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Mar 21 | Closing Market Report · Closing Market Report

• 0:00
  Todd Gleason: From the Lend to Grant University in Urbana Champaign, Illinois. This is the closing market report. It is the March 2025. I'm extension's Tuck Gleason. Coming up, we'll talk about the commodity markets with Mike Zuzolo.
• 0:12
  He's at GlobalComResearch.com out of Atchison, Kansas. I'll bring you up to speed on some of the agricultural news for the day, and we'll hear from Eric Snodgrass at Nutrien Ag Solutions in Agrabal about the weather forecast here in The United States, the safrinha crop in Brazil, Brazil, and get an update on what's happening in Ukraine and Russia as it's related to the wheat and corn crops there, all on this Friday edition of the closing market report from Illinois public media. And if you can stay with us for the whole hour, you'll hear our commodity week program with our guests, Matt Bennett and Danny Poff. If not, it's up online at willag.org right now, and many of these radio stations will carry the program over the weekend. Todd Gleason services are made available to WILL by University of Illinois Extension.
• 1:02
  May corn today settled at $4.64 a quarter a bushel. That was down four and three quarters. July '4 lower at $4.71 and a half. And December at $4.51 down two. May beans $10.09 and 3 quarters of a cent a bushel down three and a quarter.
• 1:16
  July at 10:21 and a half three and three quarters lower in November at $10.00 7 and 3 quarters down 2 and a half cents. Bean meal up $3.20 for the day. The bean oil down 70¢. And soft red winter wheat a penny higher at $5.58 and a quarter in the May. July '5 '70 '4 and a half up one.
• 1:33
  December futures a half higher. And July hard red winter wheat for the day up 2 and a half cents. Mike Zusolo, Global Com Research dot com out in Atchison, Kansas where it's windy. Oh, it's here windy too. But, you know, it's windy.
• 1:50
  I guess, Mike, it's it's just plain old windy. Tell me about the marketplace and what conditions really are like in your area too.
• 1:57
  Mike Zuzolo: Well, the markets and the weather are very similar this week, Todd. I think the conditions out here are questionable. We did not get hardly any precipitation. We had a lot of winds, enough to potentially, I think, do some damage to the wheat that is now out of dormancy. I haven't heard anything concrete from any of the clients I work with.
• 2:19
  But we also had a hard freeze again on Thursday morning. And that hard freeze went down to the Oklahoma Kansas border, especially the western half of that border. So be very eager to see the updated crop conditions report which will be coming out here in April, they'll start those back up again. But it's interesting because we started this week with the supply weather threat type mindset and new five month lows in the US dollar. We ended the week with gaps trying to be filled in the wheat on the weekly charts.
• 2:53
  In other words, we fell and the dollar was making new weekly highs on the index. We traded both sides of the extremes when it came to supply fundamentals and demand fundamentals. I suspect a lot of it had to do with the geopolitics and the dollar becoming a safe haven again, with The Middle East and Ukraine, Russia heating up again. Also probably finding a lot more fund related liquidation pressures on tariff and tariff talk and tariff news again, and that reigniting some of the lower demand fears.
• 3:31
  Todd Gleason: We did see that the European Union has pushed back their tariff imposition date to the April, at least at this point in time. That gives them some more time, I guess, to figure out exactly what tariffs they're going to impose and in onto, which product lines. However, the Trump administration clearly is going to impose tariffs on April. At this point, that will have an impact on the marketplace, I suppose. Has it all been built in yet?
• 4:03
  Mike Zuzolo: I think a good portion of it has. It doesn't mean we can't go back down to those March 4 lows and test those. In fact, it would kind of make sense that we would, once the reciprocal tariffs and the amounts are known. A) would have known now what those numbers would be theoretically. And more importantly, we would know what China and Mexico will do in response.
• 4:27
  Those are the two missing links right now that make me feel like that we've priced a lot of it in, but not all of it. Because those two are the most meaningful of the trade partners we have in agriculture, especially China. On that note, there are reports coming from Bloomberg. This has not been confirmed by the USTR office yet. But next week, there's supposed to be a phone call between the USTR trade representative Greer to someone who is a counterpart in China.
