Episode Number
10480
Episode Show Notes / Description
The November 12, 2026, broadcast of the Closing Market Report, hosted by Todd Gleason, provides a comprehensive overview of current agricultural markets, policy news, and global weather impacts. The program begins with Matt Bennett of AgMarket analyzing recent USDA yield reports and the implications of tightening global grain stocks. The show then revisits insights from economist Joe Janzen regarding fall corn basis recovery and soybean export demand. In policy and industry news, the broadcast highlights efforts by Senate leaders to negotiate a Farm Bill during the lame-duck session, discusses the agricultural trade deficit, and warns that an aging U.S. barge fleet could increase grain transportation costs. Finally, meteorologist Mike Tannura details the effects of a strong El Niño pattern, specifically noting its role in bringing heavy, persistent rains to South American crop regions and its broader impact on global wheat conditions.
02:10 Ag Markets with Matt Bennett, AgMarket
08:18 A Fall Corn Basis Recovery Reminder
11:33 Senate Ag Leaders Still Negotiating on Farm Bill
13:09 Aging Barge Fleet Raises Concerns for Grain Transportation
14:25 Ag Weather with Mike Tannura, Tstorm Weather
02:10 Ag Markets with Matt Bennett, AgMarket
08:18 A Fall Corn Basis Recovery Reminder
11:33 Senate Ag Leaders Still Negotiating on Farm Bill
13:09 Aging Barge Fleet Raises Concerns for Grain Transportation
14:25 Ag Weather with Mike Tannura, Tstorm Weather
Transcript
cmr261112
The November 12, 2026, broadcast of the Closing Market Report, hosted by Todd Gleason, provides a comprehensive overview of current agricultural markets, policy news, and global weather impacts. The program begins with Matt Bennett of AgMarket analyzing recent USDA yield reports and the implications of tightening global grain stocks. The show then revisits insights from economist Joe Janzen regarding fall corn basis recovery and soybean export demand. In policy and industry news, the broadcast highlights efforts by Senate leaders to negotiate a Farm Bill during the lame-duck session, discusses the agricultural trade deficit, and warns that an aging U.S. barge fleet could increase grain transportation costs. Finally, meteorologist Mike Tannura details the effects of a strong El Niño pattern, specifically noting its role in bringing heavy, persistent rains to South American crop regions and its broader impact on global wheat conditions.
02:10 Ag Markets with Matt Bennett, AgMarket
08:18 A Fall Corn Basis Recovery Reminder
11:33 Senate Ag Leaders Still Negotiating on Farm Bill
13:09 Aging Barge Fleet Raises Concerns for Grain Transportation
14:25 Ag Weather with Mike Tannura, Tstorm Weather
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Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report for the 12th day of November 2026. I’m Extension’s Todd Gleason. Coming up, we’ll talk about the commodity markets with Matt Bennett. He is at AgMarket. We’ll turn our attention to the agricultural news for the day, including a rehash of something Joe Janzen told us about a couple of weeks ago related to the corn market and how it recovers, generally speaking, during the fall, and what his expectations at the time were and how that’s played out since then. Then we’ll turn our attention again to the news, where we’ll hear about the Senate committees looking towards agriculture and the Farm Bill, whether that can be done during the lame-duck session and how. And we’ll wrap up our time together by talking about the weather forecast, too. We’ll do that with Mike Tannura at Tstorm Weather. Mike will take up El Niño in greater detail and what it has meant particularly for wheat across the planet, also soybeans in South America. You want to stay with us for that as we wrap up our time together here on the Closing Market Report from Illinois Public Media. Along the way, I’ll remind you to visit our website. The address there is willag.org, and it includes today a way to register for the Illinois Farm Economics Summits. The ag economists and I will be on the road during the month of December. You can drop in and see us in Mount Vernon, Sherman, DeKalb, or Peoria, but you need to register today. Do that now at willag.org.
announce: Todd Gleason’s services are made available to WILL by University of Illinois Extension. December corn for the day settled at $4.42 and a half, five and a half lower. The March at $4.54 and three-quarters, down five and a half. And the May contract, five and a half lower at $4.62 and three-quarters. January beans down 11 and three-quarters at $12.19. The March at $12.25, down 13. And soft red winter wheat in the December, down 15 and a quarter cents, settled at $5.84 and a quarter.
02:10 Ag Markets with Matt Bennett, AgMarket
Todd Gleason: Matt Bennett from AgMarket now joins us to take a look at the marketplace. Hello, Matt. Thanks much. You’ve been traveling a little bit. I’ve been busy as well. Been a couple of weeks since we talked. What have you seen in the marketplace, and maybe you can start with that report we had earlier in the week from USDA?
