- High Priced NH3 Likely to Persist into the Fall
- Eric Snodgrass, NutrienAgSolutions.com
From the land to Grant University in Urbana Champaign, Illinois. This is the Closing Market Report. It is the March 2026. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Mike Zuzolo and the weather forecast with Eric Snodgrass.
Todd Gleason: 00:17Along the way, we'll explore yesterday's webinar from the PharmDoc team and their expectations for the price of anhydrous ammonia this fall. If you can stay with us for the whole hour today, you'll hear all of our commodity week program too. If not, you'll hear a portion of it and the rest of it you can hear over the weekend on many of these stations or up online right now at willag.org. Todd Gleason services are made available to WILL by University of Illinois Extension. May corn for the day settled at $4.62.
Todd Gleason: 00:50It was down 5. July at $4.73 and a half. Four and a half lower. And December, new crop down four and a quarter. Settlement price there at $4.90 and a quarter.
Todd Gleason: 01:00May beans, $11.59 and a quarter, 14 and a half lower. July down 14 and a quarter to $11.75 at a quarter, and November soybeans at $11.44, down eight and three quarters of a cent. Bean meal $6.80 lower, the bean oil down 61ยข, wheat futures in the soft red unchanged at $6.00 5 for the July, the hard red at $6.47 and a half, up six and a quarter since all on this Friday afternoon. Mike Zuzula, globalcomresearch.com out of Atchison, Kansas now joins us to take a look at the marketplace. Hi, Mike.
Todd Gleason: 01:36Thanks much for being with us on a Friday. A lot of expectations for this Friday, including SREs and RVOs. They came through in a big way, but the market didn't seem to care. Can you tell me about, what the expectations were, what actually came out, and how the market reacted?
Mike Zuzolo: 01:53Yeah. I mean, the the expectation, I think, Todd, for both 2026 and 2027 biofuel obligations from EPA were around 24 to 24 and a half billion RINs. USDA, excuse me, EPA came out with 26.8 for 2026 and 27 point o two for 2027. So about roughly 2,000,000 2,000,000,000 more for each year. I think the biggest thing that I saw that was price friendly.
Mike Zuzolo: 02:20The market was the total mandates, would include a 70% blending obligation. In other words, that small refinery exemption or waiver, I think we were thinking it was going to be 50%. But the EPA took it up to 70%, which the way I read that was and the way I read it is the the large refineries are gonna have to add another 20%. They're not gonna be able to take that small refinery exemption. So I think I saw it the same way as the national corn growers saw it, the Clean Fuels Alliance saw it, the American Coalition for Ethanol.
Mike Zuzolo: 02:55All of them came out with statements applauding this decision. Haven't seen anything from the American Soybean Association yet, but look like to me a good EPA decision for the production side of the equation, increased production in the domestic blending. And then the, you know, e 15 waiver for summer blends. All of a very good news. Why did we make new lows, heading into Friday after the news announcement?
Mike Zuzolo: 03:20I guess I'm gonna chalk it up to good old fashioned buying the rumor and selling the fact.
Todd Gleason: 03:24Yeah. So does that mean we'll start back up on Sunday evening into Monday if nothing changes, in the fundamentals over the weekend?
Mike Zuzolo: 03:34Yeah. I mean, with crude oil back around $99 a barrel and I I will say this, Todd. I think that going into the weekend, we may have a lot of news to digest ahead of Monday's acreage and stocks report. So I'm gonna say Friday's close meant next to nothing. The the the supply demand numbers we got meant a lot, puts a lot more burden on the stocks report and the acreage reports as far as increased domestic demand, maybe take some pressure off president Trump with his meeting in China.
Mike Zuzolo: 04:02But when it comes to the the energy side of the equation, the extension given to Iran from Friday to another ten days for him to increase and escalate the conflict. I think the trade took that very seriously as Iran is now setting the pace of the war, and that it adds to the questions about The United States and Israel's goals and whether they match up. And I say that because we we saw the crude oil really take off and the stock market really get hammered on Friday. So I think I'm leaning towards this is still early days, and there's more upside in the grains than downside given the energy markets.
Todd Gleason: 04:40You mentioned the perspective plantings and the grain stocks figures. Those are due out Tuesday at 11:00 next week. What are your expectations at this point?
Mike Zuzolo: 04:50Well, I'm I'm still light on corn. I I you know, nine bushels is the expectation, a little bit over for the average trade guess. I'm the lowest number is 8.42. I would probably be down in that area because I just don't think we had as big a yield, and and we have more demand than what USDA has given us right now. So that's where the quarterly grain stocks come into play.
