Apr 10 | Closing Market Report

Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report for the April. I'm Extension's Todd Gleason. It's USDA report day, and CONAB released its updated production figures as well. We'll talk about those with agmarket.net's Matt Bennett along with what the trade looked like for the day, and then we'll turn our attention to the news for the afternoon as well as what's happening in the weather forecast across planet. We'll be joined by Mike Tenor at tstormweathertstorm.net online to explore The United States, Brazil, as well as the wheat growing regions of Western And Eastern Europe all on this Thursday edition of the closing market report from Illinois Public Media.

Todd Gleason: 00:46

It is public radio for the farming world online on demand at willag.org. That's WILLAG.0rg. Todd Gleason services are made available to WILL by University of Illinois Extension. This morning, USDA updated the world agricultural supply and demand estimates. These are released monthly.

Todd Gleason: 01:09

It now shows a soybean ending stocks for the current marketing year or old crop soybeans at three seventy five million bushels. That's down 5,000,000 from last month. The season's average cash price did not change. It's still $9.95 a bushel. The season's average cash price for corn also unchanged at $4.35.

Todd Gleason: 01:31

However, the ending stocks went down from 1,540,000,000 bushels last month to 1,465,000,000 bushels this month. Conab, the counterpart to USDA in Brazil, updated their numbers this week. Not much changed in the soybean ledger, but the s and d tables for corn in Brazil increased by 78,000,000 bushels in production that coming on the heels of more planted acres for the safrinha or second crop corn. In Chicago, May corn for the day at $4.83, 9¢ higher. July up eight and a quarter.

Todd Gleason: 02:09

It settled $4.88 and 3 quarters. In December corn at $4.54 and a quarter. It finished 3 and a half cents higher. Soybeans for the afternoon finished the May contract at $10.59 and a quarter, up 16 and a quarter, and November up seven and three quarters at $10.04 and 3 quarters of a cent. Bean meal, up $3.40.

Todd Gleason: 02:31

The bean oil, 13¢ higher. Wheat futures, soft red in July, down two and a quarter at $5.53 and a half, and the hard red at $5.58, a dime lower for the day. Live cattle futures in Chicago finished the nearby contract at a hundred and $95.20, 3 dollars 17 and a half lower. Feeders down $2.90 at $2.75 45, and lean hogs at $93.17 and a half cents per hundred pounds, up a dollar 47 and a half. Crude oil at $60.20 a barrel, down $2.15 for the day.

Todd Gleason: 03:05

Wholesale price of gasoline at a dollar 95 and 8 tenths. That's down 7 and a tenth of a cent. The Dow Jones Industrial Average off just about a thousand points, and the S and P five hundred around a 72 points lower. We're now joined by Matt Bennett from AgMarket dot debt to discuss this morning's reports and actually the bigger news in the afternoon that I believe was the reason that the Dow and, the financial markets pushed lower was that, the president now says he's going to impose a 45% tariff on China. Let's start with those numbers from USDA that were released at 07:00, and they did lower the ending stocks for old crop corn.

Todd Gleason: 03:51

What'd think of that figure?

Matt Bennett: 03:53

Yeah. I mean, so we raised exports a hundred and we dropped feed and residual 25. Exports was definitely a necessary adjustment from what we see. They could even do a little more later on potentially. As far as feeding residual, that's also necessary.

Matt Bennett: 04:09

Think, obviously, you lost some birds as far as eating. That's your number one grain consuming animal unit. Cattle numbers are fairly low, but at the same time, cattle numbers being low are a little bit offset by the fact everyone's feeding them with such heavy weight. So, you know, I I think they could actually take a little more out, you know, as far as that feed and residual goes on down the road. I think that that would be met with an increase for exports.

Matt Bennett: 04:32

So, you know, +1 465, definitely, Todd, is a fairly friendly number. It's more friendly than what the average trader was predicting. You know, we felt like the carryout would come down. We're a little surprised it came down that much, but we felt like between April and May, we'd be looking at something in the mid 1.45, point four five, one point four six, something like that. So I think it's certainly a positive direction.

