Jun 17 | Closing Market Report
From the land grant university in Urbana Champaign, Illinois. This is the closing market report at June 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Blohm at totalfarmmarketing.com. She's in West Bend, Wisconsin.
Todd Gleason:Dave Chatterton from Strategic Farm Marketing will be here to go through the agricultural energies. We'll talk about the 50¢ change in the price of diesel month over month, go through the RVOs and the E15 announcements. Then we'll turn our attention to the weather forecast too as we wrap up our time together with Don Day. He's at Day Weather in Cheyenne, Wyoming. All on this Tuesday edition of the closing market report from Illinois Public Media.
Todd Gleason:Is public radio for the farming world online on demand at willag.0rg. Yesterday afternoon, the United States Department of Agriculture released the weekly crop progress report. It shows 59% of the corn crop around the nation is in good condition, 13% in excellent condition. That's up one percentage point in those two categories from the previous week. 98% of the soybeans have now been planted, 96% is the five year average, and 84% of that crop has emerged.
Todd Gleason:It's said to be in 56% good and 10% excellent condition. That's down two percentage points from those two categories last week, both in the good category. Turning our attention to the winter wheat, 93% of the crop is now headed and 10% of crop has been harvested. The rolling five year average for harvest of winter wheat is 16% the condition of the crop, 45% good, 7% excellent. Both of those categories are down one percentage point respectively.
Todd Gleason:Corn futures in Chicago, three lower to four higher for the day. Soybeans up four to seven, and wheat futures were up 11 to 13¢ on this Tuesday afternoon. Naomi Blome from totalfarmmarketing.com out of West Bend, Wisconsin now joins us to discuss the marketplace. Hi, Naomi. Thanks for being with us on a Tuesday again.
Todd Gleason:Can you give me your assessment of soybean oil at this point? The impact potential impact of RVO. I know there's been some impact of the announcement, but what do you think it really means to soybeans and the products, oil and meal?
Naomi Blohm:Well, it's definitely welcome news, good news that we had from Friday. My opinion is that in the shorter term, it's not, like, absolutely bullish for the crop that's growing in your fields right now, but is definitely supportive for 2026 and 2027 as far as potential for new demand. Now the next question is, you know, this is great. It's new demand. It's supportive for the market.
Naomi Blohm:But in the end, does all it do is offset potential demand loss from exports to China? That's the question. We're still looking to balance that. But for the most part, that demand definitely welcomed. It's been supportive for bean oil prices, and it's been supportive for soybeans.
Naomi Blohm:Beans have rallied about 50¢ since that announcement has been released. And now very important to know, the soybean futures prices are up near some major overhead resistance, the highs almost from back in February. So this is a big price point to have any reason to get through this resistance area. It would take, further bullish news either from the conflict in The Middle East, or it would have to be potentially a weather event. So just be aware of that.
Todd Gleason:Are you advising or talking to producers about making catch up sales if they're behind? And I don't know what behind means at this point.
Naomi Blohm:Yes. Old crop and even starting with new crop, just because there's also a seasonal tendency for soybeans to now correct a little bit lower into the last couple weeks of June, so that might be something that we see. And, definitely getting some sales made for the old crop, getting things in place for some new crop sales. This is the best price you've had since February.
Todd Gleason:On the corn side of the ledger, for that which you do not have storage on farm, what are your suggestions?
Naomi Blohm:Well, corn is just in such a conundrum right now. The funds are just being big bullies and pushing the markets lower. You know, we've talked about how the old crop ending stocks are friendly, but the funds just think that because the Brazil corn crop is good enough and it's getting harvested right now, that the world will have enough corn until The United States gets to our harvest then in late September, October. So that mentality is weighing on the market. And something to just really be aware of on the new crop corn is that the funds are short about a 160,000 contracts right now.
Naomi Blohm:If there is no weather events in July, we might see the funds continue to push the market lower. Last year, when they shorted the market, they got to almost 350,000 contracts short by the July into early August. And that resulted in December corn prices actually creeping below that $4 area. So we are at $4.38 today, so it might I know it's not attractive. I know it's not.
Naomi Blohm:But it might be a place to make some sales because if the funds continue on this selling spree, the price could get worse before it has potential to get better. Now, again, what could make corn rally? If the conflict in The Middle East really flares up and if crude oil goes above $80 a barrel, that could take corn with it, or it would have to be a forecast in July that goes to a 100 degrees and no rain for the whole month. So we're kind of at this conundrum, seasonally, starting after the Juneteenth holiday and after Father's Day, that corn market has a tendency to kinda tip over lower. So just be mindful of that.