Matt Bennett: Yeah, I mean, there’s no doubt going into that report I think a lot of us were pretty concerned about, hey, what happens if they take yields on higher? For instance, in the state of corn, you know, I mean you look at this corn number and we dropped 1.6 bushels, which, Todd, as you know, whenever you go up from September to October, it’s not often that you come back in November with a lower yield, and that’s exactly what we received. And so, you know, I’ve been talking for as long as anyone would listen that Illinois seemed too high to me, you know, and coming down to 200 bushels, that definitely had a big impact. It was almost a bushel of the impact. And so a lot of folks feel like Iowa at 219 is still a little rich. And if you look historically, coming down in November, there’s a decent chance you’d go even further lower. I’ve got to think that there’s a chance. Now on the bean side of things, there’s probably a chance that could grow a little bit. You know, a lot of the anecdotal reports were awfully strong this year. And so I would say these reports could go in a couple of different directions moving forward, whereas beans could go up a little bit and corn might go on a little bit lower.
Todd Gleason: And it will be January when we get the next set of numbers that update yields for both corn and soybeans from USDA. That’s the final set of figures for this crop year. Between then and now, we’ll have another, of course, WASDE or supply and demand report, and they’ll start to calculate grain stocks, which will also be released on the January number set. That is as of December 1st. I think interestingly in that set will be how USDA deals with consumption related to feed and residual. What do you think that they’ll find?
Matt Bennett: Yeah, I mean, the feed and residual, as we’ve learned, you know, there’s no doubt that it is strongly correlated to what overall production looks like. Now, whenever we came in here for the quarterly stocks on September 30th, you know, a lot of folks pointed to, hey, they were running awfully rich for the whole year. This finally has trued up. And I think that there was probably a little bit of hedging back and forth between one year to the next. I think whenever you look as of right now, Todd, you’ve got to scratch your head and say, hey, we’re all of a sudden looking at a 10.8 stocks-to-use again, which what’s that tell you? If the yield comes on lower, it tells you that it could get snug, of course, unless you really mess with demand. And so the USDA was smart in taking exports lower. I mean, there’s no doubt pace analysis would suggest that it should have come lower. Feed and residual is a big one, though, and we always have to remember feed and residual is not feed. It’s feed and residual. And unfortunately, it makes it very hard to kind of pinpoint exactly why it is what it is. But again, it is a percentage of total production that the USDA historically has used to kind of even things up, if you will, maybe make adjustments where they’ve been incorrect previously. So it’ll be interesting to see how they handle it. But my personal opinion is that, you know, stocks coming down again this month definitely tells you that these things are a little bit more snug than what the trade was expecting it to look like.
Todd Gleason: On that note, because USDA will explain that the larger the crop is, and last year’s was the largest crop we’d ever harvested, that the residual side also represents loss, and because big crops tend to have more loss, one because they’re bigger, and two because more of the grain is stored on the ground. I’m wondering in this year with the second crop, if there is any effect that might take place in that loss or residual category because of what’s happening in the Western United States, meaning that their crops in Minnesota, Nebraska, Iowa, are so large. Did they have ground piles? Were they forced to have much bigger ground piles, and might you expect that there would be bigger loss, and consequently a bigger feed and residual number?
Matt Bennett: Yeah, I mean, that’s certainly a possibility. The other thing, you know, of course you’re going to have big loss with a big crop. And this year, I think it’s interesting to see how that crop finished, if you will. And I’m talking crop that was ready to harvest, you know. Over the last two to three weeks, Todd, you had a lot of wind in that part of the world. And so we’ve heard about a lot of lodged corn, a lot of corn on the ground. And it’s pretty tough to get that harvested whenever, in some cases, you’re still wet. You know, ground conditions wet along with lodged corn does not equate to something good going on as far as trying to get that corn harvested. So you know, I think feed and residual certainly can continue to stay a mystery to people, but as you suggest, there’s no question the bigger the crop, you’re going to have a little bit bigger feed and residual. And that is something everyone was very uncomfortable with this last year due to what everyone felt as far as the feed side of things should be considering cattle numbers were low. So I think whenever it’s all said and done, again, you’re down here to a snug level. And I think when you look at world levels, stocks-to-use is a very snug level, the tightest we’ve seen since 2012 as far as stocks-to-use goes. I mean, you have to produce moving forward, and you got to produce on soybeans as well. I mean, no question, world stocks numbers are not growing, which is interesting after two massive Brazilian crops and the biggest U.S. crop we’ve ever seen.
Todd Gleason: We’ll talk with you again soon enough. I appreciate it. Thanks much.
Matt Bennett: Absolutely, thanks.
Todd Gleason: Matt Bennett is with AgMarket. He joined us here on the Closing Market Report on this Thursday afternoon.
08:18 A Fall Corn Basis Recovery Reminder
Todd Gleason: I want to take us back a couple of weeks now to something Joe Janzen was talking about the last time we spoke with him. As it relates to basis, particularly for corn at the time in the end of the month of October, Joe was discussing what normally would happen with corn basis and how he thought basis would play out this year.
Joe Janzen: I think, I mean, we have been seeing and probably will see a little bit of basis recovery, that now is the time for that to happen. Remember, it’s important to remember that the scale of that recovery is not massive. It’s not 20, 30, 40 cents. It’s 10 to 15 cents, maybe 20 cents, depending on where you’re at in the country. And the timing of that does tend to coincide with actual harvest progress. But we’re already in that stage where we’re coming out of that harvest low, and you’d expect to see a little bit of recovery, but not massive amounts. I think we’re going to have to get comfortable with a corn price on the board in that $4.50 range. In the country, obviously, a little bit lower than that. That’s where the market needs to be right now to manage a crop of the size that where we think it’s at.
