Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the Closing Market report for the 10th day of January 2025. It's USDA report day. I'm Todd Gleason. Coming up, we'll talk about the commodity markets and the reports with Mike Zuzolo. He's at GlobalCommResearch.com out of Atchison, Kansas.

Todd Gleason: 00:18

Then we'll turn our attention to food and feeding programs in Los Angeles County as they are dealing with those catastrophic fires. I thought it might be interesting to hear how they go about flexing what is normally about a 900,000 people a month food and feeding program for the regional food bank to something much larger than that. And then as we close out our time together, we'll take a look at the weather forecast too. We'll do that with Eric Snodgrass of Conduit Ag here on this Friday edition of the Closing Market Report from Illinois Public Media. It is public radio for the farming world.

announcer: 00:55

Todd Gleason services are made available to WILL by University of Illinois Extension.

Todd Gleason: 01:00

March corn for the day settled at $4.70a half, up 14 and a half cents. The May at $4.79a half 15 higher, and new crop December at $4.50 a quarter, 3 and a quarter higher. March beans at 10.25 at a quarter, up 26 at a quarter, the May at 10.38. 27 at a quarter higher, and November at 10.31, up 17 and a quarter cents. Bean meal, a dollar lower at $298.30.

Todd Gleason: 01:26

The bean oil at $45.58, up $2.82. Wheat futures soft red down 3 and a quarter at $5.30 3 quarters in the March. The hard red at 5.51 and 3 quarters a penny and a half higher for the day. Live Kettle futures were up a buck 17 and a half, feeders a dollar 10 higher, and the lean hogs up 77 and a half cents. They finished at $82.55 for this Friday.

Todd Gleason: 01:52

Mike Zuzalo now joins us from globalcomresearch.com out of Atchison, Kansas. Wow. What a busy day. Usually, the January reports are busy, but this one had a whole lot going on in it. Some big changes.

Todd Gleason: 02:06

Can you start out by detailing some of those for me?

Mike Zuzolo: 02:09

Yeah. You know, the biggest changes, Todd, and they were sorely needed because of the fact that that we've continued to see the demand side of the equation really wobble here, whether it's the weekly export sales this morning having several marking year lows or whether it's China seeing 16 month lows in their currency, near record lows in their currency and record lows in their bond yields with their deflationary pressures increasing. We really needed some supply to go along with the Argentine weather. And we got that in the form of the USDA coming in and changing the US yield numbers in a big way. The corn taking it down 3.8 bushels to the acre.

Mike Zuzolo: 02:47

And so we're now dealing with a 1,540,000,000 bushel carryover, and we're dealing with stocks of 12 just a little over 12,000,000,000 bushels as of December 1, about a 100,000,000 less than last year at this time. So supply's tightening dramatically again for what I think a 3rd month in a row when you incorporate the world corn supply demand fundamentals. Bean saw yield decline about a 8th a tenth of a bushel. We'll call it a bushel just to be nice. But they didn't do enough that we took the ending stocks down to 380,000,000 bushels.

Mike Zuzolo: 03:21

And we did do enough to, take the ending stocks globally from 131.9 down to 128.3. So we did lose a substantial amount of ending stocks in the beans. And as I say, there, it was sorely needed because Mato Grosso is harvesting beans right now. And so I think we have with these numbers in the row crops, a reason to really come back next week and look at that South American weather, which I think Argentina, specifically in the Pampas regions, and this is not just me saying this, but some of the South American colleagues I have. I'm saying it.

Mike Zuzolo: 03:58

We could be close to a 2012 type scenario for Argentina in terms of big irreparable yield damage being done in the next 10 days. So we're in a bonafide weather market after Friday's report if you ask me.

Todd Gleason: 04:10

I thought it was interesting as we watch the trade through the day that we haven't really had a big noon swoon for a while, but, soybeans, they jumped there at 11 o'clock as the report came out, and they saw that big drop in yield in the United States. And then they lost about half of their gains for the day, but they picked them all up again as we closed out the day. I suppose that's gotta be a good sign for this marketplace.

