Feb 23 | Closing Market Report

Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois. This is the closing market report. It is the February 2026. I'm extension's Tug Gleason. Coming up, we'll talk about the commodity markets with Kurt Kimmel.

Todd Gleason: 00:13

We'll hear from Chad Hart at Iowa State University. He's an ag economist, and then we'll turn our attention to the weather forecast too. We'll do that with Mark Russo at Everstream Analytics on this Monday edition of the closing market report from Illinois Public Medium. But right now, you can sign up for the all day I got. Look, it's a week and a day away.

Todd Gleason: 00:34

That's next Tuesday at the Beef House in Covington, Indiana. We've got a great agenda for you. Don't wait. Do it right now. Get signed up.

Todd Gleason: 00:42

Make sure that you join us for the Beef House all day Ag Outlook. Todd Gleason services are made available to WILL by University of Illinois Extension. March corn for the day settled at $4.27 and a half unchanged. December at $4.64 and a half unchanged. And March beans down three and a quarter, eleven thirty four and a quarter.

Todd Gleason: 01:03

November, two and a quarter higher to $11.17 and a quarter. Soft red winter wheat down 4¢. It settled $5.69 and a half. The hard red at $5.60 down 12 and a quarter cents for the day. Turning our attention now to really what made the marketplace move, not so much, but there was a relatively wide range in the soybeans is Kurt Kimmel.

Todd Gleason: 01:26

He's with agmarket.net. In the overnight session, Kurt, soybeans were down, oh, 10 to 13¢. They did manage to have some upside during the day. Just off three, this all, I suppose, attributable to the uncertainty about tariffs and trade the president, has put into place along with the supreme court over the last several days. What do you hear from Chicago?

Curt Kimmel: 01:54

Giddy up. It's the market's climbing the wall of worry. But, no. We basically had concern in the overnight and early morning trade on tariff issues and the fallout from the tariff. You know, is China actually going to come through and pick up that 8,000,000 metric ton?

Curt Kimmel: 02:13

Is the 25,000,000 metric ton future demand good or not? Will the rest of the countries, you know, push the potential and decide to go to plan B. So there was a lot of uncertainty there but as we got into the day session some of this demand concerns might be a little bit more longer term. Soybean oil was quite a bit higher and kind of helped pull the market up out of the hole. Shipments helped on corn over 2,000,000 metric tons being shipped.

Curt Kimmel: 02:46

Beet shipments were a little skinny there, close to 669,000 tons and the wheat shipments, five thirty five. But the other supporting ideas maybe giving the market a little bit of support, through the day was Brazilian harvest estimated to be about 31%, complete and that's about 8% behind last year. Same thing on the corn harvest and corn planting, so that might have given the market a little bit of recovery. But the thing that to kind of keep an eye on is AI programs, app trading. We're seeing some participants come into the marketplace to give this market a little push up and down here whenever there's not a whole lot of volume from the producer or the commercial side of the equation.

Curt Kimmel: 03:41

Then lastly, one other thing that kinda, moved the market I feel was the uncertainty particularly in the indexes. The Dow as we speak now is down over 800 points and I'm not quite for sure we saw a little money come out of the equities into hard assets, Todd.

Todd Gleason: 04:00

On the AI side, we have gotten used to, I suppose, the the funds and then the black boxes and the algorithms and now the artificial intelligence. Being in the marketplace, it just adds volatility, so wider swings maybe in the day trade even if it's just around where the marketplace might be, on slow days would give some opportunities for producers to pick up, a few pennies here and there?

Curt Kimmel: 04:25

Well, I think so. I I I I think there's some optimism. You know, it's the fire horse, but I don't think we're going go sky high, but I think it's going to create volatility both up and down. I think you'd be one to be prepared in the market to take advantage of it. I think scale up selling programs in line here at AgMarket, we've done some hedging, we've put in some price floors but two, we've did some hedge to rise or straight futures and cover it with a call option.

Curt Kimmel: 05:01

That way if it moves on higher, you can participate. Waiting around, waiting for higher prices is a risk in through here. And it's kind of a gamble if we don't see some weather concerns or some demand come forward in here. But the volatility is definitely picking up. Option volatility is gonna pick up.

Curt Kimmel: 05:20

So if you are looking at doing some option strategies, I would probably look at doing it sooner, than later as we're gonna continue to see, market participates, come and go here.

Todd Gleason: 05:33

Turning your attention to the livestock side have been climbing back higher again, although they're off a bit today and filling a gap actually in the April live cattle. Can you talk to me about what you see there?

Curt Kimmel: 05:46

Yeah. Today was probably spread activity more than anything, selling the fats and buying the hog side of the equation. Cattle and feed reports continue to show, you know, a tight situation. Last Friday the report showed where we had 98% on feed, a year ago we had 99%, a place 95% compared to 101%, marketing is 87% versus 101% a year ago. So the beef complex continues to be tight here in The US.

Curt Kimmel: 06:22

The other thing, uncertainty too is tariffs. We do import a little bit of beef from around the world so that's gonna be a market maker here as we move forward too.

Todd Gleason: 06:34

Thanks much, and we'll talk with you again next week.

Curt Kimmel: 06:36

You bet. Take care, Todd.

Todd Gleason: 06:38

You too. Kurt Kimmel is with agmarket.net. In today's agricultural news, sign up for the FBA or Farmers Bridge Assistance payments open today. Farmers and sharecropper landowners are eligible. USDA would like them to use farmers.gov to submit applications, and it will be the FSA's preferred method going forward.

Todd Gleason: 07:05

However, as you'll hear in a moment, it's not necessary. The farmers.gov account will need to be linked to login.gov. Follow the instructions on the website. When it eventually asks you to take a photo with your phone, click the link in the text before you take the photo. By the way, it took me a moment this morning to realize this is what needed to happen.

Todd Gleason: 07:27

Otherwise, none of what we just discussed is necessary. You may still simply go to the FSA office, or you may have them send the prefilled out application to your email for signature. The deadline to sign up for FBA is April 17. Let's stay in Washington where reaction came swiftly after the Supreme Court's Friday six to three ruling striking down president Trump's tariffs, but many questions remain. Iowa senator Chuck Grassley expects trade deals, for instance, that are already in place to boost beef, pork, corn, soybeans, and ethanol to survive, but he's cautious.

Chuck Grassley: 08:04

I will bet you that a lot of these countries, however far they went in their agreement with the president, is willing to stay there as long as there's certainty of it. And, of course, they could back out, but I don't necessarily think they will because I think trade with The United States is very important to them.

Todd Gleason: 08:24

And then there's the question of refunding tariffs that add to the cost of farm inputs like fertilizer, seeds, pesticides, and equipment.

Chuck Grassley: 08:32

The supreme court was silent on whether refunds will need to be issued for the tariffs that president Trump has already levied. It also didn't address whether the president has authority under other provisions to impose tariffs.

Todd Gleason: 08:49

Trump said he was deeply disappointed by the ruling and announced a 10 global tariff under section one twenty two, then upped it to 15% and planned to launch several section three zero one investigations, all of which most of agriculture is familiar with. Grassley, for his part, does say congress needs to reassert its constitutional powers over tariffs. He does admit Trump's alternatives at the moment will likely survive or some of them and expects others to end up in court.

Chuck Grassley: 09:20

It's likely there will be additional tariff cases in the future, but members of congress have not questioned past presidents or this one on their use of, nineteen sixty three and '74 legislation.

Todd Gleason: 09:36

This preceded the 1977 law. The supreme court said only gave Trump power to regulate with quotas or embargoes, but not tariffs. The American Soybean Association urged the president to refrain from imposing tariffs on agricultural inputs using other authorities. And that's a look at today's agricultural news. Chad Hart now joins us, agricultural economist at Iowa State based on campus in Ames and with Extension.

Todd Gleason: 10:16

Thanks Chad for being with us. I wanna roll back to the Ag Outlook Forum and then talk about some of the numbers that were released. There were supply and demand tables there, for corn, soybeans, and wheat. Which did you find the most interest? And if you didn't find any of them as interest, I thought the acreage numbers were kind of fun to deal with.

Chad Hart: 10:41

Well, they were, and I had fun comparing them to where they put the numbers last fall. So if we think about it, the first numbers of what have come out for 2026 would have been in their long term projections, which they were released in October. And so I was looking to see how did they update them as well as we got here to February. And what you saw them do was, basically hold soybeans where they were at. They ended up shrinking corn a little more and and sort of did the same with wheat.

Chad Hart: 11:12

They just kinda kept it right there. But what was fascinating to me is, as you say, is looking at the acreage, what they you know, when you add it all together, they basically say, when you add the big three up, we're going to plant two twenty four million acres across the country, which is actually down over a million acres from last year. So that land is going to look for some other place to be. Where they pointed to was basically thinking that there's gonna be at least a little expansion in CRP. So we're gonna look to to move some out for conservation purposes, and and take a payment that way that will lock that land up at least for a few years as we think about the land base.

Todd Gleason: 11:55

Oh, interesting because I hadn't really thought about it in terms of this going to CRP, a million acres being off the market maybe for a decade or thereabouts, I suppose, depending on how they're locking it up. I did think, quite frankly, that, the corn and soybean numbers, which were 94,000,000 for corn and 85 for soybeans, were a million acres short. Did all of those acres for CRP? Do you think they're coming out of just those two crops?

Chad Hart: 12:25

Well, that's the deal. They seem to be coming out of corn because when I go back and look at, like, say, where USDA was this fall, they had us at 95,000,000 acres of corn and 85 on the soybean side. So that tells you they took that million out of corn and that million they've redirected in the CRP.

Todd Gleason: 12:42

Does that mean and I don't think you can make this truly a jump, but does that mean that 45z renewable diesel, bioprocessing for soybean oil is really in an expansion mode?

Chad Hart: 13:00

Well, I don't know if they really got that wrapped into these numbers here, but they're they're definitely, you know, one, I think they're playing on the traditional agronomic rotation of heavy corn in 2025, leading to, you know, more soybeans in 2026. But I also think in this case, they're probably banging on this idea of that, yeah, either guiding towards conservation, but also, know, realistically just saying, you know, 2025, we got out of the chute really in fine fashion. We didn't have much prevented planting in a certain sense. You could argue they're arguing about going back more to a normal pattern when it comes to planting, limiting the amount of acres in play as well. So I don't I don't think it's, necessarily an an economic play that they're making here as they adjust the acres.

Chad Hart: 13:52

It's more returning back towards historical patterns.

Todd Gleason: 13:56

Now when you take a closer look at the supply and demand tables for corn particularly, it does show a drop in the ending stocks from this fall to the twenty twenty seven fall at 1,830,000,000 bushels. Do you think that is in line?

Chad Hart: 14:14

Yeah, well, given where they're at, I mean, what they are showing here is that at 94,000,000 acres, you put it at a trend line yield and there's another place where they made some change. You know, they updated based upon what we saw out of the 2025 data. So they're looking at a trend line yield of 183, which was a bushel higher than what they had had last fall. Oh, that combination leads to about 15,750,000,000 bushels. So that would be over a billion bushels less than we created this past year.

Chad Hart: 14:43

So a fairly large drop in production. When you look down at the usage side, they basically say usage is going to hold fairly firm. They're looking at feed and residual at 6,000,000 6,000,000,000 bushels, ethanol at 5,600,000,000, and exports holding over three at 3,100,000,000. So by the time you add up all the usage, still using over 16,000,000,000. That's what helped cut into those ending stocks.

Chad Hart: 15:09

And so a lot of this has to be sort of you gotta chalk it up to they see shrinking area, which is gonna lead to smaller production, but they see usage continuing to remain strong through 2026 and the 2027.

Todd Gleason: 15:21

Usage, and ending stocks for soybeans, or at least the ending stocks, nearly the same for the 2627 crop year as it is for this year. That one based off of what?

Chad Hart: 15:33

In this case, you know, and this has been true for the last few years. We've been watching as production moves up or down usage just tends to follow right in line, keeping those ending stocks relatively stable over time. Here, they're saying in more acres leads to more production. So going up to about 4,450,000,000.00 on the production side, and they see usage moving up there as well with the gains being sort of equally divided between domestic crush as we continue to try to use more through biofuels. But they also see, you know, movement up in the exports, especially as The US China, you know, if that carries forward as it's been laid out, we should see some gains on the export side.

Todd Gleason: 16:18

For producers, bottom line, what are your concerns for new crop and their sales?

Chad Hart: 16:23

For new crop, it's still you're talking about some very large crops here. Even with the reduction on the corn side, we're still looking at what would be the second largest corn crop we've ever seen. Soybeans, we're looking at possibly the second largest soybean crop we've ever seen. So you're still talking some massive crops coming into this fall that can continue to keep that pressure on prices to be lower.

Todd Gleason: 16:47

Hey. Thanks much. I appreciate it, Chad.

Chad Hart: 16:49

Thank you, sir.

Todd Gleason: 16:49

You're welcome. That's Chad Hart. He's an agricultural economist based on campus at Iowa State University and with extension in Ames. I'd like you to join us in Indiana next Tuesday, not tomorrow, but the following one for the beef house event, the All Day Ag Outlook. This is our thirty sixth annual event.

Todd Gleason: 17:10

We have a great one planned for you. We really decided to dial back just to the basics this year because we know that's where you need to be. Crop insurance discussions will take place at the end of the day with Gary Schnicki and Bruce Sherick, also land values in that. We'll talk about the competition that's been coming and will continue to come, of course, from Brazil. Joanna Colucci will be there.

Todd Gleason: 17:32

Our own Joe Jansen will lay out the fundamentals of the marketplace, and we'll have our ag analyst from WILL, the brokers join us too. Should be a fantastic day. You need to be there. The cost is just $40 through Friday of this week. Make sure you get signed up.

Todd Gleason: 17:48

Don't wait. Do it right now so you can join us next Tuesday at the Beef House in Covington, Indiana. And that $40, it does include your midday noon hour Beef House meal along with the Beef House cinnamon roll and coffee in the morning. All the details are online at willag@.org or @ farm doc daily dot illinois dot e d u. Let's turn our attention to the global growing regions and the weather in them.

Todd Gleason: 18:23

Mark Russo is here. He's with Everestreem Analytics. Hello, Mark. Thanks for being with us today. I want to start on the East Coast.

Todd Gleason: 18:31

We don't usually pick this up, but there's just an historic set of snowfall out there. Can you tell me how historic that might be?

Mark Russo: 18:38

Yes, Todd. Yeah. Certainly one for the record books with this bomb cyclone nor'easter that's affected the region there. Well, today, and it started yesterday, ending here by later tonight. And overall, we've seen record snowfall totals, especially in areas of, like, Massachusetts, Rhode Island.

Mark Russo: 19:00

Areas have picked up over 30 inches of snow already, and more is still on the way as it's still snowing there. And in general, across that whole I 95 Corridor, again, a very densely populated and a high business operations and transportation area from Philly all the way up to Boston, the snow totals anywhere from, you know, 15 on the low side all the way up to over 30 inches on the on the high side. That and super strong winds as well, even some hurricane force winds in in around the Massachusetts area producing, you know, extremely extreme blizzard conditions there.

Todd Gleason: 19:38

And I'd like to build from that into the Southeast and back to the Midwest and parts of the Great Plains States. Wanting to know whether the Southeast, like the Midwest and parts of the grain plates, is in a very dry condition or not. Sometimes that has more of an impact early on in the season, particularly for the Midwest if it's really dry in the Southeast. I'm not sure that those are correlated, but where do we stand today, and what is that correlation?

Mark Russo: 20:08

Yeah. Over the past few weeks, we have seen increase in in precipitation across the Southeast, the Midwest, which has helped soil moisture levels, also improved river levels here. The one area that has seen a little bit of precipitation but is the driest overall, that's the the plains hard red winter wheat belt. And so not much of a correlation there with any kind of with the current storm system or any kind of regional teleconnections per se other than, you know, with this La Nina event, which is, you know, beginning to transition out of right now. But, you know, you tend to have more widespread dryness across The US, especially areas of the Central And Southern US.

Mark Russo: 21:00

So kinda seen that here when you look back over the past six months in general. But with with with this transition to El El Nino, then over time, that points towards a a very long term improvement.

Todd Gleason: 21:16

Now I believe most have said early in the month of February that the transition appeared that it was going to move very quickly from La Nina to El Nino. Is that still the case?

Mark Russo: 21:26

Some debate in that right now. I guess, you know, we we're starting to see this weakening. Likely, it will end here. La Nina will end over the over the the spring time frame. The biggest question mark right now is does El Nino develop before the start of summer here in June, or is it more so an item for late summer and fall?

Todd Gleason: 21:49

And does that make much of a difference in how much rainfall we get?

Mark Russo: 21:52

It could. Yeah. Certainly, a slower transition to to El Nino would lengthen this general drier bias. A quicker return to El Nino would increase more precipitation and also would start to at least limit some of the tropical development in areas of the Atlantic Basin since typically El Ninos tend to inhibit tropical development, especially in the western part of the basin.

Todd Gleason: 22:23

Any impact on second cropper safrinha corn in Brazil from this transition?

Mark Russo: 22:28

Not as much here for the current safrinha being planted, but longer term, thinking ahead more so towards the start of the growing season for soybeans and first crop corn next year in Argentina and Brazil, El Ninos tend to produce drier conditions across Central Brazil and kind of that Center West area into the eastern areas too. So, yeah, that is something to watch here for down the road this year.

Todd Gleason: 22:57

Thank you much.

Mark Russo: 22:58

You're welcome, Todd.

Todd Gleason: 22:59

Ask Mark Russo. He is with Everstream Analytics, joined us on this Monday edition of the closing market report. It came to you from Illinois Public Media. I'm extension's Todd Gleeson. Doctor.

Todd Gleason: 23:51

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