- Eric Snodgrass, NutrienAgSolutions.com
From the Lend Grant University in Urbana Champaign, Illinois. This is the closing market report. It is the July. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Mike Zuzlow.
Todd Gleason: 00:13He's at globalcomresearch.com out of Atchison, Kansas, and we'll hear about the agricultural weather forecast from Eric Snograss from NutriNag Solutions at Agrabal. If you can stay with us for the whole half hour, we'll also include all of our commodity week program. If not, you'll hear a portion of it with our panelists including Joe Jansen. He's with the University of Illinois along with agmarket.net's Kurt Kimmel and Greg Johnson from Total Grain Marketing all on this Friday edition of the closing market report from Illinois public media. It is public radio for the farming world online on demand at willag.0rg.
Todd Gleason: 00:56September corn for the day settled at $3.99 and a half. That was down two and a quarter since December at $4.19. A penny and three quarters lower in the March at $4.36 and a half on this Friday afternoon. A penny and three quarters lower. August soybeans, $9.98 and 3 quarters, five and a half lower.
Todd Gleason: 01:12September at $10.02, down three and three quarters. November beans at $10.21. They finished 3 and a quarter cents lower for the day. Bean meal futures a dollar 90 lower. The bean oil at $56.49, 18¢ lower.
Todd Gleason: 01:27December wheat at $5.58 and a quarter down 3¢. The hard red at $5.47 and three quarters down two both in that December contract. Mike Zuzolo, globalcomresearch.com in Atchison, Kansas now joins us to take a look at the marketplace. Hello, Mike. Thanks for being with us.
Mike Zuzolo: 01:45Great to be back with you, Todd. Thanks for having me.
Todd Gleason: 01:48Where would you like to start today?
Mike Zuzolo: 01:49Well, I think for us, the commodity demand low mindset is something that I really wanna keep track with for anybody that I'm talking to in in ag media. And because if it's not gonna be about weather as far as how the market goes in terms of turning around, and we continue to keep demand underpinned, especially in corn like we saw this past week. And we see trade deals signed with still inadequate, I would say, details, but yet forward progress is being made. And the market still is making new weekly lows, which it did in soy and in soft red wheat, but not corn. I think it's important to keep track with whether we can make a commodity demand low before the August crop report.
Mike Zuzolo: 02:38And this week kinda suggested to me that while I'm not giving up on it, it's not a dead idea at all because of the fundamentals that I just mentioned. But it is kind of on life support because we weren't too far from taking last week's lows out. And those are the big numbers for me as we get prepared for the USDA WASDE numbers. And so that's kind of where I sit as we close out the Friday trade is that I got what I wanted fundamentally, from the trade deals, from the demand side. Price action was not having anything but lower prices, and I think that really does go back to the supply side, the weather side.
Todd Gleason: 03:15I was going to ask you what this goes back to, but I suppose you're telling me that it's simply that crop growing conditions in The United States, particularly across the Midwest, have been really pretty good so far this season.
Mike Zuzolo: 03:28I I think so. I think there's probably some program selling going in, with the commodity funds still with the corn being the short side of spreads. We noticed that early in the week. The the beans try to rally. It's hard to think about, but those beans, you know, getting back up towards that ten thirty plus level early in the week and then ending up back down around 10.
Mike Zuzolo: 03:48At the end of the week, the market seems very satisfied with $4 corn at front end and and $10 beans front end. And that's, I think, where the program selling comes into play because the beans tried to go. Corn was a short side of spreads. Then after we saw more Chinese news about meal from Argentina going second low going to China, saw that they were gonna start liquidating their sow herd because of poor profitability and losses. These things just brought the beans right back down again.
Mike Zuzolo: 04:18So at the end of the week, I still feel as though, as I felt the past several months, beans still have the roughest road as far as trying to get higher and breaking their trend.
Todd Gleason: 04:27Let's go through what you think the supply side of the marketplace might look like because as you said, the demand side has been fed, though it hasn't really reacted.
Mike Zuzolo: 04:40Right.
Todd Gleason: 04:41What do you see as it's related to the moisture levels across the Corn Belt and how that's feeding into yield?
Mike Zuzolo: 04:49Yeah. I mean, are areas that look like they're gonna get blessed with some very needed rains, East Of The Mississippi especially, and maybe a little bit more in the Dakotas as well and also Central And Western Kansas. But it midweek, I went ahead and did my corn yield analysis ahead of the August numbers. And I got a lot of really good feedback from clients both before and after and subscribers as well. And I felt really good about the numbers and how I did them.
