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Feb 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 report. It's the February, 2025. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Blohm of totalfarmmarketing.com. We'll hear from Google about its AI in workspace areas, and then as we close out our time together, we'll take up the weather forecast too with Don Day on this Tuesday edition of the closing market report from Illinois Public Media.
• 0:30
  March corn for the day settled up five and three quarters at $4.94 and a half, the May 0 at five zero four and three quarters, up five, December up two and three quarters at four sixty eight, March beans up sixteen and three quarters. Settlement price at $10.75. And new crop Nov. 0 at $10.73 and a half, up 10 and a quarter cents. Naomi Blum now joins us from totalfarmmarketing.com.
• 0:53
  She's traveling today in Fargo, North Dakota. Is that right? Where are you, and what are you doing?
• 0:59
  Naomi Blohm: Yes. Fargo, North Dakota. I'm at the Northern Ag Show. It's for corn and soybeans. So I'm here today as a guest speaker this afternoon to talk grain market outlook for, you know, what's in store potentially for the next year.
• 1:13
  So no pressure. Right? All the shenanigans and happenings of the world right now will have plenty to talk about.
• 1:19
  Todd Gleason: There will be a lot to talk about. I bet big on their mind are tariffs as related to the Trump administration and China particularly. That had a huge impact across all of agriculture, in 2018 related to soybean exports. However, North Dakota exports almost all of its soybean crop, and I'm sure they're worried. What can you tell them, or what are they asking?
• 1:45
  One of the two.
• 1:46
  Naomi Blohm: Yeah. You're you're you're so right about that. Soybeans in North Dakota had out the PNW, and so it's it's very critical for a lot of their demand for the farmers here that the tariff and trade wars maybe be averted. So, you know, good news yesterday from Canada and Mexico that the tariffs are put on hold for a month. They've agreed to some short term negotiations in order to pause tariffs for a month.
• 2:13
  So the market liked that news, and prices were able to do an about face and turn higher just on that hope that the trade war is averted. Now, of course, China coming out this morning and responding to president Trump's tariffs with their own version of tariffs. Now that to my opinion, they seemed a little bit modest. Just a little bit of a shove back to say, alright. You know, we're we're not gonna just bend over and and do whatever you want here, mister Trump, but they are willing, I think, in a sense to negotiate.
• 2:42
  But with all of the trade and tariffs, the question is going to be, is there new demand coming out of it for ag commodities? So are we going to see as these trade and tariff conversations continue for Mexico, Canada, China, are we going to see any hope for new ag demand for corn, soybeans, wheat, ethanol. That's what we're watching for. And with China specifically, you know, as Trump was leaving office in 2020, he had gotten them to agree to the phase one deal. And that's when China came in and bought a large amount of US commodities at harvest time, of course, when it was cheaper.
• 3:22
  But now they haven't finished that phase one buying. So the question will be not answered probably today, but in the coming weeks and months, will China come back and finish that buying? Now if they do, that's new demand for agricultural commodities that would be supportive for the market, but we just don't have any for sure news on that front yet. And that's why grain markets as of today's close just finishing up near resistance levels again with March 0 corn near the $5 handle. The soybeans getting closer to the $11 handle on that March 0 contract.
• 3:59
  We are at a cliff looking out onto the horizon with an entire sea of unknown fundamentals ahead of us, some of which if combined perfectly together could be so friendly to the marketplace. And yet if they don't occur, we could see the price pullback that we've been maybe expecting for a while. So stay tuned. So many things to come. And every day, of course, different because you just don't know what is gonna be coming out of the White House.
• 4:25
  Todd Gleason: As a reminder, the phase one agreement, was not met, as you said, by China. They purchased about 75% of what they were expected to to purchase over a short timeline I which has expired at this point, the timeline that way that is. So there was 25% that they did not purchase, and they have not been in the marketplace, in a large enough way to recoup all of the pre 18 purchases that they had been making. So the number of bushels that is being exported, actually, I think it's by a percentage, is not as large now as it was prior to that particular trade, TIF between The United States and China. When you talk to producers, they're all in, willing to do their part.
• 5:16
  Are are they ready and situated again to do that? Meaning, are are are they capable and willing to to bear the brunt of of a trade war, not only with China, but Mexico and Canada?
• 5:32
  Naomi Blohm: I think when you talk with producers about that from a patriotic standpoint, yeah, they're all in. Yet when you ask them, okay, how are we gonna protect your marketing if prices fall apart, you get the deer in the headlights looking right at you. So there has not been the strategic, happenings necessarily occurring at the level that potentially it should. You know, there is still hope for a version of of trade war and tariff, but if things get down to the nitty gritty and all of a sudden the trade wars just happen full on, we would be at risk of losing export demand. And that export demand is what had helped pushing the markets higher recently.
