May 12 | Closing Market Report
From the Land Grant University in Urbana Champaign, Illinois, this is the Closing Market Report. It's Monday, May 2025. I'm extension's Todd Gleason. It's USDA report day. Coming up, we'll talk about the report numbers with Kurt Kimmel of AgMarket.net and the impact they had in Chicago.
Todd Gleason:We'll hear more in-depth about those figures with Joe Jansen, agricultural economist from the University of Illinois. Mark Russo will be here to take a look at the weather forecast from Everestream Analytics, and I'll bring you up to speed on some agricultural news for the day as well on this edition of the closing market report from Illinois Public Media. USDA's WASDE or World Agricultural Supply and Demand report showed old crop corn ending stocks were down 50,000,000 bushels this month from 1.465 to 1.415. Soybeans off 30,000,000 bushels from three eighty million to three fifty million. The new crop estimate for the first time around at 1,800,000,000 bushels for the carryout for corn and soybeans at 295,000,000 bushels.
Todd Gleason:Todd Gleason services are made available to WILL by University of Illinois Extension. July corn for the day, a penny and 3 quarters lower. It settled at $4.48 cents. September at four thirty two and three quarters, up three and a half. December at four forty five and a half.
Todd Gleason:For Monday, '3 and a half cents higher. July beans, 19 and a half cents. Settlement price higher at $10.07 1 a quarter. August at 10.68 and a quarter up 21. And new crop November '20 '7 cents higher at 10.57 a half.
Todd Gleason:Bean meal up $4. The bean oil a dollar 35 higher. And July wheat futures were down 6 and a half cents. They settled at $5.15 and a quarter. The hard red wheat at $5.00 8 down 9 and a half cents in the July contract.
Todd Gleason:Live cattle futures at $2.16 82 and a half, 2 dollars 15 cents higher. Feeders at $3.00 $6.37 and a half, 6 dollars 7 and a half cents higher, and lean hogs up 72 and a half cents at $98.30. Kurt Kimmel is here from AgMarket.net to discuss these numbers and the impact this morning's USDA World Ag Supply and Demand Estimates Report had on them throughout the day. Thank you, Kurt, for being with us. Tell me about the trade at 11:00 and the numbers that you saw.
Curt Kimmel:Giddy up. Here we go. We got some excitement here. We've, basically the soybean complex was the shocker or the surprise in general. Fundamentally first, it was some support from ideas that the Chinese US trade talks over the weekend was moving along fairly well through here.
Curt Kimmel:Backing off on these tariffs by 115%, kind of opens the door here to, keep products flowing back and forth between the two countries, but the significance of that ninety day window is it gets us, takes us into the good chunk of the growing season, so we're talking August so the trade can focus on today's numbers and the weather forecast as we move forward. But the soybean estimate, particularly on jumping straight into new crop, carry out two ninety five million bushels. The trade was looking for about three seventy five million bushels. Demand stains robust getting through here. It's kind of the big thing that was on there.
Curt Kimmel:The old crop being carried out was lowered by 25,000,000 bushels due to the idea exports are gonna stay strong, then when you roll three fifty million bushels into the new crop supply demand balance sheet versus three seventy five, it keeps it fairly tight. So, when you look at the, the yield and the acreage, and a two ninety five million bushel carryout, the trade kind of scratches their head here, say if we have some adverse growing conditions and lose two bushels to the acre, boy, we could, if we can be down into the ones real, real quick in through here. So we're putting a little bit of weather premium, back into the marketplace, but the bean, the bean number, the bean sector here was the bullish or positive surprise here this morning, Todd.
Todd Gleason:Yeah. That ninety day pause also comes at a time, I believe, when China tends to start buying or making their purchases for fall and early winter delivery. I would guess that that was an important part of what the trade saw and why it rallied 20¢. In fact, I believe that it rallied nearly that much just on the news out of, Switzerland over the weekend and then began to drop back waiting for the USDA report. Is that the case?
Curt Kimmel:Yeah. Yeah. It's like, earlier this morning here, you wake up and and see some positive price action and it's like, oh, no. Not again. The market gave us hope.
Curt Kimmel:The market gave us hope and took hope away, but once the report came out, we resumed, the buying interest, full, full steam again. The, the key closing above $10.50 in the November new crop using that as a benchmark, kind opens the door to move up towards 11. July closed at, 71. The Ag market team, Brian Split, he's been pointing out for quite some time that if you take a soybean chart, a long term soybean chart, draw a line straight across and mark even south of $11 will go quite a bit above $11 so, I'd like to get up there, and see what the market wants to do towards the $11 benchmark.
