Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report for the 8th day of January 2025. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson from TGM. I'll recap yesterday's press conference with president-elect Donald Trump as it's related to agriculture and energy, and then we'll take up the weather forecast too with Drew Lerner at World Weather Incorporated in Kansas City. In Chicago today, nearby corn at 4.54, down 4¢ in the March.

Todd Gleason: 00:32

May futures 3 a quarter lower at 4.62 and a half. December new crop, down a penny and a quarter. March beans, 2 3 quarters lower at 9.94 and a half. In November, at 10:0:9, down 2 and a half. Greg Johnson now joins us from TGM.

Todd Gleason: 00:48

That's Total Grain Marketing, the elevator owned by FS right here in Champaign County. Hi, Greg. Thanks for being with us today.

Greg Johnson: 00:55

Good to be with you, Todd.

Todd Gleason: 00:57

Today, the market is quiet. I suppose that's just now awaiting the USDA reports due out at 11 o'clock on Friday morning. We can discuss those in a moment. But what are the fundamentals, been telling you about the marketplace domestically and on the global perspective since the winter break began?

Greg Johnson: 01:17

Well, fundamentally, the corn demand has been very good. Exports, were raised last month by USDA because the exports were ahead of pace. Ethanol usage is slightly ahead of pace. It's basically right on schedule. Feed demand has has been lackluster, but, of of those 3, 2 of the 3 demand components have been better than expected.

Greg Johnson: 01:38

So, the demand is good and, the the farmers are, selling a little bit, but, still waiting, as they tend to do this time of year. So, a a lack of movement from the farmers combined with, a little bit of demand, has really helped the corn market out, price wise. We've gone up, 50¢. March futures have gone up 50¢ since right before harvest. The basis has improved 40¢ since right before harvest.

Greg Johnson: 02:07

So we've had a cash increase in prices of 90¢ a bushel, and, you know, it it hasn't been anything, that you can point to any one particular week. It's just been 2¢ here and 3¢ there. But over time, we are 90¢ higher than, where we were right before harvest. And, looking back even farther, we started, 2024 at about 4.50. Cash corn went all the way down to 3.60, and now we're right back to 4.50 again to start 2025.

Greg Johnson: 02:37

So we're starting in the same place this year as we did last year. We'll see how we end up, but, but the fundamentals for corn are very good. And, personally, for soybeans, not not the same fundamentals. We've got a bigger supply. Exports are okay, but they need to be okay to to get rid of this bigger supply.

Greg Johnson: 02:55

And then, of course, Brazil planted more beans, and they're off to a phenomenal start. Argentina planted more beans. Now they're a little dry, but they don't even have all their beans planted. And, it's not the whole of Argentina that's dry. So, I mean, we could have some problems, but to me, it's still too early to say for Argentina.

Greg Johnson: 03:14

You know, they they just got implanted. So, you know, when the beans are small, they don't need a lot of rain. Brazil, on the other hand, January is the critical month. That's the seed setting and and, and or pod setting and pod filling month. And, they've been getting good rains for 90% of Brazil.

Greg Johnson: 03:30

The extreme southern part's a little dry, but, Brazil's off to a good shape, off to a good start. Argentina, too soon to say one way or the other. And, we've just got a tremendous, supply of beans, and so the fundamentals aren't the same for beans. We've lost 40¢ or I'm sorry. We've lost 90¢ on the futures market since the first of harvest.

Greg Johnson: 03:52

Basis has improved 45¢, but cash prices that would mean they're down 45¢ from where they were the 1st October. So different fundamentals on on the bean side than what than what we've seen on the corn.

Todd Gleason: 04:05

On the corn, do you suppose that once Friday arrives, USDA will change very much? And it may very well be the grain stocks that prompts WASDE, because they look at all those numbers before they put their supply and demand tables together. They'll do that when they're in lockup. They'll have an idea what was used in their first quarter. And I'm I'm just wondering because USDA NAS has already changed a couple of things and WASDE too, increasing demand exports, the World Ag Outlook Board that is, and ethanol usage, and then USDA NAS taking down already fairly substantially the yield per corn.