Mike Zuzolo: 05:11I would say the quarterly grain stocks and the acreage for corn, if they both come in tighter on supply, it really adds to the idea that we're done selling corn out in the farm country because we're planting now. And so that means the corn maybe has a bit more upside potential to it than maybe the trade's giving it for right now. My acreage base is still 93.5 on corn and and 87 on beans. I'm out of the highest trade guess for the news wires, and that's just because of rotation and because of the higher levels of crop insurance. So that's kinda how I'm playing it.
Todd Gleason: 05:43Alright. Well, it'd be interesting to see how that plays out. Those numbers are due out again at 11AM central time on Tuesday. I won't get a chance to talk with you again next Friday because it is Good Friday, and the markets are closed. Fortunately, you'll be joining us for commodity week, and we'll take up all those numbers and everything that takes place in Iran and the rest of the world.
Todd Gleason: 06:06Anything else you've been watching at this time that we ought to pay attention to, whether it's in South America or someplace else?
Mike Zuzolo: 06:12Yeah. The one thing we didn't touch on, Todd, that we really need to, and this goes back to the crude oil market and the wheat relationship. It's diverged a little bit. It came back together at the end this week. Winter wheat drought, cattle drought, both at 57% this week.
Mike Zuzolo: 06:24They're both going up. Conditions are going down. I I think the week becomes a much more supportive feature unless we see a lot of rain as we get into the April. So be watching for that as well.
Todd Gleason: 06:35Meteorologists have been warning us about that for a while, and it doesn't look like there's much in the offing for them, I think, at this point.
Mike Zuzolo: 06:42No. And we've got Texas and Oklahoma and Colorado and Kansas all falling. You know, Kansas lost 6%. That's our anchor right now in weak conditions, and winter wheat's 57% versus 38% a year ago. So it's it's significant.
Mike Zuzolo: 06:55I can tell you that.
Todd Gleason: 06:55We'll talk more about that later. Thanks much.
Mike Zuzolo: 06:57Thank you, Todd. Have a great weekend.
Todd Gleason: 06:59You too. That's Mike Zuzlow. He's at globalcomresearch.com. Joined us here on the Closing Market Report. You know, corn farmers have been fearful about the elevated price of fertilizers for a couple of years now.
Todd Gleason: 07:23It's not a new thing exactly, but the war with Iran has made it front and center in Washington DC. It was February 2022 actually when Russia invaded Ukraine and the price of corn had been rallying for no real apparent reason since the previous fall. The futures markets were anticipating something that had not happened, and then on the twenty fourth day of that month, tanks from Russia rolled into Ukraine and upended the global grain trade. Both nations are major players providing the world with wheat and corn. Those supplies were in doubt, and the price of corn spiked to $8.
Todd Gleason: 08:02The market feared a disruption, but farmers there still went to the field. They still planted and harvested a crop, and by 2022, the price of corn had sunk to $5.6 a bushel. The global food and feed crisis had been averted. You'd think that's the story, but it's not really. The real issue for corn farmers is with the price of energy, gas.
Todd Gleason: 08:31It takes those two things to make diesel fuel for the farm and to move grain and natural gas to make nitrogen fertilizer. That's one of the three primary plant foods: NPNK or nitrogen, phosphorus, and potassium. Crude natural gas prices plummeted in 2020. That's further back than we've been so far as the whole of the world shut down. Crude bottomed in April at $16 a barrel.
Todd Gleason: 09:00Natural gas cost about $3 then. Two years later, the Russian invasion of Ukraine pushed crude to $128 a barrel and natural gas to $6.70. Remember, corn prices were at $8 a bushel. Therein lies the difference. This time, so far, crude spiked to about a $120.
Todd Gleason: 09:21Natural gas, about 6, and the price of corn, not 8, not even 5, but $4.70. Here's the kicker. Natural gas, the primary ingredient required to make nitrogen fertilizer, well, it's been $6 since last summer. Here's Washington DC based economist Gretchen Cuck from the National Corn Growers Association talking about that price difference.
Gretchen Kuck: 09:45If you had asked me in February or December, what, you know, one of my biggest concerns was, for farmer profitability, I probably would have already told you fertilizer. This is not a new idea. This is not a new concept. As far back as September, we had a survey of growers saying up to 40% were planning to reduce fertilizer applications to weather some of these economic conditions.
Todd Gleason: 10:09McCuck made her comments during a recent University of Illinois webinar on the impact of the Iran war on fertilizer and fuel prices.
