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Feb 25 | 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 February 2025. I'm extension's Todd Gleeson. Coming up, we'll talk about the commodity markets with Naomi Blum. She's at totalfarmmarketing.com out of West Bend, Wisconsin. We'll hear from Dan O'Brien at Kansas State University Extension.
• 0:22
  He joins us once a month to talk about the agricultural energies, particularly ethanol and renewable diesel. And then as we close out our time together, Don Day will join us from day weather in Cheyenne, Wyoming to discuss what's been happening in the weather forecast here on this Tuesday edition of the closing market report that comes to you from Illinois, a public medium. It is public radio for the farming world where you can purchase your tickets online at willag.org right now for the all day outlook. It's only a week away. The cost is just $40.
• 0:54
  The full agenda is there. Do pay attention to the authors that will be on hand and the books that they'll sign if you bring them with you. There are links in the agenda for you to pick up books from Neil Dahlstrom, as well as Scott Erwin and Jonathan Coppes. It It should be a fantastic day. I hope that you will join us at the Beef House next Tuesday, but you need to register right now at willag.0rg.
• 1:22
  announcer: Todd Gleason services are made available to WILL by University of Illinois extension.
• 1:27
  Todd Gleason: March corn for the day settled at $4.79 and three quarters, down two and three quarters. May at $4.94 and a quarter, two and three quarters lower. And December, down three quarters of a cent. It settled at $4.70 a bushel for the corn. The March soybeans at $10.31 and a quarter, up two and a quarter.
• 1:44
  May opinion a quarter higher at $10.48 and three quarters in November at ten fifty one, three quarters of a cent lower. The bean meal futures up $2. The bean oil, 26¢ lower. Soft red winter wheat down 6.25 at 5.723 quarters for the March. The hard red March at 5.913 quarters down four and three quarters of a cent.
• 2:05
  The crude oil $68.94 a barrel down a dollar and $70.76 cents. Cattle futures in the nearby contract, 62 and a half higher. Naomi Blum now joins us from totalfarmmarketing.com. She's in West Bend, Wisconsin. Hi, Naomi.
• 2:21
  Are you enjoying some warmer weather there today?
• 2:24
  Naomi Blohm: Oh, yes. We are. It's been close to 50 the last, two days, and it is a delight. It was nice to have the snow finally, but I'm alright to see it melting out my window. So it is a gorgeous day.
• 2:36
  Todd Gleason: Yeah. I heard for the first time last week or maybe the last two weeks they opened up the snowmobile trails. They'll have to be closed again, I suppose.
• 2:43
  Naomi Blohm: Yes. So the snowmobilers were going hard while the trails were open, late at night, in the afternoons. So it was nice to have them open, but, yeah, they are, I'm sure, closed today with all of the mud and slush that's out there now.
• 2:58
  Todd Gleason: Well, let's talk about more mud and slush because it seems to be a little muddy for the marketplace at this time. Trying to figure out which direction it really wants to head from this level. Can you talk to me about what you're seeing in both corn, soybeans, as well as wheat?
• 3:13
  Naomi Blohm: Yeah. We saw a nice technical pullback and correction after the rally that we had higher for most of January, of course, and early February. So corn market hitting about a 38% Fibonacci retracement on charts, getting close to the forty day moving average, for, daily charts. And so this has been a kind of a target. I feel like traders, now might wanna come in and and do some buying at these values because we've had this pullback.
• 3:41
  And, of course, the corn fundamentals remain the most friendly right now in the complex for old crop. I have a hunch we'll see some end users start to increase bids, just because, you know, this 25¢ pullback has has been just a nice correction and an uptrend. So traders also probably doing a little bit of position squaring ahead of first notice day for the March grain contracts later this week, also ahead of the USDA Outlook Forum later this week as well.
• 4:11
  Todd Gleason: Yeah. So speaking into that Outlook Forum, USDA does release some numbers in November that they use some some of in the World Ag Outlook, or the Ag Forum. The World Ag Outlook Board then in November said, we think 92,000,000 acres of corn. The trade's much higher than that at 94. What happens if we come in at 93 and a half or even just at 94?
• 4:38
  Naomi Blohm: Well, you know, a lot of the the expected increase in acres, I think, is priced into the market already. So, unless they do something dramatically larger than expectations or dramatically smaller than expectations, It's a nonevent and it's already been priced into the market. So what we will be wanting to see is if there's any indication about biofuel demands as as the conversations flow from the USDA outlook forum. And we'll maybe wanna be, of course, keeping an eye peeled on, next round of trade and tariff talks, which will be next week. That might affect the market as well, in addition to keeping an eye on weather in South America.
• 5:16
  Todd Gleason: What's coming out of Washington DC that you're keeping your, pulse on other than those trade talks for next week? Are there policies that you've been watching, 45 z or something else?
