Jun 27 | 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 on this Friday, we'll talk about the commodity markets with Mike Zuzlow. He's at globalcomresearch.com out of Atchison, Kansas.
Todd Gleason:And Eric Snodgrass will join us from Nutrien Ag Solutions in Dackeville to discuss the weather forecast. If you can stay with us for the whole of the hour, you'll hear all of our commodity week program with our panelists, Naomi Blum and Jim McCormick. If not, it's up online right now at wilag.org. July corn for the day finished 8¢ higher at 4.17. September up 7.5 and new crop December six higher.
Todd Gleason:It finished at $4.27, July beans up 5¢, and November there 8 and a quarter higher. They finished at $10.24 and 3 quarters of a cent. Mike Zuzlow joins us from globalcomresearch.com out of Atchison, Kansas. Hey, Mike. Thanks for being with us on a Friday again.
Todd Gleason:Last week, we didn't get to talk. Next week, we don't get to talk, so I suppose we ought to make it really count today. We can start with some fresh news. I think you've got a fairly good handle on this. Within the half hour, as you and I are recording, the president has said that there will be no trade deal with Canada, at least not yet, and he will be announcing how much of a tariff they'll be paying within the next seven days.
Todd Gleason:First, how did the marketplace, because it was still trading when that was released, take that news, and what are our expectations?
Mike Zuzolo:Yeah. This, digital services tax is is what president Trump is ending his negotiations with Canada on and said he's gonna, as you say, gonna next seven days, just send a letter out to tell them what they're gonna be paying for tariffs. So we're gonna have to watch this very closely in the unleaded gas market, in the ethanol market, obviously, in the lumber market too, and and probably in the autos as well. But another little bit of a wrinkle here. Not a lot of details.
Mike Zuzolo:The market didn't look at it. I don't think too hard. We did come off for highs in the stock market, Todd, but that was after making new all time highs in the S and P 500. Also noticed a new daily high in the dollar index on the Canadian dollar breaking lower, and that probably took some of the luster off of the wheat market. I noticed that hard red wheat on a harvest Friday went ahead and went back just a hair in the red for the close, and then we saw the the soft red wheat come off 7 6, 7¢ gains and cut those back to four, five.
Mike Zuzolo:But the the story of the day really was about the corn market, and I I do think that the crude oil break to the downside really overdid the market break, to the downside in in a lot of commodities. Sugar made a four year low this week, I think in big part because of what happened with the crude oil market. And so it was nice to see the the corn market come back around led by the July, led by that old crop spread.
Todd Gleason:Why do you think that happened?
Mike Zuzolo:Well, I've been talking to clients and subscribers ever since last Sunday, suggesting to them this is before the the bombing and and, you know, right after the bombing, but not knowing what Iran would do, that if we were going to go higher in this market, given the opening up of the wheat harvest in the Northern Hemisphere and some of the private estimates coming across with the Russian crop. It was probably gonna be needed to be led by the crude oil market leading the wheat higher, that in turn leading the corn higher. As we went through the week, it seemed to me that the trade started to not only build in negativity on the energy side, but also build a lot of negativity in the corn with ideas of a very big acreage number. And overall, Monday's crop reports end of the month with July futures and delivery here coming up Monday. Being in a situation where we just have a burdensome supply of corn.
Mike Zuzolo:I looked at the low this week, Todd, of corn, four zero eight. Our low last August when we were in the doldrums was three sixty. So we're really only about 40¢, 45¢ from that level. And I I really think the trade overplayed it, from the downside. My take is the stocks number could be surprising because the export pace that we have kept up.
Mike Zuzolo:We hit USDA's target this week on export sales with ten weeks left, and we're still about the cheapest corn price out there in the world. So I feel like between that and some of the ethanol issues that Brazil announced this week of increasing their blend, Corn's still got the best fundamentals, and and we'll see if maybe just maybe the stocks numbers offset and surprise the market to the upside, and the acreage number is not as big a deal as the trade's thinking.
Todd Gleason:Okay. So on the week, the corn's gonna be somewhere in the middle of the trading range for the whole of the week. It almost looks like a spike low in the weekly market. We won't know that for some time, but that's, I'm assuming, what you're hoping for.
