Todd Gleason: 00:00

From the land grant university in Urbana Champaign, Illinois, this is the closing market report for the 7th day of January 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets markets with Naomi Blohm. She's at totalfarmmarketing.com out of West Bend, Wisconsin. A bit later in the program, we'll discuss the weather forecast with Don Day at Day Weather out of Cheyenne, Wyoming.

Todd Gleason: 00:24

And along the way, we'll take up a broader perspective of the marketplace, particularly the fundamentals. We'll go through those with Ed Usset Agricultural Economist at University of Minnesota Extension, all on this Tuesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world.

Todd Gleason: 00:45

Todd

announcer: 00:46

Gleason services are made available to WILL by University of Illinois Extension. A March corn for today settled at $4.58 a quarter higher.

Todd Gleason: 00:54

The main contract at 465 3 quarters up a half cent in December. That's the new crop, 3 quarters of a cent higher at 4.46 at a quarter. March beans, $9.97 at a quarter down a half cent. The May a penny lower at $10.7 3 quarters of a cent. And new crop November down a penny and a half at $10.11 and a half cents.

Todd Gleason: 01:15

Bean meal futures at 303.5380 lower. The bean oil for the day finished at 41.25.92¢ higher on this Tuesday afternoon. Naomi Blum now joins us from totalfarmmarketing.com. She's in West Bend, Wisconsin. Happy New Year to you, Naomi, and thank you for joining the willag.org team as a regular Tuesday analyst from this point forward.

Todd Gleason: 01:41

Thank you very much. I appreciate that a lot.

Naomi Blohm: 01:44

Oh, you're welcome. I'm so excited. Thanks for having me, and I always try to bring my a game every Tuesday and and market information and just keep everyone as informed as I can.

Todd Gleason: 01:54

Yeah. So give me a little bit about your background. Where what what do you wanna tell us about your bio for the day?

Naomi Blohm: 02:01

Yeah. So I grew up in the Madison, Wisconsin area. And growing up, my dad and grandpa, we had a dry dog food business in our backyard. So it's okay. You can laugh.

Naomi Blohm: 02:10

It's kind of a weird thing. But we would buy our corn and soybeans for the dog food from my grandpa's 2 brothers, and they live just a quarter mile down the road. They farmed 2,000 acres and had a very small grain elevator. So growing up, I really got to see my great uncles farm and run a grain elevator. I got to see my dad and grandpa, you know, make dog food, you know, buy products as end users, turn it around, make this product, and then sell it in the in the Madison, Wisconsin area.

Naomi Blohm: 02:41

So it was pretty neat growing up to have that background, and I participated in 4 h and FSA. And then when I went to college, I went to the college at University of Wisconsin in Platteville and studied agriculture business and political science and, just really fell in love with commodity marketing and and how it affects families. So, like, in 1995, 96, my dad and grandpa as end users were not ready for the big price rally that corn and soybeans had from 95 into 96. So that was a game changer for our family's business, and it really opened my eyes to market volatility and just being prepared for those types of situations as end users and then on the flip side as farmers.

Todd Gleason: 03:26

Oh, thank you for that story. It's a wonderful background and and a great story as well. How's it serving you today as you think about policies and fundamentals and, I suppose, the upcoming USDA report as well?

Naomi Blohm: 03:39

Well, you know, just just I think with my background, I can thankfully say that the college that I went to did a great job of being able to present both sides of situations on the political side. So it really helped me to see both sides of situations, global situations, US situations to know how the world can work together and understanding, global history of countries and and bigger conflict. So that's been really advantageous, I think, to my career and I love being able to explain to farmers what it means when, you know, a certain region of the world is starting to erupt and have issues and what that could mean to policy, why it could affect the price then of grain in their backyard. And just every day, every week, every year, agriculture is so different. And just trying to take all of that news and bring it down into a tangible form to explain it to the farmer so they can then use that to make the best business decisions for their farm and for their family.

Todd Gleason: 04:45

Okay. So some of the things that are in place, and we'll talk about them in a moment, are the weather, in Argentina, potential tariffs under a new Trump administration incoming. But for the moment, it will be the Friday USDA reports that make a difference. What are you thinking about for them?

Naomi Blohm: 05:03

Yeah. So that absolutely is gonna be the cornerstone for this entire Q1 for, US agriculture, US ending stocks, and then, of course, the global situation. So we just started to get some pre report estimates out today. So we're gonna be getting, the quarterly stocks information on this report. We're gonna be getting production on this report, demand, and winter wheat, planted acres as well.

