Nov 04 | Closing Market Report

Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois. This is the closing market reported as the November 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Bloom. She's totalfarmmarketing.com out of West Bend, Wisconsin.

Todd Gleason: 00:17

Then we'll hear from agricultural economist Todd Hubbs at Oklahoma State University. You might recall his name from the U of I Farm Doc team. He's written an article for FarmDoc Daily along with Scott Irwin about the RFS playbook and the impact of recent EPA decisions. You want to stay along for that. And then as we finish up our time together, we'll take a look at the weather forecast too.

Todd Gleason: 00:42

We'll do that with Don Day at Day Weather in Cheyenne, Wyoming on this Tuesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world online on demand at willag.orgwillag.0r,jim. But right now today, you can sign up for both the farm assets conference and the Illinois farm economic summits. They're coming up in Bloomington, DeKalb, Vernon, and Peoria in the month of December. All the details again online at willag.org.

Todd Gleason: 01:16

Todd Gleason services are made available to WILL by University of Illinois Extension. December corn for the day settled at $4.31 and a half cents, two and three quarters lower than March at $4.44 and 3 quarters down two, and the May at $4.53 and a half, two and a quarter lower. January beans at $11.21 and a half, down twelve and three quarters. The March 12 and a half lowered eleven twenty seven and three quarters, and new crop November soybeans at $11.03 a bushel, finished down 10 and a half cents for the day. Naomi Blohm from totalfarmmarketing.com now joins us to take a look at the marketplace.

Todd Gleason: 01:53

Hello, Naomi. Thanks for being with us on a cooler Tuesday. Looks like more cool weather is coming in, and the soybean market really cooled off today. What can you tell me about that?

Naomi Blohm: 02:03

Well, I think it was kind of a combination of technical selling, seasonal selling, and we have priced in for now all of that friendly news that we had out of China. So seeing some, pullback there. One thing to take note of is that from a technical perspective, when the January beans got up near 11:40 yesterday, we had a short term technical swing objective higher. So back in early October, we had, support on those January beans at $10.20, and resistance was at $10.80, so a 60¢ price difference. So then recently, when we pushed through $10.80, we pushed 60¢ higher, the difference in that range that we had been in.

Naomi Blohm: 02:48

And so when we got up near this $11.40 area, that was a target for a lot of traders, and they started to just take some quick profits along with just sometimes that seasonal expectation for a simple pullback lower for corn and soybeans in early November heading towards Thanksgiving.

Todd Gleason: 03:07

So profit taking is better than something actually fundamentally changed in the marketplace. Where do you think this could be headed into the winter, meeting season?

Naomi Blohm: 03:17

Yeah. So just here in the short term, if the soybean market has a little bit more of some simple profit taking, First support for the January beans now would be down at the $11 area with the ten day moving average at $10.92. And then you always kinda gotta wonder if we're gonna fill that gap from just a couple weeks ago. That January gap would be filled if we got to $10.63. So just something to keep an eye on.

Naomi Blohm: 03:46

Also pressuring the market a little bit today. Stonex came out, with some estimates for corn and soybean yields. They put the bean yield at 53.6. So while it's a little bit lower than their most recent estimate, that still is a pretty big soybean number, and and kinda weighed on the market a little bit along with their corn yield at one eighty six. So that also weighed on the market a little bit today for corn because we're still seeing in general big yields.

Todd Gleason: 04:16

Yeah. So those are big numbers. Farmers I don't know. Farmers have been relatively quiet about what's really going on, I think. And we've talked about this in their fields.

Todd Gleason: 04:27

There has been a lot of variability, but I think better maybe than the variable that we're hearing. So we'll see how USDA deals with that. It will be interesting to see how that comes out. It'll be out on November 14. Should have been out on Monday, but the government still closed.

Todd Gleason: 04:45

In this case, they brought the statisticians back and said, let's put this out on the fourteenth. That's Friday of next week. I bet you're looking forward to having that as a guidepost.

Naomi Blohm: 04:54

Well, it'll be something for the industry to finally sink our teeth into. There's gonna be scrutiny over every single line item on this report from not only US production numbers, but demand. We're also gonna see where they peg production for crops around the world and demand around the world as well. So it'll be a big report, of course, just because we haven't had one for a while. And then that'll set the tone for the next few weeks until we get the government reopened and then get the next report in December after that.

Naomi Blohm: 05:25

But it'll be one that we're all watching, and I think we could see a little bit of volatility once that report comes out as well.