Matt Bennett: 04:58

The other thing is when you carry that into your new crop balance sheet, it's pretty tough to assume the yield that Outlook for him predicted at one eighty one, that trend line. You know, if you just throw in, like, a one seventy eight, you're, you're down there about one six. So, you know, that's not factoring in a whole lot of weather. So I think right now the market's saying, hey. Maybe we've got a situation on our hands that, we don't wanna necessarily just get completely out of this corn market.

Todd Gleason: 05:23

USDA reminding this in a note, again, this month as they did last month that it, incorporates any kind of trade policies that are already in place. So the 10% and this morning, the 4% at the time, tariff would have been in place on China. However, they did not make changes really in the soybean balance sheet. I suppose that's on the export side because they expect what has been purchased to be shipped. And really, we don't sell that much between now and the end of the marketing year.

Todd Gleason: 05:54

What do you think of the figures there?

Matt Bennett: 05:55

Yeah. I mean, on soybeans, you've gotta assume that, you're not gonna. We don't have a whole lot of unshipped sales anymore. We've shipped a lot of beans actually. So, and you're right, we're not gonna sell a whole lot more beans here to China and they don't buy any corn off of us here for quite some time.

Matt Bennett: 06:11

So, I think that USDA standing pat on that probably made some sense. 3.75 for a carryout for soybeans is still plenty rich. I don't think it's anything to get super excited about, but at the same time, you've got some bullishness that's unfolding here for corn. I do think that that's the kind of help and bolster these bean prices a little bit. And so moving forward, you know, a person probably ought to at least be a little patient on beans as well just to kind of see how this plays out.

Todd Gleason: 06:39

And then, turning your attention to the CONAB numbers that were released earlier and then what USDA did as well. Brazil in Brazil, the CONAB numbers show that, there are about 78,000,000 more bushels of corn in production. That's 2,000,000 metric tons. USDA still at one twenty six, and they didn't change anything. What'd you make of those figures?

Matt Bennett: 07:00

Yeah. I mean, I think Conab's tipping their cap to the fact that the Brazilian grower sees prices, you know, especially relative to soybeans, fairly strong and that they're gonna try to grow a big crop. And so it'll all be dependent upon the weather and and what they see there. Clearly, they've had some issues with weather, had some rain recently, but they need a lot of rain moving forward to get them to pollination because they just don't have a whole lot in the way of reserves there for moisture. So yeah, absolutely understood USDA's standing pat where they are for the time being because there's a lot of question marks still.

Matt Bennett: 07:34

But overall South American production is strong. But on corn, I don't know. They don't raise near the corn we do. They do export a fair amount of corn. Exports weren't changed for Conab, so I could kind of agree with their numbers.

Matt Bennett: 07:49

You know? And so I think moving forward, it's all gonna be dependent on The US, especially whenever you're looking at corn.

Todd Gleason: 07:55

Yeah. Konab did say that, the increase in production came on an increase in total number of hectares or acreage. Here in The United States, Corn Farmers are looking to put more acres in as well. Do you think that number could increase as we move to June?

Matt Bennett: 08:10

Yeah. I mean, it's possible if mother nature allows. You know, you're still fairly dry out west, and then you've got all kinds of moisture in the East. So, you know, if mother nature will allow for it and we've got enough seed to go around, you know, I think that that could go up a little bit. I know that availability of nitrogen sources is a big issue here this year.

Matt Bennett: 08:29

So we got to keep that in the back of our minds. But if I was gonna guess, I would say corn acres could inch up a little bit while bean acres could maybe inch a little bit lower.

Todd Gleason: 08:38

Hey. Thanks much. I appreciate it.

Matt Bennett: 08:40

Thank you, Todd. Have a good day.

Todd Gleason: 08:41

Matt Bennett is with agmarket.net. You're listening to the closing market report from Illinois. Public media. Our theme music is written, performed, and produced by Logan County, Illinois Farmer Tim Gleason. Do visit our website.

