May 27 | Closing Market Report

Todd Gleason: 00:00

From the Lende Grant University in Urbana Champaign, Illinois, this is the closing market report. It is the May 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Blohm from Total Farm Marketing. We'll hear about the weather forecast from Don Day at Day Weather.

Todd Gleason: 00:18

Dan O'Brien from Kansas State University will join us to discuss the agricultural energies, and I'll bring you up to speed on the ag news for the afternoon on this Tuesday edition of the closing market report from Illinois Public Media. Todd Gleason services are made available to WILL by University of Illinois Extension. July corn for the day settled at $4.59 and a half unchanged. December at $4.46 and a half, down four and a quarter. July soybeans, two and a quarter higher.

Todd Gleason: 00:48

It finished at ten sixty two and a half, and the settlement price for the November futures at $10.50 and 3 quarters, up a quarter of a cent. Bean meal, a dime higher. Bean oil, 22¢ higher. Wheat futures soft red down 14 for the day. It settled at $5.28 and a half, and the hard red July at $5.24 and a half, down 14 and a quarter cents.

Todd Gleason: 01:08

Naomi Blohm now joins us from TotalFarmMarketing.com on this first trading day of the week. It's a Tuesday, of course, Naomi. I hope your Memorial Day weekend went well.

Naomi Blohm: 01:18

Yes. Just a nice, relaxing weekend at home with family.

Todd Gleason: 01:21

Excellent. Me too. However, I guess relaxing, maybe not. I did make a trip to Saint Louis, and went through, some of the devastated areas. My gosh.

Todd Gleason: 01:33

What an awful tornado that was. I just there there are still cars in the street with trees on them, whole homes down, all kinds of stuff. Just awful. Feel so very sorry for them, but let's talk about the marketplace for the day. Kind of a quiet day for the beginning of, this trading week, a shortened week.

Todd Gleason: 01:55

Sometimes those can be a little volatile coming back after Memorial Day weekend, not this weekend though, I suppose.

Naomi Blohm: 02:00

Right. Exactly. So very quiet coming into this week. Traders starting to be focused, I think, on the crop progress ratings that'll be released later this afternoon. They're looking for corn planted acres to be near 87% planted.

Naomi Blohm: 02:16

Now that would be up from 78% last week, and for soybeans, they're looking for soybeans to be 77% planted, up from 66% last week. But the question will be, you know, how much actually did get planted with rain occurring in many places throughout the Midwest, often on throughout the week, along with cold weather conditions? So I'm curious what the numbers will be today, and we will get a first glimpse of the corn rating as far as what the good to excellent category will be. Traders think it's gonna be amazing at 73% good to excellent, so we'll see what the USDA has to say about that as well. Markets just, marking time today with corn trading, steady to a few cents lower, beans trading mixed.

Naomi Blohm: 03:03

Wheat though down about 14¢ on better chances for weather in parts of Europe, and that weighed on the wheat market today.

Todd Gleason: 03:10

We will have the state statisticians from Iowa, Illinois, and Indiana on tomorrow. That will be the last time, actually, that we get to talk with them for their state reports because USDA has made a decision that those reports, at least the audio side of them, will no longer be made available starting on Friday. I will miss them because they've been in place, in part because of WLLAM five eighty since 1991. A lot of history in those. So I am not looking forward to losing those, but we'll make sure that we have the state reports.

Todd Gleason: 03:48

The paper copies will still be available from the state, so we'll be able to stay up to speed on states and some of the individual things that you see in those state reports that are not in the national reports. Now I do have to ask Naomi about wheat futures. They were off $13.14 cents for the day. I'm supposing that put some pressure in the back end, the new crop corn months. But why was it?

Todd Gleason: 04:10

Is it just the rainfall across the hard red winter wheat growing regions and maybe spring wheat planting rate that managed to push that market lower today?

Naomi Blohm: 04:22

Yeah. Definitely a part of it. Also, some technical selling. If you look at daily charts and if you watch the moving averages, Chicago July wheat went below the forty day moving average, which was up near five forty two at opening price. Once it went below that, just more sell stops got triggered, taking prices down to the next area of moving averages near five thirty four and five thirty two, and just the market was unable to find any strength.

Naomi Blohm: 04:54

So the technical selling took over. Prices, though, should have some pretty good support at the $5.25 area on the July contract. And then we'll see what crop progress ratings are this afternoon because we'll find out, of course, about spring wheat planted acres and spring wheat conditions for the crop and winter wheat conditions for the crop. And we'll be keeping an eye, of course, on the rainy weather that has occurred in portions of Illinois. There's always concerns of disease that could emerge because of too much rain.

Naomi Blohm: 05:23

Same with Kansas.