Mike Zuzolo: 04:36

Yeah. I think so. But I would say that the problem with the markets as we go into the weekend is that it's it's driven more by weather and supply because the meal market is so sick looking. And, unfortunately, the wheat market is so sick looking. And and the winter wheat seedings, while not burdensome, they were above the average trade guess by a little under a 1000000 acres.

Mike Zuzolo: 04:57

It did not surprise me. I'd had a lot more clients going after more soft red and hard red wheat. I was at 34.3 all winter wheat, and UST came in at 34.1. But we're not getting anything in terms of supportive fundamentals in the meal and the wheat. And the most disturbing fact of the of the close on Friday for me was we're still near the 2024 lows in meal.

Mike Zuzolo: 05:20

It needs to be the leader of the upside for the soy complex. And and we've got a weak corn spread now that is the lowest since, I think, June of 2023. And we went through 80¢, and we're now in the sixties as far as where we're at on the soft red minus the corn, hitting 60¢, maybe closing below 60. And again, that takes you back to the June, July time period of 2023. Wheat is now a feed grain.

Mike Zuzolo: 05:46

Southeast Asia is treating it like that with more reports that feed wheat is being bought instead of feed corn.

Todd Gleason: 05:51

Yeah. So is that is that just a global perspective that it will be feed wheat or will there be feed wheat fed in the United States too?

Mike Zuzolo: 06:00

I think feed wheat will be fed in the United States if we come out of the winter with ample moisture levels. I don't think we're there yet, although I did see feed and residual for corn, I think, did drop by USDA. But as we know, that's kind of the the leaky hole in the bucket. It's it's the whatever's left over type number. So it's not really a representation of feed actual feed demand.

Mike Zuzolo: 06:20

It's more of a residual demand if you ask me.

Todd Gleason: 06:23

Can you turn your attention to the consumption numbers just a bit and run through those? Maybe start with any changes, and I don't think there were for soybeans to speak of residual outlet. You know, a a million or, what? Not not very much. No.

Mike Zuzolo: 06:41

A total demand stayed at about 4,350,000,000,000, Todd. The the the USDA kept the exports unchanged at 1.825. Exports unchanged at 1.825. We saw a little bit of decline in corn and wheat imports for China. The market was ready for that, I think.

Mike Zuzolo: 06:59

As far as the corn side of the equation goes on the demand and consumption side, we did see a pullback in in, as I say, the feed and residual. The ethanol number remained at 5,500,000,000. Exports were trimmed just a little bit like 25,000,000 bushels. Worldwide though, the total consumption went up. And so the world stocks to use ratios really took a pretty decent nosedive in the corn by seeing both reduced supply and increased demand.

Mike Zuzolo: 07:24

That was a surprise to me. I think this is where the corn market, if you would have asked me before the report, could it go by itself higher, after the report comes out? I would have said not without the market getting fed as far as the bull getting fed. We got the bull fed through the beans, but we also got the bull fed through the corn outright. So, we are now back within about a penny of the 2024 high now in lead month corner, that 473a half area.

Mike Zuzolo: 07:50

That's gonna be a big number for me next week.

Todd Gleason: 07:52

Yeah. Speaking of the global numbers, no changes for Argentina or Brazil as it relates to soybeans. On the global side, was there much of a change in either corn, soybeans, or wheat, in total?

Mike Zuzolo: 08:05

No. Not much, especially in the in the South American side of the equation. I went back and looked at the 23, 24 for Argentina and Brazil when it came to the corn, especially because I still think Brazil is a lot tighter in corn. And their prices are suggesting that the Brazilian corn price has been going steadily higher here the last month, month and a half or since the new year. So I feel like that overall, that's another key element to watch here is if we are near a 2012 drought situation on hitting the yield very hard for corn in Argentina and it being the big product exporter, number one meal exporter in the world, you would think corn and meal cash prices in South America really would really start to react to that.

Mike Zuzolo: 08:52

So that's a real big piece of the puzzle too.

Todd Gleason: 08:54

Thank you much. I appreciate it. You too, Todd. Thanks. Mhmm.

Todd Gleason: 08:58

That is Mike Zuzilow. He's with Global Comm Research dotcom out of Atchison, Kansas. Given the wildfires in Los Angeles, I thought it might be interesting to talk with somebody about food and feeding programs and how they respond during catastrophes. I called and spoke with David May. He's at the LA Regional Food Bank.