Mike Zuzolo: 05:19Use a variety of different tools, anecdotal talking with the clients and subscribers, a lot of satellite imagery, a lot of other modeling that I do. And what was hard this year, Todd, was there is a lot of inadvertent or indirect losses showing up on some of the satellite imagery because of the wet spring and the either the poor stands or, one Northwest Iowa client told me, and and this is really important because I think Iowa is the heart and soul of people talking about one eighty five plus national corn yield this year. He said two thirds of my crops amazing, but the other third between the trash in the field or you know, doing no till. I just had really bad stands and the beans look really rough. And I'd say one third of my crop is no better than average.
Mike Zuzolo: 06:11And that's in one of those areas that did get a lot of rain in the springtime. And I think that's what's going to be the issue, whether USDA picks that up because of the satellite imagery, I'm looking at and some other things, or whether they have to wait until we actually get in the fields in the fall is probably the biggest question in my mind. But I couldn't get much above USDA's 181 level from last year on national corn yield. Came out with 182.2. Part of that reason goes back to talking about what I just talked about in states that just got done having record yields, Illinois last year, Iowa last year, South Dakota 164 last year, can we really be above last year's level in South Dakota because of some of these metrics that I'm looking at.
Mike Zuzolo: 06:55So if the 182.2 is right, we've shaved some of the old crop carryover down to maybe a 1,300,000,000 bushel, keep everything else the same from USDA, you're looking at maybe a 1.7 to carryover instead of 1.6. This begs the question, why are we at three ninety five Sep corn? That's more like a two one to two two carryover on my model.
Todd Gleason: 07:17Do you have a reason why?
Mike Zuzolo: 07:19Well, yeah. I mean, I think we do have a lot of traders and a lot of colleagues I work with, and I'm sure you've talked to a lot of our mutual colleagues at +1 85, +1 86, even +1 87 national yields being kicked around just because of the fact that the corn conditions are at a nine year high right now.
Todd Gleason: 07:37Do you mind if we detail the top five corn producing states in the nation and what you think their yields might look like?
Mike Zuzolo: 07:44No, not at all. And the reason I do the top five, and I'm glad you brought that up, is is because they're gonna be, around 56,000,000 acres of the 95.2. So they're they're approaching 60%, just those five states. Every acre is gonna count this year when you're talking about record yields. I don't mean to shortchange the other states out there, but when you look at the top five, Iowa, Illinois, Nebraska, Minnesota, South Dakota, and I was I was surprised once again to remember that Kansas is number six, just barely below South Dakota at 6,200,000 acres.
Mike Zuzolo: 08:19You throw Kansas, Indiana, and North Dakota into the mix, you're talking about 65,500,000 acres, and that's gonna take you up to almost 70% of the total. But for the top five, I I put Iowa up about 2.5 bushels to two thirteen point five. Illinois actually took below last year because of the southern third of Illinois. So instead of two seventeen, I'm at a two fourteen. Kansas very similar 01/1929 last year, 01/2024 is where I'm pegging Kansas, Illinois and Kansas are probably going to be the areas that if I'm wrong on my yield, it's probably going to be there.
Mike Zuzolo: 09:00Nebraska, I kept exactly the same as last year at 188. South Dakota, I took down three bushels because it was a record at 161. And that would be, you know, another area that would be something I'll watch to see if I'm off on. Then Minnesota, I did take up, two and a half bushels from last year to one seventy six point five.
Todd Gleason: 09:21For those of you who are following along and trying to figure out where your state might have landed in the mix, this is the order by production. I think that Mike may have put them in order by total number of acres, but by total production, the prediction for this year is Iowa as usual for number one. Illinois, Nebraska, Minnesota is number four, South Dakota is number five, and then Kansas which edges out Indiana, and that's followed by number eight, North Dakota. We haven't talked about soybeans. Maybe we should take those up, Mike.
Mike Zuzolo: 10:02No. And I think it's a good place to end the the discussion because soybeans gonna be doing that yield update after the August report comes out, because we're still making the crop. One thing I've noticed about soybeans, though, we had a very nice inverted market, probably what, three or four weeks ago in beans with July beans leading the November. And now with the August now lead month, we've seen that inversion get quickly erased. And I'm keeping track of both Sepp Dees or excuse me, Sepp March corn and Sepp March beans.
Mike Zuzolo: 10:36And Sepp March beans are now over 51¢ in terms of a carry. And so we're talking about 8.6¢ a month for carrying charge. Trade clearly is telling the farmer, we aren't worried about supply. They're doing the same thing in corn at a little over 6¢ a month. But you can see by the spreads that this trade is not worried about the demand side, and certainly not worried about the the yields at this point.
Mike Zuzolo: 11:00And that's really, I think, again, the crucial point of where we're heading as far as the August report. For beans, especially to me, Todd, I don't know about you, but it feels a lot like last year at this time for beans. Could we go another 50 or 60¢ lower based upon the USDA report? Or is this actually going to put in a low for the the, you know, next two, two and a half months, kind of like what we did last year? And it just feels a lot like August '24 as we get ready to this get to this next August report.