Todd Gleason: 04:51

I'm wondering whether all of that has already been built in and whether we'll see anything more this time around.

Greg Johnson: 04:58

Yeah. You you bring up some good points. A lot of this, is kind of baked in already. I think we know about this. But, nevertheless, it seems like this January report, tends to have some surprises.

Greg Johnson: 05:10

Look back over the last 10 years, and the average price, of of corn, change on the day of the report is 9¢, and beans change 19¢. Some years higher, some years lower. We've had as much as a 25¢ move in corn back in 2021. We've had as much as a, 46¢ move in in 2021. Last year, corn was down 11 on the day of the report, and beans were down 12 on the day of the report.

Greg Johnson: 05:38

But the couple years before that, we were higher. So, you know, it it seems like we probably will have something unexpected come out of one of the reports on Friday that, probably will move the market, one way or the other.

Todd Gleason: 05:51

If USDA comes in close to what the numbers the trade is expecting and those are lower, does that mean we go lower on Friday?

Greg Johnson: 06:01

I I think the funds if now I switched, you know, topics to the funds. The funds, since November 1st have, gone from a record short corn position to a moderate long position, and I think, they could still add to their lengthy, to their length, if we don't get a a negative report. So if it's just a little bit lower and people say, well, that's what we expected, that still may, allow the funds to buy a little bit more corn. The the funds were short, 1,200,000,000 bushels, billion with a b, back on November 1st, and now they're long, 1,200,000,000, and they have been as long as 1,500,000,000 in certain years. So they've still got some more length if if they want to get long.

Greg Johnson: 06:45

Now, you know, that's you know, a lot of that's already factored in, but, you know, I I still think the funds might have one more push up, and that might give farmers one more selling opportunity to get corn sold on a, you know, 10¢ rally, let's say, if that report is somewhat friendly on Friday.

Todd Gleason: 07:00

Do you think it's yield or demand that will really push that?

Greg Johnson: 07:04

The report may be yield. I I think we may drop a bushel, a bushel and a half in the corn, and that gets your carry out down to 1.6 something instead of 1.7 something. And a lot of the funds just trade the the raw numbers. And if you see a 1.6 carryout, that might trigger that, computer, that algorithm to say, let's buy some more corn. So if we do see that, like I say, that may be a selling opportunity because we've already rallied 90¢.

Greg Johnson: 07:30

If we can get another 10¢ out of corn, that's about, where we were last year. And, unless we have a weather problem, that may be a good place to start selling some corn.

Todd Gleason: 07:39

What expectation do you have for the changes in the soybean?

Greg Johnson: 07:41

I don't look for anything positive to come out of the report. We may see the, yield drop a half a bushel, but that still is gonna leave us with a carryout well over 400,000,000 bushels. It's probably gonna take a weather problem in either Argentina or Brazil to really get the bean market to move up. Otherwise, it just seems like $10 cash seems to be the limit on the upside. 9.50 has been holding on the downside.

Greg Johnson: 08:05

But at some point in time, if they, you know, we get another month off the calendar and the crop is still good down there, 9.50 may not hold. So hopefully, we'll get one more chance to sell $10 beans and, and take advantage of that.

Todd Gleason: 08:16

What dampening prospect does, the soybean number have on, the corn if it comes to fruition as you expect?

Greg Johnson: 08:25

Yeah. I mean, it's hard for one to rally over time. I you can do it in the short run. Corn can go higher while beans go lower for a week or 2. But over time, if beans really drop, down to the $9 level, let's say, by the next fall, it it's hard to imagine the corn's gonna stay, you know, at at the 4.50 level.

Greg Johnson: 08:42

So, you know, if it's if if beans go down, it probably will drag the corn down with it to some extent.

Todd Gleason: 08:48

They're not buying acres is what it amounts to.