Todd Gleason: 09:23

I asked him first to tell me a little bit about how many meals or people they service in a given month.

Eric May: 09:30

The Los Angeles Regional Food Bank on average reaches about 900,000 people every month through our direct distribution programs and through our partner agency network. In order to distribute food locally in LA County, which is, of course, very large, we partner with about 600 other nonprofit organizations that might be churches or synagogues or mosques or or non religious organizations like YMCA and Boys and Girls Club, and those organizations help us to provide food to local communities, from our large distribution centers. We have one in South Los Angeles and then another one in the city of Industry.

Todd Gleason: 10:06

So now let's turn our attention to the issues of the day, the catastrophic events that are taking place in Los Angeles County at this point, the fires there. How does the food bank support the area, and its needs, which are different, relatively speaking, than your everyday food and feeding programs?

Eric May: 10:30

Right. So the I mean, one thing that is helpful in in situations like this, in a very unfortunate situations like this, is that, we do have the pipeline and the apparatus and everything set up to deploy food relatively quickly throughout LA County. So some of what that looks like from a disaster response perspective is increasing the inventory to our partner agencies that are in affected areas or serving people in affected areas. There's also oftentimes in emergencies like this, and we saw this early in the COVID 19 pandemic as well, opportunities for the mobile food pantry program that I described a minute ago, to set up in, disaster response locations and provide additional supplemental food assistance there. We're also just a resource.

Eric May: 11:17

For example, LAUSD is closed right now. The their website is linking to us for families who need groceries or supplemental food items to help, with with food assistance for their families. And then, of course, we remain very connected to government and local organizations, and we can provide food assistance in bulk where needed, you know, wherever, government or other nonprofit organizations need it. For example, we're getting a lot of water right now that we're trying to to deploy into, into the affected areas.

Todd Gleason: 11:47

How how do you flex from 900,000 a month to whatever this larger number must be at this point?

Eric May: 11:56

Yeah. I mean, we the way that we organize our operations is so that it is scalable. And what that means is, for example, before the pandemic, we're reaching about 300,000 people every month. At the worst part of the pandemic, it was about 1,100,000. Then it came down for a little while to about 800,000.

Eric May: 12:12

And then, before the end of 2024, it was already, you know, consistently in fact, really through most of 2024, was up to an average of 900,000 people every month. So we'll see what the numbers are after this emergency related to the Greater Los Angeles wildfires. But what we what we essentially do is scale more food resources through the pipelines that we have established and through the the distribution channels that we have established targeting. We just increase that volume, and then direct people to the food assistance as necessary. So we are we are able to scale.

Eric May: 12:46

It seems like, you know, it's it's it's devastating, the the experiences that many people are going through right now, but we're doing everything that we can to scale up food assistance into the community and make sure people are getting that nutritious food, water, and other household items.

Todd Gleason: 13:03

Whose shoulders do you tap on, at this point in time for help? I mean, do you tap on organizations, individuals? How do you provide the greater amount of food that's needed? Because you it it's either donated or or you have to purchase 1 of the 2. Yeah.

Eric May: 13:21

I mean, we're we're fortunate that, we live in a a generous community, and we're as as devastating as a lot of the images that we're seeing in the media are, we're we're so grateful to the people that have reached out to provide assistance. We we see support from, different local organizations, but in this case, also national organizations who wanna provide donated food items, who are providing financial support, people coming in with extra volunteer support. So those are all important ways that people, get involved. We, of course, prioritize, relationships with our corporate pawns sponsors and corporate partners as well as with local government officials and and, of course, the many individuals that reach out to us and wanna get involved and be part of that solution.

Todd Gleason: 14:07

What do you need most at this point?

Eric May: 14:09

Right now, at our primary distribution centers, we're collecting shelf stable items as far as, food donations. The the easiest way for people to get involved is to go on to the website, and make a financial contribution. That allows us to be flexible about how we deploy resources, and it allows us to be really nimble in our response. But for some people, financial donation isn't possible, so they wanna make a food donation or maybe they wanna come in and volunteer. All of those are great ways to to support the community at this time.

