Apr 03 | Closing Market Report

Todd Gleason: 00:00

From the Lend Grand University in Urbana Champaign, Illinois. This is the closing market reported as the April 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Matt Bennett. He's at AgMarket.net.

Todd Gleason: 00:14

We'll explore yesterday's tariff announcements as they relate to history, not only Smoot Hawley, but a decade prior to that. And then we'll turn our attention to the weather forecast too. We'll do that with Mike Tenure. He's the president and CEO at T Storm Weather, all on this Thursday edition of the closing market report that comes to you from Illinois Public Media. It is public radio for the farming world online on demand at willag.org.

Todd Gleason: 00:45

Todd Gleason services are made available to WILL by University of Illinois Extension. Macorn for the day settled at 04:57 and a half, a quarter lower. July up a quarter at $4.65 and a half. In December '4 '40 '7 and a half, down a penny a quarter. May beans 18 lower at $10.11 and a half.

Todd Gleason: 01:04

And November at $10.17 down 20 and a quarter. Hard red winter wheat finished July at $5.80 and 3 quarters up one. The soft red in the July at $5.50 down two and three quarters of a cent for the day. Matt Bennett from AgMarket.net now joins us to discuss the day's trade. Hello, Matt.

Todd Gleason: 01:23

Thank you very much for being with us. It appears that the ag markets weren't overwhelmed by the announcements yesterday. What can you tell me about the trade and how it ensued overnight and through the day?

Matt Bennett: 01:36

Well, you know, most of our contracts that we all watch, corn beans, you know, we we we gapped lower, actually, on the overnight session. After seeing the equities markets trade as poorly as what they did, when they opened up there at 05:00, There's no doubt there was a little bit of angst, and, you know, that's what happened is that we gapped lower. But then throughout the night, we, you know, we were able to bounce back just a little. You know? And then actually, you saw corn Front month May futures, traded $14.03 quarter cents off the lows at one time, you know, and then was able to settle in in in the green.

Matt Bennett: 02:15

So, actually, corn performed pretty good. The soybeans didn't perform quite as good. I mean, you know, most contracts were down anywhere from 15 to 20¢. And so, definitely a little more angst there. I think, with some of the talk, you know, with tariffs with China, I think there's, of course, quite a bit of concern.

Matt Bennett: 02:35

You know, when China came out today and said, hey. We demand that you drop all these tariffs. We're we wanna sit down and talk about this. And so, you know, I don't know, Todd. I mean, I've said this to you a few times.

Matt Bennett: 02:45

I know that threatening tariffs and implementing them are two different things. Well, they're I believe they're implemented at this point, so it'll be very interesting to kinda see how that plays out.

Todd Gleason: 02:55

I'm wondering if you've thought very much about the 2018 version of the trade war compared to to today. There were some extenuating circumstances, of course, in China with their hog herd. They had African swine fever and were eliminating much of the herd, through early summer, into the fall and the winter months that caused them to simply not purchase from The United States and to fill their needs, I believe, from Brazil. The Brazilian crop, though, is so much bigger at this point. They're already importing, I don't know, just an incredible amount of it from that nation.

Todd Gleason: 03:36

Could they do the same thing, do you suppose, this time? Is that capacity there?

Matt Bennett: 03:40

Yeah. I think the capacity is there. I think the tough thing, there's a couple three things to think about. I mean, I don't know that they're gonna be growing how much they are importing, first of all. So, yeah, it works against us just a little bit.

Matt Bennett: 03:54

Of course, at this point in the game, Brazil's got a readily available supply. They're quite competitive on the world market. And so it's gonna be pretty tough, for us. I mean, we saw today, for instance, the dollar just got absolutely, killed, for quite a while. Bounced off the lows, almost a dollar on the index.

