Jul 14 | Closing Market Report

Todd Gleason: 00:00

From the land of Grant University in Urbana Champaign, Illinois. This is the closing market reported as the July 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Kurt Kimmel at agmarket.net. We'll be joined by Freyne Olsen, agricultural economist at North Dakota State University Extension.

Todd Gleason: 00:19

I'll ask him about that very low season's average cash price, $4.20, for the 2025 corn harvest, and then we'll turn attention the weather forecast with Mark Russo of Everstream Analytics. And along the way, I'll remind you to sign up for tomorrow's webinar with FarmDoc team as it's related to the One Big Beautiful Bill Act and the changes it has made in both crop insurance and commodity titles. These may have an impact on your marketing. You'll want to be sure to get yourself signed up. The program runs from noon until one p.

Todd Gleason: 00:56

M. Tomorrow. And you can find all the information on that webinar on our website at willag.org. That's willag.0rg.

announcer: 01:08

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

Todd Gleason: 01:13

September corn today, $4 even, up 4¢. December at $4.18 on its settlement, up five and three quarters. And March, five and three quarters higher. Settlement price at $4.34 and 3 quarters. August beans, down three and a quarter at $10 and a penny.

Todd Gleason: 01:27

November at $10.00 7, down a quarter of a cent. Here to talk about these numbers in the USDA report from Friday is Kurt Kimmel of agmarket.net. Hi, Kurt. Thanks for being with us. Pick up with that report on Friday.

Todd Gleason: 01:41

We can dismiss it fairly quickly. We'll come back to it too, in a bit with Freyne Olsen from North Dakota State University. But the marketplace, looked at it and said, yeah, we thought those numbers were what they were gonna be even though they were a little friendly, I guess.

Curt Kimmel: 01:54

Yeah. When you when you look at the big picture here, old corn one three, new corn one six six is relatively tight, by all means. They kind of shook it off from better expectations for this new crop. Old crop beans unchanged at $3.50, new crop beans raises up 15,000,000 to $3.10. So, you know, it's one of those situations where it's kind of a kick in the teeth when you look at, a little tighter supply demand balance sheet the market that went lower last scratching their heads there.

Curt Kimmel: 02:30

But looking fast forward in through here, staffing's crop conditions reports continue to show the corn crop 74% good to excellent and the soybean crop improving 1% to 67% good to excellent. So, the the corn's six points above a year last year. The beans are behind about 1% in that good to excellent category. But you can break the good to excellent category poor, very poor down and kinda justify any any type of position. But the main thing is on corn particularly as we move into this week here about 50% of the crops moving into pollination and feeders and alts are locking in a higher yield than the 181.

Curt Kimmel: 03:27

Some extra 87,000,000 bushels of corn to work with. Yields kind of discussion right now. As far as on the demand, boy, it's kind of hard to really step in and fine tune it, but yield has continued to be the benchmark. And the market today actually shook off that news, we saw corn finish 3 to 5¢ higher, actually a new contract low, closed higher, closed at last week's high, so I don't know if you can really key price reversal to the upside, but most definitely, the overnight lows going to be supported through here. Beans finished just a little soft, these can hold their, their gains.

Curt Kimmel: 04:15

Some of the emphasis for the turnaround is, one is we've got, another hot dry forecast, July 19 through the twenty fourth, expect the ridge, take place. Then secondly, two, I guess social media gets the star for the day, whether it really helped or not. There's a lot of coverage on Missouri and Arkansas. One particular company, one particular number just did not pollinate at all, with the good weather they saw.

Todd Gleason: 04:44

So, we did drop out for just a second. What I didn't hear from you was what the trade was discussing as it's related to an increase in yield. I just didn't hear the yield number. Heard the one eighty one, but now are they at 183 and 184? What number were they using?

Curt Kimmel: 05:01

All above there. I think a lot is one 180 3 to 100 85. That 185 is the highest we've seen in through here And whenever you just increase, one bushel per acre, that's gonna put an extra 87,000,000 bushels, to the supply demand balance sheet. But, I think we're trading 184 here at the present time, you know subject to change here as we go through the next thirty days.

Todd Gleason: 05:29

So are you expecting that this contract low and you discussed the not quite outside update that we had, do you think that contract low can find traction as a possible low for this marketplace going into the fall?

Curt Kimmel: 05:45

I think it could be a short term low here over the near term and put in a so called little bit of a balance or, or retracement, but it's going to be awful hard, for the markets to sustain some strength here. One, we still have some old crop inventories to move and two, we're going to see the, this, well, we're seeing harvest take place in Texas, but the the delta is gonna pick up here in a couple weeks. We're gonna have plenty of supply on the market here as we move into, the next month or two.

