Aug 05 | Closing Market Report

Todd Gleason: 00:00

From the land to Grant University in Urbana Champaign, Illinois. This is the closing market report. It is the August 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Bloem.

Todd Gleason: 00:12

She's at totalfarmmarketing.com. I'll bring you up to speed on the agricultural news for the day. We'll hear from Jackie Fadka with CodeBank about the SREs. Those are the small refinery exemptions and how she and CodeBank are viewing what the EPA might do going forward and then we'll turn our attention to the NLRS the nutrient loss reduction strategy and nitrogen rate applications and timings. This is less about the NLRS and a whole lot more about the economics of the MRTN.

Todd Gleason: 00:47

That's the maximum return to nitrogen. The in rate calculator you can find online Gary Schnitke will be here for that. And as we close out our time together, we'll discuss the weather forecast with Donde too on this Tuesday edition of the closing market report from Illinois Public Media. Todd Gleason services are made available to WILL by University of Illinois Extension. December corn futures for the day settled at four dollars two cents, a nickel lower, the March down four and three quarters at $4.20, November beans at $9.19 3 quarters, three and three quarters lower, January, 10 o nine and a quarter down three and three quarters of a cent as well.

Todd Gleason: 01:28

And wheat futures in the soft red, eight and a half lower. Naomi Bloom from totalfarmmarketing.com now joins us from West Bend, Wisconsin. Hi, Naomi. I hope you're having a great day.

Naomi Blohm: 01:38

Yeah. Nice nice day here today in Wisconsin.

Todd Gleason: 01:40

It's a good thing it's a nice day because when I opened up, bar chart to look at the numbers and saw corn was down a nickel, sometimes I don't get that until we get to this closing market report. That hurt just because it's another contract close and in that $4 range for December corn. What can you tell me about the losses today and why it happened?

Naomi Blohm: 02:01

Yeah. So just another day of losses as the weekly crop progress ratings continue to look great. 73% of the corn is good to excellent, same as last week. But I think what really killed the market today, Stonex came out with their next updated yield guesstimate of one eighty eight point one, which was just more negative news for the market to absorb. Now keep in mind, next week on Tuesday is the next USDA WASDE report, and it'll be, yield guesses based on satellite imagery and farmer surveys.

Naomi Blohm: 02:32

So we will likely see them show a bigger number out there. And when you look back at the past ten years, six out of the last ten years, the USDA WASDE yield number has increased from July to August. And when it increases, the average increase was 3.73 bushels from one month to the next. So ideas of a big crop, just ho demand news, waiting for more trade deals, just the lack of bullish news continues to weigh on the market. We'll see if $4 holds for the DEAS contract or not.

Todd Gleason: 03:09

Well, we'll wash to see if that holds. Do you think it can?

Naomi Blohm: 03:13

No. I'll be honest. I don't. I I would say that the market probably holds $4 support for a few days here. We trade in a maybe a a 5 or 6¢ sideways pattern pattern.

Naomi Blohm: 03:24

But if $4 fails, then I think that the technical mindset points to $4.85, which would be a match of the December low last year in August, at the $3.85 number. So I think that that is possible if $4 fails, and then that might take us into the August, and hopefully, we see our harvest low at that time.

Todd Gleason: 03:49

Well, but it would be good if it would come before harvest. I think producers would feel good about that. On some kind of rebound, is there historical precedence for how much happens, during the September, October timeframe? Do you know?

Naomi Blohm: 04:03

Yeah. So it's a lot of times that harvest low is the last couple weeks of August to the September. And it when you just eyeball chart December corn charts back over the past ten years, take out 2021 and 2022, just because those were different years of lower production. But in general, usually, if you can see a harvest recovery, it's been maybe 20 to 30¢, but then it kind of stalls out and prices have a tendency to trade sideways. Last year, we had initial recovery bounce and then a little bit of a pullback, and ultimately, of course, that market chugged higher all the way into February.

Naomi Blohm: 04:43

But just the initial get up and go is slow going because we have to get that harvested crop into bins or into town, and we might actually see some big piles out there this fall, depending on where things come in when all is said and done at harvest time with this big crop.

Todd Gleason: 05:00

So if you think about that as, the four ten, four fifteen area, producers who have to market across the scale, is that what you want them to wait for?

