Jul 15 | Closing Market Report
From the land to Grant University in Urbana Champaign, Illinois. This is the closing market reported as the July. Happy birthday to my twins, Megan and Jared. Coming up, we'll talk about the commodity market with Naomi Blohm she's at totalfarmmarketing.com Dave Chatterton will be here to discuss the agricultural energies. We'll explore a recent article that Giovanni Prezipontes penned for the Crop Central website about nitrogen applications on soybeans, and then we'll turn our attention to the weather forecast with Don Day.
Todd Gleason:He's at Dayweather in Cheyenne, Wyoming, All on this Tuesday edition of the closing market report from Illinois Public Medium. It is public radio for the farming world online on demand at willag.org. Todd Gleason services are made available to WILL by University of Illinois Extension. September corn for the day settled at $4 a penny and a quarter up 1 and a quarter cents. December at $4.19 and 3 quarters, a penny and 3 quarters higher.
Todd Gleason:And the March corn futures at $4.36 and 3 quarters, the settlement price there, up 2¢ on the afternoon. Soybeans in the August contract at $9.95, down 6. 09/09/1987 at a quarter, 6 lower as well. And November at $10 a penny and three quarters, down 5 and a quarter cents. Bean meal at $2.65 30, $2.40 lower.
Todd Gleason:Bean oil at $54.56, up 39¢. Wheat futures, soft red in the December contract, 3 and a half cents lower at $5.58 and three quarters, and the hard red December at $5.46, a half cent higher for the afternoon. Live cattle futures in Chicago at $2.50 higher, $219.27 and a half cents for a 100 pounds. Feeder cattle at $322.27 and a half cents, up $2.80, and lean hogs at $87.47 and a half cents, 27¢ higher for the day, rather 20¢ higher for the day. Crude oil at $65.39 a barrel, that's down 42¢.
Todd Gleason:Diesel fuel or heating oil, a penny and a tenth higher, $2.37 and 8 tenths, and gasoline on the RBOB at $2.12 and 3 tenths of a cent just about unchanged for the afternoon. The Dow Jones Industrial Average now stands at 44,374. That's down 322 points. And the S and P 500 is too lower. It's at 6,309 points for the day.
Todd Gleason:We're now joined by Naomi Bloem. She's at totalfarmmarketing.com out of Windsor, rather West Bend, Wisconsin. Naomi, thank you so very much for taking some time with us this afternoon. I really do appreciate that. Can you begin by discussing what you think the most important parts of the trade are over the last week to you and of today?
Naomi Blohm:Well, actually, keeping an eye, of course, on any potential for trade and tariff news coming up or any new trade deals, but I think the thing that a lot of my clients today were talking about was this potential storm system coming through South Dakota, Northeast Nebraska, all of Iowa, Southern Minnesota over the next forty eight hours has the potential to just get hammered with some pretty severe weather between high winds, potential for rain, of course, and hail. So that's what we're gonna be watching tonight, and I kind of wonder if that was some of the reason that corn futures prices traded a little higher today, maybe some of those short positions going to the sidelines, just in case this turns into a mega storm. But of course, if it turns out to just be nice rain, the gains that we've had the last couple days might diminish and we could go back into sell mode as the rest of the week progresses. So we'll want to keep an eye on that storm.
Todd Gleason:Okay, so on that sell mode side, I know you have probably been talking to your colleagues and looking at the charts. What do they tell you about the marketplace from this point forward, and potential pushes lower and or higher?
Naomi Blohm:Yeah. So yesterday, we had a nice bullish, reversal on corn. So that may be said that the market was ready to kinda take a break from that negative momentum. So we know that there's this potential to be a bigger crop than the USDA 181 yield, but it's gonna take a few weeks to know potentially how big the crop actually is or isn't. So, I feel like because we had this little bullish hook reversal yesterday, maybe for the rest of this week, corn prices, soybean prices trade in a little bit more of a sideways fashion until we get a better idea on more weather information and potentially some more trade and tariff news as well.
Naomi Blohm:So, the chart's not looking quite as bad in the short term as what they had been, but the big picture still looks like the market is in a defensive mode on the expectations of large crop overall.
Todd Gleason:So I have heard recently that there is some worry that there remains enough grain on the farm in storage that it will have an impact through the end of the month of July and into early August, and complicate issues related to basis not rebounding as corn is coming out of South America as well. Are you fearful that basis, even if the futures markets were able to rally some, might widen?
