May 22 | Closing Market Report

cmr260522

- Ag Markets with Mike Zuzolo, GlobalCommResearch.com
- Ag Weather with Eric Snodgrass, NutrienAgSolutions.com

Todd Gleason: From the land-grant university in Urbana-Champaign, Illinois, this is the closing market report. It is the 22nd day of May 2026. I'm Illinois Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Mike Zuzolo. He's at GlobalCommResearch.com out of Atchison, Kansas. Today, we'll take a macroeconomic look at the global economy and how it's impacting what's happening in agriculture. Then we'll turn our attention to the weather forecast. We'll do that with Eric Snodgrass from Nutrien Ag Solutions. If you can stay with us for the whole of the hour, you'll hear all of our Commodity Week program. It is a fantastic look at the marketplace today with Colin Watters from the Illinois Corn Growers Association, Dave Chatterton of Strategic Farm Marketing, and Kurt Kimmel of AgMarket.net. If not, meaning you can't stay with us for the whole hour, many of these radio stations will carry it over the weekend, and it's already up online in its entirety at WILLag.org.

Todd Gleason: July corn in Chicago finished at $4.63 and a quarter today, up a penny. September up one and a quarter at $4.69 and three quarters. And December corn, the new crop, $4.86 and a half, a penny and a half higher. July beans up two and a quarter cents, settling priced there at $11.96 and a half. The August $11.95, up one and a half. And new crop November soybeans, one cent higher at $11.87 and three quarters of a cent per bushel. Bean meal up $3.50. The bean oil 11 cents higher. And the July soft red winter wheat finished at $6.47 on a Friday afternoon, that down a penny and a quarter. The hard red July at $6.82, finished a nickel lower on the day. Live cattle futures in Chicago at $239.60, 25 cents higher. Feeder cattle down $6.67 and a half cents, and lean hogs were 37.5 cents higher on this Friday afternoon.

02:02 Ag Markets with Mike Zuzolo, GlobalCommResearch.com

Todd Gleason: Mike Zuzolo, GlobalCommResearch.com out of Atchison, Kansas, now joins us on this Friday to take a look at the marketplace. Happy Friday, happy holiday weekend. Memorial Day on Monday, Mike. We appreciate you taking some time with us.

Mike Zuzolo: Great to be with you, Todd. You and I have been doing this many, many years, and this is probably the most special summer holiday because of our loved ones that we've lost, and especially those people that have fought and died for our freedom. It's a very, very meaningful weekend, and I'm looking forward to doing them honor by spending it with family.

Todd Gleason: Thank you very much. Me too. Let's do talk about the marketplace, however. In the morning hours, futures did manage to gain a bit. Can you tell me about what the reasons behind that move might have been?

Mike Zuzolo: As I usually do, I'll go around the longer way. Coming into the long weekend, the futures market was acting like they've rationed enough demand, and our two leaders, the crude oil and the wheat, were very willing to sell both the bearish news and very unwilling to hold gains on bullish news in both commodities. So we're in a situation coming into Friday morning not knowing whether this is due to 19 to 28-year highs in the bond markets, six-week highs in the dollar as a result of these bond markets, or how much of it is due to concern again and uncertainty about the U.S.-China trade deal details. Fortunately, Friday morning, we saw some unknown sales in corn, we saw some unknown sales in soybean meal. These things I think the market is rightfully putting together as China, and on the weekly export sales, we had some small unknown sales as well that the market tended to disregard and ignore. So going into the long weekend, my mindset is we still need to ration wheat and crude oil, even though we heard rumors that we're going to get potentially European or another area around central Europe of wheat into Mexico, or Polish wheat coming back into this country. Increases by the Buenos Aires Grains Exchange on corn and bean production above USDA's estimates. I see the supplies ticking up a little bit this week, but do we really have what it takes to ration demand if we let prices go back down? I think they still need to be elevated, and we're a long way from rationing demand, I think, in the crude.

Todd Gleason: I want to come back to wheat and crude in just a bit, but you did mention the bond market and some long-term highs. You'd like to talk about the macroeconomics and explore them. What does that mean to you? Anything in particular?

Mike Zuzolo: Generally speaking, when you have the yields on bonds go higher, you're cutting out the ability of the risk traders to cash flow their positions, whether it's margin or their portfolio size. The interesting reason this time around—and I'm getting ready to do a special report on this for clients—is this similar to 2007-2008, or is this closer to the early 1980s when we had a Federal Reserve chairman that was hiking interest rates because of inflation coming off of an oil situation? There's kind of a hint of where I'm heading with my research, but those higher energy prices are now a double-edged sword. They make things more valuable that are energy-intensive, like corn and wheat and soybean oil, but they also now are attracting the idea, and the market is pricing in the idea, that the Fed is going to start raising rates. I think the good news here is the market in the futures at the Mercantile Exchange on the bonds have gone from two to three rate cuts this year to a rate hike as early as December. So we've got a lot of negativity built in at this point.

Todd Gleason: So this is part and parcel of potential inflation related to the closure of the Strait of Hormuz. I suspect that you'll be watching this really closely as the war continues or until it is settled. For instance, Oman has been negotiating with the Iranians about a payment system for using the Strait of Hormuz, something that did not exist prior to the war beginning, and that would change the price of crude oil and make it higher.

Mike Zuzolo: It would, and it would permanently adjust it higher. I think that's an excellent point you make, and it would be a game-changer as far as what our cost of production would be, and whether that would then mean our prices for corn, beans, and bean oil would have to go up permanently as well. And that's the rub. Right now, the market is saying, if you keep these energy prices this high for another three months because we keep the Strait of Hormuz closed for another three months, there are some really good analysts saying that we could be back into a global recession. I'm part of that, but before we do that, I think we would probably see the energy markets lead the other commodities higher first, and so that's what I'm really working on.

Todd Gleason: And so you're trying to figure out what timing might be, including dry weather and other conditions that might take place in the United States, for producers to make the best options and sales coming through the summer months?

Mike Zuzolo: Precisely. And whether we need to lock in fall diesel or not, with summer locked in. Essentially, Todd, we're losing 10 million barrels a day. The Department of Energy says we're permanently losing almost 3 million barrels a day that we will never get back. And 10 million barrels a day ends up being 300 million barrels a month. So you can hit a billion barrels in three months, and two billion barrels in six months, and that's where we're headed. We're two billion barrels short right now. This is why I think we haven't rationed enough, and this is why I think with the wheat and the crop conditions and the heading, the U.S. is just not going to have much of a hard red wheat crop, and even the Illinois yield was ticking down on some of the private surveys. So I just don't think the market has really grasped that yet.

Todd Gleason: Anything else you wanted to hit on before I let you go?

Mike Zuzolo: Big thing in the feeder cattle market is we've set up a market where the cash and the futures are so disparate and diverging. This cattle on feed report, I think, is extremely important in that we're still down 9.5% on year-to-date slaughter, but the expectations by the trade is we're actually going to go up potentially 2% in cattle on feed. Those two numbers just don't work out halfway through the year. So that's going to be a big red flag as we go forward between getting those two numbers reconciled.

Todd Gleason: We'll watch that and try to remember to talk with you about it next week. Thanks much.

Mike Zuzolo: Sounds great. Thanks, Todd.
Todd Gleason: That, of course, is Mike Zuzolo. He's at GlobalCommResearch.com out of Atchison, Kansas.

09:12 Ag Weather with Eric Snodgrass, NutrienAgSolutions.com

Todd Gleason: Let's turn our attention now to the weather forecast for the growing regions across the planet. Eric Snodgrass is here from Nutrien Ag Solutions in Champaign. Hi, Eric. Thank you for being with us on this upcoming holiday weekend. I need to know what the weather's going to be like first. Let's get a short-term just for us.

Eric Snodgrass: I can tell you why we have a chance for rain this weekend. And the reason is because I'm going to head over to the Indy 500. I've been going every year for five or six years. I love it, but man, can I always bring terrible weather to the Indy 500. So we have a front coming through. Yes, it's going to bring us chances for rain as we work into this weekend. Most folks probably won't see much at all, but we are bringing some chances for rain. But the good news, Todd, is that after this, we've got a pretty nice little change in the pattern. Now, where I wish I could get more of that rain is in the northern part of the state. We've started to slip back into a bit of a drought scenario in the northern part of the state. It's just abnormally dry, but something to keep track of. Maybe Trent mentioned something like that if you got a chance to talk to him lately. But we need some rain. I just think we need a little bit farther north, and we're going to probably get it right through the mid-part of the state.

Todd Gleason: Trent did mention it, but it's coming up later in the program, not before you on the program. So those folks who can stay with us all the way to the top of the hour will hear that. I do want to know what you think about the beginning of June because we're almost there. And I will say Emerson Nafziger, emeritus agronomist at the U of I, is of the mind that June, even a dry one, is really pretty good for the corn crop.

