Jul 17 | Closing Market Report
From the Lend 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 Matt Bennett. He's at agmarket dot net. We'll return to a conversation I told you earlier in the week that we'd discuss in greater detail about nitrogen applications in soybean, and then we'll take up the weather forecast too.
Todd Gleason:We'll do that with Mike Tenora at T Storm Weather, all on this Thursday 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's services are made available to WILL by University of Illinois Extension. As we begin our program today, we take a moment to remember Mike Perine who passed yesterday at age 83, farm broadcaster from the state of Illinois and a member of the National Association of Farm Broadcasting Hall of Fame. December corn for the day settled at $4.21.
Todd Gleason:That was three lower. The March at $4.38 and a quarter down two and three quarters. September beans $10.12, up six and a quarter. November up six. At $10.26 and a half, the bean meal 30¢ higher.
Todd Gleason:The bean oil up a dollar 40. Soft red winter wheat was down 7 and a half cents. It settled at $5.54 a quarter in the December. The hard red December at $5.40, down 5 and a quarter cents. Live cattle futures were down 42 and a half, feeders 57 and a half lower, and lean hogs up a buck 90.
Todd Gleason:Matt Bennett from agmarket.net now joins us to take a look at the marketplace. Hi, Matt. Thanks for being with us today.
Matt Bennett:Yeah. Thanks for having me.
Todd Gleason:Corn down 3 to 4¢, and soybeans up 6 to 8 or thereabouts. What'd you make in the marketplace today?
Matt Bennett:Well, you know, this corn market, of course, first three days, we actually rallied. And, you know, it's the first time we've had a three day rally in a while. But, overall, you know, there's a lot of talk about, of course, some pollination issues, first of all. And, you know, high pressure ridge setting up here next week, I don't know if it's gonna quite get to us. But certainly to the Southwest of us, it looks to be excessively hot, you know, and you don't know if that thing's gonna keep moving to the east or if it's gonna set up in that area.
Matt Bennett:And so the trade, I think, which had basically been beaten down, as you know, for quite some time, the trade, I think some of the funds probably decided we better go ahead and cover some of these shorts over the last three days. And then you come in here today and the reality of the situation is, yeah, mine end up being awfully hot. But clearly, there's just multiple rounds of precipitation for a lot of folks. I I know in your neck of the woods, my neck of the woods, there's some really good opportunities for rainfall, you know, over the next several days. And if you could get through this pollination window, you know, in good form, it's gonna be really tough to get this market super excited, unless, you know, you get excessively hot, for your nighttime temperatures and, you know, don't give that plant a chance to shut down.
Todd Gleason:Is there any, real worries about pollination issues, the ones that we've heard? Are you hearing that from the industry, or is that just here and there and people looking for something to move the markets?
Matt Bennett:I I mean, I think that there's a fair amount of it, Todd. I don't know how much, but I don't know percentages. Clearly, whenever you get on social media and you see stuff like that, you gotta take it with a grain of salt. But at the same time, we have checked in with several growers that have, you know, witnessed pollination problems. Now, you know, what's the extent of it?
Matt Bennett:I really don't know. You know, you hear a few hybrids talked about where it's most prevalent, but at the same time, you know, as you maybe are alluding to, sometimes things get overblown in a big way. So, you know, overall, there could be some pollination problems here and there. That really doesn't take away from the fact that, you know, if there's one or two even fairly large scale type numbers, there's a lot of other folks in the Corn Belt that have looked at pretty much ideal weather conditions since they were able to get the crop on the ground. I know that doesn't go for everyone.
Matt Bennett:You know, there's some folks that have had just a horrific spring, but at the same time, I think several of us that were dry before are no longer dry, and we're sitting in pretty good shape as a whole.
Todd Gleason:Oftentimes you travel across the Corn Belt. Have you done that recently by vehicle and been able to see much of the Corn Belt?
Matt Bennett:Yeah. So last week, I actually drove over to Cedar Rapids, then back over to Indianapolis, and then I went out to the Ozarks. And so I saw a large section of the Corn Belt. Now I didn't get into the drier areas in Northern Illinois or Indiana. I stayed south of those just because of my route being the quickest.
