Jun 16 | Closing Market Report
From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report. It is the June 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Kurt Kimmel. He's at agmarket dot net.
Todd Gleason:We'll hear from Ben Brown, agricultural economist with the Food and Agricultural Policy Research Institute at the University of Missouri and extension there. We'll discuss last Friday's US EPARBO Renewable Volumes Obligation Announcement. And then we'll turn our attention to the weather forecast with Mark Russo as we close out our time together. He's with Everstream Analytics and it all happens right here on this Monday edition of the closing market report from Illinois Public Media. Todd Gleason services are made available to WILL by University of Illinois Extension.
Todd Gleason:July corn today at 08:34 and three quarters finished nine and three quarters of a cent lower on the afternoon. The September at four nineteen and three quarters down eight and three quarters and December eight lower at four thirty five. July beans unchanged. A settlement price at $10.69 and three quarters, August 1071 and three quarters up two and three quarters. In November finished five and three quarters of a cent higher at $10.60 and a half cents.
Todd Gleason:Bean mule futures down $8.20 at $283.70 and the bean oil for the day at $55.11 up four dollars and fifty cents. Wheat futures, the soft red at $5.36 and a half down 7 and a quarter cents. The hard red at $5.36, 4 and 3 quarters of a cent lower. Live cattle futures finished $3.10 higher. Feeders were up $3.80 and lean hogs up $2.55.
Todd Gleason:Crude oil down a dollar and a nickel at $70.25 at this hour and gasoline on the wholesale price just about seven hundredths lower at $2.20 and 5 tenths of a tenths a cent. Actually, that's seven tenths lower, not 7 hundreds. We're now joined by Kurt Kimmel. He's at agmarket.net. Hi, Kurt.
Todd Gleason:Thanks much for being with us. We're watching lots of things happening in the marketplace, Iran, Israel, the, EPA announcements from last Friday. Where would you like to start?
Curt Kimmel:Oh, boy. Yeah. Where do you start? A lot of optimism there last Friday with, EPA announcements, renewable green. There's some other moving parts, small refinery, numbers are still to be worked on.
Curt Kimmel:But, overall, the market did hold in there with that news. It's encouraging a little longer term looking at a situation where, everybody's looking for weather to help the market, but this announcement definitely, it gave the market a little bit shot in the arm. Today, beans held in there, corn reached some resistance and backed down the support. But on the bean sector, the crush came in a 192.8, a little bit below the trade estimate, but we're above last month, a 190, and last year's a 183,000,000 bushels being crushed. These crushed numbers are gonna go up if we see this legislation, follow through in some of these numbers, put in place.
Curt Kimmel:Bean oil stocks, 1,300,000,000. Trade is looking for about 1.4. Last month, 1.5. Last year, 1.7. These the today's number, one three seven, is, lower, which indicates lower bean oil stocks.
Curt Kimmel:So bean oil is expected to stay fairly, supportive here as we move forward. The thing is when you look at the bean oil prices with this, optimism we saw Friday here, that's more longer term. We gotta get things set in stone for the most part, and a lot of this is gonna kick in as we go into next year, and the front end is fairly strong compared to the back end, so for some reason, the urgency is up front to be a buyer here, getting some inventory bought, which is is welcome. So we kinda saw buying beans, selling corn, buying beans, selling wheat on the spread today, Todd, as the market kinda waits for the next bit of news, which is, of course, weather, crop conditions, and and and a lot of other things too.
Todd Gleason:Yeah. So we have crop conditions. We have events happening on the global stage. Which of those two have you been watching today, or both of them, I suppose?
Curt Kimmel:Oh, you know, I just don't know which way to look anymore. The crop conditions report is expected to improve about 1% as a nation. Corn is expected to come in 72% good to excellent versus 71% last week and 72% last year, so we're at last year's, conditions. That being said, a year ago we had corn carry out 2,200,000,000 bushels, now the old crop, which is July, same crop years down to 1.3, and we're about 90¢ lower. So, you know, we've got to have conditions erode fairly quickly here to the last bushel for, the market to get excited because we've got a considerable amount of less carryout than we did a year ago.
Curt Kimmel:Bean conditions expected to be 69% good to excellent versus 68% last week, 70% a year ago. The breakdown kind of central belt in through here, we're in fairly good shape. You go west, they've received some rains to give them short term relief. The key is the Eastern Corn Belt there, where they've been struggling tremendously here most of the spring.
Todd Gleason:So we have a Juneteenth holiday that's on Thursday of this week. There will not be trade on that day. Resumption of trade on Friday and then we come back up within another two weeks. We're hit the July 4 holiday too. So should be a busy end of the month.
