Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the Closing Market Report. It's the 15th day of January 2025. I'm University of Illinois Extension's, Todd Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson. He's at TGM.

Todd Gleason: 00:15

That's Total Grain Marketing, the FS elevator located in Champaign County. And we'll hear from Drew Lerner at World Weather Incorporated in Kansas City. Along the way, I'll remind you to visit our website. The address is willag.org, and to look into the calendar for tomorrow's kickoff event for 6 weeks worth of webinars 1 hour long on Thursday mornings at 11 AM CST from the FarmDoc team. This is the IFES series updated; the Illinois Farm Economic Summits.

Todd Gleason: 00:49

If you missed the series in December or you just want to be updated, this is a great place to get started. You can register using our calendar at willag.org. Look for the event on Thursdays at 11 o'clock. Open that up. Click on more details, and there'll be a hot link for the registration.

Todd Gleason: 01:07

Once you're registered, you're registered for all 6, and I look forward to seeing you on Thursdays at 11 AM for the webinars each week for the next 6 weeks.

announcer: 01:20

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

Todd Gleason: 01:25

March corn for the day settled at $4.78 3 quarters. It was up 4 and a quarter, the May 4.88, 3 and a quarter higher, and December futures at 4.57, a quarter of a cent higher. March soybeans, 10.42 3 quarters, down 4 3 quarters.

Todd Gleason: 01:40

The May off 6¢ at 10.55 and a quarter in November at $10.39 and a quarter, down 10 and a quarter cents. Bean meal futures down $3.80. The bean oil, a nickel higher, and soft red winter wheat, 3 quarters of a cent higher at 5.47. The hard red at 5.57 and a half, down 3 and a quarter. Greg Johnson now joins us from TGM.

Todd Gleason: 02:03

That's Total Grain Marketing, the FS owned elevator here in Champaign County. Hi, Greg. Hello to you. Thanks for being with us for the day.

Greg Johnson: 02:11

It's good to be with you, Todd.

Todd Gleason: 02:13

Let's talk a little bit about basis post USDA report. Some of our analysts on market to market, the Iowa Public Television program that aired on Sunday on WILL TV channel 12. Matt Bennett, in fact, was talking about base is probably going to break after these USDA reports showing a really, kind of friendly to bullish set of numbers because in his terms, I believe he said that they the id users were just bought up. So the question then for you is, was he right? Did basis break?

Greg Johnson: 02:54

It certainly did in the, in in both cases, but corn especially. We've had a, probably a 40 to 50¢ rally in futures prices here in the last couple of months. And, even since the, report came out, we've had a 20, 25¢ rally, so in futures. So that, rally has incentivized farmers to make sales, reward the rally, which, you know, we that's what we encourage them to do, and that's what they did. Unfortunately, you know, if everybody sells at the same time, the the market doesn't need all that corn in any one particular, week or month.

Greg Johnson: 03:31

So the the purpose of the market is to try to encourage, elevators and farmers to hang on to that corn, and the the easiest way to do that is think about in the fall. You know, farmers would love to haul it all in in the fall, but, we just don't need it all in the fall. So basis gets wide in the fall. As soon as harvest gets over, basis starts improving, and that's exactly what happened this year again, and that's kinda what happened last week with the run up in the prices. The basis dropped probably 5 to 10¢ in beans, and it dropped 10¢ in corn.

Greg Johnson: 04:02

And, you know, the the it's still a good price. It's still a good cash price, but, the market just couldn't digest all that corn coming onto the market at one time. So they, tried to disincent disincentivize farmers from and and commercials from moving all that corn at the same time. So, you know, now that, the market has, calmed down a little bit, you know, the basis has not snapped back yet, but over time, you know, I would anticipate the basis to get better, but, not right away. We we've gotta digest all the corn that has moved in the last 2 to 3 weeks.

Todd Gleason: 04:36

Moe will pat Matt on the back today because he did say he thought it would be about half of the gains in the futures as well in his commentary on market to market. We won't tell him that tomorrow. We'll just we'll just go with the day. We'll just go with the day. So now farmers were making sales to of corn.

