Jan 27 | Closing Market Report

Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market reported as the 27th day of January 2025. I'm Illinois Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Kirk Kimmel. He's at agmarket.net out of Normal, Illinois. Chad Hart from Iowa State University Extension will join us to discuss last night's events between the US and Colombia and what impact that might have on the marketplace over time.

Todd Gleason: 00:32

And then we'll turn our attention to the weather forecast with Mark Russo. He's at Everstream Analytics here on this Monday edition of the closing market report from Illinois Public Media. It is public radio for the Farming World Online on demand at willag.org, celebrating 40 years, 10000 episodes, and some 30,000 interviews. Todd Gleason services are made available to WIL by University of Illinois Extension. March corn for the day settled at $4.82 a bushel, 4 and a half cents lower.

Todd Gleason: 01:08

The May at 4.92 and a quarter, down 4 and a quarter, and December at 4.58 and a quarter, 2 3 quarters lower. March soybeans, $10.45, down 10 3 quarters. The May at 10, 58 and a half, 9 and 3 quarters lower. And November, new crop at $10.43 and a quarter down 5 and a half cents. Bean meal, $4.10 lower.

Todd Gleason: 01:28

The bean oil down 22¢. Soft red winter wheat in the March at 5.35 and a half off 8 and a half cents. The hard red at 5.53a quarter, down 6 and a quarter cents. Live cattle futures were up 80¢ at 203.82a half, and the lean hogs at 89.87a half, a dollar 67 and a half higher on this Monday. Kurt Kimmel from agmarket.net now joins us to take a look at the marketplace.

Todd Gleason: 01:57

Interesting overnight trade into the day trade. Tell me about what you saw, Kurt.

Curt Kimmel: 02:02

Yeah. Just basically a pickup of volatility, uncertainty, you know, what can happen when the market's, you know, you know, what can happen when the market's closed over the weekend, particularly with, Colombia. You know, everybody is probably aware now that moving immigrants back home and, to Colombia there. And, initially, they were, would not allow, those transport planes to land, and so Trump kinda echoed or or told him that, okay. We're gonna impose tariffs, and the Colombian president came back and did a counter.

Curt Kimmel: 02:38

And, before you knew it, all of a sudden, everything's cool all of a sudden. I'm not quite for sure if the Mexic not the Mexican, but the cartel in Colombia said got involved maybe, but who knows what took place in the back, vaccines. And these are where I'm going with this is these are scenes or events that we cannot control, we don't know, and I think we're gonna see more and more of that here as we move forward. So, it increases volatility. It sets the stage of managing risk because we just don't know what's gonna blow up where and where.

Curt Kimmel: 03:13

But the significance of the Colombian thing, if it would follow through, was, Colombia has become a good trading partner. They're number 3 corn, bean, and soybean buyer. They're number 4 with ethanol, and, they buy some pork from us. They're about number 7. That varies from year to year, but, you know, last thing we wanna do is, lose some export business here, and that would, upset the balance sheet.

Curt Kimmel: 03:38

That coupled with a better forecast for the Southern Hemisphere, we're seeing, the drier areas received. The northern regions actually need to dry out. They've been a little bit wet. On the southern hemisphere, I think they're projected to be about 4% complete of harvest. I've not heard any yields per se or or whether it's up to expectations or not, but we're starting to enter that stage of harvest in in some of the areas whereas Argentina, still has a little ways to go.

Curt Kimmel: 04:13

The other thing is the Lunar New Year holiday starts here January 29th. That's the Chinese New Year. It's the year of the snake, and that's gonna run for about 16 days till about February 12. In the past, export news has been kinda quiet during the holiday, but with today's atmosphere, we don't expect a whole lot of news, but you just never know. So the Chinese are sort of on the sidelines.

Curt Kimmel: 04:41

Coming into midday, totals were 34100 beans being sold by the funds, 59100 contracts of corn, 38100 contracts of wheat. They were sellers, about 29100 contracts of bean oil, about 32100 contracts a meal, going into about that 11 o'clock hour. Export inspections, corn shipments were fairly good. The trade was looking for 1 to 1,400,000 metric tons. It came in 1.247.

Curt Kimmel: 05:13

Beam's shipments were a little slow. They look for 800,000 tons to 1.2. It came in 729. In the wheat shipments, they were looking for about 250 to 450, and it came in at 4.85. Just a little above, trade expectation on shipments.

Curt Kimmel: 05:32

We're still early in the marketing year, so the key is to mainly watch the sales, make sure they stay strong here as we move forward. These shipments will kind of fall in place as we move forward here, Todd.

Todd Gleason: 05:45

Did the volatility from last night, and I guess I will call the volatility out of the Oval Office as opposed to in the marketplace, cause agmarketnot dot net, to reevaluate anything as it's related to that volatility and how it expects producers to help to to manage it.

Curt Kimmel: 06:07

Yeah. We'll, have our fundamental meeting here this afternoon, Monday afternoon here. We'll kinda, review what's taking place. But, yeah, it's gonna turn up a notch or 2 to have some covered positions on so you have some staying power in the marketplace. Last thing you wanna do is have a hedge on and get spooked out of it.

Curt Kimmel: 06:28

So, the the the key is to, be able to have that staying power. You know, another thing too is overnight too, we saw this AI talk with the NASDAQ, but, typically, sharply, sharply lower. There was, I believe, a Chinese company. They called it DeepSneak. They developed some AI technology, and it took 2 months to, get it up and going to develop it.

Curt Kimmel: 06:57

And a low budget, $6,000,000. So it says there's gonna be some competition out there. Whether or not it's legitimate competition, whether that particular program takes off, we'll see here, but that really spooked investor confidence. And, that's just another outside factor that's just gonna say, we're gonna be in a roller coaster mode in through here and having a marketing plan and having a state in power is gonna be very, very important here as we go through the 2025 growing season.

Todd Gleason: 07:29

Yeah. The point of that is that there is more competition with the in the AI world, but more importantly, it was Chinese based. And If I remember correctly, it is one of the most downloaded apps on both the Apple and the Android side as it's related to free AI interfaces. So interesting to watch, could have an impact on the marketplace. Thank you much.

Todd Gleason: 07:49

We appreciate you being with us for the day.

Curt Kimmel: 07:51

You bet, Todd. Take care.

Todd Gleason: 07:52

Mhmm. Kurt Kimmel is with agmarket.net. The United States Environmental Protection Agency is of concern to the American Farm Bureau Federation. Courtney Briggs is the senior director of congressional relations there. She says the topic of clean waters, specifically the waters of the US rule or WOTUS, is typically on the concern list.

Todd Gleason: 08:20

She notes it's become very challenging for farmers and producers as rules and regulations change from administration to administration and believes congress needs to do the hard work and open the Clean Water Act up to provide a clear definition of voters in statute.

AFBF: 08:37

Unfortunately, that is a very difficult exercise, but both from a policy standpoint and a political standpoint. You still need 60 votes in the senate. This is a very politically polarizing issue. So we need to see that bipartisanship and for folks to come together to support a rule that helps landowners but respects the law, respects congressional intent, and respects, the Sackett decision.

Todd Gleason: 09:02

Briggs adds that the belief by some that farmers do not care about the environment couldn't be farther from the truth.

AFBF: 09:09

You can't grow anything. You can't raise anything without clean water and healthy soil. So our farmers live and work in the same communities. They are, drinking the same water, so they have every motivation to, keep our our waters clean and our soils healthy.

Todd Gleason: 09:28

Another issues Briggs says AFBF plans to address is PFAS. She says the federation would like to see legal protections for farmers, but added that may be an issue that's delayed until later this year or into 2026 or perhaps even further down the road. If you're listening to the closing market report from Illinois Public Media, it's public radio for the farming world. Later this week, we'll put registration information up for the all day outlook at the Beef House in Covington, Indiana on our home website. Be sure to put that in your calendar today.

Todd Gleason: 10:11

It's Tuesday, 4th day of March. The theme music for our program today is written, performed, and produced by Logan County, Illinois farmer, Tim Gleason. We're now joined by Chad Hart, agricultural economist at Iowa State University. He's in Ames. Hi.

Todd Gleason: 10:33

Thanks much for being with us, on a Monday. We appreciate that, Chad.

Chad Hart: 10:37

It's my pleasure to be with you today.

Todd Gleason: 10:39

We have a lot to talk about. Let's start with last night's events related to Colombia and the United States. Military jets were carrying sets of deportees into Colombia. The Colombians didn't allow them to land. The president of the United States said, wait a second.

Todd Gleason: 11:03

If that's gonna be the case, we're gonna put tariffs on. And it escalated from there and then de escalated very quickly. What does it tell you about the marketplace? Because the tariffs of course, while not directly related yet to what might happen to corn and soybeans, probably would have led to retaliatory tariffs, being put in place by the Colombian president. In fact, I'm sure he said that, but he didn't detail what exactly.

Todd Gleason: 11:31

So tell me how you saw it all.

Chad Hart: 11:33

Well, that's the deal. I think you what you saw here was that, one, when a country disagrees with whatever the US is doing, the president is gonna respond through tariffs. He sees this as an economic weapon or tool, depending on how you wanna look at it, to get the US point across. At the same time too, you can see the markets are definitely fearful of what can happen there with the retaliatory tariffs. I mean, I would say the markets are still down today even though we seem to be right where we started, before this all happened, the markets are still shaken by how quickly these tariffs can come in.

Chad Hart: 12:14

And, yeah, it's my understanding that, Colombia basically responded by saying if we get hit with 25% tariffs, we will respond with 25% tariffs. So they were basically saying tit for tat, we're going to respond in kind. At the same time too, this this agreement was basically not about moving, those deportees. It was more in the manner in which they were moved. The idea of using military aircraft to do it as opposed to, you know, you know, let's call it nonmilitary civilian aircraft, I guess.

Chad Hart: 12:49

Or, you know, something that, you know, would be easier, I guess, to explain to, you know, Colombian's national security, I guess. As far as looking at it as, you know, if US military aircraft are coming in, that sends a it's called a stronger message and maybe not the message that needed to be communicated to Colombia. So, yeah, you see a lot of volatility building up in the marketplace because they recognize just how quickly, the tariff pattern can change, not only from a US perspective, but in the case of how quickly the retaliation might

Todd Gleason: 13:27

come back. Yeah. So the, factually, the the Colombians had taken to deportees prior to this, always on commercial airlines. So it was about the military planes being used. And I suppose they didn't ask if they could land until until they were there.

Curt Kimmel: 13:45

Well yeah.

Chad Hart: 13:46

And I think that's part of the part of the issue here. I mean, that will it it just wasn't communicated that there was gonna be a change in the way this is gonna happen. As you say, it's not that Colombia refused to take, you know, the deportees. No. They had been throughout the, you know, the last administration.

Chad Hart: 14:01

And by all sounds, it sounds like they were willing to take on this one as well. It was just, again, the manner in which they were being brought back to the country.

Todd Gleason: 14:09

Yeah. And and for agricultural purposes, Colombia's import of corn from the United States, this year opposed to last year in just a 3 month period. This according to the US Grains Council from September to November 2023 and then at 2024, up 78%, but they're the 3rd largest importer of US corn.

Chad Hart: 14:30

Yes. They are. In fact, when I look at just so far this marketing year, you look at the export sales up to last week, they're up nearly another 40%. So they have been an incredible growth market for US corn over the last couple of years, especially. A lot of this is built off the idea that the US and Columbia signed a free trade agreement back about, I think, 12 years ago.

Chad Hart: 14:56

And ever since then, we've been seeing Columbia sort of move up the rankings for us in terms of they becoming a more important trade partner with each and every year that passes.

Todd Gleason: 15:06

What does last night's kerfuffle tell you about trade going forward?

Chad Hart: 15:11

It tells me that trade is being weaponized for a lack of a better term. The idea that it it seems like we're going to see tariffs being utilized as that negotiating tool for, all sorts of possible international disagreements here. You know, in this case, this was, you know, a disagreement about basically immigration and and deportation and not not just it wasn't just about, you know, the policies themselves, but just how do we move people. And yet tariffs got caught up in the mix very quickly. We have seen President Trump discuss this in terms of concerns about the drug trade across international boards and things.

Chad Hart: 15:55

So tariffs seem to be the preferred tool, that president Trump wants to utilize in order to reinforce his point to other international leaders.

Todd Gleason: 16:08

And he's been clear, now very clear as it's related to trade. He also has been fairly clear as it's related to using tariffs to raise income for the federal government related to the external IRS proposal. I'm I'm wondering what that means to you as it's related to marketing both the old and new crops.

Chad Hart: 16:36

Well, in this case, you know, you recognize that with the old crop, you know, in fact, if anything, we enjoyed a little bit of a bounce last week, arguably because of the delay with the tariffs. And that offered up some old crop marketing opportunities that I know a lot of farmers took advantage of. At the same time too, as we're looking new crop, I mean, it does sort of beg the question now, do you try to put something in place before these tariffs hit to sort of price protect on the downside? Or do you take a long run approach and say, you know what? I'm gonna have to wait some time, see how these tariffs develop, and hopefully, they may not.

Chad Hart: 17:17

Again, these tariffs seem to be mainly used as a negotiating tool so that maybe they will not come to pass and new crop, we can hold off for a while before trying to price protect.

Todd Gleason: 17:31

So your bias depends.

Chad Hart: 17:33

Bias, you know, in this case, I'm I'm leaning towards old crop. Yep. Let's get it moving. New crop, I'm more willing to probably sit on my hands a little bit for a while and say, you know what? It's still early in the administration.

Chad Hart: 17:45

It's still fairly early in the year. We tend to see our better prices late spring, early summer. I would still look to that window, before wanting to make any major moves with new crop.

Todd Gleason: 17:58

Thank you much. I appreciate it.

Chad Hart: 18:00

Thank you, sir.

Todd Gleason: 18:01

Chad Hart is an agricultural economist. He's with Iowa State University Extension. Let's check-in now with Mark Russo. He's at Everstream Analytics to see what the global growing regions look like in the climate in places like South America might be doing as it's related to the corn and soybean crops. Hi, Mark.

Todd Gleason: 18:32

Thanks for being with us.

Mark Russo: 18:33

Hello, Todd. Thanks for having me.

Todd Gleason: 18:34

Begin in Argentina. Work your way northward.

Mark Russo: 18:37

Sure. In Argentina, following significant rains late last week and over the weekend, which helped to provide a boost in soil moisture, especially to the heart of the grain belt. We see more opportunities for rain coming up over the next several weeks, which will aid in crop stabilization. Latest computer model guidance, is projecting additional rain systems moving through. There's some debate in the guidance but kind of taking a step back and looking at the Argentina grain belt as a whole, if the latest model guidance verifies as projected then rainfall would register near normal.

Mark Russo: 19:19

Along with the additional rain activity, there will be a warmer temperature bias, with some decent heat redeveloping over the upcoming weekend in the early part of next week. But if everything tracks as expected, then that heat would be followed up by a significant rain event to, again, provide some relief there.

Todd Gleason: 19:41

Because where the crops are in their maturation stage, this is more than a just in time rain. This is a timely rain event, I take it?

Mark Russo: 19:51

Yes. For both corn and soybeans. Now with corn going through, really the the heart of its, yield sensitive pollination stage, then, heat is is the most significant impact and we had seen some significant or severe heat back, you know, week and a half ago, which certainly impacted yield potential. With some heat coming up, there still is some risk of issues, but again it's not to the extent of what occurred kind of prior to the better rains. Now for soybeans, soybeans still have a long ways to go and with soybeans being more of a rainfall sensitive crop at this stage of the season, yeah, these rains are exceptionally timely and, will be improving the crop here, at least in terms of soil moisture for for crop development as we go through these next several weeks.

Todd Gleason: 20:46

For corn pollen, 93 degrees and above is kind of the critical area, the meaning above that is can be problematic. Were those previous temperatures well above that? And what do you see in the coming temperatures?

Mark Russo: 21:00

Yeah. With the previous heat wave, we did see multiple days, I e, 7 plus days of maximum afternoon temperatures climbing above 95 degrees Fahrenheit across the majority of the belt. Now overnight minimum temperatures did cool down quite a bit rather than stay elevated. So that could be one kind of saving grace here, with, this pass heat. And coming up here, at least the duration and the hours above 95 Fahrenheit on a day or during these multiple days here coming up, again, it doesn't look as long as what occurred back over a week ago.

Todd Gleason: 21:39

In Mato Grosso, other parts of Brazil, are things still wet?

Mark Russo: 21:42

They're easing here. We've seen the pattern turn less active or easing back to something more seasonal for this time of year, and that looks to continue over the next couple of weeks. In fact, a few areas within Mato Grosso could receive only 70 to 75% of normal rainfall, which still the heart of the rainy season, but that still is not enough to, you know, bog down any kind of, early soybean harvesting or safrinha corn planting.

Todd Gleason: 22:10

What are you watching here in the central part of the United States?

Mark Russo: 22:14

Yeah. We're watching the major arctic air of last week retreat, And in fact, we've already begun to see a temperatures climb back up to warmer than normal levels and basically look to stay that way throughout much of this week into the start of the following week. Right now, there's no sign of any extreme cold returning to the nation's midsection. There will be some cold air, lurking in Western Canada. But right now, we're not seeing the signals or the the triggers that would bring that cold, you know, plunging down again into the central US.

Todd Gleason: 22:46

Thank you very much.

Mark Russo: 22:47

You're welcome, Todd.

Todd Gleason: 22:48

It's Mark Russo. He is with Everstream Analytics. Joined us here on the closing market report. It came to from Illinois, a public medium. It is public radio for the Farming World Online on demand at willag.org, where later this week, you'll be able to register for our all day Ag Outlook.

Todd Gleason: 23:05

I'm University of Illinois Extensions, Todd Gleason.