May 18 | Closing Market Report

cmr260518

- Ag Markets with Curt Kimmel, AgMarket.net
- Comparing Corn Production Costs in the United States and Brazil
- US-China Ag Deliverables: Board of Trade, Soybean Sales, $17bln
- Ag Weather with Mark Russo, EverStream.ai

Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report. It is the 18th day of May, 2026. I'm Illinois Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Curt Kimmel. He's from AgMarket.net out of Normal, Illinois. He'll tell us all about the big rally that took place in Chicago at the CME group today for corn, soybeans, and wheat. And then we'll turn our attention to the differences between raising a corn crop in Iowa and raising a corn crop in Mato Grosso, Brazil, financially, that is. We'll be joined by Joana Colussi, who's penned an article for the farmdoc daily website. She's at Purdue University and an agricultural economist there. As we close out our time together today, we'll take a look at the weather forecast with Mark Russo from EverStream.ai. I'll bring you some comments that Jamieson Greer, the US Trade Representative for the Trump administration, made yesterday on the Sunday morning news programs. You want to stay with us for that right here on this Monday edition of the closing market report that comes to you from Illinois Public Media.

Announcer: Todd Gleason's services are made available to WILL by University of Illinois Extension.

Todd Gleason: July corn today at $4.77 on its settlement price, up 21.25 cents. December, that's the new crop, at $4.98, up 17 cents. July soybeans, 36 cents higher, the settlement price at $12.13 for the old crop; new crop at $12.01 in the November, 30.25 cents higher. Bean meal up 21 cents, soybean oil $1.75 higher. July soft red winter wheat gained 28.75 cents to settle at $6.645 for the harvest month, and the harvest month hard red at $7.0375, up 15.75 cents for the day. Live cattle futures in Chicago down 77.5 cents at $247.15, feeders $2.60 lower at $358.85, and lean hogs $102.75 per hundred pounds, down 60 cents for the day. Crude oil up $3.54 at $104.54, that's the WTI, and the crude oil in the Brent at $112.13, up $2.86. Here to talk about these numbers is Curt Kimmel. He is at AgMarket.net. Hello, Curt. Thanks for being with us again on a Monday.

02:21 Ag Markets with Curt Kimmel, AgMarket.net

Curt Kimmel: Glad to be here for a Monday again. Thank you.

Todd Gleason: Tell me about the marketplace as you saw it develop overnight and during the day trade today.

Curt Kimmel: Giddy up, here we go again. Going home Friday, there were some fairly nasty reversals to the downside, with a lot of 'wish I coulda, shoulda, woulda.' Now we're back to almost where we were before we broke. December corn is near $5, and November beans just closed above $12 benchmarks. It's risk-on, risk-off. I guess there's a White House fact sheet that came out, providing a little bit more detail on what China could possibly do. In addition to the 25 million metric ton bean commitment, which is valued anywhere from $10.5 to $12 billion, there's supposed to be an additional $17 billion on top of that, putting total ag purchases near this $28 to $30 billion mark. Therefore, there's a lot of money and optimism which could come into the ag sector. There is no real confirmation on this news from China for the most part; we'll have to see several things fall in place. But what little signals there were included close to 400 export licenses granted or renewed for beef plants to ship beef to China. Why? I don't know, because we're basically looking at record-high beef prices here in the US. Why we would be trying to curb inflation and export beef to China, we'll see. The other thing is we did see some Chinese interest from the commercial side in sorghum out of the Gulf. There are some cat and mouse things going on here. There was quite a bit of optimism going home last Friday when the funds liquidated a fairly large long position. But today, going into midday, they came back two-fisted buying, with up to 30,000 contracts of corn, 16,000 contracts of beans, 7,500 of wheat, 4,500 of meal, and about 6,500 contracts of oil going into midday. We put a lot of optimism back into the marketplace here. I think the trade is going to be eager to see confirmation on this. Also, how is this going to be enforced, if it's going to be enforced? If you go back to Phase 1, Phase 2, Phase 3, or whatever, the administration at that time did not hold their feet to the ground on this. The bottom line is optimism. I looked at John Deere stock; if there's that much optimism, John Deere stock should have been up, because you give a farmer $1, he'll spend $2. I think you can look around in some other sectors to try to confirm. Also, if we're going to be selling a bunch of grain and ag products to China, you need to watch the shippers too. Hopefully, we can keep these gains going here for a while as we move forward, Todd.

