Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report for the 26th of February 2025. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson. He's from TGM. That's total grain marketing, the elevator that belongs to FS right here in Champaign County.

Todd Gleason: 00:18

Nick Paulson will be here to discuss net farm incomes for grain farms in Illinois for 2024 and 2025. They'll be just about the same, he believes, but only only if the government assistance continues to come from Washington, DC. And then as we wrap up our time together, we'll talk with Drew Lerner at World Weather Incorporated in Kansas City. And, of course, I'll ask you to pick up your tickets or at least register for the all day ag outlook at the Beef House in Covington, Indiana online at willag.org and at farmdocdaily.illinois.edu during this Wednesday edition of the closing market report from Illinois Public Medium celebrating forty years, ten thousand episodes, and some 30,000 interviews. Todd Gleason services are made available to WILL by University of Illinois Extension.

Todd Gleason: 01:12

March corn for the day settled at $4.78 and a quarter. It was a penny and a half lower. The May contracted $4.93 and a half, down 3 quarters of a cent for the day. December corn, new crop, $4.67, 3 lower. March beans at 10.24 and a half, down six and three quarters.

Todd Gleason: 01:29

The May at 10.41 and a quarter, seven and a half lower. And November soybeans at 10.45 and a half, down 5 and a half cents. Bean meal futures down 40¢. The bean oil, 47¢ lower. Wheat futures soft red down six and three quarters settled at $5.66.

Todd Gleason: 01:47

And the hard red at 5.85, also down six and three quarters of a cent. Live cattle futures a buck 10 lower. The feeders off 27 and a half cents, and lean hogs up a dollar 72 and a half, 4 hundred pounds. Greg Johnson from TGM, that's totalgrainmarketing.com, now joins us, the FS Elevator here in Champaign County. Hi, Greg.

Todd Gleason: 02:09

Thanks for being with us today.

Greg Johnson: 02:10

It's good to be with you, Todd.

Todd Gleason: 02:12

Well, let's, first talk about the upcoming ag form that takes place in, Washington, D. C. USDA will have some numbers, a supply and demand set of tables that come out for corn, soybeans and wheat. The trade appears they think USDA will put the corn acreage at 93,600,000 acres. By the way, the number USDA has in that supply and demand table at the moment from last fall is 92,000,000.

Todd Gleason: 02:45

What are you thinking about?

Greg Johnson: 02:47

You know, I I could see where it could be 93 and a half to 94 and a half, you know, quite a bit more than, the 90,600,000 acres that we planted last year. The one thing that keeps me thinking that it may not be quite as high as what, some of the private analysts are is that the input cost, especially for corn, have not really dropped near as much, as the price of corn has. So, with those higher input costs, we may not see 4,000,000 more three and a half to 4,000,000. We may only see 3,000,000 more acres of corn, compared to last year. So, you know and, again, this is just a an economic analysis.

Greg Johnson: 03:25

It's not based on an actual farmer survey, so we won't get that number till March 31. But, just based on the, analytics and the economics, it sure looks like corn, with the corn bean ratio, as tight as it's ever been, that certainly favors more corn acres. But like I say, with higher input cost, it may not be quite as high as what, some people are thinking otherwise would have happened.

Todd Gleason: 03:48

Yes. So it will be interesting to see what the agricultural economists, the number crunchers at USDA come up with, for the this week's figure as it's related both to acreage for corn and soybeans. As you suggest, the economic analysis with the high input prices may not point to the acreage that some of the trade is thinking about, particularly for corn. If they were to come in under 93, does that make a difference to the marketplace, or do they dismiss it thinking that the survey of farmers that comes out at the March will show a larger figure?

Greg Johnson: 04:27

I I think they'll put more weight, obviously, in the actual survey of farmers. So the, the number that we get tomorrow, probably will influence the market a little bit, but I really think, the trade will more than likely wait for the March 31 acreage number and, and, you know, and trade that with more weight, with more emphasis than what they will tomorrow.

