Episode Number
10462
Episode Show Notes / Description
This edition of the Closing Market Report covers commodity market movements, supply and demand estimates, and agricultural weather forecasts. Agricultural economist Ben Brown of the University of Missouri reviews disappointing September soybean crush numbers from NOPA, muted Chinese export demand following recent bilateral talks, and the impact of heavy managed money fund liquidation across corn, soybeans, and wheat. Former USDA Chief Economist Seth Meyer analyzes whether last year's record corn crop was overstated, examining how statistical discrepancies in the feed and residual category obscure actual domestic disappearance, alongside emerging shifts in consumer meat demand driven by GLP-1 medications. Finally, Mark Russo of Everstream Analytics details a warm, dry forecast across the Corn Belt that will accelerate harvest progress while keeping soil temperatures above the 50-degree threshold required for fall anhydrous ammonia applications, alongside favorable planting conditions in South America.
00:45 Commodity Markets Discussion with Ben Brown, University of Missouri
12:49 Crop Size and Feed Usage, a Question or Two
20:44 Ag Weather with Mark Russo
00:45 Commodity Markets Discussion with Ben Brown, University of Missouri
12:49 Crop Size and Feed Usage, a Question or Two
20:44 Ag Weather with Mark Russo
Transcript
cmr261019
This edition of the Closing Market Report covers commodity market movements, supply and demand estimates, and agricultural weather forecasts. Agricultural economist Ben Brown of the University of Missouri reviews disappointing September soybean crush numbers from NOPA, muted Chinese export demand following recent bilateral talks, and the impact of heavy managed money fund liquidation across corn, soybeans, and wheat. Former USDA Chief Economist Seth Meyer analyzes whether last year's record corn crop was overstated, examining how statistical discrepancies in the feed and residual category obscure actual domestic disappearance, alongside emerging shifts in consumer meat demand driven by GLP-1 medications. Finally, Mark Russo of Everstream Analytics details a warm, dry forecast across the Corn Belt that will accelerate harvest progress while keeping soil temperatures above the 50-degree threshold required for fall anhydrous ammonia applications, alongside favorable planting conditions in South America.
00:45 Commodity Markets Discussion with Ben Brown, University of Missouri
12:49 Crop Size and Feed Usage, a Question or Two
20:44 Ag Weather with Mark Russo
---
Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report. It is the 19th day of October, 2026. I’m Extension’s Todd Gleason. Coming up, we’ll talk about the commodity markets with University of Missouri Extension’s Ben Brown. He is with the Food and Agricultural Policy Research Institute there. Then we’ll turn our attention to Seth Meyer, also with FAPRI. He spoke at last week’s Chicago Federal Reserve Ag Conference. And then as we wrap up our time together, we’ll talk about the weather forecast, too. Mark Russo should be here from Everstream Analytics on this Monday edition of the Closing Market Report from Illinois Public Media.
announce: Todd Gleason’s services are made available to WILL by University of Illinois Extension.
Todd Gleason: We’re now joined by Ben Brown, agricultural economist with FAPRI, the Food and Agricultural Policy Research Institute at the University of Missouri. And with Extension, hi. Thank you for being with us, Ben.
Ben Brown: Yeah, thanks, Todd. I always appreciate the invitation.
00:45 Commodity Markets Discussion with Ben Brown, University of Missouri
Todd Gleason: Let’s start with some of the reports that I don’t deal with all of the time here, but I know that you watch closely, particularly as it relates to soybeans, NOPA, which is a crush report, but also I’m kind of wanting to talk about exports, too, in that same sort of vein. What are you watching?
Ben Brown: Yeah, so let’s start with the National Oilseed Processors Association report. We get that in the middle of the month for the previous month. So here in October, we’re talking about September. And I think you could define the September 2026 crush report as being disappointing. It came in within the range of expectations, but the estimate of 196.3 million bushels was nearly 8 million bushels below the average trade estimate for the month. But probably most notable to me was that 196.3 million for September of 26 came in a million and a half below the September 2025 crush number, which that’s the first month where we haven’t exceeded the prior year in a long time. We’re talking multiple years here where we’ve just constantly been setting new monthly records. And so we’re starting off the 26/27 marketing year, which started September 1st, this is our first month of data, we’re starting off the year lower than what we did last year. And I think that has to just kind of be a psychological disappointment to the market, even though it was within the range of expectations. USDA is currently estimating a 5% year-over-year crush increase for 26/27. So to be able to do that, we’re going to have to see some increases. Now, we’ve got a long ways to go, 11 months, but certainly, I think just kind of a little bit of a bearish bias to start out the month.
