Aug 08 | Closing Market Report
From the Land Grant University in Urbana Champaign, Illinois, this is the closing market reported as the August 2025. I'm extension's Todd Gleeson. Coming up, we'll talk about the commodity markets with Mike Zuzlow. He's a globalcomresearch.com out of Atchison, Kansas. We'll hear about the weather forecast from Eric Snodgrass at Nutrien Ag Solutions.
Todd Gleason:And if you can stay with us for the whole of the hour, you'll hear all of our commodity week program on our home radio station, including our panelists today, Chip Nellinger of Blue Reef Agra Marketing, Brian Split from agmarket.net, and Chuck Shelby of Risk Management Commodities. If not, many of these radio stations will carry it over the weekend, and it's up online right now at willag.0rg. Well, we are on the fairgrounds here at the Illinois State Fair. Our thanks to the Illinois Beef Association for letting us borrow some space and WiFi to bring you the program today. We're now joined by Mike Zuzlow.
Todd Gleason:He's a globalcomresearch.com out of Atchison, Kansas. Don't I know, Mike, are you a state fair person? Have been all my life, but I grew up working with them and here nearby and really love state fairs and being on the grounds and seeing what's happening just day in day out. How about yourself?
Mike Zuzolo:No, I always have the the county fairs we always go to, Todd, but the state fairs were growing up in Ohio and being about three hours away from Columbus. It was just a little bit too far to go on a weekend because we didn't have an I didn't have an agriculture background even though I lived in a village of 900 people. And everybody was a farmer unless they worked in town. And my dad happened to work at a hospital, about 30 miles away. So we didn't get to the state fair hardly at all, maybe once or twice.
Todd Gleason:I can see that happening. I worked the State Fair from the time I was really young, sometimes with the American Legion and then on my own. Just different. And I was twenty minutes away. It was fun.
Todd Gleason:And it was older I got, the more fun it was actually.
Mike Zuzolo:We always had the kids in the four h for the for the county fairs. And that's always just a great time to catch up with people and get outside the work environment and be able to let down some.
Todd Gleason:It is four H is a fantastic thing in the OR Building this weekend. You want to see four H, come check out the four H exhibits in the OR Building, you will be just impressed. I know here on the Illinois State Fairgrounds, the thing you might not be impressed with, though it wasn't as bad as I thought, even though we were making some contract lows this week for the marketplace. What do you think of it?
Mike Zuzolo:A lot of deja vu, Todd, I tell you deja vu when it comes to a wheat led market to the downside with Black Sea in the headlines a lot, a new five year low in soft red wheat made this past week even though we've got about 7.5% less stocks worldwide than we did a year ago. And we're at the lowest levels in the world wheat supplies and ten years, corn numbers even worse, you know, crop corn, compared to where we were last year, down about 13% as far as world corn ending stocks and stocks to use at the lowest level since 2012, 2013. It kind of dawned on me earlier this week when I was thinking about all this that you and I and the other panelists on Commodity Week last month had had a conversation about a potential commodity demand low. I felt that very strongly again this week when I saw the export sales and the fact that the dollar continued to weaken is down about 10% year to date. So I think the battle lines are drawn at this point with the WASDE report and how big of a supply it can lay on the market and whether that overshadows as it has the demand improvement in the export front that we have continued to see especially in the corn and and to a lesser degree now in the wheat market as well.
Mike Zuzolo:So, for me, it's about the report. It's about the the weather for the beans next week, because we are looking at a little bit more hot and dry bias, at least in the early part of Friday's trade. Midday, noon models got wetter, and it seemed like beans kinda tanked the whole situation and the corn building up to new highs early on gave way with the beans. So that those two things and then The US Russia potential meeting, what does that do to the crude oil and the wheat market as well? But circling all the way back around between the wheat led market again this week, and the fears of how big of a corn yield we're going to have it feels a lot like last year at this time,
Todd Gleason:it would be nice if they came out with a +1 or four. That's for sure.
Mike Zuzolo:Yeah, I think you hit it on the nose. I mean, I've been hearing a lot of my colleagues say that we haven't dialed in a +1 yet. I do disagree with that. I think we're all the way up at a +1 given the fact that March corn sure feels a lot like a 2,300,000,000 bushel carryover. So that's kind of the thing that I'll be looking at is okay, what's the harvested acres?
Mike Zuzolo:What's the yield? What do you give me for corn demand? Do you take old crop corn down because we're 101% on exports for 02/2025?
Todd Gleason:So we'll have to watch that for the crop production numbers. Those WASDE figures coming out on the same day that happens Tuesday next week. What do you think about the beef figures that you've been watching come out of the CME Group in Chicago, a stunning kind of trade over the last couple of weeks.
Mike Zuzolo:Yeah, it really has been and you know, it could be the beginning of the end on the cattle side of the equation, because of Friday's trade and what it did after making such record highs, at least twice this past week. But it could also be the situation where the trade just got seriously tired, didn't get any new news to feed itself, and the cash market and the futures market came together very nicely by Thursday's close. But it does put one on notice because this has been a market where you've needed bullish news to keep feeding these new record highs. Once we run out of that, we probably are due for a substantial setback.
Todd Gleason:So I take it next week you'll be watching maybe for that number. I know you will. And hoping that that will put a demand bottom in it with a supply that's not as big as the trade is working with today.
Mike Zuzolo:Yeah, exactly. And the corn and you know, the other thing that ties the corn and the cattle together is that feeder corn spreading and where the commitment of traders report really highlights that and shines a light on how net long funds are in the feeders and how net short they are in the corn. Friday's numbers will be kind of a barometer to where they sit as of this past Tuesday. And that'll be a really big deal to me next week at this time.
Todd Gleason:Thank you much.
Mike Zuzolo:Bet. Thanks, Todd.
Todd Gleason:That's Mike Zuzlow. He's at globalcomresearch.com out of Acheson, Kansas. Just one news item. Today marks the twentieth anniversary of the Energy Policy Act. The landmark legislation in The United States promoted the use of renewable fuels like ethanol and biodiesel.
Todd Gleason:Former CEO of the National Corn Growers Association, John Doggett, was VP of public policy in its Washington office at the time.
Jon Doggett:You know, looking back to all the time and all the effort it took to finally enact legislation that required, ethanol to be in our fuel supply. It was an amazing time. It was a huge effort. And I think as I think that that got it done was the fact that the entire industry was united. Everybody made an effort to get those votes.
Jon Doggett:And I remember sitting at my desk in our Washington office and getting calls from Capitol Hill from offices saying, would you please have your farmers quit calling? We're going to vote with you.
Todd Gleason:The Energy Policy Act of 2005 led to the 2007 RFS or Renewable Fuel Standard legislation that requires 10% of the nation's gasoline supply be made from a renewable feedstock. Today, the United States produces more than 15,000,000,000 gallons of ethanol made from corn to fulfill the goal of creating a stable, renewable fuel supply. I'm University of Illinois Extension's Todd Gleason. We're now joined by fifteenth district congresswoman Mary Miller. We're walking across the Illinois State Fairgrounds in Springfield on Ag Day.
Todd Gleason:Thank you, congresswoman, for being with us. Can you tell me about Washington DC, the one big beautiful bill act, and how you see that playing out over the next several years in your district across Illinois?
Mary Miller:Well, I think that's gonna have a huge impact both on the entire country for economics, but for Illinois and in particular for Illinois ag. We had to get the Tax Cut and Jobs Act put into permanent law to preserve the family farm and then also to incentivize investments. There's just a lot of provisions in there that will help basic you know, farms and households be able to pay their bills, basically.
Todd Gleason:As you look forward to things that need to come for agriculture, E15 is among them, I'm sure on your list. Continuation of some of the farm bill and farm programs that need to take place probably before the end of the year. How do you see those coming to fruition?
Mary Miller:Well, of course, I've been a big supporter of the e 15, and we need to find, outlets for our amazing corn crop. Our farmers are doing such a good job that they're basically bankrupting themselves. We don't have the prices we need. We've been below breakeven. President Trump cares deeply about our farmers and he wants to advocate for better trade deals.
Mary Miller:He's been in for eight months. He's already done great things. He's not abandoning the farmers. And for us, I'm on the ag committee. I'm one of the few family farmers there.
Mary Miller:So I understand deeply the situation we're in, but two things have put us here. Well, this has been long term. Agriculture has been hand to mouth for decades. My husband and I have been farming for forty five years and it's hand to mouth. We love the lifestyle, and that's why we continue on.
Mary Miller:But in recent years, under Joe Biden, we had skyrocketing inflation, energy prices, fertilizer, all that, and then a very passive trade policy. So Trump understands two things. We gotta get inflation under control and we need to amp up our, our our trade and get new trade agreements and new new markets.
Todd Gleason:As you know, I do markets and weather on WILL AM five eighty every day. Your family's involved in that process, has involved been involved with the elevator system Yeah. Over the years. Some of the analysts are very concerned
Mary Miller:Yes.
Todd Gleason:About the trade deals and the length of time it generally takes to get them done and what impact that would have on this year, particularly as it's related to China. They have yet to import any soybeans from The United States. Are you hopeful that a deal can be cut and how soon?
Mary Miller:Well, I'm hopeful because president Trump has proven that he loves our country, that he cares deeply. And his first term, he did not abandon the farmers. And he understands using leverage to get better trade deals, so I'm very hopeful.
Todd Gleason:The other part is with the one big beautiful bill, there is some concern that the amount of increase in money that will be coming into the agricultural countryside may simply flow into the input side. Have you heard that as it's related to the cost of fertilizer and seed, and that that it it it it looks really good, but it but it may cause issues over the long run?
Mary Miller:I don't know. I'm I have contact with all kinds
Todd Gleason:of farmers and people from the ag industry, and there's different opinions on that. Any final word as it relates to the ag bill or the farm bill that you hope to get done yet before the end of the year?
Mary Miller:Well, agriculture is such a big part of our American economy and Illinois economy. President Trump understands that. And I just even though it hasn't happened yet, I wanna encourage people that he is in the court for the ag producers, and so am I.
Todd Gleason:On the education side, University of Illinois, of course, very involved within your district. What concerns do you have at this point about funding there, if any, and what do you see going forward?
Mary Miller:Well, I support all kinds of research and development, and we need to keep that going. And, you know, I support excellent education, but we are $37,000,000,000,000 in debt. So we're looking for ways not to leave our children and grandchildren in bondage. So we want the dollars to flow where they're gonna be the most impactful.
Todd Gleason:Thank you very much. Thanks for taking time with me today. Come. Mary Miller is congresswoman for the Fifteenth District in the state of Illinois. I'm extension's Todd Gleason.
Todd Gleason:Let's check-in now with Eric Snodgrass at Nutrien Ag Solutions and Agribal. Hello, Eric, thank you very much for being with us. It's hot here on the Illinois State Fairgrounds. I do want to know what you think that heat might mean for the crop so far this season.
Eric Snodgrass:Well, Todd, as I think about this, yeah, you've got some pretty serious heat coming in this weekend. Maybe a chance of storms to relieve some of that coming across the Central part of Illinois, but most of those big storms were way back, in the Northern Plains and Upper Midwest as we kinda work our way into this weekend. Alright. So let's talk about this heat. I made a map today that looked at the number of stress degree days, and that's how you add up the temperature above 86 every single day.
Eric Snodgrass:And you you wanna stay under about a 140 or a 150 of them. Right now, we're approaching a 150, and we know we've got more heat coming. I mean, the temperature tomorrow at the fair is expected to be well into the low nineties. So that's one thing that I'm getting concerned about, plus the overnight low temperatures which have been so warm for much of June, well, late June and all of July. Now it did back off.
Eric Snodgrass:The temperatures cooled off for the first five days of August, but here we are back under heat advisories as we kind of work our way into the second full week of August. Now we know that from satellite the crop looks absolutely amazing, This the NDVI values are off the charts, but as we're getting more folks to like walk through fields, they're starting to pick out some problems which may mean that some of these really high estimates on the size of the crop just aren't there. But the reality is, is even if you took off eight or 10 bushels on some of those estimates, we're still looking at a huge corn crop overall.
Todd Gleason:Is there any rain in the forecast?
Eric Snodgrass:Todd, know, as I think about where the precipitation's coming from, it's the same quarter I've seen it all year. It's kinda going through the Canadian prairie, which is great. We gotta put out the wildfires that are North of the Canadian Prairie. It's then diving into the Northern Plains and working its way across the Central And Eastern Corn Belt. But if I had to find a spot that was gonna stay dry through this, it's the Southern Plains.
Eric Snodgrass:It's parts of Texas over towards sections of the Mid South. And then honestly, sneaking all the way through to the Northeast, which to be honest with you, the Northeast is having a bit of a drought situation, and need we to keep an eye on it. They do grow crops we compete with there.
Todd Gleason:What do you suppose the rest of the month of August and early September might look like?
Eric Snodgrass:You know, Todd, as I look out there farther, I mean, the month of August will likely stay hot. I think we have better signals of staying on the warmer side of average, which comes back to the first question you asked. Is this gonna be impactful on the total yield number? But I think we stay hot and stormy around here for the most part. But remember, as you transition later into August, that's, the definition of what hot and stormy is begins to shift.
Eric Snodgrass:Right? Our wettest time of year is spring into early summer. Well, late summer's a bit different, and there's always the wild card of the tropical season. And I'm gonna be honest, we've been watching a couple of the things that kinda have me just going, okay, be prepared. This is the the kinda thing that we can sometimes see in the models that gets us worried.
Eric Snodgrass:And what I'm talking about there is I think as we get out past the sixteenth, seventeenth, and eighteenth, there could be a tropical system that tries to work its way into The Gulf or at least toward the Southeast Coast. Right now I'm hoping it's a phantom storm in the models, but it's been pretty consistently showing up in all of the forecasting systems, which just has us a big concern. The later we get into the, you know, into August, I think the more that we'll have more drier weather, save any sort of tropical system. But, big question is how does September and October, November shape up for harvest? Now if you look over the last five years, with only one exception, we have been drier in our fall time frame and much warmer.
Eric Snodgrass:There is a long standing kind of trend lately that is showing us warmer falls and it's also showing us with drier falls. We have a weak La Nina brewing that could help that out this particular year. So I'm gonna go ahead and stick with persistence on what this fall could bring us when you think about the last few falls stitched together. But the big thing we'll be talking about once we get into October is South America's crop and is it going in fast? And there are still some signs in the global models that suggest it will be wetter than average to start their growing season, which means they'll probably get in quick and get moving quick.
Eric Snodgrass:So that's it, Todd. Those are the big things I'm looking at.
Todd Gleason:Hey, thank you much, Eric. Eric Snodgrass is with Nutrient Ag Solutions and Agrabal joined us on this Friday edition of the closing market report. It came to you from Illinois Public Media.
