Latest / Closing Market Report / May 16 | Closing Market Report

Transcript

May 16 | Closing Market Report · Closing Market Report

• 0:00
  Todd Gleason: From the Lend Grant University in Urbana Champaign, Illinois, this is the closing market report. It is the May 2025. I'm extension's Tug Gleason. Coming up, we'll talk about the commodity markets with Mike Souslow. He's at GlobalComResearch.com out of Atchison, Kansas.
• 0:17
  I'll bring you up to speed on the agricultural news for the afternoon, and we'll hear from Eric Snodgrass at Nutrien Ag Solutions and Agrabal about the weather forecast. Two, if you can stay with us for the whole hour, you'll hear all of our commodity week program including guests Naomi Blum, Greg Johnson, and Arlen Suderman. If not, it's up online right now at willag.org. That's WILLAG.org.
• 0:45
  Speaker 2: Todd Gleason's services are made available to WILL by University of Illinois Extension.
• 0:50
  Todd Gleason: On this Friday, I'm out of the office for the afternoon. So we're talking with Mike Zuzlow, GlobalcomResearch dot com during the trading day. Mike, thank you for joining us early. I appreciate that. Let's begin with a new story that came out of Brazil, Avian Influenza now in their poultry flocks, which means that I believe China will not be taking any poultry meat from them.
• 1:17
  I I pretty sure that has been confirmed, 35% of the world poultry or chicken comes out of Brazil. That's a big number. What does it tell you about the marketplace?
• 1:30
  Speaker 3: Yeah. We're we're really hypersensitive to this high frequency news when it comes to the demand side of the equation, Todd, and naturally so when you're talking about the world's largest poultry exporter. And you're right, China has put a countrywide ban in place at this stage. The thing I think that's important about this week compared to looking at it in a bigger picture after the USDA report and after The U. S.-China trade thaw that we've seen here for ninety days is the trade is very nervous about demand because they still can't get the tariff issue out of their heads.
• 2:09
  So the market is on pause right now, I think, as far as new bears coming into market, new sellers coming into the market. And I think there's also another group of potential sellers out there that are very much on pause right now and maybe even getting out of their short positions in the second half this week because of the global weather. China has made a lot of news this week, and most of it has been pretty price friendly. Friday, across the wires that China has officially, in their Meteorological Administration, issued a weather alert from next Monday through next Thursday on hot, dry temperatures in their primary winter wheat belt. And that's very important for us in that wheat leadership category as far as upside potential.
• 2:52
  Very important because USDA put out their new 25, 20 six production numbers, as you know, and they're giving China a record 142,000,000 metric tons of production for this new crop year on a record yield. That's very much in doubt now with the type of weather they're having. So we've got global weather underneath us. We've got tight stocks, but these demand and tariff issues are going to stick with us.
• 3:16
  Todd Gleason: Yeah. So that would be one issue for Kansas, it looks like they have an awfully good wheat crop according to the tour that went through that state this week.
• 3:28
  Speaker 3: Yeah. Very glad you brought that up. We've got issues in the wheat here that are not damaging the production. The 53 bushels, Kansas wheat tour matched up very nicely with USDA's fifty bushel Kansas state yield, and the production numbers were within 6,000,000 or 7,000,000 bushels of one another between the two. But they noted drought and they noted wheat mosaic and that those two things being potential big hits to the market in terms of the production potential that they have not factored that in at this stage, but they've noted it.
• 4:01
  And so I would say you've got three big hotspots in Northern Hemisphere that could make or break the global wheat crop in the next thirty days. You've got the Western Corn Belt, hard red wheat belt. You've got Ukraine, Russia. Ukraine getting rain, drought saving rains, it sounds like, but Russia getting mixed missed and coming news out about declaring some emergencies due to frosts last month. And then you've got the Chinese wheat belt as well.
• 4:29
  So when I look at both the USDA numbers and everything in totality, I do think that the wheat is still the leader to the upside when it comes to the big picture. Unless we have a 2012 type scenario in the corn and bean market here in terms of the row crops in The United States, instead of being Illinois, Indiana, Ohio, it's out here in the Western Corn Belt.
• 4:51
  Todd Gleason: Yeah. So I do wanna talk a little bit about that, because you're telling me that wheat needs to be in the leadership space because I suppose there's not that big of a difference, buck the closed rank, I guess, between corn and the price of wheat. And wheat will hold the corn market back to some extent. When would you expect that to flip? I mean, what what kinds of things might happen?
• 5:18
  The wheat crop, not all that much time left with it, I suppose.
• 5:22
  Speaker 3: Yeah. Excellent question because it is really a timing matter now. I told clients that the trade up until the middle of this week, I felt like traded more The U. S. Numbers, the buying beans, selling corn instead of looking at the world numbers, where we've got the tightest stocks to use globally in corn now since 2012.
