Apr 09 | Closing Market Report

Speaker 1: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report for the April 2025. I'm University of Illinois Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson. He's at TGM, total grain marketing Com. I'll update you on the agricultural news for the day, and we'll hear from Drew Lerner at World Weather Incorporated in Kansas City.

Speaker 1: 00:38

6a. M. Both will be posted to our website at wilag.org. Wilag Org under the USDA reports tab. You can check those out tomorrow.

Speaker 1: 00:52

Today I am away from the office at a conference at the Eye Hotel for Uovaya Extension so no update of the commodity trade or at least the closing markets for the afternoon. But coming up we will talk with Greg Johnson.

Speaker 2: 01:07

Todd Gleason's services are made available to WILL by University of Illinois Extension.

Speaker 1: 01:13

Greg Johnson now joins us from TGM. That's Total Grain Marketing, the elevator here in Champaign County that belongs to FS. Thanks for being with us, Greg. Today, the president's There were some breaking news after I talked with Greg Johnson as it's related to tariffs. President Trump, Wednesday, announced a ninety day pause of the higher tariffs against 60 odd trading partners that went into effect earlier today with the exception of China.

Speaker 1: 01:39

On incoming goods from China is 104% and yet the commodity markets particularly have seen to take little notice of this and are shrugging them off at best.

Speaker 3: 01:53

You're exactly right. 104% on incoming tariffs or incoming goods from China and in retaliation, they're putting 84% on our exports to them and that would include soybeans. The thing is, I guess right now, the reason the market probably isn't doing a whole lot is China doesn't buy a whole lot of beans from us for the next six months. They'll be buying beans from South America. And then once that supply is depleted, then typically, normally they come back and buy the rest of the beans that they need from us.

Speaker 3: 02:26

So the tariffs on soybeans today don't really have much an effect because we're not shipping many beans to China. But the EU is not happy with the tariffs that went into into effect on them. Canada is not happy. So there are some other countries that could take some retaliatory measures. China has said they're gonna take The US to the World Trade Organization.

Speaker 3: 02:51

They they say that these tariffs are unfair via the protocol of the WTO. So we're not out of the woods yet by by any stretch when it comes to the tariffs. But I guess for today, we haven't sold China corn in several years, and the beans are probably six months away from selling them beans. So I guess it's having kind of a limited impact on on corn and soybeans.

Speaker 1: 03:14

Is the trade not fearful that China will cancel cargos of soybeans that they've already booked and then, I suppose, maybe book them again later at a lower price?

Speaker 3: 03:25

That that's always the fear. It doesn't seem like the market is taking that into into account right now. But you're right. That has happened in the past, and it could happen again. But, I guess today, everybody's probably more worried about, the stock market.

Speaker 3: 03:40

People are know, that's number one. And then and then number two, how the tariffs are affecting other commodities, imports, and exports. So it seems like corn and soybeans are getting a pass today.

Speaker 1: 03:51

USDA in its March World Agricultural Supply and Demand estimate put a note at the top of the page that said WASDE report only considers trade policies that are in effect at the time of publication. That was in a nod to the fact that the supply and demand tables would not reflect any potential tariffs that the Trump administration might put on other countries. Those have now been put into place and that same note went on to say further, unless a formal end date is specified, the report also assumes that these policies remain in place. So the question is, will USDA tomorrow use the tariffs that are in place and those reciprocal tariffs, like the 84% from China, should it actually go into place, to calculate export demand?

Speaker 3: 04:45

As topsy-turvy, up one day, down the next as we've been the last week or so, I guess I would think if I was the USDA, I would say let's wait a little bit longer for the dust to settle until we have a better idea of the impact. There's certainly gonna be an impact, I would think, but, how big of an impact it is and in what direction? If I was the USDA, think I would just just wait till the May report and maybe know we'd know a little bit more by then. So I guess I'm not anticipating any changes, but, obviously, you know, the the market, you know, the USDA could change something, and, that could take the market by surprise tomorrow. But I think the the general feeling going into the report is, not a whole lot of change when it comes to the supply side of the equation, not a whole lot of change when it comes to the demand side either.

Speaker 1: 05:31

Again, if USDA were to make changes based on the tariff policy, those would show up in the export demand tomorrow. That report due out at 11a. M. What other things are you paying attention to this week?

Speaker 3: 05:47

Yeah, a couple of things. One, the safrinha crop down in Brazil. If you look at a map and talk to some of the weather forecasters, about a third of the safrinha crop is what they call stressed. Now they are getting some they got rain last week. They're getting a little bit of scattered rain this week.

