day. Things correct pretty quickly and grains collect correct really quickly. They go back to their own fundamentals because they have to. It does not matter who the president is, what the stock market is doing, what the latest iPhone version is. None of it matters. What the latest AI development is.

None of that matters. People are still going to eat. The last thing anyone will do is allow themselves, their families, or their animals to be cold or hungry. And guess what? You're going to use food. You're going to use grains in a variety of ways because of that. That's why they don't correlate very well to the stock market. And Sal, I don't want to be too much of a doomsday, Sarah, but I think most of the time,

Things in the world work. Global trade works. The global economy works. And food prices are stable. I think that's fair to say most of the time. Is this a time where the risk of there being an accident in either direction happens? Either there are huge tariffs on the United States and agricultural prices

could go way down and then no one's planting and then they could go way up and there's tariffs. Is this a time of, do you think, potential extreme volatility in agricultural prices and a time where it's also responding to the news flow as a macro asset in addition to the weather and supply and demand, of course? Short answer is going to be yes.

I will temper that with weather matters more than tariffs. Okay. And it's interesting to note, let's point out you or I, or anyone in the world right now can go to Russia. That's under intense sanctions and buy wheat. It is, it's not illegal to buy wheat from Russia. There's no, no restriction on buying wheat from Russia. These tariffs are, are a different, different animal. Generally during wartime food is excluded. Often some medicines are excluded food. It's,

The tariffs are a temporary block, as we said at the beginning of the show here. All they'll do is make people go somewhere else and buy the most expensive stuff or the least friendly country stuff as a last resort or as a last time. But we use all the food we grow again. So.

Yes, tariffs can provide dislocations. They can provide opportunity for investors. If the U.S. gets blocked out of, say, China, who's the biggest buyer of soybeans in the world by far, you could see these temporary price dislocations and they will provide some opportunity.

governments subsidize farmers. So farmers will switch from one crop to another, but a farmer is not going to look out his door and have an unplanted field. That's just not what they do. They will plant something. They will get paid by their governments to plant something. So it might be a different crop than you would expect. So you'll see that, you know, they might not plant soybeans or corn, but plant something else. Or they might not plant corn, but plant soybeans, whatever, whatever it is that mixes. Fields get used. Okay. Except in, in war that,

that is going to cover vast areas. I mean, even look at Russia, Ukraine, OK? You put the two of them together, they dwarf everybody else in terms of exports of wheat. Ukraine dwarfs everyone else in terms of exports of sunflower products.

And Ukraine is also a major exporter of corn. They were China's number one supplier of corn. There's a major war going on there in all the areas. They both have still managed to export a whole lot. Now, the numbers are down and their balance sheets are shrinking. That is a bit of a problem. Russia hasn't had the best weather over the winter for their winter wheat. So things are going to tighten over there a little bit. But we still had plenty. Okay.

OK, no, nobody's been hungry because there's a shortage. They're hungry because of politics and being denied food. But the food exists. You're not going to see extremes in terms of, wow, we just ran out of wheat. That won't happen. But you will see price volatility, no doubt. Yes. What causes wheat to always be in stockpile is that the price can go way up.

Correct. It's called price rationing in the industry. And so people people simply switch to something else if they can. You know, there's a protein trade. Feeders of animals will buy whatever has the highest amount of protein for the cheapest value. So they'll switch between corn and wheat all the time, all the time, just depending on how much what their protein value.

And then you referenced seasonality earlier. When is typically the top and when is the bottom for corn, soybeans, and wheat? I'm looking at some, I found some charts, but I think they may be outdated. So I'm going to listen to the expert here. What is the seasonality here? Your seasonal lows, all else being equal, okay, without any artificial disruptions, outside disruptions of the market, are at harvest, okay? So given that about two-thirds of corn in the world is grown in the northern hemisphere, okay?

You know, our harvest time. So when you look at spot continuation charts overlaid, 10 year, 20 year, 30 year charts, annual overlays, the low for corn comes in on the first week of October. Happens all the time. OK, now that's already built into the futures curve.

