- Joana Colussi, University of Illinois
- Mike Tannura, Tstorm.net
From the land grant university in Urbana Champaign, Illinois, this is the closing market report for the 23rd day of January 2025. I'm extension's Todd Gleeson. Coming up, we'll talk with Matt Bennett of agmarket.net about today's commodity market trade. We'll hear from Mike Tannura at Tstorm weather about the forecast in Argentina and Brazil. Along the way, I'll bring you up to date on this morning's IFES series webinar with Joanna Colossi as it references conditions on the ground in those same two nations, all on this Thursday.
Todd Gleason: 00:35edition of the closing market report from Illinois Public Media celebrating 40 years of the closing market report, some 10,000 episodes and 30,000 interviews. Todd Gleason services are made available to WIL by University of Illinois Extension. Arch corn for the day settled at 4 dollars 89 and 3 quarters of a cent, up 5a half. The May at 4, 99 and a quarter, 5 and a quarter higher. December futures at 4.64 and a quarter, up 4 3 quarters.
Todd Gleason: 01:05Soybeans in the March contract at $10.60 5a half, 9 and a half cents a bushel higher, and the May futures at 10.77 3 quarters, up 9 and a half. November, up 6 and a half cents. It settled at $10.53 a quarter. Bean meal, 50¢ lower. The bean oil for the day, up 62¢.
Todd Gleason: 01:22Wheat futures for the soft red, unchanged in the March at 554. The hard red March at 5.70 3 quarters, down 4¢ on the afternoon. Live cattle futures finished the day in the nearby contract at $200.72 and a half cents, up 90 5¢. Feeders were up a buck, and the lean hogs were 7 and a half cents lower. They settled at $87.27 for a £100 in Chicago at the CME Group.
Todd Gleason: 01:49Matt Bennett from agmarket.net now joins us to take a look at the marketplace. Hi, Matt. Thanks bunch for being with us. I hear you're on the road again today, but at least in the state of Illinois. What you doing?
Matt Bennett: 02:00Yeah. I went to speak at one of the farm credit meetings, so they've got their Fielding Forward series that they have throughout the state. And, did, most of those meetings for them here this year. And, basically, you come in, you know, they usually have another speaker, and then they talk some about crop insurance. But had a nice crowd there at the Crown Plaza in Springfield today, probably, I don't know, a 130, a 150 people.
Matt Bennett: 02:21So, it's a pretty lively group. I think the mood, of course, is a little bit better than what it would have been, maybe a couple 3 months ago. And so, we have some more fun stuff, if you will, to talk about.
Todd Gleason: 02:33Well, tell me about some of the fun stuff. What are the things that are happening that make, the market feel a little better?
Matt Bennett: 02:39Yeah. I mean, you sure hate to, be happy about someone else's problems. But, you know, with China basically saying they don't want the beans right now that Brazil's shipping, They supposedly found some chemical in some of the shipments. You kinda wonder if maybe they weren't trying to, kill some of the beans to where they could get them, to harvest. But for whatever reason, there was some chemical in the shipments that they received as well as off quality beans, which makes sense with the amount of rainfall they've had in the center part of Brazil.
Matt Bennett: 03:12So where they're trying to get the beans harvested, you know, they've been awfully wet, really struggled to be able to get those beans out. And, of course, they have to get them out, because they wanna plant the safrinha crop. So so far, there's been very little safrinha crop planted. It would just be in the initial stages, but it does not look like they're gonna be on target unless this weather forecast changes to, you know, to a fair degree.
Todd Gleason: 03:35These would be the phytosanitary things that we have been hearing about over the last couple of days with China, meaning that they rejected those cargoes coming in because there was something, yeah, that they found in them as you explained. That's a temporary function. How widespread do you suppose that might be in the cargoes that come out of Brazil? Is it just those 5 or many more?
Matt Bennett: 03:59Personally, I I doubt that there will be more. There's no doubt that if they stay super wet, you're probably looking at the chance, you know, to go ahead and see more off quality type beans show up. Now with that being the case, we know Brazil's a massive country. There's going to be areas that don't have those source of issues, and so you would assume that this is a isolated incident. The other whisper, if you will, that we heard today is that, China is going to auction off some of their government reserve soybeans, which is pretty interesting.
Matt Bennett: 04:32It might lead you to believe that they had incentive to see the bean price go up just a little bit. So, my personal thought is that it's probably, more of a trade tactic than something that is, oh, I don't know. Got more teeth in it, if you will. So right now, I I feel like it's, not gonna be something that's widespread that, you know, that the market's able to take advantage of for very long anyway.