Speaker 3: 06:10

There is some rain in the forecast for the next two weeks, but it sounds like it's more the hit and miss type of showers. And when people say it rained in Brazil overnight, I always have to remind them that Brazil's a big country. It's like saying it rained in The United States overnight. Did it rain in the right parts of Brazil is the question we need to be asking. And I don't know that we have an answer for that, but there's enough uncertainty that I think that's one thing that, corn is taking some strength for.

Speaker 3: 06:37

Last week, corn was up 7¢ even with all the turmoil in the, outside markets. Corn so far this week's up a little bit. So I think the safrinha crop, they're they're not out of the woods yet, and I think that's one thing that's helping the the corn market out. And then the other thing is if you look at where the funds have been selling or at what pace the funds have been selling at, this year, just in the last couple of weeks, I take that back in last month, last four weeks, the funds have sold twice at the rate twice as fast as any other time in the last five years. So the funds are really selling fast.

Speaker 3: 07:17

Now that doesn't mean they can't take a short position, but now that they're back to basically unchanged, a lot of that bad news is probably already factored in. So, I think that's another reason for the sideways to maybe even slight strength support in the corn market at this point.

Speaker 1: 07:34

Historically, CONAB has adjusted the size of the corn and soybean crops being produced there far more quickly than USDA is prone to do. Do you expect that will happen tomorrow? And if so, will USDA put those numbers or something closer to them into the WASI or as you have said, they'll be more patient and wait until the May numbers as they might with the tariff policies?

Speaker 3: 08:05

Yeah. If they were a private forecasting analytic type company, I would think they might lower the soybean crop. I've seen some private estimates come down a little bit, not dramatically, but a little bit lower on the safrinha corn crop. But, again, this is the USDA we're talking about, and I would think they would probably be relatively conservative and probably wait another month before and have some more data, to to pour over before they change anything. So I guess I'm not anticipating any changes from the USDA tomorrow, but certainly some of the private estimates have come in just a little bit lower, which would also be a little bit supportive for corn.

Speaker 1: 08:41

It's been wet and cold in our area. That means that farmers are not in the field planting. Have they taken this time to give you a call?

Speaker 3: 08:49

Very quiet. Bean prices have, you know, tumbled below $10 and it just feels like, farmers this early in the in the season aren't gonna sell anything below $10 They've got the lower acreage number for soybeans as a kind of a reason for hanging on and hoping that, we can get a little bit of a bounce. So, bottom line is farmers have not been selling. Old crop corn, like I say, is starting to inch its way up, but I think there's some even with the extra 5,000,000 acres of corn projected to be planted, that's intended, but the weather's gonna have to cooperate, and there's a lot of areas to the south of us that are very wet. And if we just get our normal rainfall in April, a lot of that corn planting's gonna get pushed back into May.

Speaker 3: 09:31

So, you know, still still got the whole growing season ahead of us. And and the bottom line is with with all those unknowns, uncertainties, I think the farmers have been relatively reluctant to to pull the trigger on any sales at this point.

Speaker 1: 09:44

Hey. Thank you so much, Greg.

Speaker 3: 09:46

Hey. Thank you, Todd.

Speaker 1: 09:47

Greg Johnson is with TGM. That's totalgrainmarketing.com. Joins us each and every Wednesday here on the closing market report. Now if you'd like to see the numbers from USDA and CONAB, you can do that tomorrow. The updated figures on our website at wilag.org.

Speaker 1: 10:07

They'll be posted under the USDA tab and I do have the conversion rates for the metric tons to bushels for the CONAB numbers. You can check that out after the reports are released at 11:00 central time for the USDA figures and not right away at 06:00, of course, for the CONAB numbers, but I will have those updated at 11AM as well. In today's agricultural news, you know the forecast for farming in 2025 and beyond is not a particularly good one. We've heard from our farm doc team many times about this, and we'll turn now to another ag economist from a different part of the country. Mike Davis reports from Texas A and M.

Speaker 2: 11:02

The forecast for farming in 2025 and beyond is not a good one according to one of the country's leading ag economists. Doctor Joe Outlaw is a professor and extension economist at Texas A and M University, and his most recent survey of farmers doesn't look promising.

Speaker 4: 11:18

That outlook is something we present to Washington, every year, and this is the worst one we've ever taken in and shown them. And and the problem is is that we forecast out the next five years, and unless some sort of policy change gets made with the prices where they look to be going, farmers would endure loss after loss after loss, which would build. It'd be the worst outlook.

Speaker 2: 11:40

Outlaw says a new farm bill would help, but

Speaker 4: 11:44

Because this is my eighth one, I've been around a lot of them. I I think that we're gonna get elements of a farm bill and some other piece of legislation, which would be the things the key things that farmers need. Maybe we don't get a farm bill a name like a lot of people want till later in the year or something, but I think some of the elements that need for their safety net will be included in something else.

