Dec 03 | 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 December 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets. We'll do that with Greg Johnson.

Todd Gleason: 00:13

He's at TGM. That's totalgrainmarketing.com. We'll hear from the US Grains and Bioproducts Council about trade across the planet and a USMCA event taking place in Washington, DC today, tomorrow, and on Friday. And then we'll turn our attention as we close out our time together to the weather forecast. Drew Lerner is here.

Todd Gleason: 00:36

He's from World Weather Incorporated in Kansas City. And along the way, I'll remind you to visit our website, willag.org, where you can buy your tickets for the farm assets conference that's coming up Friday, December 12 at the AgriCenter in Bloomington.

announce: 00:53

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

Todd Gleason: 00:58

Oh, no update of the numbers from the CME Group in Chicago this afternoon as I am working the Greater Peoria Farm Show today at the Civic Center. It runs through tomorrow. You should drop by if you get a chance today or tomorrow and check out all the things that are happening here. It's a really good farm show. I really think you would enjoy it.

Todd Gleason: 01:18

So drop by the Peoria Civic Center for the Greater Peoria Farm Show. We'll talk to Greg Johnson in just a moment. But before we do that, I would remind you that you should visit our website, wilag.org, willag.org, where today you can buy your tickets for the Farm Assets Conference that's coming up at the Agra Center in Bloomington. The Corn Growers Association's headquarters has conference facility, and we're going to use it this year. We'll take up, of course, corn and soybeans and the price of beef and all kinds of things related to the marketplace.

Todd Gleason: 01:52

And frankly, I want to concentrate on what the future looks like and what pathways there are for new developments for corn and biofuels products and other sorts of items. It's a really good lineup. I think you'll be interested. You can check out the agenda online at willag.org. Just hit the link for the farm assets conference and get yourself registered today.

Todd Gleason: 02:14

Don't wait. Do it right now. Now speaking of right now, let's turn our attention to Greg Johnson. He's at TGM. That's Total Grain Marketing.

Todd Gleason: 02:22

Thanks for being with us, Greg. I appreciate that.

Greg Johnson: 02:25

Hey. Always good to be with you, Todd.

Todd Gleason: 02:27

Let's start with the corn market. It was up a nickel yesterday, and as you and I are talking, it's down a nickel today. What's causing the gyrations?

Greg Johnson: 02:36

Yesterday, there were some, comments made by Russian president Putin that he would he may try to restrict exports out of the Ukraine, out of the Black Sea region. Not very happy with some of the countries that are responding to trying to get him to agree to a ceasefire. So some comments by Putin yesterday thought that traders thought maybe we could see some corn and wheat exports being restricted out of the Black Sea region. So that obviously would mean more demand for US exports. And so that's why corn and wheat prices were higher yesterday.

Greg Johnson: 03:12

But I think as as today, people think, well, number one, that may not happen. And number two, Russia or Ukraine does not export a lot of corn percentage wise. I think it's only 2% of the global world market, more of a wheat thing than it is a corn thing. But, I I think that probably, you know, as traders thought about it, the likelihood that that really happens, restricting exports out of the Black Sea probably isn't as likely today as what the rumors were yesterday. So up one day on a rumor and then giving it back today on the on the skepticism of that rumor.

Todd Gleason: 03:48

Do you think sideways will be the rule of the day for the month of December?

Greg Johnson: 03:52

For corn, yes. We've had a nice little rally from the August, September lows. March corn is currently trading around $4.44. It was $4.10, so we're 34¢ off the low. We did get up to $4.57, so we're 13¢ off the high.

Greg Johnson: 04:09

And, yeah, I guess I kinda see us staying in that trading range for the rest of December and January until we get to that January 12 January 11, excuse me, USDA supply and demand report. So, you know, on the one hand, farmers are going to be tight holders of corn and the export pace is very strong, so that would support higher prices. But we still have it well over a 2,000,000,000 bushel carryout. And even if we plant 3,500,000 less acres of corn next year, which is what some of the private analysts are coming up with, if you use a 180 trend yield on 95,500,000 acres, that gets you about a 15,700,000,000 bushel corn crop. And demand this year is estimated to be 16,000,000,000.

