Closing Market Report

Todd Gleason: 00:00

From the Land Grant University in Urbana Champaign, Illinois. This is the closing market reported as the July. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson. He's at TGM.

Todd Gleason: 00:13

That's totalgrainmarketing.com. We'll hear an update from the floor of the senate as it's related to the bill that would rescind NPR and PBS funding along with funding for USAID. And then we'll turn our attention to the weather forecast. Do that with Drew Lerner at World Weather Incorporated in Kansas City on this Wednesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world online on demand at willag.org.

Todd Gleason: 00:44

That's willag.0rg.

announcer: 00:48

Todd Gleason services are made available to WILL by University of Illinois Extension.

Todd Gleason: 00:56

September corn for the day at $4.00 5 and a quarter, 4 higher. December settled at $4.24. That's your new crop up 4 and a quarter cents. The March corn at $4.41, up 4 and a quarter. August soybeans rallied 18.

Todd Gleason: 01:09

Today, they settled at $10.13 and a half. September 10 o five and three quarters, also up 18 and a half cents, and new crop November soybeans $10.20 and a half 18 and 3 quarters of a cent higher. Bean meal futures at $2.68 40 up $3.10, the bean oil $54.82, 26¢ higher. Weed futures, soft bread, December contract at $5.61 and three quarters, up three. The hard red December at $5.45 at a quarter.

Todd Gleason: 01:38

The hard red wheat, down three quarters of a cent. Live cattle futures at $220.75, a dollar 47 and a half higher for the day. Feeder cattle at $3.25 57 and a half cent up $3.30, and lean hogs at $88.70, a dollar and 22 and a half cents higher on the afternoon. Crude oil futures at $65.29 a barrel. That's just about 7¢ lower.

Todd Gleason: 02:06

Diesel fuel or heating oil at $2.36 and 9 tenths, 8 tenths of a cent lower, and gasoline on the RBOP finished at $2.10 and a half cents, a penny and 7 tenths of a cent lower. The Dow Jones Industrial Average now stands at 44,416. It's about a 170 points higher on this Wednesday afternoon. Greg Johnson from TGN. That's totalgrainmarketing.com.

Todd Gleason: 02:35

The elevator owned by FS here in Champaign County now joins us to take a look at the marketplace. Hey. A little uptrend. This is not turnaround Tuesday, but wow Wednesday, I think. Or at least that's what farmers are probably it's only you know, it's 10 or 15¢ in the soybeans and a few pennies in the corn, but it sure feels good, I guess.

Todd Gleason: 02:55

What are you thinking about the marketplace today?

Greg Johnson: 02:57

Yeah. This is actually the third day in a row that the corn market has rallied. And as you said, pennies, not not significant moves, but at least it's got a plus sign in front of it. And, I think that's probably not to be, unexpected. We've had a 40¢ drop in corn prices since, late May, and we've had a 60¢ drop in soybean prices since late May.

Greg Johnson: 03:21

So we were kind of due for this technical bounce, and there's not a lot of fundamental news as far as a reason why we're bouncing today. Some of the forecasts are calling for some hot weather to come back in next week, but those same forecasters are also calling for rain. So hot and wet, obviously, isn't as bad as hot and dry. But I I think that prob just the fact that we've gone down so much without a little bit of a bounce, I think the market was ready for a bounce, and they're using the potentially hot weather. And if it's pop up showers, not everyone may get rain.

Greg Johnson: 03:59

And so there are some areas that are starting to show some signs of stress. Nothing that a good rain wouldn't take care of, but that is a concern. And before it was the talk was how high is the yield? The USDA is using 181, and prior to this week, it was well, is it 182, 184, 186? Now all of a sudden, you know, there's really, it doesn't necessarily have to be higher.

Greg Johnson: 04:25

It could be a little bit lower than one eighty one. So I think we're starting to see a little bit of, uncertainty as to what the yield is gonna be, which makes sense. We're only in the July, and, so the corn crop's got another three to four weeks, where we can, you know, have a better idea to deter before we determine the yield. So just the uncertainty, I think, and the fact that we've been down a little bit, is causing the bounce higher today.

Todd Gleason: 04:51

Yeah. So on Monday, we had, what, a contract low, I think, in December corn, but it closed higher for the day and then followed up on Tuesday again today as you and I are talking. What are the possibilities it turns and goes back down and this is just a bounce?

Greg Johnson: 05:09

Well, last year, if we look at last year, December corn went all the way down to $3.90 before we bounced and finished the year at $4.40. I think we made that $3.90 low right around the September 1. So this year December corn's at $4.25. So with the same kind of carryout projected this year as we were projecting last year, we definitely could see corn drop below $4 as we get into the fall if we get good rains for the rest of July and followed up with good rains in August. So there's a decent chance that we could keep going lower, but the weather over the next three to four weeks will go a long way.