Todd Gleason: And on the board for soybean?
Joe Janzen: Yeah, you know, I think there’s a little bit more uncertainty here, because the soybean complex is a little more complicated with issues in dealing with meal relative to oil, dealing with the fact that the export demand piece is just so much more important. And you’d like to see a lot of our other soybean buyers step up. We’ve seen a lot of sales to China. The question is what legs does that have? We need to get a little bit further to get to those political target numbers. But those are in line with where that should be. So I don’t see a strong seasonal tendency. We will shift into a market that will be much more dominated by South American production headlines. And there’s I think a lot of, maybe a little bit more uncertainty there this year than in the past, given the El Niño and its potentially strong impacts on production levels, particularly in Brazil.
Todd Gleason: That’s Joe Janzen, ag economist. Hey, thank you much, Joe.
Joe Janzen: Appreciate it, Todd. Thank you.
11:33 Senate Ag Leaders Still Negotiating on Farm Bill
Todd Gleason: I want to remind you of what he said about basis for this season and how he expected it to react going into the month of November. He also talked about exports as well. You can look that up if you’d like on the farmdoc daily website at farmdocdaily.illinois.edu. Now let’s turn our attention to the agricultural news for the afternoon. We’ll begin in Washington, D.C., where Senate ag leaders say they’re still trying to work out a Farm Bill deal for the lame-duck session. Senate Ag Chair John Boozoman told a committee nomination hearing that conditions in farm country remain dire.
John Boozoman: That’s why I remain committed to working with our ranking member, Klobuchar, and our House counterparts to advance a five-year Farm Bill before the end of the year. I also continue to advocate for a path forward for additional emergency assistance.
Todd Gleason: Senate GOP leader John Thune looks to attach the Farm Bill of compromise onto a must-pass defense bill or a bipartisan permitting bill. Ranking Senate Ag Democrat, Minnesota Senator-elect Amy Klobuchar, whose side voted no on the Senate Farm Bill in committee, is also looking for a last-minute deal.
Amy Klobuchar: We have a lot of work to do as you noted in the next few months, and we are going to continue to work on this Farm Bill. It is so important, as you noted.
Todd Gleason: In the meantime, USDA trade undersecretary nominee Greg Ibach told Senate Ag that more work is needed to bring down the ag trade deficit.
Greg Ibach: I think that means traveling, going to countries, taking our agricultural producers and the commodity organizations that represent them with us to explain the quality of our food, the safety of our food, and the nutrition of our food, and ask for their business.
Todd Gleason: Ibach is a former Nebraska ag secretary and USDA undersecretary for marketing and regulatory affairs. He would replace Luke Lindberg, who became executive director of the UN’s World Food Programme last month.
13:09 Aging Barge Fleet Raises Concerns for Grain Transportation
Todd Gleason: From D.C., let’s move to the middle of the nation, where an aging and shrinking U.S. barge fleet could mean higher transportation costs and weaker grain prices for farmers in the years ahead. A new report from CoBank says the inland waterway system is facing growing pressure from older vessels, rising construction costs, and recurring low water levels on the Mississippi River. The barge fleet has declined nearly 8% over the past decade, while the average vessel has aged around 17 and a half years. More barges are being retired each year than are being replaced. CoBank economist Tanner Ehmke says tighter barge availability can push freight rates higher and weaken grain basis levels paid to farmers. The Mississippi River handles roughly half of U.S. corn and soybean exports, making reliable transportation critical to the agricultural markets. The report warns that without greater investment, transportation bottlenecks could threaten export competitiveness as grain shipments increase. And that’s a look at today’s agricultural news.
14:25 Ag Weather with Mike Tannura, Tstorm Weather
Todd Gleason: Let’s turn our attention to the growing regions across the planet and the climate and how it’s impacting crops. We’re now joined by the CEO and president at Tstorm Weather, Mike Tannura. Thanks, Mike, for being with us again. I’d like to start with a broader topic today. Can you give me an update on the El Niño that is in place in the Pacific Ocean and its current situation?
Mike Tannura: Well, the El Niño is very strong and it continues as we speak today. Water temperatures out in the middle of the Pacific Ocean are at record levels relative to normal, and that’s indicative of that strong El Niño. Now, these water temperatures are just so far above anything we’ve seen in the last 50 years, and probably going back several hundred years, and why is this happening? That’s a great question, but we do know that this is part of our climate. Every few years the water in the Pacific Ocean gets really mild relative to normal, and we have an El Niño, and then another year it gets very cold compared to normal, and we have a La Niña. We’re in the El Niño phase right now, and typically all the effects from this type of setup begin now, and then last for a few months going forward. So, Todd, this is going to continue here for a while, and it will eventually start to weaken once we get into the first half of next year, and then certainly by the upcoming summer it should be over.
Todd Gleason: How is it driving the weather conditions in the Southern Hemisphere, South America in particular, as it’s related to corn and soybeans?