Gretchen Kuck: 10:17We already had a really interesting year in fertilizer markets leading up to this crisis. You had elevated high prices that we've had since 2020. You've had we're heading into our fourth year of projected net negative returns for corn growers, which makes it really hard to cash flow some of those increased really high production costs, and and you're having farmers having to make a lot of really tough decisions already. Maybe we're we're hoping for prices to come down and hadn't bought, but you've you've had, you know, US tariffs re rerouting some supply chains. You've had restrictions from China on phosphate.
Gretchen Kuck: 10:57You've had countervailing duties on phosphate. So it's been a really complicated year already, and this is not really a new idea that farmers are concerned about high fertilizer prices.
Todd Gleason: 11:06Despite the war, corn prices have remained relatively low. That's forcing farmers to make difficult decisions about fertilizer applications and overall profitability. They could choose to cut back application rates, of course. It's been clear for some time that producers aim for the highest yield per acre rather than the highest profit per acre. Lend Grant University scientists across Midwest have built this calculation into the online nitrogen rate calculator at cornratecalc.org.
Todd Gleason: 11:37It optimizes the amount of nitrogen to apply including all map, dap, 28, urea, and ammonia combined. Still, this doesn't really resolve the issue. It just softens the blow. Say agricultural economists from the University of Illinois, Nick Paulson, and Gary Schnicki were leading the webinar in which Gretchen Cuck made her comments. It's online, by the way, at youtube.com/@pharmdoc.
Todd Gleason: 12:03Here the two are starting with Paulson explaining the increasing price of anhydrous ammonia in Illinois since the beginning of the current conflict.
Nick Paulson: 12:12Just as a comparison, because we were able to update this through yesterday, March 25, we do see, again, increases, relative to the start of the conflict on the order of about 15% if we're looking at Corn Belt locations for, anhydrous ammonia prices, a higher relative increase in The Middle East, closer to a 20% increase, over that timeframe from pre conflict on Friday, February 27 to yesterday, Wednesday, March 25.
Gary Schnitkey: 12:44Just a couple of other notes here. Nitrogen prices or anhydrous ammonia were edging up before the conflict. So we saw those rising. And we still don't, fortunately, or had those at the $1,200 level like the previous conflict. And by the way, the previous conflict, we were seeing nitrogen prices rise because of hurricane Ida well before the Ukraine Russia event happened.
Todd Gleason: 13:10Schnitke has been working on and using a simple anhydrous ammonia price forecasting model for a few years. Generally, when prices spike, it shows these persist for some time. Right now, even if the conflict in Iran were to be settled, it suggests while there are profitability issues today with the 2026 corn crop, likely to be more of a problem in 2027. That, says Nick Paulson, is because the model shows an $860 per ton average anhydrous ammonia price this fall in Illinois.
Nick Paulson: 13:44And that $860 number forecast that you see there, I think we talk about that in the article. You know, that I don't want to say that's a best case scenario, but I think there's even a pretty good chance that we'd see premiums, above that, Just given kind of what we saw in really the two years following that Russia Ukraine crisis, we did see some premiums above what you would maybe expect given where corn and natural gas prices were, which is kind of what this model uses to forecast premiums above kind of those maybe fundamental levels that extended into the 2022 and again into the '23. You can see those labeled on the screen there. Close to $100 in $22 $80 in $23 And so we could expect, you know, easily I think, you know, potentially $1,000 anhydrous prices in the fall, particularly if the conflict continues. Gary, you have anything to add?
Gary Schnitkey: 14:43No, just that that's going to make a difficult decision environment because many farmers often price their ingredients then and we'll see where prices are at that point in time. But you know, continuation of current prices would make the economics of growing corn in particular a bit, more difficult.
Todd Gleason: 15:06Again, that last voice was Gary Schnitke. It was preceded by his University of Illinois agricultural economics colleague, Nick Paulson. The two were joined by a series of experts, including Gretchen Cuck from the National Corn Growers Association for a webinar you may find and watch right now on YouTube at youtube.com/farmdoc or on our website at willag.org. Eric Snodgrass from Nutranext Solutions and Agribble has been traveling for the last twenty four hours, but he's nearing home now. Eric, thank you.
Todd Gleason: 15:45I know you've had a difficult twenty four hours in flight time because of the storms. We'll talk about that in just a bit. However, you were telling me about something, you and a colleague have developed called the Elvis rule. It relates to the questions that you keep being asked by producers because there's so much drought in the West, and it appears so much like 2012. They wanna know if it is.