Matt Bennett:So the route that I was on, to be honest, I just didn't see much in the way of for corn. Now, we did have several people that came to our meeting from those areas or that drove through, for instance, Northern Missouri, and there's definitely still some pockets that folks just continue to get shortchanged on moisture. But overall, I would have to say that 74% good to excellent is fairly true. You know, I've got to think that there's a lot of folks that are looking at, you know, all time records if mother nature cooperates. Now, that's a big if, you know.
Matt Bennett:We've still got really another solid probably four weeks to go on this corn crop for most folks to really feel good about it being in the bin, so to speak, as far as their yield's concerned. And then, of course, on soybeans, you've probably got at least a good six weeks before you can feel that way. But, overall, I think the crop's in really good shape.
Todd Gleason:Are you satisfied to stand aside the marketplace at this time, or is there action that needs to be taken by producers?
Matt Bennett:You know, the problem, Todd, is that if you get to looking at this, you know, you're looking at these corn in that four twenty, four twenty one level. And, you know, overall, that's not horrible. I think that if you could get a decent basis locked in with yields, know, if you can trust yourself to go ahead and peg it at something well above APH. And I think most producers that I talk to would feel comfortable with that. You you could maybe leg in the sun of it.
Matt Bennett:My biggest concern, though, is those bushels that have to go to town this fall. I do think storage will pay. You look a big carry in the market at store and you're corn at home. I think you could play the basis and carry game similar to the elevator and the way they handle it and really do well in those bushels at home. But the problem, of course, is delivering to the elevator.
Matt Bennett:We've got to assume, Todd, if we get as big a crop as what a lot of folks are suggesting and what you and I have seen, know, basis could be just ugly as could possibly be this fall. I don't want growers to have to haul in and just take a price. You know, clearly, they can do some commercial storage if they want. You know, but looking at the market right now, commercial storage is gonna eat up most of that carry. So they'd have to either bet on a basis appreciation and or, you know, a futures rally.
Todd Gleason:Thank you, Matt.
Matt Bennett:Oh, absolutely. Thanks for having me.
Todd Gleason:Matt Bennett is with agmarket.net. Now one note of action. The house is holding a final vote later today to eliminate federal funding for public media stations like this one, WILL AM five eighty, where this program originates. It's your last chance today to share your opinion. You can go to willag.org to learn how.
Todd Gleason:You're listening to the closing market report from Illinois Public Media. It's public radio for the farming world online on demand anytime you'd like to hear us at willag.0rg. You'll find a list of articles penned by the crop scientists, the animal scientists, the ag economist from the University of Illinois. It includes one titled Nitrogen Fertilizer and Soybean Yield. I told you earlier in the week that we would spend some more time with Giovanni Prezafontes discussing it.
Todd Gleason:That comes up next. Gio Prezafontes now joins us. He's an agronomist here on the Urbana Champaign campus of the University of Illinois and with Extension. Thank you, Gio, for taking some time today. You, along with John Jones and Emerson Nafsig, are all agronomists in the Department of Crop Sciences, have penned an article, I believe producers across the Midwest, certainly in Illinois, will find of interest related to nitrogen and soybeans.
Todd Gleason:Can you lay out for me, kind of what you did and why in a series of field trials over three years?
Giovani Preza Fontes:Sure. Yeah. First of all, thanks for having me, Todd. Yeah. That was a a work that was initiated by doctor Neff Sigr back in 2014, and I think that it's valid until today because there's still an ongoing question about, nitrogen fertilizer and soybean yield responses.
Giovani Preza Fontes:And I think the idea comes because soybean requires a lot of nitrogen. Right? So soybean has seed that has high protein content. So roughly, we think that they need about five 4.5 to almost five pounds of nitrogen per bushel, and they remove about 3.5 pounds of nitrogen with grain. So if you do a quick math, right, a 60 bushel soybean will require about two seventy pounds of nitrogen per acre.
Giovani Preza Fontes:And it's not unusual to see fields yielding 80 bushels or more. So for those situations soybeans will require more than three fifty pounds of nitrogen per acre.
Todd Gleason:So in this case producers hearing this and probably thinking about it over the last decade have come to a conclusion that maybe additional nitrogen, as in the case for corn, might be needed to make sure that the highest yields are available. That's what you all set out to do and that Emerson, put forth in this trial. Can you explain how the trial was set up?