Mike Tannura: Well, it’s making for a lot of rain. It’s just raining everywhere there, and that’s going to be the case into the end of the month. You know, it’s unusual, Todd, when you think about Argentina and Brazil and Paraguay, and for all of them to be getting rain at the same time, because that’s a really big area. I mean, how often would you see the United States having rain on the West Coast, rain in the middle of the country, and rain in the Eastern United States? It just doesn’t happen very often. Usually one of those areas is wet, maybe one or two are dry, and that’s just kind of the way it works, and then weather wobbles around like that all year long. Well, in the current situation, we’re just seeing rains scattered all over the place, and the interesting thing is that if you look at some of the computer models, like the European model in particular, it’s projecting 100% of soybeans in Brazil to be wetter than normal over the next 14 days, and that’s just a very big geographic area to be seeing that much rain. And if you include Argentina, 75% of that crop is also going to be wetter than normal over this period. And we think that model in particular has a good handle on this situation because with the strong El Niño in place, it’s basically keeping a pretty wide jet stream stuck across South America, and it’s sending all kinds of energy across those areas, and that’s why it keeps raining. And we think it’s going to continue here for a while. Typically, Todd, once you get into January and February, that’s when things start to break down a little bit. You know, it’s not uncommon to see a lot of rain in those areas at this time of the year with this setup, but it’s also not unusual for the rains to eventually break up once we get into January and February, and that’ll be kind of what we watch next.
Todd Gleason: I want to follow up with you on this early season and what impact it might have on the crops there and turn from really your meteorological side, roughly speaking, to the ag econ training that you have from the University of Illinois and some of the models that you use. Do you have similar models for South America that you have used for North America?
Mike Tannura: Yeah, we certainly do, Todd, and you’re talking about yieldcast.net. So that’s yieldcast.net, you can go on there and see all the models and how they’re expected to perform every year. But we recently upgraded those models for Argentina and Brazil and Paraguay to cover their corn and soybean crops, and the models do very well over time, so we have a lot of confidence in those and how they perform. But to your question, you know, it’s a little bit early, that’s kind of the main thing that they’re telling us right now. Just like in the United States, if you have really nice weather or really poor weather at the beginning of the season, say in April, May, maybe even into June, it doesn’t really tell you a lot about what can happen, because just look at last year. Things were humming along for the U.S. corn crop, it was looking nice, things seemed to be going pretty well, maybe not great, but not terrible either, and then all of a sudden we got into July and we had a pretty short duration heat wave, but a strong one, and on top of that it wasn’t raining. And that’s really all it took was a few weeks of that, and it pretty much guaranteed we were not going to have a very large corn crop, maybe not a terrible one either, but as you know the yields are below where they should be in a normal year, and that’s because of that very short window of time. It’s kind of the same thing in South America. Right now, we’re kind of in May heading into June, and maybe even getting into July if you start looking at Brazil soybeans, but key weather is still a few weeks out in Brazil for their soybean crop, it’s really driven by what happens in December and January. And then corn in Argentina starts to become important in January and then lasting through March, and then Brazil corn is very important in March, April, and May. So there’s kind of three distinct weather periods that happen in South America as opposed to the U.S. where we have one in July and August. So you know, just a tiny bit early, but the only thing we can say for sure is that we’re going to have moist conditions leading into the onset of the key weather period in Brazil, and you’d think that’s favorable, but you just need to kind of wait and see what happens four to eight weeks from now.
Todd Gleason: Turn your attention to North America now. Although there is a wheat crop, of course, in Argentina that we probably should discuss as well. But across the planet, what are you thinking about as it’s related to wheat and growing conditions for it?
Mike Tannura: Well, Todd, it’s just kind of the same story, and, you know, this could be a function of the El Niño and also just a function of the randomness of weather, but it’s just raining everywhere. I mean, you look at Argentina, we already talked about that, their wheat crop’s getting plenty of rain, so is the Brazil crop even though it’s a small one. Australia, they’re getting nice rains going forward over the next week or two even though they’re starting to harvest, but generally speaking they’re doing fine. Let’s go to Europe and Russia and Ukraine. There have been some dry pockets here and there, and there was a drought last summer in Europe, but rain, rain, rain. They’re getting rain now and they’re going to start getting more rain as they move into the end of the month. And then we didn’t even talk about the U.S. hard red winter wheat crop, but Todd, I mean, this one, they just been getting hammered with rains pretty much all throughout the fall, and typically you get a lot of rain in the winter when you have an El Niño like this, and there’s more rain ahead there on Sunday and then more again next weekend. So, you know, it’s just rain, rain, rain everywhere. And that’s just the way it is today.
Todd Gleason: With the exception of the soft red winter wheat crop here in Illinois, parts of Missouri, Indiana?
Mike Tannura: Well, yeah, and that’s probably a good point to bring up because most of our listeners are there right now, and yeah, they’re the one exception to all that. They’ve been having a pretty dry season. But, you know, typically, the soft red winter wheat crop will get the rains that they need at some point in time, so not too much of a concern there even though it is a little dry today.
Todd Gleason: Thank you very much, Mike. We appreciate it. We’ll talk with you again next week.
Mike Tannura: Yeah, that sounds great, Todd.