Todd Gleason: 04:53

Did they sell soybeans as well? I take it they did.

Greg Johnson: 04:56

They did. Not not to the same extent that they did with corn, but they did sell beans. They I they I think they had done a better job of selling beans or a better job. They had sold a bigger percentage of beans prior to the report than they had on corn. And so, there there weren't as many beans to move because, they had already sold a bigger percentage of beans prior to report.

Greg Johnson: 05:15

But, no. They took advantage of that, both old crop and new crop. We're starting to see some sales made on beans. Cash price got over $10 at most places for both old crop and new crop beans, and and farmers are certainly rewarding that. It's not a great price, but with all the uncertainty over potential trade wars and tariffs and this, that, and the other, you know, $10 beans may not be a bad price when it's all said and done.

Todd Gleason: 05:40

Yeah. I was thinking that the $10 beans would be good, and that 50¢ move against me after that last just a little bit. I won't be this the only one in that boat, but I was making I was making a hedge on, hey. Is it gonna go higher? It says, yeah.

Todd Gleason: 05:54

Probably, it is, but, it it may very well go lower as well. So the question then is, how long can we stay at these levels, because of the change in the numbers from USDA? I mean, ending stocks were changed, for both corn and soybeans.

Greg Johnson: 06:13

Yes. And let's talk about corn first. I mean, taking the carry out from 1 point 7 to 1.5 is very supportive. I mean, we need 9 now we need 92 and a half 1000000 acres of corn to get get planted this spring here in the US so that we can have a with a normal yield to have a 15,200,000,000 bushel supply. That's about what the demand is.

Greg Johnson: 06:33

It's 15.2. So, the market needs to, make sure that we get 92 a half 1000000 acres or more planted, and, the best way to do that is to keep the price up. So I think the corn price will be very supportive, between now and the end of March, until we see how many acres of corn we actually do in fact plant. Now if we plant way more than that, 94, 95000000 acres, then obviously we'll be, you know, due for a, a sell off. But, between now and then, I think the market wants to make sure that we get at least 92 and a half 1000000 acres of corn planted.

Greg Johnson: 07:06

So, you know, that that USDA report, tightening up the the old crop carry up by 200,000,000 bushels certainly is gonna be supported for the couple of months.

Todd Gleason: 07:15

How much of a drag, if at all, will the price of soybeans be as the harvest comes in from Brazil?

Greg Johnson: 07:23

You know, it it it probably will drag a little bit, but then we need to talk about the funds. I mean, the funds have gone from short one and a half 1000000000 bushels of corn to long one and a half 1000000000 bushels of corn. That's with a b. That's 3 that's a 3000000 bushel, purchase. And, they've been short, soybeans that seems like forever until this week where they finally now are net long.

Greg Johnson: 07:46

Not a lot, but, they've got they've eliminated that short bean position. I don't know that they'll wanna go real long, but, at least, that selling pressure seems to be off the beam market at this point, now that they've gotten back to even. So, maybe a little bit of a drag, but not a not a big drag, I I would say.

Todd Gleason: 08:03

So I I wonder, 45 z not finished up. This is the piece, that has to do with GREET, sustainable aviation fuel, biofuels in general, that the Biden administration has left details to for the Trump administration. Do you suppose that the aviation industry, along with the oil industry, and agriculture all pushing together for the same thing might be the reason that the funds are interested in owning vegetable oils and soybeans?

Greg Johnson: 08:39

I I suppose there's that chance. I mean, that is a big unknown. I mean, I've I've read articles and listened to different people, and, you know, I think you hit it right on the head. I think the Biden administration is kicking the can down the road. And so now everybody's got their Ouija boards and crystal balls out trying to foresee what the Trump administration will do.

Greg Johnson: 08:58

And, I don't know that we have a clear picture of that, but, obviously, that could move the market, you know, one way or the other depending on the outcome of their decision.