Todd Gleason: 05:32

It'd be interesting to see what USDA's World Ag Outlook Board does with the 12,000,000 metric tons that is now in agreement between China and The United States. Policies that are in place will be reflected in the WASDE report. Do you think the exports will show that extra 440,000,000 bushels or some portion of it? And I'm wondering whether it'd be a large portion or not at all in your opinion.

Naomi Blohm: 05:57

Yeah. And that's that's the question. Is it Does it show up as new demand or is it just enough to say, okay, the current USDA number that they have pegged for demand is correct? And that's the question. So we're all anxious to see that.

Naomi Blohm: 06:14

My guess, my hunch, my gut feeling says that for this report for soybeans, they're actually maybe not gonna do a lot of twists and turns, just some modest tweaks. Because now with the China buying from us and we have more of a quantifiable amount, we can really kinda move forward from the standpoint of saying, know, in general, ending stocks are gonna be tighter for The US soybeans. So that should be supportive for the market. But then also in the next breath, we're gonna, on that report, be reminded that global carryout for soybeans is still record large. So it's gonna be a lot to balance going forward, and that's where the volatility is gonna come into play.

Naomi Blohm: 06:56

We're gonna be, again, looking at every single line item on that report. So be ready for anything, and also just keep in mind, you know, when you look at where the soybean price was just a few weeks ago, we've rallied over a dollar. So this is a good opportunity for some cash sales and reward what we've had and reward the good news that we had with the China agreement.

Todd Gleason: 07:17

Thank you much. We'll talk with you again next week.

Naomi Blohm: 07:19

Thank you.

Todd Gleason: 07:20

That's Naomi Bloem. She is with totalfarmmarketing.com. Let's turn our attention to the biofuels industry, particularly to biomass based diesel fuel made from soybeans. Scott Irwin and Todd Hubbs have written an article for the PharmDoc team. Scott, an agricultural economist here on Urbana Champaign campus of the U of I.

Todd Gleason: 07:48

Todd, a former member of the PharmDoc team, returning as well now with the Department of Agricultural Economics at Oklahoma State University, and he joins us. Thank you, Todd, for being with us. You've written this article, and you started it by going through the three things that EPA has done so far this year. And you say it's been extraordinarily active or you write it that way. What are the three things that EPA has done related to the RFS, RVOs, and soybeans?

Todd Hubbs: 08:22

It has been something this year. In June, they dropped the renewable volume obligations for 2026 and '27. And then in July, they did a comprehensive rulemaking on small refinery exemptions, which had been hanging out there since 2018. And then in September, they did a reallocation policy framework for those small refinery exemptions. And all three of these things, of course, the new RBOs set up the RFS over the next couple of years, but the other two also feed into that to give an idea of what the renewable volume obligations might be for the RFS as we move into 2026.

Todd Gleason: 09:06

There are a lot of calculations that must be done. Can you simplify them so that I might understand exactly how each of these things impact what the potential implication might be for soybean oil in the future?

Todd Hubbs: 09:24

There are a lot of calculations. There is no doubt about it. So we get the percent their percentage standards for their volume obligations from EPA, which is how they sort of set the r f r f s numbers. And so if you take the percentages times the different categories within the RFS, which would be cellulosic, biomass based diesel, the undifferentiated, and the conventional. And you come up with a number which turns into RIN gallons or gallons needed to meet the RIN obligations for the obligated parties.

Todd Hubbs: 10:04

As you can see, this is already getting incredibly complicated, and we haven't got anywhere yet. But the idea is how many RIN gallons are necessary that the obligated parties under the RFS have to supply to meet the goals set forth in the renewable volume obligations.

Todd Gleason: 10:23

I want to step in here for just a moment for some clarification's sake. The RFS requires that about 15,000,000,000 gallons of the gasoline supply in The United States, that's what we put in our automobiles generally, be made from a renewable source. It does not mandate that it's ethanol made from corn, but that it is made from some renewable source. What we're talking about does not really impact that part of the RFS. It's the other fuel sources that are impacted here.

Todd Gleason: 10:55

Cellulosic and biomass based diesel fuel are what we're really discussing or renewable diesel and what we would call soy diesel. That number starting next year is going from 5,360,000,000 gallons annually to 7,500,000,000 gallons by 2027 or a 40% increase.

Todd Hubbs: 11:17

And so when we do this kind of work and we do this kind of calculations, we have to make some assumptions about what we think the diesel and gas numbers will be, which the EPA also did in their September reallocation framework for the SREs. How the SREs fit into this, Todd, and I'm sorry this is getting a little bit complex, but this is how it is. Since they hadn't done any since 2018, the number of gallons that were put in for were quite large. It's almost 4,000,000,000 gallons, 3,960,000,000. They didn't grant all those.

