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Apr 04 | 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 April 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Mike Zusolo. He's at GlobalcomResearch.com out of Atchison, Kansas. In fact, if you can be with us for the whole of the hour, you'll hear more from Mike as he was part of our commodity week discussion recorded yesterday afternoon with Matt Bennett and Logan Kimmel.
• 0:27
  And then during this first half hour, during the closing market report, you'll also hear from Eric Snodgrass about the weather forecast in The United States and what he thinks the hurricane forecast might mean for summer weather in the Corn Belt. Oh, and along the way, I'll remind you of some recommendations that come from the Midwest states as it's related to the maximum return rate for nitrogen and some calculations in the study that have been done by the PCM or Precision Conservation Management data set to prove that this works and that about 70% of farmers are applying nitrogen at a rate that decreases their income even if it is increasing their yields and we'll do all of that 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 online on demand at willag.0rg. Todd Gleason's services are made available to WILL by University of Illinois Extension.
• 1:37
  Corn futures were up a penny or 2 for the day. Soybeans were down around 30¢. Had the meal off $4.90. Oil off a buck 31. Wheat futures were down around 7¢ for the day.
• 1:49
  Cattle futures were off $6.50. The feeders were 8, 25 lower, and the lean hogs were off $4 for the day. Crude oil, down $4.90. Mike Zuzlow of GlobalCommResearch.com out of Atchison, Kansas now joins us. Hi, Mike.
• 2:08
  Thank you, for being here this afternoon and for joining us on our commodity week program yesterday too. I appreciate that.
• 2:14
  Mike Zuzolo: Well, I always appreciate the invitation and the ability to share comments and share analysis with your great listeners, Todd.
• 2:22
  Todd Gleason: I was pretty sure that things would change overnight because of the tariff policies that have been instituted by The United States and that those would not be in the commodity week program. In fact, China, in the wee hours of this morning, this morning, our time at least, said that they would impose on April a 34% reciprocal, I suppose, tariff on all goods coming from The United States into their country. That pushed the market, particularly soybeans, lower. Can you tell me what the reactions were like in Chicago?
• 2:58
  Mike Zuzolo: Yeah. That was a good way to frame it up. Because with China now giving us more of an idea of the demand side, and that being a key missing link when we talked on commodity week, we have China and I think the trade sees it as most of Asia in terms of the demand side of the equation, Todd. As you rightfully point out, that soybean trade took an extra hit compared to the other grains, especially the corn market. Yeah, when you look at the pork and bean trade, I think that's one thing that I will be looking at when I come back next week again because the hogs and the soybeans are oftentimes associated with China and Asia.
• 3:35
  Obviously, Mexico is a big player, the biggest player for our pork exports. But meat exports into Asia really are key and critical and I think we saw that on Friday with the hogs down about 3.7, soybeans down about 3.5%, four %. So they were the leaders to the downside. Think they actually added to the negativity in the cattle market. And I say that because the cash cattle market remains elevated at about now a $7 or $8 premium to the futures as of Friday's close.
• 4:11
  It's something else to be watching. Kind of going back to what we talked about a second ago, I really think the market made a distinction after the Chinese news of picking the commodities to not sell that were based upon USMCA and in our northern trading partner and our southern trading partner versus China and Asia.
• 4:33
  Todd Gleason: So a couple of other things from the outside crude oil touch touched the $60 a barrel level in that range that is, and the Dow Jones Industrial Average below 39,000. What are these two things mean to you?
• 4:48
  Mike Zuzolo: Yeah. Not a good trade Friday compared to Thursday when you add that. And also especially the the probably the third and most important leg of the stool is the US dollar. It really came roaring back, up about a percentage point, not nearly making back what it lost on Thursday. But as we talked about on the commodity week program, I really think if we in the ag sector and the commodity sector as a whole want to come out of this less scathed than Wall Street, We really need that dollar to continue to depreciate and weaken and work this market into a mindset that our goods are getting cheaper, our interest rates are going down by our bond yields.
• 5:30
  And those two things are both inflationary. And I think we got half of that from the Federal Reserve chairman on Friday in his speech where he looked at slower growth, rising inflation. That's the definition of stagflation. What I'd like to see is the dollar continue to soften, and the bond yields continue to go down. And we actually start talking about inflation again, here in The United States, and that may attract the commodity investment demand and soften some of this blow.