Todd Gleason: 04:50

What's influencing the marketplace for corn, soybeans, and wheat today?

Greg Johnson: 04:54

Well, we've had a nice run up in corn. Ever since, fall harvest lows. We gained a dollar in corn, on February 18, which was just a little over a week ago. We made our highs when corn was a dollar. It's $5.00 4 on the board, and it was $4.00 4 on March futures, like I say, in the fall.

Greg Johnson: 05:14

So we had gained a dollar, and here this last week, we've lost 26¢ of that. So farmers have, been selling especially old crop corn and soybeans on this rally, and so that dollar rally has now turned into a 75¢ rally, which is still good. On the soybean side, beans were $9.50, back in December. We hit a high of $10.75, last two weeks ago. And so that was a dollar 25 rally in the soybeans, and we've given back 50¢ of that.

Greg Johnson: 05:45

So, the soybeans aren't, performing quite as well, but that makes sense because we've got, not as much demand for the soybeans as we do for the corn. The South American crop looks a little bit better with Argentina and Brazil getting some rains here in the last week or two, and always the, uncertainty as to what China, will do with, buying soybeans from The US versus buying from South America. So corn's hanging in there pretty well, beans not quite as well, and, wheat, didn't get much of a rally. We had a 75¢ rally from the January lows, and we've given back half of that over half of that already. We've given back 42¢.

Greg Johnson: 06:23

So corn is definitely the, the leader of the three commodities, followed by soybeans and then wheat.

Todd Gleason: 06:30

Are the fundamentals going to suggest to you that it can remain the leader?

Greg Johnson: 06:34

Yeah. You know, I think the farmer selling, has, you know, we were expecting a little bit of a sell off after that dollar rally. And and now that we've seen that, I think we go back to trading fundamentals, which is the crop in South America, the double crop corn, got planted three weeks late. That doesn't necessarily mean it's gonna be a lower yield, but it certainly raises the odds and and causes a little bit more uncertainty to the traders. You'd have to be very confident that they're gonna have a normal corn crop.

Greg Johnson: 07:02

And at this point, we don't know that. So I don't think anybody really wants to sell this market off, you know, dramatically until we have a better idea of how the South American double crop corn is going to fare. On the other hand, you know, we we've had had a nice rally, and, it's probably gonna take a number below 93,000,000 when, when that comes out, on March 31 to really, put some juice into this corn market. So until then, we I think we're pretty fairly priced.

Todd Gleason: 07:29

So we have a month and a half to figure that out. We'll also be in the beginning of the planting season here, mid April that is, for corn and soybeans across the Midwest. Farmers probably need to set themselves up so they're paying attention at that point as well as they're in the tractor cabs. What suggestions do you have for them?

Greg Johnson: 07:54

Well, I think it's a percentage type of thing. You know, we we typically want to sell, corn, in that April, May, June time frame. That's typically the best time of year seasonally to sell corn and soybeans. With all the uncertainty about trade and tariffs, we may wanna move that, time frame up a little bit and get a little bit more sold sooner rather than later. But, farmers have done a good job of selling old crop corn and beans.

Greg Johnson: 08:21

We think farmers are 80 to 90% sold on old crop corn and beans. But once again, we're a little, well, not just a little, we're way behind on new crop corn and bean sales. I would say we're probably in the 10% range on corn, maybe maybe as much as 20 on beans, 10 to 20% on beans. So we don't have much sold, and I know farmers don't like the price. $10 beans doesn't seem to, you know, generate much excitement, but it may be one of those years where we don't make a lot of money on soybeans.

Greg Johnson: 08:49

We just try to break even on soybeans and try to make our money in the corn market.

Todd Gleason: 08:53

It is difficult to think about the marketplace, particularly as it's related to what your income has been in the past. Last year, this year, probably looking at a fifth of the income that you might have had in 2022. That must be weighing on the minds of producers really heavily.

Greg Johnson: 09:11

It is. It is. That economic, assistant package that, was passed, we're we're certainly hopeful that that, doesn't get cut, that the farmers get that money because the marketplace is not going to, guarantee a profit this year, especially in soybeans. So, you know, farmers are gonna have to be, shrewd marketers. Hopefully, they saved up some money from the past and combine that with some government payments.

Greg Johnson: 09:35

Hopefully, that'll allow us to get through this year, and hopefully things will look a little bit better next year.

Todd Gleason: 09:40

Thank you much, Greg.

Greg Johnson: 09:41

Hey. Thank you, Todd.

Todd Gleason: 09:42

That's Greg Johnson. He is with TGM. Oh, and Greg will be looking forward to seeing you at the All Day Outlook next Tuesday.

Greg Johnson: 09:49

Looking forward to being there, Todd.

Todd Gleason: 09:50

Greg Johnson is with TGM. He'll join us for the All Day Ag Outlook next Tuesday at the Beef House in Covington, Indiana. I hope you will too, but you need to pre register. Do that right now at willag.org, w I l l a g 0 r g. Most farmers have completed their 2024 financial statements, and they include some financial assistance from the federal government that passed late in the year.

Todd Gleason: 10:19

It appears financial assistance will come in 2025, and I asked Nick Paulson, agricultural economist at the University of Illinois, to talk a little bit about an article that he and his colleagues from the FarmDoc team, Gary Schnitke and Carl Zulof, had written and posted earlier in the week to the FarmDoc Daily website as it's related to the net incomes and financial statements for 2025.

Nick Paulson: 10:45

So we were looking at net farm income and where we think that number on average across Illinois will, will settle at for the 2024 crop year. And then looking ahead to the upcoming, 2025 crop year. And sort of the the theme of the article is that, you know, recognizing that we came off record, average farm income number in 2022, for the state of Illinois. We, saw prices come down, and some of those production costs, have remained, sticky in in at at the high levels, that they that they reach because of those high incomes, in '21 and particularly in '22. And so what we're looking at for '24, and this even includes the economic assistance package of the $10,000,000,000 in payments that are expected to go out here in the next month to farmers that were passed in December.

Nick Paulson: 11:40

We're looking at farm income numbers in 2024 and then into 2025, kind of back down below definitely below the hundred thousand dollar mark, back down to sort of that maybe 30 to $50,000 range, which is what we experienced on average during the last most recent downturn, with lower prices and relatively high cost, which is 2014 through 2019.

Todd Gleason: 12:04

You take up in the article time and risk. I'm wondering if you can explain what that means as it's related to net farm income.

Nick Paulson: 12:12

Well, yeah. And that's the maybe a poor pun here, but the the million dollar question is, you know, how long will this last? You know, again, 2014 to 2019, that's, what, a five to six year period. Are are we in for a repeat of that? There's no reason to think it couldn't also last longer.

Nick Paulson: 12:30

Or, you know, we could have a a crop failure in The US in in 2025 or in in another major production area in the world, and and maybe we see prices rise, and we're talking about a totally different story, you know, six, eight months down the road. You know, the concern is that if prices stay where they're at, there needs to be, some cost adjustments made on the part of producers. You know, input costs, need to come down or adjustments need to be made to get those costs down. You know, land is another market that we follow. It's it's, you know, the most valuable input we have in agriculture.

Nick Paulson: 13:06

So looking at land values, stabilizing, plateauing, cash rents, stabilizing, hopefully declining from the farmer perspective. Those adjustments have to be made. You know, otherwise, we're just in a cycle where every year moving forward at these price levels and these cost levels, there will be calls for more of this ad hoc support like we saw passed at the end of of twenty twenty four. The challenge with that in in our eyes and and the most economists view is that, you know, while that aid is great in the short term and and you can't argue that it's very much needed and justified, it makes some of those cost adjustments that we need to make, even harder, because, you know, it it it kind of alleviates the income problem in the short term, but we have that longer term systemic issue still in place.

Todd Gleason: 13:55

Meaning that because there's money flowing from Washington DC to the farm, that money also flows back to the price of inputs, which remains sticky?