Todd Hubbs: 11:54

They were really, I would say, stringent or more stringent than the last time the Trump administration on granting small refinery exemptions. And so what ended up happening, it was a smaller number.

Todd Gleason: 12:08

I'm back again this time around to explain SRE. That stands for small refinery exemptions. It's a way that smaller refineries can get out of the mandate that EPA has required for it to produce a renewable fuel.

Todd Hubbs: 12:23

They gave the parties that they granted small refinery exemptions from 2018 to 2022 their RINs back and didn't roll them into the new Renault into the they didn't give them current RINs, And so they basically gave them worthless RINs. They're like, here's your RINs back for 2018, but that's closed. Quite strange. And then they've agreed to run some SREs or small refinery exemptions at percent standards into the twenty twenty six-twenty seven renewable volume obligations, where they take the obligated parties who aren't subject to small refinery exemptions are the ones who have to make up the difference. I know that's Todd, that's a mess.

Todd Gleason: 13:15

Yeah. So I think I've got this right, but correct me if I'm wrong. So, essentially, they gave, they gave some of the small refineries, the small refinery exemptions, but said, here's your RIN or your or your the gallons that you produced, but by the way, you had to use them, and they're not worth anything today. That took them out of the marketplace. And then they arbitrarily took half of what was left out of the marketplace too, so they sort of shorted the marketplace all of those RINs, and that would make RINs more valuable.

Todd Gleason: 13:50

Is that what happened?

Todd Hubbs: 13:52

It's the way they went about doing the judgment of economic hardship. I I don't wanna say they shorted it, like, by half, but the way they the EPA granted the SREs this time to the parties that applied for them seemed a bit more stringent. But for our sake, you know, the ag sector, it it help it's helpful. You know? And when they under the reallocation ruling, when they reallocate, they add those gallons back into for the obligated parties.

Todd Hubbs: 14:25

Right? For '26 and '27. So that's sort of what we're talking about now and calculating, and we we're gonna have some articles where we get more detail about what it means for feedstock and rent prices and stuff as we move forward. We were just trying to set up what had happened this year and come up with some numbers on what we think the RVOs might be.

Todd Gleason: 14:48

Yeah. And what what do those what are those implications? I mean, what are the numbers for the RVOs?

Todd Hubbs: 14:53

Well, it depends on if they do a 100% or 50 reallocation, but we think they're gonna do one or the other. They haven't finalized it yet. But it is a really strong growth in biomass based diesel inside the RFS, the renewable volume obligations. If we're at 5,500,000,000 RIN gallons during 2025, in 2026, we could be anywhere from 7.23 to 7.34, depending on how the reallocation goes, RIN gallons inside the biomass based diesel set. So it's a pretty good amount of growth and somewhat, you know, strong for our soybean oil and other vegetable oil and feedstocks that go into biomass based diesel.

Todd Hubbs: 15:47

But to do this right, you know, you have to have an understanding of how many D4 RINs are out there and what the D4 balance sheet looks like for and the RIN bank looks like. And and that's what we'll be trying to do as we move forward.

Todd Gleason: 16:05

And they set it up, as you write in the article, so that it favors domestic production as opposed to imported supplies.

Todd Hubbs: 16:14

Well, one of the things they did when they did the RVOs in '20 in June is they came out with a half rent policy, which was unheard of previously in the RFS, where any imported fuel or imported feedstock used to make fuel would only get half a RIN value. And so that sort of favors domestic feedstock and domestic production. Well, that sort of totally favors it. Right? And so this half are in ruling had big implications for, you know, feedstock domestically and renewable diesel and methyl ester biodiesel producers and how they source and go about, you know, fulfilling the obligations of the RFS.

Todd Gleason: 17:07

And then they also created a one and a half RIN as well for FAME biodiesel, which is soy diesel, as opposed to the renewable diesel, I suppose, and that has to play somehow too.

Todd Hubbs: 17:22

Well, there's in the same ruling, they did it they lowered the D4 RIN equivalents value for, you know, non estuary renewable diesel and SAF2. They used to get 1.7 RINs per gallon and it was lowered to 1.6 RINs per gallon, which puts it more on an equal footing with Fein biodiesel, which has been a 1.5 per gallon.

Todd Gleason: 17:46

Oh, I see.

Todd Hubbs: 17:47

So that's what they did. I'm sorry I didn't get to that. There's so much people should read the paper. There's a lot in there where we just sort of recap. Yeah.