• 6:13
  So producers do need to be thinking about how can they be forward contacting, how can they be making cash sales, thinking about the next crop year, thinking about various potential put option strategies to protect just in case prices do fall power part lower. With this environment, you have to be ready for any scenario to unfold, and the news happens so fast that you can trade it maybe for one minute of a day, and it's probably at nighttime when we're all sleeping. So be ready for anything. Put marketing at the forefront of your of your plans as we finish out winter here. And while you're thinking about getting ready to go back to the fields for springtime, there's marketing to do first.
• 6:56
  Todd Gleason: Yeah. So your your thought here is that really this market could turn either direction and move quickly either up or down.
• 7:03
  Naomi Blohm: Yeah. Absolutely. So here's the things that can make the market go higher. If we avert trade wars, if, let's say, China comes in and says, yeah, we're gonna buy a little something something, that would be supportive to prices. If the second crop corn in Brazil has poor weather on it, that's a reason why the corn price would need to work higher.
• 7:20
  If there's, of course, poor weather in this in the spring or summer in The United States as we go down the road, those are reasons why the grain markets could work higher from here. Yet those are a very big sequence of events that need to occur to make the market go higher. And if they don't happen, then we might see just a simple correction lower of prices and then start to trade sideways. Or if the demand becomes lost because of a trade war, then we have reason for prices to potentially fall significantly lower from here. And we know that Brazil has a record soybean crop.
• 7:55
  We know that global ending stocks of soybeans are at record levels. So we are really at this cusp of price movement going forward where I can literally tell you four reasons why it could go higher from here or four reasons why prices could go lower from here.
• 8:10
  Todd Gleason: And finally, something to ask you about because you are in the Western Corn Belt, and in an area that raises a lot more beef cattle than we do here in Illinois and going to the East. On Friday, USDA released its cattle inventory numbers. What did that show, and how did you view it?
• 8:30
  Naomi Blohm: Well, it just confirmed what we already suspected, that we're gonna have another year of tight supplies of cattle in the country. I think in most capacities, the report in general was as expected by traders. And so because there wasn't anything over the top friendly on it, the market didn't have a reason to continue to run higher. And then instead, it was the news of the border opening with Mexico for cattle. That was a reason that we actually saw the market do some profit taking on Monday morning, which triggered technical selling, which triggered another washout for prices to the downside.
• 9:07
  And so with where cattle prices finished, so far today, testing some major support levels near the twenty one day moving average and a short term uptrend, that'll be interesting to see how the market fares for the rest of the week. We'll be keeping an eye, of course, on box beef values. We'll be keeping an eye on weekly export sales, keeping an eye on cash markets, and also one eye constantly peeled to TV to know what is coming out of the White House.
• 9:34
  Todd Gleason: Safe travels back to West Bend, Wisconsin. We appreciate you taking the time there in Fargo today.
• 9:39
  Naomi Blohm: Yep. Thanks for having me.
• 9:40
  Todd Gleason: That's Naomi Blum. She is with totalfarmmarketing.com. If you've been listening to the closing market report for very many years, you probably already understand that I really like technology. Particularly if it improves my efficiency whether that's at home or at work, I deploy technology. That's why when Google called and asked if I would do an interview with them about Google AI, particularly as it's related to Workspace, that's the suite of apps that you're probably already familiar with like Gmail and Google Sheets and Google Docs, those sorts of things, but packaged together in a more office like setting.
• 10:21
  I said yes, absolutely, we could do that. I spoke with Google Workspace expert Harris Bieber earlier today. He started with Ace Sign Company out of Springfield as a local example of how Workspace and the AI inside of it was being used to improve their efficiency.
• 10:43
  Harris Beber: So last month, we announced that the best of Google AI is now included with Google Workspace. And Google Workspace is the apps that people know and love. It is Gmail, Google Docs, Google Sheets, and Google Slides. And it is helping small businesses really thrive in an ever changing landscape and giving them the tools they need to take off all the tasks that come up throughout their day and let them focus on what they love and why they started their business. And what I mean by that is, for example, Ace Sign Co has been in Illinois for eighty five years.
• 11:20
  It's a generational family business. They make all these great neon signs. And before they build something with their hands, they have to design concepts for customers. That used to take them hours. Now with just a few prompts and input from their customers, they could generate images and ideas in Google Slides in moments and share that with customers to get feedback before they land on a final design that they handcraft and build for the customers.