Todd Gleason: 08:54

The address is willag.org, w I l l a g 0 r g. There you'll find our daily programming as well as our weekly commodity week program. We'll record that this afternoon, by the way, with our panelists Naomi Bloom, Chip Nellinger, and Sherman Newlin. And you'll also find information there at willag.org. I'm the agricultural economist, the crop scientist, and the animal scientist on the Urbana Champaign campus of the University of Illinois.

Todd Gleason: 09:32

In today's agricultural news, the White House and congressional lawmakers have begun discussing a tariff relief package for farmers. The talks are starting as agricultural trade groups continue to warn elected officials about the economic impacts of tariffs. We're setting up an infrastructure that if, in fact, we have some short term economic consequences for our farmers and ranchers, we'll have programs in place to help, says ag secretary Brooke Rollins. Also says the administration will be prepared in case of longer term damage by lining up funds with lawmakers. During a trade war in president Trump's first term, US Farmers were hit hard forcing the USDA to authorize some $23,000,000,000 in assistance to crop, livestock, fruit, and vegetable producers.

Todd Gleason: 10:19

The ag secretary would not be specific about how much money USDA might need to make farmers whole. We've got the same team that built the first program under Sonny Perdue, she added. Let's stay in Washington DC and with the Trump administration, which is considering a different plan now for fees on Chinese ships visiting US ports. The Economic Times says significant pushback against the plan came from industries that all said the idea would bring economic devastation. The changes being considered include delaying the plan implementation and a new fee structure that would lower the cost for Chinese ships that visit US ports.

Todd Gleason: 10:57

The subject came up during US Trade Representative Jamieson Greer's testimony at the US Senate Finance Committee hearing yesterday. He told the lawmakers that not all of the proposed multimillion dollar fees for Chinese ships to dock at US ports would be implemented and might not be cumulative. The USTR office had suggested fees could top 3,000,000 per port call in The United States for those Chinese built ships. The administration says the fees would halt China's growing maritime influence and help promote America's domestic maritime industry. Now let's turn to the farm bill where congressional Democrats are threatening to sink a new farm bill over expected GOP supplemental nutrition assistance program savings.

Todd Gleason: 11:40

The top house ag democrat, Angie Craig, made it pretty clear at a hearing just where democrats are headed on snap cuts in a new farm bill.

Angie Craig: 11:47

This committee truly has a choice before it. Do we want to make American families hungrier and farmers poor so that a handful of bill billionaires can get richer, or do we want to pass a bipartisan five year farm bill?

Todd Gleason: 12:02

Other Democrats also threatened recently to withhold needed farm bill support after the outdated 2018 law was extended twice, but GOP AG Chair GT Thompson was not backing down.

GT Thompson: 12:13

Clearly there is a need to strengthen the connection between receiving SNAP and securing employment. Now we can examine the relationship between SNAP and employment by taking a closer look at two key components of the program, work requirements and SNAP employment and career and technical education programs.

Todd Gleason: 12:32

However, democrat Craig argued cutting SNAP called for in the GOP budget will not yield a farm bill that makes farmers richer.

Angie Craig: 12:39

Cutting SNAP also cuts farm income for America's Family Farmers. This cut would slash farm revenue by approximately $30,000,000,000.

Todd Gleason: 12:50

And finally today, a reminder that the ARCPLC decision is due by April to FSA offices. The quickest way to do that is to reach out to your local FSA office. You can also make a trip to the office where you could sign up for ARCAN PLC and the ECAP program if you've not done that already and learn more about disaster and assistance programs too. To learn more about the FSA programs, visit FSA.gov. And that's a look at today's agricultural news.

Todd Gleason: 13:20

A quick reminder that next Friday, not tomorrow, but next Friday, the markets will be closed in observance of Good Friday and the Easter holiday. Mike Tenure at tStorm Weather, where he's the president and CEO now joins us. Hi, Mike. Thanks for being with us. Let's start in the Midwest.

Todd Gleason: 13:53

The Corn Belt and some of the growing regions to the South have been wet. How wet?