Todd Gleason: 11:31Hey. Thank you much, Mike.
Mike Zuzolo: 11:32Thanks, Todd.
Todd Gleason: 11:33Mike Zuzlow is with globalcomresearch.com out of Atchison, Kansas joined us on this Friday edition of the closing market report from Illinois public medium. Find us online at willag.org, willag.0rg. Our theme music is written, performed, produced in courtesy of Logan County, Illinois farmer, Tim Gleason. Eric Snodgrass from NutriNag Solutions and Agrabal now joins us to take a look at the weather for the growing regions across the planet. Hi, Eric.
Todd Gleason: 12:13Thanks for being with us. Let's go back to last week when you and I were unable to come up with a term, and I'm a little surprised that nobody wrote in and said, hey, dude. That's tassel wrap. They didn't. Yeah.
Todd Gleason: 12:27So that was good on my part, I suppose. But I'll bet you have checked into that, and you have some more to talk about, particularly as it's related to the impact it might have.
Eric Snodgrass: 12:40Well, that was what's funny. It's funny how old news gets. Right? So, like, last Thursday, when I was starting people talk about it as we were really discussing how warm these overnight low temperatures have been and how rapid the the crop growth was, I started to hear folks just chattering about that. It's amazing to think it's only eight days old.
Eric Snodgrass: 12:58Right? But now it feels like really, really old news. Like, hey. We got this thing called tassel wrap. And so anyways, so yeah.
Eric Snodgrass: 13:05So long story short, I was talking with some folks here. So think about this, Todd. When you look at the early part of this growing season back in May and in early June, we were way behind on heat units. It was cool. Do you remember that?
Eric Snodgrass: 13:16I mean, I I was looking at some crops planted on the same day last year as they were this year that were, like, twelve days behind in their maturity because of the lack of heat. And then what happened is the June came on, and it got really hot. And since we got into July, we've had plenty of episodes of heat with overnight lows that have been, you know, fairly well, very much above normal. In fact, the Eastern Corn Belt's probably looking at the top five warmest, you know, mid June through the July time frame in history. Going back to, like, 1893 is how back our data were.
Eric Snodgrass: 13:49Okay. Crap grew fast. And so I was walking through fields on Monday because I was like, you gotta tell me what's going on here. So I took one of our local guys named Craig Robert. He went out there and walked through the field with me along with Keith Keith Gingrich, who I also work with.
Eric Snodgrass: 14:03And we found two things, a rapid growth syndrome, which is where these low down leaves on the on the corn plant have, like, little ripple to them. And, you know, they told me it was rapid growth syndrome. And if you go back and look at it, Todd, we had a very cold May, a cold start to June, and then it was the June that the heat came on, you know, I mean, a lot. So starting off ten to twelve days behind normal on heat accumulation, you know where we are now? We're above the the historical GDD number.
Eric Snodgrass: 14:30And so what's amazing is we put on all this heat late. The crop grew very, very rapidly, put on a lot of biomass very quickly. And, as a result, yeah, we see the rapid growth syndrome, and we see some of the issues with, the tassel wrap. Now I was like, is this tassel wrap a big deal? Like, tell me what that means because I don't understand it.
Eric Snodgrass: 14:46He goes, well, first of all, look at the silks. And the way it was described to me, says, look how that silk looks like Farrah Fawcett's hair. I'm like, okay. Good analogy there. I guess it's really long and flowing.
Eric Snodgrass: 14:56He says, well, that's the ear kind of putting out, you know, that that it's getting out there trying to catch the tassel that it's not got yet. And but he said, look. If we just have a few plants with tassel wrap in a field that's nothing. Like, the rest of them that have opened up, we're gonna be able to cross pollinate this, and it'll go. But it's, it's just something to to think about.
Eric Snodgrass: 15:13Now bigger picture, we do know that warm overnight lows tend to have a a downside impact on yield. So, Todd, I looked at 2010 as a possible analog. Because if you remember, I know it was fifteen years ago, but 2010 was one of those summers where we just had constant hot humid nights. And the USDA over projected yields, I think, what was it? Seven bushels, what the adjustment was at the end.
Eric Snodgrass: 15:36So some folks are still wondering, is this crop as amazing as everyone says it is? I'll just say this. If you look at it from space, the NDVI values, again, the newest data that just came out set a record. So, Todd, that is what I know. It has rained in a lot of places.
Eric Snodgrass: 15:51It's raining right now across Central Illinois as we're talking. We got storms coming in this weekend, and you can't make the argument that drought expanded at all. Even though there's little pockets, it did not expand, this summer. So there you go. That's what I know.