• 5:25
  Naomi Blohm: Well, that's the one that we're always very curious to see if there's gonna be more commentary about that. Now earlier this week, the American Petroleum Institute, you know, they kind of pressed for a nationwide policy on higher ethanol blends of gasoline. So so there's, you know, it's kind of fresh in mind for for the marketplace in general. So we'll see if we can get some traction on that. Looking forward as well, just because we had, you know, we still have strong ethanol demand.
• 5:54
  We still have strong demand for exports. I feel like at some point in March either with the March USDA WASDE report or the March quarterly stocks report at the end of the month, we'll see the demand uptick and likely see ending stocks come down for old crop corn values. And then we'll also keep an eye on what's happening with the biofuels in terms of soybean, soybean oil. And actually, there is some talk today that, palm oil supplies are gonna be tight in in Indonesia and Malaysia, for the next two to three months because there's been some flooding there. So that might be something where we see, some of those countries in Southeast Asia, and other countries in the world looking to maybe import bean oil, especially if, palm oil supplies remaining tight could keep palm oil prices working a little higher.
• 6:48
  So that's something we're gonna be watching as well. But in general, sometimes you see the February and early March has a little bit of a trading low for the grain markets as we gear up balancing old news that's priced into the market and looking ahead to fresh fundamental news to give us some new direction.
• 7:06
  Todd Gleason: On the fundamental news side, is there anything new or different coming out of Argentina and or Brazil that you're watching?
• 7:14
  Naomi Blohm: Just keeping a track that the weather, of course, has improved. So soybean harvest in Brazil on track, second crop corn plantings on track. Now, ironically, it is starting to maybe getting a little bit wetter in Argentina. So we'll want to keep an eye on that. But in general, things have improved down there substantially, which could give us a little bit of harvest pressure yet for soybeans and and and keep the bean market from any kind of a significant rally in the short term as the world turns its attention to buying, export product from South America as it is their harvest season.
• 7:53
  Todd Gleason: And much of the trade had been looking at the maybe some soybeans. What do producers do at this point, do you suppose? And I know it varies from one to the other, but let's say they followed directions and made the sales.
• 8:19
  Naomi Blohm: Well, I would say if you if folks have made sales, chances are you've made it within the past $0.2 for where the corn market rally has been between old crop or new crop and you have rewarded the rally that's been there. I think right now maybe you look at staying in a little bit of a holding pattern. There are folks who are gonna have to do a price or roll yet this week ahead of first notice day. If you are making the cash sales on a price or roll, if you're making the sale and just closing out that cash market, make sure that you are aware and mindful of reownership possibilities down the road because that old crop situation is still so friendly. Thanks to that January USDA report.
• 8:59
  And then otherwise, I would say potentially, hold off for a little bit on new sales just because we could see some traction here as we get into spring and then have that summer rally at some point and then just put it on your calendar now. A lot of times that summer market rally price peak will occur between Mother's Day and Father's Day, and so that's always when folks are busiest in the fields and getting planting finished. And and that's when a lot of times the market rally or the market peak can come. So, start thinking towards summertime, and it might be quiet here for a week or two just depending on what happens, of course, with the USD outlook form and with the trade talk next week.
• 9:42
  Todd Gleason: Thank you much. I appreciate it.
• 9:43
  Naomi Blohm: Thank you.
• 9:44
  Todd Gleason: That's Naomi Bloom. She is with totalfarmmarketing.com. We're now joined by Dan O'Brien. He's at Kansas State University with extension there, an agricultural economist. Hi, Dan.
• 9:59
  Thanks much. We appreciate you joining us again this month for our conversation about the biofuels industry. What have you been watching as it's related to US corn ethanol and profitability within that system?
• 10:14
  Dan O'Brien: Well, there's both the policy front and the actual performance front. On the policy front, just a couple of things quickly. There's a, it sounds like, but the recent recent announcements that that, there's more, openness to to having e fifteen year and then then there was in the past. That's on the positive side. On the other side, there's a there's the, I guess, the holding back of our final approval of 45 z budget funding, which which has to do with the biofuels industry, and, even even people talking about replacing e electric vehicle cuts with 45 z approvals.
• 10:53
  And, I always have to go back and remind myself what's 45 z trying to accomplish. And a a good definition of it is that it provides a tax credit to biofuel producers on a per gallon basis based on the carbon intensity, fuel production. So they, in in certain areas, they could work with producers, and then producers could potentially benefit grain producers, oilseed producers potentially benefit from from, carbon friendly production practices. So we'll see where that goes, I guess. And, you know, as you talk about also the other other issues that, with the, with the increased, moderate strength, I'd say, in the corn market.