Matt Bennett: 04:13

But, you know, as you and I are talking about this, down, like, 1.65, I mean, that's a big move on the dollar. It cheapens up some of our products and certainly makes them a little more attractive on that world market. But I do think moving forward, it's concerning because China, I don't think necessarily wants to do business with us unless they have to. I mean, that's kind of the way that they've tipped their cap over these last couple years. And so, certainly, with the kind of talk that we see here, you'd have to be worried about some cancellations of sales that we've already made.

Matt Bennett: 04:45

And I believe we've got, you know, pretty significant amount of beans that still are on ship. Now we've shipped a lot of beans. Don't get me wrong. But, you know, you could take that three eighty and maybe add twenty, thirty million bushel to it potentially, and I'm talking the carryout number. You know?

Matt Bennett: 05:02

And if you get back, 400 or above, I I don't think that's something the trades are gonna wanna see. So, yeah, I think that that's part of the reason the market was so reactive today, especially whenever we essentially said the USMCA is gonna take care, you know, of agricultural products, as what we're worried about with Canada and Mexico, whereas there's no talk like that China. And so I think that's the reason why beans did not perform well.

Todd Gleason: 05:28

The good news would be for corn, particularly as it's related to Mexico. However, I wonder some about that. They they are the number one export country for US corn. They had a drought last year that caused a lot of issues. Their growing region's not dry this year like they had been.

Todd Gleason: 05:50

It'll take some time still. Are you worried about them as it's related to just the total number of bushels that they might take from The United States?

Matt Bennett: 05:58

That's certainly something to keep an eye on. I mean, as at this point in the marketing year, they've taken quite a bit more corn than most people felt like they would. It sure seems to me like there's a little bit better rhetoric back and forth between, The US and Mexico maybe than any other country that we've been talking to. So I've gotta think there's still gonna be plenty of opportunity for us to ship them corn. They like how we ship them corn by rail.

Matt Bennett: 06:26

It's been pretty cheap for them to source it from us. So I think moving forward, of course, it'll be a function of weather. They've actually had a couple bad years in a row. You know? But if, they would have better weather this year, there's no doubt, that they would probably, not be maybe as reliant as what they've been here, over the last couple, three years.

Todd Gleason: 06:45

When you look forward to the summer months, and think about the RVO, the RFS, and the talks that are now taking place between the ag industry and oil, What do you hope will come of them, and what do you think will come of them?

Matt Bennett: 07:02

You know, I think that overall, you've got to think that especially if our markets struggle, it might put even a little more pressure on us politically to step in and say, hey. Know, we've gotta use some of these products in more abundant supply as far as domestic consumption goes. Clearly, there's been some good talk come out of those talks, if you will. I mean, the soybean oil market this week certainly performed very good so far. Now, unfortunately, here on Thursday, you know, we actually took a pretty big hit.

Matt Bennett: 07:35

But if you look over the last seven, eight sessions, you know, we've rallied $6 from low to high. So, you know, drop no. I think as as you and I talk, it looks like we're gonna settle down around a buck 40. So you can give some of those gains up, but overall, there's no doubt in my mind that people feel better, if you will, you know, about renewed optimism for renewable fuels, renewable diesel, if you will, has been one of them we talk quite a bit about in here.

Todd Gleason: 08:03

Anything else before I let you go for the day?

Matt Bennett: 08:05

No. I mean, we just gotta see the dust settle here. I mean, it's really hard to look at markets like this. You know, it's really hard to trade markets like this, but, I don't recommend anyone trade them. I think that the best thing to do is kinda let the dust settle, and, see what happens on the other side.

Todd Gleason: 08:19

Thank you much, Matt. We'll talk to you for commodity week. I appreciate it.

Matt Bennett: 08:22

Sounds good. Thank you.

Todd Gleason: 08:23

That's Matt Bennett of AgMarket.net. He will join us for our commodity week program. We'll post that to our website before 06:00 tonight. Yesterday, as you already well know, president Trump announced a 10% tariff on all goods imported into The US from all countries across The United States. There were additional or reciprocal tariffs imposed on 60 more countries, notably those do not include Russia, Belarus, Cuba, and North Korea.