Todd Gleason: We'll follow up with some more information about the trade deals that have been struck maybe between China and the United States a little bit later in this program. I do want to know what you're thinking about planting progress for this past week and how farmers did getting into the field.

Curt Kimmel: There's quite a bit of catch-up and also quite a bit of replant taking place. Going home Friday, they thought we'd see 60% of the corn and 50% of the beans planted. The official trade guess is that 75% of the corn is in the ground as a nation, with a range anywhere from 72% to 78%. For soybeans planted, the average trade guess is about 67%, ranging from 63% to 75%. So we're continuing to stay above the average pace, and we're above last year's pace. For the most part, it's going to come down to getting maybe that last 5% to 10% in. But we're in mid-May. With this heat coming on and helping the crop move along here, we'll hopefully get some crop condition reports as we get into the second half of May.

Todd Gleason: Thanks much, we'll talk with you again soon enough.

Curt Kimmel: Very good, take care.

Todd Gleason: That's Curt Kimmel. He is with AgMarket.net.

07:37 Comparing Corn Production Costs in the United States and Brazil

Todd Gleason: Joana Colussi now joins us. She is an agricultural economist at Purdue University in West Lafayette, Indiana. Hello, Joana, thanks for being with us.

Joana Colussi: Hello, Todd. Thanks so much for having me again.

Todd Gleason: You have written an article that's been posted to the farmdoc daily website, along with many other places, titled "Comparing Corn Production Costs and Returns in the United States and Brazil." We probably should start, not with the conclusions of this article, but with some of the methods and where the data comes from. Purdue for a very long time has pulled data from a larger set of production costs from around the planet. Can you tell me about that data set?

Joana Colussi: Yes, this data comes from the agri benchmark network. That's a global network that compiles production and economic information on many activities like beef, cash crops, and dairy across 35 countries in North America, South America, Europe, and Asia. The agri benchmark concept of typical farms was exactly developed to facilitate the comparison between different countries and different agriculture systems. In this article, we explored specifically the United States and Brazil.

Todd Gleason: Of course, Purdue has a long history of using the agri benchmark network to come up with the data comparing production costs across countries. In this case, you're looking at an Iowa farm and a farm in Mato Grosso. Can you give me some of the basics of the size of these farms?

Joana Colussi: Yes. When you think about the average area planted to corn over 2020 to 2024, it was almost 6,000 acres on the Brazilian farm, and almost 2,000 acres on the US farm. We expressed all this information, the costs and revenues, in dollars to enable the direct cross-country comparisons.

Todd Gleason: Just to be sure and to clarify, on the farm in Mato Grosso, this was for the second or safrinha corn crop only?

Joana Colussi: Yes.

Todd Gleason: Tell me about the primary differences between producing a corn crop in Mato Grosso and Iowa.

Joana Colussi: When you look at the cost shares for corn production, direct costs dominated the typical Brazilian corn farm, accounting for more than 50% of total costs in every year analyzed. Basically, this reflects Brazil's high input expenses, especially for fertilizer. We know that corn is particularly dependent on nitrogen, and these prices rose significantly after 2022 because of the disruptions related to the Russia-Ukraine war. Brazil is also heavily dependent on nitrogen imports, which supply nearly 95% of the country's consumption. Meanwhile, for the typical US farm, overhead costs accounted for the largest share of total production costs in three of the five years analyzed, representing more than one-third of total costs. This large share primarily results from appreciating land values that contributed a lot to higher land costs over the last few years. The exceptions were 2022 and 2023 when direct costs exceeded overhead costs because of the high fertilizer prices.