Mike Zuzolo:Yeah. I think that's exactly right. And then, you know, when you look at the supply demand fundamentals, matter how you slice it, you you still have the tightest world stocks to use since 2012. And so we told in the marketplace in futures that the trade, the funds told the market, we don't need the the supply held onto. We've got ample supply to meet demand.
Mike Zuzolo:Let's go ahead and take the old crop, new crop spread from 15 to 20 plus July to twelve fifteen plus December. I just think it's too early for that right now. I know there's a lot of people out there promoting a record crop. A lot of my colleagues are promoting that. I I just don't think we're there yet based upon what I'm hearing from clients on both sides of the corn belt.
Mike Zuzolo:Two weeks from now, we could be, but I don't think we are right now with some of the holes in these crops.
Todd Gleason:Yeah. So July corn, while it's finishing, and most of this came today at around 8¢ higher, it is still down 11¢ from last Friday's close. So week over week, 11¢ off, but it's been more than twice that deep at some points during during the last seven days of trading. Looking forward, another trade agreement deal has been made with China. Apparently, this one on, rare earth minerals.
Todd Gleason:Does that make much of a difference in the grand scheme of things for agriculture.
Mike Zuzolo:It it suggests to the trade that we are moving in the right direction with China, but I I would also give caution with what you and I've talked about a lot. You're one of the few people that asked me about this to your credit. We really do have significant issues in China's economy. And other than the US dollar, China's economy has been weakening pretty substantially, a four year low against the euro currency this week. That says to me they're still trying to export their way out of their deflation and their problems, and consumption domestically is just not getting it done.
Mike Zuzolo:So I I really do hope that the president Trump admit and his administration can get a deal with India. I think that would be much more beneficial to the commodities and and bring the funds back around to increased commodity demand in the next five to seven years instead of worries about decreased. I I just don't think China has what it takes, and they did that soy meal test with Argentina taking a load. They're clearly making moves along with the Shankei Port that we've talked about, clearly making moves to get away from our agriculture sector except maybe the meats at this stage. So I I'd just love to get India wrapped in a trade deal and not have to worry about China anymore.
Todd Gleason:Yeah. For what it's worth, the president mentioned mentioning the China deal that was struck yesterday also in that same breath saying, we've got major announcement at some point to talk about India. I guess we'll get to talk about that again soon enough. Hey. Anything else before I let you go?
Mike Zuzolo:Just have a great Independence Day, and let's hope it's a safe one, and, thank goodness for this country at two hundred and fifty years.
Todd Gleason:Mike Zuzolo is with globalcomresearch.com out of Atchison, Kansas, Joined us on this Friday edition of the closing market report from Illinois Public Media. We are into the last two business days of our fiscal year. That's today and Monday. And by the time we get to the end of June 30, and don't forget at 11AM, we will have an update with the information from the acreage and quarterly green stocks reports, by the time we get to the end of the day, we'll need all the money in the bank that Illinois Public Media will use starting July 1 for the coming fiscal year. You can help us out right now by making a donation.
Todd Gleason:Do that online at willag.org, willgive.org or by calling (217) 244-9455. That's 9455. It's 217 And when you talk to the person on the phone line or if you're online, make sure you put in the comments section, either way, in support of agriculture. Let's check the weather forecast now with Eric Snodgrass. He's at NutriNAC Solutions in Aggable.
Todd Gleason:Hi, Eric. Thank you for being with us. You're in the Great White North still this week. Although I don't know that it's white. I'm sure it's still hot.
Todd Gleason:But you're you're north in Wisconsin this week. Thank you for taking some time with us. I wanna start not in your part of the world but out to the West because we did talk earlier in the week about the rainfall there and heard about these big seven inch rains that came in some places already, and I'm wondering what you think of those and what they've meant for that part of the world.