Todd Gleason: 09:08

Yeah. I've used the Ouija board on that before, and it never works very well. So alright. So so when farmers call now, what are they most often asking you today?

Greg Johnson: 09:19

Well, you know, the trend is their friend. So with the markets going up, they wanna know how much higher it's gonna go. And, of course, we went through some of the friendly, supportive factors here between now and the end of March, but I also make sure to let them know that there's another question that to be asked. Not only is how high can part markets go, but how low can they go? If in fact we do have a trade war, if in fact Brazil, which grows about 3 times as many beans as Argentina, more than offsets the the the the short crop in Argentina, if that in fact turns out to be the case.

Greg Johnson: 09:52

You know, how you know, we we may have enough beans, more than enough beans. The carryout is tight, but it's not, it's not extremely tight, and, a a 170, a172,000,000 metric metric ton crop out of Brazil will go a long way towards increasing that world supply. So, you know, farmers are asking how high can markets go, especially if the funds continue to add to their length. And that's a good valid question, but, just keep in mind, another question to ask is how low can prices go to if if things, if things are kinda normal as far as Brazilian weather and then US weather this coming spring and summer.

Todd Gleason: 10:28

Are you giving them a good answer?

Greg Johnson: 10:31

I think I like to do percentages. I I don't like to put all my eggs in one basket. I think we've hit some targets that, we can make that first 20% sale on corn and on beans. I think we've gotten high enough that we can make 2 sales. We can be up to 40% sold on new crop beans, and then we can kinda wait and see.

Greg Johnson: 10:50

But I think the prices are good enough that we can reward this rally and and make our 1st sale of corn and make a second sale of beans.

Todd Gleason: 10:57

Interesting. You're not going to wait and see what the February number looks like for crop insurance?

Greg Johnson: 11:02

You know, I'm leading off a little bit, but I think I think we'll be okay. I mean, these are profitable levels. We haven't seen them in some time. We've had a dollar rally in the cash price of corn. We've had a dollar rally in the cash price of beans, and I just think that needs to be rewarded.

Todd Gleason: 11:15

Thank you very much. I appreciate it.

Greg Johnson: 11:17

Thanks, Todd.

Todd Gleason: 11:18

That's Greg Johnson. He is with TGN. That's Total Grain Marketing. He's at the elevator owned by FS here in Champaign County. Hey.

Todd Gleason: 11:30

Do visit our website at willag.org. That's willag.0 rg. There, you'll find daily information from our agricultural programming here at Illinois Public Media along with University of Illinois Extension, content from the ag economist, the crop scientist, and the animal scientist, a way to listen to older programs. That's under the podcast tab and the USDA reports, including some that are not USDA. The CONAB numbers are there as well.

Todd Gleason: 11:58

All at willag.org. In the calendar of events, you'll find tomorrow an IFAS series webinar. You can register for that. Joe Janssen kicks off 6 weeks with The Ag Economist, 1 hour long webinars. I'll be there for each of them going forward.

Todd Gleason: 12:14

The Ag Economist on Thursdays at 11 AM. Check out the webinars in our calendar of events at willag.org. Let's turn our attention now to the weather forecast. Drew Lerner is here from World Weather Incorporated in Kansas City. I woke up to frigid conditions here.

Todd Gleason: 12:43

I suppose you're cold in Kansas City too.

Drew Lerner: 12:46

Yeah. It's not, I'm getting used to it, though, by now. We've had a lot of that off and on here recently, and, the foot of snow we got a week or so ago was, icing on the cake.

Todd Gleason: 12:57

Indeed, it was. We'll talk more about weather here in the United States in a moment, but turn your attention to South America. We need to continue to discuss conditions in Argentina and the changing forecast there. What can you tell me about it?

