Latest / Closing Market Report / Aug 08 | Closing Market Report
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- cmr260807 The August 7th edition of the Closing Market Report, hosted by Todd Gleason, provides a comprehensive overview of current agricultural markets, agronomic research, and weather trends. The broadcast opens with market analyst Mike Zuzolo, who breaks down how currency fluctuations, international trade sanctions, and global weather concerns are impacting commodity prices ahead of the highly anticipated USDA WASDE and Crop Productions reports. The program then shifts to crop science, featuring researchers Connor Sible and Jared Fender from the University of Illinois. They share practical takeaways from the recent Crop Physiology Field Day, specifically highlighting how farmers can improve fertilizer efficiency and yields by matching specific corn hybrid root architectures with proper nutrient placement. The episode concludes with a forecast from meteorologist Eric Snodgrass, who discusses the unpredictable nature of summer convective rainfall, the silver lining of cooler August temperatures for drought-stressed crops, and the potential long-term impacts of a historically strong El Niño pattern on South American agriculture. 00:31 Ag Markets with Mike Zuzolo, GlobalCommResearch.com 07:27 Crop Physiology Field Day, Connor Sible 10:54 The Corn RootBall & Fertilizer Placement 15:56 Ag Weather with Eric Snodgrass, NutrienAgSolutions.com --- Todd Gleason: From the Land Grant University in Urbana Champaign, Illinois, this is the Closing Market Report. It is the seventh day of August coming up. We’ll talk about the commodity markets with Mike Zuzolo. We’ll hear from yesterday’s Crop Physiology Field Day about the corn root ball and how fertilizers are impacted by their placement. And then we’ll turn our attention to the weather forecast. Eric Snodgrass will be here too on this Friday edition of the Closing Market Report from Illinois Public Media. 00:31 Ag Markets with Mike Zuzolo, GlobalCommResearch.com Todd Gleason: Mike Zuzolo of GlobalCommResearch.com out of Atchison, Kansas, now joins us to take a look at the marketplace. Hi, Mike. Thanks for being with us. Mike Zuzolo: Great to be with you, Todd. Happy Friday. Happy pre-WASDE report weekend. Todd Gleason: What else is news? Anything? Mike Zuzolo: One of the things that I think was a big market mover that didn’t get a lot of press this week is that we saw a really sharp increase in the price of gold and silver. Gold is up 7%, silver up 10% so far on the month after this week’s close. We saw the wheat market really fall apart until the end of the week on Friday. I think part of that was the crude oil market being a lot weaker than normal, but I think the other part of it is the Russian ruble being down almost 5.5% over the past two weeks. I am connecting the dots right now outside the WASDE report, looking at the potential of the Senate bill on Russian sanctions passing the Senate on Friday. I think that has been built into the trade through the weaker Russian ruble. I’m wondering whether the gold and silver markets haven’t become safe havens again. The dollar weakens again in part because part of the sanctions bill has to do with the top five or seven importers of Russian oil. President Trump also added and passed an Iranian sanctions bill. It is essentially targeting 100% tariffs on imports of Russian or Iranian oil that would directly hit not just Russia, but also China. I think that could have been part of the reason why the soybeans were also a little bit weaker this week because of the policy side of the equation. That is something I am definitely keeping on the shelf as I get ready for the WASDE report. Todd Gleason: Because I didn’t talk to you last week, and we’re talking policy and currencies, what did you think of the Japan-US purchase of the yen? Mike Zuzolo: This is a situation where Asia is suggesting right now that Secretary Bessent came in and helped support and intervene directly with the Japanese, very similar to what was done at the Plaza Accord in 1985. That 1980s mindset is still very much at the forefront of my mind. The Asian analysts are suggesting that intervention was due in part to the currency market in Asia being very nervous that between the South Korean stock market decline of almost 10% in a few nights, and the Japanese yen hitting 40-year lows, it was going to create a systemic currency run in Asia, and they wanted to prevent that. It is a big deal and one of those things that didn’t get a lot of press. Todd Gleason: Now, turn your attention to the thing you started with, which is the WASDE. That’s due out next week, and it will be the first time we also have a crop production report for corn and soybeans. Mike Zuzolo: The big thing for me is going to be matching up acreage, yield, and demand domestically, and giving us fresh ending stocks numbers. The survey that I’m doing right now will be completed by this afternoon, and then I’ll add some of my extra satellite imagery analogs to complete my model for yield determination this weekend. I’m leaning towards keeping my yield about 180 on the corn. My 51 to 51.5 yield on beans might go up based upon the survey. Both sides of the Corn Belt, east and west of the Mississippi, are generally saying pretty concretely they feel like the corn is there. It’s a good crop, but they’re worried about tar spot, southern rust, and the spring weather. One farmer near Effingham told me this week that his ears are the smallest he’s seen in many years because of the spring conditions. I get the impression that the corn could really be stunted as far as upward yield trajectory, whereas clients