Mike Tannura: 13:59

Well, it's been much wetter than normal in Southern Illinois, much of Indiana and Ohio, and then stretching on to the South through the Mid South with a lot of that wetness right on top of Kentucky. Our proprietary data shows that basically about 10 to 20% of US corn and soybean production were quite a bit wetter than normal with at least twice as normal rainfall over the last thirty days. And this is the area of concern. It's primarily to the South of Champaign Urbana and then stretching off to the South and east from there. So this area needs to dry out.

Mike Tannura: 14:35

On the plus side, there's not much rain in the forecast over the next week. We saw a few showers over the last twenty four hours and we'll see a few more over the next twenty four, but all in all is going to be fairly dry over the next week. Our concern is that once we get beyond this period it's going to turn wetter. We can see that some systems are going to move across the Central US 1 To 2 Weeks out and even though there might not be a lot of rain with this setup, there certainly will be some and we only need a little bit to limit planting and field work in these wet areas. So it is going to stay a challenge through the end of the month for all these corn and soybeans to be planted.

Mike Tannura: 15:15

Now, of course, that planting window is lengthy and it does extend all the way into the May and beyond. So there will be plenty of time to get this crop planted, but at least in the near term and even the medium term, it doesn't look all that good and it's primarily a function of how much rain we had over the last ten days as opposed to how much rain is coming up.

Todd Gleason: 15:35

So the wet weather is an issue. However, producers are likely to sporadically be able to plant. The bigger problem would be if it happens to be cool and wet. What do you see for temperatures over the next coming couple of weeks?

Mike Tannura: 15:50

Well, it's an interesting setup because you can basically divide the Central US in half, and these wet areas are going to be colder than normal. We'll see high temperatures mostly in the forties, fifties, and sixties over the next week, and that's quite a bit below normal. But as you move west and especially once you get into the plains, it'll be way warmer than normal. Even yesterday, we had high temperatures well into the seventies and eighties in much of Kansas, Nebraska, and Oklahoma. And at the same time it was pretty cold in the Eastern Corn Belt.

Mike Tannura: 16:20

And that temperature set up is going to linger for another week. Now with that stormier period that we're talking about one to two weeks out, it will be warmer, and that's part of the reason we're going to see some of these rains coming up. So the temperatures will certainly be a limiting factor in evaporating some of the soil moisture over the next week, and then it'll be warmer, but with that warmer weather comes with some of that rain.

Todd Gleason: 16:44

Do they remain dry, even droughty conditions in other parts of the Corn Belt?

Mike Tannura: 16:47

Well, it's a little dry across parts of Iowa, Nebraska, and in the parts of Missouri and Kansas, but it's kind of a minor situation at this point. It would take a long time before we'd be really concerned about this. And with some of these rains coming up one to two weeks out, they should tap into some of this. So we don't think that drought is really a concern at this point in time in the Corn Belt. That said, it does linger once you move further west into Southern Kansas and into Western Oklahoma.

Mike Tannura: 17:15

Despite all the rains that we saw seven to ten days ago, it tended to miss some of these really dry areas. So basically about 40% of US hard red winter wheat is still in a significant drought with the other 60% having normal to wet conditions. So not an ideal situation for hard red winter wheat, but it's certainly been worse in the past. And that's because this has kind of turned into more of a localized drought in Southern Kansas and Western Oklahoma as opposed to a widespread drought across all of the plains.

Todd Gleason: 17:45

What are you watching in the varying second corn crop areas of Brazil.

Mike Tannura: 17:50

Well this is a challenging one to discuss because of some of the conflicting data that we have. If you look at rainfall over the last thirty days across Goias and Mato Grosso and this region accounts for about 60% of second corn production. It's been the driest since before 1979 across these two state areas. That gives you some idea that they haven't really been getting all that much rain. If you move into the southern areas where about 30% is produced, Paranal does not have that unusual of a rainfall setup.

Mike Tannura: 18:21

Their tolls have been a little bit below normal, but not much below normal. Now, if this were to continue, this will become a significant problem fairly quickly for corn across the Northern half to two thirds of their growing belt. At this point in time though, it appears that rains are on the way. We should see a cool front or two move into these areas and that should develop some rain and because of that we're not overly emphasizing this to our customers, but it certainly is something that's in the background and rains do need to verify in this area. At this point it looks like they're on the way, but if this forecast were to change, this would suddenly become a pretty significant issue just because of how dry it's been to date.