Todd Gleason: What kind of conclusions can you draw about the differences and the impact mostly between these two kinds of production cost setups? On the Iowa farm, it's really the long-term investments that make the difference and make up the bulk of the price tag, as opposed to the farm in Mato Grosso where they're paying more than half of the cost of production of a corn crop on the input side. How does that play out in the financials for these two sets of farms?

Joana Colussi: When you put together the total production cost and the gross revenue, economic profits are different between the two farms. Both farms had record profits in 2022 when Chicago corn futures prices exceeded $6 per bushel. But when you consider and compare as a whole, the Iowa farm had higher total costs between 2020 and 2024, largely because of the higher overhead and operation costs, including land, machinery, labor, and capital-related expenses. In contrast, the Mato Grosso farm had lower total costs, but its cost structure was more heavily concentrated in direct inputs, especially fertilizers, and less concentrated in operation and overhead costs. We should remember that the role of the second crop corn in Brazil also helps explain those differences, as land and some machinery-related costs can be spread across soybeans and corn within the same production year. However, the second crop corn is more exposed to production risk because planting happens within a very short window after soybean harvest and also depends heavily on the timing and duration of the rainfall season. Unlike soybeans, where average yields in the two countries are very similar, average US corn yields are more than twice as high as Brazil's because of decades of specialization and highly developed production systems here in the US. Brazil's growing competitiveness is basically driven by the ability to expand corn acreage through second crop production, spread some fixed costs across two crops, and produce corn at a lower total cost. That is the big difference when you compare Brazil and the United States, especially Mato Grosso, the number one corn producing state in Brazil, and Iowa, the number one corn producer in the United States.

Todd Gleason: So the bottom line for you is that the US continues to hold an advantage in those production and scale costs as it relates to corn, particularly in years when the price of fertilizer and direct cost inputs are higher?

Joana Colussi: Yes, I would say yes. When you compare total production in Brazil and the US, the United States is three times bigger than Brazil and has scale. Total production and yields are double that of Brazil. Brazil is growing, but the growth in corn production in Brazil is based on the second crop that still has a lot of room to continue growing; their competitiveness is based on lower total costs. The United States can offset that with higher yields. They are completely different agricultural systems. When you compare soybeans in Brazil and the US, the agricultural systems are much more similar than when you compare corn production because of the second crop in Brazil, which represents almost 80% of total corn production.

Todd Gleason: Hey, thank you much. I appreciate it.

Joana Colussi: Thank you so much for having me.

Todd Gleason: Joana Colussi is an agricultural economist at Purdue University in West Lafayette, Indiana. You may read her article on the farmdoc daily website, or at willag.org. You're listening to the closing market report on this Monday afternoon. Our theme music is written, performed, produced, and courtesy of Logan County, Illinois farmer Tim Gleason.

17:01 US-China Ag Deliverables: Board of Trade, Soybean Sales, $17bln

Todd Gleason: Yesterday on CBS's Face the Nation, the US Trade Representative was asked about the new Board of Trade structure the Trump administration hopes to put into place to manage relations with China. Jamieson Greer said the board's development will be important to formalize trade relations, as opposed to creating it on the fly and in an ad hoc form. A note here from me: this sounds a bit like a bilateral replacement for the WTO, or the World Trade Organization. It's not clear that's exactly the case, but Greer did suggest it would deal with a host of tariffs, import controls, export controls, and even non-tariff barriers. On that last note, Greer says China, during the visit last week, agreed to reduce a host of non-tariff barriers on agricultural products like beef and poultry. He also, when pressed, went on to say the Trump administration believes under the trade deal struck last fall, that it still has the ability to impose tariffs on incoming Chinese goods.

Jamieson Greer: The Chinese know, just like many other countries we're dealing with, that we're going to have a certain level of tariff to control our imports, but that we also expect market opening.

