Todd Gleason: 00:00

From the Land Grant University at Urbana Champaign, Illinois, this is the closing market reported as the 16th day of January 2025 by my extension's Todd Gleeson. Coming up, we'll talk about the commodity markets with Matt Bennett. He's at agmarket.net. We'll hear from Nick Paulson. He and his colleagues from the farmdoc team, the agricultural economist at the U of I have updated the crop budgets for both 2024 and calendar year 2025.

Todd Gleason: 00:28

They both still show negatives, but things are getting better. You'll probably want to listen to that, and then as we wrap up our time together, we'll talk about the agricultural weather forecast too. We'll do that with Mike Tenure. He's at Tstorm Weather. That's tstorm.netonlinerighthereonthiseditionoftheclosingmarketreportcelebrating40 years, 10000 episodes, and more than 30,000 interviews.

announcer: 00:57

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

Todd Gleason: 01:02

March corn for the day settled at $4.74 and a half cents. That was down 4 and a quarter. The May at 4.83, 5 lower, and December at 4523 quarters, down 4 and a quarter cents a bushel. The March soybeans at $10.19 down 23 and 3 quarters, and they closed below a moving average. We'll talk about that in just a minute with Matt Bennett.

Todd Gleason: 01:24

May contract at 1031 and a half down 23 and three quarters as well. And November at $10.20 3 quarters down 18 and a half cents. The bean meal futures off $7.60. The bean oil at 4503, a dollar 24 lower. Wheat futures soft red down 9a half.

Todd Gleason: 01:42

At 537a half. The hard red at 5.48 a quarter down 9 and a quarter cents on this Thursday afternoon. This is the closing market report. Matt Bennett now joins us from agmarket dotnet. He's on the move.

Todd Gleason: 01:57

Again, kinda like the marketplace today. Matt, where are you?

Matt Bennett: 02:01

Tucson, Arizona, the pression, corn, trials, if you will, that Mayer rolled out. It's the short corn. And so, they have an event where they bring everyone in to kinda go over, you know, how their performance was and whatnot, and they want me to come out and give a a commodity outlook. So came out there for that, and then I'm going to Orlando. I'm gonna speak to the Total Acre guys here.

Matt Bennett: 02:24

Their conference starts this weekend. So, doing a little moving around this week.

Todd Gleason: 02:28

What'd you think of the short corn?

Matt Bennett: 02:30

You know, I haven't tried it actually. I just spoke there, but I know that the growers that had it really like it. I think their primary region is maybe just a little bit north of me. It'd probably be Champaign in north in Illinois, but their secondary region where they're still working to try to fine tune it, you know, we could try some of it here one of these days. But I know there's a lot of it planted in, Northern Illinois, Iowa, you know, up into the Dakotas, Minnesota.

Todd Gleason: 02:56

Corn finished the day lower. Can you tell me about what's been happening in the marketplace?

Matt Bennett: 03:01

Yeah. I mean, clearly, we've had a lot of buying since last Friday. There's no question. The funds have been very active. A lot of it had to do, of course, with the fact that the balance sheet was tightened up quite a bit.

Matt Bennett: 03:12

But clearly as well, Argentine weather was factoring in. So Argentina, Southern Brazil, those two areas have really been dry and on the warmer bias. And so what we saw this morning, you know, or overnight, you know, is that the the forecast changed a little bit. So they've had rains here and there, But the bottom line is is that if they get more normalized rains, Todd, given especially the global soybean balance sheet, people understand. It's gonna be awfully tough road to hoe to keep a soybean rally alive, first of all.

Matt Bennett: 03:45

You know? And second of all, that'll certainly spill over to corn. And so it's been a struggle here, as far as today's concern. That doesn't mean that the forecast can't change and we can, get going again, but, it looks to me like we might violate some technical support, you know, as far as beans are concerned. The other thing is these corn pushed up on that 200 day, and it just doesn't look like it wants to get through it for now.

Todd Gleason: 04:08

Yeah. And the 200 day has been an issue for a long time.