Ben Brown: As you asked about soybean exports, we get asked a lot about Chinese purchases of soybeans given that they’ve committed to buy 25 million metric tons of soybeans. Last week, which was the week of October 13th, we did see China come into the market and buy about 1.3 million metric tons. I think that’s notable because that was really the first purchases of soybeans we’ve seen China make since the Trump-Xi meeting back at the end of September, September 24th. The expectation was that we could see quite a few purchases around that meeting, and the meeting in itself was kind of disappointing because there wasn’t a whole lot of reaffirmation about the trade commitments in place. And then we went a while without seeing any purchases. I will also mention that China maintains the 10% specific tariff on the US, then there’s a 3% tariff on the total world. So US soybeans have a 13% tariff going into China, 10% higher than some of our competitors. That remains an uncompetitive advantage for US soybeans, and as a result, the purchases we have seen by China have been their state-owned companies. And I think that’s going to continue as private companies just don’t have an incentive to buy from the US. They have an incentive to buy cheaper beans from the rest of the world. So I think in general, both of those things feed into some of the bearish headwinds that we see facing the soybean market.
Todd Gleason: I have a question about the NOPA report. And this was my conjecture during commodity week, because that was a September report, and the Iowa soybean crop, while it may have been ready, was not being harvested because of rainfall. The numbers were just low. Because there weren’t available beans to crush, do you think it will right itself in the month of October?
Ben Brown: Yeah, I think definitely the increase of supplies coming into the market will certainly help. And when we do look at the year-over-year changes, it was Iowa that kind of pulled down that whole number. Southwest US, Iowa, Southeast US were three regions where we did see quite a bit of pull down. Minnesota and the Dakotas were up really strong in the month of September. So we were seeing quite a bit of crush in that region, and part of that might have been just the lack of exports and needing something to do with the soybeans.
Todd Gleason: Speaking of exports, let’s turn your attention to corn and wheat, but not out of the United States, from Russia and Ukraine, and what those projections look like.
Ben Brown: Sure. Yeah, so there’s kind of been a renewed flare in the Ukraine-Russia war here as of late. It really kind of started back in July. The market responded to it for a period of time, but the market seems to be ignoring it again. And this is kind of the tendency of prolonged events, right? We’ve seen this multiple times throughout history to where the markets hang on every single word that news outlets share until it just kind of becomes numb to the news. And I think that’s where we’ve got to with Russia and Ukraine. I want to specifically focus on the export numbers. When we think about what has transpired over there and just kind of the difficulties getting product, corn and wheat in this case, out of the region, you could add sunflower oil into that mix too, although most of that sunflower oil is going to India, not necessarily to broadly global markets. But as it relates to corn and wheat, both Russia and Ukraine are large exporters in the global market. Together they represent about 25% of global exports of wheat. And right now, the USDA is forecasting a 17% reduction in their export potential for the new marketing year. However, if you look at the month of September so far, exports have been off 40%. And so while USDA is signaling the difficulties of getting wheat out of the region, the localized conflicts right now are much worse. And the longer this drags on, the conditions would create for USDA to continue to decrease their exports out of that region, potentially looking at other places around the world, but we’re also hearing of just pulling down stocks. Of course, when you get tighter stocks you get more volatility. And so I do think we’re going to potentially continue to see conflicts in that region and the conflict there continue to limit exports of both corn and wheat.
Todd Gleason: Last week’s sell-off in the commodity markets, what do you think happened in that case?
Ben Brown: Yeah, I think it was a number of bearish headlines, but one of the things that was compounding the issue was just the sell-off of managed money positions in the market. So if we look at just the futures only, not taking into account the options market, which I do like to look at both, but here I’m just going to look at the futures given the time of the year. We saw almost 100,000 contract sell-off in the market. It was largely corn, down 83,000 contracts on the week. The whole complex, corn, soybeans, and soft red winter wheat, was historically long or optimistic or bullish, whatever term you want to use, just five weeks ago. And we’ve started to see it unwind here lately. And again, that’s a little bit of the changing sentiment that we’ve seen in the markets. I think for corn and soybeans, it’s been two bearish reports. The September 30th grain stocks report and then also the October WASDE report just kind of created a bearish sentiment. Traders reacting to that, and we saw 100,000 contract sell-off just in this last week of those three commodities, but nearly 250,000 contract sell-off just over the last two weeks. So, kind of some added bearishness to the market.
Todd Gleason: I was hoping that you were just going to tell me that they had rebalanced and that this, coupled with the natural hedge positions that are taken by elevators and during harvest and the pressure that comes with that, should rebound, but that doesn’t really sound like what you’re aiming at at this point.
