Jun 04 | Closing Market Report

Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report. It's the June 2025. I'm extension's Todd Gleason, coming to you from the Distillery Labs in Peoria, Illinois, a member of the Illinois Innovation Network. We'll hear more about that a bit later along with a look at the weather forecast and the markets on this Wednesday edition of the closing market report from Illinois Public Media. Greg Johnson from TGM, that's totalgrainmarketing.com, now joins us to take a look at the marketplace.

Todd Gleason: 00:36

Hi Greg, thank you for being with us. What can you tell me about the market that's new and interesting today?

Greg Johnson: 00:42

Well, new and interesting may may not be two words that we can use to describe the markets. We've been very quiet not only this week and not only this month, but for the last two months. I was just looking back since the May 1, corn is only down 3¢ and beans are only up 9¢. And if you go back to the April 1, corn is up a penny from where it was two months ago, And beans are only down 11 from where it was two months ago. So extremely quiet markets and that's reflected in the volatility on the options.

Greg Johnson: 01:18

We're at a seven year low when it comes to volatility. So things are pretty quiet. It's too early to really start focusing on weather, although every week we're one week closer to when the corn gets closer to pollination, and that's obviously a critical time. But when the crop's just getting planted, it's just hard to get the market excited about weather because if it rains, rain makes green in a lot of traders' minds, and if it doesn't rain, these small crops don't need a lot of rain. So for the crop that has been planted, it's hard to come up with anything that, would really be debilitating, as far as potential yield.

Greg Johnson: 01:58

Now for the areas in Kentucky, Southern Illinois, Southern Indiana, Southern Ohio, where they haven't got it planted yet, it does not look very good. There's more rain in the forecast this week and more rain in the forecast next week for those areas. And so we could see some acres either shift over to soybeans or we could actually see some prevented plant acres being claimed on in those areas. But around here things look great. I was just looking at the wet rainfall totals for Champaign at the Illinois State Water Survey.

Greg Johnson: 02:32

And for the month of May, we finished once again below our ten year average. That makes five months in a row. Every month so far in 2025, we've been below normal rainfall. We've only received 10 inches of rain for the first five months. We normally receive 16 inches of rain.

Greg Johnson: 02:51

Northern Illinois is in the same boat, about 10 inches for the first five months. But like I say, we don't need that much rain now. As long as it remembers to rain in July and August, we'll probably be fine. But Southern Illinois, on the other hand, has received well over 22 to 25 inches of rain so far this year. So while we're a little on the dry side here in the central northern part of the state, they're obviously way too wet in the southern part of the state, and we'll just have to see how that all plays out.

Todd Gleason: 03:19

I would say remembering to rain rain in July and August might be harder than you think. We'll see. I mean, is July and August, so it is it doesn't have to rain much. Actually, I think Emerson Nassiger for a long time would say you need four inches of rain or one inch a week in both June and July. I'm well, I've heard him talk about June and say, you know, dry Junes aren't so terribly bad for the corn as long as July gets some rainfall, particularly as we go through pollination.

Todd Gleason: 03:52

So we'll see how all of that moves through the system. It's in the futures, and the futures will try to negotiate what the rainfall across the Midwest will look like. On the prevent plant and acreage shift potentially to soybeans, are there enough acres do you think, across that, Illinois, Indiana, Ohio area to make a difference?

Greg Johnson: 04:17

Probably not to make a difference. What it will do is keep that corn acreage number going up very much. There was a lot of talk because the corn price was so much better relative to the bean price ever since last winter that, we actually could have seen we probably did see more corn acres, corn on corn being planted in the Central Northern parts of Illinois, Iowa, some of the other areas where they did get off to a good start because of the drier weather. So that 95,300,000 acreage number could have been 96 or 97, based on, more corn on corn acres. But now if you take away the acres down south that probably will switch over to beans or go to prevent plant, we're probably still looking at maybe just right around 95,000,000 acres.

Greg Johnson: 05:02

So I think that's we we dodged a bullet because on June 30 when we get the revised acreage number, if that would have come out at 96 or 97, that really would have been tough for the market to handle. So I think we're in pretty good shape as far as keeping that number right around 95,000,000 acres.

Todd Gleason: 05:20

Here we are at the June. Historically, how have producers done compared to previous years in marketing new and new crop corn and soybeans?

Greg Johnson: 05:34

Yeah, they we're we're way behind on new crop corn and bean marketings. Old crop corn and beans, we've done a good job. Farmers are pretty well sold out. I'd say 90% plus on sales on old crop corn and beans, but probably less than 15% on new crop corn and less than 10 to 15% on new crop beans. The prices just haven't been, what, farmers would have, liked to have seen.