• 5:58
  Todd Gleason: Just with these three days, Wednesday, Thursday, Friday, of the tariff, war trade war in play, not imposed just yet. That won't happen until tomorrow and then again Wednesday, I think, of next week. So April. I don't recall what day that ninth is. Pretty hard
• 6:18
  Mike Zuzolo: to keep track of right now.
• 6:19
  Todd Gleason: It is. But once they're imposed, do we have a a second dip lower next week at imposition? Do we, as the futures are prone to do, take it all into account by then? What what what do you see coming? And, of course, we haven't heard from the rest of the globe about their plans yet.
• 6:43
  Mike Zuzolo: Yeah. That's it. That's the answer for me, Todd, as we're hearing on Friday afternoon that maybe Vietnam and The United States will work out a sideline deal, bilateral trade deal. We need three or four of those to compensate for the actual trade tariffs going into play and being put into action in order to not have another leg down in this market. We saw a really nice showing on the corn market for the week, not far from the weekly highs on Friday's close, we've got some weather support there.
• 7:12
  The bull spread was very active again, July D's getting above 20¢. Again, that's South American, specifically Brazilian weather, I think. And also our planting weather. AccuWeather made a big deal, made news week this week about the headline that the rainfall in that Mid South Tennessee River Valley, Ohio River Valley, could exceed the 500 or even maybe the 1,000 year average as we get into this next five days. So I think we've got some reasons to find support.
• 7:41
  But if you just strip the weather out of the equation, and just talked about the tariffs, we need more bilateral trade deals, especially in Asia, that would help offset and maybe put the Chinese position a little bit more on the defensive.
• 7:57
  Todd Gleason: We will know more by the time we talk with you again next week. I'm looking forward to that. Thanks much for being with us today.
• 8:03
  Mike Zuzolo: My pleasure, Todd. And we'll remember that there's the weekly crop conditions that start up again. That'll be big for the wheat.
• 8:09
  Todd Gleason: Yes. It will. That, will come out Monday afternoon. We'll have those on Tuesday right here on the closing market report. Thank you much, Mike.
• 8:16
  Mike Zusaloem is with GlobalComResearch.com. He's in Acheson, Kansas. A nitrogen rate and timing study shows about 70 of corn farmers should apply fewer pounds of fertilizer to maximize their incomes. The data used in the study comes from the Precision Conservation Management or PCM project. Laura Gentry from the Illinois Corn Growers Association and Sarah Sellers with the South Dakota State University presented the information during a Farm Doc Daily webinar.
• 8:51
  Sellers and Agricultural Economists says 68% of farmers are losing money by applying more nitrogen than the university recommendations across the 12 Midwest states. These recommendations, called the maximum returned nitrogen or MRTN, are part of the online in rate calculator.
• 9:11
  Sarah Sellars: So you can see that most of the fields in the data set are receiving an application above the MRTN recommended range. 26% of the fields are receiving an application at the MRTN, and and 6% of our fields are receiving an application below the MRTN. So you could see there's quite a bit of people who are applying above the MRTN.
• 9:31
  Todd Gleason: Again, 68% are using more nitrogen than the land grant university recommendation. The results from the study suggest that applying above the MRTN increases yield but does not increase returns compared to applying at the recommended rate. It also showed some other findings, says Sellers.
• 9:49
  Sarah Sellars: Our main findings from this MRTN adoption study are that using cover crops, enrollment in an NRCS program, and the use of strip till or no till are the characteristics associated with farmers who are more likely to use the MRTN. The only significant factor we found associated with farmers who are less likely to adopt the MRTN are those farmers who are having their any of their nitrogen custom applied by an ag retailer. So if they're, having someone else do their application for them, it decreases the likelihood of adopting the MRTN.
• 10:26
  Todd Gleason: Other things brought forward by study show a seven bushel per acre corn yield advantage to a fifty fifty split nitrogen application, 50% pre plant, 50% post planting, and that farmers could shift away from fall nitrogen application altogether and maintain their current level of profitability. But mostly, as Laura Gentry of the Illinois Corn Growers Association noted, it provides proof the MRTN or online in rate calculator recommendations maximize profit, not yield.
• 10:57
  Laura Gentry: In fact, what this shows us is that when the MRTN doesn't get it exactly right, it's because it is being conservative, which is exactly what doctor Emerson Nafziger has been telling us all these years is that that that it is a conservative estimate for the most profitable rate range. So farmers should feel confident that they're not underapplying nitrogen fertilizer using the MRTN.