Eric Snodgrass: 16:12Yeah. I mean, so you're right. When you look at the Western Corn Belt, you look at the Southern Plains, we've got an extremely dry March that unfolded after an overwinter drought with the area. There's been numerous fires. We've seen them in the news.
Eric Snodgrass: 16:24We've watched them in the weather. And even today they're under red flag warnings for high winds and more fire danger. So at the last two events I did this week, which yes, the storms last night cost me an extra twelve hours in airports, which is why I'm just now getting home midday today. Only thing good by the way in all this Todd is the Illini won. So I was in high spirits the entire time.
Eric Snodgrass: 16:47But this this Elvis rule, we we should talk about it. So here it is. Okay. We have 75% of the country in some form of drought. Right?
Eric Snodgrass: 16:54Some stage of drought. And I got asked, hey. How does it compare to 12? We do this every spring. And I'm saying it doesn't compare at all.
Eric Snodgrass: 17:01We actually had much less drought in 2012 than we do in 2025. And people are like, well, what does that mean? Are we are we in for it? I said no because of what April and May rain can do. And I said, now listen.
Eric Snodgrass: 17:14If you're in the Midwest, which you and I certainly are in the bull's eye of that, I said, you have to apply the Elvis rule. And everyone's like, Elvis rule? I said, yeah. Elvis Presley. I said, if I live in Iowa, Illinois, or Indiana, I'm gonna watch Memphis.
Eric Snodgrass: 17:29I'm gonna watch Graceland. I'm gonna watch on one side of it over to Little Rock and the other side of it over to Nashville. And in every big, big drought that robbed us of yield in June and July, there was already drought in Graceland. So that's that's our source area of really dry air in June and July. Now this doesn't apply after that.
Eric Snodgrass: 17:50So you can't use it for August and September and on. But I said if if in April and in May we do not recover moisture in the Mid South, then the risk is on for June and July. And if you go back and look at 2012, which is what the comparison questions are all about, I mean, it was a massive statistical outlier with how dry it was or where over where we have now the Elvis rules. So, Todd, for the next five, six weeks, we're gonna bring up Elvis in every single one of our talks because it'll just be a question as to whether or not they break away and get the moisture and relieve us of the worry of drought. By the way, what is the worry?
Eric Snodgrass: 18:27Our drought risk increases three times. So three x risk on droughts if we get the Mid South very dry in April and May. So I'm talking again about June and July, the two following months.
Todd Gleason: 18:39Not very far away. So what do you see for that area?
Eric Snodgrass: 18:42I see it wet. So the Elvis rule is going the other direction, and that's why I'm saying the 2012 comparison right now is probably not the most wise year to compare against. And on top of that, the other part of this, you and I have talked about for years, Todd, is that in 2012, already in early March or March, excuse me, the amount of cold water that was in the Gulf Of Alaska and off the West Coast, I mean, was everywhere. We just don't have that this year. In fact, we're watching a big El Nino build versus, colder water developed off of those West Coasts of North America regions.
Eric Snodgrass: 19:14So I do see this. We've got a pattern that's gonna develop a trough in the West starting on Monday, Tuesday of next week. It'll dig into the Central Plains. Midweek next week, it's gonna open up the Gulf, and we're gonna see multiple chances for more storms and more rain. And, yes, the severe storms that have come through us already in Illinois, which, by the way, Illinois is leading the statistics categories on severe wind, hail, and tornadoes, so far this week.
Eric Snodgrass: 19:36We've had a lot of severe weather, and last night added to, in fact, big hail over in Urbana just nearby us. But all of that has also brought in rain, and it's really revived the area, especially some of the topsoil with moisture. It's to our west that the big concerns remain, and I think April may not be as kind to pockets of Nebraska or Kansas or Colorado or the Panhandles, which means they're gonna be desperate for May rains in that area to cure their drought situation.
Todd Gleason: 20:04Alright. Well, with that, we'll wrap it up. Thank you very much, and we'll keep track of whether Elvis is in the building and we're partying in the rain in April or not. How about that?
Eric Snodgrass: 20:14We'll talk with you again next good. I'm a big Elvis fan, so I'm all for then.
Todd Gleason: 20:18That is Eric Snodgrass. He is with NutriNet Solutions, and Agrabelle helped us to wrap up this Friday edition of the Closing Market Report. You can stay with us. You'll hear all of our commodity week program. It's coming up next, and many of these radio stations will play it over the weekend.
Todd Gleason: 20:33It's also online right now at willag.org.