Drew Lerner: 13:10

Yeah. Argentina is, about to have a little bit of a litmus test, at least in regard to model forecasting. The way it stands right now, there's supposed to begin to be some scattered showers and thunderstorms occurring across Argentina starting tonight and occurring into Saturday. This first round of precipitation is already being hotly debated in the model data where the, the American model is suggesting mostly a very light amount of precipitation, maybe couple tenths to, you know, maybe 6 or 7 tenths of an inch with a pocket to 1 inch amounts. The European model though, is of the opinion that we might see more generalized 4 tenths of an inch to an inch and a half rains with some local amounts to 2 inches.

Drew Lerner: 13:55

So I think that watching these two models and seeing which one verifies is gonna have a lot to say about the next rain event, which is expected about a week later towards the end of next week. It my personal opinion here is that we will see good distribution of rain in Argentina in this first event, and it will bring some relief. But it's not gonna be a soaking. There will be some pockets to get good rain, but most of the region's gonna be in need of much more moisture. We'll go back to dry and warm conditions, Sunday all the way through Thursday of next week, and then we'll bring on the next opportunity for rain.

Drew Lerner: 14:31

I do not see a lot of excessive heat though in the interim. I think it will be hot today and tomorrow, and then I think after that we'll be a little bit closer to normal for a while. And so the crop is still hanging in there by a thread. The topsoil moisture is very short now. Subsoil moisture is marginally adequate to short.

Drew Lerner: 14:50

It it this rain this weekend is gonna be really important, but the one that comes the following week will be all the more important. And lastly, on that subject matter, there is La Nina, of course, involved right now. And, according to the latest data from the Climate Prediction Center, rather aggressive Mad Julian oscillation event, developing now over Africa and moving to the Indian Ocean may allow for La Nina to intensify a little bit more as we get into, the last days of January and the 1st week to 10 days in February. And that could bring back a little more notable heat and dryness in Argentina and neighboring areas of Brazil and Uruguay and Paraguay. So that makes next week's rain all the more important.

Todd Gleason: 15:37

Gathering all that information together, analysts and traders will be weighing out the size of the crop in Argentina and whether it can be offset by the output from Brazil and the soybean crop particularly there. It's been in good condition. Will it stay in good condition?

Drew Lerner: 15:56

Yes. Brazil is going to have a tremendous crop the way I see it. The only issue that Brazil is faced with, of course, is whether or not they can get the crop harvested quickly enough for the safrinha corn. But from a soybean perspective, you know, we're a little dry right now in southern Brazil, not critically, but we're gonna get a little bit of rain out of this weekend event. We're gonna get some more next week.

Drew Lerner: 16:23

So the, the southern parts of Brazil are gonna stay in pretty darn good shape. And everybody else is gonna have plenty, if not a little excessive moisture. So there's no way that they're going to come up short because of dryness. And as long as they can get some drier weather to occur in the next couple of weeks, so that that, early crop can be harvested, I I really don't think there's gonna be much standing in the way. So I fully do expect big crops out of Brazil.

Todd Gleason: 16:49

Here in the United States, it's cold. What will the end of the month of January look like from your perspective?

Drew Lerner: 16:55

Yeah. You know, I mentioned that Madden Julian event coming out of Africa and moving to Indian Ocean. Typically, when we get a robust MJO event to come into the Indian Ocean, at this time of the year, it does tend to help build a ridge of high pressure over Eastern North America. And that, if it occurs, should bring back warmer than normal conditions for a big part of the Midwest, the, eastern part of Canada, maybe even the northeastern US. This would occur in the last days of January into the 1st part of February.

Drew Lerner: 17:30

It will be a temporary event. It would eventually be followed by a return of cold weather, but that would probably be late in the 1st week of February or even in the 2nd week. So a little reprieve coming up. And as far as precipitation is concerned, once that ridge and warmth gets reestablished in the eastern part of North America, when we get ready to transition from that pattern back into the cold, we'll probably have another large storm or 2 come through the heart of the the country, impacting probably the Midwest more than the plains. But, that's that's the big picture outlook right now.