Naomi Blohm: 05:11

Well, it's it's gonna be a little bit of a different bag this year. You know, what worked last year isn't necessarily gonna work this coming year. I would say if you are in a position where you know you're going to be selling grain across the scale at harvest, start to look at a reownership strategy maybe out to May with a bull call spread or something like that with fixed risk in case China all of a sudden comes in and and buys a large amount, or if South America has any bad weather come December, January, February, that's something that could let the market rally later on. So, you know, the reality is that right now perception is that it's a large US crop, and that's just gonna weigh on things for a while. But low prices ultimately, as you know, cure low prices.

Naomi Blohm: 06:00

So at some point, the market should have a rebound.

Todd Gleason: 06:02

What are you watching in the soybean?

Naomi Blohm: 06:04

Yeah. So with soybean markets, you know, USDA report next week probably should have either just a slight increase on yield, just because the weather, of course, has been good, but I don't think we'll see anything big there. What we're gonna be continuing to watch is if the USDA makes any further demand revisions regarding soybean exports. That's where all the questions are at, and China still hasn't really shown up yet. When I read the newswire, president Trump says, oh, we're talking to China and everything's gonna be hunky dory, but August 12 is their deadline for the next trade tariff negotiations.

Naomi Blohm: 06:39

And so do we just get to August 12 and actually have something on the table for a deal? And for the market to get excited, we need to have not just a deal, but we need to say China's gonna come in and buy, you know, x amount of soybeans to get the market excited. If president Trump comes in and just pushes the can down the road and gives them an extension, beans are gonna have, a rough go of it for a while, especially on the perception that it's gonna be a big crop.

Todd Gleason: 07:04

It'll be interesting to see how they do it and whether the trade agreement will include some purchase agreement of some sort. It would also be interesting to see when that purchase agreement might be put into place, whether it would be for this fall and new crop or if they're looking further out. So lots of things to look at as it's related to the marketplace. Any final word from you before I let you go?

Naomi Blohm: 07:29

Well, just, of course, cattle market continues to be on fire. So another push higher today. Cash values continue to be strong. But in general, stay defensive with the grain markets. And when we see signs of any type of a harvest low in the August, we will be sounding the alarms and letting everybody know.

Todd Gleason: 07:47

Thank you much. We appreciate it. That's Naomi Bloom. She is with total farm marketing dot com. In today's agricultural news, several small refinery exemptions wait for ruling from the Environmental Protection Agency and the US Renewable Fuels Industry is watching to see what the agency will do.

Todd Gleason: 08:11

Jackie Fatka, lead economist for farm supply and biofuels at CoBank, talks about where the situation is right now.

Jacqui Fatka: 08:19

We are waiting to see what EPA will do with some of these small refinery exemptions. And the question is, do they eliminate it, or do they require additional larger facilities to absorb some of those smaller refinery exemptions? Looking back in previous years when the Trump administration did approve some of these SREs in 2017, it did create a little bit of shift. The market is waiting to see what's going to happen and how this might impact demand.

Todd Gleason: 08:48

Fadka says the agency is expected to make a decision on the SREs before November 1.

Jacqui Fatka: 08:54

We do know that EPA is likely to make a decision on these SREs ahead of its final rule on the renewable volume obligation, which is supposed to go into effect by November 1. So we'll get a little bit more clarity here. That is one of the wildcards we're waiting to see. I've been calling it an x factor on how EPA treats these historical SREs and what they do and how they allocate those potential exemptions on the overall demand for biofuels.

Todd Gleason: 09:22

Jackie Fatka is with CoBank. Elsewhere in Washington DC last week, the senate has managed to pass an ag appropriations bill. The USDA bill was one of three f y twenty six spending bills the senate passed in the last week, and it did so in a bipartisan fashion. Democrat Patty Murray gave the bill backhanded praise.

Patty Murray: 09:44

We fully fund the WIC program and reject Trump efforts to eliminate international food aid programs, rural housing support, and food boxes that feed hundreds of thousands of seniors.

Todd Gleason: 09:56

The senate version spends almost $4,000,000,000 less than the house's 25,500,000,000.0, but ups WIC nutrition by 7% and fully funds NIFA, FSIS, AFIS, and ARS. Congress relied on three consecutive continuing resolutions to keep the government funded through September 30. Lacking the full budget for this fiscal year, another will likely be needed next month. A couple of other items of note, farm real estate prices rose year over year nationally as every state saw gains in land values according to an annual report by the Ag Department. The value of land and buildings on farms rose 4.3% this year to $4,350.