Eric Snodgrass: It is. The more we look at the historical data and understand how hybrids are making us more immune to drought issues, especially during vegetative stages of the crop, the more the research points toward a hotter, drier June seems to be a winner for both corn and soybeans. So the good news is after this slow start, we're about 60 to 80 GDDs behind normal so far in the month of May, so you could call that maybe three to four days, half a week behind if you compare it to historical averages. We're going to be finally getting some warmth back into place as we get into next week. Temperatures are getting back up into the 80s at times. And then the farther we go to the end of this month and the beginning of June, it is drier and it is warmer. And that combination is good for those of us that had a good recharge of soil moisture across the state. But again, I point out we've been a bit drier in the northern part of Illinois, and they have a better chance at staying drier going forward into this next 10 to 15-day forecast. But like I said, there is some more routine warmth coming in the pattern.

Todd Gleason: So we've talked a lot about Illinois. What about the rest of the country? Or maybe take a longer-term look at what the summer might feel like. Any new information that you can bring to us?

Eric Snodgrass: Let's look around the country real quick. If I were down south, like eastern Texas through parts of the lower Mississippi River Valley, even parts of the Ohio River Valley, I'd be looking into some gopher wood, might need to build an ark at some point. It is so wet down there. And this is important, Todd, because what do we talk about months ago? Remember the Elvis rule thing we came up with? Well, the Elvis rule is all about drought in the mid-South right around Graceland that survives the month of May, and it has been dry there. They're still on the drought monitor. I mean, 76% of the country is in some form of drought. But when we're going to go through that area and add multiple chances of rain—three, four, five inches are possible throughout the lower and mid-Mississippi River Valley—well, we could wipe that out in a hurry, which tends to take the risk off of Illinois developing drought in June and early July. Not all of July, but early July. So the Elvis rule is in full effect here.

Now, the farther out I go in the forecast, the more I start to see the models honing in on some northwest flow. You're going to hear a ton of stuff about El Niño. In fact, probably everybody's heard about the big El Niño of 1877, which apparently created some famine and some food shortage problems, killed millions of people. And everyone's asking me, is that going to happen again? No, it's not going to happen again. We're a much different society with a different supply chain and infrastructure than we were in 1877. But the El Niño coming up is going to be a big one. I'm going to ask you to put it in your back pocket, because El Niño in the middle of summer is not as strongly correlated as the Gulf of Alaska, the northeast Pacific, or just off the west coast of North America. Those two regions have much higher correlation with our weather pattern, and here it is in a nutshell. If you keep those areas warmer than normal, our summer risk of having drought goes way down. In fact, we're probably going to be near normal, slightly cooler than normal, if they stay warm. And the new Climate Prediction Center outlook for July, August, and September came in with Illinois favored on the cooler side of average. This was just released yesterday. The only thing I don't agree with them on is they're a little drier in the upper Midwest. I think it's going to be stormier in the upper Midwest.

There's one other spot to look at, Todd. It's the Atlantic. That's my third spot. And when the middle of the Atlantic stays warm like it is right now, we also tend to see more summer thunderstorm activity and don't run the risk of major heat. Now, of course, all of that's looking out there for the next three to four months, and so much can change during that timeframe. But the ocean is giving us signals of kind of a risk-off summer for long-duration heat or long-duration drought episodes. And that's what I wanted to make sure I told you today.

Todd Gleason: Hey, finally, anything from South America we should know about?

Eric Snodgrass: I'm just still surprised, Todd. I was talking with Matt Bennett about this earlier this week. The rain shut off early, it has been dry, crops don't finish well under really dry conditions, and that's what that safrinha crop did. And I don't think anybody cares. Nobody's talking about it. I can't get any sort of a hint in the markets that they're moving because of that. We may have to wait further into June before that news really surfaces and gives us something more to kind of bite into to figure out if the markets are going to respond. Once the combines start to roll.

Todd Gleason: Thank you much. I appreciate it, Eric.

Eric Snodgrass: You bet.

Todd Gleason: Eric Snodgrass is with Nutrien Ag Solutions and Agrible. He helped us to wrap up the closing market report for this Friday afternoon. If you can stay with us, you'll hear all of our Commodity Week program. If not, it's available right now online at WILLag.org. Commodity Week is our weekly look at what's been happening in the world of agriculture.