• 11:35
  It's a good way to put it. Here we're looking at at, I guess, that's been eating into or causing the profitability of ethanol production to, to go down some here. We've got, basically, from about November through, your early February projections. November will be showing we lost about well, we had a a breakeven price of ethanol about a dollar 52, dollar 50 3, and and that was down about, about 6¢ below, below breakeven. And then as we moved from on it to, December, January, and Feb and early February now well, February, we're losing about 11 to 11 and a half cents a bushel, pardon me, per per gallon of ethanol.
• 12:24
  Again, breakevens, about $1.58, dollar 60 5, dollar 60 9. And, again, you look at at ethanol prices at plants, at least in Iowa, they're they're running again about $10.11 cents below those numbers. Of course, we bring in BBGs and corn oil into those calculations as well. So, we'll see where all that where where all that goes as the if you get into spring and see where the how the corn market goes forth and having the possibility of increased fuel demand from from, driving picking up.
• 12:54
  Todd Gleason: I'm gonna try to be simplistic with this because this is the way I understand it, but I don't know if it is the way it works. Is the profitability driven by the price of, ethanol or what the oil companies are willing to pay for it, I suppose. And you're losing profit now because the price of corn has gone up, but the price of crude oil has not.
• 13:21
  Dan O'Brien: No doubt, there's a synergy between, what's what we can pay for, what what ethanol market values are in in the marketplace and and with the price of RBOB gasoline. So, so so prices for for gasoline, in general and again again coming from, as you're mentioning, having to do also with what's going on in the oil market have, I guess, have moderated, profitability. So, I I think it's not it's it's doesn't fall on our on deaf ears to us that that once we get into the spring, into vacation times for people when water fuel demand picks up, that that supply demand balance would affect the oil market, affect the gasoline market, and would bring in, again, mandated via RFS usage of of ethanol, in in those motor fuel blends in in in into play and and probably if if if, well, if nothing else changed, Ceteris Teravis, as economists say, and we just increased, gasoline demand to raise that price a little bit, I I I think we'd be at a breakeven or better situation than we than we have right now in the ethanol market. But we're waiting for spring and, and, summer driving to pick up and to, to improve all that.
• 14:39
  Todd Gleason: And you talked about '45 z, the impact on biodiesel. What have you been watching there as it's related to both biodiesel and renewable diesel?
• 14:47
  Dan O'Brien: Well, that, plans that we're going forward under the old administration are are on hold, as we head off into, into this new administration as they recalibrate what they're recalibrate, reconsider what they're doing. I would say, here this week, we have the, Ag Outlook Forum in Washington, DC as some of no doubt some people from Illinois will be there. I'll I'll I'll be there from Kansas State, some others also. And we'll I'll I guess I'm gonna be listening really closely and, talking with people trying to find out what what the administration's, goals going forward are in the bio biofuels, biofuels area. It was I I think I think we're still living with especially from from, the the impact of what happened about a year or so ago when the, EPA made their announcements made made their announcements that were, taken as less than hoped for at least by the renewable diesel industry.
• 15:44
  And and, because, again, that industry was looking for more protection, more surety of of of a market share going forward. So, so I I guess, if policies don't, aren't, I guess, recalibrated, don't we don't come back and and support those needs, then then you would have to at least have a have a valid question about about how much more strong expansion we'd see in in the, in the biodiesel side. I know we we had a lot more enthusiasm and optimism about that before those most recent announcements. And now it's it's, this administration's turn as we look at towards 02/1926, modes. And and, so we'll see.
• 16:33
  The there there's a an article that came out here this week that AgBiofuels Petroleum Industries, both joined forces calling for a boost in multiyear RFS volumes, And those are parties that don't generally come together. You know, they don't always agree, but but this time they did. Looking for, looking for the USDA to come forth and for well, part of the e the EPA to come forth and still support strongly what's being what's happening, in in renewable fuels. So we'll see where that goes off off, in the coming coming months and year, I guess.
• 17:08
  Todd Gleason: Hey. Thank you much. I appreciate it, Dan.
• 17:10
  Dan O'Brien: Thank you. Take care, Todd.
• 17:11
  Todd Gleason: You too. That's Dan O'Brien. He is with Kansas State University Extension. Joins us once a month on a Tuesday to talk about the agricultural energies. Next Tuesday, speaking of the day of the week, we'll be at the Beef House in Covington, Indiana for the all day outlook.
• 17:25
  I hope you'll be there. The farmdoc team will be there. We're going to have a farmdoc team panel in the afternoon. I've only done this once before at a farm progress show. It was something to behold then.
• 17:37
  It was really great, and I think it will be on that day as well. So we'll have Scott Erwin and Nick Paulson and Gary Schnitke and Jonathan Koppas up front at the end of the day. Oh, Bruce Sharik will be there from the FarmDoc team as well. He'll talk about land values in a separate part of the program for the day as will Joe Janssen. Joe will take up, of course, the marketplace.