Futures know that. But it's a very simple reason why. OK, all the corn is harvested at the same time. That's it's it's cosmic. All right. It's winter. It's cold. Nothing's growing. You plant in the spring. Watch it grow in the summer and harvest in the autumn. At the end of the autumn, there's a gigantic pile of corn. And every single day, the whole world's coming and pulling out of that pile. Just do it that way. And they're going to pull out of that pile. That pile is going to get smaller until the following harvest is complete.

And so it's an entire year. It's an entire year. So people get complacent because they see the giant pile around the first of October. You see prices go down all winter long or taking from that pile. People get nervous. Will the tractors get in the fields in the spring? Nothing's planted. The pile's going down. It's not raining or it's raining too much. The fields are too muddy. Fields are too dry, whatever. All that goes away. And you generally see prices rise pretty steadily.

And again, it's already built in the futures curve. So it's not an easy trade. It's not as easy a trade as you would think. But prices go up generally from the first week of October. And they flatline anywhere from late March to mid-May. And then they start

their downward cycle into the pre-harvest once we realize there's not going to be a drought. So if you can get through June and the weather's good, you will see a low that generally almost equals the harvest low in August because people say, oh, everything's fine. It's raining. Everything's fine. And they get out of all the speculative long positions.

And then they simply wait to see how big the harvest is. So you often get two lows. You get them in August and again in late September, early October for the big crops. And corn and soybeans kind of walk together, as does wheat. But remember, there's winter wheat, there's spring wheat, summer wheat. So it depends.

You know, wheat's kind of a slightly different hand. And when you look at the futures curve for corn, soybeans, or wheat, you said that's often priced in. What are you seeing now? Because I'm looking now, and I'm not seeing a huge amount of variation in the curve. For example, like the current price of corn is, as of May, contract $4.74. In December 2028, it's $4.60. So I guess that is that seasonal low you referenced, you know, near the harvest season. But yeah, also, I think like if...

If you contango, you basically have to pay to be long the thing. And then backwardation, you're earning roll because the futures prices are lower. So, for example, someone in April 2020 said, oh, I'm going to be long oil at negative a dollar amount. But actually, the futures contracts were trading at $30 or $40. You still made money. But it's a little more difficult than that. So, yeah, I mean, just...

Are you seeing opportunity there in just how flat the curve is? There is, yes. And I think that... So what happens with futures is the front month, the nearby month, if there's a surplus, like when oil went negative, okay? Well, oil's negative, so you can buy all the oil you want, but you have to have somewhere to store it. No one had anywhere to store it. Storage was full. That's why it went negative, okay?

But it dragged the whole curve down because then people start saying, well, wait a minute. Oh, it's not worth anything anymore. What's it going to be worth in the future? Level heads prevail. OK. And so futures got pretty low out the curve, but they didn't go anywhere near zero. But they got below break even.

And that's that. Those are the times you buy. OK, you know, Warren Buffett's strategy of buying when no one else wants it and selling when everybody else wants it. It's the same thing in commodities. It really is. And so during these seasonal lows, the entire curve gets dragged down. All right. Yes.

The corn will be more expensive further away from harvest. Okay. But the whole thing will get dragged down depending on how low you go, just because people get very complacent. There's opportunity. There is opportunity to layer things. There's opportunity. I'm just thinking anything else on agriculture before we move. I think that we, you know, what people need to pay attention to is there's two things to do in ags. One is it's a tactical strategic trade when ags are at their breakeven price.

You should really look into having eggs in your portfolio for that. If you want them only as a diversifier, obviously you can buy them anytime. But if you want to get positive alpha as well, the best time to be looking at eggs is to layer them in during those seasonal lows. That's the best time.

So, let's talk about that alpha. You have the products that offer consistent exposure, but what if someone says, "I want Sal, I want a professional commodity trader who knows all of these things, has experience and is paying attention to them and incorporating them." Tell us about your active commodity strategy that you've been running for several months. What's going on there? What have you been waiting? And by the way, it's not just agricultural commodities, right? It's all commodities.

I mean, the bull market in gold. Tell us how that has been, your views on that and just how you as a commodity trader have been kind of bobbing and weaving. So when I left trading commodities and started an ETF firm here, and we're offering long-only ETFs,

The biggest question we got from people was, all right, I get it. And I'm convinced I need ags in my portfolio. But when do I when do I buy them? When do I sell them? You know, this is really hard. And then because we have extensive commodity knowledge in our company and I actually started my career at Cargill as an oil trader.

And so people call us up all the time and asking us different advice. We're happy to talk to people about commodities anytime and we'll help where we can. But the number one thing that we heard from advisors in particular was we love this. We want to have commodities. We know they're a great diversifier, but we don't know when to buy them or how to wait. OK, and so one of them came to us and said, look, I get it. I would put five percent of my portfolio in corn. I think it was

Last September, I might be wrong, but last autumn, corn got below $4 a bushel for just a couple of days. And he said, you know, I buy into your argument. I would have put 5% in, but it was in another bucket. I found out too late. I'd rather know that I want 5% in commodities. You know, my alternative bucket of 15 or 20% of my portfolio, I'm putting 5% of that in commodities.

I'll buy it and everyone should start with a multi-commodity basket of their choice. Then what do I do? What do I overweight? What do I underweight? Tell us. We actually developed a system that tells that, that gives people that. It signals and they can sign up for it. We send a once a month

signal and it has ETFs in it that are not just two grams. They are ETFs that are what we believe the good ETFs representing that part of the industry, whatever it is, whether it be a gold ETF, an oil ETF, whatever it might be. And so we're publishing a model

OK, that that people can go and they can tweak it on their own or they can follow it directly. We name names of the ETFs that we we include in this model and we use as a benchmark the Goldman Sachs Commodity Index. It's just a reference reference because most people own that one or a lot of people do. And we we try to beat it. And we've you know, it's a back.

test because we weren't running this live. We've only been running it live now for a couple of months and it beats just holding a multi-commodity index, in this case, the Goldman multi-commodity index. But you can pick whatever. They all work. People have their preference. Buy it. Go ahead. You should have a commodities allocation in your portfolio. And then if you sign up for our model,

And again, it's a once a month email. That's all it is. We rebalance once a month and it tells you which ETFs we would be buying. You can buy other ones of your choice. And it's outperforming pretty substantially. And what is this secret sauce? Is it your discretionary views or is it systematic? And then also, what has it been overweight? Like, for example, gold has been up. Gold has been crushing the commodities index. Oil has been a laggard, underperforming the index. So what's in the...

how have you outperformed? It's systematic. Um, we can override it, but we haven't just yet. And again, you can't do a back test with an override because that's too arbitrary. So we've, we've pretty much stuck to the system that we've put in place and, um, it gives us the signals. And again, once a month, that's when we look at it, we, we have been overweight in gold. Um, we have been overweight in, in some of the grains that changes month to month. So I don't want to

I don't want to mess up here, but we've actually done really well. We've, you know, in some of the holdings, we've really been glad that we held those. So it's been doing fine. It's a good model. It is a good model, if I do say so myself.

And what was it that the model picked up of, oh, I want to be overweight gold here? It looks at a lot of momentum. It looks at a lot of technicals. And again, you know, when I was taught in Cargill, technicals are a picture of the fundamentals. I can have a team of a thousand people trading whatever commodity it might be, oil. OK, we're going to know a lot. We're going to know a lot. We're going to we're going to probably make some money trading oil. But we don't know everything. The market knows everything.

OK, there's there's some trader in some part of the world that that my thousand traders aren't interacting with who knows a piece of information that's more important than any of the other pieces of information we have. He's still got to reflect that he or she is still reflecting that in the market. So the market price is the perfect price at the time.

