T H A N K Y O U
- Matt Bennett, AgMarket.net
- Efficiency of the Soybean Crush
- Mike Tannura, Tstorm.net
From the land to grant university from the land to grant university in Urbana Champaign, Illinois. This is the closing market report. It is the September 2025. I'm extension's Todd Gleason. Always remember.
Todd Gleason: 00:15Coming up, we'll talk about the commodity markets with Matt Bennett. He is at agmarket.net. We'll discuss the weather forecast with Mike Tenura from T Storm Weather, and we'll hear from Joe Jansen today about the products as it's related to soybeans, bean meal, and bean oil, how that has changed over the years, and what renewable diesel has done to cause the industry to press more oil and be more efficient in the last four to five years. We'll also ask you to join us this week as a supporter of the ag programming from Illinois Public Media with a gift in support of the closing market report and commodity week and all the other programming that you hear from IPM. You can do that easily enough at (217) 244-9455 or willgive.org willgive.0rg.
Todd Gleason: 01:12It is public radio for the farming world. We come to you just a few times each year and ask for your financial support. It's really important this time around. I hope you will make time to dial that number or to go to willgive.org and make the donation right now, today. Todd Gleason services are made available to WILL by University of Illinois Extension.
Todd Gleason: 01:35December corn for the day at $4.19 and 3 quarters up two and three quarters of a cent. The March at $4.37 at a quarter bushel, two and three quarters higher, and the May contract up 2 and a half cents. It settled at $4.47 and a half for the corn. November beans, ten thirty three and a half, eight and a quarter higher. January soybeans, ten fifty two and a half, up seven and three quarters, and March, ten sixty '8, seven cents higher.
Todd Gleason: 01:59Bean meal, up $2.60. The bean oil, 61¢ higher. Wheat futures in the soft red winter for the December at $5.21 and a half, up 6 and a half cents. The hard red December at $5.10, up three for the day. Live cattle futures a buck 12 and a half higher.
Todd Gleason: 02:15Feeder cattle up a dollar 95 on the day, and the lean hogs 97 and a half cents higher. Crude oil down a dollar and 29¢ a barrel. Diesel fuel of four and nine tenths of a cent per gallon, and the wholesale price of gasoline down two and eight tenths at a dollar 97 and 9 tenths of a cent for the afternoon. Matt Bennett from agmarket.net now joins us. He's in the field this afternoon.
Todd Gleason: 02:40Hi, Matt. Thanks for being with us. I take it you're cutting beans today. Tell me about it.
Matt Bennett: 02:44Yeah. We, you know, we tried cutting a few there a couple days ago, and they were just too wet. And we gave it a little bit of time. In all honesty, they've dropped, good lord, probably three to four points in the last two days. I mean, clearly, this warm weather is changing things very rapidly.
Matt Bennett: 03:03Beans are good. I mean, they were our first plant of beans on black ground, you know, I think that they'll be probably close to APH, but certainly not quite as good as the beans have been cut in the last few years here.
Todd Gleason: 03:16Does it give you any indication of what you think tomorrow's USDA report will look like given those numbers will come from September 1 or now nearly twelve days ago by the time we get to them tomorrow?
Matt Bennett: 03:28Yeah. I mean, there's no doubt that this field, for instance, that I'm cutting right now, if we woulda had rain in the month of August, and my yield potential August 1, I woulda said it'd be 15 bushel at least better than what we're cutting. But, you know, yeah, I would have to assume with so much of the Corn Belt being as dry as what we've been that they're gonna have to consider lowering yields at least a little bit. You know, the average trade guess, I get I believe on corn is $1.86. I think corn or soybeans, in my opinion, dropping a bushel would make sense.
Matt Bennett: 04:05I don't know if the USDA is gonna get super aggressive here, but, at the same time, it was one of the driest August we've ever seen across a pretty decent chunk of the Corn Belt. So if they do make some sizable drops, I guess it wouldn't be too hard to fathom.
