Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market reported for the 219th day of February 2025. I'm Extension's Todd Gleason, Coming to you today from the Crop Management Conference taking place in Sycamore. That's in DeKalb County. We're at the Farm Bureau Building here. It is a beautiful facility.

Todd Gleason: 00:18

And if you've not ever been, it's worthwhile just coming inside to see the carved wood mural. It is magnificent. That's in Sycamore on Peace Road. Come by any business day to check that out. Now today, we'll talk about the commodity markets.

Todd Gleason: 00:35

Of course, we'll do that with Greg Johnson. He's a TGM. That's the elevator system owned by FS, and he's in Champaign County. And then we'll turn our attention to Drew Lerner at World Weather Incorporated in Kansas City, and we'll do all of that on this Wednesday edition of the closing market report from Illinois Public Media. I will also tell you to pick up your tickets for the all day outlook.

Todd Gleason: 00:58

That's Tuesday, March, not very far away. Just $40 a great event. More on that later as well as we make our way through this edition of the CMR. Todd Gleason services are made available to WIL by University of Illinois extension. Just as a reminder as we get started that the Beef House event is just a bit more than a week away.

Todd Gleason: 01:19

And if you've not signed up yet, you should do that now at willag.org. That's Tuesday, March at the Beef House in Covington, Indiana. And just as importantly, you'll need to hit the links at willag.org maybe for one of those books. We have three authors that will be on hand to sign their books, including Neil Dahlstrom, who's the author of Tractor Wars. That documentary from Iowa PBS also will show in the month of March on channel twelve.

Todd Gleason: 01:49

Back to the Futures is Scott Irwin's book and The Fault Lines of Farm Policy or Between Soil and Society by Jonathan Kompas. You can bring one or all of those books. All three of the authors will be there to sign the books. We hope that you will be there not only for that, but, of course, for the all day ag outlook. Well, March corn for the day settled at four ninety seven and a half, down four and a half.

Todd Gleason: 02:13

The May at $5.12 and a quarter, three and a half lower, and December at $4.76 and a half down a penny. March soybeans at $10.31 and 3 quarters for the day of the settlement price there. Six and three quarters lower. And the May at ten forty eight and a quarter, down seven and a quarter. November beans, ten fifty one and a quarter.

Todd Gleason: 02:31

Six and three quarters lower for the new crop. Bean meal futures down rather up 90¢. Bean oil, a dollar lower. And soft red winter wheat in the March at $5.92, down twelve and three quarters. The hard red, down 13 and a half at $6.13 and 3 quarters of a cent.

Todd Gleason: 02:48

Greg Johnson is now here. He's with TGM. That's totalgrainmarketing.com in Champaign County. It's the elevator owned by the FS System. Hi, Greg.

Todd Gleason: 02:57

Thanks for being with us.

Greg Johnson: 02:58

Good to be with you,

Todd Gleason: 02:59

Todd. So let's talk a little bit about the marketplace in a broader perspective. We have climbed, quite a distance, in both corn and soybeans, particularly in corn, and a very sharp grade going up upside. Can you tell me how how that affects your thinking as it's related to the rally.

Greg Johnson: 03:30

Yeah. We've had a nice dollar rally in the futures, and then you throw a $35.40 cent basis improvement since fall on top of that, and, the cash prices are significantly higher. And the farmers have done a very good of selling into that rally. Some obviously think they sold too soon, because we're at the highest price we've had in over a year for corn today. So, obviously, if you sold before today, it it wasn't at the high, and if you guys are kicking themselves.

Greg Johnson: 03:58

But, you know, you can't I I tell people you can't look backwards. You just have to say, can I make money at this price? And if I can, let's get it sold. And, so farmers are probably in that 80%, sold range on old crop corn and soybeans, and that has not translated over to new crop. However, probably still looking at 10%, sold on new crop corn and new crop beans.

Greg Johnson: 04:21

With the inverse in the market, the new crop prices are not quite as high as the old crop prices, so that's one reason. And the other thing is farmers really don't know what to expect for a yield on their new crop corn and beans yet, Whereas the old crop, they know what they've got in the bins. So it's a little bit easier to market, new crop corn and or old crop corn and beans, given that we know what we've got. And so farmers, like I say, have rewarded this dollar rally in corn, by getting up to 80% sold, and I think they're content now with the potentially positive news out there as far as, lateness in the serfina, double crop corn down in South America. The funds still continue to be big buyers of, corn on paper, and, a little bit of a whiff of inflation.

Greg Johnson: 05:08

All those things are a little bit supportive to commodities, and so it kinda feels like, farmers wanna wait and see, get closer to that March 31 planning intentions report before they really maybe throw in the towel and and sell a little bit more of that old crop corn that they've got left hanging on to.