Giovani Preza Fontes:So, yeah, we did this trial over three years between 2014 and 2017. We had a total of nine locations over the three year study period, and we have different locations across the straight the state that provide us a good range of soil environment. So we had locations at our old experiment station at Brownstown, and then we also had locations on the experiment stations here on campus at the South Farm in near Malmouth. We also had one more location at near Chilikothi in Peoria County. That was a farmer's field that we collaborated with.
Giovani Preza Fontes:And, again, all of those locations spanning good range of texture soils with low organic matter, for example, at the Chikothi and Brownstown sides, to up to very productive fine texture soils, our highly productive mollisols with higher organic percent matter percentage at Monmouth and Urbana.
Todd Gleason:I I wanna divide these into two sections because there was really only one place where nitrogen over the trial period, the additional nitrogen paid off. That was on the soils near Chillicothe. They were also irrigated and really pretty poor soils. Can you tell me about conditions there and how things transpired?
Giovani Preza Fontes:Yeah, like you said, I think that Chillicothe was the site that we consistently saw substantial yield responses with applied nitrogen over the three year period. So soils that chili coffee was, you know, coarse textured soils, they were loam and sandy loam soils with about 2% organic matter. We had a center pivot irrigation where we provide more water through irrigation as needed. And if you look at the data there, in 2015 and 2016, we saw a substantial yield increase when we applied nitrogen at planting. We saw at about 3538% yield increase compared to our untreated control in both years, and those are significant.
Giovani Preza Fontes:They they correspond to almost 20 to 22 bushels more per acre when we compare to our control.
Todd Gleason:So now we have producers excited this can work. However, Urbana, Monmouth, and Brownstown were not the same as those very poor soils at Chillicothe, though Brownstown soils weren't particularly good either.
Giovani Preza Fontes:Yeah. It was interesting to see that yields were quite good at Brownstown given the soil. It's still a silt long seasony soil series with, you know, about a 1.7% organic matter, but we don't expect that soils to yield much. But we were surprised to see that yields were were on average. Our untreated control at Brown Stown yielded about 61 bushels per acre, which is, I would say, very good for that region.
Giovani Preza Fontes:So, yeah, we didn't see any response when we applied nitrogen either at planting or either time during reproductive stages where we applied nitrogen at a single application at R1, R3, or R5. And when we look at our more productive soils like in Mammoth and Urbana, we also didn't see any yield response when we applied nitrogen, a single application, either at planting or during any reproductive stages like we did.
Todd Gleason:So what's the takeaway for this as it's related to farmers across the state of Illinois and making additional nitrogen applications to soybean. Because the one thing we didn't talk about, I think, and there are two takeaways. If you're gonna do it, I suppose, you need it it appears nitrogen up front as opposed to in season might be better, but across the board, maybe not economically worthwhile?
Giovani Preza Fontes:Yeah. Overall, our results didn't support because let me go back a little bit. When we think about nitrogen responses versus yield level, right, going back to the basics where all of this begins when we think about high yielding soybeans because they require more nitrogen, I think there's a common perception that those high yielding soybeans fields will likely to respond more to supplemental nitrogen. And and that was not the case, at least under the conditions of our study. We didn't our data does not support that assumption that high yielding soybeans will respond more to nitrogen fertilizer.
Giovani Preza Fontes: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 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, you think about the soil our soils, our molysoles in Central And Northern Illinois, I mean, 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 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 Malma Field, we had years that we had 80 to 90 bushel soybean per acre. So, yes, they do require more nitrogen, but, 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:Hey, Gio. Thank you much. I appreciate you taking the time with us for the day.
Giovani Preza Fontes:Thank you, Todd. Appreciate it.
Todd Gleason:Giovanni Preza Fontes is an agronomist on the Urbana Champaign campus of the University of Illinois. He works with Extension along with his colleagues, John Jones and Emerson Nafziger. They reviewed a nitrogen study that was run between 2014 and 2017. It's actually a three year study for most of the farms, but it spanned that four year period. They were looking at whether high yielding soybeans that above 60 bushels to the acre would benefit from nitrogen applications.