• 11:49
  So it's not about changing the work they do. It's about making it more efficient, higher quality output, and really helping them succeed and thrive so they could focus what the on what they love, which is building amazing signage for customers across the country.
• 12:04
  Todd Gleason: So they would be using Google Gemini, which is the AI back end from Google within Workspace and slides into what? Simply ask it a question explaining what they're looking for to see if the AI can build it for them?
• 12:22
  Harris Beber: AI is the best the more specific you are. And in Google Slides, we have image generation. So you could be very specific on we're designing a sign for a diner called Mel's Diner. We want it to be red and yellow neon, have an interesting shape, and it'll come up with four or five different images. And then based on those images from the customer, they could give feedback.
• 12:45
  I don't like the shape. I want the the font to be different. So, really, it gives them an iterative design process that is really rapid and takes away some of the time consuming work that they used to spend hours on. So for them, they're using image generation. For a small business like Cottrell Boats in Maine who has been handcrafting boats for forty years, and you'd say, what do crafts craftsmen who build boats need AI for?
• 13:12
  Well, they have a website that attracts customers, and it's not so easy for them to describe what it is that they do. And they're using AI to help them draft newsletters and website descriptions that used to take them hours, and now they're doing in minutes. So it really spans the vast amount of use cases depending on the business, whether that's smart replies and email and helping them summarize an email thread, reply to customers, build a customer proposal, do inventory reports or tracking in Google Sheets. It really depends on what the business needs are, and then Gemini and AI is there to help them get what they need done in a more efficient way so they could focus on what they love.
• 13:54
  Todd Gleason: Do you see this as an iteration, in the way, work is done, or is it more akin to the word processor and that transition?
• 14:06
  Harris Beber: I would say it's a leap forward. And there's two things that AI is great at. You started a business as a baker because you love baking goods. You might not be a great marketer, or you might have no finance background. AI is there to help you do those tasks that you either don't have time to do or might not know how to do.
• 14:27
  And when you're a small business, a lot of times, every job falls on your head. Right? So if you're not doing it, it's not getting done. And now you have this tool that enables you to get all the things that need to get done so you could focus on the things that you wanna wanna do and love doing.
• 14:43
  Todd Gleason: So this is a place where Google and Workspace is thinking that the businesses are small enough that they may or may not be using, for instance, a graphic artist, or they may or may not be using a communications specialist, and they're doing all of this in house, and it enhances what their capabilities are.
• 15:02
  Harris Beber: Absolutely. Or that might be your skill set, and it's letting your the amount of work you could do and the quality of your work up level. Right? I have to write proposals all the time, and I might have a great idea in my head. And I could spend four hours drafting that, iterating it.
• 15:19
  But if I just put the idea and prompt it and ask Gemini to help me write a draft proposal or, help me write a strategy doc, it'll give me a version in a few minutes that might be 80% there, and then I'm refining it. So this is work I know how to do. I am good at doing it, but it's really time consuming. And now it makes me much more efficient and at getting more done.
• 15:40
  Todd Gleason: Can I ask a question related because I work within the agricultural realm to that area, whether it be within the spreadsheets that would be used for tax purposes and or in the procurement area to track all kinds of things that are inputs on the farm? Do you have examples, or can you think of examples that might be in those areas?
• 16:06
  Harris Beber: Yeah. I can tell you a great example.
• 16:08
  Todd Gleason: FYI, they did not know I was going to ask that question.
• 16:11
  Harris Beber: Ancillary but related. So there's a great company in Oregon called Jacobson Salt. They make sea salt from seawater. Now seawater is varying at all different times, and the way they explained this salinity, which is the amount of salt in the water, can vary differently. But they're shipping a product to consumers that they want to be consistent.
• 16:31
  So the amount of boil time they use depends on the salinity in the water. And they're using Google Sheets to track the different salinity, estimate the boil time. So when they ship a product, the customers get a product that tastes the same, has the same high quality at all times. Right? And then there's also, farmers in North Dakota that make pasta and they're they're using grain and they wanna use it to track all their inventory and the shipment.
• 16:55
  So they're using it from both raw goods supplies and inventory or how do they ship, products and what what is selling the most. So it could be used for lots of different things. Anything that your business needs, the thing I would encourage small businesses to do is just ask. Get started. And the more you use it, the more you'll learn, and it is great at so many things that you might not realize.
• 17:18
  Todd Gleason: How do you go about that?
• 17:20
  Harris Beber: So the best way to do it is last month, we announced that Google Workspace now includes the best of AI in all its business plans. So there's no add on. There's no extra charge. Google Workspace is Gmail, Google Docs, Google Drive, Sheets. And if you go just look up Google Workspace on Google, you'll come to the page and you could sign up for a free trial, and then you could start trying it.