Todd Gleason:Including that acreage number, have you been thinking about it? And the grain stocks figure too.
Curt Kimmel:Oh, boy. Yes. It's it's one thing after another. Come back from Juneteenth, Friday's first day of summer. So those, you know, watching the sign of the moon, will watch market action going into Friday and coming out next week.
Curt Kimmel:Acres retort continue to, look or hear a few more acres there in the Western Belt might offset maybe some prevent plant here in the Eastern Belt where it's been a little little too too wet. So, you know, a million acres here, half million there, that that is quite a few acres, but the main focus once we get past end of the month reports here, of course, will be what type of yield do put on on the crop, and that's gonna be debated clear into, this fall.
Todd Gleason:Hey. Thank you much. I appreciate you taking the time with us today.
Curt Kimmel:Very good, Todd. Take care.
Todd Gleason:You too. Kurt Kimmel is with agmarket.net, joined us here on this Monday edition of the closing market report from Illinois Public Media. You can search out the closing market report in your favorite podcast applications by name or look it up at willag.0rg. Ben Brown, agricultural economist at University of Missouri with FAPRI, the Food and Agricultural Policy Research Institute and Extension there now joins us to take up a broader look at the agricultural marketplace. Hi, Ben.
Todd Gleason:Thank you for being with us. There's a lot of ground to cover. A WASDE last week. There's the Iran, Israel issues with oil. But right now, I'd like you to take up, the US EPA's announcement of the RVOs.
Todd Gleason:That's the renewable volume obligations referencing biofuels. Those were released Friday. What did you make of them?
Ben Brown:Sure. And I'm gonna tie two of the things you just mentioned together. So the WASDE report that was out the the end of last week made some changes in the soy on the soybean oil side. It was really the only changes in the soybean complex, but they moved 200,000,000 pounds of soybean oil use from from domestic use, the biofuels, to the export market, which I think, you know, is justified. It makes a lot of sense.
Ben Brown:And then, notably, if you look ahead to next year or the new marketing year, USDA estimated a £1,000,000,000 difference in the new marketing year of soybean oil use relative to the the current marketing year. And as I was looking at that, I was like, the only way we're gonna get there is if we see some policy changes, and that's what we got on Friday. So, you know, as you mentioned, EPA came out with their proposed renewable volume obligations on Friday that I think now put us on a path to hit USDA's targets, that £1,000,000,000 increase for the new marketing year. You know, the move came in higher than what many people in the industry had expected. You know, I feel like soybean oil has just been on a up and down roller coaster here over the last, I don't know, six six, seven weeks.
Ben Brown:We had a lot of built up excitement that rallied the soybean oil market, then it cooled off. And now now we've seen a very favorable market or a bullish market for the soybean oil. Soybean oil was up their daily limit on Friday. That helped pull up the soybean market as well, gave it a little bit of life to it. And, you know, I think this really is a long well, at least it's a multiyear, you know, step in in a domestic demand increase picture to help support soybean prices.
Ben Brown:So, it'll it'll go through a comment period, and then we'll have a final ruling. But so this is just step one of the the process, but, you always gotta start somewhere, and it's always nice to see, you know, the the higher targets in the initial step.
Todd Gleason:So this is codified in law relatively speaking as it's related to the RFS, renewable fuels, standard. However, it is an advanced biofuel. Meaning that's how it's codified in law, which that law put into place started the ethanol industry build out. Is this similar in that function, or is it different? I I it doesn't feel as if it's the same as what that ethanol build up might have been, but I might be misconstruing it.
Ben Brown:Well, there's just there's there's multiple buckets, and and, you know, the we have the conventional ethanol bucket, which, you know, is the 15,000,000,000 gallons that that everybody always talks about. Of course, it's it doesn't ever really end up being 15,000,000,000 gallons for a, or it hasn't for a while due to a a variety of reasons, and and it sometimes can get misunderstood. But, you when we think about this advanced biofuel bucket, you know, there's there's pathways for other fuels, not just fuels used from soybean oil to to compete in that space, but it really has been, seen as a driver of the vegetable oils, namely soybean oil here in The United States, but canola oil and used cooking oil and tallow, other other sources as well. And there are a couple of, like, nuances that make this a little different than the ethanol build out. But but broadly speaking, this is gonna be supportive of the investments that we've seen in in the soybean fresh space here the last couple of years.
