Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the Closing Market Report established in January of nineteen eighty five. We're celebrating forty years on the air and more than 10,000 episodes, twenty two years on demand whenever you'd like to listen to us as a podcast as well. Coming up, we'll talk about the commodity markets today with Greg Johnson. He's at TGM. That's totalgrainmarketing.com.

Todd Gleason: 00:28

And we'll hear from Drew Lerner at World Weather Incorporated in Kansas City. Drew will tell us about a two day rainfall event in Argentina. You'll want to hear the details of that one as we make our way through this Wednesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world, and on Tuesday, March, we'll hold our thirty fifth annual all day ag Outlook in conjunction with the FarmDoc team. You can register today for that one too at willag.0rg.

Todd Gleason: 01:04

Todd Gleason services are made available to WILL by University of Illinois Extension. March corn for the day settled at $4.93 and a quarter, a penny and a quarter lower than May unchanged at $5.00 4 and 3 quarters a bushel. And December, new crop corn at $4.68 and a half, up a half cent. March soybeans, $10.57, down 18. The May quarters lower at $10.72 and a quarter, and November soybeans down 11 at $10.62 and a half.

Todd Gleason: 01:31

Bean meal $5.70 lower. The bean oil 67¢ lower, and soft red winter wheat down four and three quarters at $5.72 and a quarter. The hard red finished at $5.91 and 3 quarters down three. Greg Johnson from TGM, that's Total Grain Marketing, the grain elevator owned by FS here in Champaign County. Hi, Greg.

Todd Gleason: 01:52

Thanks for being with us today. Can you tell me a little bit about the marketplace as you've seen it unfold over the last week or so?

Greg Johnson: 02:01

Yeah. It it, it just feels like, the market is very unsure of where to go direction wise because of all the uncertainty over the tariffs and the trade policy. We've had, an up day and then we have a down day. Yesterday, beans were up 17¢. Today, they're down 17¢.

Greg Johnson: 02:21

And, I think we just have to get used to that kind of volatility because every rumor that comes down the pike will move the market, and, and that's and and bottom line is we really don't know how this is all gonna play out. So, on days where the rumors seem to be indicating that, you know, the the trade issues will get resolved sooner rather than later, we seem to be trading higher. And then on days when, it looks like it might be a little bit more of a sticking point, those are the days we go lower. And on top of all that, then you throw in the South American weather, which can change from day to day. So I think we're just, in one of those sideways patterns, until we get things figured out more so on the trade policy and then also on the South American weather.

Todd Gleason: 03:09

How long do you think we have in that in that form? A month? Maybe more?

Greg Johnson: 03:14

Yeah. The the the corn, especially, has a lot longer time because we're, you know, what, 15% harvested on the Brazil soybean crop. So we've gotta get, the rest of the beans harvested and then the double crop corn planted and, then go through the growing season. So I think until we have a little bit better idea what how the corn crop is is progressing down there, I don't think corn sells off too much. You know, this the USDA report in January really tightened up the stocks down to 1,500,000,000.0.

Greg Johnson: 03:45

It's got traders concerned that we need to have a good crop out of Brazil's Second crop, and then we need to plant at least 94,000,000 acres of corn here and have a good crop just to meet the, increased demand. So I think corn is fairly well supported in here. Soybeans, on the other hand, Brazil's got a big crop. I think they can more than offset, what Argentina's gonna lose, due to their dry weather. And, so then it kinda boils down to, the trade talk trade talks as far as where the bean prices go.

Todd Gleason: 04:14

What is your thought as you look forward into the new crop for both corn and soybeans, and the fundamentals behind the marketplace at the moment, which direction they should run-in your opinion, and then what the trade policies could do to change any of that?

Greg Johnson: 04:34

The fundamentals on corn is the demand is 15,100,000,000 bushels. So we need to grow a 15,100,000,000 bushel crop or bigger, just to meet the demand. That's probably gonna take 90 at least 93, if not 94,000,000 acres of corn. We planted 90 and a half million acres of corn this past year. So I think the market needs to stay strong, and up until the point where farmers have locked in their planning decisions after after they've made their decision, then it all boils down to the weather.

Greg Johnson: 05:06

But for the next two months, anyway, it it kinda feels like corn, probably will stay somewhat supported, because we do need to buy those acres. Soybeans, on the other hand, assuming that's that Brazil has as big a crop, a 70,000,000 metric tons, maybe higher, that will probably offset the three or 4,000,000 metric ton decline in the Argentine bean crop. So then, we'll see what the acreage number is here, but, the fundamentals are certainly tighter, I think, on corn than they are on beans. And then when you throw the trade talks on top of that, if China would retaliate, with tariffs on our soybeans, in retaliation for us putting tariffs on their products, that would affect the soybeans more so in a negative fashion than it would on corn. Corn would probably be dragged down a little bit along with it, but the beans would go down, a higher percentage than than what the corn would.

Greg Johnson: 06:00

So I think there's more potential negatives on the beans and a little bit more supportive, factors on on the on the corn.

Todd Gleason: 06:06

On the flip side, if, the president presidents of China and The United States were to come to some agreement, it would likely revolve around partially agricultural purchases, particularly soybeans, I would suppose. That would put a lot of pressure to the upside into the corn market, I would think, given the fundamental need in the coming year.

Greg Johnson: 06:31

I think, yes, you're right. The the thing is with China, I think the last time they signed this trade agreement with with president Trump, they agreed to you know, they committed to buy so many dollars, millions of dollars, billions of dollars worth of commodities. I'm not sure that they really actually ever did fulfill the, entire phase one, part of that agreement. So, yes, we we could see a signature and psychologically that's friendly, but my my suspicion is that if South American beans are cheaper than US beans, they're gonna buy as many South American beans as they can until they run out, and then they'll buy what what they need, the balance of what they need from The United States.

Todd Gleason: 07:10

Yeah. Factually, they bought 75% of the agreement and didn't finish that out.

Greg Johnson: 07:15

Yeah.

Todd Gleason: 07:16

So we'll see how all of that pans out coming forward. And I do hear that fairly often that may they'll they'll they'll finish up the agreement. And I was like, well, buying 25% of what you didn't buy just just just doesn't seem like doesn't seem like that big of a deal to me. So we'll we'll see how all of that. And I I think that's just the, you know, trying to understand what was completed and that agreement expired and and how things so this I I just look at as as we were resetting the table here and and we'll see how that goes.

Todd Gleason: 07:54

Okay. So now we still have old crop to deal with. As related to sales, you have been a seller into this marketplace. Do you continue to be so?

Greg Johnson: 08:04

Beans, yes. I I anything with a tin in front of it, I think is gonna look good when it's all said and done. The corn farmers are probably 75% sold on the old crop corn. I don't have a problem with holding on to that last 25% for the next month or two and and see if we can get a little bit more of a rally out of the corn market. Soybeans, though, I I still encourage farmers to get a little bit more sold on both old crop and new crop.

Greg Johnson: 08:30

And, you know, as far as new crop corn is concerned, you

Greg Johnson: 08:35

know, farmers farmers have not sold as much as what, you know, as you would think. I mean, you know, there are 75, 80 percent sold on old crop corn, but probably less than 10% sold on new crop corn. They really you know, the new crop corn price isn't as high as the old crop corn price for one. And two, there's just, you know, that uncertainty. You know, I don't know what my yield's gonna be whereas I know what my yield was on the old crop corn.

Greg Johnson: 08:59

So they're a little bit more comfortable selling corn on Rally's old crop corn. But new crop corn, sales have been light. And like I say, that's probably okay for the next six weeks to eight weeks. But, if we do get Rally's, between now and then, I would like to have some new crop corn sold by the time that March 31 planning intentions acreage report comes out.

Todd Gleason: 09:18

Anything else you've been watching or that you're worried about?

Greg Johnson: 09:21

Funds are extremely long, almost record long. Four there are 360 to 370,000 contracts long of corn. I think their all time record is 400,000. Now that's not to say they can't do that or even exceed that, but that is something to keep in mind that, what what they buy at some point in time, they will sell. So, you know, I'd rather be a little too soon on the sales side than a little too late after the funds bail out.

Todd Gleason: 09:47

Hey, Greg. Thank you much. We're looking forward, by the way, to having you along with many of our other regular analysts over at the Beef House in Covington, Indiana on Tuesday, March.

Greg Johnson: 09:56

Looking forward to it too, Todd. I'll see you then.

Todd Gleason: 09:59

Greg Johnson is with TGM total grain marketing dot com and will join us on Tuesday, March at the Beef House. You can too register today online right now at willag.org, or you can go to the Farm Doc Daily website at farmdocdaily.illinois.edu. At either place, you'll find a link to register for the all day Ag Outlook. The cost is just $40. We have a great day planned for you with many of our regular analysts there.

Todd Gleason: 10:30

We have a special book signing with three authors, not just one, but three authors including Neil Dahlstrom, who's the author of Tractor Wars. The documentary based on that book will air on WIL channel twelve in the month of March, and you can have your book signed by Neil, but you need to buy the books ahead of time and bring them with you. All the details about the books and the authors are online, as well as all the information about the all day ag outlook. Oh, and Sue Martin will be coming in from Iowa this year to be with us as well. Should be a fantastic day with the FarmDoc team, the Will Ag analyst, and a couple of other interesting speakers.

Todd Gleason: 11:11

Find the details again at willag.0rg and register today. Hey, thank you for listening whether it's live or on demand to the Closing Market Report. Find us each and every business day of the year on your favorite radio stations and online at willag.org or in your favorite podcast applications. Places like Apple, YouTube, Spotify, and so many more. Just search out the closing market report.

Todd Gleason: 11:54

Our theme music is written performed in courtesy of Logan County, Illinois Farmer, Tim Gleason. Let's now turn our attention to the weather forecast for the growing regions across the planet. We're joined by Drew Lerner at World Weather Incorporated. Hey. Thank you, Drew, for being with us today.

Drew Lerner: 12:12

Sure. Sure. It's always a pleasure to talk with you, and, the weather is always interesting as you know.

Todd Gleason: 12:17

It is always interesting. They've had a little event, maybe a bigger than little event in Argentina as it's related to rainfall. Can you tell me about it?

Drew Lerner: 12:27

Yeah. You know, this started, Monday night into Tuesday morning. We got, you know, about four tenths of an inch to an inch and, two thirds across Northern Buenos Aires and some Southern areas of Cordoba and Southern Santa Fe, which is a part of the very most important part of, Argentina's corn and soybean production region, but that wasn't enough to really make any difference. But then last night, we came and put a lot of icing on the cake. Heather, two to three inches of rain occurred in the very same area, and there were even some local totals that got into the four to six inch range.

Drew Lerner: 13:04

Now those heavier amounts were extremely localized. But when you take the two rain events and put them together, we suddenly have a much better moisture profile across some of that region. Now I when I step back and I look at the overall area that was impacted by this, it looks like maybe somewhere around 35, 40 percent of the total production area. But then I also look at Cordoba, which, Cordoba, only the Southeast part of Cordoba was involved with these these two little rain events. But when we look back at the weather up to this point in in time during the growing season, it's pretty obvious that Cordoba has had probably the most routinely occurring rainfall and their subsoil moisture is still quite favorable.

Drew Lerner: 13:52

So when we add in all of Cordoba in this area that's just had some improved moisture, we come up with about half of Argentina's crop is probably hanging in there. And I went back and I looked at previous rains in this area that got the better rains these past two days. And, the last time we had a two day rain event like this was way back in the first couple of days in December. So that was a long time ago. But I did notice in my research that there was multiple or were multiple occurrences of, lighter rain events that impacted portions of the same region on a periodic basis.

Drew Lerner: 14:31

I think there was three or four of them in December and, two in January. And I it's really hard for me to look at that whole big picture and come to the conclusion that we have a disaster on our hands in those areas. The rest of Argentina, though, is certainly struggling, and we have a lot of heat coming up here, as we go forward through the next seven days. The rain last night is gonna end during the afternoon today. We will see dry weather in much of Argentina for the following six to seven days, and temperatures will be at mid nineties to about 106 degrees nationwide, but certainly in the north and central parts of the country.

Drew Lerner: 15:12

A couple of extremes to 110. So it won't take long for us to lose this moisture. What am I really trying to say? Well, I'm trying to say that, I think we have to be careful with how much production cut we give Argentina. There's been some wild estimates here recently.

Drew Lerner: 15:28

I think some of those are overboard. But we're only halfway through the growing season. So there's still a lot of time here to do a lot more damage. And the next rain event is at least seven days away, and it looks like that one will favor the central and northeast parts of the country and may not be a good enough rain event to fix them for very long. So they're definitely not out of the woods, but this rain event these past two days was really pretty impressive.

Todd Gleason: 15:55

And I have a question about the temperate summertime temperatures in Argentina in particular. I've watched them for several years now, and the hundred degree temperatures do not seem to be that uncommon for them. Am I mistaken about that? No. And I I often wondered whether that was just because I was seeing a wrong reading or whether they just get that hot most of the time.

Drew Lerner: 16:23

You know, I I've been doing this for forty six years. And in recent years, I would say probably in the last five to ten years, we've seen a lot more 100 degree days in Argentina than we saw in the first twenty or thirty years in my career. So it it may be kind of a short term, climatic type change that's taking place, but it is far more common now than it was earlier on in in my career. And, but seeing temperatures up in the north, especially Santiago Del Estero and Chaco, those two provinces tend to be hot fairly often. And it is kind of a semi arid area, certainly in Santiago, and that's one of the reasons why they don't produce the volume of, corn and soybeans that we see in Cordoba and and points further to the South and East.

Drew Lerner: 17:17

So I your observation is a good one, I think, and, I don't think you're crazy or anything. Well, I take that back. You might be crazy but not sure that, that the temperatures are out of line there. And even though it's it's something that's occurring more often, it is still keeping the evaporation rates really high during the summer. And it is making it more challenging when they do get in these drier weather modes, and and therefore, there's, you know, a higher potential that they run into a more serious moisture stress environment with that kind of heat.

Todd Gleason: 17:50

Thank you for the information on that tangent. I appreciate that. Brazil, safrina corn and harvest for the first crop of soybeans. What does it feel like in Montagrosso today?

Drew Lerner: 18:04

Yeah. You know, ToneLab came out with its estimates on, production or not production, but on progress in the fields day before yesterday, and it was pretty obvious that the the progress is certainly way behind. But, you know, there's a bit of a misnomer out there about that. I think folks are forgetting the fact that we couldn't plant early soybeans, in late September or early October because the seasonal rains didn't kick in until later in October. And a lot of this delay in the harvest doesn't really have a tremendous amount to do with the rains that have been occurring.

Drew Lerner: 18:43

Certainly, if the crop was fully mature and we had all this rain, there would be some delay. So I guess it's six of one, half dozen of another. But, you know, the the bottom line is that it's not until just now that these crops are far enough advanced that they really would be able to benefit with dry weather. And if we can dry it down over these next two or three weeks, I think you'll see some aggressive field progress made. The unfortunate part of that is that I don't think it's gonna be quite dry enough for that kind of aggressiveness in the fields.

Drew Lerner: 19:15

We will see a little less, frequency of rain and lighter amounts, but it's still wet in the fields. And in this environment, it will be a slow process to firm up the ground, and these guys are not gonna wanna tear up their fields too terribly, if they're gonna try to put a corn crop in. So they don't want ruts in there, and so it's gonna have to be a little bit of a slow go. So we still need to be watching all of that safrinha corn and cotton production area, favoring Mato Grosso in particular, but all the way down into Goya's and Mato Grosso de Sol as well.

Todd Gleason: 19:50

And finally, one crop we haven't checked on for a while is in Russia, the winter wheat crop. How's it fared this winter? I know it's in dormancy, of course, but winter kill can be a problem from time to time depending on how much snow cover they have.

Drew Lerner: 20:04

Absolutely. And that part of the world has been unusually warm this entire winter. There was one near near, bitter cold event, I suppose, if you wanna call it that. It occurred way back in early December, but it wasn't cold enough to be a problem. The temperature's been way above normal.

Drew Lerner: 20:24

In fact, I think in the last week to week and a half, they actually had afternoon temperatures in the thirties and forties, lows in the twenties and thirties, which is way above what they normally would see. So, the crop is still dormant as you stated, but it doesn't have much snow snow on

Greg Johnson: 20:42

the ground.

Drew Lerner: 20:42

We had little minor snow event yesterday that produced a little bit of snow cover, but only in a part of the region. And you've got to remember that those winter crops in that part of the world from Eastern Ukraine through Russia's southern region into Western Kazakhstan were very poorly established last autumn because it was too dry. Now they've had waves of precipitation since then, since the crop has been dormant, and it's not been tremendously abundant, but it has certainly moistened up the ground. And so the potential here is fairly good that that crop will have an opportunity to set new tillers and better root systems early in the spring if this trend continues and if there's no winter kill. Now over the coming week, we are going to see some cooling finally arrive, and tempers may slip just a tad bit below normal.

Drew Lerner: 21:33

Temperatures may come close to the damage threshold, but I think that it will stop short of going below that, and I think there may also be just a tiny little bit of snow around. So I'm gonna say we're probably not going to see much damage, certainly not from that event next week. And, if they stay on the road they're on, they could actually see some improvement rather than seeing further loss potential.

Todd Gleason: 21:56

Thank you very much, Drew.

Drew Lerner: 21:58

You bet. Have a great day.

Todd Gleason: 21:59

You too. Drew Lerner is with World Weather Incorporated in Kansas City. Joining us on this Wednesday edition of the closing market report that comes to you from Illinois Public Media. It is public radio for the farming world, where right now on our website, you'll find a way to register for the All DAG Outlook. It's coming up at the Beef House in Covington, Indiana.

Todd Gleason: 22:19

A couple of special events. We'll be highlighting books by authors both internally, that would be Jonathan Koppas and Scott Erwin, and externally Neil Dahlstrom. In fact, Neil will be coming in to talk about his book, Tractor Wars, and the documentary, which will be running on w I l l channel twelve in the month of March. It'll be your chance to have those three authors sign their books. All the details about the books are online at willag.org along with a way to register for the event.

Todd Gleason: 22:53

Buy your books and bring them along, and Scott and Jonathan and Neil will be glad to sign them at the all day I got look Tuesday, March at the Beef House in Covington, Indiana. You have a good afternoon. I'm extension's Todd Gleeson.