Todd Gleason: 05:24

Yeah. So we'll watch all of those. That's the other thing is that while that did rain in some of those hard red winter wheat regions in Kansas, and we've had rainfall, of course, in southern parts of Illinois, Indiana, where the soft red winter wheat is growing, little bit of Missouri as well. Wheat at this time of the year can be really hurt by disease. I did talk with the wheat breeder here at the University of Illinois last Friday.

Todd Gleason: 05:47

Asked up this question because they, last week, on Tuesday, were out, and found a record crop in the state of Illinois, but a record crop can go downhill really quickly, as she reminded me. Anything else you're watching in the marketplace, whether it's in the grains or the livestock?

Naomi Blohm: 06:04

Yeah. Looking over at the livestock sector, there was some very volatile price action earlier in the day with feeder cattle futures trading nearly $7 lower, live cattle down about four or five at one point on rumors of screwworm finding its way into Missouri. Now, the USDA shut down that rumor pretty quick, but it was enough to trigger some selling in the marketplace. And then with the cattle on feed report from Friday, pretty neutral as it came out as expected. So traders now will be watching where demand is this week in the form of boxed beef values, and we'll be keeping an eye on cash sales as we are now past one major holiday grilling season in The United States with Father's Day up next.

Naomi Blohm: 06:50

We'll see where the demand is for all of those beef products.

Todd Gleason: 06:54

Yeah. We have Memorial Day, Father's Day, Juneteenth, and July 4, all coming up within a thirty year thirty day period. It's a fast and kind of furious thirty well, a bit more than thirty days, but it's a fast and early start to, the summer grilling month. Anything else before I let you go for the day?

Naomi Blohm: 07:13

Well, we'll keep an eye out with outside market news this week. We get GDP information. We also get the minutes from the Fed meeting, and we're gonna be watching to see how fund traders square up their positions as the end of the month of May comes up here. They'll start, of course, a new month next week for their trading needs as well. So keep an eye on those outside markets.

Naomi Blohm: 07:37

They might have as much importance on grain prices as actual grain market fundamentals such as weather and weekly export sales.

Todd Gleason: 07:45

Naomi Blohm is with totalfarmmarketing.com. In today's agricultural news, the chair of the house ag committee says the Trump tax bill now headed to the senate will finally shore up the farm safety net. While most of last week's house debate on the president's one big beautiful bill focused on SNAP and Medicaid, GT Thompson, the chair of the house committee, highlighted the bill's improved farm safety net functions.

GT Thompson: 08:17

The one big beautiful bill makes permanent and expands the Trump tax cuts. It also prevents the death tax from hitting over 2,000,000 family farms and locks in the small business deduction helping 98% of American farms stay afloat.

Todd Gleason: 08:33

And there are other farm related tax breaks, he says.

GT Thompson: 08:36

It expands immediate expensing so farmers can expense the tools that they use today to secure the harvest of tomorrow. It protects domestic biofuels from being crowded out by Chinese imports. It lowers the cost of borrowing for our farmers hit by Biden's sky high interest. It reduces regulatory burdens on small farmers hiring seasonal workers.

Todd Gleason: 08:59

Thompson said the bill secures the farm safety net and delivers accountability to SNAP by shifting some cost to the states, especially those with high payment error rates. But the bill could face changes to SNAP and Medicaid reforms in the Senate where the GOP budget hawks and moderate Republicans will also fight each other for concessions. Those changes could complicate final passage when the bill returns to the House. Elsewhere in Washington DC, farm groups continued to react to the MAHA Commission report on the heels of the Thursday report released by the Make America Healthy Again Commission, part of the Trump administration, industry organizations are calling for science based agricultural policy. In a statement, the Modern Ag Alliance said the report raises the possibility that the federal government could take a position to restrict farmers' access to crop protection tools, undermining existing science based frameworks and ultimately jeopardizing the affordability and security of The U.

Todd Gleason: 10:00

S. Food supply. Crop protection tools are not only safe, they say, they are essential to food security, affordability, and the survival of family farms across the country. Losing access to these critical inputs would be devastating to American agriculture. And finally today, we'll turn to Iowa where ethanol advocates are urging governor Kim Reynolds there to veto a bill restricting carbon sequestration pipelines.

Todd Gleason: 10:29

The advocates said in a press conference Thursday, the bill is extremely problematic to biofuels. The bill, which passed the Iowa Senate May twelve, is awaiting a signature from Reynolds, would change the definition of a common carrier and increase insurance requirements for pipelines transporting liquid carbon dioxide. It would also set requirements for the Iowa Utilities Commission and expand who can intervene on dockets with the Commission. Advocates and lawmakers in favor of the bill opposed the use of eminent domain for the Summit Carbon Solutions Pipeline, which would transport captured carbon dioxide from ethanol facilities in Iowa and neighboring states to underground storage in North Dakota. And that's a look at today's agricultural news.