Ben Brown:You know, I I do think, you know, as a soybean oil processor or a soybean oil producer, this was about as friendly of an announcement as you could have asked for because not only did it increase the volumes, but then we also saw some changes on on the feedstock source. So, like, you know, fuels that are made with with international feedstocks, so that'd be used cooking oil or or even renewable diesel produced overseas, you know, are gonna get half the RIN value moving forward. That that was seen as a as a nice positive step. The one the one area where it was maybe a little bit of a oh, I don't wanna call it a disappointment because that's probably understating, or it's it's probably, you know, miss mischaracterizing, but I don't know how else to say it. We thought we were gonna get three years, twenty six through 28 of of rulings.
Ben Brown:We only ended up getting two because the EPA quoted in their release saying that they felt like the market is just changing enough that to go out that far would would kinda maybe potentially create some some situations that were undesirable. So they only did two years, '26 and '27. And and that that can be, you know, good and bad. Right? Like, if you get a policy that that's favorable, you want it as long as you can possibly get it.
Ben Brown:If if you get a policy that's unfavorable, you want it short so you can have a chance in the next year or two to to rework it. So this was favorable. It is two years of a proposal, but like I said, I think it it was about as friendly of a report as what soybean processors and and soybean producers could have asked for.
Todd Gleason:Am I right that this is a renewable diesel function?
Ben Brown:Yeah. So, I mean, it's it's renewable diesel, both from from the biomass based diesel component. You know, this this it's it's using soybean oil. So just like the old, you know, the traditional bio biodiesel, right, that use soybean oil, renewable diesel uses vegetable oils, as well, and, of course, there is pathways for for ethanol and the sustainable aviation fuel as well. But, frankly, this is this is probably, more seen as renewable diesel category than that at this point.
Ben Brown:But
Todd Gleason:Right. And and so it it is a way that brought both ag and oil industry people together on the same space.
Ben Brown:Yeah. So there was, you know, there was a coalition as I talked a couple you know, at the beginning here just, you know, seven weeks ago or eight weeks ago, whenever it was, and maybe I'm losing track of time. It was longer than that. But, you know, the the two industries came together and and made proposals, and that was seen as a significant kind of achievement because, you know, those were two industries that fought a lot for a long period of time, you know, in the years leading up to this, and and they made proposals. Now these these proposed requirements EPA released on Friday aren't quite as strong as that, but they're certainly better than what the industry expectations were heading into the report.
Ben Brown:So
Todd Gleason:Do we have capacity within the soybean oil processing industry to do what US EPA has asked?
Ben Brown:Yes. I I think so. And and everything would indicate that that is that is where we're at, and this has kind of been the the argument from the ag industry, for a few years now is that the the requirements did not match the the capacity that the industry had built, and that it was there and and the the policy needed to match the the infrastructure. And so, yeah, I you know, that was that was part of the reason why I think the oil industry and the the ag industry was able to come to their their compromise or their proposal, you know, a few few months ago was was based on that the infrastructure was there and and that the the, you know, the requirements where you create an undue burden on on, you know, on artificial shelf that that would whack the market or make it out of line, that this was something that was very possible, very doable, very quickly.
Todd Gleason:Does it have a regional impact? For instance, Minnesota, North Dakota, possibly Ohio, parts of Northwestern Indiana?
Ben Brown:Yeah. So I think, you know, there there is areas where, you know, there is more soybean crush capacity, and and that'll have a pull on on soybean basis as as well and and provide an opportunity there. But we've seen futures markets react as well, which is, you know, supportive of the entire, you know, Midwest. And, so I I do think that, yes, you will see some some regional basis pulls, but, I do think that this is this is something that every soybean producer out there can can see some some support from.
Todd Gleason:So it will impact this growing season?
Ben Brown:Yeah. I think, so, you know, USDA has decreased soybean oil consumption for our current marketing year downward a couple of times, and there's there's been justification for that. You know, even even in the monthly crush numbers, we've had a couple of months where they just haven't been as strong as what we've historically seen them. I I would remind people that, you know, when the marketing year started last year when USDA first released their balance sheets last year, USDA keeps current policy in place over the long period or, you know, in the long run. And the bio blenders credit tax credit, that expired in January was still a, still a policy then.
Ben Brown:And and then that lapsed in January, now we're six months or five and a half months past that. And, we haven't seen a renewal, of that. And, of course, congress's intention is to replace that bio based or bioblenders tax credit with, you know, some some renewed or different policy, 45 c and other things, and and we haven't gotten that through, yet or, you know, there's not a lot of clarity. There's language, but, you know, it's not official, so it's it's still unclear. And that that's kind of delayed, I think, some of the ramp up that we've seen in the the industry, and that's been supported in the last couple of months of of soybean oil production here in The United States.
