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Jan 06 | 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 January 2025. I'm extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Bloem.
• 0:13
  She's at totalfarmmarketing.com. Naomi, by the way, will also join us for our commodity week program recorded later this week on Thursday afternoon. You wanna tune in for that at willag.org or on many of these radio stations over the weekend. Then a bit later in today's program, we'll take a look at the weather forecast with Donde. He's a day weather in Cheyenne, Wyoming, and I'll bring you up to speed on the latest in the agricultural news here on this Tuesday edition of the closing market report that comes to you from Illinois Public Media.
• 0:44
  It's public radio for the farming world online on demand anytime you'd like to listen at willag.org. Todd Gleason services are made available to WILL by University of Illinois Extension. March corn for the day saddled the nearby contract at $4.44. That was a half cent lower on the afternoon. The May at $4.51 and a quarter, down three quarters of a cent.
• 1:14
  And new crop December corn, $4.61 and 3 quarters. A settlement price there, a penny and a half lower. March soybeans, $10.56 and a quarter, down five and three quarters. May at $10.68, six and a quarter lower. And November soybeans, Your new crop down seven and three quarters of a cent at $10.67 and 3 quarters of a cent.
• 1:33
  Bean meal futures at $2.99 50, up 40 rather down 40¢. Bean oil, 47¢ lower at $49.40. We'd feature soft red down two at $5.10 and a half. The hard red at $5.21 and a half, up three quarters, both of those in the March contract. Live cattle futures for the day.
• 1:51
  A settlement price for the afternoon, 75¢ higher at $2.36 62 and a half. Feeder kettle at $359 and 2 and a half cents for a 100 pounds at $3.45 higher, and lean hogs down 47 today at $85.67 and a half cents. Crude oil, a dollar and 14¢ a barrel lower at $57.19. Diesel fuel or heating oil, down about 6¢ at $2.08 and 2 tenths of a cent per gallon. And the wholesale price of gasoline, a dollar 70 and 2 tenths of a cent, a penny and 7 tenths of a cent lower.
• 2:26
  The S and P 500 up about 45 points at this hour. The Dan Nasdaq up 229, and the Dow Jones Industrial Average up around 494 points for the day. Naomi Bloem from totalfarmmarketing.com now joins us to take a look at the marketplace. Hello, Naomi. Thanks for being with us today.
• 2:45
  Naomi Blohm: Yes. Always great to be here. Thanks for having me.
• 2:48
  Todd Gleason: Tell me about yesterday's rally and today's lackluster trade.
• 2:53
  Naomi Blohm: Yeah. So yesterday, grain markets supported by a combination of technical buying, seasonal buying, grain markets were cheap buying, and also some fund money reallocation. And then we also got news for the soybeans that there were rumors that China had bought beans, so that all lifted the market yesterday. So today, we got the confirmation that China had purchased beans. So 336,000 tons of beans to China.
• 3:22
  So that, of course, welcome news, but since we priced it into the market yesterday, today ended up becoming a turnaround Tuesday with a little bit of, slight back in fill price action with corn finishing about a penny lower and beans down a nickel with wheat about 2¢ lower. So no technical damage done really. Corn putting in a bullish key reversal for the March and May contracts yesterday after testing support is really good. But when you stop and look at corn, we're still range bound. March corn stuck still on that 13¢ trading range that we've been in since about, oh, let's see, mid October.
• 3:58
  So between upcoming events later this week and, of course, the USDA report on Monday. We're gonna finally see which way these grain markets break out of this, price trading range, and and so that's what we're kinda up against for the week.
• 4:14
  Todd Gleason: Wait. What's the upcoming event later this week?
• 4:17
  Naomi Blohm: Yeah. So looking at Friday, we found out now that the US Supreme Court has scheduled Friday, January 9, as an opinion day. So it would be the first opportunity for the justice to potentially issue a ruling on president Trump's sweeping global tariffs. So we don't know for sure if they're going to address the large elephant in the room of are the tariffs legal or not, or are they just gonna be kinda talking about it and then going back, doing a huddle, and then coming out later in a few weeks to do more of a final decision. But that's gonna have the market kinda geared up on Friday because, of course, we need to know if these tariffs are legal or not and how that pertains to grain export export sales.
• 5:04
  So the market's gonna be really watching that for Friday and any commentary that comes from the Supreme Court. And then with the WASDE report Monday, you cannot ever outguess the WASDE report for the January report. There's always usually some dramatic surprise in it that you didn't see coming. And I think with corn, know, the fund traders right now are pretty much even in the market. We got the official and final commitment of traders report, so we're up to date on all of that.