are suggesting they’ve got a lot of pods on the beans and some really good potential if it finishes out strong. Todd Gleason: What do you expect on the global side of the WASDE figures? Mike Zuzolo: This is probably the most important thing of the report. We are still seeing an export price of $7.70 a bushel in corn in France, $6.40 in Romania, $5.70 in Ukraine, and $5.40 in the United States at the Gulf of Mexico. I think we need to migrate the US and Ukrainian price up towards France and Romania. The near-term weather models are suggesting heat and dry weather are likely to hit parts of Ukraine over the next 10 days, which could clip yield. Logistically, the USDA Ag Attaché came out with a fresh report this week raising Ukraine production on corn, but almost halving their exports because of logistics and war, playing it like 2022. That was big news that the trade didn’t fully sink its teeth into. Todd Gleason: So that would be big news if it was like 2022. That would be for wheat too. Given the issues defined in the Black Sea area coupled with what’s happening in the Middle East, there could be some real hunger issues in that part of the world. Mike Zuzolo: The World Trade Organization and the United Nations FAO are talking about this, but it is disappointing to me that the trade just wants to keep trading headline news. I think they will have to rethink both the global corn number and the ability to export wheat. Russia put a hefty export tax on wheat. Then you factor in crude oil and the issue with the Strait of Hormuz. I don’t think that will get straightened out until after the midterm elections. The trade will have to do a massive rethink at some point. It should come together after the WASDE report because time is of the essence. Todd Gleason: We’ll have to keep an eye on it. Thank you much. I appreciate it. Mike Zuzolo: Thank you, Todd. Take care, sir. Todd Gleason: You too. That’s Mike Zuzolo. He’s at GlobalCommResearch.com out of Atchison, Kansas. 07:27 Crop Physiology Field Day, Connor Sible Todd Gleason: Yesterday the crop scientists here on campus invited folks in to visit with them at the Crop Physiology Field Day. Connor Sible helps to organize it. It is now in its fifth year and that program, he says, is still growing. Connor Sible: It is. We call it Crop Physiology Field Day. We put talks on—myself, Dr. Fred Below, and our graduate students as well. They get to highlight their research and findings, and we speak to farmers, industry agronomists, and CCAs. We had great attendance. Last year we broke 200, and we’re pretty sure we broke 200 people again today, getting the latest and greatest on what we’re seeing in corn and soybean yield studies. Todd Gleason: And what kinds of things were you showing them today? Connor Sible: The team has some important topics. We are talking a lot about boron; we have been getting a lot of questions about that lately. We’re talking about strip-till and hybrid management, rooting architectures. We also have information on nutrient requirements for corn and soybeans. And this year for the first time, we have wheat on the docket as well, talking a little bit about our wheat agronomy research. Todd Gleason: Of these topics, what is most likely they’ll be able to put in their back pocket and use? Connor Sible: That’s the way we set the presentations up. They’re about half background and information because every farmer does things a little differently, and we don’t have the silver ticket about exactly how to do it. What we like farmers to walk away with is knowledge about that topic, whether it’s a nutrient or a practice like strip tillage. It gets them thinking about how that applies to their acre or what they might need to tweak to make it work for them. They know their farms better than anyone else, and they will figure out how that may or may not be a next step they try. 10:54 The Corn RootBall & Fertilizer Placement Todd Gleason: Connor Sible is a crop scientist on the Urbana Champaign campus at the University of Illinois and one of the driving forces behind the Crop Physiology Field Day. Jared Fender is with us. He’s a researcher that took a look at the architecture of the corn root and how that corresponds to where fertilizers might be placed in the soil profile. I want to follow up on some of the things that you presented to those who were present today because it felt like there was useful information for producers that they could put into their operations right away, just based on the hybrid they plant and how it pairs with their fertility placement. Jared Fender: Yes, one of our trials here is looking at hybrid placement on different tillage types and fertility placements within that. We know growers are often set in their ways. Whether a guy is broadcast, he’s probably going to stick to broadcast. If somebody adapted to strip-till, they’re probably going to stick to it once they have paid the input costs. We’re trying to figure out what hybrids grow best for those in-place managements and then help growers pick the right hybrid with the below-ground rooting structure to help find that fertilizer. That way, we can get more nutrients into the plant, increase our yield, and increase our fertilizer use efficiency. Todd Gleason: I know you’ve done the research, but farmers will most likely just eyeball this. How do they go to the field to choose a hybrid that matches their fertility program? Jared Fender: First, it starts with the seed companies. A few seed companies are starting to place recommendations on rooting structures. Beck’s is a large front runner for this. But what I suggest to growers is, if you plant 10 different hybrids on your farm, go dig a few plants