Todd Gleason: 05:25

And in that same broader context, can you walk me through the changes that have happened that spurred this dollar rally for corn, the November updates from USDA, the final figures, how that changed, and even the export figures from this week, I suppose?

Greg Johnson: 05:41

Yeah. We we started, back in the summer with expectations of a 15,100,000,000 bushel corn crop and only demand of 14.7. That's completely flip flopped. Now the demand is up to 15.1 and the crop size is down to 14.7. So we've kinda taken a 800,000,000 bushel, reversal instead of a 2.2, two point three billion bushel projected carryout.

Greg Johnson: 06:07

We're now down into that 1.5, maybe even a little bit lower depending on what happens, over the next several months. So, the fundamentals have changed completely. We've tightened things up, but and, again, 1.5 is not that we're gonna run out of corn. It's a 10%, nine % stocks to use ratio, but that's certainly, tighter than where we were before. And that has the funds thinking that any hiccup to production, could, cause prices to go higher.

Greg Johnson: 06:36

Any, inflation, could help prices out. So there's a little bit more upside than downside, and the the next downside is either gonna be a trade war or the big acreage number on March 31. But until we see either one of those, it kinda feels like the funds, and traders in general, farmers in general, are content to hold on and play this from the long side here in the short run.

Todd Gleason: 06:59

You know, so the 10% is important to think about in timing and coming off of the highs, what all of that means, and where we stand as it relates to current price and what the long range price is. So the University of Illinois, our long range price for December futures about or spot month, I suppose, if you wanna call it that, is, what, $4.60. We're 40¢ above that in the March contract at the moment. So there does appear to be some premium, I think, built into the marketplace, but I'm not certain that's the case. What do you think?

Greg Johnson: 07:35

Oh, no. There there certainly is. We are in the process of trying to buy acres as well on the new crop. New crop corn is approaching $4.80, so that's 20¢ above that $4.60, price that the U of I is using. So, whether it's, you know, whether it's 40¢ in the old crop corn or 20¢ in the new crop corn, there is a premium in that market, as the the market is trying to incent farmers to make sure we get 94, 90 five million acres of corn planted versus 90 and a half million this past year.

Greg Johnson: 08:07

So until we get to March 31, you know, the the market, I think, is is trying to be, trying to incent farmers to con to make sure that they that we get those 94, 90 five million acres of corn planted.

Todd Gleason: 08:20

So the safrinha corn crop in Brazil, which is being put in the ground now as the harvest for soybeans is happening, particularly in Matagrosso, but there is safrinha crop grown in the southern part of that nation as well, is an important factor in this marketplace. How important is that crop along with the summertime weather in The United States? Because those sort of happen simultaneously, meaning the harvest of the corn crop being put in the ground now in Brazil and the pollination time frame for US crops?

Greg Johnson: 08:57

It's very important, in South America. They have a rainy season and a and a dry season. And for six months out of the year, their rainy season, they get about seven, seven and a half inches of rain per month in Mato Grosso, for example. And then once they turn to the dry season, come July, August, September, you know, they get more like an inch and a half, two inches of rain a month. And on those kind of soils down there, they need every bit of five, six inches of rain every month.

Greg Johnson: 09:26

So, the key for them, obviously, is to get the corn the beans harvested and get the corn planted in a timely fashion so that it can pollinate and fill during what is still considered a dry a rainy season. If it gets too far delayed, then they run the risk that they will be pollinating and filling during the dry season when it's hotter and drier. You know, every year is different, but but in general, they'd like to have the corn planted sooner rather than later. This year, they're two to three weeks behind normal, so that doesn't mean that, they're necessarily going to have a problem for sure, but it certainly raises the risk of, of, of some of that corn, getting, pollinated and filled during the drier, hotter part of the season. So that's what the trade is, gonna keep its eye on probably for the next three months.

Todd Gleason: 10:13

Tell me how you view the soybean marketplace fundamentally at this point.

Greg Johnson: 10:20

Well, it it I think South America, especially Brazil, is going to have a big enough crop, to offset the decline in Argentina. I was a little surprised that USDA did not raise the Brazilian estimate, in the monthly supply and demand report, but maybe they're just being cautious and they're gonna wait another month, and they can always raise it next month. But, according to private analysts, the crop in Brazil is very good. Probably a 70,000,000 metric tons, if not a little bit more. USDA is at $1.69.

Greg Johnson: 10:52

So if it's one seventy one, one 70 two, for example, that's 3,000,000 metric tons more. That would offset the 3,000,000 metric ton, maybe even 4,000,000 metric ton decline in Argentina. So, from a fundamental point of view, we have plenty of soybeans in South America, and then, you know, it'll all boil down then to how many acres we plant here. We won't need as many acres if the crop down in South America is as good as we think it is. So we can, we kinda get by with less bean acres, more corn acres up here in in The United States.