Todd Gleason: 08:56

You've probably seen the reciprocal tariff card that the president held up during the Rose Garden ceremony. Those numbers include the 10% and are not in addition to the 10%. Here's how the president started that ceremony.

Donald Trump: 09:13

American steel workers, auto workers, farmers, and skilled craftsmen, we have a lot of them here with us today. They really suffered gravely. They watched in anguish as foreign leaders have stolen our jobs, foreign cheaters have ransacked our factories, and foreign scavengers have torn apart our once beautiful American dream. We had an American dream that you don't hear so much about. You did four years ago, and you are now, but you don't too often, and for many years and decades even, you didn't hear too much about.

Donald Trump: 09:47

Our country and its taxpayers have been ripped off for more than fifty years, but it is not going to happen anymore.

Todd Gleason: 09:55

President Donald Trump believes that the tariffs imposed will make The US economy stronger. History does not say that's the case. I went to the USTR, the United States Trade Representative's website, to see what it has to say. Here's what it says verbatim about reciprocal tariff calculations. To conceptualize reciprocal tariffs, the tariff rates that would drive bilateral trade deficits to zero were computed.

Todd Gleason: 10:23

While models of international trade generally assume that trade will balance itself over time, The United States has run persistent current account deficits for five decades, indicating that the core premise of most trade models is incorrect. They go on to say that the failure of trade deficits to balance has many causes with tariff and non tariff economic fundamentals as major contributors. Since USTR was looking back five decades to the mid nineteen seventies rather than the mid nineteen nineties when NAFTA was first put into place, I wondered what Smoot Hawley might be able to teach us from the nineteen thirties. I pulled the following directly from Britannica online. Formerly called The United States Tariff Act of 1930, this legislation, originally intended to help American farmers, raised already high import duties on a range of agricultural and industrial goods by some 20%.

Todd Gleason: 11:21

The Smoot Hawley Tariff Act raised The United States already high tariff rates. In 1922, Congress had enacted the Ferdinand McCumber Act, which was among the most punitive protection of tariffs passed in the country's history, raising the average import tax to some 40%. The Fordy Macumber Tariff prompted retaliation from European governments but did little to dampen US prosperity at the time. Throughout the 1920s, however, as European farmers recovered from World War I and their American counterparts faced intense competition, declining prices, and overproduction, US agricultural interests lobbied the federal government for protection against agricultural imports. Economists warned against the act, and the stock market reacted negatively to its passage, which more or less coincided with the start of the Great Depression.

Todd Gleason: 12:13

It raised the price of imports to the point that they became unaffordable for all but the wealthy, and it dramatically decreased the amount of exported goods, thus contributing to bank failures, particularly in agricultural regions. There are some similarities today to the 1930s. There's competition, this time from Brazil, that could cause you to say there's overproduction in The United States yet to be determined. The stock market has not taken the tariffs that the president has imposed well. It's also not plummeted and failed completely.

Todd Gleason: 12:49

We'll have to wait and see just exactly how all of this turns out. We're now joined by Kelly Estes. She's the state AgPASS survey coordinator here on the Urbana Champaign campus, the University of Illinois. She's looking for a few folks to join the moth trapping network this spring. It only runs for a couple of months.

Todd Gleason: 13:22

Thank you, Kelly, for being with us. Can you tell me a little bit about what you're hoping to find?

Kelly Estes: 13:26

Yeah. Every spring, we enact our moth trapping program. And in the spring, we trap for black cutworm and true armyworm. And then later in the season, we look towards other pests like corn earworm and European corn borer and western bean cutworm. But what we're looking for early is cooperators that might want to monitor some black cutworm or true armyworm traps.

Kelly Estes: 13:48

And that occurs from April through the May, first week in June, depending on how the planting season's going. It's actually a a really easy setup. We provide traps and lures, and all we do is ask the cooperators to check the traps about three times a week.

Todd Gleason: 14:06

So Monday, Wednesday, Friday?

Kelly Estes: 14:07

That's the rotation I use, but people are welcome to check them whatever days they can.