Todd Gleason: 18:09

Speaking of the plains, cold weather, as you suggested, potentially. Do they have snow cover there that will protect some of that hard red winter wheat region?

Drew Lerner: 18:19

No. Believe it or not, Nebraska and most of western Kansas, eastern Colorado and points southward are snow free today. And, this morning's cold that you mentioned before really didn't impact those areas. But the cold surge coming up as we go forward into the weekend and early next week will impact those areas and sub zero temperatures are expected. So it it is important that we put snow on the ground.

Drew Lerner: 18:47

And the way it looks right now, Nebraska may come up empty handed. And that some of the wheat there might be a little bit more exposed and vulnerable to some, issues because of the cold. Kansas, western Kansas and eastern Colorado, though, will see some upslope snowfall as the cold comes in and that should be sufficient to protect the crops. Now one other statement needs to be made and that is we have been seeing periods of cold in these past few weeks. So the the wheat crop is really well hardened at this point and will most likely be able to handle temperatures a little bit below 0 even without the snow, I would think.

Drew Lerner: 19:27

It would have to be a real punishing event, I think, to really cause a permanent loss there. And at the moment, I I just don't see the core of the coldest air getting into that region regardless of whether there's snow or not.

Todd Gleason: 19:39

And finally, as the Trump administration comes into office, I'm reminded of the tariff situation that took place during the first administration and thinking we should probably check-in on what conditions, while it's wintertime, are like in China and what that might mean for their crops going forward. Are there concerns there?

Drew Lerner: 20:02

You know, there have not been many concerns up to this point in time. Their wheat and rapeseed were put into the ground in, really just about ideal conditions. And the crops turned dormant like they should normally, and really, everything's been fairly good up until now. But we have had a limited amount of moisture fall over the past few weeks. The southeastern half to 2 thirds of China has reported way below normal precipitation in the last 30 days.

Drew Lerner: 20:33

Now normal in some of the northern half of the country is not very much moisture, so it's a little misleading. So you have to be careful with that. But it has been warm enough to keep evaporation rates moderately significant in the south, and the ground is drying out. And much of the rapeseed area in the Yangtze River Basin has become a little too dry and even drier still in some of the early rice planting areas in the southern coastal provinces. Now La Nina tends to leave the southeastern one third of China in a below normal precipitation bias.

Drew Lerner: 21:11

So there's a fairly good chance that we're going to hear more about this over the next few weeks. For right now, there's not much interest in moisture for the rapeseed crop. But when we get into mid February and beyond, the demand for moisture will be on the rise. So it'll be very important that 30 days from now that we start seeing better rains fall in that region.

Todd Gleason: 21:32

I'm sure we will check-in with you then to see how that goes. Thanks much for the day's, forecast. I appreciate it.

Drew Lerner: 21:38

You betcha. Have a great day.

Todd Gleason: 21:40

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 comes to you from Illinois Public Medium. I will remind you to visit our website at willag.org and look into the calendar.

Todd Gleason: 21:53

If you click on tomorrow's FarmDoc webinar, IFES series online, that'll be in red there in the calendar. If you click on it, you'll find a link. And if you click on that again, it'll turn hot, to tomorrow's webinar series. In fact, the whole series of the Illinois Farm Economic Summits, tomorrow, Joe Janssen will start that series at 6 weeks in a row with a grain market outlook at 11 AM CST. I'll be there hosting that program.

Todd Gleason: 22:23

We'll talk with Joe about corn, soybeans, wheat, and price prospects for 2025. This will be updated information including, of course, all of the USDA reports that were released on Friday of last week and the crop production budgets that the team released this week. You wanna make sure that you get registered. Do it right now. You can do it online at farmdocdaily.illinois.edu or through our website at willag.org.

Todd Gleason: 22:50

Again, click the calendar event in red for tomorrow morning at 11 AM for the webinar, the IFES series online. If you click that again, you'll get that hot link there, and you'll be able to register for the whole of the series. I'm University of Illinois Extensions, Todd Gleason.