Eric Snodgrass:Yeah. Well, there was an interesting thing that happened in parts of Western Corn Belt. We had we did have pockets that were Nebraska, South Dakota, Iowa, Wisconsin that just, I mean, took it on the chin with respect to how much rainfall they got. And there was a spot in Nebraska that I found quite interesting because the video was sent to me by a guy named Eric Hunt. He is an extension specialist, a climatologist out of the University of Nebraska Lincoln.
Eric Snodgrass:He's actually a contributor to the drought monitor. He's one of the guys that when the drought monitor is made every week, he tells the folks what's going on in Nebraska like that's his job. Alright. So he sent me a video of a guy walking in a field just north of Grand Island, which is right almost smack dab in the southern middle part of the state, if you will. And that farmer had seven inches of rain on his farm last week, or this week, excuse me.
Eric Snodgrass:Now, I verified it because the video was just amazing. He was walking through his fields. His corn looked pretty darn good. But he's a no till guy. And he's also he left a lot of his cover crop as residual.
Eric Snodgrass:Now what was amazing was twelve hours after seven inch rain in that area, he was not leaving it wasn't muddy. That water had soaked in. It had basically his efforts in soil health, I think, paying off for him for this big one off rain event. And we know something, Todd, right? We've studied this.
Eric Snodgrass:I've talked about it numerous times. But throughout the Corn Belt, we have observed over the last forty years a remarkable increase in these high impact rainfall events, where we get more than two inches of rain in the twenty four hour setting. It seems as though those guys that are going after their soil health first and foremost and keeping that tilt right, they're able to kind of, for lack of a better phrase, weather that storm a little bit better. So very interesting bit of information out of Nebraska.
Todd Gleason:Yeah. Interesting stuff, particularly as it relates to Nebraska. Sometimes we always think about Nebraska as being highly irrigated. It is along the Southern edge of Nebraska. Eric Hunt, by the way, we talked to last fall, I wanna say, about the Ogallala Aquifer.
Todd Gleason:I had met him earlier in the year at an event in Peoria. So everybody is just in a small world. We catch up with each other from time to time. So now let's do talk about the weather we've had. It's been hot.
Todd Gleason:What does that mean to you as it's related to the rest of this summer?
Eric Snodgrass:Well, we were pretty far behind on heat units through mid to late May and early June. So this caught us up, but there's some heat in there that we couldn't use. Like the crop doesn't use very well, and it's still hot. We still have throughout the Ohio River Valley, heat advisories in place. Now it's cooled off elsewhere, but we're not done with this heat just yet.
Eric Snodgrass:So here's something to think about. Doctor. Ellen Taylor did some research and published it in a paper that went out on Iowa State's website. Oh gosh, this was like 2013 where he looked at something called a stress degree day. Now people listening to us and you and I have talked about this many times, but it's basically just adding up temperature units above 86.
Eric Snodgrass:So if it's 90 today, you get four of them. Right? His work showed that if you accumulate in Iowa, specific to Iowa, but it probably applies to Illinois as well. If you accumulate more than a 140 of those in a year, he couldn't find a year in history where yields were above trend. So it's the heat stress aspect of of on the crop.
Eric Snodgrass:Now here's the thing. During this heat wave, Illinois picked up on average between forty and eighty stress degree days just in this short time period. And that guy was talking to you out in Nebraska. Some parts of Nebraska are already up around a 110 to a 120, and we're not even in July yet. And as I just think about where this is gonna go, I anticipate more waves of heat similar to what we saw, where you get four or five days of, you know, what we call excessive temperatures, temperatures getting into the nineties.
Eric Snodgrass:What I don't like, Todd, is what you saw this morning, which I didn't in Northern Wisconsin. And that was the low in Champaign, Illinois. It was like 77 when I checked it at 6AM. And that's much cooler up here. I am wearing a jacket, and it rained for the last two days.
Eric Snodgrass:But I was glad to be here than I, than more glad to be here than I think it would have been to be be sweating in Illinois right now.
Todd Gleason:It has been hot, and those overnight temperatures staying that high, particularly last night
Eric Snodgrass:Yeah.
Todd Gleason:Is highly unusual. Can we talk about another event that producers are going to worry about to some extent going forward? So in the Western Corn Belt here as well, they have had rainfall. They are more subject to, what is referenced as a flash drought.
