Latest / Closing Market Report / May 20 | Closing Market Report

Transcript

May 20 | Closing Market Report · Closing Market Report

• 0:00
  Speaker 1: From the Lend Grant University in Urbana Champaign, Illinois. This is the closing market reported as the May 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Bloem. She's at TotalFarmMarketing.com out of West Bend, Wisconsin.
• 0:16
  We'll discuss the agricultural weather as we close out our time together with Donde at day weather in Cheyenne, Wyoming. We'll also take up some of those drought conditions in China and along the way, we'll catch up on yesterday's USDA weekly crop progress state reports and hear from Dave Chatterton too about the agricultural energies on this Tuesday edition of the closing market report from Illinois Public Media.
• 0:41
  Speaker 2: Todd Gleason services are made available to WILL by University of Illinois Extension.
• 0:46
  Speaker 1: July corn for the day settled the nearby contract at $4.54 and a half, up 7. December at $4.48 and a half, 6 and 3 quarters higher. July beans $10.53 2 and a quarter higher November 1041 up 4¢. Bean meal futures up a dollar 50 for the day. Bean oil 6¢ higher.
• 1:05
  Wheat futures up 17¢ at $5.46 a bushel in the July for the soft red. The hard red at five thirty six and a quarter up 13 and a half cents. Live cattle futures down 7 and a half cents for the day. Feeders up two and a half, and the lean hogs were down 2 and a half cents. Just a quick reminder, join us Friday at Riggs Beer for the small grains field fest.
• 1:29
  It's the fourth annual event starts at 03:00. Naomi Blum now joins us from totalfarmmarketing.com out of West Bend, Wisconsin. Hello, Naomi. Thank you for being with us again on a Tuesday.
• 1:40
  Speaker 3: Yes. Thank you for having me.
• 1:41
  Speaker 1: Let's start with the wheat futures. Winter wheat and soft red both up in double digit gains as we finish the day. It says that was on the crop progress report which showed a two percentage point drop just rolling from fair down or from good down to fair. In the condition rating, that doesn't seem like it's worth sixteen, seventeen, or 14 points. What'd you think of the marketplace?
• 2:10
  Speaker 3: Well, I think it was a combination of things. So crop progress rating's definitely a portion of it. And I think people are still concerned about the quality of that crop in Kansas as we learn more about that disease that's spreading throughout the fields. We also had some technical buying today once prices were able to move above some of these shorter term moving average. So that enticed some additional buying as well, but also finally people waking up as to the cheap value that wheat is on a global sector.
• 2:39
  Saudi Arabia purchased 621,000,000 metric ton of wheat probably from portions of the Black Sea region. But in general, I think people are are realizing the value of wheat at this cheaper level that there are still some weather concerns globally that we need to get through. And so we are seeing the bargain buyers step up. And, that led to the marketplace having this nice 15 to 18¢ rally across the wheat complex. The July Chicago wheat today stopped just shy of the fifty day moving average near that five forty eight area.
• 3:16
  So that is a short term resistance area. Wouldn't surprise me if we see a little back and fill action tomorrow, because it would take some additional fresh news to justify a further jump higher after this awesome 18¢ move today?
• 3:28
  Speaker 1: Yeah, so as I was thinking about that, you're reminding me of those crop conditions and folks thinking about it, it is May. Wheat is very subject to disease as, was being reported out of the Kansas wheat tour, and the soft red has been under wet conditions, because it's almost all grown in the southern part of the state of Illinois, all spring long still running behind down there as it's related to corn planting. We'll talk with Matt Bennett more about that on Thursday. So turn your attention then now to the corn market because it followed wheat higher. Did it deserve to do so?
• 4:06
  Was it just being dragged higher, or were there other things afoot in the corn market as well?
• 4:11
  Speaker 3: So definitely a little bit of following weed higher, but also again, bargain value on that corn crop. And I think people are also realizing that after this rain system goes through, the outlook for weather turns to significantly drier. And NOAA, the weather service said that they're expecting a very parched July and August throughout the Midwest. So, again, people looking to buy value, cheap corn. There could be some weather scares ahead.
• 4:40
  So we're keeping an eye on that. And I also think that with Illinois only 74 planted, people are a little bit nervous too of when that rest of that crop is gonna get planted. And now you've got a large portion of Illinois that's gonna be facing, their pollination in just the extreme heat of July with the later that this crop gets planted. So again, a lot of people waking up, people recognizing that US exports for old crop have been really substantially strong. We could see another, higher tick in demand on the June WASDE for old crop, and then that lowers in new crop carry in.
• 5:20
  And then you add that to a background of it's still dry in China, and the entire Northern Hemisphere needs to have perfect weather this summer, or we actually still have tighter ending stocks of corn on the global scene. So we're not out of the woods yet. We're starting to put weather premium back into the marketplace, And corn markets, December corn yesterday with a nice bullish hook reversal, follow through action today. But similar to wheat, December corn now at a short term resistance area near four fifty. We'll need some fresh news to get it to get through that in the next coming days.
• 5:53
  Otherwise, like I said, with wheat, could could potentially see a little back and fill action, but at least it really finally looks like that corn market is bottoming out.
• 6:01
  Speaker 1: Now because you mentioned the dry conditions in China between the Yangtze and the Yellow River, a lot of that in prime soybean growing region, I'd have to double check, but I'm pretty positive that's the case, Some of it in the corn growing regions as well. Those are more to the Northeast and North Central parts of China. I'm wondering when you think about soybeans, because China did not buy again this week, How concerned you might be, as it relates to their purchases this year, not only from The United States, but they're running behind with Brazil as well.
• 6:36
  Speaker 3: Yeah. I did notice that news that they are behind on some of their purchases, and part of it may be for them to really understand where The US crop is gonna be this summer, where their crop is gonna be this summer, and as they work through their negotiations with The United States on trade deals. Keep an eye on Argentina. It has been really now too wet and too much flooding down there. There are fields underwater as they're trying to finish harvesting soybeans there.
• 7:02
  So they're talking about just losses or not even being able to harvest some of those fields that might shift some potential demand to The United States. But, of course, Brazil having that monster crop and large global lending supplies is is a cushion that the world has. But in The United States, there's no room for weather error, and we're still waiting to get details of the biofuels notifications. So lots of moving parts coming here, soybeans waiting their turn and biding their time. But it just feels like we're finally starting to put weather premium back into these markets heading into now labor or I'm sorry, Memorial weekend.
• 7:44
  Speaker 1: Hey. Thank you much, and we'll talk with you again next week.
• 7:48
  Speaker 3: Sounds great.
• 7:49
  Speaker 1: That is Naomi Bloem. She's with TotalFarmMarketing.com. Yesterday afternoon, the United States Department of Agriculture released the weekly crop progress report. It shows corn planting across the nation 78% complete, 73% is the rolling five year average, half of that crop is up and emerged, the five year average is 40%, soybeans planted 66%, the five year average 53%, emergence at 34%, the five year average at 23%. Winter weed headed has reached 64%, fifty eight % is the five year average, the condition of the crop at 44% good and 8% excellent is down two percentage points from last week in those two categories.
• 8:41
  A note about next week's release. It will be the last state release of weekly crop progress reports as we'll tell you more about that when we close out this segment, and it will include for the first time this year crop conditions for corn. Now here are the state statisticians with updates from their regions.
• 9:00
  Speaker 4: This is Rebecca Alter, agricultural statistician for the USDA NASS Iowa field office. Little or no precipitation in warm temperatures allowed Iowa farmers six point six days suitable for fieldwork. Corn and soybean planting made rapid progress. There were scattered reports of replanting as early planted crops in some areas had struggled to emerge with the dry conditions. Topsoil moisture condition rated eight percent very short, 37% short, 53% adequate, and 2% surplus.
• 9:39
  Corn planted reached 91% complete, twelve days ahead of last year and four days ahead of the five year average. 58% of corn had emerged, five days ahead of last year's pace and three days ahead of normal. 84% of the expected soybean crop has been planted, just over two weeks ahead of last year and one week ahead of the five year average. Soybeans emerged, reached forty two percent eight days ahead of last year and six days ahead of normal. 86% of the state's oat crop has emerged.
• 10:20
  Oats headed reached 15%. Oat condition rated 0% very poor, 1% poor, 13% fair, 71% good, and 15% excellent. 23% of the state's first cutting of alfalfa hay has been completed. Hay condition rated 78% good to excellent. Pasture condition rated 63% good to excellent.
• 10:50
  No livestock concerns were reported. And that's this week's report of crop progress and conditions across the state of Iowa. For the USDA NASS Upper Midwest Regional Field Office, this is Rebecca Alter.
• 11:04
  Speaker 2: Hello, everyone. This is Brad Summa, director of the USDA NAS Heartland region. There were five point eight days suitable for fieldwork in the week ending May 18. Statewide, the average temperature was 67.4 degrees, which was 4.6 degrees above normal. Precipitation averaged point three nine inches, which was point eight zero inches below normal.
• 11:29
  Topsoil moisture supply was rated at 5% very short, 26% short, 51% adequate, and 18% surplus. Corn planted across the state of Illinois has now reached 74% compared to the five year average of 77, and the corn emerged has reached 54% compared to the five year average of 48. Soybeans planted across the state has reached 67% compared to the five year average of 64, and the soybeans emerged has reached 45% compared to the five year average of 33. Winter wheat headed reached 63 compared to the five year average of 77 and the winter wheat condition was rated 5% poor, 35% fair, 49% good, and 11% excellent. For our Illinois cattlemen, the pasture conditions were rated 2% very poor, 5% poor, 27% fair, 43% good, and 23% excellent.