Greg Johnson: 04:53

But if we have a smaller crop, then the demand probably will get lowered a little bit too. So we could cut into that 2,100,000,000 bushel carryout a little bit, but, bottom line is without a weather problem, you know, the prices probably don't need to be $5, so that's why we're gonna be stuck in this range for a little bit longer.

Todd Gleason: 05:10

Do we need to have $12 soybeans? Is there a weather problem in Brazil?

Greg Johnson: 05:15

There's not a weather problem in Brazil. The $12 could come if Russia, in fact or if if China, in fact, buys all the beans that, the USDA seems to think they will buy. They're about a third of the way there. In fact, there was a comment made today by, secretary Bessent that, China is right on pace with, buying that 12,000,000 metric tons that, that was announced. You know, he says it may not happen until the February.

Greg Johnson: 05:42

It certainly won't happen by the end of this year. There's only four weeks left in the year. But he thinks it could happen by the February. I guess we'll wait and see. I mean, nobody really knows, at least, maybe president Trump and president Xi know, but they're not saying.

Greg Johnson: 05:55

So, I I think there's a lot of uncertainty. If China really does buy that many beans, the carryout is relatively tight. You know, we could see $12 beans. On the other hand, if China, you know, only buys what they need to buy from us and buys the majority from South America, $11.11 and $11.50 may be high enough. And January beans hit $11.69 last week.

Greg Johnson: 06:21

We're at $11.22 today, so we're about 40¢ off a high. I guess I don't see us hitting $12 unless the the Chinese purchases continue to be very strong.

Todd Gleason: 06:31

It appears that secretary Bessent has a different calendar year in mind because I feel like it was 12,000,000 by January 1, 12,000,000 by February would be, you know, almost March. That's, 4,000,000 this month, 4,000,000 next month, and 4,000,000 in February. So we'll see how that all plays out. When you look into next year, have you had producers talking to you at all about making soybean sales?

Greg Johnson: 07:00

Oh, yes. In fact, see, what is today? Wednesday I think Monday, we hit, $11 cash here in Champaign. Now it's 11/30 November 26 futures. And I'm not sure that that's not a bad place to start.

Greg Johnson: 07:15

$11 beans, we've held on and held on and held on for this past year's crop, we finally got to $11. So why wouldn't we wanna start at $11, you know, not getting crazy, but, you know, $10.20 percent at $11, hoping that's your lowest sale and hoping that they do go higher, we'll sell some more if they do. But, you know, if that Chinese purchase, doesn't hit the target numbers, US exports will have to be lowered, and then all of a sudden, that 300,000,000 bushel carryout, gets higher, and that does not argue for $11 beans in that case.

Todd Gleason: 07:48

You know, it may have been in the translation for the end of the year because the Chinese New Year doesn't come until the February, March. So that is on pace, I suppose, if you use their New Year. How about that? It's always in the translation. It just really is, surprisingly enough.

Todd Gleason: 08:07

What should producers be thinking about other than soybean sales for next year? Do they need to finish off sales for this year too, in your opinion?

Greg Johnson: 08:15

Well, I think a lot of farmers sold beans across the scale, you know, at sub $10 So I guess next week we'll find out from USDA if there is a bridge payment, some kind of a disaster payment. If that's the case, if we can add a dollar onto those $10 sales, I I guess you could argue that farmers are gonna get $11 for their beans. And, if that's the case, they probably don't need to make a whole lot of more sale, a lot more sales at this point. I think a lot of farmers are gonna wait now and see what the announcement is next week, how much money is tied to this bridge payment. And based on that, we may then see farmers decide to sell a few more or they may become tight holders and hold out if they've got enough cash from the government to pay bills, they may hold onto the beans and see what happens because South America's about 90% planted.

Greg Johnson: 09:07

Brazil's about 90% planted on soybeans. So we've got the whole growing season ahead of us. So I guess I don't see them falling out of bed right away. I mean, January is gonna be a critical month, obviously, but, we gotta get through December 1. So I guess I don't see the bean market really selling off until we have a much better idea of of the crop prospects down in South America.

Todd Gleason: 09:26

Yeah. For what it's worth, you and many of the other analysts on WILL said to hold on to beans and to sell corn across the scale if you had to do that. I think that was the right choice at this point or pretty close to it, though maybe a toss-up. On the corn sales, what should producers do?

Greg Johnson: 09:44

I'm a little friendly corn. Since we haven't had the big run up in corn prices like we have in the bean prices, I guess I'm still waiting to see if the acreage number comes down. I know the acreage number won't come down very much in the I states, Illinois, Iowa, Indiana. But I think the peripheral states where they can't grow the two forty, two fifty bushel corn, these high input costs I think will discourage some of those acres from getting planted. Some of the private analysts have lowered corn acres by three, three point five million acres.

Greg Johnson: 10:14

That would get us down into that 95,000,000 acre area. So, between the, good export pace and the fact that I think we could see, less acres, and then we also have the USDA report, maybe the yield gets lowered on this this past year's crop a little bit as well. I think there's some friendly things out there, and the bottom line is I think farmers are gonna be tight holders for corn until they see that number. So I guess I don't see much downside in corn. Don't see a whole lot of upside either.

Greg Johnson: 10:42

Another 15¢ when we're back up to the top end of the range, and then farmers might have something to think about. But at this point, it looks pretty sideways to me.

Todd Gleason: 10:50

Hey. Thanks so much, Greg. We'll talk with you again next week.

Greg Johnson: 10:52

Thanks, Todd.

Todd Gleason: 10:53

That's Greg Johnson. He is with TGM. That's totalgrainmarketing.com. I'm University of Illinois Extensions Todd Gleason. We're joined by Andrew Brandt.

Todd Gleason: 11:06

He is with US Grains and Bioproducts Council out of Washington DC. The US Grains Council, of course, promotes exports of all kinds of grains from The United States. Andrew, thank you for taking some time with me. Looking forward into the new crop year, what are the goals of the US Grains Council as it's related not only to grain sales, but to bioproduct sales overseas? Well,

Andrew Brandt: 11:33

thanks for that question, Todd. You know, I think our mission kinda remains the same. We are, we get funds from both US government and our members to go out and promote and develop new markets for, corn, sorghum, barley, ethanol, and now bioproducts. You know, it was the decision of our membership to add the bioproducts name to kind of recognize the more complex array of products we are, promoting anymore, specifically ethanol, but, you know, potentially in the future, others. And so, our mission, I think, at the core has not changed, but maybe in the future, there'll be more expansion of other products we will be starting to, you know, promote around the world to, you know, these are renewable products.

Andrew Brandt: 12:16

In the case of ethanol, it's cleaner burning, cleans up the air. We've seen that here in The US, and certainly, there are other mega cities around the world that could benefit from those same updates. And so I think that is what we are gonna stick to with our mission.

Todd Gleason: 12:29

I do wanna talk a little bit about Colombia as the third largest importer of US corn. Sticky situation there related to the Trump administration. How concerning might that be to farmers across The United States, corn producers in particular? And if you can give me maybe some thoughts about how big that that particular marketplace is. Sure.

Andrew Brandt: 12:54

So Colombia is, it is been a phenomenal market for us. It's, one of the countries that you don't think about. You know, I think exports in corn, I think China and Mexico probably popping, the heads of most US farmers and ag economists, etcetera. But Colombia has been a great success story. They are importing our corn to develop their livestock industry further, and they're, you know, actually exporting some of their poultry around the world that is fed with our corn.

Andrew Brandt: 13:21

As to the situation with president Trump, it's a bit tedious, we might say. I this is all in the public. I don't know any more than anyone else, but there have been comments and quotes by both sides. We obviously hope that the Columbia market stays open to our products. We love to sell them some more ethanol.

Andrew Brandt: 13:40

But to your question of why is this important to, you know, The US farmer? Well, you're University of Illinois. You guys have PharmDoc. You've got great economists there, the premier ag analysis web service, we'll call it. If we lose these markets, that's more corn that's gonna stay here.

Andrew Brandt: 13:56

And when we lose these demand markets in the agricultural industry, you've got the inelastic demand curve. If you don't have enough food, the price goes up really high. As soon as you have too much food, the price can drop pretty quickly. So if we lose these trade markets, we run the chance of, you know, food piling up because we produce we are blessed with an abundance of production here in The United States. We produce way more food than we could ever consume.

Andrew Brandt: 14:18

So if we lose these export markets, we're probably looking at, you know, piles of grain that's not gonna be good for the price and the bottom line of your farmers across Illinois.

Todd Gleason: 14:27

Same thing would go for Mexico, the number one export market for corn and for Canada, the number one export market for ethanol. You got it. Do you work for the Grains Council? No. I do not.

Todd Gleason: 14:39

But it the those are the those are the issues looking forward into 2025 and through the end of the Trump administration and depending on how the USMCA might be renegotiated. It appears that might be where things take really place as opposed to individual negotiations, I think, at this point. But

Andrew Brandt: 14:57

I mean, we don't really know. So, actually, December 3, there's gonna be testimony in the USMCA in Washington DC. We're gonna have a farmer from Iowa testify on behalf of it. We, at the Grains Council, are a 100% in favor of the USMCA continuing. There are some rumors, and certainly we've seen president Trump.

Andrew Brandt: 15:18

He's gone on the record numerous times saying he likes one on one negotiations with other countries. He prefers a bilateral as opposed to, you know, a complicated even three or 10 party multilateral negotiation. I don't know exactly how things will pan out. I hope, you know, USMCA sticks together, but certainly the benefits we have achieved from Mexico as well as the ethanol exports to Canada are significant drivers of the price that farmer know a lot of farmers aren't completely enamored with current prices today. They wish they were higher.

Andrew Brandt: 15:56

But if you take away, you know, the Mexican or Canadian the Mexican corn market or the Canadian ethanol market, things are gonna get even sadder on the farm. And I my family and I, we farm, so I am aware of the current margins and, all this. So it's important that we keep these markets open.

Todd Gleason: 16:12

Andrew Brandt is with US Cranes and Bioproducts Council. He's based in Washington, DC, where this week they are talking about the USMCA. I'm sure we'll report on that later in the week. But I do want you to be aware that the farmer president or chair of the U. S.

Todd Gleason: 16:29

Grains and Bioproducts Council will join us for the Farm Assets Conference on the December at the AgriCenter in Bloomington. You should be there as well. I think you'll want to hear what he has to say, along with all of the rest of the folks about D. C. And the future of agriculture in The United States.

Todd Gleason: 16:48

Join us at the AgriCenter. You need to register today at willag.org, willag.org. And thank you. I look forward to seeing you in Bloomington. Let's check-in on the global growing regions and the weather forecast for each of them.

Todd Gleason: 17:17

Drew Lerner is here. He's with World Weather Inc. In Kansas City. Hi, Drew. Thanks for taking some time with me today.

Drew Lerner: 17:23

You bet. You bet. Hope you're staying warm.

Todd Gleason: 17:25

I am. I'm at the Peoria Farm Show as our listeners already know, and it's not too bad here. I hope they will drop in. They can still do that this afternoon for a couple of hours and then all day again tomorrow. The Peoria Farm Show at the Civic Center.

Todd Gleason: 17:37

Check it out. Greater Peoria Farm Show. Now let's not start here in the Midwest, Drew, but begin in Argentina and Brazil, South America. It's time for the weather to change there, I think, kind of like it has been here. What do you see for them?

Drew Lerner: 17:53

Well, it is changing, but maybe not like it is here. Hopefully not. They would lose a lot of crop. Anyway, all kidding aside. Oh, I should mention too, those of you coming out to the show in Peoria tomorrow, make sure you bring extra layer of clothing because it's gonna be nasty cold tomorrow morning.