Eric May: 14:39

And, of course, there are many other nonprofit organizations doing work and addressing other parts of the emergency too. But if you're passionate about food assistance and and responding in that way, then volunteering and providing a financial or food donation to the food bank is is what's most helpful.

Todd Gleason: 14:54

Do they do that directly through the LA Food Bank, Regional Food Bank, or or can they do it through Feeding America or other places?

Eric May: 15:02

Wherever people feel kind of pulled, we're, you know, we're we're happy at the Los Angeles Regional Food Bank, and and this emergency really is affecting LA County right now. We're happy to have people, come to LA food bank dot org and find out about the many ways people can get involved, especially if you're talking about, volunteering. You know, we're gonna be able to coordinate that a lot more directly. But we also you can donate directly to our 600 partner agencies. So these are separate nonprofit organizations that are active in the community.

Eric May: 15:33

And if you're passionate, for example, about a specific part of LA County, then you may find a local partner agency of ours to to donate to. If you're passionate about helping everyone in LA County, then we direct people towards us. And then if you're interested in food insecurity at the national level, and, you know, it's a it's a an ongoing issue for many people whether there's an emergency or not. And then Feeding America is a great organization, and, of course, we're a partner food bank of Feeding America, and, we're we're, we're we're excited to have support in at any level in any way that it can come in.

Todd Gleason: 16:10

Thank you, David, and good luck with your endeavors to feed those in need there in LA County.

Eric May: 16:14

Yeah. Well, we really appreciate you helping to raise awareness too.

Todd Gleason: 16:17

You're welcome. David May is with the Los Angeles Regional Food Bank. I spoke with him earlier today about how the food bank manages to flex as there are catastrophes unfolding in its area. Now let's turn our attention to the weather forecast with Eric Snodgrass. He's a conduit ag.

Todd Gleason: 16:48

Hello, Eric. Thank you much for being with us. As you know, we just finished up an interview with the folks at the Los Angeles Regional Food Bank. They're worried about, I guess, the Santa Ana winds out there. I suppose that, you know, works into the story you've been trying to tell us about dry conditions.

Eric Snodgrass: 17:08

Right. So if you think back to the narrative we've carried for most of this fall and now winter, it's been the drought that's been in the sun belt that's extending across parts of the southwest. It gets all the way to Mexico, and that's been my story. It's there now. Could it creep north, invade more of the plains and corn belt by the time we get to summer?

Eric Snodgrass: 17:25

And that's been our biggest worry. Right? So that's why I've been saying, hey, watch the ocean temperatures. They're often a precursor to this, especially the Gulf of Alaska going cold. Watch La Nina and pay close attention to the Bermuda high.

Eric Snodgrass: 17:36

So it's all one bigger story. But what happened was last week for 2 and a half days, we saw high pressure build into the great basin. The flow comes over the Mojave desert and then goes over the San Gabriel mountains where it descends and compressionsally warms. And as it does, so the humidity levels dropped down to like 1 to 5% on 80 mile an hour winds. And we saw absolutely horrific, Santa Ana wind wildfires, in that area.

Eric Snodgrass: 18:00

And they continued even until today. And there's even worry that next week, early next week, maybe on Tuesday, we could see, a similar setup not quite as powerful and strong as the one we just had, but they're not done with this yet. And we still don't even have numbers, I think, on just how much property was destroyed. And clearly, we don't know how many people are have been killed or are still missing. So this was a pretty tragic event, and it is the same storm system, by the way, that stranded me yesterday in Texas because they shut down Dallas Fort Worth on snow.

Eric Snodgrass: 18:30

And now today, Atlanta is, almost shut down. Most of the cancellations are coming out of Atlanta because we have a snowstorm that was far enough to the south to impact, you know, the mid south, all the way over to the southeast after dumping on parts of Texas and Oklahoma. So, Todd, the whole point behind all of this is that may be indicative of where the remainder of this winter is gonna go, and that's gonna be important for next year. So I think, starting off there was a wise choice.

Todd Gleason: 18:54

Next year, you mean next crowing season

Eric Snodgrass: 18:58

in the United States. Right? So tell me about that. Well, so so here's the thing. We could have plenty of snow this winter here.