Naomi Blohm:Well, it could widen or just in general stay wide because of everything you said. Plus, if the crop, the newly coming crop coming in is expected to be large, it's a way that the end users are able to keep their their handle and and keep prices at bay by keeping that basis wide on expectations that supplies will be good enough for the coming months. I know that last year the market found that it's low at the August and then had a slow grind higher, but what if this year maybe we find the low at the August or early September, but rather than a slow grind higher, what if we just see a slow grind sideways until we get the crop fully harvested, until we get the potential piles of corn coming into the elevators moved. So that could be something different than last year to definitely be aware of and a rather reason why prices might struggle to rally in the short term. So, in general, I wish I had better news to provide, but right now, we're still just operating under this threat of a big supply coming in, and that's gonna weigh on prices both probably from the future side, the cash side, the basis side.
Todd Gleason:Okay. So this is a question that you're going to get from a lot of producers, I think. I'll just ask it for myself. I made one sale, 5% of the crop, new crop corn, $4 and 22, which I hoped was my lowest sale for the year. Looking at a $3.75, $3.80 cash bid at the moment, and you're telling me and I'm thinking this marketplace might trade lower into the fall.
Todd Gleason:How do I handle that situation?
Naomi Blohm:Yeah, it's definitely a challenge. So it's something where we've been talking with clients, and some are looking at some option strategies where they're defending in case the market prices go lower using December corn puts or even some March strategies in case it is a long, drawn out harvest low that lasts throughout the autumn timeframe. So, that's one way to still try to protect value that's there. I would say, though, if you're at the point where you're looking to make a cash sale just because potentially you need cash income flow, when we see signs of a bottom later on, we'll look to do some re ownership strategies. Another idea would be to, and this one is not for everybody, this has some margin risk to it, selling calls above the market, like out to the March contract, and just challenge the market to rally that way.
Naomi Blohm:It would help pay for storage costs, future storage costs, but again, it's marginal, so you really want to understand the risks associated with that. But, yeah, this marketplace is shaping up to be different than last year. It'll it'll take a major weather event, or we would need even better demand news than what we already have in the form of a trade deal to, you know, just be able to spur this market higher.
Todd Gleason:Anything we should take up on the soy complex?
Naomi Blohm:Well, looking at soybeans, we're gonna continue to be weather watching. The November contract is holding that $10 price point quite well for now, and I think that that likely continues. So, we have to of course know what the weather's going to be come August. The soybean crush report came out today a little bit higher than the average trade expectations, so that was really impressive and helps to just keep the story alive about the demand for the biofuels and for the crush, but for the soybeans, it's all about weather, and of course, we still are waiting to find out what is gonna be happening with China and any exports that they would be purchasing from us, so we're in a wait and see mentality for that as well.
Todd Gleason:Thank you much, Naomi.
Naomi Blohm:Okay, thank you.
Todd Gleason:Naomi Bloom is with Total Farm Marketing and totalfarmmarketing.com. She's in West Bend, Wisconsin. You're listening to the closing market report from Illinois Public Media. On this Tuesday afternoon, over the noon hour, I help to host Farm Doc webinar related to the changes included in the One Big Beautiful Bill Act. You want to check that out.
Todd Gleason:You can do that anytime you'd like, probably on the YouTube website, maybe in a couple of hours but it'll be up soon. These will have an impact on this year and of course coming years marketing opportunities and what the crop insurance changes might be as well as the commodity program changes for things like ARC and PLC. You can find those at youtube.com/the at signpharmdoc. That's youtube.com/pharmdoc. That's the PharmDoc daily YouTube website, and you'll be able to look for the latest webinar there on the one big beautiful bill act and its impact on crop insurance and commodity programs.
Todd Gleason:Let's turn our attention now to the agricultural energies. Dave Chatterton is here from Strategic Farm Marketing. Hello, Dave. Thanks for being with us again.
Dave Chatterton:Yeah, Todd. Thanks for having me. It's interesting times as always here.
Todd Gleason:It it is. However, I don't wanna start with the agricultural energies. You're busy today helping producers make sure that acreage is reported. Deadlines are upon us?
Dave Chatterton:Yeah, Todd. We're at that annual acreage reporting deadline. It's July 15. So if you haven't, you know, certified with the FSA or talked to your crop insurance agent, you better you better make that call up pretty quickly. It's interesting that last week on Friday afternoon late after the close, we saw the FSA go ahead and give themselves an extension for thirty days for getting all their information in the RMA system but they did not extend the crop insurance deadline.
Dave Chatterton:So it's a little bit of a quandary. It's very hard to match up and accurately report acres without a completed five seventy eight. So a little bit of piecing together going here and, you know, just one of the things that we deal with here along the way.
Todd Gleason:Yeah. So make sure you get hold of FSA by the end of the day today. Now turn your attention to the agricultural energies. What have you been watching over the last month?
Dave Chatterton:Yeah, Todd. I mean, it's been a little bit of a roller coaster here. And, of course, it's really primarily been about policy. And over the last month, you know, if you go back all the way really to May, that's when the market bottomed. But we've been on a steady uptrend almost since that point.
Dave Chatterton:And mixed in with that, we had the kind of culmination or the peak of the Israeli Iran conflict. Or let's say, I hope it was the peak of that conflict. And we had the big spike and then and they go down over the weekend here. We've got Trump being the, you know, the tariff drum again and talking about things like Mexico and Canada and 30% tariffs. But then on Monday announcing that he intended to place a 100% tariff on Russian goods and reciprocal tariffs for people who are buying Russian oil of up to 500% starting in fifty days.
Dave Chatterton:So the market actually reacted a little bit soft to that. It was expecting that you know Trump had foretold this agreement or this you know this announcement for a while. The fifty day deadline or the fifty day extension here and giving them fifty days was not what the market was expecting. They were expecting more of an immediate concern. So you know markets have kind of consolidated the last few days here but we remain really towards the high end of of the range here.
Todd Gleason:And if
Dave Chatterton:you look at let's say diesel fuel for an example, 188 for NYMEX futures in May, got to $2.65 during that peak of the conflict that we just spoke of. We're currently at about $2.42. So we've given up a little bit from the highest tide but generally the OPEC cuts that have come into the marketplace or been announced have not been a big bearish element of the market so far. We're still inverted in terms of price. So crude oil, see the front month above the deferred.
Dave Chatterton:Same thing for gasoline and diesel fuel indicates the demand in the market has still been pretty good.
Todd Gleason:Yeah. At fifty days, we'll be in the midst of harvest in the fall. If nothing has happened, that would mean that, nations like Brazil, China, India, have been purchasing Russian oil would be subject to a 500% tariff? That probably would leave the oil off the market, I would take it, if that's the case. And does that mean that does that mean the producers would need to think more thoroughly about purchasing their diesel fuel needs for the fall?
Dave Chatterton:Well, I think the answer is yes. I think nailing down a specific of what's going to happen after that fifty days is, you know, the market takes this with a big grain of salt, Todd, and the fact that's an eternity in terms of negotiating with these sanctions and a lot can change and probably will change. Enforcing a 500% tariff on someone who on another country that we believe is buying Russian oil is a really tough to implement I think over time. So there's a good degree of doubt about how that's gone. Russia historically has been very good at kind of alluding these US trade barriers and we'll have to see how that shapes up.
Dave Chatterton:But I think what you do want to look at here in terms of diesel fuel is that inventories right now are the lowest of the last five years. We're 23% below the five year average, Todd, and, you know, we're getting the tropics heating up here. We've got a storm moving into The Gulf here midweek next week. It doesn't look horrible at the moment, but you know how quickly those things can change. So any kind of supply disruption here that comes out of left field is really going to be kind of an igniter to a higher a leg higher in prices.
Dave Chatterton:So I think you certainly want to be looking at what can I contract fuel for, how full are my tanks, and and and having a little bit under your belt, so to speak?
Todd Gleason:Hey. Thanks much. We'll talk with you again in another month.
Dave Chatterton:Thank you, Todd.
Todd Gleason:That's Dave Chatterton. He is with Strategic Farm Marketing. There's a new article about the application of nitrogen to soybeans on the Crop Central website authored by Giovanni Prezafontes, John Jones, and Emerson Nafziger, each of them an agronomist here on the Urbana Champaign campus of the University of Illinois. We'll start with the conclusion is that on almost all soils in the state of Illinois, adding nitrogen to a soybean field to increase yields generally doesn't statistically and certainly isn't economically viable. There are some places we'll explore that in the future.
Todd Gleason:However, today I wanted to talk to Giovanni about high yielding soybeans and nitrogen and what they found in this particular study.
Giovani Preza Fontes:I think there is a common perception that, those high yielding soybeans fields will likely to respond more to supplemental nitrogen, and that was not the case, at least under the conditions of our study. We didn't our data does not support that high yielding soybeans will respond more to nitrogen fertilizer. There is a figure in in the article that shows the relationship between yield response to fertilizer nitrogen and the yield of the untreated control. And what we found was that a negative relationship between yield responses and the yield level of of the untreated control, meaning that as the yield of the untreated control increased, we saw an yield responses to nitrogen tended to decrease.
Todd Gleason:Do you know why?
Giovani Preza Fontes:Yeah. We think that, you know, like, if you think about the soil the our soils, our molysoles in Central And Northern Illinois, I mean, this those are highly productive. Right? So if you think about soybean, right, so where they they get their nitrogen from, it it's we think that about 50 to 60% comes from biological nitrogen fixation. Right?
Giovani Preza Fontes:That's the symbiotic relationship that they have with the Bradyrhizobium, and 40 to 50% comes from the soil. So if you think about those high productive soils, if you think about mineralization in nitrogen supply from the soil, conditions that favor high yields, I will also favor organic matter mineralization. So what that means is that, you know, if you if the weather is good and and you're having you're setting up a you a good yield potential. Right? So that also means that, you know, there's a lot of nitrogen being mineralized from the organic matter, and those nitrogen are gonna be available for the soybean to take up.
Giovani Preza Fontes:So even though in high yieldings and and we saw that our Urbana Fields and Nama Field, we had years that we had 80 to 90 bushel soybean per acre. So, yes, they do require more nitrogen, but, again, there's a lot of nitrogen being mineralized from the organic matter, that is gonna, supply most of that nitrogen requirement in high yielding fumes.
Todd Gleason:That's Giovanni Prezefontes. You can see the article that he has written along with John Jones and Emerson Nafziger on our website. The title of that article is Nitrogen Fertilizer and Soybean Yield What We've Learned from Multi Year Trials in Illinois. The conclusion reinforces that most soybean fields in Illinois are unlikely to benefit agronomically and even less likely to benefit economically from nitrogen fertilizer applications. We'll explore this topic more in the future here on the closing market report.
Todd Gleason:Theme music for the closing market report is written, performed, produced in courtesy of Logan County, Illinois farmer Tim Gleason. Find us online at willag.org to listen to anytime you'd like there. You'll also find agricultural programming articles from the crop scientist, the ag economist, and the animal scientist right here on the Urbana Champaign campus of the University of Illinois. Let's turn our attention now to the weather forecast with Don Day. He's with Day Weather in Cheyenne, Wyoming.
Todd Gleason:Don, looks like we're going to turn things, well, a lot hotter, and they'll be humid as well. Can you tell me about the changes that are coming across The United States?
Don Day:Yeah. There's there's actually quite a bit going on. First of all, we're we're gonna see likely a tropical depression might become a tropical storm in The Gulf called Dexter. We have an unusually strong cold front coming out of Alberta and Saskatchewan into the Northern Plains. Parts of the Dakotas won't even get out of the sixties today or tomorrow.
Don Day:And then we've got some heat that's gonna be building across the Southern Plains and expanding into, especially, the central, eastern, and southern areas of the Corn Belt as we get to the end of this week and this weekend.
Todd Gleason:Tell me about that heat and the humidity both, please.
Don Day:Well, we're gonna have a pipeline of air that's gonna be coming right out of the coastal Texas Louisiana Gulf areas and then that's going to get directed to the North Northeast. So the transport of the air mass is coming in. The source region is coming just from very warm humid areas and it's a pattern that's going to get a little bit on the stagnant side of things especially when we start looking after the twentieth and into the last ten days of July. So there's going to be a lot of heat, lot of humidity in there and there's gonna be occasionally some thunderstorm activity as well.
Todd Gleason:What do you think it will mean for temperatures? As we get through this last couple of weeks of July, we're in the middle of pollination, things above 93 degrees tend to be a problem.
Don Day:Well, we are going to see temperatures that are gonna get into that territory. Now one thing that may throttle back those temperatures a little bit will be the chance for clouds and shower and thunderstorm activity that could cause, you know, temperatures to maybe not be as persistently hot. Thing is is, while we may not spend too much time in the mid to upper nineties, certainly, you average the nighttime and daytime temperatures, they're gonna be very warm through that period.
Todd Gleason:That is typical of recent years where the overnight lows are higher and the highs during the day are not in that 98, 99, 102 degrees, but lower levels still the average comes out to be a higher average throughout the period.
Don Day:Yeah. Now one thing that and and we've talked about this in earlier interviews is that while we do see the heat coming in, one thing that's happened this summer is when we do get heat domes, they don't tend to last as long as forecast, and I think that'll be the case with this as well.
Todd Gleason:Thank you much, Don.
Don Day:Thank you.
Todd Gleason:Dundee is with Dayweather. He's in Cheyenne, Wyoming. Joined us on this Tuesday edition of the closing market report that came to you from Illinois, a public medium. It is public radio for the farming world online on demand anytime you'd like to listen to us at willag.org, willag.0rg. I'm University of Illinois Extension's Todd Gleason.
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