Naomi Blohm: 05:29

So there's so many different aspects of the report that can be tweaked. And kind of my thought here is that the USDA will make one of the commodities bullish. They'll make one of them bearish, one of them neutral, and the computers will initially have all the algorithms going and we'll see a knee jerk reaction with flare right after the report comes out. But then how we finish the day is the most important. So I I think the market's already pricing in friendly corn information.

Naomi Blohm: 05:56

We're we're expecting that we're gonna see the corn ending stocks come down for that old crop corn, which of course would be supportive and that's why the corn market's been inching higher. We're not expecting much out of, the report for soybeans. We'll probably see the USDA keep the South American production numbers unchanged and the big question mark will be what they do with, the crush numbers and how that affects ending stocks there and if they do any tweaking of yield on the soybeans. And the wheat might be the wild card. So we'll see what they say for acres and then keeping an eye on each major global producing region of wheat in the world and how that affects those ending stocks because as we've been talking for quite some time with wheat, global ending stocks are near 9 year lows.

Naomi Blohm: 06:43

So we wanna be keeping an eye, price direction there and supplies there because then ultimately that too will play into, I think, ultimately, the US and how the new administration will do business with Russia, Ukraine, and trying to get that war to end. So a lot of moving parts happening, and the month of January is gonna be wild for volatility.

Todd Gleason: 07:08

As you mentioned, some of the numbers are coming out. The average trade gas for soybeans at 51.6 bushels to the acre, That's down from the November 51.7 from USDA. For corn, the November number was 83.1 bushels to the acre dropping that to 182.7 and then the trade is suspecting that that will build into the ending stocks of 1,675,000,000 for corn down from the current 17.38, soybeans at 4.57, down from the current 470,000,000 bushels. Both of those would be lower numbers, of course, going into the Q1. Does that portend a higher market in your opinion in that case?

Naomi Blohm: 07:55

Well, that's the thing. We've been pricing in and expecting this friendly information. So now the market's becoming overbought on the corn side of things on daily charts. So almost we'll need to see something over the top for friendly news to justify a significant push higher from here. If the report comes in your expectations, we might see corn start to trade range bound just because it's a supportive number to have ending stocks be at 1.7 versus being at 2,000,000,000 bushels.

Naomi Blohm: 08:26

But then the trade is gonna start to factor in, okay, now that we know what the ending stocks are, we can start to plan ahead and think if we're planting 2 or 3 more 1000000 acres, what is that gonna be doing to ending stocks in the future? So, we'll trade that report for a good hour, I think. And then unless there's something really exciting on it, we might go back into weather watching for South America and then trying to outguess what the new administration is gonna be doing in their first 100 days.

Todd Gleason: 08:53

We'll talk with you again next Tuesday, and thank you so much. Looking forward to it.

Naomi Blohm: 08:57

Yeah. Thank you. I'm excited.

Todd Gleason: 08:58

Me too. That's Naomi Blohm. She is with totalfarmmarketing.com, and now our regular Tuesday analyst here at Illinois Public Media's wllag.org. We're now joined by Ed Usset at, University of Minnesota Extension. He's based there on campus at, the University of Minnesota.

Todd Gleason: 09:22

Thank you, Ed, for being with us. Hey. I've I've got a question for you about what you teach, and I wanna know how much policy you talk about with your Ag Econ classes and what difference that makes.

Ed Usset: 09:38

Todd, I'm by the way, happy New Year. I'll surprise you a little bit. I do very little policy, myself. I think that's a a a course all to itself. And to spend, you know, a small amount of time on it doesn't do it justice.

Ed Usset: 09:57

It's very important. Don't get me wrong. I'm not I'm not putting it aside because it's not important. But my efforts in my writings and my book and other places is how to get the most out of the market regardless of policy. Okay?

Ed Usset: 10:14

And policy, whatever the benefits or the or or the problems it brings to, grain production, that's on top of it. But my my my attitude, my focus is on getting the most out of the market.

Todd Gleason: 10:30

Interesting enough because I know that from your perspective then, fundamentals matter most. Mhmm. USDA, when it's looking into its, monthly reports, and particularly when it's doing the the NASS side Mhmm. Is looking at strictly numbers. And even the monthly reports use only the policies that are in place Mhmm.

Todd Gleason: 10:52

Generally speaking. So there are fundamentals already in place, not things that could happen. So I'm guess I'm gonna ask you what you think will change on Friday of this week as it's related to the USDA reports.

Ed Usset: 11:08

Well, it's the the year end was the, you know, they kinda put a final wrap on the 2024 crop year. You got a quarterly stocks report coming out. There's always potential when these reports come out for a big surprise one way or another. I'm not anticipating a big surprise. I think the sense is my sense is corn demand has been good, and, we made lower corn ending stocks again as we've done in the last, report.