Ben Brown: No, I think this was more following bearish news in this case. We’ve seen producer selling kind of drop off, and when producers aren’t selling, elevators aren’t taking the opposite position because they don’t own the grain to the same extent that we were seeing previously. A couple of reasons for that. One, prices have fallen off and producers are saying, hey, I saw these higher prices a little bit before harvest, if not during harvest, they can rebound, right? And so there’s a little bit of behavioral bias that’s feeding into this market. But then the second thing is, even though producers aren’t selling, we haven’t necessarily seen the increase or the strengthening in the local basis markets. And if elevators want this grain, they’re going to have to increase the basis markets. And right now they don’t have to as we’ve got grain coming in during harvest, producers are storing it at commercial elevators, some are putting it on deferred contracts. So there’s enough product out there, but we have seen producer selling kind of fall off here.
Todd Gleason: Are you sideways or bearish in this case? On which market?
Ben Brown: Corn and soybeans. So in the short term, I think I’m bearish, but in the longer term I am still bullish.
Todd Gleason: How’s that for a two-handed answer? Because of the RVO?
Ben Brown: So for corn, I still think we’re going to see reductions in total production in the global market, and specifically in the southern hemisphere as we work our way through the winter months. I think that continues to provide some support to the broader feed grain markets. On the soybean side, I’m not as bullish. And certainly we have the RVOs, they’ve definitely provided some support. We’ve seen some pullback in those numbers and delays in implementation. But the soybean oil complex is benefiting from higher oil prices, and the sentiment will follow the oil market largely there, and I have no idea where oil is going. All I know is we asked a group of about 300 ag lenders where they expected oil prices to be in five months. A third said 20% higher, a third said 20% lower, and a third said roughly about the same where we’re at. So that didn’t really tell us much other than to say the expectation was not to see a whole lot of changes between now and February.
Todd Gleason: Thank you very much. I appreciate it, Ben.
Ben Brown: Yeah, thanks, Todd.
Todd Gleason: Ben Brown is with the University of Missouri Extension and FAPRI, the Food and Agricultural Policy Research Institute. You’re listening to the Closing Market Report from Illinois Public Media. Our theme music is written, performed, produced, and courtesy of Logan County, Illinois farmer, Tim Gleason. Find us online at willag.org.
12:49 Crop Size and Feed Usage, a Question or Two
Todd Gleason: You know, there remains an undercurrent in the trade that last year’s US corn crop may have been overstated in some form. Former USDA Chief Economist Seth Meyer, now with the University of Missouri, talked about this last Friday in Chicago at the Federal Reserve Midwest Agriculture Conference.
Seth Meyer: The theme is bumper crops, which is really interesting because last year was a huge crop. First of all, we planted 98.7 million acres of corn, which had been the largest amount of corn we planted. We hadn’t planted 98 million since 2012, which is when we had a drought and very low production. So this was clearly a huge crop, even if you have doubts about that actual yield. And we’ll talk even more a bit about that. So you’ve got a huge amount of production, nearly 17 billion bushels of production, and then you roll forward and there’s some adjustment. We planted so much corn in 24/25 because of the uncertainty surrounding trade with China. Soybeans is a risk. That’s at least part of the reason. Okay, so when you look at this, clearly a reduction in production year over year, in part from an adjustment in area, and in part from a return to a more normal yield. And you can look at, we were talking about bumper yields, that 186.5 last year and so far 181.2 this year. That can still change, but it changes a lot less after the October report. Statistically, it doesn’t change much after that. Why? Because it is farmers reporting actual field yields at this point. So it looks like we still have a pretty good sized crop.
Todd Gleason: So last year’s USDA corn crop was big, primarily, he thinks, because farmers were wary of the trade implications of President Trump’s trade negotiations with China. This year, it’s also big, and Meyer says that’s unlikely to change, given historical evidence post-October crop production reports. Here’s what he thinks that means for demand going forward.
Seth Meyer: So we have a big crop last year. We have fairly large carryout coming into this year, and drawing down that carryout, that last line there of ending stocks a little bit, but let’s talk about those individual components. Let’s talk a little bit about exports. Back pre–2007, we used to talk about can we export 3 billion bushels of corn? Can we do it? Can our river system handle it? Can our transport system handle it? And last year we exported 3.4 billion bushels of corn, far and away, we’d never exported more than 3 billion bushels. And we blew through that last year with that large crop because of some pretty good foreign demand. Including places like Mexico. We expect we’re going to need to, and I’ll talk a little bit more about the need, but we’ll need to export about that same 3.3 billion bushels of corn, and the demand looks like it’s there overseas. Ethanol, those numbers aren’t much different, and there’s a good reason for that. We’ll talk about ethanol a little bit too. And then finally feed and residual, and residual is doing a lot of work in this statement. Okay, residual is doing a lot of work.