• 5:39
  And we're maintaining a ten year low in stocks to use in global wheat. To answer your question, I really think it's right here, right now, historically and production wise, agronomically, Todd, I see it that the wheat needs to do it essentially right now in the next thirty days. We'll either tighten up the global wheat crop substantially because of these three hotspots, and that gives us a wheat corn spread that keeps wheat out of the feed category. Otherwise, historically, if you don't make a low here after the May goes off the board, which we saw this week, wheat tends to go down into row crop or excuse me, into the actual harvest in the late June, early July time period. So we're on the eye of the needle right now, and we need to see that wheat market perform.
• 6:21
  We similarly need to see that July corn spread perform. I see a lot of similarities. When the wheat goes up, it seems as though that July corn spread can build premium to the July and tell and signal and telegraph to the market. We need supplies out of the farmers' bins to meet this really strong, still very strong export demand pace.
• 6:41
  Todd Gleason: How different are the conversations you're having with your clientele who are, for instance, in Indiana, Ohio, Western Illinois, and maybe in Nebraska?
• 6:52
  Speaker 3: You could flip them upside down if you talk to someone in Geneva, Nebraska versus Alaney, Illinois right now. I would say that conversation in Alaney, Illinois, not getting hardly anything done goes all the way to Owensboro, Kentucky. And in terms of too wet, worried about losing yield because the primary window of best yield optimization is closing traditionally as we get into the later May time period. And then you have the clients near the Nebraska Kansas border that started their pivots, as I said, I think, two weeks ago now. They're running very hard.
• 7:27
  Thankfully, we're going have a little bit of a cool down, but very different scenario. But both of them yield reducing scenarios, and that's what's so in particularly odd about this year as we start the year out because the USD has got big yield and big acres. That 181 number is really on the table, if you ask me, especially in the next thirty days. And so it could be quite a different market. But again, I think that's the supply side.
• 7:52
  And the demand side is going to be the tariffs and some of these issues with the disease pressure. And so you're going to have to find a balance, a profitable balance, as far as how you manage your risk here these next thirty days.
• 8:04
  Todd Gleason: Thank you much, Mike. You bet, sir. Mike Zusalo is with GlobalCom Research dot com. He is in Atchison, Kansas. In today's agricultural news, Brazil, the world's largest chicken exporter, confirmed its first outbreak of bird flu on a commercial farm on Friday, triggering a countrywide trade ban from China and statewide restrictions from other major consumers.
• 8:31
  Brazil exported $10,000,000,000 of chicken meat in 2024, accounting for about 35% of global trade. China, Japan, Saudi Arabia, and The United Arab Emirates are among the main destinations for Brazil's chicken exports. We'll stay with the livestock sector where cattle has been in a bull market for quite a while. But how long can that really last? Mike Davis from the National Association of Farm Broadcasting has more.
• 9:01
  Speaker 2: USDA chief economist Seth Meyer told farm broadcaster
• 9:05
  Speaker 3: Yeah.
• 9:05
  Speaker 4: We're in a contraction phase, and I'm I'm happy to say my NASS colleagues have given me back my cattle report for July. So, we'll see if we turn.
• 9:13
  Speaker 2: Meyer says, we should learn a lot more in a couple of months.
• 9:17
  Speaker 4: The near term record feeder prices has that effect of not wanting to hold those animals back because the the it's so there's so much money to be.
• 9:27
  Speaker 2: That has yet to be determined.
• 9:29
  Speaker 4: You talk to some of the cow calf folks and and yes, there the the those feeders are worth a lot of money but the decision is, do I take the cash now or do I retain that heifer and hope that I'll make that money two years from now on a fed out animal. And so I talked to a lot of cow calf operators and they're certainly hesitant to expand, maybe maintain some of the animals that they have and made right now. Do we have good forage conditions? Do they want to hold them? Will they be able to support that cow calf pair?
• 10:01
  So I'll be really interested to see the last January report suggested that maybe cycle was slowing a little bit. We'll see if we get a turn in the July report. So I think this is a really important report that I'm really glad to have back.
• 10:13
  Speaker 2: I'm Mike Davis.
• 10:15
  Todd Gleason: And finally today this note on corn herbicide applications. Rainfall of course has interrupted spring operations to the point that it is possible there are some fields that have been planted to corn where no residual herbicide has yet been applied. University of Illinois Extension wheat scientist Aaron Hager says if the corn has not yet emerged, the soil residual herbicide can be applied as originally planned. However, what if the corn has emerged and the soil residual herbicide has not been applied? Can the application proceed as planned or will a different product need to be selected?
• 10:51
  Well the answer he says depends on the respective herbicide. Most but not all soil residual herbicides can be applied after corn has emerged. The exceptions are products such as Prequel, Sharpen, and Verdict. These three must be applied before corn begins to emerge. Hager says applications of these products to emerged corn can result in significant corn injury.