Ben Brown:And and we've seen a lot of soybean oil in the export market. India, for instance, is is really become a a big buyer of US soybean oil in the international space. The expectation is that there'll be a big buyer again in the new marketing year, and and, you know, that's that's kinda helped make up for for some of the lack of the use in the domestic market. But like I said, USDA isn't trying to predict policy. They just take it into into consideration.
Ben Brown:And and I think they saw that we had the infrastructure and the capacity to increase domestic soybean oil use. And and I think, you know, when the report came out, I thought that was a little optimistic without the policy clarity, and and then the policy clarity came. And and so now I think that that might be pretty pretty close to to what we could see in the next year.
Todd Gleason:Thank you, Ben. Ben Brown is an agricultural economist with the University of Missouri Extension and FAPRI, the Food and Agricultural Policy Research Institute. Let's take a look at the weather forecast now with Mark Russo. He's at Everstream Analytics. Hello, Mark.
Todd Gleason:Thanks for being with us. I'd like to cover pretty in-depth the Midwest, though it appears to me it's in really pretty good shape. Can you give me an idea how things have progressed so far this season? Then we can talk about what the forecast looks like.
Mark Russo:Yeah. Overall, much of, well, the spring was on the drier side, although, except that it's that was more so in the western part of the belt versus the eastern part of the belt. But as we've moved into June, we've seen more areas receive normal to above normal rainfall. There still are some dry pockets in and around Southern Iowa into Northern Illinois, parts of Southern Wisconsin. But outside of those areas.
Mark Russo:And I guess the Northeastern North Dakota as well as one of those areas that have at least received below normal rainfall this month. That looks like it's now starting to change here with the pattern.
Todd Gleason:So to change that they'll be getting rainfall, you mean?
Mark Russo:Yes. The pattern here this weekend, next week is looking very active across much of the Corn Belt, and that's especially true in the Western half of the Corn Belt all the way up into the Upper Midwest, even parts of Canada. And the Canadian Prairies are looking more active compared to what they have been. So those dry areas have really good opportunities to improve with this active pattern.
Todd Gleason:Is that a ring of fire function or some other weather phenomenon?
Mark Russo:That is being driven by the movement of the ridge of high pressure, which right now is over the Desert Southwest or 4 Corners area. It is going to be moving eastward and by well, over the upcoming weekend, it is gonna be centered over the Southeastern part of the country. But since it's centered Southeast, yeah, north of there, it will be pretty active, and that's aligned here across the Midwest. That ridge over time then late next week and beyond looks to start shifting back westward again, but that still looks to keep the Midwest in an active zone. So overall, it's an active pattern here.
Mark Russo:I will also add that temperatures are gonna be heating up quite a bit, with the region of high pressure influencing the Midwest more. But even with the heat, again, it's it's gonna be pretty active. Lots of thunderstorms, even some, you know, severe weather at times here in the Midwest.
Todd Gleason:Harvest is underway in Kansas in the hard red winter wheat growing regions. What conditions are they working under?
Mark Russo:Yeah. Not the greatest conditions in recent weeks given this active pattern across the plains. Lots of severe weather, heavy rainfall in parts of Kansas and Oklahoma and the Texas Panhandle. Things are improving, but gradually over the next couple of weeks. This week specifically is going to be drier compared to what it has been, but it's not going to be totally dry.
Mark Russo:And approximately a little over a third of the belt of the Plains Hard Red Belt will pick up significant rainfall. Next week looks even a little bit drier compared to this week. So it's not an abrupt turnaround, but things are gradually improving for harvest progress there in the Central And Southern Plains.
Todd Gleason:Anything of interest or concern in Europe that we should be watching?
Mark Russo:Yes. Concern is increasing for summer crops in Europe, Southeast Europe, which currently has a very low soil moisture across that area. Over the next couple of weeks, significant heat is building into much of Europe, and rainfall will be below normal. So soil moisture is gonna be decreasing as crop stress increases. Right now, at least the biggest concern is in the Southeast, but have to watch, you know, does more of Europe trend even hotter and drier as we move into the key month of July?
Curt Kimmel:Thank you very much. I appreciate it. You're welcome, Todd.
Todd Gleason:Mark Russo is with Avverse Stream Analytics joined us on this Monday edition of the closing market report. It came to you from Illinois Public Media.
Curt Kimmel:It's
Todd Gleason:public radio for the farming world online on demand at willag.org. I'm Illinois Extension's Todd Gleason.