• 11:20
  Todd Gleason: Again, the PCM data demonstrates that 68% of farmers are applying above that MRTN range and should use the in rate calculator to adjust their application rates and improve their incomes. On this Friday, let's check-in with Eric Snodgrass as usual. He's with NutriNAC Solutions in Daggerable. Hello. How are you today, Eric?
• 11:56
  Eric Snodgrass: Well, we're in between chaos. So with respect to everything going on, weather and otherwise, it's, it's so far this morning. At least the weather's cooperating. So I don't know. We'll see how it goes this weekend.
• 12:09
  Todd Gleason: Yeah. Well, I was kinda hoping I might be able to mow. I don't know that that's going to be the case.
• 12:14
  Eric Snodgrass: No. We'll see. I I feel
• 12:16
  Todd Gleason: like the mower's gonna stay in the garage Yep.
• 12:18
  Mike Zuzolo: For just a bit.
• 12:19
  Todd Gleason: But let's start with the past week. Yeah. It has gotten a lot wetter. Tell me about where, why, and how much.
• 12:26
  Eric Snodgrass: Yeah. So there's been some holes that had been filled in. So we had some moisture get into the Southern Plains. Some got into Nebraska, which needed it. We even had some snow in the Upper Midwest.
• 12:36
  It hit parts of Wisconsin, Minnesota, even back to the Dakotas. There's about a half inch to an inch of liquid in that that's gonna melt. And given that their frost line was driven down pretty deep, it's about 20 to 40 inches right now, they're gonna get to keep some of that water. Now does that negate the overall drought scenario? No.
• 12:52
  The new drought monitor barely showed any sort of a change, and the longer range drought projections are still pretty aggressive on on Central Plains drop, but we'll come back to that in a minute. Let's talk about who had a lot of rain. In addition to the nearly, I mean, gosh, we're over 2,000 reports of severe weather just in last week alone. Parts of the Mid South saw anywhere between five and some places already over 10 inches of rain. And the near term forecast hits the same area for all this whole weekend, it's gonna continue to pour the rain down there while snow tries to sneak into the Texas and Oklahoma Panhandle out of New Mexico.
• 13:26
  So we're not done yet, Todd. And it's like we talked about last week, it's not just the places that don't have anything versus the places that have a little too much. It's the don't have anything and they haven't had anything for months versus these places that right now are knocking on better than 50 to 75% of their annual rainfall that they're just received here in the last forty five days or so. So this is a this is a problem. There's gonna be a lot of replant in the Ohio Valley, a lot of flooding through the Ohio Valley down into the Mid Mississippi Valley.
• 13:55
  And, these rains adding to it in the next forty eight to sixty hours are gonna be very, very problematic. It's historic, Todd, in terms of the total amount of rain that's falling.
• 14:04
  Todd Gleason: Can I ask a question about geography related to the Ohio Valley? How is it that it impacts the flow of weather that's coming up, I guess, from The Gulf?
• 14:16
  Eric Snodgrass: Yeah. Well, The Gulf has been just shoving moisture into the Ohio Valley for the last, ten days or so. What's happened is it's met coming out of Canada, some dry air, and there's been a boundary. We call it a deformation access boundary. Now that's just a bunch of nerds speak for air's coming from two different directions, giving us what we call frontogenesis, the creation of a front.
• 14:38
  But the reality of it is, Todd, is that geography is dominating this in that the flow coming from Canada is matching the flow coming from the Gulf Of Mexico where the two meet, neither is stronger. So the battery doesn't move. That's why we call it stationary fronts, and that's where the rain's gonna continue to train along as we go forward. And it seems to be lining itself up almost parallel to the way that the Ohio River Valley flows.
• 15:01
  Todd Gleason: Does that literally have something to do with the geography, or is it just about speed?
• 15:06
  Eric Snodgrass: It's about speed more than anything. Yeah. So don't geographical effects on why it's raining there are more about just the the size and shape of North America than it is the specific geography of that area.
• 15:17
  Todd Gleason: Oh, I got speed right. What do you know?
• 15:19
  Eric Snodgrass: Yeah. Yeah.
• 15:21
  Mike Zuzolo: How about that?
• 15:21
  Eric Snodgrass: The systems are slow now. That that was a wild guess. Okay. Where are we
• 15:27
  Todd Gleason: going next? What happens next week?
• 15:29
  Eric Snodgrass: Well, next week, we are gonna finally break away from this just onslaught of moisture. But, unfortunately, we got some cold air coming in here. I mean, I'm down at the the nutrient farm here in Champaign, and I was giving them a forecast yesterday. I said, hey. Look.