Matt Bennett: 04:12

Oh, absolutely. You know, as far as, front month futures, you know, March, you know, there's 5 days, I believe, before we finally broke through it about, what, 10 sessions ago, but there's 5 days all the way back to October of 23 where we at least touched it is always is all we had seen. So clearly a downtrending market over the course of time. And my opinion on this corn market, of course, is right now, it's just kinda tough. You've got tightening fundamentals on the world side of things, but big acres discussed.

Matt Bennett: 04:41

You know? You gotta assume the Brazilian grower's gonna throw everything at that crop, especially with the price coming up somewhat. So I'm a little bit worried that, the rally might not be near as strong as what people wanna see. I understand, that maybe everyone can't be profitable right here, but they're a heck of a lot better shape than where they were at before.

Todd Gleason: 04:59

If the harvest goes well in the center west for soybeans and quickly, I suppose, will there be more corn acres than the expectation is at the moment?

Matt Bennett: 05:08

I don't know that they'll have more corn acres, but you would certainly think that possibility exists. With corn prices coming up, it begs the reason that they would come in and not only plant a few more acres, but, like I said, throw everything they can to try to grow this crop. Now if they get it in the ground early as we've discussed before, that gets them to where they can get the pollination and then the grain fill before that dry season hits most of the time. And if that's the case, they can have a pretty darn big corn crop. But, yeah, you're right.

Matt Bennett: 05:41

I mean, they've actually been wet in center west. And so if they end up having issues as far as getting that crop out of the ground and they push that planting back just a little bit, that could also be a supportive factor for corn. So we'll just have to kinda wait and see what the weather does.

Todd Gleason: 05:55

On that note, what are you hearing really about the weather forecast, particularly for Argentina as related to the soybean growing areas? Is it just a little rain? Is there is it that rain came into the forecast? And how does a combination of that and I suppose maybe the funds stop buying today, building to a marketplace that moved sharply lower.

Matt Bennett: 06:18

Yeah. I mean, a couple of things come to mind. Of course, we know whenever we look at Argentina, soybean meal is the first thing that comes to mind. Soybean meal really took it on the chin today. You know, we've heard that offers out there as far as the export market, have have not been met with a whole lot of enthusiasm.

Matt Bennett: 06:34

Even though, you know, some of these areas for the US are actually cheaper, than Argentine meal, I don't know that they're so selling a whole lot of meal either. So, I think a lot of that has to do with what it looks like, is gonna be a little bit wetter type pattern moving forward. Now these things change just like in the US every 6 hours, so, you know, I wouldn't get too hung up on it. But I would say normalized rainfall, Todd, for Southern Brazil and and Argentina, in my opinion, is gonna really make it hard to see any sort of rally effort continue. So, moving forward, we're gonna be heavily dependent upon that.

Matt Bennett: 07:13

The thing is is that, yeah, I mean, we took some stocks out for the US. The world stocks, a little bit, we took out. But overall, you know, you're still taking world stocks up almost 30% over this 2 year period, and that's that's a lot to digest.

Todd Gleason: 07:28

You mentioned early in our conversation the technicals were violated particularly in the soybeans. They did settle down 23 3 quarters. At 10 19, that was below a moving average. How bad might that be on the marketplace?

Matt Bennett: 07:42

Yeah. The problem, of course, is that if it it appears that this market's going to have failed, they've been able to get enough follow through buying, to go on and build a base above the 100 day there around 10/20. You know, there could be some people kinda pile on. I mean, those moving averages are certainly looked at closely by your technical traders. And so we know that the fundamental situation without a weather story is anything but friendly.

Matt Bennett: 08:06

So, if the technical start to work against us a little bit, you know, you gotta be a little bit concerned. The funds, which you've mentioned before, you know, might go ahead and stop the trend of buying soybeans. If that happens, you'd be a little concerned about price action for sure.

Todd Gleason: 08:20

Any final word from you for the day?