Todd Hubbs: 17:56

And I I know this has been sort of all over the place, but we tried to recap everything that had happened and put it and frame it in a way that, you know, we can set up as we move forward in these other articles about what the implications really are gonna be.

Todd Gleason: 18:12

We will be back in touch with you to see if we can get to the implications, which might be easier for the audience to understand.

Todd Hubbs: 18:19

I I don't know if this is gonna be easy to understand at all, but we might have to rerecord this whole thing.

Todd Gleason: 18:25

We may, but certainly we'll record more in the future. Todd Hubbs, thank you for joining us. Todd Hubbs is an agricultural economist at Oklahoma State University. He and Scott Irwin have penned an article for the Farm Doc Daily website. It's titled in part rewriting the RFS Playbook.

Todd Gleason: 18:43

It's the first in a series of articles that try to explain how the Trump administration is working with renewable diesel as well as FAME or soy diesel and what that might mean going forward for farmers, particularly soybean farmers, across The United States. Don Day at Day Weather in Cheyenne, Wyoming is now with us. Hi, Don. Thank you much. You're traveling today.

Todd Gleason: 19:20

Where are you driving to? Any place fun?

Don Day: 19:21

I I'm on my way to Kearny, Nebraska.

Todd Gleason: 19:24

Oh, that sounds like you're doing an agricultural event. I have been to Kearny. Great agricultural area. I hope you have fun there. Let's talk a little bit about what the weather forecast looks like for that part of the world.

Todd Gleason: 19:36

If my intuition is correct, probably a little cooler than here. What are you seeing?

Don Day: 19:41

Yeah. Times are a change in weather wise, and this will certainly be felt later this weekend and into the first half of next week across a large part of the Central And Eastern United States. We're gonna see, I would say, the first real release of a larger Canadian air mass into the Lower 48. And, we'll see some snow, come in across parts of North Dakota, Minnesota, Wisconsin. We see lake effect snows for Michigan, possibly parts of Ohio, Northwest Indiana, and then spreading across, New England.

Don Day: 20:17

We might even see some snow in the Southern Appalachians of The Carolinas, by the middle to the end of next week.

Todd Gleason: 20:25

Is this then the beginning of a real seasonal change that will have just cooler temperatures and maybe a bit more precipitation?

Don Day: 20:32

Yes. I do think a structural change across the Northern Hemisphere is gonna be taking place. You're not only in North America, but, parts of Europe will see some colder weather. We're seeing a lot of very cold air building, in northern and eastern areas of Siberia. So we're seeing the things on a hemispheric perspective that you put another week or two of this together, and that's gonna set things in motion to get an early winter weather pattern going.

Don Day: 21:03

So a little less fall and a little more winter, especially for the last two weeks of November.

Todd Gleason: 21:10

Thank you much for the forecast, and have a good time in Kearny.

Don Day: 21:12

Thank you. Let's take

Todd Gleason: 21:14

a quick look at the weather forecast in South America. The Center West in particular will start in Mato Grosso, where today it will rain. Thunderstorms will be light, 85 degrees. Tonight, some fog, 72. Tomorrow, a 60% chance of rainfall, 90 degrees for the high, and 71 for the low overnight.

Todd Gleason: 21:34

And Thursday, a 40% chance of rain. That'll continue into Thursday evening with a low of 72. And then it'll be more rainfall on Friday. Just a 20% chance of a thunderstorm, though, 90 degrees, and mostly cloudy then on Friday evening with a low of 73. We'll stay in the Center West, but go to Brasilia, which is the capital of Brazil.

Todd Gleason: 21:56

It's in the state of Goias, also in the Center West, 81 today, 68 tonight. It will rain today. Tomorrow, 80% chance of rainfall, 88 degrees, 66 tomorrow evening. Thursday, 90 with a 60% chance of rainfall, 40% overnight with a low of 67. And Friday, 60% chance of rainfall, 88 degrees thunderstorms, and a 40% chance of rainfall on Friday evening moving to Argentina to Rosario, where today at 79, it'll be rainy just a bit and clear off going into the evening dropping to 57.

Todd Gleason: 22:34

Clear in 81 tomorrow, mostly clear tomorrow evening in 52 in Rosario. And then Thursday, overcast, 80 degrees for the daytime high, 52, rather 58 overnight, and 80% chance of light rain. It'll continue raining during the day on Friday with just a high of 60 degrees and mostly cloudy Friday evening with low of 52. That's a look at the weather forecast in some of the growing regions of South America and helps us to wrap up this Tuesday edition of the closing market report from Illinois Public Media on University of Illinois Extension's Todd Gleason.