Greg Johnson: 05:50

And until we know that, you know, maybe we can bounce 20¢ higher before we go 40¢ lower.

Todd Gleason: 05:55

So I was searching out, something that I had recalled Darrell Good had written and Scott Irwin related to reference prices. Maybe not quite reference prices, but price supports and, of course, the one big beautiful bill act, has changed those prices. They're up substantially. You can learn more about that, from the PharmDoc Daily website, by the way. There are a couple of articles there that can bring you up to speed on it.

Todd Gleason: 06:20

But how that sometimes puts a floor in the market, and and I went searching for that article and found one instead from Daryl talking about sideways movement in the marketplace. I think I wanna say it was from 2017. And so I went back and looked, and in that particular year, the market folded. It had been going sideways about this time, and then it just but it folded and then and then dropped into the into the into the fall. So it it it's interesting to see and look back historically.

Todd Gleason: 06:56

No year is the same. This year when you're thinking about soybeans, what kinds of historical perspectives are you using?

Greg Johnson: 07:04

Well, last year or this year we've been as high as 10.75 on the November contract as low as 9.75. And today we're kind of in that 10.25 range. So we're in the lower half of the range, but just barely, whereas corn, like you said, we just made new contract lows earlier this week. So the corn is definitely at the bottom end of the range. The beans are kind of in the middle of the range and we won't know as far as bean yield is concerned until August.

Greg Johnson: 07:32

That's usually when the bean crop is made. So we do have some good demand on the soybean oil side, but as we've talked before, you can't crush soybeans just for the oil. You're left over with all the meal and the meal is making basically contract lows as we speak, even though the oil prices rallying higher and soybeans are kind of stuck right in the middle. So I think there's a lot of uncertainty yet as far as the bean yield is concerned, and then you throw on top of that, when, if ever, will China resume, return and start buying US beans. This typically is the time of year when China will buy beans from The United States.

Greg Johnson: 08:12

We had a private sale to unknown this week. Was that China or was that somebody else? We don't know. So we're hopeful that, cooler heads prevail and that China will return and start buying US soybeans. Otherwise, we typically ship those beans in the fall.

Greg Johnson: 08:30

If we don't ship those beans in the fall, we are going to have quite a bit of a glut storage wise to try to store both the corn and the bean crop in the fall.

Todd Gleason: 08:39

So the last time we were in the midst of a trade war with China, they had an extenuating circumstance within their hog herd that allowed them not to purchase through that fall. Any at all, if I remember correctly, this was African swine fever. Are there any extenuating circumstances within China at the moment that you think would cause them to be able to do the same thing?

Greg Johnson: 09:06

I still think they'll cooler heads will prevail. They'll work out something. I think China does need to buy some from us. Obviously, they're going to buy as much as they can from Brazil first, with the bigger crop down there. But I don't think Brazil has enough to satisfy the Chinese demand.

Greg Johnson: 09:22

So I really do expect China to show up. It's just a question of whether they just absolutely buy the bare bones minimum or if they will buy a little bit more or something more along the lines of what they normally buy. So, you know, the trade negotiations continue to go on and we just don't know, but that that probably will go a long way towards telling us whether China does, in fact, buy beans and and if that if so, how many.

Todd Gleason: 09:49

Thank you much. We'll talk with you again next week.

Greg Johnson: 09:51

Alright. Thanks, Todd.

Todd Gleason: 09:53

That's Greg Johnson. He's with TGM, totalgrainmarketing.com, the elevator owned by FS here in Champaign County, Illinois. You're listening to the closing market report from Illinois. Public media. It is public radio for the farming world online on demand anytime you'd like to listen at willag.org, willag.0rg.

Todd Gleason: 10:14

There you'll find our daily agricultural programming to just click and play. That's right there at willag.org, or you can search it out in your favorite podcast applications. Look for the closing market report and commodity week. You'll also find the Illinois nutrient loss reduction podcast too. It's all at willag.org, willag.0rg, including information from the agricultural economist, the crop scientist, and the animal scientist here in the College of Agricultural Consumer and Environmental Sciences.

Todd Gleason: 11:04

Today, the Senate is legislation which would rescind two years worth of funding already allocated to public radio stations across the nation and government support for the United States Agency for International Development or USAID. I listened in this morning to see how the debate was running because, well, my entire career has been anchored in public service. It started at age 19 when I spent the summers broadcasting on the Illinois State Fair radio network from Springfield and to Coin, including the first year of AgriLand. Then I was hired in as student help in 1984 here at WILL on the University of Illinois campus. As the closing market report, this program was being developed.

Todd Gleason: 11:49

I've been here in one form or another ever since. So this debate about funding public radio, it's important to me. I reported on agriculture in the public interest across five different decades. Here's an excerpt from this morning's discussion from the senate floor. In it, you'll hear senate majority leader republican John Thune from South Dakota.

John Thune: 12:11

Reining in waste, fraud, and abuse in the federal government is a priority shared by president Trump and by senate Republicans. I appreciate all the work the administration has done in identifying wasteful spending. And now it's time for the senate to do its part to cut some of that waste out of the budget. It's a small but important step toward fiscal sanity that we all should be able to agree is long overdue. Mister president, two weeks ago, Republicans passed a historic bill.

Todd Gleason: 12:43

That opening remark, about thirty seconds long, was all the time John Thune spent on the legislation before the senate. The other six minutes extolled the One Big Beautiful Bill Act. Actually, a lot of it outlined the changes made to the agricultural programs. It's worth a listen. Thune did not mention the deal his senate colleague from South Dakota, republican Mike Rounds, made to find two years worth of alternative funding for tribal radio stations in his home state.

Todd Gleason: 13:12

The Republicans spent most of their time, at least those whom I watched, talking about the success of the one big beautiful bill rather than USAID or the corporation for public broadcasting. The Democrats, in no big surprise, did the opposite, extolling the merits of public broadcasting and USAID. Congress has until Friday to take a final vote on the legislation or it simply times out. That's unusual, but it's the way it works this time around. I'll be watching, and I suppose you will too.

Todd Gleason: 13:43

Either way, I'll be here tomorrow and Friday and Monday. Let's check-in on the global growing regions to see how the weather is impacting them. We're now joined by Drew Lerner. He's at World Weather Incorporated in Kansas City. Hi, Drew.

Todd Gleason: 14:17

Thanks for being with us today.

Drew Lerner: 14:18

Yeah. It's a beautiful day here, and we're we're anticipating some warmer days down the road, though.

Todd Gleason: 14:24

Tell me about those and the humidity that will come along with it.

Drew Lerner: 14:27

Yeah. You know, we've had we've had a really nice spring and early summer. Everyone would probably agree with that. There's a few extremes out there, but we've managed to keep the moisture profile fairly full in our soil. And so the bottom line is when we start heating up, we're gonna pull that moisture out into the air.

Drew Lerner: 14:45

And of course, that's going to make it pretty humid. So yeah, high heat indices are likely to be with us from the middle of next week through the following weekend, probably. We may see a little taste of that before then, but I think we're going to have a little bit milder temperature regime in the interim here. Not too bad in the near term, but we is going to get warm and humid. I think there's some folks that are a little concerned about whether this is going to become a persistent feature, but I don't think that will be the case.

Drew Lerner: 15:16

I think that our experience with high pressure and high humidity and warm temperatures will only be lasting a few days. And then we'll send the ridge that's responsible for all of that out to the west, should open the door again for some more seasonable temperatures and a little less humidity. But, you know, all those kind of strikes me as being a classic summer. You know, I think there's a tendency for the marketplace to get a little excited about the prospects of a little ridge of high pressure being around. But everything I've seen so far this spring and early summer sure smells like normal to me.

Drew Lerner: 15:55

And I think it still looks that way for within the next couple of weeks.

Todd Gleason: 15:59

If it's a classic summer, that means there will be downpours, I think, from time to time. I can remember quite vividly watching a downpour come across the field or more importantly being at the county or state fair and suddenly the skies just open up, but that will continue in places from time to time, I suppose.

Drew Lerner: 16:18

Yeah. Absolutely. Absolutely. We'll have our moments of, excuse me, very warm to hot conditions too. So but I don't think we're gonna see anything that's gonna be persistent for any great length of time.

Drew Lerner: 16:30

So a good mix and the bottom line is still gonna be favorable for crops.

Todd Gleason: 16:34

Let's check-in on some of the places that you have been watching. One of those is the Canadian Prairies. What are conditions like there today?

Drew Lerner: 16:42

You know, the majority of the west and southern portions of The Prairies are doing okay. Nobody in The Prairies necessarily is seeing ideal weather, maybe a few areas in Alberta. But the Northeast Part of Saskatchewan and much of Manitoba is really quite dry and there's some areas near The US border that are also in the same boat. And there's a big need for moisture in some of those drier biased areas. And here it is mid July.

Drew Lerner: 17:10

So we are running out of time for those folks. Their growing season's a lot shorter than ours. And so it's very, very important that they get a good drink of water soon. And it looks like that opportunity may show itself late this coming weekend. And again, later next week, while we are seeing the ridge of high pressure Park over parts of the Midwest, it should bring moisture into parts of Canada's prairies.

Drew Lerner: 17:36

And hopefully they'll get a couple of shots of energy coming into the area that'll tap into that moisture and help to create some rain. No matter what, they're not going to be out of the woods, but they need to get a good drink of water before the ridge returns, which is expected to occur at the end of the month. And so that'll be something worth watching for a while. Canada is not in the same level of criticalness, I guess, with dryness that they've been in past years, but there are certainly places up that way that need a good drink in order to prevent a disaster from evolving.

Todd Gleason: 18:12

Let's hop over to Europe and work our way from west to east, from France through Poland, Germany, maybe for the corn crop along the Black Sea area and then on towards China please.

Drew Lerner: 18:28

Yeah, we do have quite a bit of dryness that still remains in Western Europe, France in particular, but parts of The UK, Belgium, Netherlands, and Western Germany. All of those areas are really fighting some dryness has been ongoing since really January. And the heat that we had in late June and early July really impacted the crops in a pretty substantial manner. We were just looking at the vegetative health index just a little while ago today and a pretty dramatic decline in crop conditions from the June to the July 1. And we are not seeing large volumes of rain for Western Europe, but there will be an opportunity for rain as we go forward through this coming Friday through Sunday.

Drew Lerner: 19:14

And hopefully they'll get enough rain to buy them a little bit more time. But the moisture deficits and the long term water shortages are still going to be with them through the end of the summer. And I think August is probably going to get hot and dry again, at least one more time for the Western Europe. Eastern Europe for the most part is in fairly good shape. The exception is in that Lower Danube River Basin area in Southeastern Europe.

Drew Lerner: 19:39

And that area is also quite dry. They do a lot of irrigating in that area. So it's probably not as big of an issue as it might be in parts of Western Europe. But nonetheless, it is still very warm and dry with bias in that area and they do need rain. Recently, it's become quite dry in East Ukraine as well.

Drew Lerner: 19:57

And temperatures there this past weekend were in the nineties to near 100 degrees, and it's not going to rain over the next ten days from Eastern Ukraine through Russia's Southern region to Western Kazakhstan. Now this area is very important to a winter crop production region first of and this is going to be okay for that crop because it's harvest time. So that's not an issue, but there are a lot of spring cereals and spring grain and oil seeds that are produced in that same region. And they are going to be stressed in the unirrigated fields. So we're gonna keep an eye on that.

Drew Lerner: 20:32

They definitely need a drink of water and that is not coming for the next ten days for that area. Farther east, as you mentioned, for China, there's really not too much going on in China. That drought that they had earlier this spring is gone. There was a little bit of a return of dryness recently in East Central parts of China in the Yellow River Basin area again, but it is going to get whittled down a second time as we go forward through the next week to week and a half. So most of China is out of the woods at this point.

Drew Lerner: 21:04

They may have lost a little bit of production potential from the dryness earlier in the year, but I don't think it's going to have a big long term impact. And I should point out areas in between China and Europe in parts of India. The monsoon continues to perform really well except in the Far South of India where it's been fairly dry, but that area can plant later in the year and still do alright. So even India is not in too much trouble at this point.

Todd Gleason: 21:30

Hey. Thank you much. I appreciate it.

Drew Lerner: 21:32

You bet. Have a great day.

Todd Gleason: 21:33

Drew Lerner is with World Weather Incorporated in Kansas City. Joined us on this Wednesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world. I will remind you that yesterday, I hosted a Farm Doc Daily webinar about the changes in the one big beautiful bill and how they impact crop insurance and commodity programs. You can find that now online.

Todd Gleason: 22:01

Look for it at farmdocdaily.illinois.edu under the webinars archive section. However, it might be easier to simply look for it in YouTube. You can do that at youtube.com/@signfarmdoc. That's youtube.com/@farmdoc. That's the home page for Farm Doc Daily, and there you'll find not only webinar, but five minute farm docs, the closing mark report in commodity week as YouTube podcast, all kinds of things that come from the agricultural economist here on the Urbana Champaign campus of the U of I'm.

Todd Gleason: 22:39

On that note, you can always check out our website too, willag.org, willag.0rg. You'll find a running list of the articles that have been written by the crop scientist, the agricultural economist, and the animal scientist. There are a couple of articles by the ag economist about the one big beautiful bill and its impact on ag programming, and a new one by Boris Camilletti, a crop scientist about tar spot and Southern Ross too. I'm Todd Gleeson.