Todd Gleason: We’ll mostly skip through the ethanol and exports to focus on the feed and residual number now. Let’s start, though, with corn ethanol, which has stabilized with growth mostly coming from exports of the corn-based fuel additive. Speaking of that, actual corn exports have now topped more than 3 billion bushels. That’s a big number. And one Missouri’s Seth Meyer says will be needed to support prices. Then there is the feed and residual number.
Seth Meyer: And then feed and residual. You see that large bump up in feed, and I’ll show you another chart, we’ll kind of add up feed. And that seems to me to be a bit optimistic about what is disappearing into feed, and whether we can continue to find that level of feed going forward. Because it’s feed and residual. All the statistical error falls into residual.
announce: Another protein question. Do you feel that increased chicken and protein demand is driven by consumer use of GLP–1s, or what do you think is driving this increase?
Seth Meyer: So I do think GLP–1 usage is playing into it. And I didn’t touch on that much, but we’ve done a lot of work thinking about is usage going to continue to expand. I think I heard the number last year was like one in four households has a GLP–1 user in the US, and a lot of those users are the decision-maker for the household in terms of the groceries that they are buying. What I think is occurring, and we’re finally starting to see some good survey data on what GLP–1 users are doing with their dollars, what they’re spending their money on animal protein. Chicken works very well with a GLP–1 user who is trying to reduce caloric intake but also increase protein as a portion of their caloric intake. So we need very protein-dense food items for users, and also thinking about portion control is very important. What I’m seeing in the data, it suggests that GLP–1 users are willing to pay a little bit more for quality. So when we think about the beef side of the equation, they’re more receptive to a high-quality beef item, but they may not need a tomahawk ribeye to satisfy their itch on beef for the day. It may be a higher quality ground beef item in a small 4-ounce portion. And this is where when you talk about bigger beef carcasses, we’ve got more of that product going into ground format, but we’re also adding more fat to these animals in the US. And if you don’t have the lean content to blend with that, I think that plays into why we’re seeing more imports from beef outside of the US, is we have to fit this gap in terms of lean beef availability. Some of that plays into the GLP–1 era and what we’re seeing there.
Todd Gleason: The question Meyer is asking is fairly simple. How much of the feed and residual number is actually feed, and by design, how much is residual?
Seth Meyer: So for the 2025 crop, I think if you look at first quarter implied disappearance from the stock number suggests that maybe that crop is a little large, and it ends up in residual. So you get a surprisingly large number for feed use. So I think the 25/26 crop, there’s some suggestion that maybe it’s oversized because it ends up in a too large feed and residual. Harder to tell for the current crop that we’re looking at now, that’s still a large feed and residual number sitting out there. But like I said, I think I have trouble figuring out what that feed number should be. 25/26, I think it’s too large, or it was not that big and that we’re really trying to figure out where feed is at in the US market.
Todd Gleason: What does it mean? Well, for last year, not that much, as it is swapping out bushels. However, if the feed usage is overstated to make up for what Meyer suggests is an overstated 2025 corn crop, then the issue is how USDA deals with expected feed usage in 2026. We won’t really know that until the December grain stocks report is released.
20:44 Ag Weather with Mark Russo
Todd Gleason: Let’s take a look now at the agricultural weather forecast. Mark Russo is here from Everstream Analytics. Hi Mark. Thanks for being with us. Let’s start with the Corn Belt. What do you see over the next five to ten days?
Mark Russo: Well, Todd, yeah, we are forecasting dry and warm conditions over the next week across the Midwest, and that will provide open field work operations and rapid harvest progress. So a lot different than what we saw last week with the frequent rain activity and kind of wet weather that had been in place. So overall, a much different week, a much more favorable week here across Illinois and the entire Corn Belt.
Todd Gleason: Iowa in particular has been behind. Do you think they’ll catch up this week?
Mark Russo: Certainly, that looks to be the case here. Yeah, this is basically as good of a week as it could be here. So they should make exceptional progress here over the next seven days.
Todd Gleason: And then do you suppose that weather will cool down more than it has? Producers will need to wait until we get soil temperatures below 50 degrees to put anhydrous ammonia on.
Mark Russo: Yeah, that’s one thing we might have to wait here coming up over the next couple of weeks. Temperatures both this week and next week look to remain biased warmer than normal. And the next potential of any kind of cooler shots is not until we get into the early portion of November. So that’s something still that could be delayed compared to normal here.
Todd Gleason: Any worries in South America? As it’s related to the soybean crop, particularly in the center-west of Brazil?
Mark Russo: Yeah, no big worries at this time. While the pattern here has trended drier for this week and the start of next week across center-west, it does look short-lived and not the start of an extended dry stretch. And with soil moisture adequate to abundant right now, that should actually make for rapid planting progress.