And technicals are a picture of that. If you can read the technicals, you're doing fine. There we go. Sal, what's going on in the world of crypto? I know you're very involved. Tell us your thoughts here and also your new product that is taking them into the market by storm. Sure. We were the first firm to get a 33-act contract.

which back in the day was the only way you could trade physical crypto. It still is. So we were the first firm to get a 33-act Bitcoin fund approved. And that actually is how Grayscale won their lawsuit against the government. They used the

the approval of our fund as the basis of that lawsuit and they won. And so, you know, we're not new to crypto. We are pretty selective and I view Bitcoin as a store of value. I think that's what Bitcoin is digital gold, in my opinion, and that's how it is. We didn't do anything with Ether. We didn't do anything with Solana. They have a lot of products out there and ETFs. But XRP put out by Ripple is

We think a game changer. We think that the settlements, uh, the, you know, the near instantaneous settlements, the transfer of, of money primarily, um, and, and it will, will, will result in the transfer of other assets as they, as they build out the system. But, um,

We think that the tokenization and digitalization and the basically blockchain, using the blockchain well, is XRP is being built to do that. OK, so we filed for when the old SEC regime, which was very unfriendly to crypto, left. We filed literally the first business day. We filed the first business day after inauguration day to start a levered XRP fund.

We think people want that. They can trade it in their futures account. Sorry, in their stock account without having a margin account. It's very easy. It launched 11 business days ago, and the flows have been astounding.

Absolutely astounding. The reception for this thing, it has a great ticker. It's a two times XRP levered product and the ticker is XXRP, double XRP. So double your exposure, double XRP is the ticker. And so it has done really, really well. Thank you for asking. We chose it because we

We have a levered corn product and a levered wheat product. We think that, you know, aggressive traders can use those. These are not for ordinary people, obviously. They're for people who have a very specific, very short term, very aggressive posture in the market. And and so because the daily reset on these things to keep them at a at a at a levered position where you want them to be does cause problems.

You can lose money in a sideways market, okay, in a levered product. People need to understand that. So read the paperwork. People understand. But there's been a pent-up demand for XRP, which is a popular coin that has a very definite use case that will change Wall Street, okay? Ripple has purchased, actually, a broker-dealer that –

They're going to settle things in using XRP. Okay. So you're going to get instantaneous. No more waiting two or three days for something wiring money and things get lost. None of that's going to happen. And it's, it's really quite extraordinary. And I, we think XRP is, is the future of wall street. XRP is going to be the,

It is. It's not going to be, but it is already bridging the gap between traditional finance and decentralized finance. That's happening right now. The speed with which things will happen inside of Wall Street is going to be changed. It's going to take a while. But XRP and Ripple are leading that charge. We believe in it. And so we...

We thought there might be investor demand for a levered product to express themselves aggressively in that, and there certainly has been. Well, congratulations on the launch. And yeah, people who are listening, who are Ripple fans, are probably excited about that. Sal, explain... I've known of Ripple for a while, but explain the use case. Is it...

I thought it was a remittance. You send money across the stuff, but maybe I'm out of date. And also, you know, it's been around for so long. Is what had been holding it back just primarily the regulatory burden that now, you know, with the Trump SEC, Paul Atkins is, you know, much, much more crypto friendly regulatory regime. And also, yeah, what you just...

What does that mean, the settlement layer? Are people sending Ripple back and forth or is it a network that they send stablecoins or dollars back and forth and then the Ripple earns a fee? I don't know. Tell us.