• 5:29
  The funds had been short about, 23,000 contracts of corn, but yesterday they bought back 21,000 contracts of corn, so they're probably neutral in the market. So they're waiting for the WASDE report, they're waiting for this tariff news before they commit to being buyers in the market or sellers in the market. So you really have to be ready for anything that can happen on Friday or Monday and how it how it translates into the grain markets. Now, I really wanna focus on cash sales, especially for corn. If we get a friendly report, if we get some bullish news here, if March corn futures have a reason to get above $4.50, there's a technical upside down head and shoulders formation that points to the $4.75 to $4.80 area as a possible target higher for the March contract.
• 6:15
  Now that would be a great place if you have corn in the bin that you need to be selling. That is gonna be your cue to be making the cash sales. And on December corn, new crop corn, what you're gonna be planting in the spring. We're at four sixty one today, and four seventy five resistance on that December 26 contract, and then that was also resistance for the December 2025 contract. So four seventy five is a is a big resistance area for new crop.
• 6:41
  Four seventy five is a resistance area for the March contract as well. So those are some cash sale targets to be focused on between Friday and Monday and potentially the week after, but always have plan b ready in case we get a negative report and prices slide lower. Just have to be ready to scenario plan for anything.
• 6:58
  Todd Gleason: So those two things, the supreme court opinion day and WASDE, are more related than you might think depending on what the supreme court does as it's related to the opinion and how how it might shape policy if it does shape policy. Because USDA, if it shapes policy, will put that into the world ag supply and demand estimates, one way or the other, as to what those tariffs might mean going forward for the 2026, what might you think about the soybean market since you had a cash strategy for corn?
• 7:31
  Naomi Blohm: Yeah. So looking at that bean market, of course, we've, had that huge sell off during the month of December. The March bean contract got all the way bound to a major support area, which had been actually the uptrending line for an entire year. So that $10.50 area was a big deal. If we can have a recovery bounce into Monday, October on the March contract is their target area.
• 7:55
  That's gonna be the hundred day moving average. That puts us back to where, it had been resistance on the way up. Once we got through it, it was some short term support on the way back down. That's our short term target there. And then $11 on the March contract is the next area of resistance.
• 8:14
  To get through that, we would need a friendly WASDE report. We would need some additional demand from China. We would have to have, tariff news that would be received as positive from the standpoint of keeping export sales going. So a lot of moving parts that all come together. So, looking at the November contract for new crop beans, what you're gonna be pricing in, those finished near $10.67 and 3 quarters today.
• 8:42
  But if they could at all get back up to that $11 area, that's definitely a place to be making sales. The high before that from November was in the $11.30 area, but if we can get back to $11, that might really be a great place to get going on some of those sales.
• 8:56
  Todd Gleason: Hey. Thank you much, and we'll talk with you Thursday for commodity week.
• 9:00
  Naomi Blohm: Sounds great. Thank you.
• 9:01
  Todd Gleason: Mhmm. That is Naomi Bloom. She is with totalfarmmarketing.news, we'll start in Washington DC where the Synod Ag chair John Buzman said in a recent interview with AGGRIPULSE that more farm aid will likely be needed this year, but he can't say how much.
• 9:27
  John Boozman: I think the question is, you know, is is if we need to, and I think we probably will. Buzman told AgriPulse recently. With high input cost, very low commodity prices, our markets not being as good as we'd like. It's made it very, very difficult. So I think the commitments there, I think that, congress will step up.
• 9:48
  Question is how much?
• 9:49
  Todd Gleason: Buzman would not offer a figure while house ag chair GT Thompson says at least $10,000,000,000 more on top of the pending $11,000,000,000 or $12,000,000,000 though USDA Undersecretary Richard Fordyce did tell Reuters recently his agency is not considering more farm aid at least yet despite some $44,000,000,000 in farmer losses last year. Chair Buzman agrees that money is a limiting factor.
• 10:15
  John Boozman: What do we do? You know, we can't keep throwing money at it. How do we how do we increase our markets? You know, what do we do to get farmers in a sustainable position?
• 10:25
  Todd Gleason: Buzman said that the senate ag committee will hold one or two hearings on that in the coming weeks. Meantime, Buzman says USDA and Capitol Hill will factor in existing aid and the coming boost in farm supports to determine the unmet need. On that note, US farmers are facing one of the widest gaps between what they pay to produce food and what they earn from selling it. Investigate Midwest said it's the largest gap farmers have seen between income and expenses in ten years. New USDA data released in December shows that by October 2025, the prices paid index climbed 154.6 while the prices received index had fallen to 120.5.
• 11:06
  The agency measured that against 2011 levels which are set to 100, making it easier to see how it's changed over time. Investigate Midwest said in practical terms that means production costs were over 50% higher than in 2011, while the prices farmers received were only about 21% higher. The gap of 31.1 index points in October was this biggest gap back at least a decade. Terrain ag is projecting slightly higher operating cost for twenty twenty six corn and soybean crops. Let's stay in that gap area.
• 11:44
  This time we'll move to USDA which has released details about how much crop farmers will receive this year from that $12,000,000,000 aid program we've discussed already. However, US soybean producers say the payment won't help farmers hurt by low crop prices and trade disputes. Reuters said while the aid is expected to help farmers get ready for next season, growers and agricultural economists say those payments will only cover a fraction of farm losses and will not rescue the sagging US farm economy. The one time payments will go to growers who planted one of the 19 covered crops. The highest per acre payments will go to rice farmers who should receive more than a $132 an acre, cotton farmers around a $117, oat farmers $81.
• 12:28
  Meanwhile, farmers are eligible for $44 an acre or thereabouts for corn and about $30 an acre for soybeans and around $40 an acre for wheat. The overall payment limit per entity is a $155,000. Now let's turn to livestock. China's new beef tariff comes just as the new USTR chief ag negotiator settles into her job with a pledge to open that market to beef and other US farm commodities.
• 12:58
  Julie Callahan: China across the board has been weaponizing agriculture.
• 13:03
  Todd Gleason: That's Julie Callahan speaking at her October senate confirmation hearing, but China's commerce ministry insists it just announced 55% above, quote, a beef import tariff is a safeguard measure to protect its domestic industry. Either way, it's a new challenge for Callahan who vowed in October.
• 13:22
  Julie Callahan: If confirmed, I am committed to reopening China's market to US beef.
• 13:27
  Todd Gleason: And beef is part of a list of restricted farm products.
• 13:30
  Julie Callahan: Sorghum, beef, a number of commodities, cotton across the board.
• 13:36
  Todd Gleason: China imported just 138,000 tons of beef from The United States in 2024 compared with over 1,300,000 tons from Brazil. US volume dropped to just over 55,000 tons through last November after Beijing allowed permits to expire at hundreds of US meat plants amid China's tariff war with The US. China's new tariff took effect on January 1 for three years but with the total 2,700,000 ton quota set to increase annually. Now let's turn our attention to a couple of good news items. USDA data says exports of corn and wheat remain well ahead of year earlier levels.
• 14:13
  While soybeans lag behind last year's pace for the week of December 18, corn exports for the start of the marketing year on September 1 through mid December are 24,610,000 metric tons. That's up 67% year over year. Wheat shipments from the beginning of the marketing year at 14,561,000 metric tons are up 24% and soybean are reported at 14,237,000 metric tons, down 46% on an annual basis. Speaking of soybeans, the clean fuels industry strengthened its foundation in 2025 behind record policy targets, new engine capabilities, and proven performance setting expectations for continued growth in 2026. Government agencies, fleets, manufacturers, and consumers in 2025 recognize that biodiesel and renewable diesel have stepped forward and taken the leadership position in fueling our nation's transportation, they say.
• 15:14
  Clean fuel use has grown dramatically in recent years, and for the first time, policymakers took full account of that growth. Last year, for the first time in history of the Renewable Fuel Standard, the EPA proposed a robust biomass based diesel volume that reflects the industry's potential. EPA proposed a renewable volume obligation of 5,160,000,000 gallons for the 2026 calendar year. And that's a look at today's agricultural news. Let's turn our attention now to transportation here in The United States.
• 15:59
  A proposed merger could mean a big change for The US railroad industry. Union Pacific is working to acquire Norfolk Southern, which would create the nation's first transcontinental railroad. The purchase agreement is awaiting approval from the Surface Transportation Board. Mike Steenhook, executive director of the Soy Transportation Coalition, said there's been a positive and a negative reaction from shippers.
• 16:24
  Mike Steenhoek: I'm hearing both. I'm hearing from agricultural shippers, those who actually are quite supportive of the proposed merger between Union Pacific and Norfolk Southern. And they point to the fact that you're gonna likely have more seamless service from one area of the country to the next. So you'll have an agricultural shipper that has a collection of facilities that are West of the Mississippi River, and they would like to have greater access to maybe some of the livestock markets in the Southeast Part of The United States or to the East Coast where for the the ports over there, say, there's problems at West Coast ports or markets in the West. So you have this prospect of more seamless service.
• 17:01
  Todd Gleason: The merger, well, it'll mean fewer handoffs between railroad companies.
• 17:05
  Mike Steenhoek: One of the realities within supply chains is that handoffs are expensive. But because we have a couple Western railroads, a couple Eastern railroads, we have a collection of these handoff locations like Chicago, like Memphis, Kansas City, etcetera. And freight does not like to be treated like a baton in a track and field relay race. The more you can eliminate handoffs, the better.
• 17:25
  Todd Gleason: However, he says there's a lot to not like about the potential merger.