Todd Gleason:It would seem unlikely to me that the funds, the black box trading, would not understand that the exports from Brazil, and most of that comes from this safrinha or second corn crop, are expected to be lower than they have been in previous years. Does that not need to come into the world marketplace? Meaning, is is there just a lack of demand that's balancing that part of the the crop that's not coming out of Brazil, out in the world marketplace?
Naomi Blohm:Yeah. I'm glad you brought up that point because Brazil is starting to use more corn domestically at home. They will most likely be exporting, you know, some of this corn that they're harvesting right now. And and I feel like the the traders are ignoring that little nugget of news at the moment because they would rather focus on this potential for a large crop coming. I feel like the computer algorithms are are still convinced that this one eighty one yield is is likely until proven otherwise.
Naomi Blohm:And so I'm, of course, not aware of how they have their computer algorithms set up, but it might be a dramatic weather shift that finally gets them to exit those positions or something in the outside markets that gets them to let up on this sell pressure.
Todd Gleason:What have you been watching in the livestock sector this week?
Naomi Blohm:Well, we had quite the sell off today in live cattle and feeder cattle. The sell off just kinda started on a technical selling once we went below yesterday's low price, and it just continued to escalate after that. The box beef values at midday were supportive, and we finally got, the pre report estimates for the cattle on feed report, which is gonna be on Friday afternoon. The on feed average estimate, 99%. The placement average estimate at 94.9 with a range of estimates where 88 is on the low side, 97.7 on the high end, and the marketed number at 90.3 for the average estimate.
Naomi Blohm:So we might also see some positions squaring ahead of that cattle on feed report. We're gonna be approaching some major moving averages here that for the past six months have been always a major support area. Once they are tested, the market has rebounded higher past that. But we are kind of in that window where we're starting to wonder if we are wrapping up with our holiday demand with Father's Day behind us and fourth of July approaching rapidly. So keep an eye on this cattle market.
Naomi Blohm:It's it's likely gonna be volatile for the rest of this week and into early next week.
Todd Gleason:Thank you much, Naomi. We'll talk to you again soon.
Naomi Blohm:Alright. Thank you.
Todd Gleason:That's Naomi Blohm. She is with totalfarmmarketing.com.
Todd Gleason:Up next, Rod Bain from USDA will review some of the actions the Trump administration has taken so far this year as it's related to biofuels. This includes the US EPA's announcement on RVOs or renewable volume obligations that happened last week, and he'll take up E15 or year round ethanol usage. Those announcements came earlier in the year.
Rod Bain:It has been a significant two months of development for the nation's renewable fuels industry in its effort to increase production and use of ethanol and other biofuels. A visit with farm broadcasters this past May at USDA headquarters gave Environmental Protection Agency Administrator Lee Zeldin opportunity to talk about a just then announced policy.
Lee Zeldin:The big deadline that was upon us was May 1 as it relates to E15.
Rod Bain:The emergency fuel waiver issued by EPA prior to May 1 allows for sale of E15 blended fuels, fuels with 15% or more ethanol nationwide. During that same visit with National Association of Farm Broadcasting Representatives, the EPA administrator owed it the next important consideration regarding renewable fuels.
Lee Zeldin:Towards making a decision on the path forward on RVOs, but that's a decision to be made imminently.
Rod Bain:Referring to proposed renewable volume obligations associated with our nation's renewable fuel standard for producing biofuels in 2026 and '27. By mid June, EPA made the announcement about the RFS for the next two years. Proposed volumes of over 24,000,000,000 gallons for the next year and a slightly higher proposed total the following year. Those totals are not lost on the renewable fuel industry as both would be the highest RVOs if finalized announced in the twentieth anniversary year of the Renewable Fuel Standard. So what is next?
Rod Bain:Geoff Cooper of the Renewable Fuels Association offers an estimated timeline.
Geoff Cooper:EPA is going to be receiving and soliciting feedback and input from the public and from stakeholder groups. They're looking at a forty five comment period. They'll also have a public hearing. They'll gather all that up. They'll analyze it, and they will make any potential changes to the rule based on that input they received.
Geoff Cooper:They are fixated on having a final rule in place no later than October thirty first of this year.
Rod Bain:In a press release, Agriculture Secretary Brooke Rawlins commended the decision for bringing certainty to the biofuel industry, contributing to lower fuel prices and increasing production for export opportunities. For instance, a part of the recently reached US United Kingdom trade agreement in which The UK reduces US ethanol export tariffs to that market.
Brooke Rollins:From 19 to zero, which for our row croppers is a huge deal.
Rod Bain:I'm Rod Bain reporting for the US Department of Agriculture in Washington DC.
Todd Gleason:Let's check the agricultural energies now with Dave Chatterton. He's for Strategic Farm Marketing in Champaign, Illinois. Thank you, Dave, for being with us. Most weeks, we get to talk about the ag energies and ethanol, but this is different than most weeks where we have the RVO or renewable fuel, renewable volume obligations announcement from US EPA last Friday. We have the e 15, year round announcement that came earlier in the year, and there's just so very much going on in the world of energies across the planet, including two different wars, one between Ukraine and Russia, the other between Israel and Iran.
Todd Gleason:Can you talk me through some of what this might mean to producers and what their bottom lines look like?
Dave Chatterton:Yeah, Todd. I guess the simplest way to maybe say that is a lot of moving pieces here and potentially a lot of supply risk from a war standpoint or a foreign geopolitical standpoint. And we're dealing with the politics of biofuels here in The US and depending on where you want to start that conversation, what it has led to has been volatility, particularly of late and going back to last week. It's been volatility to the upside in the fuel complex. If you look at the moves in, let's say, diesel fuel over the last three days high to low range Friday of $0.19 yesterday $0.20 so far today $0.13 Obviously, we're getting some big movement in the marketplace.
Dave Chatterton:And when you and I talked last time on the Ag Energy segment goes back almost a month now, we were talking about diesel fuel prices at or just below that $2 mark. They're currently at or just below that $2.50 mark. And we've taken a significant jump here. So the question is, are we going to have a supply disruption in the Mideast? What is that going to mean immediately to the price of petroleum?
Dave Chatterton:And I think the secondary demand and debate is about, you know, the biofuel segment in The US and specifically as it relates to soybean oil and corn for ethanol and, you know, in in the feedstock.
Todd Gleason:Alright. So we divide this into a usage on the farmer's side and when or if they'll be able to lock in a price that's lower again. Do you think that might be coming at some point and then we can move into the supply side and what that looks like as it's related to the RVRs?
Dave Chatterton:Yeah, Todd, I think there's a couple things to consider. Hopefully, know, as we've talked in the past, producers are sitting on full tanks, maybe some contracts. If you're not and you have to buy fuel, then you're just gonna have to step in front of it. If you have the luxury of a little bit of time here and you're looking at more fall usage and covering into next year and trucking needs etc, the play is to probably be patient. Historically, that's been the you know, we get the knee jerk in price.
Dave Chatterton:We worry about disruptions in the Strait Of Hormuz or coming out of Iranian's production or exports. We kind of get past that and the market starts to settle down. Now having said that, that's the betting odds. The worst case scenario, of course, I don't think it's priced into the market as yet. It could certainly get quite a bit worse.
Dave Chatterton:We've had a few Wall Street prognostications here talking about $120 crude oil if the Strait Of Hormoz is closed or if Iran's export terminal is taken out, etc. We're sitting here today at around that $73 mark. I'm not predicting that happens, but I think certainly it can't be ruled out. So the market will carry some premium here. How long this operation, I guess, by Israel, I'll say right now goes on the retaliation factor from Iran whether it's a few more days, few more weeks, a few more months we'll have something to do with that.
Dave Chatterton:But I think for right now patience is probably the way to play the market if you're in that position.
Todd Gleason:On the flip side, I know you have been delving into the RVO announcement from last week by US EPA And what it might mean, there is a forty five day common period, which ends August before a final ruling will be made, although this would push 2026 and 2027 RVO obligations or the volumes particularly for advanced biofuels, in this case, renewable diesel or biodiesel, one of the two, Frank made from soybeans, to a much larger capacity, one that I believe we could match in The United States, in terms of what's already been built here. How do you see this playing out?
Dave Chatterton:Yeah. Todd, there's, again, a lot of moving pieces even inside of this argument. You've got you know, we had the e fifteen debate and and got that settled earlier in the year. We've now got three other pieces on the table. One of those is the RVO that we just spoke of.
Dave Chatterton:We've got specific guidance on that from the Trump administration. The EPA goes through the comment period and would then become law at the end of the year. We're also waiting for a decision from the EPA on the SRE or the small refinery exemptions. There's 160 out there and it looks like they're inclined to grant quite a few of those. We're also watching 45Z, which right now is being debated inside the big beautiful bill.