It's everything you just said. And so I don't want to speak for ripple. All right. It's a, it's a complicated process. That's why the build out is slow, but ripple, you know, you can move money around instead of sending a wire, they're going to build out with participating banks. You can, you know, you can send money, um,

around the world very quickly. All right. And all of the fuzziness of trying to send something, trying to have currency conversions, all that stuff is going to be made much smoother by this build-out. Now, what happened in the U.S. was you had a very crypto-unfriendly market.

regime, I'll call it. All right. And they prevented there from being very clear rules and they prevented in particular large financial institutions with banks. They made them scared. If you trade crypto, you're, you know, you shouldn't touch it. And so they didn't touch it. They didn't try to advance these blockchain technologies because they were afraid blockchains, you know, crypto, you use crypto in the blockchain. Right. And so

that's going away and that is going to really help. So there, the, in Asia, there are a lot of people using this technology already. A lot of banks signed up. And, and again, these are questions for ripple, but what we know about it is they bought a company called hidden road used by a lot of hedge funds and traders and people to, to, um, uh,

Basically, it's a prime broker, OK, to clear trades and settle trades. So just think about being able to near instantaneously turn one asset into another asset, be it be dollars into a foreign currency or or, you know, any sort of currency dollars or other currencies into a commodity. All that stuff eventually is going to going to end up on the block chain. All those transactions are going to end up on the block.

chain and XRP is the token. Again, they've got a stablecoin that is necessary for making these things happen. All of that is happening behind the scenes. It's complicated. It's hard to describe.

I certainly am no expert in being able to describe it, but I can tell you that it's here and it's working. It's being used aggressively in Asia. The only reason it wasn't used and being adopted faster in the US is because of the uncertainty of regulations and punishment. Quite frankly, banks were afraid of being punished for stepping into the crypto world where they couldn't.

As that goes away and we have clarity in the regulation and permissions of what people can do, you're going to see rapid adoption. It's a better technology. Why take two or three days to settle something when you can settle it in seconds? That doesn't make any sense if you don't do that. And the only thing preventing people from doing that is, number one, regulations. You can't be afraid. And number two, because those regulations are there and people are afraid, it's being adopted slowly so the build-out is slow.

Okay. But everything's going to ramp up and go much quicker than it has. It's not going to be an overnight change, but it is a change that is happening now. And that the rate of change will accelerate, I believe. And we're going to, it ripples.

changing Wall Street. They're changing Wall Street. They're not the only company doing it, okay? They just happen to be the one that, in our opinion, is furthest ahead and really going to make big waves doing it. And so, Sal, there are ETF managers, alternative asset managers who say, look, there's a demand for this product. I don't really care about it either way, but I'm going to give the people the access. And then there are people who really love it. It sounds like you are in the category of you're a believer in Ripple.

Correct. And okay, let's understand, we're not competing with the actual coin type funds that like Bitcoin, where they're in the deck of billions and they have no fees. That's just not our game. We are a boutique issuer. We're there to provide people with unique things. We provide them with things they can't get anywhere else. And so a levered XRP,

that, you know, we've, we're providing that if you want to hold physical XRP, those will be approved soon. I bet you by the end of this year and they'll, they'll be out there and you can buy them. And that's, you know, that's a buy and hold product. A levered lever product is not a buy and hold product unless you're really aggressive and managing that closely. But that's, you know, we just provide the tool and,

and the disclosures and the warnings and the education that we can. And then people can trade that at their own risk, which they do. Yeah. Lover products, not a buy and hold product. Check out the disclosures. Of course, Sal, you mentioned that your boutique is where you give people access to things that they can't get anywhere else. So

corn, wheat, double levered XRP. And then also, Sal, tell us about your new white label business where you are helping other ETF products launch and is sort of shepherding them through that process. I recently was at the launch party at the Nasdaq of one of these funds, the

the NASDAQ Iceland ETF. So investing in Iceland and obviously it's the first one to do it. So, you know, number one, congratulations on that on that white level business. But what are you trying to do there and what kind of funds are you are you looking for and what does 2KREUM offer offer them? Sure. Well, 2KREUM being a boutique shop, we have a really good, small, very competent team. I would do anything with them. And when you

We got so many calls every week of people saying, I want to launch an ETF. I have this idea. And we have to vet them. We're spending a lot of time vetting those calls. And some of our good ideas, most of them are not just when people hear the economics and how complex it is to launch an ETF. But Springer Harris, who runs our white label,

project, he basically said, look, why don't we monetize this? We have so many people calling us. There's such a demand. There are a couple of other white label firms out there. They're quite good. And we offer it as a service where we know so much about ETS. We've been in this business for 15 years. We've been in ETF game almost from the beginning.

And we get it so we can provide that help. And if you want to launch an ETF, we've launched for money managers. We've launched for private money managers who have their own systems. We, you know, we helped launch the Iceland fund. We have a lot coming down the road. We can help you. We can point you in the right direction if we can't help you. So, yeah, we're open for business on white label, which means if you have an ETF idea,

We can vet it with you and help you get it listed or point you to what the best thing you should do with that strategy might be. Saul, you are a veteran of the ETF industry. What is the one thing you think people who trade ETFs and interact with ETFs but are not specialists like yourself, what is the one thing that you think they don't know that they should know? You know what? I think it's – this might sound really simple, but I think it's execution.

Do not ever execute an ETF in a market order because an ETF is an arbitrage against something else. An ETF is packaged product. Every ETF has something inside of it that's relying on other markets that some market makers doing an arbitrage on. It's all computerized.

And so if there's some kind of glitch in a market, something doesn't open, you get a price inefficiency. So never, ever, ever use a market order in an ETF. And I would say if you can avoid it, don't trade at the open or the close. Wait 15 minutes after the open trade and try to trade a good 15 minutes before the close of anything so that you give the market makers a chance to line up their arbitrage, the crazy market orders that no one should ever use that are in there at the open and close moment.

won't skew the operations of their arbitrage, which keeps ETF pricing efficient.

Might sound simple. Never use a market order. Don't trade at the open and close. That's what we have to tell you. That is simple, but that is effective, practical advice. So I appreciate that. Sal, on this show, I ask a lot of people somewhat unknowable questions. What are stocks going to do? Bonds, currencies and the like. So if you can take off your two-gram hat, and I'm just asking Sal, the trader, put on your macro hat.

what do you think is going to happen with these, these Trump tariffs? The Trump tariffs were quite high. The market didn't like them. It appears that there's going to be some moderation on that. The news of the moderation, the stock market likes it a lot, but just how are you thinking about the stock market and also perhaps the bond market as well? I think that markets don't like instability. I think that, um,

you know, president Trump has a very unique bargaining style. He goes all in hard and then reaches a deal and it's been effective for him throughout his entire life. Let's hope it's effective for us as a country, um, throughout his entire term. And I, I believe it will be, but I believe because of that style, um, markets like certainty and they're going to have a lot of uncertainty going on until every deal is made. So I, I think you're going to see, um, uncertain markets. I think Warren Buffett has a lot of cash for a reason. Um,

I have a lot of, you know, I've uninvested a bit as well. I think that, you know, buy what you know, buy it when you want to buy it, when it's a good price for you. Look at things, alternative investments like commodities that are going to provide you some buffer. I think that that's the case. All this is going to settle out. I think we will end up with some permanent tariffs. And again, as I said earlier, it doesn't matter what they are. It doesn't matter if they're high or low. It doesn't matter if they exist or don't exist. So long as they're in place and stable.

and everybody knows the ground rules, then you can make your decisions around that. Businesses will invest knowing the ground rules, and traders will trade knowing the ground rules. That's the most important thing we can have is certainty in the regulatory environment and in our trading environment.

And then then the markets all that. Well, thanks so much. I guess the two things that people should come away from this in terms of what they should do, they should check out the golden grain cycle and they should also check out your commodity model, which invests in all commodities in addition to agricultural commodities. So we will link those two two things. I really appreciate you coming on, getting your your wisdom and your expertize in these in these

I mean, I'm going to call them niche markets, but everyone interacts with them every day, but not in a trading sense. People can find you on Twitter at Gilberti Sal. Tucrium on Twitter is at Tucrium ETFs. And then, of course, Tucrium.com. And they should also check out the Jack Farley Monetary Matters link where they have additional special information. So thank you, everyone, for listening. Until next time. Thank you. Just close this door.