• 17:58
  He's gonna kick off the morning, in fact, and then Joe has to get back to campus to teach. Along the way, we'll also have our corn and soybean panels with the Will Ag analyst, and we'll hear from John Reed. He is the director of the Center for Digital Ag on campus. He'll be talking about autonomous agriculture and what you'll be seeing in your fields, and I mean that in your fields in the future, probably not the very distant future as it's related to farm machinery, the kinds of things that you're operating now, tractors and combines and, of course, all the implements as well. We'll hear about that from John Reed.
• 18:36
  It'll be a great day, but you have to register. The cost is $40. Do it right now at willag.org. And make sure that if you want to pick up one of those books, books, you do that. Order it today as well so that you have it in hand, and you can have the authors, Jonathan Coppus, Neil Dahlstrom, who wrote Tractor Wars, and Scott Irwin, who wrote Back to the Futures, signed that.
• 19:09
  Don Day is now here to check-in on the weather forecast as usual for a Tuesday. Hi, Don. Thanks for being with us today.
• 19:16
  Don Day: Thanks for having me.
• 19:17
  Todd Gleason: Let's begin in South America. Start with Argentina. What do you see in their weather prospects?
• 19:24
  Don Day: Well, the prospects for rain in Argentina are much better than they've been in a while. And that pretty much goes for all the key growing areas as, starting to get a little more, let's say, precipitation friendly in some parts of South America. And Argentina is one area where the rain chances are looking better.
• 19:41
  Todd Gleason: And in Brazil?
• 19:42
  Don Day: Brazil is a little bit of everything. The southern and southeastern provinces and states there are are going to be drier, especially the Southeastern areas. They're not gonna partake in in the better rains that Argentina Argentina will have. Now the further north and west as you go into Brazil, some of the central areas, some of the Northwest areas of the key air regions there are gonna catch some of the rain. So warmer and drier, the further south and east you are in Brazil.
• 20:12
  The central and western areas are are gonna be picking up some decent rain.
• 20:15
  Todd Gleason: All in all, I suppose you'd say not bad for growing conditions.
• 20:19
  Don Day: Not bad. There's some pockets of dry, especially in those Southeastern areas, but not I've seen worse. Let's put it that way.
• 20:27
  Todd Gleason: Here in The United States, how are we faring in the hard red winter wheat growing regions?
• 20:32
  Don Day: Well, everybody enjoying the warming trend. A week ago at this time, we were looking at the Arctic air mass across The US. So temperatures have have risen, and, that includes those areas, the hard red winter wheat. They're looking at not so much the short term, not so much here over the next four or five days. But next week, we're gonna see a series of systems come off the Pacific and take a track further south than they've been in a while.
• 21:01
  So from the Oklahoma and Texas Panhandles through Kansas and Eastern Colorado, the rain chances, snow chances are looking good, and some of that will extend up into the Upper Midwest as well.
• 21:13
  Todd Gleason: Anything else we need to cover before I let you go?
• 21:15
  Don Day: Soon, it will be March. And the way things are are looking here in the in the next couple of weeks ahead, it looks very typical textbook type of March weather, which means a little bit of everything for a little bit of everybody.
• 21:26
  Todd Gleason: Well, if we could hold off for the all day outlook, which is Tuesday, March 4, with some good weather, I see that maybe we might have a little rain. I don't suppose I'll worry about that. Nice temperatures, though. Thank you, and I appreciate it. We'll talk with you again not next week, but the following week.
• 21:42
  Don Day: Sounds good.
• 21:43
  Todd Gleason: Donde is with day weather in Cheyenne, Miami. Joins us most Tuesdays. Not next Tuesday because of the all day outlook, but most Tuesdays here on the Illinois Public Media's Closing Market Report. Speaking of that All DAG Outlook, if you've not registered yet, please do so. And if you have but haven't picked up your books to have them signed by Neil Dahlstrom, who authored Tractor Wars.
• 22:05
  That's also the documentary that you can watch on WILL TV channel twelve. Check out all the details of that one at will.illinois.edu. Or you can pick up Scott Erwin's book Back to the Futures, or either of the books that Jonathan Kompas has written about conservation or the history of the farm bill. All the details of how to purchase those books Jonathan's books have a 40% discount on them are on our website at willag.org, w I l l a g 0 r g. Make sure you have them in hand.
• 22:37
  Bring them with you to the all day ag outlook at the Beef House in Covington, Indiana. The whole of the farm doc team will be there. The WILL analyst, John Reed, from the Center for Digital Ag here on campus. Should be a fantastic day. I'm looking so forward to it, and the weather should be not bad either.
• 22:56
  Maybe a little rainy, but warm. You'll want to join us again at the Beef House next Tuesday in Covington. You've been listening to closing market report from Illinois Public Media. I'm extension's Todd Gleeson.