• 17:42
  And the more you use it, the better you'll get at it and you'll see real value today, not tomorrow, not in the distant future. You could start getting value today if you just start using it.
• 17:52
  Todd Gleason: Thank you very much.
• 17:53
  Harris Beber: Thanks. Appreciate it.
• 17:54
  Todd Gleason: Harris Bieber is a Google Workspace specialist. I spoke with him earlier today about Gemini or Google's AI and the Workspace suite. Donde from day weather in Cheyenne, Wyoming now joins us to discuss the agricultural weather forecast for the growing regions across the planet. He is driving across the great state of Colorado at the moment. Is that right, Don?
• 18:33
  Don Day: Yep. I'm along Interstate 70 out on the Eastern Colorado Plain. And
• 18:37
  Todd Gleason: why are you in that area?
• 18:39
  Don Day: Well, you know, it is the farm and ranch show season, and, was at a no till conference, one they've had for quite a while there in Burlington, Colorado, well attended, Well over a couple hundred people I saw this morning.
• 18:53
  Todd Gleason: Interesting. I suppose they wanted to know if, the weather was gonna be dry, this coming season and what things would look like for their wheat crop as it comes out of dormancy. What kind of information were you able to provide to them?
• 19:07
  Don Day: Well, you know, we've we've we've had some pretty dry weather in that part of the country here really for most of the winter season so far. So they're really interested in the spring and summer, and I conveyed to them that I was optimistic that winter wheat country and the Southwest areas are going to have a a decent spring and a good summer from what I'm seeing.
• 19:30
  Todd Gleason: And what do you base that upon?
• 19:31
  Don Day: I base that upon the fact that La Nina has reached its peak strength and is beginning to fade. And at least in the Western High Plains, if there's a La Nina in place, that's a very dry signal. And with that signal going away, the prospects for more wet spring in that part of The US looks much, much better.
• 19:53
  Todd Gleason: And if I remember correctly, Don, while La Nina doesn't correlate particularly well in the Midwest, especially the further east you go in the Corn Belt, there is a much better correlation in the western growing regions. Is that correct?
• 20:08
  Don Day: That is correct. As you go further east, there's still some impacts depending on the intensity of the La Nina, but you start to get into that part of the country where the Gulf, whatever you wanna call it, Mexico or America has more of an influence.
• 20:23
  Todd Gleason: What's the weather forecast short term look like for us here in The United States?
• 20:27
  Don Day: Well, a lot of people across a lot of The US enjoying a thaw, started here over the past week or so, and that warmer temperature regime is gonna last a little bit longer. We're gonna see some more snow across the Northern part of The US, but that Arctic air is locked up north for a while longer. Beginning late this weekend, though, in the next week, the thaw is over, and much colder Canadian air will overspread a lot of the lower 48. It may not necessarily come with a lot of precipitation, but some. So it's been a nice little interlude of warmer temperatures, spring like in some areas, but it's not necessarily an indication that winter's over.
• 21:13
  Far from it. As we go into next week and beyond, it's a colder pattern that's likely to evolve.
• 21:19
  Todd Gleason: Now turn your attention to South America. Take us through the growing regions of concern and not of concern in your opinion.
• 21:28
  Don Day: Well, the Southern and Southeastern growing areas of Brazil and some of the northern areas of Argentina, over the last few weeks, they've been drier than average. And it's starting to make some impacts. Things are getting a little bit dry, especially the far southern states. There's been a bit more rain the more north and west you go into Brazil. It's getting a little bit warmer as well.
• 21:58
  So there's been a dry trend in some of the key growing areas. I I wouldn't call it a drought or a long spell of severe dryness, But, certainly, the last month or so, we've seen precipitation taper off.
• 22:11
  Todd Gleason: Hey. Thank you much, Don.
• 22:12
  Don Day: Thanks for having me.
• 22:13
  Todd Gleason: Don Day is with Day Weather in Cheyenne, Wyoming. Joining us on this Tuesday edition of the closing market report that comes to you from Illinois. Public media is public radio for the farming world. Do visit our website at willag.0rg. That's willag.org, where today, you'll find information on how to register for the upcoming Tuesday, March 4 ag outlook at the Beef House in Covington, Indiana.
• 22:39
  We're in our thirty fifth year of this event. It's long standing, and if you've not been before, please join us. If you've been before, come again. The cost is just $40. The farmdoc team will be on stage along with the bulk of the analysts that you hear on W I L L AM five eighties daily programs.
• 22:57
  Be sure to join us at the Beef House on Tuesday, March. Don't wait. Register today at willag.0rg. I'm extensions, Todd Gleason.