Todd Gleason: 10:42

The agency said after a survey of more than 28,000 operations conducted in April and June, Cropland cost increased 4.7% to an average of $5,830, pasture land at $1,920 an acre. Iowa ag land was valued at $9,790 an acre, that's up 3.9 on the annual basis, and Illinois saw gains of 2.6% to $8,930. On that note, the price of used high horsepower tractors fell about 1823% from 2023 to 2024 levels, while regional auctions report used equipment values fell by as much as 40%. So far in 2025, used farm equipment values found footing and a trend on the verge of reversing due to growing strains in the farm economy. According to the Machinery Pete website, after the huge rate of drop we saw in 2024, which mirrored the big drop off in 2014.

Todd Gleason: 11:45

Greg Peterson thought it would keep sliding, but says it instead has leveled off through the first half of the year. And finally today, Tyson Foods raised its full year earnings forecast as strong US chicken demand and cheap feed cost helped it withstand losses in its beef business. Operating earnings excluding some items are expected to range from $2,100,000,000 to $2,300,000,000 in fiscal year twenty twenty five, an increase of $100,000,000 at the midpoint from the prior guidance range. That's a look at today's agricultural news. You're listening to the closing market report from Illinois Public Media on this Tuesday afternoon.

Todd Gleason: 12:36

Our theme music is written, performed, produced in courtesy of Logan County, Illinois farmer Tim Gleason. Do visit our website at willag.org, willag.0rg. There you'll find our daily agricultural programming to listen to anytime you'd like. Just click and play from the website or search it out in your favorite podcast applications. Look for the closing market report commodity week in the Illinois nutrient loss reduction podcast.

Todd Gleason: 13:03

Speaking of it, Laura Gentry and Gary Schnitke along with myself hosted a webinar this morning on nitrogen application timings and rates. This has to do in part with the Illinois nutrient loss reduction podcast. You can pick that up on the PharmDoc Daily website to watch the full webinar later this afternoon on YouTube too at youtube.com/pharmdoc, the webinar on nitrogen rate in applications and the MRTN. I did ask Gary exactly what were the key takeaways from this morning's webinar while I was there in studio with him in Mumford Hall.

Gary Schnitkey: 13:46

Number one is to apply nitrogen at close to MRTN rates, maximum return to nitrogen rates. We have shown, and that's collaborated by obviously the MRTN itself, that that is the profit maximizing place to be, and that's generally less than 200 pounds of actual N per acre. It will vary, but it's roughly 179 in Central And Northern Illinois, so being near that number is number one. Number two is having a lower cost method of applying the nitrogen. And by that there's two things that impact that.

Gary Schnitkey: 14:33

Number one is the number of times you apply nitrogen in the field. And all farmers generally use two or more methods, being a print, like even fall applied nitrogen, you'll apply it in the fall. There will also likely be a DAP portion of it, but also a nitrogen in the spring with chemicals to make them adhere better. But anyway, keeping the primary nitrogen applications down to one, so fall applied mostly pre plant or mostly sidedress is pretty key, And the more times you go across the field we don't see a yield advantage and we're adding cost. Also on cost, anhydrous ammonia is your least cost nitrogen source.

Gary Schnitkey: 15:32

So as much as we can rely on that, that's going to reduce our cost, particularly if we don't have to use an inhibitor. So that pushes as a low cost way in mostly side dress.

Todd Gleason: 15:47

It's important to remember, as you already pointed out, that the EMRTN, and you can find this online by searching for in rate calculator, and this calculator is good for every county across the whole of the Midwest. It's backed up by data by from all of the land to grant universities, but important that the number that they get the pounds of N for the crop and the value of the crop by bushels is calculated based on all nitrogen applied, not just the nitrogen applied as anhydrous, so you have to add everything together and then start subtracting to get the primary application. Now once they've done all of that, what else do they have to think about as it's related to these nitrogen applications? I mean they're going to try to do one application if they can. Is there a difference between fall applied and side dressed as it relates to yield, as it relates to conservation, or other areas?

Gary Schnitkey: 16:53

Yeah, so let's just take that fall applied versus mostly side dress. We don't find a yield difference. The mostly sidedress will actually have lower cost if you put on anhydrous ammonia, because generally in fall you're also putting on an inhibitor. So that will have a cost advantage. If you go to a nitrogen solution, you may have higher cost, because nitrogen solutions have higher cost.