Speaker 2: 12:07

He says all it would take to get a new farm bill across the finish line is money.

Speaker 4: 12:12

They've gotta figure out, agree to the savings and what they're gonna take money from. And we stand here today, they need about $50,000,000,000 to make it to do the new farm bill where people would wanna have a farm bill. I mean, why have one for now to make significant improvements?

Speaker 1: 12:27

I don't

Speaker 4: 12:27

have So we need about 50,000,000,000. Well, that mean that sounds like a lot of money, but that's adding 5,000,000,000 a year for ten years. And that's the way that they do the budget forecasting over ten.

Speaker 1: 12:37

I'm Mike Davis. Let's stay with Washington DC policies, but we'll turn to tariffs now. Iowa senator and former finance chairman Chuck Grassley says China will have to back down and deal with president Trump on tariffs. Grassley agrees China, with its weak economy and limits on alternative markets to The US, will have to make a deal and end its trade war with the president.

Speaker 5: 13:01

China's gonna have to come forward, and, I hope the president is successful in doing it and, reaching an agreement that treats us fairly.

Speaker 1: 13:13

China, a top ag trade partner, has slapped US corn, soybeans, wheat, and pork with retaliatory tariffs, imposed new duties, and threatened more amid Trump's latest levy threat, but Grassley says it's just not about tariffs with China.

Speaker 5: 13:27

But manipulation of currencies, stealing our intellectual property, our trade secrets, putting conditions on doing business in China.

Speaker 1: 13:38

For his part, president Trump's US trade representative, Jamison Greer, told the Senate Finance Committee earlier this week that it may take China a while to join others in coming to the table.

Speaker 4: 13:49

And if the Chinese are open, you know, we'll we'll see what, but but they haven't signaled that at all. So I don't think that's in the very near term with China.

Speaker 1: 13:55

On the other side of the aisle, top panel Democrat Ron Wyden announced a new bipartisan major to repeal Trump's latest reciprocal levies. And finally today, Mondelez International, one of the world's largest snack companies, today at four p. M. Will cut the ribbon on its University of Illinois Research Park Future Lab, which aims to leverage forward thinking perspectives from University of Illinois students across multiple disciplines. By leveraging the abilities and unfiltered imagination of students, Mondelez seeks to identify disruptive concepts, experiment with emerging technologies, and challenge conventional product development processes.

Speaker 1: 14:38

And that's a look at today's Agricultural News. On this Wednesday, let's now turn our attention to the weather with Drew Lerner. He's at World Weather Inc. In Kansas City. Hi, Drew.

Speaker 1: 15:02

Thanks for being with us.

Speaker 6: 15:03

Yeah. I hope you're doing well, and it's a it's a pretty nice day over here.

Speaker 1: 15:07

It is not a nice day here, and it was really cold not only here, but in other parts of the growing regions in The United States earlier in the week. Personally, I have a peach tree which my wife managed to grow from a peach pit.

Speaker 6: 15:26

Oh wow.

Speaker 1: 15:27

And it is five years old, and it flowered for the first time earlier in the month. I'm a little worried about it, that there could be some winter kill on it. Do we know what kind of winter kill there was in crops and other things across the whole of the Midwest and certainly into the Great Plains states as well, Kansas, your area particularly?

Speaker 6: 15:49

Yeah. You know, looking at all this, it's kind of interesting you bring up the little peach tree because that, first of all, it's amazing. You got to grow from the pit. I've tried that before and struck out. It's all about fruit trees really in general across the Midwest.

Speaker 6: 16:06

A lot of fruit was flowering apples, peaches, some pears, all over the Lower Midwest and over into Pennsylvania and down to Virginia, North Carolina. All of the crops in those areas have been vulnerable to damage. It varies considerably, but there is a lot of flowering fruit trees in those areas. Now from a wheat perspective, no. I don't think the temperatures were low enough, long enough to cause any kind of problem in the soft wheat production areas.

Speaker 6: 16:34

But, you know, earlier this week, we had that flood event and it's still underway across parts of Kentucky, Tennessee, and the Delta. And there is some wheat that's being washed out or drowned out. And so that's probably a little bit of an issue there. But back to the cold, last Sunday morning in hard red winter wheat country, we did see the temperatures fall down to the middle teens in West Central Kansas and East Central Colorado. And that's an area where we've seen eighty and ninety degree temperatures periodically.

Speaker 6: 17:07

It's also very dry out there. It's just one more slap in the face for that crop. I just can't imagine how well it's going to yield. But most of the temperatures in hard ribbon or wheat country were in the twenties. And I think most of the crop was probably no further advanced in the joint stage, down in a few spots in Oklahoma and Texas where some booning was underway.

