Aug 13 | Closing Market Report
From the Land Grant university in Urbana Champaign, Illinois. This is the closing market report. It is the August 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson from TGM.
Todd Gleason:That's the elevator that's owned by Growmark FS in Champaign County. Then we'll turn our attention to legislative progress as it's related to farm policy. I caught up with the president of the National Corn Growers Association, Kenny Hartman Junior. He also happens to be a farmer from the state of Illinois. And then as we make our way through the end of the program, we'll turn our attention to the weather forecast with Drew Lerner at World Weather Incorporated in Kansas City on this Wednesday edition of the closing market report from Illinois Public Media.
Todd Gleason:It is public radio for the farming world. Todd Gleason services are made available to WILL by University of Illinois Extension. Greg Johnson from tgmtotalgrainmarketing.com now joins us to take a look at the marketplace. Hi, Greg. Thanks much for being with us.
Todd Gleason:My first question for you is what did farmers say yesterday when they saw the one eighty eight plus for the yield and all the extra acres and that billion bushels more of production for the year?
Greg Johnson:Yeah. The the acreage, number was kind of under the radar. I think the farmers were so focused on that 188.8 number, versus the 181 from a month ago that that's what they were talking about. But equally as important was the extra 2,100,000 acres. And trying to explain to them that the USDA is now using FSA reported data in the August report, which is something that hasn't happened before.
Greg Johnson:So, these acres are really there according to FSA. It's just that some in past years, we haven't gotten that data until the September, October reports. So I guess, you know, the bad news is in, I guess, know, not that it can't go up a little bit more, but I think most of the acres have been reported. And so that acreage number is probably not gonna change very much from here on out now that we've got that FSA data in there. The yield, I guess, now is the question mark.
Greg Johnson:Will that number could possibly go up, but more than likely go down in subsequent reports? We're hearing a lot of stories about tip back in certain areas, and, you know, and and that's all true. So we are gonna probably shave some bushels off of the crop, but we're shaving it off of a very, very, very high number. So even if you shave a bushel or two off, your carryout is still gonna have a two in front of it for for the carryout. So it it's hard to find anything real positive out of this report yesterday.
Greg Johnson:It's just gonna be a big crop, and and we're gonna have to chew through it. And it's gonna take a little while before we can, you know, start talking about carryouts, you know, carryouts in the 1.5, 1.6 range because what the government did yesterday as well, and I understand why, whenever they increase production, their model assumes that you increase demand as well. But are we really going to increase cattle feed demand when the number of cattle continues to dwindle month to month? We're still not seeing a recovery in cattle numbers. So, can we make that up in hogs and chickens?
Greg Johnson:Possibly, but it's a stretch to think that exports are going to go up as much as they did, ethanol numbers to go up as much as what the USDA said, and then cattle numbers to, or feed numbers to go up as well. So we're just gonna have to chew through a lot of this. It's gonna take some time, and and the market's going to have to disincent farmers from planting a lot of corn next year. And then the best way to do that is to keep the price relatively low.
Todd Gleason:Yeah. They added 250,000,000 bushels to the feed and residual number. I suppose, that would mean there would be a lot of well marbled cattle out there. Right? Or maybe it would or maybe it'll just attest to the fat cattle numbers.
Todd Gleason:I'm not sure what which way you wanna put that. This would here here's one that I found of interest, and I think it probably some will find this of interest as well. It has nothing to do with the numbers, but I did make note that yesterday's report was signed by the current secretary of agriculture. So Brooke Rollins signed that report. I didn't know whether she would be in town or not.
Todd Gleason:Usually, secretaries do. Oftentimes, the reports come out when they're traveling, and so they're they're signed by an undersecretary. I thought this was an important one because it was first crop production report that she will have seen, and the numbers were signed off once they were turned over to her by the World Ag Outlook Board and USDA NASS. So, the numbers have the stamp of approval by the secretary. They always do.
Todd Gleason:You said there wasn't anything, and this would be in the corn numbers that we would find that was really good. The soybean numbers on the other side of that ledger had to go down simply because so many acres shifted from one crop to the other. So that had, shown some some resilience yesterday really in the soybeans. Not so much today, but can they continue to go higher?
Greg Johnson:They can. You know, again, the the acreage number is figured in so that, you know, that's part of the rally that we've already seen. So now we go back to talking about yield. And corn is far enough along that yes, we can have a little bit of tip back and maybe some lighter test weight if we don't get much rain in August. But the soybeans are really dependent upon rain in August, and we're almost halfway through the month, and we've had less than a tenth of an inch of rain here in Champaign, Illinois.
Greg Johnson:And I know there's other areas that are similarly dry. Not much rain in the forecast the rest of this week or next week. Now, you know, how long can the soybean crop hold on? It still looks good. And so maybe we can pull a rabbit out of our hat, but if we don't get some rain, you could expect soybean yields to drop in subsequent reports.
Greg Johnson:And so, you know, and this gets back to corn as well. The reason that number, that 188.8 number came out and the bean number came out at 53.6, is it's all based off the weekly crop condition reports as well as infrared, which basically tells you the vegetative health of the plant. So we've got a lot of green plants out there, but that doesn't really tell you how the pollination went, how the kernel fill went. So, you know, farmers are trying to say that it's not as good as what it looks like from the roadside and that could very well be true. So I guess my point is, I think we could see both the corn and bean yield drop in subsequent reports, but the corn yield, even if it drops two or three bushels to the acre, is still a huge number.
Greg Johnson:And so, you know, a bean number is relatively tight. And so now if you take a bushel or two off of the bean yield, things are extremely tight. Just looking at the price performance this year for example, this is very surprising. Corn has lost 10 of its value in price since the first of the year, whereas with the rally yesterday soybeans are actually up for the month, just slightly, or up for the year, I'm sorry, slightly, I mean, maybe less than a tenth of a percent, but at least they're higher, whereas the corn has lost 10% of its value. And I think at the beginning of the year, if you would have asked people which commodity has the better potential, I think most people would have said corn.
Greg Johnson:So kind of a surprising change of events here, over the last several months.
Todd Gleason:The other shoe waiting to drop in that is the relationship that United States has with China and whether or not they will decide to buy. How worried do you suppose, or maybe better said, when will the trade decide that is a real issue?
Greg Johnson:I I think you're already starting to see that. You're starting to see fall basis levels for soybeans weaken, widen out. If this trade deal does not get done in the next thirty days before bean harvest starts, where are those beans gonna go? We're gonna have to store beans and and the country just doesn't have enough room to store an entire crop of corn and an entire crop of beans. I think the the trade is starting to see that and think about that.
Greg Johnson:You're starting to see new crop bean basis levels fall and that will continue to happen if we don't get a trading deal worked out. And the scary part is the ninety day extension sounds all well and good, but if they don't get something worked out until the latter end of that ninety day extension, harvest will have been over and China will not have bought any beans as of that point, basis levels will be under pressure, especially soybean basis.
Todd Gleason:So at this point, it is about storage, and suddenly you have not only a record crop, which we were looking at, but a really monstrous corn crop and a bean crop that's not gonna move. So it'll be a lot of corn on the ground, I suppose, and you'll all be worried about how and where you're gonna store this and how you can keep it. Beans are harder to keep too than corn.
Greg Johnson:Exactly. Now the one thing we are reminding producers is there is very good carry in the market. Right now cash corn is in the 3 sixty's, but if you can hold on to it till July, it's worth $4.16. That's a 50¢ cash carry in the market. Now, you know, if you have to pay DP charges, you're probably gonna give up 40 of that 50¢.
Greg Johnson:But if you've got your own bins, you could sell corn for July delivery today and pick up 49 to 50¢. On soybeans, fall beans are ten o two today. July price is $10.66. You can pick up 64¢ cash. Now there's interest charges on that, so it's not a free 64¢.
Greg Johnson:But the point is there's very good carry in the market. But the only way to lock in that carry is to sell the beans or the corn for JuneJuly delivery. If you wait until JuneJuly, maybe the price falls back down again to where we are today, and so you give up that carry. You know, something to think about. I'm not saying that corn prices and bean prices can't go higher, but at some point, you may want to lock in that carry, especially if you have your own storage.
Todd Gleason:Indeed. Hey. Thanks much. I appreciate it. We'll talk with you for commodity week this week.
Greg Johnson:Sounds good. Thanks, Todd.
Todd Gleason:Greg Johnson is with TGM. That's totalgrainmarketing.com. You're listening to the closing market report from Illinois Public Media. It's public radio for the Farming World online on demand at wilag.org. Now let's turn our attention to a legislative update.
Todd Gleason:I spoke with Kenny Hartman Jr. He's the current president of the National Corn Growers Association and an Illinois farmer. I asked him to tell me about the One Big Beautiful Bill Act and how corn growers across the nation, particularly the NCGA, sees it and the perspective they have on the changes it made in what's not quite yet a farm bill, but certainly has been put into law.
Kenneth Hartman, Jr.:Well, we're definitely happy with the the one big beautiful bill when it comes to the tax side. You know, that that basically helps us with some of the tax policy when it comes to inheritance tax, you know, that increases that up to 15,000,000,000, which the way land values are be, we really need that. You know, the other part of that is the bonus depreciation is there now many years through that, for that process. And then there's been some other, you know, tax policies that have helped us as far as sole proprietorships, far as competition, you know, comparative to corporations that a sole proprietor can get some of them tax, deductions there too. Then the other part of it that that, that we really needed was that title one when it comes to, updating PLC and ARC program.
Kenneth Hartman, Jr.:That was very important. But, obviously, we still don't have a full farm bill. You know, we definitely wanna wanna get a full farm bill done that needs to be done by the end of the year. And, know, you're talking about a two point o or a slim farm bill, and that's, you know, some of the things we need as far as conservation and some of these other areas that that that, big beautiful bill didn't touch. And and we need to basically work to get that done.
Todd Gleason:How quickly do you suppose Congress can manage to get a skinny farm bill passed and signed into law?
Kenneth Hartman, Jr.:Well, we we have talked to the four corners. You know, we've talked to Bozeman. We've talked to GT Thompson both, and we've talked to the the minor leaders of the ag committee, and they're they're saying that they're gonna work together and try to get something done. So we're hoping that that needs to get and that needs to get done just because we still don't have an official farm bill.
Todd Gleason:How is it that the corn growers see the food and feeding program cuts that were included in the one big beautiful bill act?
Kenneth Hartman, Jr.:Well, obviously, there there's concerns there. You know? And and we've always promoted a bipartisan, farm bill. We definitely want, you know, the the Republicans and Democrats working together. So we're hoping that in the future that that we can get something, done that they they keep working together because, obviously, we're concerned with, you know, five years from now, the next farm bill too once we get something done here.
Todd Gleason:What is it that you're working on related to biofuels, and how do you feel about the petroleum institute backing away from some of the agreements that have been made?
Kenneth Hartman, Jr.:Well, we are definitely trying to get this e 15 bill passed, yet we feel like, you know, we almost had it passed last December. We've had challenges trying to get it done throughout the year. We're definitely working with the oil industry, you know, working, for them to help us support the e 15, and we're hoping that we can still get something done there. I know, you know, Fisher capital bill is is very alive, and and Fisher's working on this. You know, senator Thune is definitely working on this.
Kenneth Hartman, Jr.:And then on the house side, we've got our champions on the house working. So we're hoping that we can find a carrier. You know, the president has stated that, you know, he's all for, e 15. You know, he he actually signed that back in '19, and then the judicial system said it wasn't done the right way, so it was taken away. So, I mean, he's supportive of it.
Kenneth Hartman, Jr.:We've got the house and the senate on on, you know, the the Republicans and the Democrats say they're all supportive. We just didn't need to get a carrier to to finish it up because, you know, our retailers wanna put e 15 pumps in. But until they got a guarantee, you know, the problem is they're just not ready to do that.
Todd Gleason:Anything I didn't ask you that you'd like to talk about?
Kenneth Hartman, Jr.:The other thing that we're working on very strongly is concerns with MAHA. You know, we we were frustrated when we seen that first report. We didn't have much input any input on that, and they had atrazine and glyphosate in there. We can't farm without our pesticides, our tools, toolboxes, I say. So we're very concerned with that.
Kenneth Hartman, Jr.:The administration has reached out to us since then. We've been having a lot of discussions with them, and we're hoping that that next report that comes out in August is going to not have some of the concerns that they put in that first one with pesticides because, you know, EPA has been working for many, many years on registering these products. We've we've got probably the most safest food in the world. EPA is very safe with what they're doing, and we feel like we don't need to reinvent the wheel and just support them on on their reviews and and get this done that pesticides are safe in The United States.
Todd Gleason:Kenny Hartman is the president of the National Corn Growers Association and an Illinois farmer. Drew Lerner is with us now from World Weather Incorporated in Kansas City. Hi, Drew. Thanks for being with us. Let's get right into this.
Todd Gleason:In my part of the world, while the grass is still green and things still feel pretty good, It's gotten dry in the month of August. I think you told us that was probably gonna happen. Is there any rain for the second half of this month?
Drew Lerner:Yeah. There is some rain. It's gonna be a pretty classic August in my opinion. And what I mean by classic August is it's the month that really has a hard time generating enough rain to counter evaporation. We see this in many, many years.
Drew Lerner:And for those who are out in the fields all the time, you know exactly what I'm talking about because typically when we get to the end of the summer, it still rains periodically, but we usually have more sunny days than rainy days. And the temperatures are so much warmer that we evaporate moisture out quicker than we back. And so net drying is pretty classic for the month of August. And I think that's exactly what we're seeing happen here right now. The moisture profile is declining across Michigan, Illinois, Indiana, Ohio, and maybe a few neighboring areas in Missouri.
Drew Lerner:It's not a crisis because subsoil moisture is still pretty darn good in most of those areas. There are some exceptions. Now farther to the south in the Delta, the Tennessee River Basin, we are looking at short and very short top and subsoil moisture. So the stress levels down that way are much more significant than they are in the heart of the Central And Eastern Midwest. And then of course, places like Northern Missouri and Iowa and Northwestern Illinois, Wisconsin, back to the Dakotas, there's still plenty wet from all the storms that have occurred in recent weeks.
Drew Lerner:So that's not an issue for them. But in answer to your question, I think as we go forward through the balance of this month, we will continue to have rain come periodically, but it is expected to be sporadic and a bit lighter than usual at times in the lower and eastern parts of the Midwest and down into the Delta in the Western Tennessee Basin as well. Now the tropics will be the key to this and watching the tropics will determine what's going to happen in the Midwest. Obviously, if we get a storm, a tropical storm that moves into the Gulf Of America, we might block moisture from coming up into the Midwest, unless of course the storm literally comes into the Delta in the Midwest. And then of course it rains.
Drew Lerner:But for instance, tropical storm Aaron, as that storm works its way off the East Coast Of The United States, it's likely to limit rain across parts of the Eastern Midwest for a little while, on how close to the coast it gets. Now, if it's out by Bermuda, we'll probably have some timely rain that will be lighter than usual, but there will still be an opportunity for moisture. And I kind of think that's the road we're going to go down. So temperatures next week are expected to be a little bit cooler biased. And so that's going to help conserve the moisture just a tad bit, slow down the evaporation rates and allow the crops to take full advantage of what shower activity does occur.
Drew Lerner:So, and to answer your question, I think we're still going to have pockets of dryness through the balance of August, but there will be some timely rain that will come and go.
Todd Gleason:We've been watching the Canadian Prairies. Any changes there?
Drew Lerner:Yeah. So since we talked last, generalized rain occurred. We had some rain about this time last week, and then in the following weekend, there was a much larger storm system that came across the region. The Eastern Part Of The Prairies, including Saskatchewan and Manitoba in particular, you got a good general soaking. I think one of the regions that had been driest for the longest period of time reported one to two and a half inches of rain in a general sense.
Drew Lerner:Unfortunately for those folks though, the majority of their crops had already moved through reproduction, especially those areas that were drought stricken. They were bolted into the finish line much earlier than usual. That includes some of the wheat and barley and oats that's produced in some of that region. Canola had just finished flowering, was beginning to fill. So the producers are happy with the fact that it rained at this point, even though they would have been happier if it rained before flowering had begun.
Drew Lerner:But because there's moisture now in the soil, most of the crop will fill and we'll see bigger, you know, bigger size grain coming out of the region. That will help improve the bottom line a little bit. Corn and soybeans and flax are the late season crops up that way, and they will all benefit from the rain. There is more rain in the pipeline, but it will probably be a week or ten days away before we get started with that.
Todd Gleason:Is there any more to discuss in Europe?
Drew Lerner:Europe. Yeah. Unfortunately, in Europe, they are in the midst of another heat wave. The last heat wave that impacted Western Europe was, the very tail June and early July. And we saw temperatures at that time get up over 100 in Germany and Central France with nineties up in UK.
Drew Lerner:Well, we're kind of doing that again. It hasn't got quite that hot yet, but we're only into the second day of the heat wave. And we do expect, France and The UK and parts of Germany to see temperatures in the nineties pretty routinely. I think 100 degree temperatures will probably stop in the southern half of France, but it hasn't rained much in these areas for quite a while. France in particular and the southern parts of The United Kingdom, that that area has been really dry for quite a while and they will see the hottest temperatures.
Drew Lerner:Germany and areas farther to the east into the Baltic States and Poland and Western Ukraine, most of that area has had good rainfall in recent weeks. So this drying in the heat isn't gonna be a big deal for them. But France and, also in the South part of Europe, the Lower Dania River Basin will take it on the chin and experience a further pressure downward on production. What I find most fascinating about this though, is that the, it has been about forty five days since the last heat wave impacted Europe. And this is that same forty five day cycle that I think I've mentioned to you in the past, where in North America, it's not a heat wave at forty five days, but it's a cool air mass that comes back every forty five days.
Drew Lerner:And, we were watching this pretty closely. And I think with seeing what's happening in Europe right now, just kind of reinforces what we're thinking will happen in The United States and Canada. And what that translates to is probably a shot of coolness in early September and again about the September. So we're gonna be watching that. I don't think it's gonna be a threat to immature crops out there in The US, but in Canada, there may be a little frost and freeze in that September.
Drew Lerner:So we'll need to watch for that.
Todd Gleason:Yeah. Thanks much. I appreciate it. Alright.
Drew Lerner:Have a great day.
Todd Gleason:Drew Lerner is with World Weather Incorporated in Kansas City. Joined us on this Wednesday edition of the closing market report. It came to you from Illinois Public Media. It's public radio for the farming world online at willag.0rg. I'm extension's Todd Gleason.