Ed Usset: 11:41

And the corn market looks kind of positive. The problem is the problem is, Todd. The soybean market is one sick puppy, and it doesn't get any better. And the fundamentals continue to to weaken, not get stronger. And I don't know if the corn market can go up, with the soybean market pulling so hard on the other side.

Todd Gleason: 12:09

So it makes the weather forecast because the markets, work on speculation as opposed to fundamentals, it makes the weather forecast in South America, particularly for Argentina, really important at this time. Do you have enough experience with these dry conditions that would happen in June, July, for instance, across the planet, in the United States in particular, but in South America, and how quickly, they can dissipate? I mean, when when a when a weather forecast comes in that says, oh, we're gonna get rain, what happens?

Ed Usset: 12:45

Mhmm. Well, things can change in a hurry, obviously, if they turn that weather situation around. What is interesting to me about Argentina is there is a record there. They can really have a bad crop. I mean, I I and I'm searching my memory now.

Ed Usset: 13:05

2017 or maybe it was more recent than that. They took a big, big hit on soybean production. And I contrast that to Brazil, which doesn't you know, they they can have crop problems, but not as severe as that. So Argentina has a history there of, and the possibility of having a bad crop. Are we too early in calling it right now?

Ed Usset: 13:30

Yes. Yes. Absolutely. We

Todd Gleason: 13:32

are. So how important is that in your decision making process as it's related to the crop that producers have left, particularly soybeans, maybe even corn, and whether they and when they might make sales?

Ed Usset: 13:47

Well, I've been fairly, consistent for about 5 months now, telling people, look for rallies to sell. And corn is thankfully giving us one, something to think about. And by the way, there is a little more selling going on. Now I'm my focus is Southern Minnesota, Northern Iowa. And I have noticed that the basis has backed off in corn.

Ed Usset: 14:13

Not a lot. Maybe maybe 5 to 10¢ weaker than it was a month ago. Soybeans also backing off a little bit. And that to me indicates that grain is moving. It's the New Year.

Ed Usset: 14:28

It makes sense that some would move. Look for rallies to sell at but the sad part is, and your listeners know this time, soybeans won't give us anything to sell. It won't give us a rally.

Todd Gleason: 14:42

Well, I'm wondering a little bit about, what has happened at the New Year. So what what you're seeing is is that just the deliveries that were set up for January already that is pushing this price down, in your part of the world in southern Minnesota, or is it new sales, do you suppose?

Ed Usset: 15:04

I'm guessing there are some new sales in there. I'm guessing there are some new sale. New tax year, You know, we do. I'm looking at corn beds in Minnesota. We are, you know, 6 50, 60¢ off our lows of late August, early September.

Ed Usset: 15:25

So we may not have a, anything to write home about with 4 20 corn cash prices, but it beats the heck out of 3.60 or 355 as it was months ago. We do have a rally here, and we're I think we're seeing some new sales.

Todd Gleason: 15:45

December corn at 446, 4.50 thereabouts when we talked on Monday. Is that a sale too?

Ed Usset: 15:54

Not at this point in January. It doesn't do much for me at this point, but, you're asking the right question. It's only January 6th. It give me to the end of February, end of March, and certainly April, May. I'm gonna take a a a good hard deep breath and think about, things that need to be done anticipating a new crop, but not on January 6th.

Todd Gleason: 16:21

When when you think about that, how how do you think about that? Do you put it in context of, what crop insurance coverage you have and then and how much that you have uncovered, I suppose, in in corn? So if you're at 85%, do you sell 15% or something like that or aim for that kind of sale, or or do you not use crop insurance in that decision making process?

Ed Usset: 16:43

No. Crop insurance has gotta come into play, and, of course, that's set on the February market. February closes on December corn and November soybeans. So I just I I can't, I like the I like the modest rally we have, although as good as, old crop soybeans have been, you know, 50, 60¢ off their lows. When we look at, I think December 25 corn right now is about 4.47, somewhere in there.

Ed Usset: 17:17

That's about 20¢ off its life of contract loans. I've said in late day, it has not bounced like the nearby contracts have bounced. So I just I can't get excited about that, but I'm gonna do what I have to do when I get later in the spring and towards early summer.

Todd Gleason: 17:37

And it tells you that much of the trade is thinking that there may be a lot more corn acres in the United States. We'll get that first look when we find the survey at the end of the, March from farmers, which means that what happens on Friday of of this week will be important because that'll set the tone

Ed Usset: 17:55

Yes. It will.

Todd Gleason: 17:55

Probably all the way through then. Right?