• 12:27
  Again, this is Brad Summa, director of the USDA NASS Heartland Region, serving the farmers and ranchers in Missouri and Illinois. Have a great week and a wonderful Memorial Day weekend.
• 12:38
  Speaker 5: I'm Nathaniel Wernske with USDA National Agricultural Statistics Service. This week, Indiana topsoil moisture rated 85% adequate to surplus. Days suitable for fieldwork were four point eight days. Corn planting was 64%, close to the five year average. Corn emerged was 39%, eleven percentage points ahead of last year and eight percentage points ahead of the five year average.
• 13:05
  Soybean crop planted was 59%, an increase of 18 percentage points from last week. Soybeans emerge was 32%, seven percentage points ahead of last year and nine percentage points ahead of the five year average. Winter wheat headed was at 51%, an increase of 20 percentage points from last week. The crop rated 73% good to excellent. 11% of the first cutting of alfalfa hay was complete.
• 13:34
  Pasture and range conditions rated 73% good to excellent. And that's this week's report of crop progress and conditions across the state of Indiana. I'm Nathaniel Wernske with USDA NASS.
• 13:46
  Speaker 1: Alright. Thanks go to the statisticians from across the Midwest for their updates of conditions in their regions. There was a special note included in this week's weekly crop progress report. It says beginning May 30, NASP will no longer generate publications tailored specifically to individual states or regions. There is no impact on state level data as it will continue to be available in the national releases and through NASA's public online database called QuickStats.
• 14:18
  All NASA reports are available to the public at nas.usda.gov. The state releases will no longer come for not only the weekly crop progress report, but also for any other state generated NASS report. On this Tuesday, let's check-in with Dave Chatterton to see what's been happening in the world of agricultural energies. Hello, Dave. Thanks for being with us again.
• 14:54
  I appreciate that.
• 14:56
  Speaker 6: Thanks for having us, Todd. Always good to be with you here, and, it's always been an interesting energy market here just like what we've seen in the grain markets.
• 15:03
  Speaker 1: Well, what are you watching most closely today?
• 15:05
  Speaker 6: We're keeping an eye on the diesel fuel market here that goes to the general, I think, you know, oil market in general and a lot of conflicting headlines here in the last week as the Trump administration has been talking with or if you want to use the term negotiating with Iran in regards to their nuclear ambitions and sanctions and trying to get a deal cut that would potentially return some barrels to the marketplace and increase supply here. So we've had, you know, crude if you look at the last week, we touched a low really near that $55 50 6 dollars per barrel mark and we briefly took the touchdown there. The highs of late have been about 64. We come in this morning here, trading at about 62. So we've kind of moved back up here.
• 15:48
  We're trying to figure out where things go. I think maybe the most interesting thing is that diesel fuel prices here in Illinois I looked at them on the Illinois production report here we're about a penny cheaper than we were last month but we're 60¢ cheaper on that diesel fuel line with an average of $2.78 than where we were last year. Know NYMEX futures have generally been in kind of a $2 to a $2.20 range. We did briefly go below $2 but looking at diesel fuel stocks in the aggregate from the EIA report nationally that the the distilled stocks, Todd, are at twenty year lows. So certainly there's a supply element along with that pricing element and something that maybe that producers should be paying attention to here.
• 16:27
  Speaker 1: The price per barrel is really low for crude oil, but its stock side, supply side here in The United States also really low, so that could create an issue going forward.
• 16:38
  Speaker 6: The supply situation, the stock situation is unique to to the distillate category. So if we look at crude, you know, supplies, if we look at gasoline supplies, you know, they're close to the five year average and really not out of line. When we look at diesel, that's where the issue has been and exports of diesel have been very strong. We've had good industrial production here. So over time those stocks have come down to a point now where I think you don't want to be working off the bottom of your tank or have nothing contracted.
• 17:03
  I think you want to keep your tanks relatively full, be looking for opportunities to extend your coverage through the summer and maybe even contract into the fall. And it's not that we have to get something, hey, done right here, but these these headline risk I think now is starting to swing back to the upside. We've had a lot of Wall Street pontification and a lot of talk about additional oil coming on. OPEC is increasing supply, different things and that we're going to have a glut towards the end of the year. That may be on a global basis but I don't think that's going to be for The U.
• 17:33
  S. And at some point physical supply is we can't burn a futures contract so we need that physical supply and the fact that those physical supplies for diesel and distillery are at a twenty year low. Think like I said just it's something you should be paying attention to and and making sure you're not you're not falling asleep at the switch here.
• 17:50
  Speaker 1: On the gasoline slash ethanol side of the ledger, what do we suppose the summer driving months look like and the demand for ethanol as an octane?
• 18:02
  Speaker 6: The overall gasoline demand has been pretty flat. We've been showing some small growth here, but not enough to really move the needle. When we look at the blending margins continue to be attractive. I mean the ethanol discount to gasoline continues to tell us and you know a higher RIN price continues to indicate that the blender demand will be good here. The production demand for the producer margins, I should say, for the plants don't look nearly as exciting.
• 18:28
  We'll call them break even to maybe a dime, so know not that they're going to slow down a lot here Todd, but it doesn't look like we've got a big ramp up in demand. I think what we are watching are ethanol stocks here as they continue to be near historical highs and just we haven't been able to put much of a dent in that. We've seen a pretty dramatic slowdown in our export side on the ethanol side. So you know keeping the blending margin looks like it's going to stay intact because stocks are high, but you know, the demand from the corn side doesn't look like it's going to change a whole lot or you know, I'm not saying the USDA I think they have it pegged pretty well here, but the upside there is probably somewhat limited.
• 19:03
  Speaker 1: Hey, thank you much. I appreciate it.
• 19:04
  Speaker 6: Thank you, Tom.
• 19:05
  Speaker 1: Mhmm. Dave Chatterton is with Strategic Farm Marketing. Let's take a look at the weather forecast now. Don Day is here. He's with Day Weather in Cheyenne, Wyoming at Day Weather dot com online.
• 19:18
  Hey, Don. Thanks for being with us again. You know, it's been where we are really nice. We had about an inch of rainfall last night, maybe getting some more in the next, I don't know, eighteen to twenty hours or so. I'm wondering what the rest of the Corn Belt has looked like through this last wave of rainfall.
• 19:40
  Speaker 7: Well, the the some of the Northern And Western Corn Belt areas, which I think in previous weeks we talked about could use some rain, the Eastern Dakotas, Minnesota, parts of Wisconsin, and Iowa, Nebraska, they all have in the last week picked up some pretty significant rain, especially the far northern and northwest areas of the Corn Belt. So they've been able to get back on track in terms of precipitation there. You mentioned the the moisture in the Central And Eastern Corn Belt here over the short term, and there's more coming. And, also, you know, we're we're gonna go into this upcoming Memorial Day weekend with chances of showers and thunderstorms. Pretty much Corn Belt ride, especially the the Northwest and Western and let's say that some of the central areas of the Corn Belt.
• 20:26
  It's also gonna be cool. Temperatures are gonna be well below average for several days. In fact, the eastern half of the nation for the last, let's say, seven, eight, nine days of May will be looking at far below average temperatures. We don't expect anybody to a freeze, but it's gonna be cool.
• 20:43
  Speaker 1: The rainfall that they've gotten in the Western part of the Corn Belt, the rainfall that they have yet to get, plus that cool temperature, which will allow it, I suppose, to be able to percolate into the subsoil area. How much help will that give to those dry regions?
• 20:59
  Speaker 7: Some areas really big help because it wasn't only one storm system, but actually two that kind of covered the same the same ground. And with that was some, as you mentioned, the cooler temperatures. So is it gonna completely erase all the dryness up there? No. But they were in desperate need of getting something and the timing of it was good.
• 21:23
  So the prospects over the next two weeks for more precipitation in some of those same areas is pretty good.
• 21:31
  Speaker 1: Does the summertime in your opinion look pretty good for the growing season across the Corn Belt?
• 21:35
  Speaker 7: I think so. We have conflicting signals. We have some computer models that are diametrically opposed to each other in terms of some of their predictions and we're also going to a neutral state out in the Pacific Ocean, which has less impact in the summer, but is something to kind of keep an eye on because we're not talking El Nino or La Nina as we head into the summer season. So I think overall, while there's always winners and losers in the weather lottery, I think it's going to end up being a decent summer for most.
• 22:06
  Speaker 1: And we have had some concerns about growing regions in China. I do not believe that those are centered on the Corn Belt area there. That would be the Northeastern provinces of that nation. What do you see there for the summer? Have you looked at it yet?
• 22:23
  Speaker 7: Yeah. Some of the seasonal forecast coming in for for June, July, and August, they're showing the tendency for the better rain chances to be in the North Central and Northeastern growing areas of China especially as we get into June and July. Now as we get into those same months, the Southern and Southeastern growing areas, China look to have below average precipitation. So we're gonna have some pockets of China that as we get into the early summer, midsummer season, we'll need to keep an eye on, especially, in that July, August time frame.
• 22:57
  Speaker 1: Thank you very much. I appreciate it, Don.
• 22:59
  Speaker 7: Thank you.
• 22:59
  Speaker 1: Dundee is with Day Weather at DayWeather.com online. You've been listening to the closing market report from Illinois Public Media. I'm extension's Todd Gleeson.