Greg Johnson: 08:51

Well, yeah, that that's it. We don't want any more bean acres, and, if we get too many corn acres, then we'll have a surplus of corn. So we're we're walking that fine line between trying to get maybe 2,000,000 more acres of corn, but, we certainly don't want 3 or 4,000,000

Todd Gleason: 09:06

more acres of corn. Hey. Thank you much. Hey. Thank you, Todd.

Todd Gleason: 09:10

Greg Johnson is with TGM, that's total grain marketing, dot com.

Todd Gleason: 09:18

Let's take a look now at president-elect Donald Trump's news conference held at his home in Florida yesterday. The first item on the president's agenda was to introduce the founder and chairman of Properties. His name is Hussein Sajwani from the Middle East. His real estate development company has a decade long relationship with the Trump Organization.

Todd Gleason: 09:38

It has primarily developed luxury properties. And mister Trump brought Sajwani to the microphone 2 minutes into the press conference to talk about a $20,000,000,000 foreign investment his company expects to make in the United States.

Hussein Sajwani: 09:52

Thank you, mister president. It's been amazing news for me and my family when he was elected, November. We've been waiting 4 years to increase our investments in US to very large amount of money. We are a company operating in more than 20 countries around the world. We have delivered more than 45,000 luxury units and another 45,000 in the pipeline.

Hussein Sajwani: 10:19

In data center, we are in 10 countries around the world, in Asia, Europe, and Middle East, and we're very, very excited now with his leadership and his open strategy and policy to encourage businesses to come to US. For the last 4 years, we've been waiting for this moment, and we're planning to invest $20,000,000,000 and even more than that if the opportunity in the market allow us. But at the moment, we're planning $20,000,000,000 in data center, catering for the AI and cloud business for the hyperscalers.

Todd Gleason: 10:52

That $20,000,000,000, as the president-elect outlined, is expected to be invested in Texas, Arizona, Oklahoma, Louisiana, Ohio, Illinois, Michigan, and Indiana. The US Department of Energy notes data centers are one of the most energy intensive building types, consuming 10 to 50 times the energy per floor space of a typical commercial office building. Collectively, these spaces account for about 2% of total US electricity use today. And so far, you're still wondering what this has to do with agriculture. Well, a couple of things.

Todd Gleason: 11:28

1st, in order to build a data center, ground would need to be purchased. According to Boehler Engineering, it requires a minimum of 40 acres. It also needs access to electricity, water, and fiber optic lines. The need for data centers and cloud computing is expected to jump dramatically in the next 5 years. The president-elect wants to clear away environmental red tape involved in projects worth 1,000,000,000 of dollars.

Todd Gleason: 11:54

So here are some notes. Demac would be a foreign investment. Data centers take up at least 40 acres of land. The data centers require 10 to 15 times the electricity of a commercial office building. Now about the electricity and farmland, President Trump is clearly not a fan of windmills.

Todd Gleason: 12:13

This is well known, but he did a bit more than mention it yesterday.

Donald Trump: 12:17

And, you know, you can talk about windmills. They litter our country. They're littered all over our country like like dropping paper, like dropping garbage in a field, and that's what happens to them because in a period of time, they turn to garbage. Most expensive energy ever. They only work if you get subsidy.

Donald Trump: 12:37

The only people that want them are the people they're getting rich off windmills, getting massive subsidies from the US government, and it's the most expensive energy there is. It's, many, many times more expensive than clean natural gas. So we're gonna try and have a policy where no windmills are being built. You know, off the coast of New Jersey, they wanna build, like, 200 windmills. The people are going crazy.

Donald Trump: 13:00

Nobody wants them.

Todd Gleason: 13:01

Clearly, some farmland owners want them as is demonstrated by a short drive from many places in the Midwest. Clean energy is the driving force behind the windmills and the solar panels, and you could argue, as many do, even biofuels like ethanol and sustainable aviation fuel. Donald Trump, however, understands energy as drill baby drill or oil, coal, and natural gas, even as it's related to the price of groceries. He was asked near the end of the Mar a Lago press conference yesterday what the American people could expect from his second term administration when they go to the grocery store.