Greg Johnson: 06:00

The good prices that we saw were back in February, which was probably a little too soon, for a lot of guys to pull the trigger. They wanted to get something planted and then, probably felt more comfortable about selling. But by the time that we got it in the ground, the prices weren't weren't near as attractive as they were in February. So bottom line is, farmer selling is behind normal once again for the it's similar to the last two years, and I think we're just waiting for some kind of a weather scare, weather rally. Farmers are hoping to take advantage of that, and I think there's a good chance of that.

Greg Johnson: 06:34

But I would remind people that, you know, farmers that those weather rallies tend to last not very long, you know, maybe a week at the most, and then the forecast can change. So, these lower prices, I think, are good reminders to, have to remind farmers to get offers in, because the prices probably will go up temporarily, but if if we get rain in July and August, they probably won't stay there.

Todd Gleason: 06:59

Yeah. The spread between the December and the March contract is, what, just about 15¢. That's not enough to cover an in charge at this point. What are you telling producers as it's related to crop that they might need to bring to the elevator?

Greg Johnson: 07:12

Yep. Look at December corn futures, which have traded as low as $4.2 and as high as $4.8 and we're currently in the $4.44 range. So we're at the lower end of the range, So I'm not excited about encouraging farmers to sell corn at these prices, but a 20 to 25¢ rally and all of a sudden we're back up close to the top end of the range again. And I know farmers would love to have $5 corn, but given the fundamentals that we have, dollars 5 corn probably just isn't in the cards. So I think we have to lower our sights to something more realistic and have offers in and around that $4.7 to $4.75 range, because that will allow you to have some corn sold in the fall, get some money, not have to pay storage.

Greg Johnson: 07:54

I think there's a lot of advantages to having some corn sold ahead. And the same way on the soybeans, we've been as low as 9.7 on November soybean futures. We've been as high as 10.7. So the midpoint is 10.2 and we're at $10.25 today. So we're right in the middle.

Greg Johnson: 08:10

It's not a bad place to get some beans sold, but again, if we think we're gonna get a little bit of a weather rally here in late June, early July, it wouldn't be a bad idea to have offers in on soybeans to take advantage of any rally that we may see.

Todd Gleason: 08:22

Hey. Thank you much. I appreciate it.

Greg Johnson: 08:24

Hey. Thank you, Todd.

Todd Gleason: 08:25

Mhmm. That's Greg Johnson. He is with TGM. That's totalgrainmarketing.com. Well, you know, I'm in Peoria today at the Distillery Labs.

Todd Gleason: 08:39

This is part of the IIN or the Illinois Innovation Network that was funded in part by the University of Illinois when it was founded. We're joined by Chris Youngmark. He is the director of the Peoria Next Innovation Center. That's at Bradley University here in Peoria, but works also with the Distillery Labs, which is a private public partnership in Peoria to try to innovate some interesting functions. This morning we were here with a group of FFA teachers from across the state of Illinois.

Todd Gleason: 09:17

I was teaching them about podcasting, but there's just an awful lot that was happening in this lab today. Can you tell me how important the NEXT Lab, which is where you're the director at, on Bradley is, and this kind of innovation hub that Distillery Labs might be to a city like Peoria.

Chris Youngmark: 09:38

Yeah, absolutely. So Peoria Next and the Turner Center for Entrepreneurship at Bradley University are here and were formed to support entrepreneurs and agnostic of industry, know the opportunity to start that business but not know exactly the direction you wanted to go, that's where we step in as advisors, as mentors to understand what is that idea or what is that business? What are your next steps? Who else do you need to talk to? How can we help you grow that?

Chris Youngmark: 10:10

And so you have a sustainable, profitable entity going forward. And Peoria is really blessed with a lot of resources similar to what we do. It's either the SBDC, the Small Business Development Center at Bradley, organizations like Distillery Labs here, Minority Business Development Center, the list goes on and on with no cost or low cost resources to support that entrepreneurial, those those ventures and those ideas.

Todd Gleason: 10:38

This particular lab is focused on sustainability also on medicine. OSF is one of its public partners. Interestingly enough, the hospital here in Peoria, of course also in Champaign Urbana and other places. How does this innovation lab, these kinds of innovation labs, work with the entrepreneurs whether they're corporate or small because internally there are a couple of really small startup companies too and I suppose that would be the case on Bradley's campus at NeXT.