Todd Gleason: Mike Tannura is with Tstorm Weather. That’s tstorm.net. You may hear him each and every Thursday right here on Illinois Public Media’s Closing Market Report. You can also check out the Yieldcast forecast at yieldcast.net or at least learn more about the forecast if you’d like. Mike is an agricultural economist and an agricultural meteorologist trained here at the Land Grant University of Illinois, and he has worked closely with the likes of Darrel Good and Scott Irwin, probably worth checking out if you get the opportunity. That wraps up the Closing Market Report for this Thursday afternoon. We’ll record Commodity Week later today and post it to the website at willag.org tonight by about 6:00 p.m. You’ll hear it all on our home station tomorrow and on many of these radio stations over the weekend. Commodity Week, of course, is our weekly look at what’s happened in the world of agriculture. You have a good afternoon. I’m Illinois Extension’s Todd Gleason.
The November 12, 2026, broadcast of the Closing Market Report, hosted by Todd Gleason, provides a comprehensive overview of current agricultural markets, policy news, and global weather impacts. The program begins with Matt Bennett of AgMarket analyzing recent USDA yield reports and the implications of tightening global grain stocks. The show then revisits insights from economist Joe Janzen regarding fall corn basis recovery and soybean export demand. In policy and industry news, the broadcast highlights efforts by Senate leaders to negotiate a Farm Bill during the lame-duck session, discusses the agricultural trade deficit, and warns that an aging U.S. barge fleet could increase grain transportation costs. Finally, meteorologist Mike Tannura details the effects of a strong El Niño pattern, specifically noting its role in bringing heavy, persistent rains to South American crop regions and its broader impact on global wheat conditions.
02:10 Ag Markets with Matt Bennett, AgMarket
08:18 A Fall Corn Basis Recovery Reminder
11:33 Senate Ag Leaders Still Negotiating on Farm Bill
13:09 Aging Barge Fleet Raises Concerns for Grain Transportation
14:25 Ag Weather with Mike Tannura, Tstorm Weather
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Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report for the 12th day of November 2026. I’m Extension’s Todd Gleason. Coming up, we’ll talk about the commodity markets with Matt Bennett. He is at AgMarket. We’ll turn our attention to the agricultural news for the day, including a rehash of something Joe Janzen told us about a couple of weeks ago related to the corn market and how it recovers, generally speaking, during the fall, and what his expectations at the time were and how that’s played out since then. Then we’ll turn our attention again to the news, where we’ll hear about the Senate committees looking towards agriculture and the Farm Bill, whether that can be done during the lame-duck session and how. And we’ll wrap up our time together by talking about the weather forecast, too. We’ll do that with Mike Tannura at Tstorm Weather. Mike will take up El Niño in greater detail and what it has meant particularly for wheat across the planet, also soybeans in South America. You want to stay with us for that as we wrap up our time together here on the Closing Market Report from Illinois Public Media. Along the way, I’ll remind you to visit our website. The address there is willag.org, and it includes today a way to register for the Illinois Farm Economics Summits. The ag economists and I will be on the road during the month of December. You can drop in and see us in Mount Vernon, Sherman, DeKalb, or Peoria, but you need to register today. Do that now at willag.org.
announce: Todd Gleason’s services are made available to WILL by University of Illinois Extension. December corn for the day settled at $4.42 and a half, five and a half lower. The March at $4.54 and three-quarters, down five and a half. And the May contract, five and a half lower at $4.62 and three-quarters. January beans down 11 and three-quarters at $12.19. The March at $12.25, down 13. And soft red winter wheat in the December, down 15 and a quarter cents, settled at $5.84 and a quarter.
02:10 Ag Markets with Matt Bennett, AgMarket
Todd Gleason: Matt Bennett from AgMarket now joins us to take a look at the marketplace. Hello, Matt. Thanks much. You’ve been traveling a little bit. I’ve been busy as well. Been a couple of weeks since we talked. What have you seen in the marketplace, and maybe you can start with that report we had earlier in the week from USDA?
Matt Bennett: Yeah, I mean, there’s no doubt going into that report I think a lot of us were pretty concerned about, hey, what happens if they take yields on higher? For instance, in the state of corn, you know, I mean you look at this corn number and we dropped 1.6 bushels, which, Todd, as you know, whenever you go up from September to October, it’s not often that you come back in November with a lower yield, and that’s exactly what we received. And so, you know, I’ve been talking for as long as anyone would listen that Illinois seemed too high to me, you know, and coming down to 200 bushels, that definitely had a big impact. It was almost a bushel of the impact. And so a lot of folks feel like Iowa at 219 is still a little rich. And if you look historically, coming down in November, there’s a decent chance you’d go even further lower. I’ve got to think that there’s a chance. Now on the bean side of things, there’s probably a chance that could grow a little bit. You know, a lot of the anecdotal reports were awfully strong this year. And so I would say these reports could go in a couple of different directions moving forward, whereas beans could go up a little bit and corn might go on a little bit lower.
Todd Gleason: And it will be January when we get the next set of numbers that update yields for both corn and soybeans from USDA. That’s the final set of figures for this crop year. Between then and now, we’ll have another, of course, WASDE or supply and demand report, and they’ll start to calculate grain stocks, which will also be released on the January number set. That is as of December 1st. I think interestingly in that set will be how USDA deals with consumption related to feed and residual. What do you think that they’ll find?