Todd Gleason:The new crop corn carryout, 1,800,000,000 bushels. That is a big number, but in larger context, a smaller number than many had expected and USDA has not started that small in quite some time, I think, for a new crop year.
Curt Kimmel:Correct. And what contributed to that was, old crop exports remained fairly strong, lowered old crop carryout by 50,000,000 bushels, probably got some more room in there. Now the significance of this whole picture, old crop corn carryout is 1.4. A year ago when this came on as a new crop carryout estimate, it was 2.2, so it's dropped a ton. Now if you compare apples to apples, new crop starting off new crop, you hinted on a year ago we started out close to 2.2, we're starting out 1.8, four, close to 400,000,000 bushels less than a year ago.
Curt Kimmel:We've got trend line yield 181 bushels to the acre. So once again, you start jiggling that yield around pretty quick here, know, two, three bushels, this new crop corn carryout number can shrink, so we just don't have enough weather premium and new crop or beans and so that's gonna be the function of the market here to keep an eye on this forecast, production concerns if there are any, and try to put a yield on this, crop as we move through the marketing year.
Todd Gleason:USDA also putting exports up 2,750,000,000 bushels for the coming marketing year. That's a big number.
Curt Kimmel:Yeah. You know, demand overall, you know, exports, it was the key there, you know, ethanol is not going away. Ethanol demand continues to drill strong. But the big thing is Mexico. Mexico has been continuing to buy corn here, they started buying new crop corn already.
Curt Kimmel:When you look at the drought monitor, it's North America, The United States has fixed out like a sore thumb that everybody likes to watch, but the real sore thumb is Mexico. Their demand just remains strong, and so not only The US weather pattern, but that Mexican weather pattern is gonna be watched fairly closely.
Todd Gleason:Hey. Thanks much, Kurt. I'll talk to you again next week.
Curt Kimmel:You bet. Take care, Todd.
Todd Gleason:Kurt Kimmel is with AgMarket.net. You're listening to the closing market report from Illinois Public Media online at willag.0rg. This morning at 11AM central time, as you well know, the United States Department of Agriculture released the monthly World Ag Supply and Demand Estimates report, and the May report always includes the first look at new crop corn and soybeans s and d tables. Joe Jansen is here, agricultural economist from the Ovibe, to discuss those. Hi, Joe.
Todd Gleason:Thank you for being with us. What's your broad takeaway from the WASDE this morning and the new crop numbers?
Joe Janzen:Certainly, The US balance sheet estimates, these new first new crop balance sheets that we see for 2526 look fairly bullish on the face. Certainly, you know, with ending stocks numbers below where the trade was expecting and the markets kind of reacted accordingly, we've seen a pop in both the the corn and bean markets this morning on the basis, I think, of, you know, pretty solid expectations for both corn and soybean usage in the coming marketing year.
Todd Gleason:Oh, so let's talk about the ending stocks for these just a bit. USDA says that the ending stocks for corn will be just 1,800,000,000 bushels. The trade, probably closer to 2,000,000,000 this time around. They also have a 2,675,000,000.000 bushel export number. 265 is that's that's a big number.
Joe Janzen:Yeah. So just backing up a step. I mean, this is still a build in corn stocks because we are seeing, you know, high expected planted acreage for this coming marketing year. So we had all this corn coming. What are we gonna do with it?
Joe Janzen:And USDA said, you know, that corn's gonna find a home both in terms of higher feed use, higher export use than in than in '24, '20 '5 where, you know, exports surprise to the upside, and then solid, you know, stable ethanol use. And all those things put together got us to an ending stocks number in the report that's, you know, well below where the trade was expecting. So even though we're building corn stocks in The United States year over year and really a a still a stocks number that's higher than we've seen in a few years, that's still a bullish number.
Todd Gleason:So USDA says on its season's average cash price, though, that the prediction it made at the ag form, was $4.20, when they had a 2,124,000,000.000 bushel, ending stocks remains the same today with a 1,800,000,000 bushel crop. That can you put those two things in context?
Joe Janzen:Maybe a part of that is sort of the global balance sheet and some, you know, strong expectations for global production. And part of it is that, you know, still a 1,800,000,000 bushel carryout is still significant in the context of, you know, global corn supply and demand. But I view that that number as a pretty wide range around there should be a pretty wide range of sort of, you know, confidence around the that that particular price forecast.
Todd Gleason:Yeah. So one last thing. The yield USDA is using is a 81. I'm wondering whether you and your colleagues, in the PharmDoc team have talked about that number because it was a one eighty one and a half last year. One eighty one's below or should be below what the trend line yield would be.
Joe Janzen:Well, I I think part of that is what's happened in the last few years. And so once you keep adding, you know, slightly below trend I mean, what we've seen in the last, say, four or five years has been, you know, slightly below trend yield. We stayed below trend for for we kinda had a run of, you know, negative yield shocks. And all of those put together kinda keep bending that curve down slightly, and that's kind of accounting for some of this. And I think USDA is building that into their numbers.
Joe Janzen:So everyone's sort of thinking, you know, maybe we don't you know, the idea that we can keep projecting, you know, record corn yield year after year after year. I mean, still one eighty one one eighty one even would be a record. All of that is just sort of, I think, part of the the adjustment process that goes into sort of changing the nature of a moving average over time, and that's that's essentially what USDA is doing.
Todd Gleason:You know, the soybean figures were one we were watching closely. They changed yesterday late and into this morning simply because the policies that were in place, the trade policies, particularly with China and the trade, framework that the Trump administration has come out of those two day discussions with has reduced the tariffs, USDA taking those into account. What'd you make of those numbers?
Joe Janzen:Yeah. I think USDA has a pretty level headed view of global ag commodity trade, and they're not sort of, you know, I think not overreacting to sort of the, you know, worst case scenario of, you know, % plus tariffs, which would essentially, you know, shut down trade between The United States and China on for many products. But at the same time, I mean, still forecasting, you know, slightly lower soybean exports than than than a year ago in the in the current sort of the the new crop estimates that they put out today for 2526. So I think it's sort of a you know, we should sort of shade our guess a little bit, but they're not sort of overreacting to to worst case scenario in the case of that export number.
Todd Gleason:And so the other part was the ag farm. Was it $10? USDA at $10.25 today.
Joe Janzen:Yeah. Bringing that average farm price forecast up slightly. Part of that might be sort of just that ending stocks number, you know, where we get to when we have, you know, in part lower planted acreage than, you know, we would have thought maybe four or five months ago, and then sort of, you know, pretty steady estimates for use, that does kind of tighten up the balance sheet to some degree and maybe moves moves that price forecast slightly higher. But again, with season average price forecasts this far out, I think you wanna sort of put a wide, wide confidence interval around, that number.
Todd Gleason:Yeah. The number is 295,000,000 bushels for the ending stocks. We'll have to continue to pay attention to that. Anything else out of these numbers we should know before I let you go for the day?
Joe Janzen:I think, you know, the one other thing that's kind of lurking in the background is South American production. So because USDA is putting out a 2526 balance sheet, they're putting out production estimates for South America for the crop that they're gonna harvest in, you know, early and mid the middle of twenty twenty six. So that's way out in the future. Again, we should sort of like, you know, pump the brakes a little bit on reading too much into these numbers. But again, both higher production estimates for both corn and soybeans coming out of Brazil in 2526.
Joe Janzen:And all of that is going to sort of weigh continue to weigh on the market. The idea that Brazil can keep growing production limits the limits potential upside going forward.
Todd Gleason:Yeah. Brazil has been, on their soybeans particular according to, their own numbers, the numbers that the farm doc team, Joanna Colucci, has been producing had an increasing yield at a faster pace than The United States for soybeans, and, of course, they continue to add acreage year in and year out. Thank you very much, Joe, for taking so much time with us today.
Joe Janzen:No problem, Todd.
Todd Gleason:Joe Jansen is an agricultural economist at the University of Illinois and a member of the PharmDoc team. Let's continue our USDA report theme as we pick up with the agricultural news today. We'll start with the White House where it Monday announced progress over the weekend between The US and China as it relates to trade, including temporary significant reductions in tariffs by those two nations. Rod Bain reports from USDA.
Rod Bain:Nearing a trade deal in principle between The US and China.
Donald Trump:Yesterday, we achieved a total reset with China after productive talks in Geneva.
Rod Bain:President Donald Trump discussing the agreement between the two nations Monday after weekend negotiations produced progress in crafting a future deal.
Donald Trump:Both sides now agree to reduce the tariffs imposed after April 2 to 10% for ninety days as negotiators continue in the larger structural issues.
Rod Bain:In addition
Donald Trump:China will also suspend and remove all of its nonmonetary barriers. They've agreed to do that.
Rod Bain:Among the farm and food commodities that stand to benefit from a new US China trade agreement, soybeans. US beans were among the largest quantity exports of any goods, farm and non farm, to the Chinese marketplace last year. I'm Rod Bain reporting for the US Department of Agriculture in Washington DC.
Todd Gleason:Let's stay in Washington DC where last week National Association of Farm Broadcasting members were meeting with those who represent farmers and others across the nation. There's no question, of course, about the level of uncertainty facing US agriculture in this calendar year. During that Washington Watch event, Rob Larue, president of the National Farmers Union, said US Agriculture is looking for more solid ground to stand on. And while it might not seem realistic that congress can get a new farm bill approved, Larue says it simply has to happen in 2025.
Rob Larew:Our point is that it has to be realistic. I think we need to reject the notion that congress can simply just continue to kick the can down the road. We've already done two extensions on this farm bill. We already urged congress to take action before we got into an election year. We got into an election year.
Rob Larew:We said it would be next to impossible to get a farm bill done. Well, unfortunately, we were right. And so now we're in an environment where they're talking about cuts and savings. This is a terrible environment to be doing in a farm bill. But, unfortunately, the conditions out there, particularly the farm economy, demands action right now.
Todd Gleason:Talks about the approach to crafting a new farm bill.
Rob Larew:That can take a couple of different views. Right? We have budget reconciliation process going on right now, but even that is struggling because some of the cuts that they're wanting to invoke in that. And I think the approach that they're taking could put the Farm Bill Coalition at risk. And I think that we all can appreciate that there are too few members of congress from farm country to actually pass a farm bill that isn't comprehensive.
Rob Larew:You simply can't get enough votes to get that done. A farm bill is way overdue.
Todd Gleason:That was the president of the National Farmers Union, Rob Larue, speaking last week at the NAFB Washington watch event in DC. And that's a look at today's agricultural news. Let's check the weather forecast now with Mark Russo. He's at Everstream Analytics. Hello, Mark.
Todd Gleason:Thanks for being with us. A start in the Midwest. A little rainfall here in our part of the world today between that and the heat. Man, corn is gonna pop, I think. What can you tell us about how widespread this is and what temperatures will be like and where we might not be getting rain?
Mark Russo:Yeah, Todd. Well, for this week, or really over the next couple of days, there's going to be some scattered showers and storms across the eastern section of the belt. This slow moving low pressure system is the the reason for this activity. But as you go further west and north away from the Eastern Corn Belt, then you get into a drier mode. But even for areas here in the Eastern Corn Belt, this is not widespread heavy rains, but rather just scattered activity over the course of a couple of days.
Mark Russo:And then temperatures, again, much of this week being well above normal. That'll be especially the case during the middle to end of this week. Looking out beyond this week, it does look like rain activity will be increasing a bit more across the Midwest. But at this time, we're not expecting any quick transition to any wetter than normal pattern. Then also temperatures will be cooling back down to more normal levels next week.
Mark Russo:But all in all here, the way that the pattern has been recently and with the forecast over the next two weeks should continue to keep planting progress generally rapid and crops that are emerging and growing in in generally favorable shape.
Todd Gleason:You know, are there things in the weather forecast that are unusual, whether they be in the northern or southern part of the growing regions?
Mark Russo:Well, some of these temperatures that we're seeing in, like, the western and northern part of the Midwest, like, for example, yesterday in the Dakotas, they got up to a hundred degrees on the North Dakota, Minnesota, Manitoba, Canada border, which is record setting actually by several degrees. So there's gonna be another couple of days of that. That's really the most unusual situation is with this anomalous heat. Granted, it's not lasting very long as of now. But what we're seeing in these couple of days here, are seeing temperatures just very unusually hot here.
Mark Russo:That's actually being driven by this northern northern displaced ridge of high pressure.
Todd Gleason:How about in South America? What are you watching today?
Mark Russo:Yeah. We're watching continued favorable weather for safrinha corn development. Overall, the pattern across the safrinha Belt will feature generally dry conditions, which is pretty typical at this time of year, a slight warmer than normal temperature bias, but nothing overly extreme. So conditions will be in good shape. And then for summer crop harvesting across Southern Brazil and Argentina.
Mark Russo:Argentina here is seeing some rain activity at times, but it does not look to be enough to cause any kind of big disruptions in harvest progress. Granted, soybean harvesting is a bit slower than the five year average, but outside of some delays the second half of this week, it doesn't look like things get totally bogged down there.
Todd Gleason:Thank you much. I appreciate it, Mark.
Mark Russo:You're welcome, Todd. Thanks for having me.
Todd Gleason:Mhmm. Mark Russo is with Everestreme Analytics. We'll talk with him again next Monday right here on the closing market report that comes to you from Illinois Public Media. It is public radio for the farming world online on demand at willag.0rg. You have a good afternoon.
Todd Gleason:I'm extensions, Todd Gleason. Doctor. JACKSON:
