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Dec 12 | Closing Market Report · Closing Market Report

• 0:00
  Todd Gleason: From the Land Grant University in Urbana Champaign, Illinois. This is the closing market reported as the December 2025. I'm extension's Todd Gleeson out of the office hosting the Farm Assets Conference in Bloomington this afternoon. By the way, don't forget that next week, I'll be on the road with the Farm Doc team for the Illinois Farm Economic Summits. Monday, we'll be in DeKalb, Tuesday in East Peoria, and on Wednesday in Mount Vernon.
• 0:26
  You can still pick your tickets up at willag.org or farmdocdaily.illinois.edu. Coming up, we'll talk about the commodity markets as usual with Mike Zuzlow at globalcomresearch.com out of Atchison, Kansas, and Eric Snongrass will join us to take a look at the weather forecast. Todd Gleason's services are made available to WILL by University of Illinois Extension. I'm out of the office this afternoon, as you know, so no update to the commodity markets from the CME Group in Chicago. Mike Zuzolo, globalcomresearch.com, out of Atchison, Kansas now joins us.
• 1:03
  Hi, Mike. Thank you very much. One of the things that I have not yet discussed on the air is an outside market function. This was the Venezuelan oil tanker, that the military intercepted, the US military, that is, coming out of Venezuela. These are, gallons of oil that have been sanctioned by The US, and apparently, they're from both Venezuela and Iran, and they were on their way to Cuba.
• 1:34
  How does this, if at all, play into the commodity markets for agriculture?
• 1:41
  Mike Zuzolo: Yeah. Was hoping we could talk about this, Todd, because I do think that there is a very strong relationship we need to keep track of. Certainly, is what I'm telling my clients and subscribers between the crude oil and the wheat. And so whenever something like this happens in the crude oil market, for instance, something that you would think would be very price friendly and, quote, bullish, and the exact opposite occurs where you make new monthly lows in crude oil, you kinda gotta scratch your head and wonder what's happening. And I think it fits very well into the analysis that the crude oil and the soft red wheat, especially, are globally looked upon as we go into 2026 as the two major commodities that are in such significant oversupply or will be in such significant oversupply, it's gonna spill over into other commodities, excluding probably precious metals and excluding the copper, which those three, silver, copper, gold, probably running their own fundamentals associated with AI and some of the other factors out there looming.
• 2:46
  But when we saw that price reaction, I thought it was very useful to come back in and say, okay, one of the things that was put out other than the Federal Reserve report and other than the WASDE report was a brand new energy outlook by the Department of Energy. And they talked about how they see in 2026 a persistent problem with about 2,000,000 barrels a day extra supply that demand won't meet or won't be met by demand. And so I I think you can really categorize the wheat, which is looking at 3,000,000,000 metric tons production in the world now with USDA's update this week and the United Nations FAO number that was put out maybe a couple weeks ago. We have now a 3,000,000,000 metric ton wheat production number. And so these two oversupply commodity leaders, I think, are really important as we go into our 2026 marketing plan and building up, you know, how we hedge.
• 3:46
  Todd Gleason: Oftentimes when I think of the marketplace, particularly of crude oil, I market down as the primary energy source, and then I think of all other commodities as energy sources, while they're food crops or feed crops, one of the two, and that crude oil, if it goes lower, can depress prices. You're also telling me that wheat will be in oversupply. How do you see that playing out in 2026?
• 4:16
  Mike Zuzolo: Well, it says very clearly for both of them, and this is where the Federal Reserve report came in on Wednesday, and we saw it on Thursday's trade, and I hope we see it through the close of the week, that a new six, seven month low in the dollar after the Federal Reserve comes out suggests that, a, the Federal Reserve was dovish b, they're gonna keep the money supply high and c, they're going to come in maybe in 2026 and do more than just one rate cut, even though they say they're not right now. I looked at the commentary. I listened to the chairman's commentary during a press conference, and I get the sense, and maybe it's just me because I'm nervous about it, but I get the sense that the loss of jobs potentially from AI in 2026 is a great big question mark. And I think they're ready at this point, thankfully, to lower rates more if they see problems arise in the jobs and labor market, and they're not going to just be completely honed in on inflation. So I think that's good.
• 5:15
  And so that to answer your question, like 2025, if the dollar can keep going down, then we can keep garnering market share even in the wheat. I mean, look at the weekly export sales that came out on Thursday year to date inspections or excuse me, commitments, I should say, tell a tale. And this is why I've always liked the grains more than the soy, generally speaking, because of the supply demand fundamentals, especially the demand. And, you know, corn is up 30% year to date, wheat up 23%, soybeans down 41%, and meal down 8%. Soybean oil also, soybeans, down 39%.
• 5:52
  So export demand has really helped the grain markets even in this tariff environment, and that's in large part thanks to the situation with the dollar. And so I think this is really a good piece of of the puzzle when it comes to how you market in 2026, sticking with a similar game plan depending on what South American weather comes and shakes out here in the next thirty days. Maybe be a little bit more friendly on the corn side and a little bit less friendly on the soybeans, and don't make a lot of changes in your marketing plan yet.
• 6:23
  Todd Gleason: So all things being equal as it's related to supply, if the Federal Reserve continues to lower rates and the dollar continues to come down, what you're saying is that there will be larger exports potentially of commodities out of The US, I think. And I'm wondering what price does in that case. Do we simply have more exports at current price, or do we have a price increase somewhere along the way?
• 6:57
  Mike Zuzolo: Yeah. That's an excellent question. I don't think anybody can really say yet because we still have a lot of shoes to drop, I. E, South American weather. And and, again, on Thursday, the models turned a little bit drier on week two, it seemed to me, and I think that really shored up the price action in the overall market.
• 7:13
  I'll put it to you this way. Going back to that wheat and soft red red wheat and crude oil market, if you look at a monthly chart of both of those or a weekly chart of both of those, Todd, you can see where soft red wheat made a major four year low right at the September, October 1, and it wasn't one week or two weeks later, the crude oil also went down and got close to its April low, which was also a four year low. These are the lows that I think we need to bounce off of, and I think the most likely scenario based upon the analysis I've done is we do that before the end of the first quarter of twenty twenty six. So if those if we go down to those lows, those lows hold, that's the answer that I can give you right now is there's no need to hedge at that point because we factored in and we're at multiyear lows, and therefore, the market is in balance, and we can keep the demand going.
• 8:06
  Todd Gleason: Can soybeans continue to go lower even if we bounce with wheat and and crude oil?
• 8:13
  Mike Zuzolo: I think they'll stay about the same, but you know we're moving in that acreage shift mindset I think already in the trade, and rightfully so with bigger bean acres on the horizon. I still go back to 2018 as kind of one of my model years to keep myself out of trouble and keep my clients out of trouble. We went from about a 300,000,000 bushel carryover in twenty sixteen-twenty seventeen time frame all the way up to almost a 900,000,000 bushel carryover by 2018, and that was in large part because of the lack of Chinese demand and that first go around with the tariffs. So I think that's what we have to watch out for is what do they actually buy. We don't have to worry as much about what they actually buy.
• 8:54
  I don't think, Todd, if we have South American weather to talk about after the Christmas holiday, because at that point, China, I think, will realize, okay. I'm probably more gonna have to play defense. I can't play offense anymore.
• 9:07
  Todd Gleason: Okay. And then speaking of China and soybeans, they did, sell from their stocks, through sinograin that is, an auction an auction of soybeans this week, simply kind of swapping in what's en route to them from The United States, I guess. What difference does that make, if any?
• 9:26
  Mike Zuzolo: I think it was a necessary piece of the puzzle that had to happen right here, right now to keep us in at least the hunt to keep Chinese demand and purchases going. And it was followed up with some fresh purchases on Thursday from both China and unknown destinations. And we also had an unknown destination of corn, and I'll be interested to see if we ever find that out because it could be China. I took note in the WASDE report while we gained 7,000,000 tons of wheat production in most of our major competitors. USDA did take the Ukrainian corn number down.