Matt Bennett: Yeah, I mean, the feed and residual, as we’ve learned, you know, there’s no doubt that it is strongly correlated to what overall production looks like. Now, whenever we came in here for the quarterly stocks on September 30th, you know, a lot of folks pointed to, hey, they were running awfully rich for the whole year. This finally has trued up. And I think that there was probably a little bit of hedging back and forth between one year to the next. I think whenever you look as of right now, Todd, you’ve got to scratch your head and say, hey, we’re all of a sudden looking at a 10.8 stocks-to-use again, which what’s that tell you? If the yield comes on lower, it tells you that it could get snug, of course, unless you really mess with demand. And so the USDA was smart in taking exports lower. I mean, there’s no doubt pace analysis would suggest that it should have come lower. Feed and residual is a big one, though, and we always have to remember feed and residual is not feed. It’s feed and residual. And unfortunately, it makes it very hard to kind of pinpoint exactly why it is what it is. But again, it is a percentage of total production that the USDA historically has used to kind of even things up, if you will, maybe make adjustments where they’ve been incorrect previously. So it’ll be interesting to see how they handle it. But my personal opinion is that, you know, stocks coming down again this month definitely tells you that these things are a little bit more snug than what the trade was expecting it to look like.
Todd Gleason: On that note, because USDA will explain that the larger the crop is, and last year’s was the largest crop we’d ever harvested, that the residual side also represents loss, and because big crops tend to have more loss, one because they’re bigger, and two because more of the grain is stored on the ground. I’m wondering in this year with the second crop, if there is any effect that might take place in that loss or residual category because of what’s happening in the Western United States, meaning that their crops in Minnesota, Nebraska, Iowa, are so large. Did they have ground piles? Were they forced to have much bigger ground piles, and might you expect that there would be bigger loss, and consequently a bigger feed and residual number?
Matt Bennett: Yeah, I mean, that’s certainly a possibility. The other thing, you know, of course you’re going to have big loss with a big crop. And this year, I think it’s interesting to see how that crop finished, if you will. And I’m talking crop that was ready to harvest, you know. Over the last two to three weeks, Todd, you had a lot of wind in that part of the world. And so we’ve heard about a lot of lodged corn, a lot of corn on the ground. And it’s pretty tough to get that harvested whenever, in some cases, you’re still wet. You know, ground conditions wet along with lodged corn does not equate to something good going on as far as trying to get that corn harvested. So you know, I think feed and residual certainly can continue to stay a mystery to people, but as you suggest, there’s no question the bigger the crop, you’re going to have a little bit bigger feed and residual. And that is something everyone was very uncomfortable with this last year due to what everyone felt as far as the feed side of things should be considering cattle numbers were low. So I think whenever it’s all said and done, again, you’re down here to a snug level. And I think when you look at world levels, stocks-to-use is a very snug level, the tightest we’ve seen since 2012 as far as stocks-to-use goes. I mean, you have to produce moving forward, and you got to produce on soybeans as well. I mean, no question, world stocks numbers are not growing, which is interesting after two massive Brazilian crops and the biggest U.S. crop we’ve ever seen.
Todd Gleason: We’ll talk with you again soon enough. I appreciate it. Thanks much.
Matt Bennett: Absolutely, thanks.
Todd Gleason: Matt Bennett is with AgMarket. He joined us here on the Closing Market Report on this Thursday afternoon.
08:18 A Fall Corn Basis Recovery Reminder
Todd Gleason: I want to take us back a couple of weeks now to something Joe Janzen was talking about the last time we spoke with him. As it relates to basis, particularly for corn at the time in the end of the month of October, Joe was discussing what normally would happen with corn basis and how he thought basis would play out this year.
Joe Janzen: I think, I mean, we have been seeing and probably will see a little bit of basis recovery, that now is the time for that to happen. Remember, it’s important to remember that the scale of that recovery is not massive. It’s not 20, 30, 40 cents. It’s 10 to 15 cents, maybe 20 cents, depending on where you’re at in the country. And the timing of that does tend to coincide with actual harvest progress. But we’re already in that stage where we’re coming out of that harvest low, and you’d expect to see a little bit of recovery, but not massive amounts. I think we’re going to have to get comfortable with a corn price on the board in that $4.50 range. In the country, obviously, a little bit lower than that. That’s where the market needs to be right now to manage a crop of the size that where we think it’s at.
Todd Gleason: And on the board for soybean?
Joe Janzen: Yeah, you know, I think there’s a little bit more uncertainty here, because the soybean complex is a little more complicated with issues in dealing with meal relative to oil, dealing with the fact that the export demand piece is just so much more important. And you’d like to see a lot of our other soybean buyers step up. We’ve seen a lot of sales to China. The question is what legs does that have? We need to get a little bit further to get to those political target numbers. But those are in line with where that should be. So I don’t see a strong seasonal tendency. We will shift into a market that will be much more dominated by South American production headlines. And there’s I think a lot of, maybe a little bit more uncertainty there this year than in the past, given the El Niño and its potentially strong impacts on production levels, particularly in Brazil.