Todd Gleason: 19:02

Before I let you go I'd like to transition to wheat. We'll move back to the Northern Hemisphere. Ukraine and Russia have a wheat crop that's come out of dormancy. What are conditions like in those two nations?

Mike Tannura: 19:15

They've improved dramatically over the last several weeks. They were in a pretty significant drought as recently as late March, but that all came to a pretty fast end over the last two weeks. And this is especially true in Russia. They saw a lot of rain over the last two weeks, and this pretty much ended the drought. So that story is pretty much over for Russia for now.

Mike Tannura: 19:38

In Ukraine, you could argue that they need to see more, but it's kind of a similar story where they saw some pretty nice totals recently and that's taken a lot of pressure off of them. So if there is going to be another dryness story in this area it basically can't rain very much over the next four to five weeks and that'd be pretty much the only way to have things really go downhill again because they saw so much recently. Now if you move further west into Europe, the story there hasn't changed all that much. They're still in a fairly significant drought and they still need quite a bit of rain and this is especially true of France, Germany and Poland which is where majority of their production comes from. They're kind of in a similar side to what we're talking about in Brazil.

Mike Tannura: 20:19

Even though there are concerns about this, it appears that a stormier period is ahead. We can see that several systems are going to approach from the Atlantic and those are more than likely move across France. That should ease their drought significantly over the next two weeks. And then the question becomes whether or not it'll move into Germany and Poland. Chances are it will because, you know, those are due East Of France and typically weather moves from west to east and we think that those rains will eventually make it there.

Mike Tannura: 20:47

So all in all, the wheat story that could have been quite problematic is at least at this point stabilized and it looks like it's going to further stabilize as long as we get these rains in France.

Todd Gleason: 20:58

Now come back to The United States, you mentioned that Kansas was going to get really warm over the weekend. They have had really cold temperatures recently as well. How's the wheat crop impacted by those temperatures?

Mike Tannura: 21:11

Well, don't think it had a major impact primarily because only very little of that crop is headed yet. So as long as they're not headed, they should be able to withstand some cold temperatures in the springtime. Now that being said, it was very cold and some of those areas fell into the teens over the weekend and you know, it's certainly not ideal. I don't think any producer would choose to have that type of weather if they could their weather pattern. But if there's going to be a winter kill problem to this crop, my perspective suggests that it would have already happened.

Mike Tannura: 21:40

We had a very unusual cold spell back in January and that followed, proceeded or it was very mild right before that. And then the same thing happened again in February. So they've certainly had some very intense cold snaps at time over the course of the winter. We even have this one we're talking about a few days ago. This isn't ideal for them but the bigger concern for weed is its dryness.

Mike Tannura: 22:05

They need to see some rain in Southern Kansas and they need to see it in Western Oklahoma. If they were to get that rain then maybe the crop would turn out a little better than what people are probably expecting today. But at this point it doesn't look like there's a great chance of rain coming up this summer. And

Todd Gleason: 22:21

Hey. Thank you much.

Mike Tannura: 22:22

Yeah. Thanks a lot, Todd.

Todd Gleason: 22:23

Mike Tenure is the president and CEO of t storm weather at tstorm.net online, joins us each and every Thursday here on the closing market report that comes to you from Illinois Public Media. It is public radio for the farming world. Don't forget that we'll record commodity week this afternoon. It'll be up online by 06:00 this evening at willag.0rg. That's WillAg.org.

Todd Gleason: 22:47

You'll hear all of it or most of it tomorrow here on our home station during this slot, the closing market report. I'll be out tomorrow and won't do the full hour, but we'll do the closing market report with commodity week in it. Many of these radio stations will also carry the program over the weekend. You have a good afternoon. I'm Illinois Extension's Todd Gleason.

Todd Gleason: 23:49

Doctor. JACKSON: