Latest / Closing Market Report / Jul 05 | Closing Market Report
Transcript
- Todd Gleason 0:00 From the Land Grant University in Urbana, Champaign, Illinois. This is the closing market reported as the fifth day of July 2024. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Mike Zullo. He's a global comm research AECOM out of Atchison, Kansas. And we'll hear from Eric Snodgrass at Nutrien AG solutions and agreeable about the weather forecast on this Friday edition of the Closing Market Report from Illinois Public Media. It is public radio for the farming world Online on demand to listen to whenever you'd like, just click and play from the website. And there you'll find daily information posted from the agricultural economist, the crop scientist and the animal scientist here on the Urbana-Champaign campus of the UO by Todd Gleason. Services are made available to while by University of Illinois extension September corn for the day settled at $4.10 and a half cents a nickel higher December the new crop of four and a half at 424 and March futures in 2025 at $4.38, up four and a half cents for the corn. August soybeans eight and a half higher at $11.66 and a quarter, September 1126, up eight and a half and November. Soybeans 1129 and three quarters eight and a quarter higher. The bean mill up $7.10, settled at $357.20. The bean oil at 4955 $0.91 higher. Wheat futures soft red in the September at 590 and a half, up 16 and a half and the September hard red at 599, up 15 and a half. The December contract there at 616, up $0.15. Oh, that December in the soft red up 15 and a half at six, 13 and a half. Live cattle futures for the day finished the nearby at one 8642 and a half, up $0.50 as the August feeder feeder cattle August down a buck 90 for the day and lean hogs at $89. 17 and a half were $0.65 lower. Crude oil at $83.20 a barrel, $0.68 lower. The name the diesel fuel or heating oil down $0.03 a to 60 and 4/10 of a cent and gasoline at 2.56 and a 10th of a cent per gallon, three and 9/10 of a cent lower for the day. Mike Zsl A global commerce search dot com out of Atchison, Kansas, now joins us. Hi, Mike. Thanks for being with us. A little ground to cover today because wheat futures managed to well take off. They took flight, the fireworks began and not even and not even lit the overnight trade because there was an what had happened here. Mike Zuzolo 2:33 Now, it was a nice way to come back and break up the holiday. If we would have been down 13 or 18, we would have said, why did they even open the trade up on Friday? But it was a nice way to change the dynamic of this trade. And I do think you had a few things come together. Todd I think the biggest thing that came together was the weekly export sales. We have always been talking about the demand for the wheat and why the U.S. is not getting that demand. And we actually came in with an over 800,000 tonne weekly export sales above the highest trade. Yes, very welcome news. And at the same time that that came out, we had the new unemployment data come out and that was actually worse than expected and that sent the dollar to new monthly lows. Emerging market currencies looked risk on after that and copper was able to rally to its best level since mid-May. So the wheat I think had a couple of things working in its favor and I would say you probably have a little bit of weather as well working in favor of the wheat in that you're going to probably see wet areas get too wet as we finish up the wheat harvest in the northern hemisphere. And you still got some issues out there and some dry belts as well. But I think those first two things were really the catalysts and let's say the fuse to light the M-80. Todd Gleason 3:48 All right. Did we take most of the hedge pressure out of the marketplace at this point, too? Yeah. Mike Zuzolo 3:53 The mindset that I heard late in the day, especially in the copper market and I suspect the software and we because the software and we've made a new two week high hardwood, we was not able to make a new weekly high from what I could see before the settlement. So that's kind of a footprint of the funds. And I think that's where it comes back to the hedge pressure, commercial, short covering fund, short covering that I think started on Friday. But I really want to see it follow through on Monday and then get some crop conditions that would also suggest we are adding to the supplies and then also look at hurricane barrels track because that could be a big player in an already saturated middle part of the corn in being built. Todd Gleason 4:37 Did I see that China was a player in the soybean market again with purchases in a big way, although I think they may have come in part from Brazil and old crop and maybe new crop both. Mike Zuzolo 4:50 Yes. And I think this was a mixed bag week for the beans. However, we were able to see, I think, a new three week high and lead month at the July settles in those July contract just bid offers until late in the session. So I'm kind of tender footing it around the new nearby in the lead month on the weekly continuation. But those exports were showing China as the number one buyer. We were though below the four week average, 32%. That was kind of countered, though, with the meal showing a really nice showing on the weekly export sales and putting in a very nice technical performance. So welcome products, support from the meal market. Nice to see. Todd Gleason 5:26 More conditions on the ground look like for your crop there. The corn and soybeans. The wheat too. As you go further to the west, I know you talked about barrel, maybe some potential issues. Mike Zuzolo 5:35 It's been a it's been a very strange year, I would say overall, and I've been driving around for the last week, I'd say overall we are well above average. I don't think anybody would statewide put this at a record crop, though, because we've either been too wet or too dry and too many pockets. But Kansas City area, the last five days down in that area and into central Missouri, I want to say they were recording 11, 12 inches of rain and one of my clients told me out in western Kansas that he had gotten about 21 inches of rain, give or take, since the first week of April. So it has been a very strange northern hemisphere weather pattern. And I think that Black Sea is a big deal. I think China is still a big deal as well. Todd Gleason 6:18 Your producers across western Illinois and Indiana and maybe back into that home state of Ohio feeling better about the crop that they have now? Mike Zuzolo 6:27 I would say, generally speaking, yes. TODD But I'd also say there are some areas in the northern part of Indiana and Ohio and also the southern part of Indiana that have missed a lot of the rain. So they they'll show up on the drought map I think, next week. Todd Gleason 6:41 What we've been watching in the livestock sectors. Mike Zuzolo 6:43 Well, not a great day on the finish side of the cattle market, had a very strong showing to begin the day with the end of the week, though, profit taking. We've got to watch that post July 4th holiday because we are starting to see some weakness in the consumption. And if we're going to talk about two Fed rate cuts this year like they are now talking about in the financial markets, that would lead you towards the idea of a recession. So I think you've got to be real careful not to get some good pricing done here this month on both fats and feeders. Todd Gleason 7:10 Then looking back at the Hogs and pigs report made note that the cat prefer going down, but they're still expecting the number of pigs per litter to manage to offset that. Mike Zuzolo 7:21 Yeah, I think that's an excellent point. I think we probably bottomed, but I don't know if we have a real push to the upside. I will say that we had 59,000 metric tons of export sales, 98% above the four week average in a marketing year. Hi, Mexico. Number one, China number two. I'd like to see that transmit into the price action next week. Todd Gleason 7:40 Thank you much. We'll talk with you again soon. Mike Zuzolo 7:42 Thank you so much, Todd. See you. Todd Gleason 7:43 Indeed. We'll see you, too. That's Mike Zaslow. He's a global Comm research Qcom out of Atchison, Kansas, joining us on this Friday edition of the closing Market report. It comes to you from Illinois public media. It is public radio for the farming world. You can find us online. Listen to us on demand anytime you'd like. You can do that and we'll ag that. RW Ileal ag dot o RG There you'll find our daily ag programming to listen to anytime you like. Just click and play right from the website or search out the closing market report in your favorite podcast applications. The theme music with the Closing Market report is written, performed, produced and courtesy of Logan County, Illinois. Farmer Tim Gleason. In today's agricultural news, Iowa Senator Chuck Grassley says the next version of the sustainable Aviation fuel Tax credit needs common sense lacking in this year's credit that's due to run out in December. According to him, Grassley says the 45 credit due by the first of next year must avoid the pitfalls of the expiring 45 bit credit for biofuel based sustainable aviation fuel, which is a potentially huge market for the industry. Senator Charles Grassley 9:12 This silly thing that we're going to subsidize imports of palm oil to a greater extent than we are, then we help encourage soybeans to be used and sustainable aviation fuel is nonsense. Todd Gleason 9:29 Grassley has been outspoken, speaking against using cooking oil imports from China to qualify for the SRF tax credit. Senator Charles Grassley 9:37 We need fairness between imports and and soybeans. Todd Gleason 9:44 The Iowa senator does credit USDA Secretary Tom Vilsack for his inter-agency efforts to get fairness. Despite the limited success. Senator Charles Grassley 9:53 I think he made a good faith effort to get some of these three other government agencies that were engaged involved in the 40 B requirements. And in the end, I don't think he was successful. I applaud him for continuing to bring some common sense to it. Todd Gleason 10:11 He can do that by calling for stakeholder input on feedstock climate requirements for next year's credit. Grassley hopes Congress puts an end to any SRF tax credit favoring imported feedstocks over domestic ones, and the imbalance, he argues, will be a disaster for U.S. grain production. And one other item to report, this one two from Iowa, where Smithfield Foods will close its Altoona ham boning facility and consolidate the production volume at other locations to improve the efficiency it says of its manufacturing platform. Smithfield says it will provide transition assistance to the 314 employees at the facility who will be affected by the closure. The company will meet with employees individually to provide additional details about the transition plans, including severance and potential employment opportunities. With Smithfield, production from Smithfield's Altoona facility will be consolidated into existing company facilities in Monmouth, Illinois, Sioux Falls, South Dakota, and one in Nebraska. And that's a look at today's agricultural news. Let's check the global growing regions and see what crop conditions and weather have been like in those and how that might change in the next week or so. And further down the line as well, we're now joined by Eric Snodgrass. He's at Nutrien AG Solutions and Agreeable. Hi, Eric. Thank you for joining us again. Meteorologist Eric Snodgrass 11:50 Yeah, thanks for having me on. Todd Gleason 11:51 Let's begin with the rainfall in the Midwest and relatively cool conditions. Will that change in this next week? Meteorologist Eric Snodgrass 12:02 Well, we're finally seeing something we've not seen at all this summer, which is a big western U.S. ridge. And even though overall the bigger picture, things haven't changed. We're just in a time period where the western U.S. is going to take on all the heat and it's going to take it on for a while, at least ten days. And that's why we've got cooler air in place as the front swept through. So a lot of natural fireworks across the Corn Belt yesterday, in addition to real ones. And and and what ended up happening is we've kind of broken away from the risk of a lot of heat for a while. And at the same time, well, that's all going on while all of this I mean it's like 120 degrees plus in central California. That's how hot it is out west. But while all that's happening, we had a hurricane that moved across the Caribbean, hit Jamaica really hard, hit the Yucatan Peninsula, south of south of Cancun, what, yesterday. And now it's heading its way toward Texas. And the good news is it's going to weaken, but the moisture is going to keep streaming farther to the north. And I was actually calling several guys this morning down in the mid-south who are beyond happy that the moisture from a hurricane is going to get into their region, because while the West Corn Belt has been so wet, other parts of the Corn Belt have been relatively dry. So here's the thing. I mean, if we're going into this mid-July time period, avoiding major heat stress and a lot of places have received some good moisture as of late, this is about what would be ideal. I think the problem is just how much water came in the previous eight weeks. And so I think that's our set up here in the near term. Todd Gleason 13:25 So corn pollination underway in the month of July. I take it you think that's going to go pretty well in most places? The weather we have had has followed the pattern that you and many others were discussing in the winter time, kind of warmer overall. I don't know. You'll have to tell me whether that's really the case. But wet. And then you were concerned about drier conditions coming in later in the season. Can you put both of those in context? Meteorologist Eric Snodgrass 13:53 Yes. So so here we are. You know, we're a little bit in some places late, right? So we think about much of Minnesota and Iowa as being late due to excessive rain. I mean, even in the month of June, those counties that line western Iowa, northern Iowa, southern Minnesota, parts of South Dakota, it was one of the wettest years they've ever had. And they're still more rain come in in the near term before they get a little bit of a slowdown next week. But the reality is, is that that's going to push this crop needing more time later in the season to to finish. And so I've always been worried every time we have a wet spring and there's delays about an early frost. Well, La Nina is waiting in the wings. It's not there yet, but it's trying to get going. We're in so neutral now, and I just looked up earlier this week and found that most years when we have a developing La Nina, we actually tend to push a bit of a warmer and drier fall and that'll be good. I don't want a cold snap early and I certainly don't want it to be soaking wet. And so the bigger picture is you get a 3rd of August, September, October. And I feel as though we've got a better look as we try to finish this particular season. But you're right. In the meantime, we have pollination. And for the beginning of it, we're certainly going to be missing some of the heat around here. Todd Gleason 14:58 Turn your attention to other places. We've been watching dry conditions I think are still an issue in parts of the Black Sea area. Meteorologist Eric Snodgrass 15:07 Yeah, I was just looking this morning at some individual data there. And once again, you choose kind of the eastern half of Ukraine and then that what they call the southern Russian wheat belt. In other words, that's about that 60 million acres, twice the size of Iowa. And we have the lowest NPV values in the last 20 years. And the forecast is averaging 10 to 12 degrees hotter than normal for the next ten days and very, very dry. And so I'm still I'm waiting to hear more news out of this area. Like we've been tracking problems in that part of western Russia, eastern Ukraine, for a while. And, you know, I'm just waiting for it to all of a sudden become something more than it is and not getting a whole lot of info. So I think it's going to be something that may all of a sudden show up at the time, that there could be problems elsewhere around the world. And you know how it works today. All this compound and then all of a sudden there's a story that hopefully pushes the markets in the right direction. But at this point, I just want people to know, keep an eye on Ukraine and Russia, because it's not ideal there right. Todd Gleason 16:05 Now to keep an eye on China as it's related to dry conditions or at least part of it there as well, too. Meteorologist Eric Snodgrass 16:11 Yeah, we had droughts in kind of around Beijing, so there's big growing areas that surround Beijing, both to the north and to the to the west called the North China Plain. They were really dry. It was just dry South of Beijing as well. Again, a big spot where corn and beans. But the forecast plus what just recently fell broke that drought issue. So I think that's come off the table as being a major story going forward. They got some critical rains right at the right time. Todd Gleason 16:35 Thank you much. We'll talk with you again next week. Meteorologist Eric Snodgrass 16:37 All right. Sounds good. Todd Gleason 16:38 Eric Snodgrass is with Nutrien AG Solutions and AG Rebel joined us on this Friday edition of the closing mark of reporter came to you from Illinois public medium. It is public radio for the farming world online on demand any time you like it will ag dot org that's W I'll go ag dot a large.