Gary Schnitkey: 17:22

But the other thing to consider is nitrate runoff, and there'll be less with side dress than mostly fall applied.

Todd Gleason: 17:30

Right now farmers are saying, But Gary, I might not be able to get in. There is a solution for that, at least as it's related to crop insurance, I think.

Gary Schnitkey: 17:41

Yeah, we have a PACE crop insurance product that will protect if you can't get nitrogen on after planting. I would note that the probability of getting it on is pretty high. We even saw that in the 2019 year. We saw most people did get nitrogen on after all that wet weather.

Todd Gleason: 18:05

Do you think PACE, because you've followed it fairly closely, is that a crop insurance that you think producers should take a close look at, or is it simply I have issues with it and I know that, so I should take it?

Gary Schnitkey: 18:18

No, I would suggest taking taking a that, good hard look at pace, and again, it will provide protection against that event, and it is subsidized, so it should be a low cost way.

Todd Gleason: 18:37

Are there differences in the economics across the state, for instance, in Northern Central high and low land values or Southern Illinois?

Gary Schnitkey: 18:47

As far as the general principle of keeping within MRTM and using one's primary system for prime nitrogen, no. Obviously, as we go down to Southern Illinois, the fall applications are much less desirable because of the nitrogen staying in the soil till the plant matures. The general recommendations are the same, fall becomes less desirable as we move south.

Todd Gleason: 19:25

Anything else about this that we should know?

Gary Schnitkey: 19:28

Nitrogen is our largest cost, one of our largest cost items, and by the way, it doesn't seem to be going down in price. We were looking at anhydrous ammonia prices today, and it's $800 per ton, which is pretty pretty pretty significant.

Todd Gleason: 19:44

Yeah. Significantly, those prices jumped just after the OPBBA passed. I saw that happen in the numbers, that were coming from dealerships across the state of Illinois. It'd be interesting to see what happens going forward and, can you make $800 nitrogen pay next year on your expected crop budgets?

Gary Schnitkey: 20:09

It's gonna be a negative return year unless we get some higher prices in there. It continues to be a tight economic time, so we either need to see costs come down, which they've been sticky, or something.

Todd Gleason: 20:31

It makes it important when you check the nitrogen rate calculator, the MRTN, to see the range that is within a dollar of the maximum return, and you can turn down the dial on the number of pounds you're applying. That's exactly right.

Gary Schnitkey: 20:47

So there is one area where we have we have the potential for savings.

Todd Gleason: 20:52

Gary Schnicki is an agricultural economist on the Urbana Champaign campus at the University of Illinois. He along with Laura Gentry from the Illinois Corn Growers Association hosted a webinar this morning for the PharmDoc team about nitrogen rate applications and timings. You can find that on the PharmDoc Daily website at farmdocdaily.illinois.edu. You look in the archives of the events and webinars section or you can visit youtube.com at /pharmdoc that's youtube.com/@pharmdoc. Now let's turn our attention to the weather forecast.

Todd Gleason: 21:34

Don Day left us this note about the growing regions in The United States.

Don Day: 21:40

After a bout of cooler weather, we're gonna see temperatures later this week into the weekend and next week start to warm back up again, but the cooler, drier air that has settled into the Midwest and Corn Belt region will be replaced by more humid and warmer air down the road. However, precipitation looks to be more centered into the Northern Plains. It looks like Minnesota, the Dakotas, Nebraska, parts of Iowa and Wisconsin are gonna have the best chances of rain in the coming week ahead. Lesser rain chances, in fact, generally dry conditions will be found across the Central And Eastern Corn Belt across Indiana, Illinois, a lot of Missouri into the Ohio Valley. Those areas in the Central And Eastern Corn Belt will be drier overall over the next week or so, along with those warmer temperatures.

Don Day: 22:30

So the wetness stays in the Northwest, cornbound in the Northern Plains, dry in the Central And Eastern areas. Another area where there will be precipitation will be in the Carolinas and parts of the Mid Atlantic as we could see some tropical activity developing there over the next to ten days.

Todd Gleason: 22:46

Donde is with day weather in Cheyenne, Wyoming. Joined us on this Tuesday 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 at willag.org. That's willag.0rg. You have a good afternoon.

Todd Gleason: 23:06

I'm Illinois Extension's Todd Gleason.