Todd Gleason:The answer with just one exception is no. That exception took place on sandy irrigated soils near Chillicothe just north of Peoria. You may find the article penned by Giovanni Prezefontes, John Jones, and Emerson Nafziger on our website now look for the headline Nitrogen fertilizer: Soybean Yield. Let's turn our attention now to the global growing regions. We're joined by Mike Tenora.
Todd Gleason:He is at t storm weather. That's tstorm.net. Thank you, Mike, for being with us. You serve, of course, as the CEO and president of the company there. I'd like to talk to you a little bit about the this week and what the weather looks like and then what the following week looks like in The United States, particularly because there appears to be some heat that may be building in.
Todd Gleason:We can get to that. But before that, what happens over the next three to five days?
Mike Tannura:Well, it's going to be cool and somewhat stormy through early next week. We have a very cool air mass in place across the Dakotas and into the Northwest Corn Belt, and that's expanding southward as we speak. This will lead the northern half to two thirds of US corn and soybeans normal to cool over the next several days. And so that in and of itself doesn't lead to too many concerns. On top of that, we have a favorable setup for thunderstorm clusters coming up.
Mike Tannura:Now we'll see a few storms over the next two days in the Southern Corn Belt, but the thing that we're more noted, more focused on is what's coming up this weekend and early next week. We have this cool air mass in place, but that's going to attempt to retreat, and a retreating air mass like that with waves of energy nearby is a pretty good recipe for thunderstorm clusters. So we think there's going to be some heavy clusters in the key corn and soybean region starting on Saturday and then continuing through Monday. So, Todd, some pretty good rains are coming up. And at this point in time, it looks like the best rains are going to focus on Illinois and Indiana, which is really the only dry spot in the entire Central US.
Todd Gleason:Now then next week, there's been a lot of talk about heat building in and the humidity sticking around. Can you tell me what you're watching and what issues and what parts of the Corn Belt might be at issue?
Mike Tannura:Well, there is a heat wave coming up. It's just a matter of how long it's going to last and exactly where it's going to be, which, of course, are very important questions. But at this point, it looks like upper level high pressure is going to set up around Arkansas early next week, and that will then expand westward and envelop that region plus the Central And Southern Plains later next week. So pretty much an arc from Colorado and Kansas through Arkansas and into that whole area of the Mid South is going to turn pretty hot and also dry out a lot as you move through next week. Now to the immediate north, this is where there's a lot of uncertainty.
Mike Tannura:Now on the one hand, if that upper level high were to really get going, that's how you get a nice big heat wave in the Corn Belt. And there are some hints of that on these various models. On the other hand, there's a lot of soil moisture in place. It's been raining cats and dogs in most areas over the last couple of months. And you put a hot air mass on top of wet soils, and that's a recipe for high humidities, and that makes it easier for thunderstorms to develop than it would be in another in a more normal situation where you had average soil moisture.
Mike Tannura:So we think there's going to be some pretty big thunderstorm clusters with this setup. Now any one of those has the ability to pull cooler air southward and disrupt what would otherwise be a notable heat wave. And we think that that's something that needs to be respected. So we're basically telling our clients that, look, it's going to be hot south, but there's going to be some pretty good rains north. There's an area in between that's kind of in that transition zone, but they don't really need any rain, especially if the forecast verifies over the next few days.
Mike Tannura:And there should be some cool air intrusions at least once or twice later this month. So overall, there are some weather concerns developing, but it's going to take a lot for this to really turn into a big story. And basically, it's going to have to turn hot, turn dry, and it's gonna have to blast right into August because it's been so good at this point in time.
Todd Gleason:Hey. Thank you much. I appreciate it. We'll talk with you again next week.
Mike Tannura:Yeah. Sounds great, Ted.
Todd Gleason:That's Mike Tanura. He is with t storm weather. That's tstorm.net online. He serves as the president and CEO of the company. You've been listening, of course, to the closing market report on this Thursday afternoon.
Todd Gleason:We'll record our commodity week program later and then you can hear it up on our website at willag.org by about 06:00 this evening. And tomorrow on our home station, you'll hear all of the program, a portion of it probably, on many of these radio stations, and most of them will carry it over the weekend as well. Thank you for listening to the agricultural programming that comes to you from Illinois public media. It is public radio for the farming world. I'm University of Illinois Extension's Todd Gleason.