Eric Snodgrass: 16:04That was the mistake a week ago, and now we've corrected it.
Todd Gleason: 16:06Rain makes grain, and you may expand on that if you'd like. But, otherwise, I'd like to look forward not to the hot weather, but the cool weather that's coming.
Eric Snodgrass: 16:17Yeah. There is. Thank goodness too. I I it's been uncomfortable. And, so we're gonna start to see by about midweek next week, a front drops out of Canada, drier air and also cooler air.
Eric Snodgrass: 16:29I I we're gonna go from temperatures in low to mid nineties several days in a row to, like, 80. And it's gonna be very well timed for our crops, very well timed for our own human well-being to get out of this heat. And all the while before that cooler dry air gets here, it's gonna we're gonna have chances for storms coming through. So I can't look at that and say that that is a a bad forecast, right, for the crop. It's certainly one there.
Eric Snodgrass: 16:54This heat would have stuck around longer. It would have been problematic, but I don't see it right now.
Todd Gleason: 16:58August arrives a week from today. Will the cool down continue into that month?
Eric Snodgrass: 17:02It will. August is gonna have a cooler go to it. And it's kinda like what we saw, with the cadence of weather patterns, you know, in June and in July. So I've been kinda joking about this, Todd, but it's kinda funny. I don't know about you, but when I was a kid, right, my mom used the v o five shampoo.
Eric Snodgrass: 17:20Right? You can get it at Walmart. And I I you know, when you're a kid, you, like, read the shower bottles because you lose all sense of time when you get into the shower. And I remember reading and I had a buzz cut as a little kid. But, you know, on the back, it said wash, rinse, repeat.
Eric Snodgrass: 17:34And I never knew what that meant as, a 10 year old. And, of course, I do now. But I I'll be honest, Todd. I think August is gonna be a wash, rinse, repeat kind of month on what we've seen here in the last thirty to forty days. So here's what I'm gonna tell you.
Eric Snodgrass: 17:47Expect a cool start, and then you're gonna get a pulse of warmth that comes in in the middle of the month, maybe last towards the end of the month. But we've had complete open access to the Gulf Of Mexico or Gulf Of America, the Gulf, and it's it's gonna rain. I think we're gonna get storms out of it, and then that's the way it's gonna be. So expect hot and humid conditions followed by some reprieve. Wash, rinse, repeat.
Todd Gleason: 18:09Any indication of what the fall will be like?
Eric Snodgrass: 18:12Yes. I I looked hard at this this morning. So let's think about the last falls. Okay? 2022, we were very, very dry going into fall.
Eric Snodgrass: 18:22We had a La Nina. 2023, we were not as dry going into fall. We had good rains. We were at an El Nino. 2024, we went back to La Nina, absolutely bone dry except for hurricane Helene.
Eric Snodgrass: 18:35So where are we now? We have chances of having a weak La Nina going forward. So most forecast indicates that September, October, November has a drier bias to it. Now that means you have to overcome what we've been doing all summer, but there's a hint that that may occur. So I would think that right now, it's a pretty favorable outlook for the harvest weather and then the fall application time frame.
Todd Gleason: 18:56Speaking of harvest, you should probably turn some attention to South America harvest of corn there. They seem to have an abundance of it. Yeah. Even a third crop that's coming on at some point soon. What do you see there?
Eric Snodgrass: 19:10Well, we are, of course, in the dry season now down in Brazil's like Serrato, the main growing area. And we know they've harvested a huge crop multiple times in this particular growing year. And I just have to tell everybody, no one's gonna like what I'm about to say, but I gotta be honest with you. If we do have a La Nina like fall, okay? The Brazilian monsoon, excuse me, tends to start on time or even start early, which means they would be able to go after this next crop of soybeans, which would open up their crop calendar rather than compress it.
Eric Snodgrass: 19:42If I am wrong, then we have to go back to the discussion of what it means when Brazil has a more compacted crop calendar, But La Nina weather tends to make dryness south into Far Southern Brazil and Argentina, which, of course, plant much later than they do up in, like, Mato Grosso. So La Nina tends to get them off to a good start.
Todd Gleason: 20:01Oh, great. You're telling me they have enough soybeans to continue putting them into the export market. Yes. And that they'll turn around more quickly than expected, possibly to put a second set in or their first crop for the next growing season sometime early in January or maybe as early as late December. Thank you so much for joining us today, Eric.
Todd Gleason: 20:26Eric Snongrass is with NutriNet Solutions Integrable joined us on this Friday edition of the closing market report that came to you from Illinois Public Media. If you can stay with us, our commodity week program is up next. If not, many of these radio stations will carry it over the weekend, And you can find it online at willag.0rg right now.