Chris Youngmark: 11:13

That's correct and so one of the clearest ways that we can offer that value is the affordability, the ability to get into a space and operate commercially without incurring all the costs that go along with that. So before you get a brick and mortar building or before you build your own physical laboratory, we can use shared spaces, communal spaces to offset some of those costs so that those expenses can be reinvested or reimplemented into the business to help that business grow, not just paying the utility company or paying the lease on a space. So these, the shared incubator model, isn't unique to Peoria, but at the same time it's been proven, throughout the nation as an opportunity for solopreneurs, those early stage founders with limited resources to get in and to start to ideate or formulate prototypes. Where those prototypes go from there, that's what this network is about. You know, it's either working with maybe the next corporate partner or finding the funding to advance research or to get that physical location that would allow that scalability so.

Todd Gleason: 12:17

I would say that being here and thinking about the workspaces that are available people to use when they don't really need a brick and mortar area and they need a smaller space than renting an office somewhere plus conference rooms that might be available here is a small part of it but it's about sometimes the co location with the city, state, maybe even federal and university folks that really makes the entrepreneurship tick.

Chris Youngmark: 12:52

Absolutely, and you know certainly the city of Peoria and really many of those surrounding communities, counties as well, have a similar focus and they know where to turn to, generally speaking, they know where to turn to to find that next level of help. And so once that conversation has started, then we can start to figure out what are these best moves. You're right, sometimes being in proximity to other entrepreneurs, startup companies, you never know what might come of that, but if nothing else, it's inspirational. And so we appreciate the diversity of what this region offers and we're rising to meet that need. I think to your point, the shared spaces, know, if you think about food entrepreneurs, either burgeoning chefs or producers and makers, before you get that first food truck or before you get your first brick and mortar, maybe you come to Distillery Labs and try out their commercial kitchen, or maybe you you stop up to the new recently opened A Matter of Taste kitchen in Peoria Heights to, to test that, you know, to test the market, to see if what you your idea says is good is really gonna be profitable at the end of the day.

Chris Youngmark: 14:04

And so we're here to set up that success with, you know, baby steps sometimes, but a little bit dose of reality mixed in there as well based on experience and based on, you know, proven success successful methods.

Todd Gleason: 14:16

Chris Youngmark is the director of the Peoria Next Innovation Center at Bradley University, joined me here at Distillery Labs. It's part of the IIN, the Illinois Innovation Network. As an example, iFAB, which is based on campus in part but runs from Champaign to Decatur to help push biofuels and other kinds of things developed from agricultural products forward, especially in the sustainability side, is an example of what comes out of these sorts of innovation centers. Let's take a look at the weather forecast on this Wednesday afternoon with Drew Lerner. He's at World Weather Incorporated in Kansas City.

Todd Gleason: 15:11

Hello, Drew. Thank you for being with us.

Drew Lerner: 15:13

Yeah. Yeah. Another nice day over here. We finally turned off the rain on our part of the world, but I think there's still more coming, and there's a lot of other folks that are getting a lot of moisture, I think.

Todd Gleason: 15:25

We are among the other folks getting moisture today, but let's talk about the elephant in the room, although I'm not sure it's an elephant. Maybe you can tell me. There's a lot of chatter about this thing called the ridge. What is it and why do we care?

Drew Lerner: 15:41

Yeah, a ridge of high pressure is being advertised rather late in the two week forecast model run. It actually begins to evolve towards the second weekend of the two week out, right around mid month. This ridge of high pressure actually starts off in the Southeastern Part of The United States and kind of builds back to the Northwest to some degree. But what this ridge is going to do is it should bring on warmer temperatures and shut off to some of the rain. I think that some of the folks that have been writing about this have been kind of implying, oh, you know, this is the ridge we've been waiting for all year long and that this is gonna block all the rain and we're gonna get hot and dry and, you know, the markets are gonna go through the roof.

Drew Lerner: 16:27

And, you know, I just wanna kind of squelch that a little bit for a couple of reasons. The ridge that is advertised is going to build up on top of our very wet Central And Southern Plains and parts of the Delta to some degree. And once you start heating up that ground, that's so wet and with the water standing in some of the fields, you're just gonna bring more water vapor into the atmosphere And you're gonna warm that water vapor and lift it into the higher altitudes where it runs into cooler air. All of a sudden, you're gonna get more showers and thunderstorms to pop up under the ridge, which will prevent the ridge from becoming a dominating strong ridge where we go into a prolonged droughty kind of pattern. So that is number one as to why that ridge isn't going to stick around in a very negative way.

Drew Lerner: 17:20

The second problem with this is that the jet stream and the higher latitudes is super strong. That's why we've got all this cool air coming around and why we're getting all this rain as one storm system after the other. And until we can slow down the jet stream in the higher latitudes, there's no way that a ridge is gonna set up and stick around for a long period of time. The top of the ridge will constantly be flattened out as the disturbances run into it. So the bottom line, if we do get a ridge of high pressure and about a week to ten days, it's gonna be actually a blessing for the producers out there trying to produce as much as they can because the crop areas in The US are almost too wet and it's been fairly chilly.