Todd Gleason: That’s Joe Janzen, ag economist. Hey, thank you much, Joe.
Joe Janzen: Appreciate it, Todd. Thank you.
11:33 Senate Ag Leaders Still Negotiating on Farm Bill
Todd Gleason: I want to remind you of what he said about basis for this season and how he expected it to react going into the month of November. He also talked about exports as well. You can look that up if you’d like on the farmdoc daily website at farmdocdaily.illinois.edu. Now let’s turn our attention to the agricultural news for the afternoon. We’ll begin in Washington, D.C., where Senate ag leaders say they’re still trying to work out a Farm Bill deal for the lame-duck session. Senate Ag Chair John Boozoman told a committee nomination hearing that conditions in farm country remain dire.
John Boozoman: That’s why I remain committed to working with our ranking member, Klobuchar, and our House counterparts to advance a five-year Farm Bill before the end of the year. I also continue to advocate for a path forward for additional emergency assistance.
Todd Gleason: Senate GOP leader John Thune looks to attach the Farm Bill of compromise onto a must-pass defense bill or a bipartisan permitting bill. Ranking Senate Ag Democrat, Minnesota Senator-elect Amy Klobuchar, whose side voted no on the Senate Farm Bill in committee, is also looking for a last-minute deal.
Amy Klobuchar: We have a lot of work to do as you noted in the next few months, and we are going to continue to work on this Farm Bill. It is so important, as you noted.
Todd Gleason: In the meantime, USDA trade undersecretary nominee Greg Ibach told Senate Ag that more work is needed to bring down the ag trade deficit.
Greg Ibach: I think that means traveling, going to countries, taking our agricultural producers and the commodity organizations that represent them with us to explain the quality of our food, the safety of our food, and the nutrition of our food, and ask for their business.
Todd Gleason: Ibach is a former Nebraska ag secretary and USDA undersecretary for marketing and regulatory affairs. He would replace Luke Lindberg, who became executive director of the UN’s World Food Programme last month.
13:09 Aging Barge Fleet Raises Concerns for Grain Transportation
Todd Gleason: From D.C., let’s move to the middle of the nation, where an aging and shrinking U.S. barge fleet could mean higher transportation costs and weaker grain prices for farmers in the years ahead. A new report from CoBank says the inland waterway system is facing growing pressure from older vessels, rising construction costs, and recurring low water levels on the Mississippi River. The barge fleet has declined nearly 8% over the past decade, while the average vessel has aged around 17 and a half years. More barges are being retired each year than are being replaced. CoBank economist Tanner Ehmke says tighter barge availability can push freight rates higher and weaken grain basis levels paid to farmers. The Mississippi River handles roughly half of U.S. corn and soybean exports, making reliable transportation critical to the agricultural markets. The report warns that without greater investment, transportation bottlenecks could threaten export competitiveness as grain shipments increase. And that’s a look at today’s agricultural news.
14:25 Ag Weather with Mike Tannura, Tstorm Weather
Todd Gleason: Let’s turn our attention to the growing regions across the planet and the climate and how it’s impacting crops. We’re now joined by the CEO and president at Tstorm Weather, Mike Tannura. Thanks, Mike, for being with us again. I’d like to start with a broader topic today. Can you give me an update on the El Niño that is in place in the Pacific Ocean and its current situation?
Mike Tannura: Well, the El Niño is very strong and it continues as we speak today. Water temperatures out in the middle of the Pacific Ocean are at record levels relative to normal, and that’s indicative of that strong El Niño. Now, these water temperatures are just so far above anything we’ve seen in the last 50 years, and probably going back several hundred years, and why is this happening? That’s a great question, but we do know that this is part of our climate. Every few years the water in the Pacific Ocean gets really mild relative to normal, and we have an El Niño, and then another year it gets very cold compared to normal, and we have a La Niña. We’re in the El Niño phase right now, and typically all the effects from this type of setup begin now, and then last for a few months going forward. So, Todd, this is going to continue here for a while, and it will eventually start to weaken once we get into the first half of next year, and then certainly by the upcoming summer it should be over.
Todd Gleason: How is it driving the weather conditions in the Southern Hemisphere, South America in particular, as it’s related to corn and soybeans?
Mike Tannura: Well, it’s making for a lot of rain. It’s just raining everywhere there, and that’s going to be the case into the end of the month. You know, it’s unusual, Todd, when you think about Argentina and Brazil and Paraguay, and for all of them to be getting rain at the same time, because that’s a really big area. I mean, how often would you see the United States having rain on the West Coast, rain in the middle of the country, and rain in the Eastern United States? It just doesn’t happen very often. Usually one of those areas is wet, maybe one or two are dry, and that’s just kind of the way it works, and then weather wobbles around like that all year long. Well, in the current situation, we’re just seeing rains scattered all over the place, and the interesting thing is that if you look at some of the computer models, like the European model in particular, it’s projecting 100% of soybeans in Brazil to be wetter than normal over the next 14 days, and that’s just a very big geographic area to be seeing that much rain. And if you include Argentina, 75% of that crop is also going to be wetter than normal over this period. And we think that model in particular has a good handle on this situation because with the strong El Niño in place, it’s basically keeping a pretty wide jet stream stuck across South America, and it’s sending all kinds of energy across those areas, and that’s why it keeps raining. And we think it’s going to continue here for a while. Typically, Todd, once you get into January and February, that’s when things start to break down a little bit. You know, it’s not uncommon to see a lot of rain in those areas at this time of the year with this setup, but it’s also not unusual for the rains to eventually break up once we get into January and February, and that’ll be kind of what we watch next.