Speaker 6: 17:32

But the temperatures down there didn't get any colder than upper twenties. So I think that most of the hard red winter wheat areas got through this without a big issue.

Speaker 1: 17:40

Now on Friday, I am headed your way to Rock Springs 4 H Camp for its beautification day. My son is the director of the camp there and will be there over the weekend. And I made note that it will be 87 in Junction City, the middle of Kansas on Sunday. There's some heat coming apparently.

Speaker 6: 18:00

Yes. And that's another reason for ongoing concern about weak conditions in the plains. You know, I mentioned that area in West Central Kansas. That area is going to be probably 94 degrees this weekend. The wind's gonna blow at 30 to 45, maybe 50 miles per hour.

Speaker 6: 18:20

And then the humidity is gonna be down under 20%. And all that's occurring after freeze damage. You know, there's no way this crop can possibly function very well with these kinds of extreme swings. We are going to see the rest of the Central And Southern Plains get into the eighties and some lower nineties. Absolutely.

Speaker 6: 18:39

And there is not any rain in the forecast here for about seven days. Now the models are playing around with the potential for rain at the end of next week in portions of hard red winter wheat country. This would be mostly in Nebraska and Kansas, maybe Northeastern Colorado, but the Southern Plains stay dry, especially the Southwest. And this is just the same old song we've been singing for a very long time. Southwest part of the wheat country is just not likely to see a good rain anytime real soon.

Speaker 6: 19:12

And we are going to continue with a warmer bias temperatures in place through a big part of the month of April or the balance of it. We will cool down a little bit next week, but it's not gonna drop below normal.

Speaker 1: 19:24

Speaking of the models playing around, I suspect that's kind of what they do at the end of the monsoon season in Brazil. What do we know about the weather there for the next couple of weeks?

Speaker 6: 19:35

Yeah. Absolutely. The the models are having a real tough time trying to figure out when the monsoon's gonna officially end. A lot of erratic forecasts coming out this week across parts of Brazil. The midday model run today really wiped out a lot of rain in the second week of the forecast.

Speaker 6: 19:55

That's the GFS model. And I think it's on the right track. Once we start getting out beyond about the April 18, I think the odds are pretty high that we're going to see a lot less precipitation occurring. But as of today, the moisture profile in safrinha crop country in Brazil is really looking pretty darn good. There's some pockets that are drier than they should be.

Speaker 6: 20:19

But the key to all this isn't what today's situation is. It's all about what happens when that monsoon does end. And it does look like we're not going to be as wet as we ought to be when the last day of the monsoon season comes and goes. So there is going to be some heightened concern about safrinha crops as we move through the month of May. But I think a lot of that's already factored into the market mentality.

Speaker 6: 20:45

So unless it gets real hot or some kind of other interesting thing takes place, I'm not quite sure there's gonna be a huge reaction. But that's next on the list here. We'll we'll bring it into all this moisture and start drying things down in the last ten days of the month.

Speaker 1: 20:59

In the last minute or so, I did read that there was a hailstorm in Russian wheat country. So unless it was a big one, that didn't really dawn on me that that was gonna be a huge problem. What do you think?

Speaker 6: 21:14

Yeah. You know, I I chuckled too. I that it was kind of interesting to talk about, you know, desperate desperate actions here. You know, that that same article though, as you read into it, it also expressed the confirmation that there had not been any winter kill this year. And it also had stated that there, that the soil moisture profile in Russia had improved quite a bit since last fall.

Speaker 6: 21:42

And, and then they came up with this hail event. So I think they're trying to, to keep the market favoring, you know, the higher side. Interesting tactic, but it really doesn't work for me. The hail event, if there really was one, and I'm sure there was, but it had been pretty localized. The environment was not real supportive of widespread severe weather over that way.

Speaker 6: 22:07

It is colder in Russia now and in Ukraine as well. Most of the Black Sea region will see below normal temperatures for several more days. And we will see some brief periods of rain and snow coming and going. But after that, next week, we'll start turning drier again and start warming it back up again. Short term improvements to the crop have occurred because of the better moisture profile.

Speaker 6: 22:28

But I think we're probably at the end of that run for right now. We'll probably start drying things down.

Speaker 1: 22:33

Thank you much, Drew.

Speaker 6: 22:34

Have a great day.

Speaker 1: 22:35

You too. Drew Lerner is with World Weather Incorporated in Kansas City. Joined us on this Wednesday edition of the closing market report that came to you from Illinois, Public Media. It is public radio for the farming world online on demand anytime you'd like to see and listen to us. You can do that at willag.org, w I l l a g 0 r g.

Speaker 1: 22:56

And there tomorrow morning, you'll find both the CONAB and USDA reports on corn and soybean production in those two nations, the first at 6AM, the second at 11AM central time.