Drew Lerner: 18:05

Degree day accumulations may not be exactly where we'd like to have them. And this will bring those degree day accumulations up and stimulate aggressive crop development and help to firm up the ground a little bit. So to me, it looks like a blessing rather than anything that would be threatening. Maybe later in July or August, we can dream up something that might actually verify.

Todd Gleason: 18:26

And seven to ten days out, what happens in the meantime across the Corn Belt?

Drew Lerner: 18:30

Yeah. This first week of the outlook is going to continue to be wet, wet, wet. We've got a lot of energy still moving through the central part of the country. So more rain and hard red winter weak country, more rain in the Lower Midwest. Actually, all of the Midwest is gonna get rain, but it's that lower area that's so wet.

Drew Lerner: 18:49

And parts of the Delta will also continue to get rain. So we're going to have some very wet conditions from the South Half Of Kansas into the North Central parts of Texas and from there into the Delta, Tennessee River Basin and Ohio River Valley. And some areas will make it fine through all this and some areas may not. The biggest concern I have is actually for hard ribbon or wheat in parts of South Central And Southeastern Kansas into Oklahoma. Those areas have already had a ton of moisture.

Drew Lerner: 19:20

And now we're gonna perpetuate the rainy pattern for another seven days. And that crops moving along. We've got some wet weather disease issues and some grain quality potential problems on top of the fact that the protein levels may not be all that whoop de doo. So a little bit concerned about that crop out there from a summer course grain oil seed perspective, corn and soybeans. Like I said, I think this is not necessarily the better scenario.

Drew Lerner: 19:48

Some of those crops are still sitting with wet feet and they really need to dry down a little bit. But I do think we'll get to that point after the ten day period.

Todd Gleason: 19:56

Is there all that whoop de doo in the Canadian prairies? I know they've had some problems.

Drew Lerner: 20:02

Yeah. You know, the the Prairies right now, the topsoil is very short of moisture from Extreme Eastern Alberta through most of Western And Northern Saskatchewan into Northwestern Manitoba. And part of that region has very short subsoil moisture too. The only thing that's keeping that crop going right now is the fact that the temperatures have cooled off quite a bit. They planted in the last few weeks.

Drew Lerner: 20:29

A lot of that crop has very short root systems and it needs to be stimulated into developing better roots, but you've got to have moisture to do that. And it hasn't rained very well. And what we're concerned about is after we go through another week of relatively mild weather, the potential for ridge building, as we mentioned before, is becomes much higher for the Central part of North America. That'll push heat into Canada. And if we can't get some significant rain to fall across some of these very dry areas in the Prairies, we're going have a lot of crop that will probably fail or at least really get in pretty bad shape.

Drew Lerner: 21:09

So it's an absolute must that they get, you know, maybe, I don't know, half to an inch and a half of rain in some spots and in others, maybe an inch or two in order to get that crop in a position where it can handle some warm and dry weather. You know, it's only the June. We got a lot of summer ahead of us, so we gotta get some moisture up that way.

Todd Gleason: 21:29

And finally, and I hesitate to ask this question, but how's the safrinha corn crop doing in Brazil?

Drew Lerner: 21:36

You know, that crop, we it certainly has had a lot of press. But, you know, the bottom line is it's been raining routinely unusually in parts of Mato Grosso, the Soul and Parana and parts of Sao Paulo, even Paraguay and all these States and the country of Paraguay all produce a safrinha corn crop and the subsoil moisture is adequate. And that means that that crop that was planted so late is actually in a very good environment between the good subsoil moisture and the timely rain to yield a whole lot better than everyone was worried about. Now to the north in Mato Grosso, which is probably, you know, almost half of that Sirena corn crop for Brazil. It's a different story.

Drew Lerner: 22:25

It hasn't really rained much up there and Goias too. So both those states are drier bias than areas to the south. And so there is still some stress occurring there and a little bit of a decline in yield is certainly occurring across those areas. So it's a mixed bag, but it's nowhere near as bad as what was feared, you know, a few weeks ago.

Todd Gleason: 22:46

We'll talk with you again next week.

Drew Lerner: 22:48

Alright. Have a good one.

Todd Gleason: 22:49

You too. That's Drew Lerner. He's with World Weather Incorporated in Kansas City from the Distillery Labs in Peoria, Illinois. You've been listening to the closing market report from Illinois Public Media online on demand at willag.0rg. You have a good afternoon.

Todd Gleason: 23:07

I'm extension's Todd Gleason.