Dave Chatterton:So we've got the House version that went to the Senate. The Senate revised their version and went back today. And to save you all the hey, the what ifs, at the end of the day what we've gotten so far has been a win. We got an RVO here that exceeded the expectations of the industry even though we had some rumors that it was going the other way. It's a big one for US biofuels production, particularly the biodiesel side and the green diesel side of the equation here as it effectively moves to limit or eliminate any of the tax credits for foreign sourced feedstocks or read that as used cooking oil or maybe vegetable oil coming in from Canada or Mexico and it's going to favor domestic production whether that may be just North America between Canada, Mexico, The US or maybe you know it might be just domestic US production.
Dave Chatterton:But in any case, that narrows the field of feedstocks, makes the RIN values much more valuable to those producers and adds profit into what they're doing, creates that demand for bean oil. That's been a very supportive thing for the bean market here of late when we've seen the corn market, you know, hitting new you know, going down to recent lows and sitting on kind of the bottom of the fence. We've had some some upward movement in in bean oil, but dragging the soybean market with it.
Todd Gleason:On that RVO announcement from last week because you mentioned the SREs or the small refinery exemptions, which means those rye refineries would not have to produce ethanol for RINs. The EPA did say that if those were granted, that they would have to be picked up and and reallocated to larger refineries. Do you think that will happen?
Dave Chatterton:That's, you know, part of the indication that we've got. I'm, you know, I guess I'm not taking that as 100% fact at this particular point. I think there's still this is a bill that's being negotiated kind of on the fly and a lot of last minute wrangling. And so I think I would hope that that would be the case and we would preserve that total, if you will. But, know, I don't think it's a given.
Todd Gleason:Hey, thanks much. I appreciate it. We'll look forward to talking to you for our Commodity Week program this week.
Dave Chatterton:Thank you, Todd.
Todd Gleason:That's Dave Chatterton. He is with Strategic Farm Marketing in Champaign, Illinois. Don Day now joins us from Day Weather in Cheyenne, Wyoming to take a look at the forecast for the Midwest. Thanks, Don, for being with us today.
Don Day:Good to be here.
Todd Gleason:Kudos for you because you had arguably predicted, the June weather, to be a little stormy and wet, warm as well, I believe. Now we're looking forward to the last part June. Can you accurately predict what's coming over the next ten to twelve days?
Don Day:Well, that's a that's that's a tough task, but I'm I'm up for it. Couple of things. What we're gonna see here for the June is we have seen a little bit of a resurgence of of Northwest Corn Belt rain and thunderstorm activity, and that's something that we do see going forward as as a possibility here for another week. So I think more rains coming to Iowa, Minnesota, Wisconsin, parts of Nebraska, and South Dakota, and Central Corn Bells as well. We are going to see also a lot of high pressure wanting to build rather robustly.
Don Day:This is especially true later in the weekend and into the middle of next week, and this is gonna spread some very warm weather into the Central US, the Great Lakes, and along the East Coast. Temperatures are are really gonna be going up and and getting very warm, and staying warm for an extended period of time, before we see maybe some cooler weather the week after that. But we've got some summer heat coming with with fairly good chances for occasional thunderstorm activity.
Todd Gleason:Are we talking upper nineties, triple digits? Is it the overnight lows that will be the warmer temperatures? What are your expectations?
Don Day:Well, we're gonna get both. I mean, the overnight low temperatures are are are that's one reason why if you if you were to average out the seven day period from, let's say, where we are now to the middle of next week, That's certainly one reason why the temperature, anomaly is is gonna be there because of both daytime and nighttime temperatures. When it comes to 90 degree heat, that's certainly on the table with a lot of humidity. Now triple digits will be found in parts of the Southwest United States and the Southern Plains. But on the flip side of things, Todd, what's gonna be interesting is while we're gonna see a lot of heat in the Corn Belt, Midwest, Great Lakes, the East Coast developing this weekend and into next week is gonna be unseasonably cool, the opposite over parts of the North Central and Northwest areas of The US.
Don Day:So there's gonna be a huge contrast. You're gonna be hearing a lot about the heat next week in the Central and the East, and some news may report on the coolness in the West.
Todd Gleason:Hey. Thanks much. We'll talk with you again soon.
Don Day:See you then.
Todd Gleason:Donde is with Dayweather. He's in Cheyenne, Wyoming. Joined us on this Tuesday edition of the closing market report that comes to you from Illinois Public Media where we're celebrating forty years of this program. It began in January of nineteen eighty five. More than 10,000 episodes and 30,000 interviews for the closing market report.
Todd Gleason:Thank you for listening today. I'm University of Illinois Extension's Todd Gleason.