• 11:16
  He also cautions against applying a soil residual herbicide in a UAN carrier if corn has emerged as this can increase the potential for corn injury. You may read more from Hager on our website at willag.org. And that's a look at today's agricultural news. The theme music for the closing market report is written, performed, and produced by Logan County, Illinois Farmer Tim Gleason. Now next Friday, the U of I small grains research group will host its fourth annual field festival at Riggs Beer in Urbana.
• 11:59
  It's open to anyone interested in growing or just learning about wheat, barley, rye, among other crops. U of I wheat breeder Jessica Rakowski says things will kick off in the on-site test plots at 03:00.
• 12:12
  Speaker 5: We started off looking at the demo plots that we planted on-site there at the brewery. We have 18 different demo plots and we have their wheat, barley, rye, triticale, and kernza, which is perennial wheat. So we show people what these crops look like, we talk about what it's like to grow them and what different varieties we have. We talk a little bit about our breeding program as well. And, and yeah, and then there's plenty of time for, you know, questions or for people to just interact and learn from each other as well as from the experts.
• 12:52
  Todd Gleason: The field day runs from three to six Friday afternoon, May twenty three at Riggs Beer in Urbana. It's opened and free to attend. If you want to stick around, the brewery will be open, and the food trucks will have a special small grains dinner menu. Oh, and there's also a varietal hot steep malt tasting. That's the fourth annual field festival next Friday afternoon at Riggs Beer in Urbana.
• 13:14
  It's honestly the most fun you'll ever have at a field day. Let's check the weather forecast now with Eric Snodgrass. He's with NutriNag Solutions into Agrabal. Hello, Eric. Thank you for being with us.
• 13:40
  Let's recap, the rainfall. The event that came through last night, I was looking at that on the radar as it moved through our area, and it stretched from Saint Louis on an arc through us, through Green Bay, and around to Winnipeg. I mean, it was an enormous event. Tell me what it did.
• 14:02
  Speaker 6: Okay. This is a good point to bring up, Todd, because so it's mid May, and that is a that's a large, large, low pressure system. Now if you were show me that in March or April, like, yeah. That's what we get. But what's going on here in May is that the atmosphere is still out of momentum.
• 14:18
  It doesn't have it. So what we're doing is we're peeling off these slow moving large systems. And what they're doing is they're locally delivering very, very heavy rainfall. So yesterday across Illinois, I was watching the radar all night long. In fact, my son and I were out practicing.
• 14:33
  He's throwing discus in sectionals, so we're out of the high school. And I say, hey. We're gonna have to do this quick because the storm's coming. Of course, the lightning detection system went off. I'm like, alright.
• 14:42
  We're done. We're out. We're going back. And I was just watching these storms, and, man, there was a big rotating supercell near Bemet. There was hail in in in Bloomington.
• 14:50
  You know, there was some nasty storms. But if you look back at the total precip, it's streaky. So the problem is is that, yeah, from here through Wisconsin, even farther north into Manitoba, it eventually got into Ontario. And this morning, by the way, it's in New York. So this is how big the system is.
• 15:06
  But the point behind it is to say that a lot of folks are probably really disappointed with what they got out of this because the storms were hyper local in the rainfall delivery, meaning that we've got issues still in the northern part of the state of very dry spring conditions because of the way the storms haven't delivered. Now one quick thing to think about. I don't know if you looked at the backside of this, but there's been a ton of discussion about drought in Nebraska. Right? And in Nebraska going into Western Iowa yesterday, there was a large, large amount of dust and dirt and and just stuff lifted into the lower atmosphere as the winds picked up, indicating how dry that it's been there.
• 15:45
  And so what's interesting is you you talk to a guy like Matt Bennett down south in Southern Illinois. He's like, Eric, shut this rain off. I've gotta get finished. It's too much. We're having problems.
• 15:53
  The Mid South is the same way. We're looking at prevent plant in parts of the Mid South right now. And then you got guys in Nebraska that are saying, like, just just give us a drop of rain, and that's what a low momentum long wave pattern does. It tends to slow systems down, which it's been doing since mid April, and they tend to really give us a huge range of precipitation variability. And I'm worried about that lasting all the way till summer, Todd.
• 16:19
  Todd Gleason: Well, given that, I've been hearing about a big event next week. How widespread might that be? And do you think it really is a big event?
• 16:28
  Speaker 6: I'll be honest, Todd, for those places that have been dry. Alright? So these these drier pockets, I take whatever the model suggests and I cut it in a third. And then I take the places that are wet, and I take whatever the model says and I double it. Like, that's where my thought process is.