Ed Usset: 17:57

Yes. It will. And, you know, if you you're also bringing up the right topic, because we're we're soon gonna turn our attention to planted acres in 2025. And I think absolutely we're gonna see more corn and, less soybeans. I'm not willing to put numbers on either, but, the soybean market and the prices we're seeing today, the opportunities for 2025, that's not gonna attract a lot of acres.

Todd Gleason: 18:27

Thank you much. I appreciate it.

Ed Usset: 18:29

Thank you.

Todd Gleason: 18:29

At us, it is an agricultural economist. He's with University of Minnesota Extension. You're listening to the closing market report. Our theme music is written, performed, produced in courtesy of Logan County, Illinois farmer, Tim Gleason. We're in our 41st year.

Todd Gleason: 18:46

That means we're celebrating 40 years on the air. More than 10,000 episodes of the closing market report. Let's turn our attention to one of those some 30,000 interviews we've done over the years today with Don Day. He's at Day Weather out of Cheyenne, Wyoming. Hi, Don.

Todd Gleason: 19:05

Thanks for being with us today.

Don Day: 19:07

Glad to be here.

Todd Gleason: 19:08

Let's begin in South America. A lot of concern about Argentina and La Nina. Sometimes it can be really painful in Argentina under La Nina. It hasn't been to this point really, for this growing season. However, things may or may not be changing.

Todd Gleason: 19:26

What can you tell me about it?

Don Day: 19:27

Well, we're we're we've reached the peak of La Nina's strength, and it's starting to show signs that, it's gonna begin to fade, that fade slowly. And we have seen a drier trend in Argentina and far southern areas of Brazil here over the last couple of weeks, and I think that is a trend that's gonna continue. It does look to be a bit drier, in Argentina, the southern growing areas of Brazil here over the next couple of weeks. Now I don't necessarily think that is a trend that's gonna keep going, but they are hitting a bit of a dry patch.

Todd Gleason: 19:57

Okay. So now turn your attention here to the United States. Tell me about conditions on the ground, particularly where you are and in the western part of the US after the winter storm over the weekend and what we can expect coming up.

Don Day: 20:10

Well, I tell you, it's been a very interesting pattern. Winter is really, getting going. And not only are we gonna have one major storm that we're just getting done with, but we're soon gonna see a significant, outbreak of winter weather from Northeast Texas across Oklahoma, Arkansas, then it's gonna go across some of the southern areas that received snow from the first storm. And, earlier today, we had freeze warnings along the Gulf Coast from Florida, then even into the desert Southwest all the way into Southern Arizona. So there's a lot of cold air pouring into the nation out of Canada.

Don Day: 20:49

And what's been interesting is is it hasn't been bitterly, bitterly cold air, but it's it's causing temperatures to be as much as 15, 20 degrees below average. And when you're that far below your 30 year normal for January, you're pretty cold. And so, we're gonna be looking at plenty of winter weather here for at least another week, and some of the areas that have seen the winter weather will continue to see that. And that goes from some very cold weather and snow from the northern plains, to, a lot of the Ohio Valley and the southern plains getting into that winter weather.

Todd Gleason: 21:24

Sometimes when there is cold weather, particularly in your part of the world, if it comes along with heavy snowfalls, that begins to be a really big problem for livestock, in, the northwestern corn belt as well into the western United States. Do you see any issues coming up for them?

Don Day: 21:43

Well, the northwest corn belt is an area that's certainly cold, but the heavier snow has avoided those areas. Now the exception would be far southern areas in Nebraska, then, of course, we've got widespread snow cover across a lot of Western Missouri and all of Kansas. This next round of heavier snow is gonna stay south of those areas. But, certainly, this is a stressful situation on livestock without a doubt with the cold and the wet, and it's gonna be persistently cold for most of the month of January, and I think well into February, in a large part of the country that's experiencing winter weather now. I think we're just getting winter started.

Todd Gleason: 22:22

Persistently cold. How far below normal temperatures, do you think?

Don Day: 22:28

Well, I I you know, when you when you look at if you average out all the days that are left in January, it's gonna be a good 10 to 15 degrees in some parts of those areas I just mentioned. So that's pretty far below average.

Todd Gleason: 22:39

Thank you much, Don. We'll talk with you again next week. Thank you. Don Dey is with day weather. He's in Cheyenne, Wyoming.

Todd Gleason: 22:46

Joined us on this Tuesday edition of the closing market report that came to you from Illinois Public Media. We're online on demand anytime you'd like to listen to us at willag.org. That's willag.org, or search us out in your favorite podcast applications, places like YouTube, Apple Music, Spotify, and all of the rest. I'm Extension's Todd Gleeson.