• 17:30
  Mike Steenhoek: People point to the fact that this is not our first rodeo. We've had mergers, acquisitions, consolidations within the rail industry for a number of decades. And what that does often result in is higher rates, a decline in service. And for agriculture and other industries, what you want is as many transportation providers competing for your business. That's good for us.
• 17:51
  And when all of a sudden you start eliminating or reducing those transportation providers, you start changing that competitive balance away from the customer, agricultural shippers in our case, or the railroad. So rightfully, there's a number of shippers who are very concerned about this.
• 18:07
  Todd Gleason: Again, that's Mike Steenhook. He is with the Soy Transportation Coalition. You're listening to the closing market report on this Tuesday afternoon. If you'd like to hear the program again, you can do that right from our website. Just click and play from willag.org.
• 18:20
  That's willag.org. Or you can search it out by name in your favorite podcast applications. There is a podcast tab at wilag.org too, where you can subscribe to the Closing Mark Report and or Commodity Week, both if you'd like. You'll find them in Apple as well as on YouTube and many other places, including Spotify, or you could just ask Alexa or Google if they could play the closing market report. That's right.
• 18:51
  You can do that or watch it, listen to it, I suppose, on your YouTube account on your TV because it's right there as a podcast in YouTube. Well, the closing market report and commodity week, part of the service that comes to you from Illinois Public Media, University of Illinois Extension. Oh, by the way, on the home site at willag.org, don't forget that you also can find information from the agricultural economist, the crop scientist, and the animal scientist right here on the Urbana Champaign campus of the U of I. Let's check-in on the weather forecast now. Don Day is here.
• 19:40
  He's with Day Weather in Cheyenne, Wyoming. Hello, Don. Thanks for being with us. You know, sometimes in January, we get a January thaw. It usually doesn't last all that long, though it appears this one might be around for a while, at least in portions of The United States.
• 19:57
  Can you give me an assessment of what you think is happening in this hemisphere?
• 20:03
  Don Day: Yeah. So what we're seeing right now is a major realignment and a big adjustment. We've had two major blocking patterns out in the oceans. Big blocking near Greenland in the Atlantic, a big block in the Bering Straits near the Aleutians in the Pacific. And with that breaking down, both of them weakening right now, we're seeing a west to easterly flow across the nation that has led to that thaw that we've been talking about.
• 20:30
  But as the pattern evolves and changes and readjusts, I kinda like to use the analogy of a control delete. We're kinda just resetting everything, and we're gonna see part of that reset. There will be a cold front that will come out of the Pacific Northwest and into the Plain States this weekend, late this week and into the weekend that will bring a cool down. The air behind the system is not true arctic air. It's it's colder Pacific air.
• 20:58
  So it isn't gonna be a huge drop in temperature, but there will be a little bit of winter into the Plain States, into parts of the Northern And Northwest Corn about late this week in the weekend. There'll be some areas out in winter weak country that haven't seen a drop of anything in weeks. Places in Kansas, Eastern Colorado, parts of Oklahoma, Texas Panhandle could see some snow out of this system.
• 21:19
  Todd Gleason: So that would be good, particularly if it's gonna get cold. Was gonna follow-up with whether there was enough snow cover or would be enough snow cover to protect a crop that may have tried to come out of dormancy, because of this warm weather at that time. Sounds like there might not be too many worries.
• 21:35
  Don Day: No. I don't I don't think so. The the the the next round of cold is probably gonna be a bit more of that Arctic flavor, but that probably isn't gonna happen until after the weekend after this one.
• 21:46
  Todd Gleason: Turn your attention to South America. Give me an update on crop conditions in both Brazil and Argentina.
• 21:52
  Don Day: Those both of those locations are gonna be picking up a little bit more in the way of rainfall. It's been pretty warm in Brazil and a little higher than normal over the last week and a half or so. Argentina has been a little bit cooler but we're going to see a more active pattern. Rainfall across both countries overall their growing areas is going to be on the uptick here over the next week or two.
• 22:15
  Todd Gleason: On track for good crops in both places?
• 22:17
  Don Day: I think so. There's nothing that I could see that stands out as a real big problem for South America at the moment.
• 22:23
  Todd Gleason: Thank you much, Don. Don Day is with Day Weather. He is in Cheyenne, Wyoming. Joined us on this Tuesday edition of the closing market report that came 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.org.
• 22:38
  That's willag.org. We're there today. Right now, you'll find all of the audio from the mid December farm assets conference. I'll leave it up for the week. You can find it, of course, in the closing market report podcast as well.
• 22:53
  It aired last week right here on our station over the winter break. All of the Farm Assets conference audio online today at willag.org. You have a great afternoon. I'm University of Illinois Extension's Todd Gleeson.