Todd Gleason: 11:28

Let's take a look at the agricultural energies for the day on this Tuesday. Dan O'Brien joins us. He's with Kansas State University Extension. Hello, Dan. Thank you for being with us.

Todd Gleason: 11:38

What's the profitability in the ethanol industry been like over the last month?

Dan O'Brien: 11:43

Well, in May, we've seen a little bit of a more of a turn towards a more positive outlook. Not much, but an estimate of about 3¢ a gallon profit, again, using the kind of an iOS centric based model with the latest numbers for the for the first three weeks of the month. So we've got a a breakeven cost of about of about a dollar 61, ethanol price, dollars dollar 64, but you've got DDG price is about a hundred and $45 per ton. Oil price corn oil prices of about 53¢. So both the DDG and the corn oil numbers are up.

Dan O'Brien: 12:20

Of course, the key issue with ethanol profitability is the corn input price and and a price of about $4.49 here in May and April. It had been about $4.63. So, again, you drop the the oh, by about $14.15 cents, cost of corn and and have some, moderate, improvement in in both well, in ethanol, DDG, and corn oil prices, and you end up with some profitability that the, that's following as a time frame from basically November of twenty four through April where we lost anywhere from from well, from 1¢ up to 11 or 12. The worst worst profitability time frames worst months for profitability came in in, well, again, November, December, January, right in the right in the, key post harvest time frame for corn, and it just just we're we're seeing a lot positive going on. So got that happening.

Dan O'Brien: 13:19

Of course, we're, you know, we're watching the corn ethanol or part watching the ethanol inventories and, and just trying to see how how, both corn, corn based eth well, feed grain based ethanol production and stocks are coordinating with what we think will probably be a a decent time of of, fuel demand coming up this summer and kind of an up and down situation. It's kinda surprising really that that the corn ethanol production figures or US ethanol production figures had dropped down here of late, but yet yet, for some reason, last week or so, well, for some supply demand factors, we haven't seen a major drop off yet in in the inventory. So, you know, since the ethanol industry industry operates on the margins, when you when you see inventories creeping up, it it always is a source of concern given that it could be the step in an inventory building phase, which would really drop prices. So overall, a little bit better picture so far, and, we are coming into driving season. And if the economy holds up, fuel demand continues to to, click along, then, that would bode well for the profitability of the ethanol industry.

Todd Gleason: 14:34

Yeah. The Memorial Day weekend was supposed to be one of the largest driving weekends that we've had in a very long time, maybe a record if I remember correctly. Mostly pushed along by lower prices of gasoline at the pump. Now you and I might have looked at the price and thought, I don't know. I remember much lower prices.

Todd Gleason: 14:55

However, I was talking to my daughter, and from the time she's been 16, she thinks this price is cheap.

Dan O'Brien: 15:02

Yeah. That's right. Frame of reference.

Todd Gleason: 15:04

Yeah. Frame of reference is different. So I and and it dawned on mine. Was like, well, if she thinks it's cheap, she and, you know, on those 20, 30 year olds are really going to think, can drive this this summer and take off, and they're in prime family vacation time. So we'll see how all of that goes.

Todd Gleason: 15:23

45 z, I know that you, Frey Olson, and one of his colleagues in North Dakota at NDS, you had a discussion about this last week. What did you learn?

Dan O'Brien: 15:36

Well, Dave Ripplinger has been the the person who's really been on top of that. And, of course, the 45 z credit extension, has been delayed. There was originally intended to, to come in in January. We'll get we got all tied up with, presidential administration transition issues. So that, that extension, holds the possibility of of being very helpful to the biofuels industry, especially on the, for especially with regard to renewable diesel, biodiesel, factors.

Dan O'Brien: 16:09

So, anyway, I guess, just to remind people, the bill, is attacked. It it it comes in on the heels of what had been a a tax credit that had been helping the bio biodiesel industry that that went away in in at the February. So coming into this year, we've been waiting for that to happen. It hasn't happened yet. We have seen a lot of some some real concern in that industry.

Dan O'Brien: 16:35

In fact, the news here in the last well, in yeah. Here in May of a plant in Iowa owned by Chevron had been bought from an REG group, which is one of the leading groups anticipating, again, strong biodiesel demand off in the future. Well, that they, because of this uncertainty with 45 z, it's a a final final approval. They've laid off laid off employees. Maybe that's temporary.

Dan O'Brien: 17:02

Don't know. But but, you've got that happening. And so, so we'll see. But there's there's promise that that tax bill will go forward. It does sound like that, I think it's been it may have if I'm getting my signals right, I think it's been approved by the house, has to go now into the senate, and we'll see how 45 z as a set of regulations affecting the bio bioenergy industry will survive there.