Todd Gleason: Here's how Greer talked about the agricultural product deliverables from the meeting between Presidents Trump and Xi.

Jamieson Greer: First of all, we've had a deal in place with the Chinese since October that they would buy 25 million metric tons of soybeans each year for the rest of the President's administration. So that deal is still in force. What we expect with the new purchase agreements—where the specific number will be announced very soon—are double-digit purchases of aggregate agricultural products. When I say aggregate, I mean everything else. That could be soybeans, that could be beef, that could be grains, that could be dairy products, all kinds of things. So we have the existing soybean deal that they may be referring to, and then over and on top of that, we have these agricultural products as well, and all of that will be facilitated by Board of Trade discussions with the Chinese.

Todd Gleason: There are a couple of new bits of information in Greer's comments there and on the White House website. First, the trade representative said the 25 million metric tons of soybean purchases would come in "each year for the rest of the President's administration." It's not been clear until now whether those sales were pegged to calendar or marketing years. By Greer's account, and this note on the White House website, it is calendar years. The note reads in part, quote, "China will purchase at least $17 billion per year of US agricultural products in 2026, prorated, 2027, and 2028, in addition to the soybean purchase commitments that it made in October 2025," unquote.

19:51 Ag Weather with Mark Russo, EverStream.ai

Todd Gleason: Let's turn our attention to the growing regions. We'll concentrate to begin with on the Corn Belt. Mark Russo is here; he is with EverStream.ai. Hi, Mark. Let's get right into it. What do you see for the weather as it relates to the Corn Belt? You can talk about the storms we've had and the storms that are coming.

Mark Russo: Sure, Todd. Looking back here over the past week, let's start there. We did see mostly dry weather across the summer crop belts, especially here across the Corn Belt. As a result, we are expecting some pretty big jumps in the state planting numbers that will be issued here this afternoon. Coming up, we expect favorable weather here and planting to continue through the remainder of the month. Basically, the Corn Belt and most summer crop areas will continue to be at a pace which is either close to normal or ahead of normal, due to precipitation which will be generally close to normal and temperatures averaging out to be near to even above normal.

Todd Gleason: So the rainfall events that have come and will continue to come are kind of in the range of what we expect and really pretty good for a beginning of the crop?

Mark Russo: Yeah, exactly. Just continuing this generally favorable start.

Todd Gleason: Tell me about those areas that we have not had the best of rainfall. I'm thinking really of the hard red winter wheat growing regions of the United States.

Mark Russo: The Plains as well as the Canadian Prairies, those are the areas having issues. For the Plains hard red winter wheat belt, those issues are primarily due to the long-term dryness across that region. As we've seen with the recent updates in numbers here for the Plains hard red belt, they continue to be in very poor shape. We just haven't seen any kind of significant improvement in soil moisture this spring. Coming up, as the crop matures and starts to be harvested, we don't see any turnaround in the situation.

Todd Gleason: Check in on the safrinha or second crop corn for me in Brazil.

Mark Russo: For Brazil, they continue to be in good shape with no issues of note at this time. There are still some additional rains, which for late May and early June is a bit unusual, but they can happen if there are frontal passages across the region. That's what the safrinha areas have seen in recent weeks and will continue to see over the next week or two. With the upcoming rains, most of those scattered rains are going to be focused south in around Paraná, whereas up north, any rain activity will be very isolated. But all in all, the safrinha crop continues to be in good shape. There's no sign of any changes in that here over the next few weeks. Even from a temperature standpoint, we always have to watch at this time of year for any kind of anomalously cold weather that could be a freeze threat, and we don't see any of that looking out over these next few weeks.

Todd Gleason: Hey, thank you much. I appreciate it.

Mark Russo: You're welcome, Todd.

Todd Gleason: You too. Mark Russo is with EverStream.ai and helped us to wrap up this Monday edition of the Closing Market Report. It came to you from Illinois Public Media. I'm Extension's Todd Gleason.