Todd Gleason: Hey, thank you much, Mark.
Mark Russo: My pleasure, Todd.
Todd Gleason: Hey, thank you, Mark. Mark Russo is with Everstream Analytics, joined us on this Monday edition of the Closing Market Report from Illinois Public Media. It is public radio for the farming world. We’re online at willag.org, that’s w-i-l-l-a-g dot o-r-g. There you can find our daily programming to listen to anytime you’d like, or search it out by name, the Closing Market Report, in your favorite podcast applications. I’m Extension’s Todd Gleason.
This edition of the Closing Market Report covers commodity market movements, supply and demand estimates, and agricultural weather forecasts. Agricultural economist Ben Brown of the University of Missouri reviews disappointing September soybean crush numbers from NOPA, muted Chinese export demand following recent bilateral talks, and the impact of heavy managed money fund liquidation across corn, soybeans, and wheat. Former USDA Chief Economist Seth Meyer analyzes whether last year's record corn crop was overstated, examining how statistical discrepancies in the feed and residual category obscure actual domestic disappearance, alongside emerging shifts in consumer meat demand driven by GLP-1 medications. Finally, Mark Russo of Everstream Analytics details a warm, dry forecast across the Corn Belt that will accelerate harvest progress while keeping soil temperatures above the 50-degree threshold required for fall anhydrous ammonia applications, alongside favorable planting conditions in South America.
00:45 Commodity Markets Discussion with Ben Brown, University of Missouri
12:49 Crop Size and Feed Usage, a Question or Two
20:44 Ag Weather with Mark Russo
---
Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the Closing Market Report. It is the 19th day of October, 2026. I’m Extension’s Todd Gleason. Coming up, we’ll talk about the commodity markets with University of Missouri Extension’s Ben Brown. He is with the Food and Agricultural Policy Research Institute there. Then we’ll turn our attention to Seth Meyer, also with FAPRI. He spoke at last week’s Chicago Federal Reserve Ag Conference. And then as we wrap up our time together, we’ll talk about the weather forecast, too. Mark Russo should be here from Everstream Analytics on this Monday edition of the Closing Market Report from Illinois Public Media.
announce: Todd Gleason’s services are made available to WILL by University of Illinois Extension.
Todd Gleason: We’re now joined by Ben Brown, agricultural economist with FAPRI, the Food and Agricultural Policy Research Institute at the University of Missouri. And with Extension, hi. Thank you for being with us, Ben.
Ben Brown: Yeah, thanks, Todd. I always appreciate the invitation.
00:45 Commodity Markets Discussion with Ben Brown, University of Missouri
Todd Gleason: Let’s start with some of the reports that I don’t deal with all of the time here, but I know that you watch closely, particularly as it relates to soybeans, NOPA, which is a crush report, but also I’m kind of wanting to talk about exports, too, in that same sort of vein. What are you watching?
Ben Brown: Yeah, so let’s start with the National Oilseed Processors Association report. We get that in the middle of the month for the previous month. So here in October, we’re talking about September. And I think you could define the September 2026 crush report as being disappointing. It came in within the range of expectations, but the estimate of 196.3 million bushels was nearly 8 million bushels below the average trade estimate for the month. But probably most notable to me was that 196.3 million for September of 26 came in a million and a half below the September 2025 crush number, which that’s the first month where we haven’t exceeded the prior year in a long time. We’re talking multiple years here where we’ve just constantly been setting new monthly records. And so we’re starting off the 26/27 marketing year, which started September 1st, this is our first month of data, we’re starting off the year lower than what we did last year. And I think that has to just kind of be a psychological disappointment to the market, even though it was within the range of expectations. USDA is currently estimating a 5% year-over-year crush increase for 26/27. So to be able to do that, we’re going to have to see some increases. Now, we’ve got a long ways to go, 11 months, but certainly, I think just kind of a little bit of a bearish bias to start out the month.
Ben Brown: As you asked about soybean exports, we get asked a lot about Chinese purchases of soybeans given that they’ve committed to buy 25 million metric tons of soybeans. Last week, which was the week of October 13th, we did see China come into the market and buy about 1.3 million metric tons. I think that’s notable because that was really the first purchases of soybeans we’ve seen China make since the Trump-Xi meeting back at the end of September, September 24th. The expectation was that we could see quite a few purchases around that meeting, and the meeting in itself was kind of disappointing because there wasn’t a whole lot of reaffirmation about the trade commitments in place. And then we went a while without seeing any purchases. I will also mention that China maintains the 10% specific tariff on the US, then there’s a 3% tariff on the total world. So US soybeans have a 13% tariff going into China, 10% higher than some of our competitors. That remains an uncompetitive advantage for US soybeans, and as a result, the purchases we have seen by China have been their state-owned companies. And I think that’s going to continue as private companies just don’t have an incentive to buy from the US. They have an incentive to buy cheaper beans from the rest of the world. So I think in general, both of those things feed into some of the bearish headwinds that we see facing the soybean market.
Todd Gleason: I have a question about the NOPA report. And this was my conjecture during commodity week, because that was a September report, and the Iowa soybean crop, while it may have been ready, was not being harvested because of rainfall. The numbers were just low. Because there weren’t available beans to crush, do you think it will right itself in the month of October?
Ben Brown: Yeah, I think definitely the increase of supplies coming into the market will certainly help. And when we do look at the year-over-year changes, it was Iowa that kind of pulled down that whole number. Southwest US, Iowa, Southeast US were three regions where we did see quite a bit of pull down. Minnesota and the Dakotas were up really strong in the month of September. So we were seeing quite a bit of crush in that region, and part of that might have been just the lack of exports and needing something to do with the soybeans.
Todd Gleason: Speaking of exports, let’s turn your attention to corn and wheat, but not out of the United States, from Russia and Ukraine, and what those projections look like.
Ben Brown: Sure. Yeah, so there’s kind of been a renewed flare in the Ukraine-Russia war here as of late. It really kind of started back in July. The market responded to it for a period of time, but the market seems to be ignoring it again. And this is kind of the tendency of prolonged events, right? We’ve seen this multiple times throughout history to where the markets hang on every single word that news outlets share until it just kind of becomes numb to the news. And I think that’s where we’ve got to with Russia and Ukraine. I want to specifically focus on the export numbers. When we think about what has transpired over there and just kind of the difficulties getting product, corn and wheat in this case, out of the region, you could add sunflower oil into that mix too, although most of that sunflower oil is going to India, not necessarily to broadly global markets. But as it relates to corn and wheat, both Russia and Ukraine are large exporters in the global market. Together they represent about 25% of global exports of wheat. And right now, the USDA is forecasting a 17% reduction in their export potential for the new marketing year. However, if you look at the month of September so far, exports have been off 40%. And so while USDA is signaling the difficulties of getting wheat out of the region, the localized conflicts right now are much worse. And the longer this drags on, the conditions would create for USDA to continue to decrease their exports out of that region, potentially looking at other places around the world, but we’re also hearing of just pulling down stocks. Of course, when you get tighter stocks you get more volatility. And so I do think we’re going to potentially continue to see conflicts in that region and the conflict there continue to limit exports of both corn and wheat.
Todd Gleason: Last week’s sell-off in the commodity markets, what do you think happened in that case?
Ben Brown: Yeah, I think it was a number of bearish headlines, but one of the things that was compounding the issue was just the sell-off of managed money positions in the market. So if we look at just the futures only, not taking into account the options market, which I do like to look at both, but here I’m just going to look at the futures given the time of the year. We saw almost 100,000 contract sell-off in the market. It was largely corn, down 83,000 contracts on the week. The whole complex, corn, soybeans, and soft red winter wheat, was historically long or optimistic or bullish, whatever term you want to use, just five weeks ago. And we’ve started to see it unwind here lately. And again, that’s a little bit of the changing sentiment that we’ve seen in the markets. I think for corn and soybeans, it’s been two bearish reports. The September 30th grain stocks report and then also the October WASDE report just kind of created a bearish sentiment. Traders reacting to that, and we saw 100,000 contract sell-off just in this last week of those three commodities, but nearly 250,000 contract sell-off just over the last two weeks. So, kind of some added bearishness to the market.
Todd Gleason: I was hoping that you were just going to tell me that they had rebalanced and that this, coupled with the natural hedge positions that are taken by elevators and during harvest and the pressure that comes with that, should rebound, but that doesn’t really sound like what you’re aiming at at this point.
Ben Brown: No, I think this was more following bearish news in this case. We’ve seen producer selling kind of drop off, and when producers aren’t selling, elevators aren’t taking the opposite position because they don’t own the grain to the same extent that we were seeing previously. A couple of reasons for that. One, prices have fallen off and producers are saying, hey, I saw these higher prices a little bit before harvest, if not during harvest, they can rebound, right? And so there’s a little bit of behavioral bias that’s feeding into this market. But then the second thing is, even though producers aren’t selling, we haven’t necessarily seen the increase or the strengthening in the local basis markets. And if elevators want this grain, they’re going to have to increase the basis markets. And right now they don’t have to as we’ve got grain coming in during harvest, producers are storing it at commercial elevators, some are putting it on deferred contracts. So there’s enough product out there, but we have seen producer selling kind of fall off here.
Todd Gleason: Are you sideways or bearish in this case? On which market?
Ben Brown: Corn and soybeans. So in the short term, I think I’m bearish, but in the longer term I am still bullish.
Todd Gleason: How’s that for a two-handed answer? Because of the RVO?
Ben Brown: So for corn, I still think we’re going to see reductions in total production in the global market, and specifically in the southern hemisphere as we work our way through the winter months. I think that continues to provide some support to the broader feed grain markets. On the soybean side, I’m not as bullish. And certainly we have the RVOs, they’ve definitely provided some support. We’ve seen some pullback in those numbers and delays in implementation. But the soybean oil complex is benefiting from higher oil prices, and the sentiment will follow the oil market largely there, and I have no idea where oil is going. All I know is we asked a group of about 300 ag lenders where they expected oil prices to be in five months. A third said 20% higher, a third said 20% lower, and a third said roughly about the same where we’re at. So that didn’t really tell us much other than to say the expectation was not to see a whole lot of changes between now and February.
Todd Gleason: Thank you very much. I appreciate it, Ben.
Ben Brown: Yeah, thanks, Todd.
Todd Gleason: Ben Brown is with the University of Missouri Extension and FAPRI, the Food and Agricultural Policy Research Institute. You’re listening to the Closing Market Report from Illinois Public Media. Our theme music is written, performed, produced, and courtesy of Logan County, Illinois farmer, Tim Gleason. Find us online at willag.org.
12:49 Crop Size and Feed Usage, a Question or Two
Todd Gleason: You know, there remains an undercurrent in the trade that last year’s US corn crop may have been overstated in some form. Former USDA Chief Economist Seth Meyer, now with the University of Missouri, talked about this last Friday in Chicago at the Federal Reserve Midwest Agriculture Conference.
Seth Meyer: The theme is bumper crops, which is really interesting because last year was a huge crop. First of all, we planted 98.7 million acres of corn, which had been the largest amount of corn we planted. We hadn’t planted 98 million since 2012, which is when we had a drought and very low production. So this was clearly a huge crop, even if you have doubts about that actual yield. And we’ll talk even more a bit about that. So you’ve got a huge amount of production, nearly 17 billion bushels of production, and then you roll forward and there’s some adjustment. We planted so much corn in 24/25 because of the uncertainty surrounding trade with China. Soybeans is a risk. That’s at least part of the reason. Okay, so when you look at this, clearly a reduction in production year over year, in part from an adjustment in area, and in part from a return to a more normal yield. And you can look at, we were talking about bumper yields, that 186.5 last year and so far 181.2 this year. That can still change, but it changes a lot less after the October report. Statistically, it doesn’t change much after that. Why? Because it is farmers reporting actual field yields at this point. So it looks like we still have a pretty good sized crop.
Todd Gleason: So last year’s USDA corn crop was big, primarily, he thinks, because farmers were wary of the trade implications of President Trump’s trade negotiations with China. This year, it’s also big, and Meyer says that’s unlikely to change, given historical evidence post-October crop production reports. Here’s what he thinks that means for demand going forward.
Seth Meyer: So we have a big crop last year. We have fairly large carryout coming into this year, and drawing down that carryout, that last line there of ending stocks a little bit, but let’s talk about those individual components. Let’s talk a little bit about exports. Back pre–2007, we used to talk about can we export 3 billion bushels of corn? Can we do it? Can our river system handle it? Can our transport system handle it? And last year we exported 3.4 billion bushels of corn, far and away, we’d never exported more than 3 billion bushels. And we blew through that last year with that large crop because of some pretty good foreign demand. Including places like Mexico. We expect we’re going to need to, and I’ll talk a little bit more about the need, but we’ll need to export about that same 3.3 billion bushels of corn, and the demand looks like it’s there overseas. Ethanol, those numbers aren’t much different, and there’s a good reason for that. We’ll talk about ethanol a little bit too. And then finally feed and residual, and residual is doing a lot of work in this statement. Okay, residual is doing a lot of work.
Todd Gleason: We’ll mostly skip through the ethanol and exports to focus on the feed and residual number now. Let’s start, though, with corn ethanol, which has stabilized with growth mostly coming from exports of the corn-based fuel additive. Speaking of that, actual corn exports have now topped more than 3 billion bushels. That’s a big number. And one Missouri’s Seth Meyer says will be needed to support prices. Then there is the feed and residual number.
Seth Meyer: And then feed and residual. You see that large bump up in feed, and I’ll show you another chart, we’ll kind of add up feed. And that seems to me to be a bit optimistic about what is disappearing into feed, and whether we can continue to find that level of feed going forward. Because it’s feed and residual. All the statistical error falls into residual.
announce: Another protein question. Do you feel that increased chicken and protein demand is driven by consumer use of GLP–1s, or what do you think is driving this increase?