Donald Trump: 13:37

Energy is gonna bring down prices. We're gonna have a lot of energy, and energy is what brought it up. Energy and their bad spending is what brought it up, and energy is gonna bring it down. We're gonna have prices down. I I think you're gonna see some pretty drastic price, reductions.

Donald Trump: 13:52

As an example, food, bacon, ham, apples, everything has gone through the roof. It's one of the reasons I want.

Todd Gleason: 14:01

In perspective, if the price of food were to actually decrease, that would likely represent deflation and possibly lead to an economic depression. Neither of these would be good for the American farmer and might further exacerbate the current situation. What is happening at the moment, and presumably will continue to happen, is that food prices hold closer to steady with predictable annual increases, and should a president Trump's policies prove economically sound, lower inflation rates. Generally, it takes about 18 months for a new administration's economic policies to be reflected in the broader economic numbers. However, trade and international policies can be much more quickly reflected into individual industries.

Todd Gleason: 14:44

Agriculture and automotive would be two good examples. Let's turn our attention now to what's happening in the growing regions across the planet as it's referencing the climate and the weather. Drew Lerner is here from World Weather Incorporated in Kansas City. I take it you survived the big snowstorm, that we had over the weekend.

Drew Lerner: 15:17

Yeah. It's a great thing. You know, meteorologist dream come true. Rank number ranked number 3 on the record books for for my part of the world here in Kansas City. So, it was, we had a foot and, I'm my back still hurts.

Todd Gleason: 15:32

I bet. Did you have ice before that as well?

Drew Lerner: 15:35

A little bit. But, it wasn't too bad right in this metro area, not just to the south of town. There was a lot more ice than there was here in the metro area.

Todd Gleason: 15:44

Yeah. My son is in as I've talked to other meteorologists in Junction City, and they seem to be in the bull's eye. I don't recall exactly how much he had on the ground, but something more than 18 inches, I suppose. And they had freezing rain. That was all shut down there.

Drew Lerner: 15:59

Yes. Yes. In fact, I never before have I ever, experienced this, but they put out an alert, on everyone's cell phones that no one was to drive across any Kansas road. They had closed, I believe it was 80 to 90% of all roads in the state.

Todd Gleason: 16:17

Wow. That is a tough winter storm. They might be digging out. Some of those areas are probably still digging out at this point. Let's come back to the US, in just a bit, but turn your attention to, the crop at hand, particularly in Argentina.

Todd Gleason: 16:34

That soybean crop is still very early, a corn crop too, in its season. Can you give me an assessment of where you believe it is and what the weather is like?

Drew Lerner: 16:43

Yeah. You know, the majority of our Argentina has a really long growing season. They start planting early and they're still planting, although they're about done now. But, so the crop is in all kinds of different stages of development. So that's the very first thing that we have to know.

Drew Lerner: 16:59

There's some crop that has just recently been put in the ground and that crop is, of course, vulnerable to all kinds of problems because we are drying out Argentina. The top soil moisture is marginal at best at the moment with the exception of Cordoba, which is actually in pretty good shape. But with the the the limited top soil moisture, germination, emergence, and establishment is gonna be pretty bad, for some of these more recently planted crops. Now for the crops that were planted back in November, there's good subsoil moisture still across Argentina. We have not seen any excessive heat yet in the majority of the country.

Drew Lerner: 17:37

So the crops are really hanging in there pretty good. And when I step back and I look at the big picture as of today, we have seen no yield loss in Argentina. Now that may change a week from now because we are going to not only perpetuate the dryness for another 10 days at least, but we're also gonna turn the heat up and it's going to get real hot this weekend and especially next week. And we'll see temperatures in the nineties to slightly over 100 degrees every day and no rain. And, the no rain will be with us for 10 days there.

Drew Lerner: 18:13

And maybe a few showers will show up in days 11 through 15, but it will not be a soaking. So stress will be on the rise. Those, late planted crops are really gonna tough it out. The early planted crops are probably hanging in there for a big part of this period. But I think by the time we get to this point next week, we'll start pressuring some of those yields up downward a bit.