• 10:00
  And so if that January yield decline in corn comes, which I think it should, especially in Illinois and Iowa, then I think, you know, we could be in a situation where what we've talked about in wheat and crude oil is oversupply. What we've talked about in soybeans is not enough demand, but in corn, it's it's almost looking like we need to start rationing demand at this point. But the the yield for The United States will probably dictate whether that's the case or not.
• 10:26
  Todd Gleason: Okay. We'll have to watch the January reports, include many reports. WASDE crop reduction and grain stocks among them along with the winter wheat seedings report. Other reports we will be keeping track of, and I know that you watch closely, are the cattle on feed numbers. I'm wondering what you're seeing in that marketplace and how it might trade out through the 2026.
• 10:52
  Mike Zuzolo: Yeah. I don't think that we need to go and take out the old highs in cattle unless we have a very rough calving weather seasonal. And so I'm going to put cattle kind of in a grain market situation where the weather is going to be huge, in my opinion, in February and March. And some of my cow calf fellows and gals are already telling me they're going to start dropping by the January 1 because they've moved up their schedules over the last few years just so they're not in the heart of the winter weather. So January, February, March are going to be really important.
• 11:27
  If we do have a bad calf crop, I think we could take out the old highs in feeders and fats. Otherwise, I think the supply and demand are pretty well in balance right now. And if the stock market would make a big correction, it would probably be really tough on the cattle market at this point. So I think mostly sideways from the recent ranges, but watching that weather.
• 11:47
  Todd Gleason: On that note, we'll ask Eric Snodgrass about the winter weather and what January and February might look like. Thanks much, Mike. We appreciate it.
• 11:56
  Mike Zuzolo: Thanks, Todd.
• 11:57
  Todd Gleason: That's Mike Souzlo. He's at globalcommresearch.com out of Acheson, Kansas. Up next, another in our elevator pitches gathered at the National Association of Farm Broadcasting Convention in Kansas City in mid November.
• 12:16
  Steve Sopher: My name is Steve Sopher. I'm the tech service manager for the state of Iowa with a specialty in seed treatment, and we're here today to talk about UPL and some of the new products that we have coming on in the, coming up this year. UPL is a one the fifth largest ag chemical company that you probably never heard of. We've got a lot of, we've, in the past, worked with a lot of post patent brands, but we've got a lot of brand new innovative products that we're working on. Such as?
• 12:43
  Such as NEMAXA, seed treatment for nematodes. We've got Intrava DX, which is a brand new corn pre that, with a with a new AI for waterhemp. We've got Preview on soybeans, which is another pre product in soybeans. We've got Axios and apples, which is a fungicide. Really, we've got everything that covers the gamut.
• 13:07
  Todd Gleason: Let's talk about the nematodes. Corn nematodes, soybean nematodes, both generally controlled at least in soybean by genetics. Can you talk about that?
• 13:18
  Steve Sopher: Yeah. So normally, soybean genetics have been controlling nematodes. So there's a couple of genes that have been bred into those plants, one of which is the eight eight p I eight eight seven eight eight. The other one is a p king. Right now, the eight eight seven eight eight is a 95 plus percent of the genetics that are out there.
• 13:36
  What we're seeing right now in the especially in the Midwest, but all over, those populations of nematodes that are out there are starting to be able to, breed and live on varieties that have that P88788 gene. So it's no time more important than it is right now to start putting on a nematicide on the seed.
• 13:56
  Todd Gleason: And it works well? It works great.
• 14:00
  Steve Sopher: So ours is a bio nematicide. It's a three way bacillus bacteria, which is different from what's out there in the competition right now. All the other ones are a single strain bacteria, bioinheumatocyte. This is a three strain. What it does for you, one of the strains germinates early, grows with the roots, keeps the eggs from hatching, and the second strain germinates at a higher temperature, also grows with the roots, provides a zone of protection around that plant so that when the nematodes encounter that zone of protection, it just paralyzes them.
• 14:37
  They're not able to live in that kind of environment. And then the third bacillus strain is a plant growth enhancement product that you know, causes increased root growth and increased plant growth.
• 14:52
  Todd Gleason: Are there advocacy trials that have been done by third parties, universities, other places that might support your claims?
• 15:01
  Steve Sopher: Yeah. We've been doing trials on this since well, before 2022, but that's when I, started looking at this product. And I've been doing trials all across, the I States and the Midwest, including Wisconsin, also in Minnesota. I also had trials this past year in Louisiana on Reniform nematode and in Arkansas and in Missouri on Rootknot nematode. And things performed extremely well for Nymaxa.
• 15:27
  It was it was doing, up to five bushel better, especially in Louisiana. And you could see those visual symptoms about halfway through the year. I walked the plot. It was very evident that there was definitely something going on, the untreated check. Plant heights were very up and down, but the Nemaxa looked straight as a board looking awesome.
• 15:44
  Todd Gleason: Steve Soffer is the technical service manager with UPL across the state of Iowa. By the way, UPL has partnered with the Iowa Soybean Research Center at Iowa State University located in Ames. You're listening to the closing market report on this Friday afternoon. I'm Todd Gleason. Don't forget to visit our website at wilag.org willag.org.
• 16:08
  Our theme music is written, performed, produced in courtesy of Logan County, Illinois farmer, Tim Gleason. Let's check-in on the weather forecast now with Eric Snodgrass. He's with Nutrient Ag Solutions and Agribal. We're talking of course on Thursday because I'm hosting the farm assets conference in Bloomington at the Agricenter today. Speaking of which, I'm going to guess, Eric, that I skated into the Agricenter on Friday morning.
• 16:50
  I hope I made it perfectly fine. I'm sure I did. However, there was quite a bit of snow that was forecast for Thursday evening. What was that expectation like when we talked?
• 17:00
  Eric Snodgrass: Yeah. To you know, we might get up three to five inches of snow out of this. And then there's another round coming on Saturday. It's kinda fun. We call these systems Alberta Clippers.
• 17:08
  They get their name because they start in Alberta, they clip through the Northern tier of The United States real fast, bring a little skips of snow, and then head out east. They're a lot different from the big monster storm systems like the Colorado lows or the Panhandle hookers or even the Gulf lows that can come through, which tend to ride on Southwest jet stream flow rather than Northwest jet stream flow. So long story short, we get these little systems that hit us, and they bring in some snow. We we saw the one on Thanksgiving, of course, and then we saw, a little bit more snow after that. And now we have two more rounds of it, the next one coming on Saturday.
• 17:40
  The good news is, Todd, you know, earlier in this week, we warmed up, and a lot of that snow melted. So now our top four inches of soil have a little bit of water in it. Now there's still some drier conditions the farther down you go, of course, and we're gonna have to probably wait on spring to revive those soil moisture values. But the good news is is that melt, while it made things slushy and muddy and gross, was exactly what our soil needed before we pile a little bit more snow on top of it. So, yeah, we're locked into it, and be prepared for some brutal cold weather this weekend.
• 18:11
  I think we might struggle to get above minus seven for our low temperatures as we work our way from Saturday night to Sunday morning. So very, very cold air on this next clipper.
• 18:21
  Todd Gleason: Oh, that's gonna make next week feel really warm later in the week, I think. I did see warm conditions right there late week next week.
• 18:30
  Eric Snodgrass: So I I was just looking at this this morning, and I was talking to my wife about it because we're trying to figure out, like, oh, what what's Christmas travel gonna look like? And some of the models are right now this is this is nuts, Todd, and it'll change, but some of the models came in with a high of 67 on Christmas Eve. Oh, wow. Now now now remember, let's just say it gets close to that. That is actually a signal that you better be prepared for the week between Christmas and New Year's.
• 18:55
  We're bringing that much mild air. We're likely gonna shock it back into normal with a big low pressure system some point between Christmas and New Year's. So I I you know, it's it's it's short lived. We've had a we've had plenty of access to cold air this year. We know that the polar vortex is still a huge mess.
• 19:11
  I mean, we understand that the atmosphere as we watch La Nina Fate is gonna be prepared to give us more shots of this really cold weather this winter. But, boy, there is a warm up coming, and it's kinda got two two two bits to it. One next week and then one as we get into the week of Christmas.
• 19:26
  Todd Gleason: Is this roller coaster going to continue through the winter into the January and February time frame?
• 19:31
  Eric Snodgrass: I think it is. I think we're gonna have a pretty volatile winter in terms of temperatures, but that's pretty typical for Illinois. So I I wouldn't tell anybody that, you know, anything's way out of whack. I would just say, hey. This is kind of what we get when we walk into a La Nina type winter, and I think we should expect pretty violent swings in temperature, to be honest with you.
• 19:50
  But the only thing I can say, and I mentioned it a minute ago, is that the polar vortex is off. It's weakened. It's been displaced. It's forecast to split in two. And, normally, that that tells us that when we get our Arctic outbreaks, they just tend to have a bit more of a punch.
• 20:06
  So that's why I said pretty volatile temperature pattern I expect not just to finish December, but most of January and February as well.
• 20:13
  Todd Gleason: Now I know on Thursday afternoon, were talking to the folks at Strategic Farm Marketing, the conference they held at the iHotel. What were your expectations for springtime during that meeting?
• 20:24
  Eric Snodgrass: Yeah. We we had to dig into that. And so I I threw out a word of caution in that when you look historically at years that finished a La Nina in early winter and then built in even El Nino conditions by summer, those years are a bit of a mixed bag. You have years like 2009 in there, which is like, hey, fantastic. You know, we love that.
• 20:46
  But we also had 2023 was in there. So 2009 was a cool summer, huge yields. We had great conditions. 2003 was bone dry in spring, but then storm like mad in in July. So the point here is that there is some risk.
• 21:01
  It's about a 60% risk that we see some drier conditions during the spring. So I'm now talking about April, May, and June, and that's not a problem. A little bit drier spring is fine for our crops. It's just the big question mark, and I'll explain this. You know?
• 21:15
  I'm talking to these guys about it. What does it look like when we get into those critical months of July and August? And we're just too far out to make a, you know, a really educated guess on that at this point.
• 21:24
  Todd Gleason: Okay. Now turn your attention to South America for me. What's your best educated guess about the crops there?
• 21:30
  Eric Snodgrass: Yeah. I think the issue was they had a deep low that went through some of the driest parts of Brazil, even hit some of par some parts in Northern Argentina, which were dry. And that low brought in rains that were needed in those areas. And so put a bit of a a hold on any sort of a weather issue in in, most of South America, to be honest with you. The thing we're gonna be watching is you know, a lot of folks always talk about drought, drought, drought.
• 21:54
  If we just get drought in Brazil, that's that's not how we have big problems on a Brazilian crop. The big problems with the Brazilian crop is if you can get it to stay wet, very, very wet in January into February. That is what delays the harvest of soybeans and causes some issues with quality. So to be honest with you, I'm trying to see if that is anywhere in the forecast going into late January, and there are some hints of it that they could be wet going into harvest. And that's good for soybeans, but it's really good for corn.
• 22:24
  So if you wanna be watching something in Brazil, watch across the Serrato to see if they get really wet in about forty five days. Really, really wet.
• 22:32
  Todd Gleason: Okay. So I really would prefer that you watch and just tell me if that's alright.
• 22:37
  Eric Snodgrass: Deal. I I I could handle that.
• 22:39
  Todd Gleason: Alright. Thanks so much. Eric Stotgrass, of course, is with NutriNA Ag Solutions and Diagrable. Joined us here on the closing market report that comes to you from Illinois Public Media. It's public radio for the farming world.
• 22:51
  Don't forget to join us next week for the Illinois Farm Economic Summit. We'll be in DeKalb on Monday, Peoria on Tuesday, and Mount Vernon on Wednesday. You can get yourself registered right now at willag.org or farmdocdaily.illinois.edu. I'm extensions, Todd Gleason.