Dan O'Brien: 17:28

But so, generally, a positive outlook going forward, but but, again, it has to wind its way through the legislative processes to, as part of that large tax bill and survive any reconciliation, which there no doubt will be, and, and come out the other end and and be able to benefit the industry. But regardless, I think we're seeing signals that this delay has caused uncertainty in the bio biodiesel industry for sure and, you know, against affecting the the, the risk attitude and the financial viability under risk of some of these plants that are out there. So if if you're in the bio biodiesel industry, forty five z's approval can't come soon enough in order to help help solidify business plans and and, keep that industry moving forward.

Todd Gleason: 18:15

Thank you very much, Dan.

Dan O'Brien: 18:16

Thanks, Todd. Take care.

Todd Gleason: 18:18

You too. That's Dan O'Brien from Kansas State University joined us on the Tuesday edition here of the closing market report that comes to you from Illinois Public Media. Do visit our website. The address there is willag.0rg. There you'll find our daily program to listen to directly from the website.

Todd Gleason: 18:35

Just click and play or search it out in your favorite podcast applications. Actually, there's a podcast tab at willag.org as well. And under that tab, you'll find the closing mark report Commodity Week and the Illinois Nutrient Loss Reduction podcast. Each has a way to subscribe and or share your favorite podcast from Illinois Public Media. Let's check-in on the weather forecast for the growing regions across the planet.

Todd Gleason: 19:14

Don Day is here. He's with Day Weather in Cheyenne, Wyoming. Hello, Don. Thanks for being with us. How was the weekend weather where you are?

Don Day: 19:25

Well, pretty cool and pretty wet. We had a little bit of snow in the high country, but more importantly, we did see some really beneficial rains across some of the drought areas of the Western High Plains. If you were to look at the drought monitor and see the islands of drought conditions over portions of the Western High Plains and Rockies, parts of Nebraska, parts of Wyoming, South Dakota and into some dry areas of the Western Wheat Belt areas, all picked up one to three, some areas over four inches of rain along with some very cool temperatures. So that was great news for those areas. Those areas have been missing out this spring, so it was good to see that moisture.

Todd Gleason: 20:06

In that Western part of the Corn Belt, how far do they remain behind and will they be able to alleviate the drought risk at this point do you suppose?

Don Day: 20:16

Well there's there's help coming but there are areas in the Northwest that need another good three to five inches of rain. If you want to catch up, if you're if you're keeping score. Now the recent rains have certainly helped, but it's like an elephant. You can only bite out a drought one bite at a time.

Todd Gleason: 20:33

The rainfall that you had over the weekend, where is it headed or did it dissipate?

Don Day: 20:39

Well, we we have a a little upper level low that is gonna end up being very pesky. In the days ahead, it's gonna spin up over the Northern Plains. It's gonna be centered over Iowa, portions of Wisconsin, Minnesota, and it's gonna meander. It's not really hooking up with the jet stream at least for next let's say next two or three days. So it's gonna be cool.

Don Day: 21:03

It's gonna be wet in those states I just mentioned with considerable coolness, shower and thunderstorm activity. So that's going be in the northern and northwest areas of the Corn Belt. Now it's going to be cool in many other areas, but the heavier rain will be more towards the Far Eastern Corn Belt and then down towards the Delta.

Todd Gleason: 21:23

Now can I ask one follow-up question about these meandering rainfalls in Wisconsin? Is it an Eau Claire kind of thing, or might that be far enough to the south that Janesville, parts of, Illinois, particularly Freeport, and Rockford area where it has been really pretty dry? Might they pick up some rain?

Don Day: 21:45

They might. This is especially true as we get into Friday in the weekend, or let's say right at the end of the week because the upper level low will eventually get caught up and will swing through those areas you just mentioned. So there is going to be an opportunity for showers and thunderstorms there. Will it be enough to alleviate the dryness? Maybe.

Don Day: 22:05

Especially between Wednesday and Friday, those areas getting a chance of rain.

Todd Gleason: 22:10

Through the Eastern Corn Belt, what happens the rest of this week? Then if you could take a broader look at next week across the Corn Belt for me too, please.

Don Day: 22:16

Well, once the separate level o moves out, we are going to see a gradual warming trend. Keyword there is gradual, but we do see high pressure nosing into the Corn Belt Midwest. So we are gonna see warmer weather. That is gonna be especially true, right, Here we are between Monday and Wednesday of next week is when you're gonna notice the warmer weather. When it comes to shower and thunderstorm activity, it's gonna be a while.

Don Day: 22:41

I think once we get into past this weekend, there'll be a break. There's gonna be a warm up. And then the next round of precipitation should come through west to east right around between Wednesday and Friday next week.

Todd Gleason: 22:53

Thank you very much. I appreciate it, Don. Thank you. Donde is with Day Weather. He's in Cheyenne, Wyoming.

Todd Gleason: 22:59

Joined us on this Tuesday edition of the closing market report. It came to you from Illinois Public Media. I'm University of Illinois Extension's Todd Gleason. Doctor. JACKSON: