Closing Market Report

Todd Gleason 0:00
From the Land Grant University in Urbana, Champaign, Illinois. This is the Closing Market Report. It's the 30th day of January 2025. I'm extension's Todd Gleason. We're celebrating 40 years of this program, some 10,000 episodes and more than 30,000 interviews. Today, we'll talk with agmarket.net's Matt Bennett about the commodity markets. We'll hear from meteorologist Mike Tannura at T storm Weather. And along the way we'll explore illinois eats and how it's impacting the food supply chain locally as it relates to small farms and food and feeding programs right here on this Thursday edition of the Closing Market Report from illinois Public Media.

Announcer 0:43
Todd Gleason services are made available to WILL by University of Illinois Extension.

Todd Gleason 0:43
March Corn settled down six and three quarters today, and for 90 and a quarter, December two and a half lower and for 64 and a quarter nearby March, beans down 16 and a half at 1040 for new November, down a dime at 1053 and a half. Matt Bennett from Egg Market dot net now joins us to discuss the marketplace. However, Matt, I'd like to begin with your Nashville, Tennessee event that kicks off on Sunday. It sounds like you have a great lineup there. I expect you also have a full house.

Matt Bennett 1:17
Yeah, it's been a great response here this year. Of course, I think a lot of folks are, you know, heightened awareness, I guess, with the markets jumping up like they have. Maybe not such a frustrated grower as what we saw for a couple of straight years anyway. And so you know, as far as the line goes, of course, we've got Dan Bazzi, Eric Snodgrass, pretty excited to get a guy like Eric Moreland from the CME Group. He's one of the more fascinating speakers I've ever heard. But and then we've got a guy from Brazil, actually, that's going to talk to us about what's going on down there for real and what the projections are for the future. And I, I don't know that everybody's going to want to hear that discussion, but it's something that they need to hear. So we've got a pretty good diverse group of.

Todd Gleason 2:00
Speakers, and I wish I could make it down, but I'm not available at the time so I won't be there. But I look forward to hearing from Curt on Monday. I know I already talked to him and we're planning to do the closing market report with him there live in Nashville. And then of course, you next week on the Marketplace. What do you make of the drop in the soybeans today?

Matt Bennett 2:20
Well, I think overall, whenever you look at Frances, a lot of these forecasts are saying that, hey, there is going to be some rain come in Argentina. When you talk about some of the experts down there, essentially they're going to tell you that this is so much different than two years ago and that you came into that growing season excessively dry and you just stay dry throughout. They have had pockets that have been excessively dry, but they've had pockets that have actually been doing pretty good on some sporadic showers. So as they improve the forecast, I think most of them down there that have been forecasting that we've been talking to feel like the USDA may not be too far off. And, you know, USDA, so over 50 million tons. So it's a totally different situation than, I guess, that fear factor of what you saw a couple of years ago when they raised our crop.

Todd Gleason 3:08
Cordon here, of course, lowering his Argentina projection. I suppose you're looking forward to having a conversation with somebody who's on that continent during your conference next week.

Matt Bennett 3:19
Yeah, I mean, I think it's going to provide quite a good perspective because, you know, whenever you talk to someone who's down there in the thick of all of this, I mean, he can provide us with just a little bit different type of perspective than I think anybody can north of the equator. So overall, yeah, there's no doubt you could see some reduction for Argentina. That's not something that's been secrets. But whenever you start talking about USDA forecasts, Brazil already up 16 million tons from last year with some analysts getting in well over one seven things. You know, if that's the case, you know, a three or four or 5 million drop in Argentina doesn't really look that threatening to me. So we're really looking forward to hearing what he has to say. I think total South American production from most people's perspectives is going to be overall higher than a year ago. And if he compares with that, you know, I think that's something we need to pay close attention to.

Todd Gleason 4:12
You have called this rally recently a gift for the marketplace, particularly for corn, is that still an adjective you would use?

Matt Bennett 4:22
Yeah. I mean, I think overall, whenever you look at the corn market, there's no doubt that that still got the chance to go higher. I mean, what you did in January, of course, you lowered the US stock situation enough to be down almost to a 10% stock to use. If you look at the world stocks over the course of time they whittle down, but does that put you in a position where you just really don't need to have a disruption somewhere, spraying crops, not going in quite as quick as what we'd like to see. And so of course, we want to hear about that as well. But it's still a dollar better start, cash prices go than what we saw in the middle of March. So I'm not saying the rally is over, but I think rewarding a market that's done so much already is probably advisable.

Todd Gleason 5:07
So when you think back to the USDA's January reports and they really set the tone going into the month of March, was it that in the marketplace we discounted looking maybe at what USDA report was domestically and concentrated too much on what the USDA's report was on the Internet National Front? Or are we just trying to figure out what that balance still is?

Matt Bennett 5:36
I think it comes down to balance. I think if there was a heavy focus going into that report, it was on what you would call a very burdensome soybean situation. I think people would note that the corn situation had improved enough to warrant a little bit of optimism, but I think most of us were concerned that when you look at real numbers on soybeans, it was going to be pretty tough to get that market fired up. Now, wherever you come in and you extract as much production as quickly as we did along the corn, you know, you took 90 million bushels of stocks. Now we're getting it down to 380. With that, the cases certainly put beans in a better spot than they were before now. But if we're going to be honest about it, you got to go all the way back to 2019 to see that and some of the stocks number for me. But at the same time, as we know, demand is really increased quite a bit. So I think when you look at corn, you can look at both corn and beans together, first of all. But second of all, we got to note that that soybean court ratio continues about the lowest we've seen in ten years. So corn, relatively speaking, has performed better than soybeans, which makes sense given world fundamentals.

Todd Gleason 6:43
We've been worried about the Trump tariffs possibly be put at being put into place on February 1st. That happens this weekend. And I'm heard from Washington, D.C. that some of the agency nominees were saying, well, really, he's talking about 25% as it's related to trade on April 1st and 25% with Canada and Mexico as it's related to immigration and what he'd like them to do. Does that change your calculus? Very much.

Matt Bennett 7:16
You know, the thing is, is that obviously traders have looked at that. Todd, you asked us yesterday, we would all say, holy smokes, the trade is not super concerned with what this tariff situation looks like. And then you come in here today, and I think it was a variety of most likely this Argentina situation not looking this all of this. First of all, it's second of all traders and quite frankly, a bunch of money being long corn and beans here over the last couple, three weeks. And I think you saw a fair amount of profit taking. People are just taking risk off the table thinking that, hey, if these tariffs do here, clearly we could see retaliatory measures. What jumps out to me from China's perspective is that they could Kansas and soybean shipments that they you know, the sales that they've already said if that's a possibility, all of a sudden you get into a different discussion as far as where that balance sheet looks like. So it's definitely a fluid situation and one we want to monitor very closely. But at the same time, I've said all along the threats of tariffs and the implementation are two completely different things we get. We just got to see how this thing plays out.

Todd Gleason 8:24
Thank you, Matt. I appreciate it.

Matt Bennett 8:25
Oh, absolutely. Thank you.

Todd Gleason 8:26
That's Matt Bennett. He is with agmarket.net.

You know, this week, food producers that you might meet at a farmer's market gathered in Springfield for the everything local conference. As we told you yesterday, University of Illinois Extension premiered a video there. There was a lot of talk about a USDA grant program called LSP that stands for Local Food Purchase Assistance Program operated by USDA. The purpose of this program is to spur local food production in hopes of providing some resiliency to the supply chain. Now, that's USDA speak, I think, for creating a network of local farmers that can raise ready for the table fruits, vegetables and meats to supplement the existing grocery store supply chain, particularly in the case of an emergency, although that's not explicitly said in any way, shape or form within the grant process. And the state of Illinois, through the Department of Agriculture, the Department of Human Resources and University of Illinois Extension created the Illinois Eats program to distribute these funds. Last fall, I spent more than a little time on small acreage farms around the state, learning how the Illinois Eats program is working both at the farm level and within the food and feeding programs meets 25 year old Max Albritton.

Max Allbritten 9:52
I farm pigs. Yeah.

Todd Gleason 9:56
He's a pretty happy guy. I received Max comes from a farm family that raised pigs. They went on to college to learn more about animal agriculture, but the family farm closed up before he could ever take over.

Max Allbritten 10:09
Typically, a transition like that would happen seamlessly, right? And we had a gap. So in a sense, I was starting out from scratch. Square one, if you will. And that's difficult, if not impossible to do.

Todd Gleason 10:31
Max is not all that unusual. Farming is a struggle. Part of it is just having the resources to get started. The other part is finding a market to sustain the operation.

Max Allbritten 10:42
The Illinois Eats program did it. I and here's why. The biggest issue is finding a market that that is you're going to be your number one problem. Someone you know I can raise a pig, right? Lots of people can raise a pig. Finding the market to go with to meet a local market price, one that is sustainable, that is difficult, especially for someone starting out. Commercial markets exist, but not for a farm of this size. So yeah, that was the ticket.

Todd Gleason 11:19
That ticket came in the form of a USDA grant. The idea behind it simple use the grant money to buy food locally, spurring the regional economy, and then distribute the fresh and local food to those in need, leaving them with a little more in their pockets to spend in the local economy. That's how Glen Roberts, the executive director of the Tri-State Food Bank, sees it.

Glenn Roberts 11:42
The Illinois Eats program. It's called the Local Food Purchasing Assistance Program. They call it Illinois Eats Here in Illinois is an absolutely wonderful program. It is national, but each state has decided how it's going to look and how it's going to run. This, I must say, has been the most rewarding program I've ever been involved in. It's very cool. We didn't know exactly what it was going to look like. And the Illinois Extension brought together the stakeholders, the farmers and the food bankers and the community. Stakeholders that would see this through and figured it out. And we said, here's our goal. We want to help our socially disadvantaged farmers and we also want to make sure this food gets to people who are food insecure. How are we going to do that? And it evolved and we would have hurdles. Yet we would come together and figure out how are we going to get through this? Find the solution and then move forward.

Todd Gleason 12:40
This USDA program, which only started at the beginning of 2024, has been moving forward across the whole of Illinois from the tri state food bank in Indiana that works with small local farmers like beekeeper Angie Keel and vegetable grower Jill Randleman to a grassroots food pantry called Rooted in Good in DeKalb County, well north of Interstate 80. It has gardens at every elementary school in the city of DeKalb. The kids learn how to raise food, and that produce goes to food pantries like this one. But it really wasn't enough until now, says Carson Parris.

Karson Paris 13:16
Well, I think that what was surprise ing was the lack of produce in pantries. It's more about, I guess everybody takes it for granted that they can go to the grocery store and buy an ear sweet corn or buy a bell pepper to cook at home. But that didn't exist in pantries. All they had was canned or highly processed food. There was nothing fresh, nothing that had to be stored. And folks can't make real meals out of that. You know, there's only so many days a week that you can eat a box of macaroni and cheese. You know, it's nice to have a fresh veggie like a green bean to go with that. And that didn't exist before.

Todd Gleason 13:59
Rooted in Good has long had farmer partners, but the Illinois Eats program has pushed that local economic engine called the farm further. It works with Kline's quality produce, the Harrison Farm Market Mushroom Farm in Burlington and Family Farm Meats in Hinckley. It means the food insecure in DeKalb County have access to high quality, fresh meats and produce. That insecurity is a bit different, though, in New Haven. Beverly Stanton works for this village of about 400 people along the Illinois Indiana border, where the Tri-State Food Pantry makes fresh and local goods available.

Beverly Stanten 14:37
It's a small little village here. Everybody knows everybody. Like I said, when we decided we needed the pantry, we worked really hard to get it in here because we don't have a store. We pretty well don't have much here. So we worked hard in trying to get the pantry up and going so it would benefit people.

Todd Gleason 15:02
People that live in a food desert that don't have a way to travel 15 miles to the nearest grocery store. When the Tri-State Food Bank mobile pantry rolls up, it serves about 70 families in this town of 400. For her part, Jill Randleman, who raises vegetables for Tri-State, says giving people fresh, local, nutritious food is one of the reasons she farms and her farm is also one of those places people can come to work. It's what agriculture does and what it can do for the local economy.

Jill Rendleman 15:34
The Illinois extension, I think, has always been a kind of the foundation of all the good things that have happened in terms of agriculture in the state of Illinois and probably across the United States. So, you know, they have very they're organized. They have talented people. They know what to do to help create a program and make it work and make it work smoothly. And I think that's where the extension has fallen in. They've also done an excellent job in communicating the program, having online meetings, having online question and answer. Any time I picked up the phone to ask a question that I was just totally lost on about, you know, Illinois eats, if I call the extension and in, you know, the number they provide on their website, I'm telling you what you'll get the nicest, most qualified people and you can tell they want to make this work.

Todd Gleason 16:41
She's not wrong. They do. If you'd like to learn more about the Illinois Eats program, contact your local University of Illinois extension office or search out Illinois Eats online.

Mike Tannura now joins us. He's the president and ceo of t-storm weather. That's tstorm.net online. Thanks mike, for being with us. The market is watching South America with an immense amount of interest trying to decide exactly what the impacts of the weather might be there. Can you begin with what conditions are like on the ground as it's related to the weather in Argentina?

Mike Tannura 17:31
Well, absolutely. The forecast going forward is pretty straightforward. It's going to be hot with temperatures in the nineties and one hundreds over the next two weeks. So heat will be a factor on corn and soybeans. The part of the forecast that is less clear comes down to rainfall amounts. We know the next five days will be dry, but we also know that some thunderstorms are coming up Tuesday, Wednesday and Thursday next week. And there might be a few more after that. This region averages about two and a quarter inches of rain over the next two weeks. And it looks like we'll get around half of that, maybe all of that. But somewhere in between is the most likely scenario, which is still below average because we need to hit that 2.25 inch mark to basically have a normal two week period. So, Tara, in the end, it's going to be hot in Argentina, but there are going to be some storms.

Todd Gleason 18:24
What's the weather forecast in Brazil like?

Mike Tannura 18:27
Well, in southern Brazil, in Paraguay, it's kind of the same story. They're not going to be as hot because they'll have some cooler influences from some storminess to the north. But in the end, they're going to be drier than normal and they're also going to be warmer than normal. This is especially true in Rio de Janeiro School and in Paraguay. And these two areas combined to produce almost 30 million metric tons of soybeans. That's about 60% of what you get out of Argentina. So it is an important area and they're kind of stuck in that same pattern in the other areas of southern Brazil. They'll see a little bit of a stormier sun up, but it's not going to be stormy per se, with only rains near or below average. So in the end. To summarize everything, we've talked about Argentina through southern Brazil and Paraguay, they're essentially going to be drier and warmer than normal into the middle of February.

Todd Gleason 19:21
What do you think the impact might be on the crops that are growing there?

Mike Tannura 19:25
Well, that's a great question, and I think that's where a lot of the uncertainty comes from. If these rains outperform expectations next week, then all of the sudden you'll be looking at Argentina and saying, okay, we're not going to have a great crop, but we're not going to have a terrible crop either because we have had some rain over the last two months and we had some rain this week. That's what you would be saying, say a week from now. But if those rains underperform and you have to keep in mind that the last couple of rain opportunities did underperform, then all of a sudden you have to start thinking harder about what's going on here, because within the background of all that, you know, it's going to be hot. And that's especially problematic for corn, whether it rains or not. And it can be a factor for soybeans if rains are limited. So we're kind of in this wait and see mode here where eventually it'll become clearer if it's going to rain a lot or a little. And that's pretty much going to determine whether we have a good outlook or a poor outlook once we get into the middle of next month.

Todd Gleason 20:24
What is the weather forecast for the more northern regions of Brazil?

Mike Tannura 20:28
Well, there it's a little bit of the opposite. They're going to see heavy rainfall over the next 2 to 3 days. But the important thing is that it's going to dry out after that, an upper level high is going to form and that will diminish rainfall as we move through next week. Now, that is kind of a mixed bag for them as well, because if you look at Mato Grosso, their soybean season is coming to an end and they don't need a lot of rain now. They would actually prefer some drier weather to get the harvest going. Well, it's going to be pretty wet here for a few more days and then it'll take a few more days to dry out after that. But overall, it will be improving there once we get into next week. Now, the other areas of this region, they're planted a little bit later and so they would like to see more rain. Then they're going to get. And once you combine all these things that we've talked about, not only for this region but everywhere else, it's just a mixed story with some rains here, some rain there, some people getting more than they want, some people not getting enough, some heat and some okay temperatures. So this is just kind of a easy forecast, but a very difficult one to dissect from an impact standpoint on crops. Anything of note here in the United States you want to discuss? Well, there is a lot of rain coming up for the Mid-South and the southeast, half of the Corn Belt. This does include much of Illinois, Indiana and Ohio and then stretching on to the south from there. The reason is because we have three significant systems that will pass over the next two weeks. One comes through today and tomorrow. Another one comes through in about five days from now, and then another one follows five days after that. Now, at this point, the first two look like they're going to be pretty big rainmaker. And this should lead to anywhere from 1 to 4 inches of rain from southern Illinois and points down to the south. So that's enough to induce some river and field flooding, especially when you consider that the ground is still partially frozen. The third system is the one that probably needs to be watched a little bit more closely for not only a rain threat, but a snow threat as well. But that's still around 12 days into the future. So we have a little bit of time to figure that out. But basically, we're going to have a pretty wet open to February in the Mid-South and the Southeast half of the Corn Belt. But the plains on the northwest, half of the Corn Belt and not too much is on the way. So they're going to stay fairly dry.

Todd Gleason 22:40
Thank you very much. Mike Tannura is with t storm weather that's tstorm.net online and joined us on this Thursday edition of the Closing Market Report from Illinois Public Media. Don't forget, we'll post our Commodity Week program to the website this evening after 6:00 at willag.org. And it will air on many of these radio stations tomorrow and over the weekend. I'm University of Illinois Extension's Todd Gleason.