Todd Gleason: 06:17

Hey. Thank you much. I appreciate it, Kurt.

Curt Kimmel: 06:19

Very good. Take care.

Todd Gleason: 06:20

Kurt Kimmel is with agmarket.net. Now on that last note about the supply that has to move out of the old crop, we do discuss that with Freyne Olsen in just a few moments. So stay with us here on the closing market report from Illinois Public Media. And don't forget, you should sign up for tomorrow's one big beautiful bill act farm policy impact webinar with the PharmDoc team that starts at noon. You can find all the information on our website at wilag.org.

Todd Gleason: 06:50

That's willag.org. I'm University of Illinois Extension's Todd Gleason. Frayn Olson, agricultural economist at North Dakota State University with extension in Fargo now joins us. Thank you, Frame, for taking some time with us. I'd like to cover a couple of things.

Todd Gleason: 07:20

Of course, we had a WASDE, the July report on Friday of last week. We have some tariffs to discuss potentially that the president is thinking about putting on, the largest importer of corn, Mexico, starting August 1. So let's start with what, the WASDE report told us about the marketplace when it was released. It should have been bullish, however, or a little more friendly, I suppose. However, the marketplace dismissed it fairly quickly.

Todd Gleason: 07:52

What did you see in it?

Frayne Olson: 07:53

Yes. So I I you know, there's two ways to think about the numbers that come come out from the WASDE. One is to say, well, what's the numbers this month relative to last month? So it was a change, which we we spend a lot of time focusing on and making making sure everybody understands those adjustments. But for a lot of the market analysts and traders, they've already made those adjustments in their in their heads, and so they're looking at it saying, well, what do we expect to see versus what we actually saw?

Frayne Olson: 08:20

So, for example, the trade was expecting to see some small adjustments in ending stocks for both corn and beans, and we got those. The numbers coming out of USDA were very similar to what the trade was expecting. So this business of what are we comparing it to becomes an issue. What I always try and explain to everybody is you know, what we had last month is great, but if we're if the trade is expecting some adjustments, are those adjustments coming out of USDA similar to what they were expecting to see? And that's usually when we get some big shifts or adjustments in the marketplace is when expectations are different from what what the actual numbers are.

Frayne Olson: 09:03

And and so when we compare those, the the USDA numbers came out very close to what the trade was expecting to see.

Todd Gleason: 09:10

On that adjustment side, just looking at the corn balance sheets, there will be an adjustment from old crop to new crop of about 300,000,000 bushels in terms of carryout from 1.34, which I think most would say is a fairly tight carryout for the old crop to 1,660,000,000 for the new crop, and Mhmm. That's, I guess, a a fair carryout. How do you view that, and the transition from this marketing year to the next marketing year?

Frayne Olson: 09:45

Right. And and then and we're in that stage stage of our marketing season where we're we're kinda balancing two sets of numbers. As you mentioned, we've got the old crop numbers. We've got grain in the bin. We've got grain in the system from last year.

Frayne Olson: 09:59

We're trying to say, Well, how thin are those supplies going to be before we hit the new crop as we get into the harvest for the new crop season? The old crop numbers coming in, so the amount of inventory we have in the bin, whether it be on farm or in commercial storage, it is a little bit on the tight side. It's not desperately tight. We're not completely freaking out over this, but it is a bit on the tight side. And so if you're a corn user, a consumer of corn right now, whether it be livestock or an ethanol plant or an exporter, to get those supplies to the new crop harvest is gonna be a little bit tricky.

Frayne Olson: 10:36

So they're trying to ration the old crop a little bit differently than the new crop. And and most of the folks, especially, you know, the farmer, farm managers around the area are looking at the new crop numbers and saying, it looks like we have a pretty darn good corn crop as well as a pretty good bean crop coming in 2025 harvest, but we have to get there first. And so there's this difference in pricing. When do you need the crop? I mean, when do you need your bushels as a consumer?

Frayne Olson: 11:01

And then what kind of supplies we're looking at? And The new crop supplies, the crop that's still growing in the field, those look to be much stronger. I'm not going to say that they're burdensome, but we have a much more comfortable supply chain for the new crop than we do for the old crop. As I was looking back through the numbers, we've seen higher estimates for carryout at this time of the year. If you look back a couple years, we were expecting some really, really big carryout above 2,000,000,000 bushels.

Frayne Olson: 11:34

And so we're below that right now, but it's still much more comfortable than we saw in the in the old crop numbers, which are getting a little bit tight, mainly because of some pretty good export sales.

Todd Gleason: 11:43

So I do wanna talk about the stocks to use ratio. This is, the number, I think, that comes in giving some kind of context to to the $4.20 cash price that USDA is using for the coming year, which most producers are going to say, well, gosh, how could it be $4.20 if when we had 2,000,000,000 bushels, we were $485? What what what's the difference here? And stocks to use ratio really just gives you the supply and the demand both in in kind of an estimate, and it's telling us, I guess, that we're pretty adequately supplied at this point looking forward.

Frayne Olson: 12:19

Correct. And so so there's there's two things going on. So when I when I look back historically and do kind of the analysis, what I find is that when we get really tight, there's kind of a tipping point. When we get started getting really tight, we tend to see really high prices, a lot of price volatility. And then there's there's a a point where it seems like the the the markets get much more comfortable.

Frayne Olson: 12:42

We start to see prices falling and a lot more price stability. And that tipping point from my math is about 10% carryover stocks. So if you have less than 10 carryover stocks on corn, things get a little bit tight and and the market gets a little bit nervous and it's like, well, we gotta make make sure that we don't run out. And on the flip side, we get over 10%, the comfort falls in and and people come become less anxious. The other thing that's going on though in in this year that's a little bit different than we've seen in the past, we tend to focus supply demand or your stocks to use ratio is really focused on domestic production and consumption.

Frayne Olson: 13:18

For corn, our exports are 15%, 18% of our total use. This year, the Brazilian crop, in particular the Brazilian safrinha crop, is looking exceptionally good. The safrinha crop, or what they call the winter crop, accounts for about 75% of the total bushels produced in Brazil. So their safrinha crop is looking very good, which really also signals we are going to have a lot of competition in the international market. So yes, we have most of our use for corn in The US is domestic in the livestock sector or in ethanol, but we do rely on that export market to be able to get rid of a pretty significant number of bushels.

Frayne Olson: 14:02

It's that export market I think some of the traders are looking at and saying, We have to be price competitive versus the Brazilians to be able to make those sales. And and that's why I think they're getting a little bit more anxious and saying, you know, this is gonna be a competitive, export season for the next several months.

Todd Gleason: 14:17

Okay. So now let's talk about prices going forward looking at the December contract, and we are approaching that four dollar level, around $4.15, $4.16 for the day. We have made new contract lows as early today, in fact. And and I'm wanting to know, when you look at this marketplace, is there room to push this market to $3.80 through the harvest season when we're going across the scale, and having to put bushels in the elevator with an in charge? And how should producers think about those bushels?

Frayne Olson: 14:59

So that's a really tricky question, and it And it really does depend upon the individual producer. So here's the setup I'm concerned about. Rephrase the question as to how could we get to those low levels, especially coming into harvest? What series of events would have to occur? Well, first, we would have to have continued favorable weather conditions through the end of the pollination season and through the end of the growing season.

Frayne Olson: 15:27

So we start getting really good test weights, our bushel counts start to come up, we get big, big, cob length as well as cob thickness, all of that can start adding to yield. The other thing I'm a little bit concerned about is I do know at least up here in the North, we still have a lot of old crop corn in the bins. And what I'm a little concerned is given the fact that we've got what looks to be a very good new crop corn coming in, that we're gonna have to try and clean those bins out at least to have some storage space to be able to keep the combines running as well as to try and find enough room for everything. So if we have really good corn crop, we have a really good soybean crop on farm storage, I think it's gonna be at a premium, which means we might get a a flush of sales starting in probably late July or August to try and get those cleans those bins cleaned out. That's typically historically at a time where we don't have a lot of export demand.

Frayne Olson: 16:25

It's a little bit harder to try and find room for everything. The elevators are also going to be in the same position where they are not going to want to have a lot of old crop corn in storage coming into harvest because they are going to have as much working room and flexibility as possible. So I get a little bit concerned that if we start having this flush of farm level sales coming into harvest, that we have to push those through the system before we get into the harvest months the peak of that harvest rush. So I get a little bit concerned that not only from a future standpoint, but also from a basis standpoint, we might start seeing some of the basis soften as we come into harvest, assuming now again that the weather conditions hold and that our expectations and our viewpoints about what yield is going to be maintained. I think the bias right now is for a very good crop, and it might be getting larger depending upon what happens again in in August and and with temperatures and rainfall.

Todd Gleason: 17:26

Thank you much. I appreciate it, and we'll talk with you again in another month.

Frayne Olson: 17:29

Alright. Always a pleasure, Todd.

Todd Gleason: 17:31

That's Frey Olson, agricultural economist from North Dakota State University Extension. He's based in Fargo. If you'd like to hear his comments again, you can do that on our website. Look for the closing market report today at willag.org willag.0rg or search it out in your favorite podcast applications by name, closing market report. If you're at our website, you'll be able to listen to not only today's closing market report, but if you hit the podcast tab, you'll see the closing market report for the last six days as well.

Todd Gleason: 18:06

That's all at willag.0rg. Let's check the weather forecast for the growing regions across the planet. Mark Russo is here. He's with Everstream Analytics. Hello, Mark.

Todd Gleason: 18:22

Thanks for being with us again on a Monday.

Mark Russo: 18:24

Hi there, Todd. Thanks for having me.

Todd Gleason: 18:25

Let's start with the Corn Belt. Give me the short term forecast. We have had some rain quite a bit actually in some places. Who missed it, if anybody? And what can we expect over the next, I don't know, three to five days?

Mark Russo: 18:40

Yeah. Certainly, Northern Northern And Central Illinois, were the winners here with the rain activity here over the weekend or late last week as well. And that was the area that needed it, considering the drier conditions that were in place from late June into early July. So that dryness has basically been solved. And looking forward, there continue to be opportunities for rain, not only in Illinois, but across much of the Corn Belt.

Mark Russo: 19:09

Now a few areas of Indiana and Ohio could use more rain here coming up, and they do have chances. So overall here, rainfall over the next couple of weeks looks to register not that far from normal. So for any remaining dry pockets, they have really good opportunities to improve. As for temperatures coming up, for the next basically from now through the end of the month, we're not seeing any yield threatening heat. However, we are keeping an eye on some longer range computer model guidance suggesting that temperatures will be quite toasty here and some heat actually building in right around August 1.

Mark Russo: 19:53

So something to keep an eye on, but we have a ways to go there.

Todd Gleason: 19:56

What is it that tells you that might be the case?

Mark Russo: 19:59

A couple of different things, Todd. Number one, in terms of computer model guidance, just in the past twenty four hours, we saw pretty strong signal in all of the guidance of this kind of broader or stronger ridging of high pressure across more of the Southern Half of The US, but that does build into the Midwest. And because of the stronger signal in guidance, that definitely has caught our attention here. And then also we're seeing across the entire Northern Hemisphere actually this strengthening of ridging, but being more displaced south of what it was back over the past several weeks or even back in the June as well. And so that also is something that has signaled potentially some changes on the way as we approach August 1.

Todd Gleason: 20:47

Now because you talked about this being across the whole of the Northern Hemisphere, does it change anything in Europe at all?

Mark Russo: 20:54

It is. For the next couple of weeks or the July, things are looking improved here in terms of rainfall and reducing the anomalous temperatures or heat that has influenced and still influence Europe this week. But the overall pattern for the next two weeks, it's becoming, more troughy, and that is allowing more opportunities for rain and also beginning to cool temperatures down and helping to stabilize their summer crops, especially corn, which has been hit here recently by heat and some of the lowest soil moisture for this time of year of the past twenty years.

Todd Gleason: 21:31

So that covers France. If you're doing corn, then probably Serbia, Yugoslavia, those places as well.

Mark Russo: 21:37

Yeah. Both in Western And Eastern Europe, France, Germany, Poland, down through Romania, Bulgaria. The only area within those countries name that at least they won't improve or stabilize as much as the rest, that would be portions of Romania down into Bulgaria.

Todd Gleason: 21:56

Thank you much. We'll talk with you again next week.

Mark Russo: 21:58

You're welcome, Todd.

Todd Gleason: 22:00

That is Mark Russo. He is with Everstream Analytics, joined us on this Monday edition of the closing market report from Illinois Public Medium. It is public radio for the farming world. You can find and listen to our programming online anytime you'd like. The address is willag.org, willag.0rg.

Todd Gleason: 22:18

Where right now, and don't forget to do this, you may sign up for tomorrow's noon to one p m farm doc webinar related to the one big beautiful bill act and how it will change crop insurance, SEO, ARC, and PLC. You wanna join us at that time. Again, that's noon with the FarmDoc team, the agricultural economist here on the Urbana Champaign campus of the University of Illinois. A webinar for you as it's related to agriculture and farm policy and changes that came with the one big beautiful bill act that was signed into law by president Trump. Do that at willag.0rg.

Todd Gleason: 23:00

The webinar is tomorrow from noon to one p. M. I'm University of Illinois Extension's Todd Gleason. You have a great afternoon.