Todd Gleason: 04:57It is a up day at the CME Group in Chicago driven mostly by what's happening with China and Brazil or other things?
Matt Bennett: 05:05Clearly, there's a lot of that going on. And then, of course, you know, you're still seeing a little bit, of a lack of rainfall for Argentina. Temperatures are still quite high. And then, of course, the areas that you don't necessarily wanna see the rain are continuing to get some rain in that center Brazil, west center Brazil type area. So, that's definitely playing into the market.
Matt Bennett: 05:27It definitely begs the question, Todd, you know, how long do the funds wanna get corn? Because, with them coming into the week, you know, with a 300,000 long, you've gotta think they're gonna be pushing up on a record long here before too long. So, you know, a word of caution there. Typically, when you get up closer to that record long type position, you could be subjected to a massive, a correction if you will. As far as beans are concerned, they got long finally, and it's been a long time, like, a a year since the funds have wanted to be long soybeans.
Matt Bennett: 05:59And so are they gonna wanna build a long position there? Be very interesting to kinda see how corn and beans correlate because right now, it sure feels like this corn market wants to rally relative to soybeans. I think corn's been stronger. But at the same time, again, I think you gotta be a little cautious after the type of rally we've seen as far as corn's concerned.
Todd Gleason: 06:18Weekly ethanol report was released today late this week. Bigger than the trade thought at 1.099000000, barrels per day. They were down just below that. That was, I guess, good news for the day too.
Matt Bennett: 06:32Yeah. I mean, no doubt that ethanol margins have improved from that late November, early December time frame. Essentially, with higher crude oil prices, it's returned some of the profit margins there. Of course, we know a lot of these ethanol plants have bought corn or had bought corn at quite a bit cheaper price than what we're looking at today. So, you know, if you wanna look at spot margins, they don't look near as good.
Matt Bennett: 06:55Of course, crudes fell back just a little bit. Corn prices are pretty darn stout. Now basis is certainly widened in most places throughout the corn belt because of how much corn that has been sold, you know, but at the same time, you've gotta think that these types of ethanol numbers, especially in the midst of what we would call a pretty darn good export program so far. It's pretty good news here for this for this corn market.
Todd Gleason: 07:19Hey. Thank you much.
Matt Bennett: 07:20I appreciate it. Absolutely, Todd. Thank you.
Todd Gleason: 07:22Matt Bennett is with agmarket.net. You're listening to the closing market report from Illinois Public Media. Our theme music is written, performed, and produced by Logan County, Illinois farmer, Tim Gleason. Well, I sure hope you took some time this morning to join us for the IFAS series webinar from the FarmDoc team today in this part 2 of the 6 part series. Joanna Colusi took a look at South American production this season both for Argentina and Brazil.
Todd Gleason: 07:55I started by asking her to update us on how things had changed since this presentation was first made in December.
Joana Colussi: 08:04Sure. So as of January 20, 1% of the soybeans were harvested in Brazil, especially in Mato Grosso, the number 1 in soybean production in Brazil. Brazilian soybean acreage is, projected to grow by 2.6%. It is the is lowest growth in a decade. And the soybean harvest is forecasted to hit a record, 6,100,000,000 bushels, 13% increased from last year.
Joana Colussi: 08:39So, there are private consultancy projections, even more optimists. We have favorable conditions, especially in the center west of Brazil, Mato Grosso, Goyas, Mato Grosso do Sul, all these regions, the soybean fields are receiving a good amount of rainfall in the last few weeks. On the other hand, there are some concerns in the southern Brazil, especially in Rio Grande do Sul, the state that I'm in right now. So since the beginning of the year, beginning of January, there is lack of rain in some regions, also in some spots in Parana, in the south of Brazil and Mato Grosso do Sul, but the expect so far is just some concerns. I don't know if you can call that drought, maybe lack of rain in some spots.
Joana Colussi: 09:38And like I said, the very good situation in Mato Grosso, Mato Grosso do Sul, Goyas, and in some, states of the Matopiva region in the northeast of Brazil should offset any losses that you may have in the south of Brazil. That's the situation regarding soybean crop season in Brazil. When you look the Argentina, the situation is a little bit different. The early soybeans are in good condition, but late soybeans are suffering from a lack of water. Some rain last week, helped the situation, but more water is still need in the coming weeks.
Joana Colussi: 10:26Remember that we have different calendar seasons, in the South America, So, for soybeans in the center west of Brazil, December is crucial, but when you think about Argentina, February is the most important month to decide or to, change the soybean season because the harvest will be in the end of March, beginning of April. In Mato Grosso, for example, the harvest are right started.
Todd Gleason: 11:00Of all the production in South America, Brazil, Argentina, Paraguay, other places, how much do you expect them to produce? And I mean, where does that land as it's related to the record books?
Joana Colussi: 11:13If you look the whole picture including Brazil, Argentina, and Paraguay, just think about the numbers regarding Brazil. The forecast 107,000,000,000 metric tons plus 52,000,000 microtons from Argentina, and plus 11,000,000 microtons from, Paraguay. We are talking about 232,000,000 microtons in South America. That could be a record soybean production. That's the reason that you are seeing some, pressure in terms of the the supply and also that will is impacting the price of the soybean, that moment.
Joana Colussi: 11:59We have a lot of supply of soybeans in South American coming in the next few months.
Todd Gleason: 12:04What understanding do you have of corn production in South America for this season?
Joana Colussi: 12:09So when you turn our attention to the corn crop season as January 20, 5% of the corn first crop was harvested. Brazilian corn acreage is expect to remain stable. We are talking about the 1st, the second, and the third season of corn. Total corn crop is expect to reach 4,700,000,000 bushels, a 3% increase compared to last year. If achieved, this would mark the 2nd largest harvest in history, in Brazil.
Joana Colussi: 12:47Like I said, 52,000,000 acres will be the corn acreage and 4,700,000,000 bushes will be the harvest. Of course, we are we needed to remember that the safrinha and the second season is the second crop season is responsible for 80% of almost 80% of the total corn production in Brazil and it's just starting. Remember that I said that there is some concerns regarding rail falls, in Central West of Brazil. Central west of Brazil, Mato Grosso, Mato Grosso do Sul, Goyas, they are starting the harvest right now. There is some concern that the amount of rainfall that's good for soybean yields, but maybe it's not good to the harvest season right now, could delay the planting season of the corn and could be could have some impact in the corn yields, the safrinha.
Joana Colussi: 13:50So far the forecast says that we could have the 2nd best result in the history, but again the safrinha is just starting. There are a lot of stuff to happen from now until actually March, that is the end of the planting season. Remember that the planting season for saffrinha, the window is very small. Sometimes if you have 1 or 2 weeks of difference that will completely change the corn yields in the harvest. And talk a little bit about the corn, in Argentina.
Joana Colussi: 14:30So, Argentina corn planting projected to decrease by 25%, that's equivalent to 6,000,000 acres. This would mark the largest relative drop in corn acreage in 17 years and the factors behind this decline is especially the cornstunt disease that affect the corn fields last season, and because of that many Argentinian farmers, chosen planting soybeans instead of corn. Remember that Argentina is very similar than the Midwest, unlike in Brazil soybeans and corn share the same planting period in Argentina. So they compete for the same growing area, and because last season corn face significant losses, many farmers decided to plant soybeans like I said instead of corn. And La Nina will introduce uncertainty as the phenomenon is typically associated with the dry conditions and there happens some dry conditions right now in Argentina.
Joana Colussi: 15:45So there were some rail falls these last weekend, but it's still necessary to have more water in the coming weeks to help, the situation of cornfields and soybean fields in Argentina.
Todd Gleason: 16:00Thank you very much. I appreciate it.
Joana Colussi: 16:02Yeah. Thank you so much.
Todd Gleason: 16:03You're so welcome. Joanna Colusi is a FarmDoc team member and hosted the second in the IFES webinar series. You can see it online now at farmdocdaily.illinois.edu. Sign up for it as well. There are 6 in that series.
Todd Gleason: 16:18It's archived there, where you can simply go to youtube.comforward/at farmdoc. Speaking of this morning's webinar, it included Paulina Lescano. It included it included grain analyst Paulina Lescano. She's from Argentina. I spoke with her for our commodity week program about the conditions on the ground in her nation and how she's been seeing the marketplace.
Todd Gleason: 16:47You can listen to that tonight on our website at willeag.org. Our other panelists will include, I'll record this a bit later this afternoon, Joe Jansen from the University of Illinois along with Kurt Kimmel of agmarket.net. Let's turn our attention to the global growing regions. Mike Tenura is here from tstormweather@tstorm.netonline. He's the president and CEO there.
Todd Gleason: 17:23Hello, Mike. Thanks for being with us again on a Thursday.
Mike Tannura: 17:25It's always great being here, Todd. Thanks again for having me.
Todd Gleason: 17:28I'd like to concentrate on South America today. Can you begin in the growing regions of Argentina, and then work your way northward, please?
Mike Tannura: 17:37Well, Argentina and southern Brazil and Paraguay are all in the middle of one of their driest January's on record. It's especially true in Paraguay where the rainfall numbers are very low. They've had less than an inch for the month, and they normally should have had about 3 and a half to 4 inches. In key areas of Argentina, the story is not quite as poor, but it's also not very good with them being in the middle of their driest January on record. And then if you move into southern Brazil, it's the same story.
Mike Tannura: 18:08They're right around number 2 driest. So we need some big rains. We need them soon. And the only reason this story might not be bigger than it could be is because it was nice and wet until about a month ago. If you recall back in November December we were talking about all the great rains that were happening in these areas.
Mike Tannura: 18:28Well, they suddenly shut off about 4 weeks ago and that's why we have this problem that's developing. Now there are some storms on the way so this is not going to be completely dry as we move into February, but the rain totals that we're looking at over the next 10 to 12 days of around 1 to 2 inches are simply not going to be enough to offset what's been happening. So we're still going to end up being one of the driest on record in January in all of these areas, and then we're going to need to see some big rains in February to get out of this situation for corn and soybeans. One thing to keep in mind, Todd, is that temperatures are also going to be a factor in Argentina. They've been pretty hot for most of the month, and high temperatures will be in the low nineties to low 100s going forward.
Mike Tannura: 19:12This is not an ideal situation for them, and because of that, we do have some risks for these crops.
Todd Gleason: 19:17In Argentina itself, does La Nina have an impact at this point?
Mike Tannura: 19:23Well, this is certainly related to that. If you look back in their history, a lot of their poorest crops happen with a La Nina, and we are in a La Nina today, and so this does kind of fit that overall pattern. Now the reason we weren't screaming about the potential for a drought, say, a month or 2 ago, is because not every La Nina does this, but generally, when you're going to have a problem, it's going to be with a La Nina and we're certainly seeing some signs of that now.
Todd Gleason: 19:52From those areas of the South American continent, can you move northward into Brazil, please?
Mike Tannura: 19:57Well, absolutely. The northern half of Brazil produces about half of their first corn and soybeans, and these areas have not been dry at all. They've been actually having some pretty great rains over the last several weeks. You could argue that some of them are a little bit too wet, but rains over the last 5 days or so have diminished a little bit and that's helping to take away that story. Our concern there is that we have a big front that's going to move through in about a week and that's going to set the stage for thunderstorms across most of this area starting up on Wednesday, Thursday, and Friday coming up, so about a week out, and then lasting for 5 to 7 days.
Mike Tannura: 20:33If that happens then some of these areas are going to end up too wet And the reason that's a little bit of a concern is because soybeans are starting to be harvested. So we do have some precedent in these areas where if you get too wet in January or especially February, you can start to reduce quality. Now we're not there yet, but this is a concern because we just can't have a real wet February and not end up going a little bit past the point where you don't want any more rain. So we're going to near that number, but whether or not we cross it is what's what we're going to be following.
Todd Gleason: 21:07Does it have an impact on the safrinha or second crop corn in your opinion?
Mike Tannura: 21:12Well, not directly, but if soybean harvesting is delayed, then 2nd crop corn planting will also be delayed. Now despite what that might look like, it's all going to come down to weather in April May. If you plant late or early, it really doesn't matter exactly when you get it planted as long as you get some really nice rains in April, because that will fix all your problems. On the other hand, if April turns out to be a dry month, then all the problems are going to show up. So, you know, we'll get that crop planted and maybe it won't be in the ideal window if it does stay wet in February, but it really matters what happens in April May, and that's just way too far out to think hard about.
Todd Gleason: 21:52And finally, a factoid that you've given us before that will give us a marker that now we can think about going into the future, when does the monsoon generally end in, South America, particularly in Brazil in those primary areas for 2nd crop corn?
Mike Tannura: 22:08Well, it's typically going pretty strong through about April 10th, and then that's where things start to fall apart. So that period between April 10th May 10th is kind of where you end up either being wet or you end up getting really dry. So that's kind of the period to monitor because we know that historically by looking at the rainfall, you typically will get good rains in February and in all of March and then things start to tail off. So, you know, if it ends up starting a little bit early, say on April 1st, that's a problem. If it starts a little bit later on April 20th, well then that's not a problem and that's actually a nice way to make a good crop for them.
Mike Tannura: 22:47So we still have to get right into that April 10th to 20th period to start understanding what's going on.
Todd Gleason: 22:52Thank you very much. I appreciate it.
Mike Tannura: 22:54Yeah. Thanks for having me, John.
Todd Gleason: 22:55Mike Tanura is with tstormweather@tstorm.net online. Joined us on this Thursday edition of the Closing Market Report. It came to you from Illinois Public Media. It's public radio for the farming world. I'm Extension's Todd Gleason.