Eric Snodgrass: 19:06

In fact, as I'm talking to you right now on Friday afternoon, it's snowing in our hometown of Mohammed and all around this whole area. And we're actually getting more snow out of this. It feels like here at least than we got out of the system earlier this week. Now parts of central Illinois got hammered by the snowstorm earlier this week. Some places picking up 8 to 10 to 12 inches of snow, and, of course, that's the one that shut down Kansas City.

Eric Snodgrass: 19:27

Now here's my thing though, Todd. There is water in this soil but not or excuse me, in the snow, but not much. And I accidentally said soil in there because I'm thinking about how we still have trapped below the frost layer some drier soils down low. And I talked to some farmers back, earlier this week. I was with Arlen Suderman actually, and we were asking growers do any of you in Iowa and Illinois and Indiana have tile running?

Eric Snodgrass: 19:50

And now a lot of them were from northern Illinois and northern Indiana and all over Iowa, but the answer was no. And he showed them the soil moisture maps, and even though we've got moisture right now in this snow, it is not able to be used. And so this just comes back to again this narrative that there is increased risk, not guaranteed, but increased risk of drought issues in 2025. And if they're gonna start to spread from somewhere, it's gonna be out of the plains. Either the northern plains or the southern plains into the sun belt and into Mexico.

Eric Snodgrass: 20:21

And this La Nina, which is likely at its peak, is a kind of a part of that problem with making the atmosphere reluctant to retrieve moisture to hit some of those really dry areas. So, Todd, that's one big long breath, but me telling you that some of the narrative you and I have been talking about all these Fridays for the last couple of months continues to play out. And by the way, we've got more cold and snow on its way. But remember, it's snow that happens in March that is more critical to our soil moisture than snow that happens in January.

Todd Gleason: 20:50

Indeed. Can can you tell me what is it that changes this narrative for you? What what would be Yes.

Eric Snodgrass: 20:56

What happens? I so, yes. So so what needs to happen is that the jet stream needs to become like, I guess the right word or phrase is multidimensional. It's one dimensional right now, which means we've got one piece that's diving into Canada, ripping across the country with no strong, what we call, subtropical component. That will be the component that goes from Hawaii into Southern California and Mexico and then races off to Maine.

Eric Snodgrass: 21:24

So one of the reasons why California has been able to have such horrific wildfires and stay so dry in its southern half is there's no second dimension to the jet stream, which would be coming out of the south. El Nino years, we have that. And that's why last winter was wet. That's why last winter was mild. That's why last spring was so wet.

Eric Snodgrass: 21:43

We're now in a different regime. It's a La Nina. At times, the waters in the Gulf of Alaska have been cold. The momentum has been all over the place in the atmosphere. So despite us seeing snow here right now, it's dry.

Eric Snodgrass: 21:56

You know? So that that's, I think, the big implication we have. We just need to understand if this carries through the remainder of winter because I expect winter to stay active and cold. No doubt about that, I think. And then here term especially.

Eric Snodgrass: 22:06

But, question is, what good is it gonna be if we can't maintain the moisture into spring and summer of this year? This year, Todd, this growing season.

Todd Gleason: 22:14

30 seconds on Argentina. Will they get rain?

Eric Snodgrass: 22:17

So there have been some embedded thunderstorms in the interior of Argentina during this whole drought building episode. Episode. Most of the drought is in Santa Fe, Entre Rios, down to Buenos Aires. I don't know if that's a large enough area to offset some of the, you know, much bigger yields in Brazil, which it's extremely wet in the center west region. Here's the end point.

Eric Snodgrass: 22:35

If this continues past the 25th January, if we're still talking it past the 25th January, I think we start seeing some yield loss there.

Todd Gleason: 22:42

Thank you much.

Eric Snodgrass: 22:42

You bet.

Todd Gleason: 22:43

Eric Snodgrass is with Conduit Ag, joined us on this Friday edition of the closing market report. It comes to you from Illinois Public Media. It is public radio for the farming world online on demand at willag.org. Stay with us if you can. Many of these radio stations will carry our Commodity Week program.

Todd Gleason: 23:01

Otherwise, you'll hear it over the weekend or online now at willag.org. I'm Todd Gleason.