Matt Bennett: 08:22

No. I just think that, we've had some really good opportunities in here. I think that there's the market's not completely, dead just yet, but still, I think these prices are a lot better than what we experienced the last several weeks. So, you know, taking a look at them, seeing how they work for your operations, probably something we all need to do.

Todd Gleason: 08:38

Thank you much.

Matt Bennett: 08:39

Absolutely.

Todd Gleason: 08:40

Matt Bennett is with agmarket.net. You're listening to the closing market report on this Thursday afternoon. Our theme music is written, performed, produced in courtesy of Logan County, Illinois farmer, Tim Gleason. We're now joined by Nick Paulson. He's an agricultural economist, a member of the FarmDoc team on the Urbana Champaign campus of the University of Illinois and has penned an article along with his colleagues, including Carl Zuloff, Brad Swilling, and Carrie Schnicki to the FarmDoc Daily website.

Todd Gleason: 09:19

You can read that at farmdocdaily.illinois.edu, revising the 2025 crop budgets. Nick, thanks for being with us. First, can you define what a crop budget is for me, please?

Nick Paulson: 09:33

Sure. So our our crop budgets are, you know, our projections for, what farmers might be looking at in terms of revenues, which are broken out into price and yield and also any government payments that might be received, and then their production costs and then putting those revenue and costs together to look at, what the what the net returns might be for the upcoming, crop year.

Todd Gleason: 10:01

So in this set of updated crop budgets, what things should we make note of that have changed?

Nick Paulson: 10:09

So our our original release and kind of the standard schedule for us in in releasing these budgets is we usually do kind of a late summer, initial release for the next year. So our 2025 budgets were originally released in September, of last year. And this is kind of our standard, winter update that we typically do kinda mid January. And, this year, you know, the the changes for looking ahead to 2025 were were relatively minor, compared to some other years. So, no big changes on the cost side.

Nick Paulson: 10:47

It really it's just, kinda little relatively small changes on the revenue side. So, for corn, we're looking at a bit higher price than we were, planning on back in September in the original release. So we went from a $4.25 planning price for corn to a $4.30 price, and that just, you know, kinda reflects what where markets have headed since September. And in the case of corn, we've we've seen a little bit little bit more strength, in the corn markets particularly over the last 6 weeks that kinda justify that 5¢ increase. Soybeans have kinda gone the other direction.

Nick Paulson: 11:25

So we were originally budgeting at 10.25, per bushel price for beans for next year and and we actually lowered that to 10.20 a little bit. So our our corn revenues and and ultimately corn returns, our projections improved a little relative to what we were looking at back in September, and our soybean revenues and returns, dropped a little bit. But if you're looking at a, you know, kind of a corn soybean rotation like most form farmers in Illinois and throughout Midwest do. You know, slight improvement, in per acre returns looking ahead to 2025. Unfortunately, those numbers, are still, negative and and historically are are are, you know, pretty large negative, returns, if we build in a a land cost that is, equal to the average cash rent that we see farmers

Matt Bennett: 12:22

paying in in regions across the state of Illinois.

Nick Paulson: 12:22

So bottom line for me,

Matt Bennett: 12:25

in regions

Todd Gleason: 12:25

across the state of Illinois. So bottom line for me, what this looks like as it relates to acreage in Northern, Central and Southern Illinois. And I suppose in Central Illinois, you have both highly productive and

Matt Bennett: 12:37

and low productivity soils to go through. Correct. So,

Todd Gleason: 12:37

yeah, we we've, you know, for, soils to go through.

Nick Paulson: 12:40

Correct. So, yeah, we we've, you know, for for a number of years now broken out our crop budgets into those those four regions. You mentioned Northern Illinois, Southern Illinois, and then Central Illinois, we do a case for, kind of the higher productivity soils we have in the central region and then the lower productivity soils. You know, the numbers vary a little bit across regions when you get to that net farmer return number. But, you know, regardless of the region you're looking at, we're looking at at potential negative returns, next year in kind of that 50 to $60 range, for for corn and soybeans.

Nick Paulson: 13:17

So, again, an improvement relative to where we were, we thought we might be back in September for the upcoming year, but but a relatively small improvement. And, again, we're still at negative returns that are, by historical standards, you know, quite quite large in terms of being negative.

Todd Gleason: 13:37

And then you updated the 2024 budget as well, I think, to change maybe price. I'm not sure about that. Exactly. And then you added the ad hoc payments in that were passed by congress, as they finished up their last term. Did that make much of a difference?

Nick Paulson: 13:58

It it, yeah, the 2024 changes in this revision are are definitely larger, in in dollar per acre terms than what we're looking at for those 2025 numbers we just discussed. The the smaller portion of those changes is due to some some price adjustments we made there. So similar to what we were looking at, for 2025, corn prices have strengthened. So we went from a $4.10 budgeted price back in September to a 4.25 price on corn for 2024. And soybeans, we went from a 10.50 price back in September to a 10.20 price, for that 2024 season, in this update.

Nick Paulson: 14:44

So, again, that aspect of the revision improved the return, projections for for the previous crop season for corn, a little bit worse for soybeans. But the bigger factor that, impacted those 2024 numbers was those economic assistance payments that were outlined in the American Relief Act, which was passed, I believe, on December 21st is when it officially became law. And those payments we've estimated at $43 per acre for corn, $30 per acre for soybeans, and so, that that additional $43 per acre per for corn improves the the corn return picture, and that $30 per acre payment on to soybean acres kind of more than offsets the effect of that that price reduction that I talked about. So in both cases, improvements in those 2024 return numbers for corn and soybeans, a larger improvement for corn. Unfortunately, again, we're still looking at, negative numbers, across all four of those regions that we look at in Illinois, just just not quite as negative as what we thought they'd be in September.

Nick Paulson: 15:58

So, again, a a meaningful improvement, but still looking at, some pretty poor return prospects here for the crop season that that we just wrapped up.

Todd Gleason: 16:08

Thank you very much, Nick.

Nick Paulson: 16:09

Thank you, Todd.

Todd Gleason: 16:09

You're welcome. Nick Paulson is an agricultural economist here on the Urbana Champaign campus of the University of Illinois, a member of the FarmDoc team who earlier today, the team that is, began their Illinois Farm Economic Summit online series for 6 weeks in a row starting earlier today, and that will be up online shortly this afternoon where you can see it at the FarmDoc Daily website. Look under the webinar's archives. The FarmDoc team will be making presentations, including Nick and Gary Shnicki on February 13th. They'll be talking at that point about how to manage low income years on the farm that same week on 10th 11th, and all of these are in our calendar at the willag.org website.

Todd Gleason: 17:00

The Soybean Summit will take place here on the Urbana Champaign campus at the U of I's I Hotel. That's just to the south of the State Farm Center. It's free. You can sign up for it and for the IPAS series online seminars or webinars. We're all of that right there in the calendar at willag.org.

Todd Gleason: 17:23

You open those up. Just click on those events in red, and then hit more details. And there should be hot links for each of those to get yourself registered for the IPAS series online as well as the Illinois Soybean Summit. Let's turn our attention to the global growing regions and each of those. Mike Tenure is now here.

Todd Gleason: 17:55

He's the CEO and President at tstormweather. That's tstorm.netonline. Hello, Mike. Thanks for being with us again on a Thursday.

Mike Tannura: 18:04

Hey. Thanks for having me, Todd. I agree being here.

Todd Gleason: 18:06

Let's begin in South America. We have been concerned about Argentina. Is it still the number one hotspot or are there other places that are of concern to you?

Mike Tannura: 18:18

Well, we would argue that southern Brazil and Paraguay are in more need of rain than Argentina. That's primarily a function of where their crop is. It was planted earlier than takes place in Argentina and because of that is further along in its development. Now conditions were great until about mid December. After that it started to dry out and has rained very little ever since.

Mike Tannura: 18:39

Because of that, we need some big rains for first corn and for soybeans in all of southern Brazil and Paraguay. If we don't get those rains, it'll be clear there's a major problem there, but it looks like rains are coming up. There's some pretty good chances for storms over the next few days in part of the region, but the real reason that we're not overly concerned is because a cool front moves through this weekend and early next week that should bring in a few thunderstorms, and even more so than that, the main storm track is then pretty likely to set up right overhead, and that should lead to some pretty good thunderstorms next week. So all in all, near normal rainfall going forward. And even though that might be a not might not be enough to eliminate all the dryness that we've seen over the last month, it will certainly stabilize things, and that's the way we think we're going.

Todd Gleason: 19:27

So Paraguay, Southern Brazil, on the precipices, but probably headed for recovery. Does that same kind of recovery come into the Argentine growing areas?

Mike Tannura: 19:36

Well, Argentina will see some rain this weekend and there will be some okay totals of around 1 inch. So because of that, the pressure on that crop will diminish a little bit. And you also need to keep in mind that rains were pretty nice in the very beginning of the season. So it's not like we're looking at widespread drought conditions today. All of that said, there is a lot of rain that's still needed because it hasn't rained very much over the last 30 to 40 days and even though the crop has been planted later than what takes place in Brazil and Paraguay, it still needs to rain because we're going to be approaching some key phases, in the not too distant future.

Mike Tannura: 20:11

So it looks like we'll get some rain this weekend but our bigger concern there is that there's not really a whole lot behind it. It looks pretty dry again next week and even though it won't be hot next week it'll still be very warm and warmer than ideal for the early planted corn that is pollinating and for later planted corn that just want to break from some of the poor weather. So we think the Argentina story, while improving, is not over, and we're going to need to see a pattern change at the end of the month or certainly in early February.

Todd Gleason: 20:43

Elsewhere on the South American continent, the center west portion of Brazil, a large producer of soybeans, they're late in the season. Things still going well there?

Mike Tannura: 20:54

Well, things are going pretty well. Yes. That region you're talking about produces over half of first corn and soybeans across Brazil, and they've seen some really nice rains over the last 2 to 3 weeks. It will be drying out as we move forward but we're not too, too concerned about that because of the rains that we've already seen and on top of that it's been very cool. Temperatures there have been pretty much ideal for the last several weeks and even though we have this dryer pattern coming up as upper level high pressure develops nearby, heat is not going to be accompanying this one.

Mike Tannura: 21:26

So overall temperatures stay pretty stable. It dries out a little bit but drier weather in late January into February, will help out with the early soybeans, that need to be harvested. So the situation there, while maybe not perfect, is still pretty good, and we're not overly concerned about anything there right now.

Todd Gleason: 21:45

Here in the United States, unseasonably cold temperatures, will they be a problem anywhere across the nation?

Mike Tannura: 21:53

Well, the only area you really need to keep an eye on would be in the plains. Parts of Kansas and Nebraska will will fall under the minus zeros and minus tens on Sunday and Monday morning. These areas won't have much snowpack, if any. And because of that, there's a small area of hard red winter weed that could, be affected by some burn back or winter kill. They'll be primarily in the central portions of Kansas and Nebraska because as you move further west, we think there'll be a little bit of snow this week and that should protect some of the crop.

Mike Tannura: 22:22

So this is not a major event and it does warm up right behind it with temperatures at least getting back above 0 for later next week. But that will be really the only big story as far as week goes with that.

Todd Gleason: 22:34

Thank you much. I appreciate it.

Mike Tannura: 22:36

Yeah. Thanks for having me, Todd.

Todd Gleason: 22:37

That's Mike Tenure from tstormweather@tstorm.netonline. You've been listening, of course, to the closing market report on this Thursday afternoon. It comes to you from Illinois Public Media, where we're celebrating 40 years of the closing market report, some 10,000 episodes, more than 30,000 interviews. Thank you for taking your time with our program today. You can find it online at willag.orgwillag.org.

Todd Gleason: 23:06

I'm extensions, Todd Gleason.