Todd Gleason: 04:18I know that things could change dramatically depending on what USDA does tomorrow, but at this point, farmers looking at a harvest of a record corn crop, probably a very good sized soybean crop as well. What should they consider on the bushels that have to go across the scale as opposed to those, and I suppose those that need to or can stay, in the bin at home?
Matt Bennett: 04:44You know, if you have to go across the scale on soybeans, there's so much carry in the market that, you can probably pay for the storage and, actually store them commercially. I know a lot of folks are wanting to sell and then, do some sort of a reownership. I'd probably be more of a fan of that on corn maybe than soybeans, but I think you can get yourself a longer call spread out to May for 15¢ or less with an at the money call. You know? And I'd probably put, like, a 70¢ window and something like that.
Matt Bennett: 05:11With a strategy like that, essentially, you're gonna be maybe a third of the cost of commercial storage. You know? And you know darn good and well that if the market doesn't rally between now and next spring, you'll probably fix some basis up, but you're gonna spend a heck of a lot of money storing. So bushels got to go across on corn, I'd probably consider selling and then reowning. And then on soybeans, some commercial storage would be okay.
Matt Bennett: 05:33I don't know that I'd do them all that way, but that's the way I'd be looking at it.
Todd Gleason: 05:37USDA always takes into account current trade policy when it releases the WASDE report. Those are the World Ag Supply and Demand Estimates, the S and D tables that come out again tomorrow along with those crop production figures. They have maintained, both corn and soybean exports fairly well. Do you think on soybeans that they will take an opportunity tomorrow to change things up a little?
Matt Bennett: 06:05Yeah. I mean, I I would assume that if you see any sort of yield reduction in beans, you'll get the drop in demand that'll come directly off of exports. I'll just tell you, Todd, for our numbers, I mean, we we came in with 52 and a half, which was the same estimate we had a month ago. But coinciding with that, we actually took a 100,000,000 bushels off of, soybean demand. So, you know, we took our yield down 1.1 bushels from USDA, but we actually had a little bit bigger carryout than a month ago.
Matt Bennett: 06:34And I think something like that would be reasonable to assume. If the USDA has to get more aggressive in the future as far as taking yields down even more, I do think they still have wiggle room there. You know, our exports to other people in China have been fantastic so far for soybeans as far as what they typically buy, the non Chinese customers. But, obviously, we're not selling hardly any beans. There was a rumor this morning that there were some beans sold to China, but that would be the first shipment.
Matt Bennett: 07:01So, absolutely, I think they'll probably have to take some out of demand, and it'd be out of exports.
Todd Gleason: 07:07One other policy, the SREs, there is some information floating around that the Trump administration may not make the large refineries pick up all, maybe only half or less of what the SREs are allowed and have been. That would be something like 500,000,000 gallons worth of RINs. Does that make any difference to the marketplace? It seemed to have shrugged it off.
Matt Bennett: 07:30Yeah. I mean, the market shrugged it off for the time being. I mean, most of what we've heard over the last couple of weeks is that something like that was very possible to try to appease both sides. Certainly, it would be, I I think, our first thing as far as renewable fuels go that would be viewed as very disappointing, versus what, you know, especially the ag folks were looking, to see. But at the same time, you know, I mean, they're talking about potential for e 15.
Matt Bennett: 07:56I think, hopefully, we can get that offset with some better news. But by all means, that's not exactly what we're all looking for.
Todd Gleason: 08:02Anything else before I let you go for the day?
Matt Bennett: 08:05No. Just as the guys get out there, I think they're gonna find that this stuff is, clearly drying down very quickly. So, if this weather holds, Todd, I think that two to three weeks from now, there's gonna be a lot of bare fields.
Todd Gleason: 08:17Stay safe, and, thanks for joining us from the Combine Camp this afternoon.
Matt Bennett: 08:21Absolutely. Thanks for having me.