Todd Gleason: 11:25

How much of an impact does the the load, the pressure within the soybean market have on the corn market?

Greg Johnson: 11:33

That yeah. Does the corn price you know, does does the corn market raise soybeans up a little bit? You know, some people are arguing that beans are higher price than what they probably should be as a kind of as a result of the corn market, or does does the bean market, pull the, corn market down? Maybe a little bit of both and, you know, it kinda depends which week you're looking at. But right now, it certainly seems like corn is is pulling beans up.

Greg Johnson: 11:59

At some point in time, if, we get all the beans harvested down in South America and we get a halfway decent acreage number here in The United States on March 31, maybe then you could start to argue that the bean prices will pull the corn prices lower, but we haven't seen that yet. And I guess I don't anticipate that over the next four to five weeks.

Todd Gleason: 12:16

Hey. Thank you much. I appreciate you taking the time with me today.

Greg Johnson: 12:19

Thank you, Todd.

Todd Gleason: 12:20

You're so welcome. That's Greg Johnson. He's with TGM. That's Total Grain Marketing. Greg will join us, by the way, for our Beef House event, the all day outlook, Tuesday, March in Covington, Indiana.

Todd Gleason: 12:32

I hope you will too, but you need to register today if that's gonna be the case. Willag.org, w I l l a g 0 r g, or maybe you've seen an email if you're signed up for the FarmDoc emails about this upcoming event. The FarmDoc team will be there in Mass along with John Reed, who's the director of the Center for Digital Agriculture on on campus. We're gonna talk about autonomous agriculture and what the future looks like on your farm as it's related to your machinery. John, while he is currently the director of the Center for Digital Agriculture, spent a career at John Deere and has some real insight into what might be happening across the planet, particularly in the Midwest as it's related to things like See and Spray, and how that's the first of one of many innovations related to what John Deere likes to refer to as machine learning, sometimes called artificial intelligence.

Todd Gleason: 13:30

You wanna be there for that, for the farmdoc team, for our corn and soybean panels, it should be a fantastic day. It's better if you are there. The cost is just $40. You can sign up right now at willag.org, w I l l a g 0 r g, or on the FarmDoc Daily site, whichever way you sign up. Thank you.

Todd Gleason: 13:51

And we look forward to having you at the beef house in March. Drew Lerner now joins us from World Weather Incorporated in Kansas City. Hello, Drew. Thank you, for being with us. It's cold, but let's get to that in just a bit because it's South America we're worried about at the moment.

Todd Gleason: 14:20

Argentina, I think, has gotten some pretty good rainfalls that has helped to salvage a crop. I don't know about salvage, but keep a crop in much better condition. Can you tell me your assessment of what things look like on the ground there?

Drew Lerner: 14:34

Yeah. Absolutely. The central parts of Argentina had multiple waves of rain over the past ten days and really has moistened up the ground in a highly favorable manner. Now some of the early season corn and sun seed probably missed the boat. Reproduction and filling had already occurred and the last minute rain probably didn't change the bottom line tremendously, certainly not the yield, but I suppose there may be some quality improvement.

Drew Lerner: 15:07

But the bulk of the crop probably two thirds of the crop was planted later and is still in the reproductive process or getting ready to go through it. And this rain was just perfectly timed. And so we will be adding back a little bit of yield potential after a lot of talk about shrinking the crop. Now I don't want to make it sound like it's going to get back to full production potential. There is still about a half a season ahead of us here and we can still have some trouble.

Drew Lerner: 15:36

And in the next ten days, I do not expect to see the northern part of Argentina do well with rain at all. The north in this case would be probably the north half of Santa Fe and Northern Cordoba up into Chaco. And that region will probably be bone dry and get back into some hot weather as immediately actually. The heat will probably hold off until the weekend into next week, but it will get dry again in those areas fairly quickly. But from Southern Santa Fe and Southern Cordoba into the heart of Buenos Aires, we will see some rain return to those areas probably this weekend and definitely next week.

Drew Lerner: 16:19

So that part of Argentina will stay in pretty good shape. Now there's been a little bit of concern about Brazil too. We are playing well we aren't, but the producers down there are playing a mean game of catch up on harvesting the early soybeans and the planting of safrina corn. The cotton crop has been fully planted now. It's about two weeks behind on its completed planting progress, but the corn is still got a ways to go.

Drew Lerner: 16:52

I heard a rumor today that there's thinking maybe 60% of the corn had been planted. I think that may be a little high for Mono grassho, but nonetheless, Mono grassho needs to have another ten days of dry weather to really get the bulk of that crop in the ground. And many folks believe that if you don't have that crop planted by the February, you run a much higher risk of more yield. And it looks like they may be able to get it done as long as the American model or the GFS model is correct in the forecast. Now that model suggests that rain will be erratic over this next ten day period and not heavy or persistent enough to prevent field work from occurring.