Todd Gleason: I want to follow up with you on this early season and what impact it might have on the crops there and turn from really your meteorological side, roughly speaking, to the ag econ training that you have from the University of Illinois and some of the models that you use. Do you have similar models for South America that you have used for North America?
Mike Tannura: Yeah, we certainly do, Todd, and you’re talking about yieldcast.net. So that’s yieldcast.net, you can go on there and see all the models and how they’re expected to perform every year. But we recently upgraded those models for Argentina and Brazil and Paraguay to cover their corn and soybean crops, and the models do very well over time, so we have a lot of confidence in those and how they perform. But to your question, you know, it’s a little bit early, that’s kind of the main thing that they’re telling us right now. Just like in the United States, if you have really nice weather or really poor weather at the beginning of the season, say in April, May, maybe even into June, it doesn’t really tell you a lot about what can happen, because just look at last year. Things were humming along for the U.S. corn crop, it was looking nice, things seemed to be going pretty well, maybe not great, but not terrible either, and then all of a sudden we got into July and we had a pretty short duration heat wave, but a strong one, and on top of that it wasn’t raining. And that’s really all it took was a few weeks of that, and it pretty much guaranteed we were not going to have a very large corn crop, maybe not a terrible one either, but as you know the yields are below where they should be in a normal year, and that’s because of that very short window of time. It’s kind of the same thing in South America. Right now, we’re kind of in May heading into June, and maybe even getting into July if you start looking at Brazil soybeans, but key weather is still a few weeks out in Brazil for their soybean crop, it’s really driven by what happens in December and January. And then corn in Argentina starts to become important in January and then lasting through March, and then Brazil corn is very important in March, April, and May. So there’s kind of three distinct weather periods that happen in South America as opposed to the U.S. where we have one in July and August. So you know, just a tiny bit early, but the only thing we can say for sure is that we’re going to have moist conditions leading into the onset of the key weather period in Brazil, and you’d think that’s favorable, but you just need to kind of wait and see what happens four to eight weeks from now.
Todd Gleason: Turn your attention to North America now. Although there is a wheat crop, of course, in Argentina that we probably should discuss as well. But across the planet, what are you thinking about as it’s related to wheat and growing conditions for it?
Mike Tannura: Well, Todd, it’s just kind of the same story, and, you know, this could be a function of the El Niño and also just a function of the randomness of weather, but it’s just raining everywhere. I mean, you look at Argentina, we already talked about that, their wheat crop’s getting plenty of rain, so is the Brazil crop even though it’s a small one. Australia, they’re getting nice rains going forward over the next week or two even though they’re starting to harvest, but generally speaking they’re doing fine. Let’s go to Europe and Russia and Ukraine. There have been some dry pockets here and there, and there was a drought last summer in Europe, but rain, rain, rain. They’re getting rain now and they’re going to start getting more rain as they move into the end of the month. And then we didn’t even talk about the U.S. hard red winter wheat crop, but Todd, I mean, this one, they just been getting hammered with rains pretty much all throughout the fall, and typically you get a lot of rain in the winter when you have an El Niño like this, and there’s more rain ahead there on Sunday and then more again next weekend. So, you know, it’s just rain, rain, rain everywhere. And that’s just the way it is today.
Todd Gleason: With the exception of the soft red winter wheat crop here in Illinois, parts of Missouri, Indiana?
Mike Tannura: Well, yeah, and that’s probably a good point to bring up because most of our listeners are there right now, and yeah, they’re the one exception to all that. They’ve been having a pretty dry season. But, you know, typically, the soft red winter wheat crop will get the rains that they need at some point in time, so not too much of a concern there even though it is a little dry today.
Todd Gleason: Thank you very much, Mike. We appreciate it. We’ll talk with you again next week.
Mike Tannura: Yeah, that sounds great, Todd.
Todd Gleason: Mike Tannura is with Tstorm Weather. That’s tstorm.net. You may hear him each and every Thursday right here on Illinois Public Media’s Closing Market Report. You can also check out the Yieldcast forecast at yieldcast.net or at least learn more about the forecast if you’d like. Mike is an agricultural economist and an agricultural meteorologist trained here at the Land Grant University of Illinois, and he has worked closely with the likes of Darrel Good and Scott Irwin, probably worth checking out if you get the opportunity. That wraps up the Closing Market Report for this Thursday afternoon. We’ll record Commodity Week later today and post it to the website at willag.org tonight by about 6:00 p.m. You’ll hear it all on our home station tomorrow and on many of these radio stations over the weekend. Commodity Week, of course, is our weekly look at what’s happened in the world of agriculture. You have a good afternoon. I’m Illinois Extension’s Todd Gleason.