Todd Gleason: 14:12

Any parts of the state you're particularly interested in, or is this for across the whole of the state?

Kelly Estes: 14:17

This goes across the entire state. And for those that might not be aware, black cutworm and true armyworm moths do not overwinter here. So the purpose of this particular program is monitoring migration of those moths into the state. So usually, we get reports out of the southern part of the state first and gradually move our way north. And we get them generally following big storm fronts that move moths in with wind and rain and storms and things like that.

Kelly Estes: 14:47

But the most important part of the program is our ability to monitor and trap for them gives us the potential to alert farmers to when black cutworm and true armyworm may be active in their fields later in the spring.

Todd Gleason: 15:01

You know, I know how to look for them in the field and understand what the larvae look like, but I have no idea what the moths look like. Are you gonna help me out with that?

Kelly Estes: 15:09

Yes. We have really great photo guides and hands on instructions, and we also can do on phone video calls for those that may need a little bit of extra help. But the great thing about this particular trapping for black cutworm and true armyworm is that the pheromones are pretty specific. So in general, the only moths you are catching in those traps are black cutworm and true armyworm. So my daughter's been trapping and helping me with these since she's been probably six or seven.

Kelly Estes: 15:40

So it's pretty straightforward.

Todd Gleason: 15:42

Oh, well, that's easy enough. How do I give you the data once I collect it? I assume I'm making the counts on these traps.

Kelly Estes: 15:48

If you make the counts, we work with several other states and have a a big database that gets put into and it generates maps and things like that. I can set cooperators up and have them enter all of that themselves, but I also have several people that just email me the counts daily whenever they check or even every other week. Just give me some summarized data. We are are pretty flexible and can make just about anything work.

Todd Gleason: 16:17

How do I pick one of these traps up?

Kelly Estes: 16:19

If you want to give me a call at (217) 333-1005, or you can email me at kc00kandthenumber8@Illinois.edu. I'll get you your get your address and information, and we will be mailing those out in the next couple weeks.

Todd Gleason: 16:38

Hey. Thanks much. Thank you. That's Kelly Estes. She's the state ag pest survey coordinator here on the Urbana Champaign campus of the University of Illinois.

Todd Gleason: 16:46

If you'd like to participate in the mock trapping network, you can. Just contact Kelly at (217) 333-1005. That's 333-1005 or email her at kcook8@illinois.edu. K c o o k eight at illinois dot e d u. We're now joined by the president and CEO of t storm weather at tstorm.

Todd Gleason: 17:24

Net, Mike Tenura. Hi, Mike. Thank you for being with us. We have a lot of ground to cover today. Much of it saturated in, The United States because of the rainfall.

Todd Gleason: 17:35

Can you tell me about where this has fallen and what conditions are like across the growing regions?

Mike Tannura: 17:42

Well, it's pretty wet across the Central US. About 60 to 70% of expected US corn and soybean production were wetter than normal over the last thirty days. And this is prior to what's going to be a very wet setup to the immediate south of Champaign Urbana going forward. There's a lot of rain coming up to the Mid for the Mid South and for the Southern Corn Belt. We're thinking four to eight inches of rain is on the way for a big chunk of this region.

Mike Tannura: 18:09

And this is through Saturday night, so this is coming up over a very short period of time and that will lead to some significant river and field flooding. The worst of the flooding will more will more than likely be in Arkansas, Kentucky, Tennessee, southern Missouri, as well as southern areas of Illinois, Indiana, and Ohio. So this is a pretty important area. And not only is it an important area for corn and soybeans, it's also important for soft red winter wheat. So all these areas are going to be very wet by the time we get into early next week.

Mike Tannura: 18:43

The other thing to consider with this, Todd, is that this is the area that plants corn and soybeans first in The United States. They're starting to plant now, but they're going to have a significant delay because of this. So all the planting that we've seen is more than likely going to turn into some replanting, then it's going to make it so we need a very dry setup going forward.

Todd Gleason: 19:02

Do you see that happening in the second half of the month?

Mike Tannura: 19:05

Well, the first half of the month is going to be pretty dry once we get beyond this situation here through Saturday night. We'll see some showers next week, but they won't be heavy. So things will be improving as we move forward throughout next week. Our concern though is that there are some hints of thunderstorms in the Central US in the April time frame. So this is still about two weeks into the future, but just based on the amount of rain that we're going to see over the next few days, it won't take much of anything to slow things down again.

Mike Tannura: 19:36

And so, we'll be closely watching that, but at this point in time, it's hard to believe that we're suddenly going to move into this real dry and mild pattern that's going to somehow last into May. We'll probably see some rain at some point. And in these areas, again, basically to the south of Champaign Urbana, that's where any rain is going to slow things down.

Todd Gleason: 19:55

Tell me about the growing regions you're watching closely in South America.

Mike Tannura: 19:59

Well, everything is centered on Brazil's Second crop corn. This area is pretty dry. The last thirty days were basically around the fifth driest of the last forty six years of record. And even though it is still a little bit early in the growing season, that crop is starting to turn sensitive and it will be sensitive over the next four to six weeks. So we're kind of in the July of Brazil right now as compared to The United States.

Mike Tannura: 20:25

As we move through the next couple of weeks, there'll be some storms around here and there, but it doesn't look like a great setup for heavy rain. The problem is that areas of high pressure are going to linger in different regions and that'll prevent a great setup for rain. So we think that the Brazil corn story is going to take place maybe a week or two from now. If the rains over the next one to two weeks are okay, then we'll really like to see some nice rains over the second half of the month and then maybe we'll sneak by this and not have a major problem despite it being pretty dry over the last one to two months in these areas. However, if it starts to turn dry at the April, then all of a sudden all this will come to fruition and we'll see that there's a crop problem there.

Mike Tannura: 21:09

So there's a lot hanging in the balance in Brazil, that's for sure.

Todd Gleason: 21:12

Let's return now to the Northern Hemisphere. We'll pick up with wheat, Start in The United States and then move through Western And Eastern Europe.

Mike Tannura: 21:21

Well, the southern half of the plains has been really dry over the last several months. We need a big rain in Southern Kansas, Oklahoma, and Texas in particular that would aid the hard red winter wheat crop. We are going to see some nice rains there over the next few days as that same setup is bringing all the heavy totals to the Southern US will clip parts of Oklahoma and Texas. So we think the drought will ease there. Kansas is kind of in between dry and wet weather going forward, and it doesn't look like they're going to snap out of this situation.

Mike Tannura: 21:52

So although things will improve for the crop, it doesn't look like the drought is going to completely end, and there's very few if any rain chances out there until possibly that April time frame. So kind of a mixed bag for US hard red winter wheat.

Todd Gleason: 22:05

And in Western Europe?

Mike Tannura: 22:07

Well, Western Europe needs rain. They're in a drought, and there's not much rain on the way for France, Germany, or Poland. So that story is going to continue. On the flip side, if you move a little bit further to the east, there's been some nice rains in Bulgaria and Romania, and those have also been extending into Ukraine and Russia. Ukraine and Russia, you might remember, were in a drought not too long ago.

Mike Tannura: 22:27

And even though they still technically might be in one, they've been getting some decent rains over the last seven to ten days. And more importantly, there's some more rain on the way over the next seven to ten days. So the dryness story there is diminishing and it'll be difficult for it to return unless it turns super dry after the April.

Todd Gleason: 22:45

Hey. Thank you much. I appreciate it, Mike.

Mike Tannura: 22:47

Yeah. Great being here, Todd.

Todd Gleason: 22:48

We'll talk with you again next week. That's Mike Tanuri. He is the president and CEO at t storm weather. That's tstorm.net online. You've been listening to the closing market report on this Thursday afternoon.

Todd Gleason: 23:01

Don't forget, we'll have our commodity week program up on willag.org by about 06:00 this evening. I'm extensions, Todd Gleeson.