Drew Lerner: 17:38

It just might be a little bit disruptive at times. The European model though today and yesterday too for that matter seems to think it's going to rain rather significantly starting next week across that region. Now I believe the European model is a little overboard on this, but if it verifies, there could be some notable delay in field progress after we get through probably Saturday of this week. And so that puts a lot of pressure on if that's going to verify. So we'll be watching real closely as we get into next week to see exactly what happens.

Drew Lerner: 18:14

But I really do believe the European model is overboard on the rain. And if that's correct, then they should be able to get a fair amount of that crop all planted before we get to the March 1. And, we'll see we'll see what happens. It does look like the rainfall in March may be a little light and erratic at times in Brazil. So that will be an interesting feature to watch also as we get closer to the end of the rainy season in in April.

Todd Gleason: 18:41

Yeah. This all, is important because the end of that rainy season sometime in mid April, we'll have to put enough moisture in the ground to maintain the crop the rest of the way through. And, really, it needs to be pretty close

Greg Johnson: 18:57

to

Todd Gleason: 18:57

the time that it it is ready to make the nick across that corn crop. So we'll watch that very closely. I know you've been paying attention. Do you have a judgment yet as to whether you think the rainy season will end early or late in Brazil?

Drew Lerner: 19:14

Yeah. I do not believe that it will end early, but I do think that the rain will be a little bit lighter than usual and that's not necessarily a death sentence. Brazil usually gets far more rain than they need. The key here is making sure that the temperatures do not get exceptionally warm and that rain even though it might be lighter than normal has to occur routinely enough as you said to keep the ground saturated or nearly saturated. And I think that we will probably get to the end of the growing season with a little less of the moisture abundance that we usually have, but I do not believe the monsoon will end early.

Drew Lerner: 19:56

It's just not going to be really well performing in those last weeks. And that does set the stage for maybe just a little bit more potential for stress to occur during reproduction because they may exhaust some of that subsoil moisture, as they move through reproduction that might make the latter part of that process a little bit more, stressful and threatening

Todd Gleason: 20:23

although it looks like it might be a little volatile over the next few weeks. Tell me about it.

Drew Lerner: 20:29

Absolutely. You know, it's already been crazy this year. This past weekend, it was in the 60s and 70s from the Southwestern U. S. Plains.

Drew Lerner: 20:39

Well, actually, Southwestern hardware and wheat areas into West Texas and a big part of the Deep South, all temperatures in the 70s and even some 80s. But boy, it is getting cold now. This morning, we saw negative and positive single digit readings in the Southwest part of hard red winter wheat country, including Southwest Kansas and Southeastern Colorado straight southward into the Texas Panhandle and Western Oklahoma. And those areas have no snow on the ground today. And after being warm last weekend, there's a little bit of concern about the overall condition of the crop there.

Drew Lerner: 21:14

Now we will stay pretty darn cold for the next twenty four to thirty six hours in that region. So the core of the plant may get pretty darn cold and the potential that we may see a little winter kill in that area or at least some damage done to the crop. So we'll keep a close eye on that. Of course, we won't be able to assess that until we get to spring and the green up. And if we can manage to get a lot of moisture into that region as we get out of the winter dormancy period, new tillers can be set and so it's not a done deal that the crop is lost.

Drew Lerner: 21:50

And I don't want to make it sound like there's widespread serious losses anyway, but I do think that they will be necessary not only in the Southwestern part of the plains, but all the way north into South Dakota. There's going to be a need for moisture this spring and temperatures that are going to be mild for a while, so that new tillers and better root systems can be developed, because I do think there's been some injury periodically over the course of the winter. Now we are going to see temperatures in the teens in the Delta probably tomorrow. I think it'll probably be Friday morning, but tomorrow morning, we'll see some twenties in that area. And, of course, they were in the eighties, this past weekend in some of that region with severe thunderstorms.

Drew Lerner: 22:32

So quite a wild ride, and there's a lot of stress for livestock. And even some of the winter crops in that region are are going to be a little bit vulnerable to some impact as well.

Todd Gleason: 22:42

Hey. Thank you much. We'll talk with you again next week.

Drew Lerner: 22:44

You bet. Have a good week, and stay warm.

Todd Gleason: 22:46

I'll try. That's Drew Lerner. He is with World Weather Incorporated in Kansas City. Joined us on this, Wednesday edition to the closing market report that comes to you from Illinois Public Media. Do visit our website.

Todd Gleason: 22:57

Get yourself registered for the AllDAG Outlook. The cost is just $40. The AllDAG Outlook is Tuesday, March at the Beef House in Covington, Indiana. I'm extension's Todd Gleason.