from each one of those 10 hybrids. Look at the differing root structures that you have. You are probably farming them all the same way. When you look at the key rooting differences, you can use that information, and when you get your seed guide in the fall, remember what they look like. Take your yield monitor data and start making decisions on how to improve matching your fertilizer placement with the hybrid rooting structure. Todd Gleason: I have a quick question related to no-till and having a smaller mass closer to the surface. Do we know if that also correlates with its ability to survive dry conditions? Jared Fender: That is a very good question regarding the survivability of a smaller rooted hybrid. Ten years ago, when we classified hybrids, a lot of people classified them as offensive or defensive, racehorse or workhorse. The racehorses were typically smaller rooted hybrids that would not withstand drought as well because they lacked the root mass or surface area to find water. Those smaller rooted hybrids benefit from placing fertilizer in a no-till scenario, or a scenario that places it very shallowly in the soil, because those roots don’t have the mass to find it deep in the soil themselves. Matching where you place fertilizer in relation to that rooting structure is how we are picking up large swings of yield differences. 15:56 Ag Weather with Eric Snodgrass, NutrienAgSolutions.com Todd Gleason: Let’s check in on the weather forecast now. Eric Snodgrass is here from Nutrien Ag Solutions and Agrible. Hi, Eric. Thanks for being with us. Eric Snodgrass: You bet. Todd Gleason: Let’s start with the rainfall we’ve had, the rainfall we didn’t have, and the rainfall we might have. Eric Snodgrass: As a meteorologist, summer is the most disappointing time of year to hope that you can forecast accurately, especially precipitation. Our models are not designed to handle it. They do what we call parameterization of convection, which means they cannot simulate the storms inside of the big models we use, like the European model or the GFS. Our summer rainfall gets here usually through convection and thunderstorms, and these models are doing their best just to try to get it right. It is maddening to see the weather forecast change so rapidly. Earlier this week, rain came through parts of Iowa and Missouri that I thought would hit Illinois more. Some parts of Iowa picked up five inches, and around Columbia, Missouri, some places got six to seven inches of rain. The rainfall has been distributed very hyper-locally. If you didn’t get rain, the drought continues to grow. Nationally, we are still sitting at 70% of the United States in some stage of drought. Looking at the forecast, we’re going to see a ridge develop over Texas with high pressure to our south, so we should expect to see ridge-riding clusters of storms for the next couple of weeks. Todd Gleason: Fair time comes and there is always a rainfall. The question is how localized are those, and are there enough of them that everybody gets something? Eric Snodgrass: I don’t think everybody gets the rain. Some forecast models suggest one to two inches in the next two weeks from eastern Iowa to Ohio, but when the rain comes through, it is really local. If you don’t get the rain you want, at least we are not going to be compounding that with heat. July finished hot in the western Corn Belt, averaging two to five degrees above normal, which should peel off about five bushels from that region. The eastern Corn Belt avoided long-duration excessive heat. Now in August, the temperature forecasts are pretty cool going forward. If you don’t get rain, at least we are not compounding it with incredibly hot temperatures giving us a flash drought scenario. All of that heat risk is going to be down in the southern plains for the next two to three weeks. Todd Gleason: This is the time of the year where the old saying works: rain makes grain. What else are we talking about this week? Eric Snodgrass: You are going to start seeing a lot of crop tours taking shape across the US. As they do, they will be reporting back yield numbers. I would tell everyone not to be surprised if they start to hear national yield numbers on the higher side of average. I do not think we had enough widespread massive damage in the western Corn Belt to pull back the numbers. If August comes in with cooler conditions and we pick up rain in key areas, you can put a lot of weight on that crop late. Todd Gleason: Here in Champaign County, there was more than one Brazilian crop tour. There was one on campus, and I think you had a different one at Nutrien, right? Eric Snodgrass: We did. We had about 50 folks from all over Brazil here this week. I asked them two questions. I first asked if they would be expanding acreage this year, and the answer was a resounding no. They said the likelihood of continuing a 2 to 4% increase in total acreage was going to be minimized. The second question was about La Niña. They basically said the same thing I have observed: it tends to be drier north in areas like Mato Grosso and Goiás, and wetter south. They are concerned about the speed at which they can get the crop in, watching southern Brazil for most of this upcoming growing season being too wet. This La Niña is already on pace to be the strongest on record long before it reaches its peak. It is going to really drive the story the farther we go into fall. Todd Gleason: I bet I see you at the State Fair. Thank you for being with us today. Eric Snodgrass: You bet. I’ll be there. Todd Gleason: That’s Eric Snodgrass. He is with Nutrien Ag Solutions and Agrible. You’ve been listening to the Closing Market Report on this Friday afternoon.