Eric Snodgrass:Yeah.
Todd Gleason:How how do those come about, and and do we need, given the heat that we've had, and thinking about hot weather and stress going forward, to consider those?
Eric Snodgrass:Well, we know that we can kind of ramp up the hydrologic cycle with higher temperatures, right? So if you've got a lot of water in the vegetation in the soil, and you put some heat on like we did last week, you will see evaporation rates. And in the plains, these evaporation rates can be higher. But you'll see them as high as two and a half, three inches a week, Which is why we keep track of precipitation minus evaporation because that is such a key number to keep an eye on that could signal some stress before you start to see it in your total precipitation numbers. But basically what's going on there is that the plant is just working overtime to transpire water.
Eric Snodgrass:And what we think about with corn, is that corn has two jobs. During the day it takes in all that sun and it takes in all of that biomass that it's creating through the sunlight and the pulling in of the CO2. And at night it needs to take the time to convert that over into the mass and the sugar that the crop needs, right? But if you keep those evaporation rates high, more of the energy that plant has in it is being used to transpire more water. So what we get concerned about are these very rapid time periods of drought development where crop is stressed first.
Eric Snodgrass:And so sometimes you see an agricultural drought before you see a meteorological drought because of the way the plant transpires water.
Todd Gleason:So let me ask you a question that Matt Bennett would want to know today. Yeah. As it's related to a lack of rainfall where he is. Yeah. He says the corn crop there in Mattoon, Illinois, an hour now just an hour south of us, not even that, the corn is rolling, the leaves are rolling, and they haven't had rainfall, but they were really wet in that area.
Todd Gleason:And there are other places across the Illinois. I was looking at the numbers that came in to me from Agrabal, thank you, by the way, this morning Mhmm. For year to dates and what's been in the last seven days, and it looks like Jacksonville, Macomb, Peoria, are a little low.
Eric Snodgrass:Yep.
Todd Gleason:Freeport, Rockford remain low. They've been that way for the better part of the year. So how how do these things develop? So there are areas without rainfall, and then there are places like Southern Illinois which have just had so much, and they could transpire an enormous amount of rainfall or precipitation, moisture out of the plant and then dry out really quickly?
Eric Snodgrass:Yeah, they can. So I always think of it this way. When I think about the hydrologic cycle and growing a crop, it's always a story of what have you done for me lately? You know what I mean? So, yeah, Matt was drowned out early in the season.
Eric Snodgrass:He was about a month late in planting, and he was super soaking wet. And then I called him two days ago, and he's like, hey, bud. You know how he talks. Like, hey, bud. When are gonna send me some rain?
Eric Snodgrass:And I was like, it's funny just to hear within a few short weeks how quickly the tone changes, but that's how the crop is. It's gotta be routine and regular for it to maximize its potential. So the promise, Todd, we're going into July and August. And July and August are defined by hyper local rainfall events. So you're gonna have some folks that catch these storm clusters, which are gonna be probably quite a big disorganized mess at times.
Eric Snodgrass:But, they're gonna come through, and you're gonna get it. And the guy, you know, two miles down the road is gonna miss it. And, it's gonna create some jealousy. I have a feeling at the coffee shop in the morning when everyone's talking about it. I think it's gonna be that way for for the next eight to ten weeks.
Todd Gleason:We'll watch it and see what happens to the crop along the way. Thank you. I appreciate it.
Eric Snodgrass:Yeah. You bet.
Todd Gleason:Eric Snodgrass is with Nutrien Ag Solutions and Ackable joined us on this Friday edition of the closing market report that came to you from Illinois Public Media. It is public radio for the farming world online on demand anytime you'd like to listen to us at willag.org, willag.0rg. There you'll find a podcast tab, and in that you'll find players with the closing mic report Commodity Week and the Illinois Nutrient Loss Reduction podcast. All of them have updated information in them as of today, and you can subscribe to them right there in the podcast. Also, you'll find at wilag.org information from the crop scientist, the livestock specialist, and the agricultural economist from the University of Illinois.