Nick Paulson: 14:03

Yeah. I mean, we're we're University of Illinois ag economist, so we we believe firmly that markets work. And, you know, if if if you're providing cash to farmers, they're gonna use that, and there's gonna be at least some effect of, continuing to support some of the input prices, farmland values, cash rent levels. And so, again, it's it's it's this balance of the need for it in the short term, but also the need for, cost adjustments given where prices are at, in the long term.

Todd Gleason: 14:35

How did you all summarize the article as you closed it out on the FarmDoc Daily website?

Nick Paulson: 14:40

I think probably one of the the big takeaways that actually at the end of the article is, you know, again, we talk about if things remain where they're at, and they can always change, like I said. But if, price levels remain where they're at, if our cost structure remains where they're currently at, You know, we're looking at another year like last year where there will probably be some pretty strong calls for additional support, through additional ad hoc aid to farmers, for the 2025 year. The the the potentially bigger challenge with that, you know, beyond some of the issues I talked about in in terms of how that might impact getting some of those costs down longer term, is that we're in, you know, a very budget driven environment at the federal level, and it might be harder, to to get payments like that, you know, approved through Congress, when it looks like, we're gonna be in a reconciliation, process from a budget perspective federally and looking for ways to cut spending, not add new spending.

Todd Gleason: 15:42

Those, of course, are issues that we can take up next week at the All Day I Got Look. You'll be there along with Gary Schnitke and Scott Erwin. We'll also have Jonathan Koppas on hand, Joe Janssen from the FarmDoc team, as well as Bruce Sherrick with us to take a look at land values. I'm really looking forward to having you all there, and thank you, by the way, for being part of the All Day I Gotlook, a FarmDoc conference.

Nick Paulson: 16:05

Yeah. No. Appreciate the invitation to be part of the program as usual. It's a it's a fun event. Looking forward to a good crowd and some good discussion next week at The Beef House.

Todd Gleason: 16:13

If you'd like to join us at The Beef House, certainly, you can do that by If you'd like to join us at the Beef House, certainly, you can

Greg Johnson: 16:20

do that by registering today at willag.org, w I l l a g

Todd Gleason: 16:20

0 r g, or on the FarmDoc site at farmdocdaily.illinois.edu. Preregistration closes on Friday. Be sure to get yourself registered before then. Don't wait. Do it right now at willag.org.

Todd Gleason: 16:35

The FarmDoc team will be there. The bevy of Will Ag analysts will join us along with John Reed, who is the director for the Center of Digital Agriculture. Oh, along with those analysts, Sue Martin will be flying in too. I hope you can join us. It should be a great day at the Beef House, but you need to register.

Todd Gleason: 16:54

Don't wait. Do it right now. The cost is just $40 through Friday. Let's turn our attention to the weather forecast now. Drew Lerner is here from World Weather Incorporated in Kansas City.

Todd Gleason: 17:16

Hello, Drew. We've got quite a bit to get through. Let's check-in on the South American crops to begin with. Where would you like to start there?

Drew Lerner: 17:24

Well, let's talk about, rain in Argentina. You know, this year started off and it it it was very dry in Argentina. A lot of people were concerned about it, and then somebody released the rumor that La Nina was coming, and it was never gonna rain in Argentina again. And La Nina never came, and finally, it showed up in December. And, it stayed dry into, into the first days of January, and then we started seeing some rain.

Drew Lerner: 17:51

And now we're turning the corner. La Nina is dying, and it looks like, appropriately, we're gonna see the weather change. And Argentina is gonna see one wave after the other of rain in the Southwest part of that country, and it's going to go from being pretty darn dry to being excessively wet. We have a good chance for flooding in Northeastern La Plampa and from Northwest to central parts of Buenos Aires. All of that occurs in this coming week.

Drew Lerner: 18:17

Probably looking at new rain totals that'll run from four to 10 inches. It'll probably be some local amounts of 10 to 12 inches possibly. And it rains almost every day, to some degree in the area from Southern Cordoba and San Luis through Buenos Aires. So field progress is gonna be on hold. The only crop that is currently at risk of being damaged is sun seed, which is currently maturing and being harvested.

Drew Lerner: 18:46

And, the quality of that crop is gonna be the pits by the time we're done with this week of weather. Now just to the north of that in Argentina's North, it is not gonna rain for ten or eleven days and, it's already dry up that way. It's also hot. Temperatures in upper 90s to 108 degrees and that is going to continue through the same rainy period and that the south endures. So very interesting Argentina weather right now.

Todd Gleason: 19:12

Does that make its way into the southern parts of Brazil?

Drew Lerner: 19:15

It does. Rio Grande do Sul will see some of that heat, and it actually looks as though rainfall is going to be below normal from Southern Paraguay and Rio Grande do Sul all the way through most of Center South Brazil into, the northeastern crop areas like Bahia and Minas Terez. So this does include some important safrinha crop country. Right now, I don't think it's a big deal for some of those southern areas like Capernaum and Sao Paulo and Autograca De Sol because they do have good moisture profiles right now. But a week to ten days from now, they may not be doing quite so well, and that may fuel a little market interest.

Drew Lerner: 19:58

Just to the north of that though in the most important safrinha corn production area in the country is Mato Grosso. And Mato Grosso is going to see a routine occurrence of rain and thunderstorm activity daily for the the next ten days, and that will slow down that late safrinha corn planting. I think they've they're going to have about 20 to 25% of that crop that's still gonna be needed to be planted in March. The longer they're delayed, the bigger the potential, decline and potential yields that may occur. So we're gonna be watching that real closely.

Todd Gleason: 20:32

In The United States, what are you watching here?

Drew Lerner: 20:35

You know, the biggest issue in The US, in my opinion, is still that longer range outlook for the plains and the Western Corn Belt. And we have two weather patterns that have been dominating since the beginning of the cool season, and neither one is promoting a lot of moisture for the middle of the country. The biggest difference between the two patterns is one's warm, which we have now, and the other one's cold, which we'll have in another, oh, ten days or so. And there's just not a lot of precipitation coming. So most of the hard red winter wheat country, the Northern Plains, and the Upper Midwest will continue to receive lighter than normal precipitation through most of the March.

Drew Lerner: 21:18

And, that disturbs me because we do have moisture deficits in those areas. And the closer we get to warm weather like the latter part of April and May, the higher the potential is we may have a little bit of dryness issue to deal with over the summer.

Greg Johnson: 21:33

How do

Todd Gleason: 21:33

you put that into context with the beginning of the planting season about a month and a half from now?

Drew Lerner: 21:39

Yeah. The the biggest interest there is going to be that we will probably have an opportunity for aggressive planting to occur just simply because we aren't going to have a surplus of moisture around. We should get a few timely rain events to take place, and those timely rains, should help to support field progress. But I don't think we're going to eliminate the moisture deficits down deeper in the ground, and so that is the reason for a close watch as we get, you know, into the the real warmer days of late spring and summer.

Todd Gleason: 22:10

K. Thank you much, Drew.

Drew Lerner: 22:11

Alright. Have a great day.

Todd Gleason: 22:12

You too. That's Drew Lerner. He's 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 Medium. It is public radio for the farming world where right now you can sign up.

Todd Gleason: 22:24

Don't wait. Do it today for the all day Ag Outlook. Tuesday, March, that's next Tuesday at the Beef House in Covington, Indiana. And while you're there, you'll see in the agenda a way to purchase, or links at least, for books, and the authors will be on hand, including Neil Dahlstrom. He wrote Tractor Wars.

Todd Gleason: 22:45

That's also a documentary that will air just after market to market on channel twelve this coming Sunday, March. You can pick the book up and have Neil sign it. Of course, Scott Irwin and Jonathan Coppas will be there to sign their books too, but you need to buy a copy and bring it with you, so please do that when you sign up for the All Day Ag Outlook at willag.0rg. I'm Illinois Extension's Todd Gleeson.