• 4:56
  They're not sure who. I think that would be potentially very market moving situation, especially if we got good news out of that. And all of a sudden, would start to hear that President Xi would be coming over to talk directly to president Trump. Right now, the lower level indications and and information I'm getting, intelligence I'm getting right now is president Xi is not in any way, shape, or form gonna come in The United States unless there is really gonna be good news. He's not gonna put himself in a position where he's gonna look badly.
• 5:28
  So it would be really nice to see that next week because then that would maybe take the sting out of the April 2 situation. The market might be able to breathe a sigh of relief.
• 5:38
  Todd Gleason: One of the extenuating circumstances within this, on the trade and tariff side is that Trump administration, and the US government in general has been worried about the Chinese shipping industry, its ability to build ships, put them into play on the marketplace, they'd like to make sure that that is slowed down. And there is an expectation that there may be attacks on even just vessels that are produced or made in China that dock, the large ones that dock in major ports in The United States. I suppose president Xi will have to weigh that and the tariffs all at the same time as they're making decisions.
• 6:15
  Mike Zuzolo: Yeah. I think I'm glad you brought that up because that news story exclusively on Reuters Wednesday or Thursday, and I started to think, oh, no, I better start watching the cash price of US corn and the basis. And what has happened since that news story came out is the cash basis, especially for corn has fought back this futures break. And you know, you saw the weekly export sales show up very nicely for corn and look very disappointing for wheat at face value. But if you look at new crop wheat export sales on that same report, they were four times what the trade was expecting.
• 6:52
  So essentially, you saw the wheat move out of twenty fourtwenty five into twenty fivetwenty six times three. So right now, we're not seeing that. In fact, you could argue that this is more funds and more futures price action, whereas the cash market seems to be getting tighter and tighter and tighter.
• 7:09
  Todd Gleason: There was a point last fall where we were all thinking that everything was front loaded. That doesn't appear to be the case. This time, or maybe it was, and there's just that much more demand behind this as well.
• 7:22
  Mike Zuzolo: Yeah, great point. I think we are still front end loaded on the soy complex with China, because of their meal prices and their livestock situation. Mexico, however, I think they may have been front end loaded if they could have gotten rid of their terrible drought, especially in Chihuahua province or state of Chihuahua that has actually gotten worse from my understanding. So it looks as though corn maybe is not front end loaded. We don't know what the Canadian ethanol situation is right now.
• 7:53
  But kind of wrapping up this this week, what I thought thought was very interesting was that the wheat market, the winter wheat drought increased got worse by seven points versus last week, and is now at 34%. But the trade clearly was not looking at any of the weather and looking at the situation when it came to potential production losses, whether here or in Russia, it really did become a demand story as we closed out the week. That's probably the place we need to start on Monday is to see whether the weather comes back in as a key element or not.
• 8:30
  Todd Gleason: And we'll talk with you again next Friday. Thank you much.
• 8:32
  Mike Zuzolo: Sounds great. You betcha.
• 8:34
  Todd Gleason: Mhmm. Mike Souzaloz with GlobalcomResearch.com out of Atchison, Kansas. In today's agricultural news, a proposal from The United States Trade Representative to impose new fees on ocean carriers with ties to China could take a major toll on US Farmers and ranchers. Two thirds of all agricultural exports by volume are shipped overseas, and the cost of transporting exports to international trade partners could increase dramatically. In an effort to address China's dominance in global shipbuilding and logistics, the Trump administration has proposed a series of fees as high as $1,500,000 targeting Chinese operated vessels and Chinese built vessels that access American ports.
• 9:30
  Depending on the fee set, bulk agricultural exports could face an additional $372,000,000 to $930,000,000 in annual transportation cost, says an American Farm Bureau Market Intel report. Bulk agricultural exports, particularly grain and oilseeds, are especially vulnerable. Farmers have lost money on almost all major crops recently, says AFBF's president, Zippy Duvall. From AFBF, let's move to the NFU or the National Farmers Union. It and an Italian farm organization called Coloretti have issued a joint declaration and letter to US President Trump and the European Commission President Ursula von der Leyen on the ongoing trade dispute between The United States and the EU.
• 10:18
  Farmers on both sides of the Atlantic are feeling stress and uncertainty from the tariffs and the threat of tariffs, says NFU president Rob Larue. We urge our leaders to begin negotiations as soon as possible to prevent further economic hardships on American and European farmers. The trade war puts agricultural producers at risk, they say, and must be stopped before it causes further damage. The president of the Italian organization went on to say that it shares with their American colleagues the same concerns about the negative effects of the escalation and the need to restore a constructive relationship between the European Union and The United States. Caldoretti is the leading organization representing agricultural entrepreneurs in Italy and Europe, in a view, as the second largest general farm organization in The United States, representing farmers and ranchers across the country behind the AFBF.
• 11:15
  And finally, one more international story for the day, this time from the US Grains Council, which released its twenty twenty four-twenty twenty five corn export quality report. It shows the average aggregate quality of US corn samples tested was better than or equal to US Two on all grade factors. The report says the average test weight came in at 58.3 lb per bushel and was higher than in twenty twenty three, twenty twenty four, and the five year average. The US Grains Council's international offices are expected to announce the results in a series of seminars for potential buyers. And that's a look at today's agricultural news.
• 11:56
  The theme music with the closing market report is written, performed, and produced by Logan County, Illinois Farmer, Tim Gleeson. Let's check the weather forecast now with Eric Snodgrass. He's at Nutrien Ag Solutions in Daggerville. Hi, Eric. Thanks for being with us.
• 12:13
  Eric Snodgrass: Yeah. Thanks for having me on again.
• 12:14
  Todd Gleason: Well, let's start, with what's top of mind for you. I take it there's some new information about drought in the Western Corn Belt in the summer time frame out?
• 12:23
  Eric Snodgrass: Yeah. So this was just released yesterday by the Climate Prediction Center, and it really does echo a lot of our long range global models. And what what they did was, they have now kind of anchored the driest midsummer, so June, July, and August, the driest precipitation pattern across the country honestly centered on Nebraska, Iowa, Missouri, and encroaching, of course, on the Mississippi River. And it is one of the most aggressive dry forecasts I've seen the CPC release for summer. And again, it just points to this overall kind of sense that we've got drought.
• 12:58
  I mean, what do we have? 44% of the lower 48 and some form of drought right now. We've got falls drought locked away in our dry subsurface soil moisture. And each system that keeps coming through moves so rapidly. I mean, yeah, it brings in a tremendous amount of severe weather.
• 13:12
  Right? Like last weekend, the middle of this week. But what did we have in all of that rain we got? Right? We had dust from Texas.
• 13:18
  So you just step back and look at these bigger picture things and you realize that the atmosphere is not just kinda out of balance. It's it's pretty far out of balance, and there's worry that this could carry into summer. And when the CPC comes out and says drought development likely and points it right at the Western Corn Belt, you know, my ears perk up because that's something we've been worried about for a while.
• 13:37
  Todd Gleason: If there was going to be wind erosion and it's going to drop soils on us, I'd prefer it come from Iowa as opposed to Texas. But I I'd rather Iowa keep their soils as well as and everybody in conservation. I was just thinking, you know, I'd I'd rather have something a little better than rather worse than our soils dropping down on us. Those winds, though, I I think they're important. Can you tell me more about the winds that we have there?
• 13:59
  Howling again today.
• 14:00
  Eric Snodgrass: Yeah. I mean, we we we saw it well at Willow Willow Airport the other day, 65 or 68 mile an hour gusts. It's very windy today. I will be cleaning up a tremendous amount of sticks in my yard here in a few minutes. But, you know, windy springs are normal.
• 14:15
  Right? We we get windy springs. But the question is, is there any sort of long term statistical change? So this morning, I dug out some data going back to 1940 looking at the Central Plains and the Midwest. So we looked at that area.
• 14:29
  Now it was quite windy, similar to what we're experiencing in the last couple of decades back in the forties, fifties, and sixties. But through the seventies and eighties, there's this dip, this lull where we just didn't have such strong spring winds that since about 1985 has been on the increase again back up to these levels that we once saw back in the forties, fifties, and sixties. So for many of us that are, you know, listening right now, that that wasn't a time period we remembered. Right? So in terms of this current generation, these winds are quite strong compared to our historical past.
• 15:02
  And, it's mostly a spring event, which is kind of the time of year when having strong winds is is okay other than these huge dust storms that we've seen due to drought areas in our South and West. So just wanted to give you that piece of information because I'm getting asked about it a lot.
• 15:16
  Todd Gleason: Where where do you get the data from? Is that National Weather Service NOAA data or someplace else?
• 15:21
  Eric Snodgrass: Yeah. So that is the National Weather Service NOAA data that contributes to some of the global reanalysis datasets. That's where we go back and reprocess historical data and put it on a grid so it's easier to analyze around the world, and that's where I pull that data from.
• 15:34
  Todd Gleason: Yeah. So are they putting balloons up and getting that kind of thing, or they just have
• 15:38
  Eric Snodgrass: That's part of it. Yeah. Yeah. Is a mainstay of our of our weather collection, information. All the way going back to World War two till now is the weather balloon launching across the country.
• 15:48
  Todd Gleason: So out of curiosity, have we heard from NOAA or the National Weather Service what impact the Trump administration cuts in their employee and staff numbers might be having?
• 16:01
  Eric Snodgrass: Yeah. Absolutely. And and understand this, Todd, regardless of political affiliation. I'm gonna defend NOAA no matter what. I've already done this in front of congress back in 2023 in front of a bipartisan committee that had tremendous support for Noah and their mission.
• 16:15
  So, you know, we did see numerous employees. I think the number at one point was up to 900 employees at Noah that were let go. I believe some of them have gotten their jobs back because of a judge ruling, but, this could have a a massive impact on what we do. So just as an example, if for some reason, NOAA was dismantled, that, You know my website agweather.com? Website would go I wouldn't be able to run it.
• 16:39
  In fact, most weather apps that people use would be useless. The weather channel would lose all of its content. People are well, about AccuWeather? Well, AccuWeather gets its stuff from there as well. NOAA is such a mission critical part of what we do in weather.
• 16:53
  And just remember this, for the average taxpayer, NOAA costs about $19 a year. And we get all of that content from them, every bit of life saving information. So I was a bit more disturbed when I heard just yesterday that because of staffing shortages, many in the Western And Corn Belt, Northern Plains, many of the weather station weather offices there are now reducing those weather balloon launches because they don't have enough staff to get them launched. And that's that's huge because that is about the only way by which we collect vertical transects through the atmosphere to understand stability, wind shear, to understand the upper level jet stream pattern. And you know, Todd, where all of our weather comes from.
• 17:31
  Right? It's barreling out of the planes.
• 17:33
  Todd Gleason: Right.
• 17:33
  Eric Snodgrass: So I I do get a bit up in arms about it because I think it is I think it is a a major inefficiency cut that doesn't make sense. And then on top of that, it's quite bothersome knowing that the biggest mission for NOAA is to protect life and property. And where are we in time? We're going into our spring severe weather season right when we need to have this information.
• 17:55
  Todd Gleason: Okay. So coming back to those balloon launches in in the Western Part Of The United States or the great the Plain Plain States and the Western Corn Belt. What impact does that have on our ability to predict weather here coming into Illinois, Indiana, the Eastern Corn Belt?
• 18:13
  Eric Snodgrass: Yeah. So there's drought there right now. Right? I mean, we've got a big area in the Northern Plains that is tucked in fact, I was having a conversation late last night with a bunch of guys in South Dakota on Twitter who were going after their spring wheat and just planting it into dust. And so they're asking all these questions, and I need to understand through the depth of the atmosphere where the deficits are.
• 18:33
  So to not have that's gonna be problematic because, like I said earlier, 44% of the Lower 48 in drought right now. Where are the two big epicenters of it? The Southwest and then the Northern Plains. And the concern is those areas push east toward the Mississippi River, which is where we started today, which is with the new CPC update. So I need that data and that information.
• 18:54
  So I hope that there's a solution that comes out soon to get it back online.
• 18:58
  Todd Gleason: Okay. What else should we talk about today as it's related to weather and growing conditions across the planet?
• 19:03
  Eric Snodgrass: Yeah. Well, first thing is I told you about the Western Corn Belt. I think the Eastern Corn Belt may continue to see tighter windows, but there is a bigger factor taking shape for summer that's not just centered here in the Western Corn Belt with respect to drought. One of our new long range models put out by Columbia University also put drought in Ukraine and Russia at the same time that we're expected to see it in our whole western half of our Corn Belt. And if I'll be honest with you, Todd.
• 19:30
  If those two things hit and we get news that there was some trouble on the safrinha crop in Brazil, that that's a lot of news compounding toward a shorter crop of corn globally. And I think it's gonna be something that could be very newsworthy if and it's a big if if those three three things are timed. And just to be clear, Todd, normally, this time of year, I don't talk yet about those kind of risks. So I just wanna let you know that my ears are really perked up with respect to these three possible big areas having some issues.
• 20:01
  Todd Gleason: Because of the seasonality, wheat, would be harvested in July presumably or thereabouts.
• 20:08
  Eric Snodgrass: Mhmm.
• 20:08
  Todd Gleason: Dry conditions early in the season are gonna be really difficult for it. Corn in The United States, maybe in Russia, Ukraine, a little less so because, like here, it would be harvested in, September, more likely October. So still chance to get that done, but it it is you you can have a bad wheat crop in the same place that you have good corn crop or just stay bad all season long.
• 20:31
  Eric Snodgrass: I mean, my worry is pollination. Right? The reproductive stages of that corn crop. But you're right. If the Central Plains Of The United States don't finally get active with thunderstorms I mean, Todd, all the severe weather, where has it been?
• 20:43
  It's it's been east. Right? It's not gotten back to the plains yet. So if that doesn't happen, when we get into April and May when that wheat crop is trying to finish and if we have drought that builds in June and July for Russia, it's a wheat problem first. It's a corn problem second.
• 20:57
  And I think we gotta pay attention to it. And to be honest, Todd, I told somebody last night, I go, I hope I'm way wrong. I I mean, I just hope I I misread the tea leaves here and that it doesn't happen, but I can't ignore some of these early boxes getting checked to tell me to tell you that there could be some risk going forward into this 2025 season.
• 21:15
  Todd Gleason: And finally, because you said it's a corn problem second, and then I was reminded about safrinha. You've mentioned it a little bit in Brazil. Are you concerned there very much so?
• 21:26
  Eric Snodgrass: Well, I checked NDVI values in Eastern Brazil on about fifteen, one five, 15 percent of their corn, cesarena corn acres. And it's the lowest in Eastern Brazil that we have on records going back to about the year February. So it doesn't look very good. But starting at about four days from now, the front that's been creeping through Southern Brazil is gonna get up in Eastern Brazil, they're gonna get some rain. Mato Grosso looks fine.
• 21:49
  Southern Brazil looks okay. Argentina's gone over wet as they've now entered their fall time frame. So what would need to happen is that the monsoonal rains would need to shut down a bit early in, let's say, the April versus the April, and we could start to see the production number on those safrinha corn acres back off. Now that always depends on how many acres they put in, but if we can ding them a little bit on yield, we'd get that information in May when we'd finally know how big this crop's gonna be in The US. So compounding things here could be quite interesting with respect to weather, putting a little bit of premium in the market going through the next two and a half months.
• 22:28
  Todd Gleason: Thank you very much for all the information today. We'll talk with you again next week.
• 22:32
  Eric Snodgrass: Alright. Sounds good, Todd. Thanks.
• 22:33
  Todd Gleason: Eric Snodgrass is with Nutrien Ag Solutions and Aggable 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. Don't forget that our commodity week program is up online right now at willag.0rg with our panelist Matt Bennett of agmarket.net and Danny Poff of strategic farm marketing. You can listen to the whole of the program there. Many of these radio stations will carry it over weekend, and if you're listening on our home station, you'll hear it next here on Illinois Public Media.