Todd Gleason: 08:22Matt Bennett is with agmarket.net in Windsor, Illinois, joined us on this Thursday edition of the closing market report from Illinois Public Media. It is public radio for the farming world where about 40% of our budget comes from you, our listeners, and about 20 of our budget in the last two months has disappeared as congress in a rescission removed already designated dollars that we were going to use in this fiscal year, the one we're in right now, and in the next fiscal year as well. So 20% this year and 20 next year both. We're trying to make some of that up in this four day period where we're coming to you and asking for your donations. We're looking to raise a $100,000.
Todd Gleason: 09:07Now we're short a million and a half bucks, so there's a lot more to do. But we've been doing that in the last several weeks and reconfiguring how the station works. And of course, there are issues that come along with that, but we need your help today. And I'm hope hopeful that you will dial in at (217) 244-9455 or go to willgive.org and make a pledge of support. I like the $120 level to start out with.
Todd Gleason: 09:35If you happen to be brand new and have never given before, that would be fantastic. Less is perfectly fine, by the way. More is great as well. Now if you've been with us for a while, I'm gonna ask you to do something I've not ever asked. I've been at a $120 with you for, no, I don't know, maybe ten years now.
Todd Gleason: 09:52I want you to go to $2.40. I really do, or something in between. If you can do more, that would be great too. We're under the gun, a bit like you are. I know it's deep in your pocket, and thank you, thank you so much for giving and caring.
Todd Gleason: 10:07We do the same for you. And we're here every day, including Saturdays and Sundays with Market to Market on television. So if this makes a difference to you, go ahead and please make your call at 217244, your call at 217244. Let me repeat that again. Your call at (217) 244-9455 or make that pledge at willgive.0rg.
Todd Gleason: 10:36However you do it, do tell the person on the other end of the line or put into the comments section in support of agriculture, and thank you. Thank you so much for the gift. Today we're going to dive into the long run evolution of the soybean crush with Joe Jansen from the University of Illinois. He's been exploring this concept through a series of articles on the Farm Doc Daily website. The Ag Economist says the research uncovers some interesting changes.
Todd Gleason: 11:16When you crush a 60 pound bushel of soybeans, the standard calculation assumes you get 11 pounds of soybean oil, 44 pounds of soybean meal, four pounds of hulls, and one pound of waste. But when Illinois' Jansen looked at the data, he found a slightly different story. Those proportions aren't as fixed as one might think, he says, and the difference is reshaping the nature of soybean demand.
Joe Janzen: 11:42Let's start with our key finding. Waste rates in soybean processing have declined by 44% since the nineteen sixties. We're talking about going from 2.7% waste down to just 1.5% today. Essentially, the industry figured out how to extract a percentage point more value out of every single soybean. This might seem small, but when you're processing billions of bushels, these small improvements add up to significant gains.
Todd Gleason: 12:07Here's the important part of that change. While waste was going down, soybean oil extraction rates were going up.
Joe Janzen: 12:14Not only were crushers wringing more output out of each bushel, but the composition of that output was changing. Back in the mid nineteen sixties, a typical bushel yielded about 18% oil. Today, it's nearly 20%. That means each bushel of soybeans produces about 10% more oil than it did sixty years ago. Importantly, the gains in oil output were larger than the decline in waste, so the composition of the crush was changing.
Todd Gleason: 12:41Now why does this matter? Well, enter the renewable diesel boom. Starting around 2020, demand for soybean oil as a biofuel feedstock exploded. And if you're a soybean processor, you'd like to dial up oil production while leaving meal production fixed. The problem, of course, is that soybeans come in fixed packages.
Todd Gleason: 13:00You can't make more oil without making more meal, but the data since 2020 suggest it is possible to extract more of the oil that is already in the bean.
Joe Janzen: 13:12Since 2020, right when renewable diesel took off, soybean oil extraction rates have been consistently above their sixty year trend line. This suggests the market is adapting in real time. The changes aren't huge. Changing the composition of the crush is like turning an ocean liner. It doesn't occur instantaneously.
Joe Janzen: 13:33But there is some evidence of a response.
Todd Gleason: 13:36It seems then that the soybean industry may have a little bit more flexibility than the standard board crush margin suggests. When the market conditions change, producersprocessors can adapt by tweaking extraction and improving efficiency. It's not instantaneous, and it's not unlimited, but it is happening, says Joe Jansen.
Joe Janzen: 13:57So what does this all mean? First, those standard industry calculations about crush ratios, the one that assume exactly 18.3% oil content, might need updating. It seems that the soybean industry might have a little bit more flexibility than the standard board crush margin suggests. Last, this has implications for farmers, food prices, and fuel markets. When processors can squeeze more oil out of the same amount of soybeans, it changes the economic equation.
Todd Gleason: 14:24The PharmDoc team will explore those potential changes going forward. You may look for them online at the University of Illinois PharmDoc Daily website. Hey, have you gone online or dialed in yet and made your contribution during this fall fun drive? I hope so. Thank you if you already have.
Todd Gleason: 14:49If you've never done this before, it's quick, it's simple, it's easy. Please take time right now, particularly if you've not ever given before, to make gift to WILL in
Todd Gleason: 15:01the AG programming (217) 244-9455 or go to willgive.org and again thank you for taking the time it makes a big difference to us and we're really kind of dealing with the same kinds of shortfalls you have been dealing with too. I know it's hard to reach in your back pocket, but we're both here working together trying to make things better on the farm. Let's check-in now with Mike Tanure. He's the CEO and president of t storm weather. That's t storm dot net online.
Todd Gleason: 15:36Hi, Mike. Thanks for being with us. I wanna look back at the month of August, now that you've had some time to really comb through the data. It's a big month for soybeans. What can you tell me about it as it's related to climate and weather historically?
Mike Tannura: 15:52Well, it's rather fascinating in that it was unusually dry. It was the sixth driest on record in the Seventh State Corn Belt going back to 1960. And interestingly, that makes it the sixth driest going all the way back to 1895 because we didn't have very many dry August prior to 1960. The most notable state in this region, is Ohio because it was the driest in more than a hundred and thirty one years of record in the month of August and Missouri was the driest since 1936, which you might recall is the peak of the Dust Bowl year. And then if we look at Illinois and Indiana, they were the driest since 2013.
Mike Tannura: 16:33And those four states are pretty much driving this whole piece because if you look at Iowa, Minnesota, and Nebraska, their rains were pretty much normal for last month. So this dryness story is being driven by essentially the Southeast half of US corn and soybeans. And even though we aren't talking too much about the Mid South right now, you need to keep in mind that they were unusually dry from late June through late August. And basically what's happened is that the dryness and drought that developed there during part of the summer essentially expanded northward.
Todd Gleason: 17:06Can you tell me, because you're not only a meteorologist, but an agricultural economist, and do a lot of work with yield, what, impact those dry years had on soybeans?
Mike Tannura: 17:17Well, if you look at the 10 driest August on record going back to 1960, US soybean yields after you detrend them and what we're doing there is we're basically looking back at the yields from 1960 all the way through last year. And, you know, they go up over time, so you need to flatten that line to make them all visible as if they were happening in this year. And if you do that, what you end up seeing is that nine of the 10 driest August on record had yields that were lower than what the USDA is projecting at 53.6 bushels per acre. The one year that was higher was 1969 and the yield would be expected to be 54.3 this year, so a little higher than where the USDA is at. If you look back at all these years, few of them aren't really comparable to what we're in.
Mike Tannura: 18:05The easiest ones to remove from these 10 dryas August would be nineteen eighty three in 2012 and 02/2003. And that's because of severe and prolonged drought as well as an aphid infestation in 02/2003, and all those lower deals. That doesn't really match anything that's been going on this year. We just kind of throw those out. But if you look at the rest of them, 1969 is the one that's the most interesting because it's still yielded above where the USDA is today, and that's around one to two bushels per acre above the long term average.
Mike Tannura: 18:40That year had rainfall that was fairly similar to this year from April all the way through August. So you can't completely discount that as a possibility. The biggest difference between 1969 and this year is the months of June and July. This June was way, way warmer than in 1969, and it also was a little bit warmer in July. August temperatures were pretty similar.
Mike Tannura: 19:05So that's kind of the big difference is whether or not that's going to play into this. The other year that had somewhat similar weather, at least during the height of the growing season was 02/2008, and the yield in 2008 would drop all the way down to 50 bushels per acre right on the money there. But the thing about 2008 that might not be super representative with this year is that it was planted quite a bit later than this year. That was because of some flooding in Iowa that happened back in 'eight. And the other difference is that this growing season was a lot warmer pretty much every single month all the way from the spring through the summer.
Mike Tannura: 19:42So we'll have to wait and see how all this pans out. But the other fascinating thing that's going on is that some people argue that while you can still get out of a poor August with okay rains in September, but that certainly hasn't happened. It's been super dry and there's really no rain coming up from the Mid South through Indiana and Ohio. There might be a little bit in Illinois, but this is a pretty dry pattern that we're still in. So basically, the last third of your growing season is gonna go down on the books.
Mike Tannura: 20:11It's unusually dry in all these states that we talked about earlier.
Todd Gleason: 20:15If there's nothing else about the forecast going forward, which it doesn't sound like there is, what do you see in South America?
Mike Tannura: 20:22Well, the rainy season is going to start a little bit early in Mato Grosso. This is the top producer in Brazil as far as their states go. It accounts for about 30% of soybean production. And typically, the rainy season there will start as early as September 20 and as late as October 10, it's always a little bit variable there. But it has very little effect on their overall crop potential.
Mike Tannura: 20:44It just really matters as to when these soybeans will come online later on when they're harvested. But it's already thunderstorming there this week, and it's going to ramp up next week and into the following week. So basically, the rainy season is going to start a couple of weeks early in Mato Grosso, and that's going to allow soybean planting to start early too. Now just because it's raining now doesn't mean it has to continue. They really don't see regular rains until after mid October, and that's still four to five weeks out.
Mike Tannura: 21:13So yes, you can plant now because it is going to rain and it is raining a little bit, but it's still a risky move because if you want to be certain, you really have to wait until you get into October before getting those in the ground. And the other thing to keep in mind is that even though Mato Grosso is 30% of Brazil production, there's other key states up there like Goias and Minas Torres and then into the North. And those areas are not going to receive much rain, if any. They typically don't start to receive rain until the October and even into November. So even though the rainy season is starting early in part of Brazil, it's not representative of the entire country.
Todd Gleason: 21:51Hey. Thanks much, Mike.
Mike Tannura: 21:52Yeah, Todd. Thanks for having me.
Todd Gleason: 21:53That's Mike Tenure. He is with t storm weather. That's tstorm.net online. Joined us on this Thursday edition of the closing market report. I hope by now you've gone online too at willgive.org and made your donation in support of the ag programming that comes to you from Illinois Public Media.
Todd Gleason: 22:10If not, there's still time. Just keep going ahead and dial in the number (217) 244-9455 or go online at willgive.org. I like the $120 level to start with if you're brand new. If you've been with us for a while, actually, for everybody, kinda like two forty. We're under the gun a bit here, and we're trying to raise a $100,000 by the time we get to Friday afternoon.
Todd Gleason: 22:34The help from the ag audience would be fantastic. Less is perfectly fine, particularly if you're brand new and you've never given before. I urge you, I really urge you to take just a moment, think about this program and what it means to you, and then put a dollar amount on it. Go to (217) 244-9455 or willgive.org and make that donation today. Either way, make sure you tell the person you're talking with or put in the comments section in support of agriculture.
Todd Gleason: 23:06I'm Extensions, Todd Gleeson.