Todd Gleason: 18:36

Elsewhere in South America, I assume Brazilian farmers are saying, hey ho. We've got a crop ready to go. They've got a good one still in most of those areas. Yeah?

Drew Lerner: 18:46

Yeah. You know, I think they do. There's really it's really hard to come up with a a real issue there with the the crop and how it's performed up to this point. Now there is a little concern about, too much rain perhaps as we mature the crop and start harvesting it. That's the early soybeans we're talking about.

Drew Lerner: 19:08

You know the wettest bias here recently has been ministerece and goyas. Now goyas produces about 13% of the early soybeans. Ministerece is probably pretty pretty low number. So they don't really count too much. Montagrosso, which of course produces almost half of the safrinha corn and and most about 8 70 or 80 percent of the cotton.

Drew Lerner: 19:30

The, that particular state has not been that wet and, so the harvest looks pretty good as long as it can stay as it has been. Now, Amatogrosso is going to get wetter as we move forward through the next 2 weeks. And, there's a little bit of concern that that may slow down the maturation of harvest. And the reason why this is an issue not because of soybeans but because of the safrinha corn that comes in behind this. And that corn crop really needs to get planted as quickly as possible because they lost a little bit of time by the delayed seasonal rains at the beginning of the season this year.

Drew Lerner: 20:09

Now the weather's been so good in Brazil. I think they've really caught up a lot of that development. But, there is still concern that if we get too much moisture these next few weeks that we may be late getting that safrinha crop in the ground or later, and that could lead to a problem with reproduction during the dry season. So a close watch on that. I don't know that I would sit here today and tell you, oh, you know, that crop is in big trouble.

Drew Lerner: 20:35

The reason why I say that is number 1, I think that these Brazilians will be able to get a lot of that crop in the ground relatively quickly if they can just get a few days break. And then second of all, because we do have this weak La Nina like environment, I think there's a slight chance that we could prolong the shower activity in Brazil just enough that they might be able to, you know, make up, the difference on a week or 2 of late planting. So it's not a done deal and something we will be watching closely.

Todd Gleason: 21:11

And finally, here in the US, what do you see for the month of January? The rest of it that is, and any concerns at all?

Drew Lerner: 21:17

Yeah. You know, I think for the rest of the month, we're going to at least have 2 weeks of cold weather. Next week, we'll warm up just a little bit, and then we'll get a new surge of cold beginning to push back across the country in the 3rd week of the month. At the end of the month though we're seeing indications now that suggest a notable warming trend will take place across the Midwest and the Atlantic Coast States And we'll see above normal temperatures possibly evolving, once again. And that will also help to stimulate a little more active weather in a southwesterly flow pattern aloft that might bring moisture to the upper Midwest where it's been a bit dry to say the least for quite a bit of this season so far.

Drew Lerner: 22:00

So we're going to watch real closely again. That would be in the last days of January and maybe early February, when we heat up the eastern part of the country. Now that warmer weather isn't going to last for a long period of time. February does promise to bring more cold air into the central and eastern parts of the country eventually. So we will not, perpetuate the wet bias in the warm conditions for too long, but maybe long enough to make some improvement.

Drew Lerner: 22:27

In the nearer term we do have a winter storm that will occur, really Thursday into Saturday of this week from Texas into Virginia and the Mid Atlantic region. Going to be an impressive storm for the northern parts of the Delta. They could get anywhere from 2 to 6 inches of snow and local totals to 10 inches and maybe Memphis will be ground 0 for the heavier amounts possibly, and that could be a real problem for a place where snowplows are hard to find.

Todd Gleason: 22:55

Indeed. It could be. Thank you much. I appreciate it, Drew.

Drew Lerner: 22:58

You bet. Have a good day.

Todd Gleason: 22:59

You too. Drew Lerner is with World Weather Incorporated in Kansas City, helped us to wrap up this Wednesday edition of the Closing Market Report. From Illinois Public Media, I'm Todd Gleason.