Seth Meyer: So I do think GLP–1 usage is playing into it. And I didn’t touch on that much, but we’ve done a lot of work thinking about is usage going to continue to expand. I think I heard the number last year was like one in four households has a GLP–1 user in the US, and a lot of those users are the decision-maker for the household in terms of the groceries that they are buying. What I think is occurring, and we’re finally starting to see some good survey data on what GLP–1 users are doing with their dollars, what they’re spending their money on animal protein. Chicken works very well with a GLP–1 user who is trying to reduce caloric intake but also increase protein as a portion of their caloric intake. So we need very protein-dense food items for users, and also thinking about portion control is very important. What I’m seeing in the data, it suggests that GLP–1 users are willing to pay a little bit more for quality. So when we think about the beef side of the equation, they’re more receptive to a high-quality beef item, but they may not need a tomahawk ribeye to satisfy their itch on beef for the day. It may be a higher quality ground beef item in a small 4-ounce portion. And this is where when you talk about bigger beef carcasses, we’ve got more of that product going into ground format, but we’re also adding more fat to these animals in the US. And if you don’t have the lean content to blend with that, I think that plays into why we’re seeing more imports from beef outside of the US, is we have to fit this gap in terms of lean beef availability. Some of that plays into the GLP–1 era and what we’re seeing there.
Todd Gleason: The question Meyer is asking is fairly simple. How much of the feed and residual number is actually feed, and by design, how much is residual?
Seth Meyer: So for the 2025 crop, I think if you look at first quarter implied disappearance from the stock number suggests that maybe that crop is a little large, and it ends up in residual. So you get a surprisingly large number for feed use. So I think the 25/26 crop, there’s some suggestion that maybe it’s oversized because it ends up in a too large feed and residual. Harder to tell for the current crop that we’re looking at now, that’s still a large feed and residual number sitting out there. But like I said, I think I have trouble figuring out what that feed number should be. 25/26, I think it’s too large, or it was not that big and that we’re really trying to figure out where feed is at in the US market.
Todd Gleason: What does it mean? Well, for last year, not that much, as it is swapping out bushels. However, if the feed usage is overstated to make up for what Meyer suggests is an overstated 2025 corn crop, then the issue is how USDA deals with expected feed usage in 2026. We won’t really know that until the December grain stocks report is released.
20:44 Ag Weather with Mark Russo
Todd Gleason: Let’s take a look now at the agricultural weather forecast. Mark Russo is here from Everstream Analytics. Hi Mark. Thanks for being with us. Let’s start with the Corn Belt. What do you see over the next five to ten days?
Mark Russo: Well, Todd, yeah, we are forecasting dry and warm conditions over the next week across the Midwest, and that will provide open field work operations and rapid harvest progress. So a lot different than what we saw last week with the frequent rain activity and kind of wet weather that had been in place. So overall, a much different week, a much more favorable week here across Illinois and the entire Corn Belt.
Todd Gleason: Iowa in particular has been behind. Do you think they’ll catch up this week?
Mark Russo: Certainly, that looks to be the case here. Yeah, this is basically as good of a week as it could be here. So they should make exceptional progress here over the next seven days.
Todd Gleason: And then do you suppose that weather will cool down more than it has? Producers will need to wait until we get soil temperatures below 50 degrees to put anhydrous ammonia on.
Mark Russo: Yeah, that’s one thing we might have to wait here coming up over the next couple of weeks. Temperatures both this week and next week look to remain biased warmer than normal. And the next potential of any kind of cooler shots is not until we get into the early portion of November. So that’s something still that could be delayed compared to normal here.
Todd Gleason: Any worries in South America? As it’s related to the soybean crop, particularly in the center-west of Brazil?
Mark Russo: Yeah, no big worries at this time. While the pattern here has trended drier for this week and the start of next week across center-west, it does look short-lived and not the start of an extended dry stretch. And with soil moisture adequate to abundant right now, that should actually make for rapid planting progress.
Todd Gleason: Hey, thank you much, Mark.
Mark Russo: My pleasure, Todd.
Todd Gleason: Hey, thank you, Mark. Mark Russo is with Everstream Analytics, joined us on this Monday edition of the Closing Market Report from Illinois Public Media. It is public radio for the farming world. We’re online at willag.org, that’s w-i-l-l-a-g dot o-r-g. There you can find our daily programming to listen to anytime you’d like, or search it out by name, the Closing Market Report, in your favorite podcast applications. I’m Extension’s Todd Gleason.