• 15:43
  By next Tuesday morning, we could see temperatures here, in the mid to upper twenties. Now the question is, do we stay that cold? And the answer is no. Right? It's gonna blow out of here midweek, and then we're gonna get a big warm up.
• 15:54
  And here's the thing, Todd, that's like mid April. Right? We were already talking about mid April, insurance dates are up, and I don't see cold air coming to add us at the middle of the month. Next week, yes, but more mild air begins to flood in here. And if we can avoid any cold, you know, cold snaps after that, I'm talking about the kind of cold that drops the frost line back toward us, we're gonna be going after this crop fast with any open window that we get here in Illinois.
• 16:19
  Now Southern Illinois, Southern Indiana, then Kentucky, Tennessee, Arkansas, no. They're gonna have to drain all that water out first and then replant what they've already planted. But get ready for the cold next week, but prepare for mild conditions to try to flood into the Midwest going forward for the rest of April.
• 16:35
  Todd Gleason: What's your forecast for April then?
• 16:37
  Eric Snodgrass: My forecast is kind of a week on, week off with respect to April rainfall. So I see the mild air coming in again after next week's cold, But with the mild air opens up the Gulf, we could see more moisture out of that and as a result, storms toward the latter half of the month of April, which is why we continue on this thought process that if you're in the Eastern Corn Belt, you're looking at tight spring planting windows because of that of ability for the atmosphere to keep opening things up. But we're used to that, Todd. I mean, we know we plant in tight windows every year. It's just no one wants to get a crop established when we know that there's some longer term risk on on this crop with drought.
• 17:15
  You don't wanna establish the crop with, you know, less than ideal conditions. So, yeah, April's gonna be a volatile one, but that's that's pretty common for April.
• 17:23
  Todd Gleason: Is there new any information in this week that we need to consider as it's related to the growing season?
• 17:28
  Eric Snodgrass: Yes. This is thank you. This is this is what I wanna tell you about. So this guy named Phil Klotzbach, he is a, scientist out of Colorado State. He's famous for his hurricane forecasts.
• 17:40
  He released them yesterday. Now I'm not I don't wanna talk about the hurricanes. I wanna talk about in his discussion the years that he chose as analogs. So what are they? They're 1996.
• 17:51
  They're 1999. They're 02/2006, '20 '11, '2 thousand '17, oh, and 02/2008. Now the years that I'm keying in on is 02/2006 and possibly 02/2011. And Todd, I know it's I don't if it's a faux pas. I don't know what you'd say, but I gotta be honest, there are a lot of boxes being ticked right now that actually say 2012 needs to be included in the analog package.
• 18:16
  So what happened in April and May and all of those years? Extremely wet conditions in the Mid South and dry in the same places has been dry now. So there's a lot of current correlation. Each of those years came off of a weak Nina and then built in another weak La Nina the following winter, which is what we're thinking is gonna happen. And what they did, Todd, and this is what's important is July, when you stitch all those years together, was hotter and drier in the Central United States, and that includes that includes us.
• 18:47
  Now Northern Illinois into Indiana, we tended to get better ridge riding storms during those years. So the drought stress was really more toward the western side of the state and then getting over past the Mississippi River. But it's another thing that just says because we've so we talked about all the models already this month, right, or last month. It's another thing that says there is drought risk on the table, and we need to just consider it. Because already right now, even with all that rain I'm telling you about, we saw 45% of the land area in the Lower 48 in D 1 to d 4 drought.
• 19:17
  So it's there. It's creeping, and we're concerned.
• 19:19
  Todd Gleason: Alright. Hey. Thanks much. We'll talk with you again next week.
• 19:22
  Eric Snodgrass: Yeah. You bet, Todd.
• 19:23
  Todd Gleason: Eric Snodgrass is with NutriNag Solutions and Agrabal joined us here on this Friday edition of the closing market report that comes to you from Illinois Public Media. It is public radio for the farming world online on demand anytime you'd like to listen to us at willag.0rg. Our theme music is written, performed, produced in courtesy of Logan County, Illinois Farmer Tim Gleason. Coming up, we'll hear from our commodity week panelist. If you can stay with us for the whole of the hour, you'll hear all of that program.
• 19:56
  Again, if not, it airs on many of these radio stations over the weekend and will be up online or already is in fact online at willag.0rg, where you'll also find information from the agricultural economist, the crop scientist, and the animal scientist. All three have posted articles in the past week. Think you will find of interest. Check them all out on our website right now today.