Drew Lerner: 18:11

But anyway, in South America, the situation is getting ready to pivot in Brazil. Now Brazil has, as we've talked in the past, had a bit of an erratic rainfall pattern in the northern part of the country over the big part of the spring season. And we actually have quite a few areas that are pocketed as being pretty dry. And there is a big need for rain right now. We went through about ten days without rain or without a significant amount of rain in Mato Grosso and Southern Mato Grosso and point southward to Rio Grande do Sul.

Drew Lerner: 18:48

And so we've done a lot of firming of the soil. Well, things are going to churn around a little bit for the north. We do expect to see slowly increasing rainfall over the balance of this week into the weekend. And next week we'll probably be seeing some more typical mid summer deluges of rain in Brazil. And we're going to fix these moisture deficits and turn the crop around.

Drew Lerner: 19:10

Southern Brazil will continue to dry down for maybe three or four more days. Mato Grosso de Sol into Rio Grande de Sol, maybe Sao Paulo as well. And these areas will have firmer soil. It's an excellent opportunity to finish up field work. There's some wheat that's still being harvested.

Drew Lerner: 19:28

There's still some late soybeans that need to be put into the ground and a few other crops. So this is going to be really good. There is a disturbance in Argentina that's going to come into Southern Brazil as we go into the first part of next week, probably Monday night into Wednesday. And that should bring in a little bit of relief for these drying areas in Brazil. Not everybody's going to get treated equally though.

Drew Lerner: 19:52

I do think there's going to be some dry pockets in Rio Grande do Sul, maybe in Paraguay and maybe even a couple of spots in Parana. But we will get most areas to moisten up just a little bit. But right after this, we will go through another period of drier weather in Southern Brazil. And that will last for probably a good five to six days before we get another drink of water and that'll occur near mid month. So it's not a bad scenario.

Drew Lerner: 20:19

And you know, there's a lot of drought mongers out there who believe that La Nina is going to cause Argentina to fall off some cliff and we're suddenly going to have a small crop there. But I disagree. I do not think this La Nina has it within itself to do that. It will reduce rainfall for a little while, but I see timeliness in what rain that does occur. And I think a big part of the country is going to do okay.

Drew Lerner: 20:43

And there may be a pocket or two that gets pretty dry, but that's kind of expected for most places in the world. So I think they're gonna do alright. And the bottom line for Brazil is that we will see enough rain in those northern areas to fix a lot of the concern there, at least for now. So we'll see what happens afterwards.

Todd Gleason: 21:01

You sound a little more hesitant there. How important is the timing of this rain at the moment? And if it doesn't quite fix it, what issues does that create?

Drew Lerner: 21:12

Yeah. You know, I I am a little bit concerned because we've gone so deep into the growing season with these moisture deficits. And even though the reporting out of Brazil seems to be still mostly roses, there's some folks that do agree there's some pockets of issue out there. But it is getting so late. I'm just not quite sure we can pull all these crops back into their full production potential.

Drew Lerner: 21:37

Some of that crop that was put in the ground in late September, early October is in the midst of reproduction now. It is an extremely important rain event, but depending on just where the crop is and its development will determine how much it can benefit from this. And if for some reason this precipitation turns out to be a little disappointing, I do think that we're going to see some yield loss. But with all that said, I don't want to walk away from this conversation with the idea that Drew thinks there's going to be a problem in Brazil. I think for the most part, it's going to be a good crop.

Drew Lerner: 22:12

I think it will be hard to achieve the 177 that has been published recently. But I don't think it's going to be a disaster either. I am looking for the Northeast part of Brazil to have some dryness issues in January and February. That would include Piawi and Maranau and and perhaps Northern Tolkantins and parts of Bahia. They are not the the heart of the production region, but they do have an influence, and that might also help that yield come down just a little bit.

Todd Gleason: 22:41

Yeah. Thanks much. We'll talk with you again about this next week.

Drew Lerner: 22:44

You bet. Have a good week.

Todd Gleason: 22:46

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 at willag.org, where you can sign up today, register for the Farm Assets Conference. It's Friday, December 12 in Bloomington. I hope to see you there.

Todd Gleason: 23:07

Have a great afternoon. I'm Todd Gleason.