• 16:44
  So I've got a lot of hope in this system early next week. It's coming over the Western Mountains this weekend. It'll eject into the plains on Sunday. It should be getting into our neck of the woods by midweek next week, and I've got a lot of hope for that to bring in rainfall to some of these dry areas starting in Nebraska, getting into Iowa, hitting Illinois. But the problem is we mentioned Matt a moment ago.
• 17:06
  I showed him a forecast yesterday that his seven day total and which included the system coming through him today and then the one that's coming next week was over five inches more rain. And he did not like me very much when I said that. We're good friends, but I I I won't show you the text stream. You know? He's like, can you just give me some good news?
• 17:26
  And I'm like, I really, I can't, Matt. But, anyways, that that's the way this system's gonna go. So I I seriously would do this. I take whatever it says for those dry areas, cut it in a third, and double it up for the, for the wettest areas. But there's hope for that system this early next week.
• 17:41
  Todd Gleason: Yeah. To be honest, I'd rather have the rainfall than dry conditions that stick with me. Yeah. Does Nebraska get wet next week? And, you know, you've told us about drought, coming this summer at June 17.
• 17:55
  That's still a month away, but, gosh, we probably ought to talk about that too.
• 17:58
  Speaker 6: Yeah. So so Nebraska is a state where I'm seeing wetter than average conditions, and I'm gonna take those numbers, and I'm gonna divide them down to a third. I just am. I'm not gonna trust it until I see it. So, yes, the Western Corn Belt is still under the gun, and the new forecast for the month of June came out.
• 18:13
  And if you could just draw a line from Minneapolis, okay, straight down to New Orleans, that's basically following the the Mississippi River, the model's quite generous with rain east of it. I mean, we're in that we're in that bucket. Right? But if you're west of that line, it continues to stay drier. And I'll be honest with you, Todd.
• 18:31
  I I could look at that forecast and explain it and just tell you that's exactly what's gonna happen a million different ways. But that's that's me just, you know, trying to, you know, look at the painting and tell you exactly what the painter was thinking when he painted it. Right? And I don't know that that's necessarily the way things are gonna pan out as we get into June. I'm concerned, especially if we get into mid June, if the heat builds in the middle part of the country while the West Coast water temperatures drop off, we could be still looking at this risk, especially in the Western Corn Belt of summer drought.
• 19:03
  And I'll be honest, the CPC agrees with it. They just released a new long range forecast, and they went drier.
• 19:08
  Todd Gleason: How much drier?
• 19:09
  Speaker 6: Well, they kept this epicenter of dryness from Missouri through Iowa into Minnesota for June, July, August, and September. And it was another shade drier on their color graph. Now we don't look at it for magnitude, you look at it for pattern, but they did not break away from where they had the risk in mid summer. What is confusing is that while they have that area dry, they're calling for the greatest heat to be out in the Great Basin, which is in the mountains. I don't know why they're not colocated.
• 19:40
  Usually, when you get into summer and you're in a big ridge pattern and it's July and August, that's your epicenter of heat as well. And so I'm just gonna tell you this again. We have a forty five day assignment. Okay? The probably the most important is gonna be the next thirty days, getting us out there to mid June, but we've gotta watch the West Coast Of North America.
• 19:57
  It's already cold off the coast of California. If it gets cold in the Gulf Of Alaska, then I will be ringing the alarm bells every time we talk on Friday.
• 20:05
  Todd Gleason: Okay, teach. You'll have to continue to remind me because I'm going to procrastinate, but I will try to get it done.
• 20:12
  Speaker 6: Thank you. Good. Alright. Just watch it.
• 20:17
  Todd Gleason: That's Eric Snodgrass. He is with Nutrien Ag Solutions and Agrabal. Joined us on this Friday 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 at willag.org. That's willag.0rg.
• 20:38
  There you'll also find our commodity week program which comes up next. For those of you who can stay with us for the whole of the hour on our home station, you'll hear all of it. Otherwise, it will air on many of these radio stations over the weekend, and it's up online in its entirety right now.
• 20:59
  Speaker 2: Todd Gleason's services are made available to WILL by University of Illinois Extension.
• 21:04
  Todd Gleason: Well, welcome to Commodity Week. I am Todd Gleason. Our panelists for the day include Naomi Blooms. She's at TotalFarmMarketing.com out of West Bend, Wisconsin. Greg Johnson joins us from TGM.
• 21:15
  That's the elevator. TotalGrainMarketing.com here in Champaign County, Illinois. And Arlen Suderman joins us from stonax.com. He's in Kansas City. Commodity Week is a production of Illinois Public Media.
• 21:28
  It is public radio for the farming world online on demand anytime you'd like to listen at willag.org. W I l l a g 0 r g. Let's get a list of items we might want to discuss for the day. Naomi Blum from totalfarmmarketing.com. What's on your list today?
• 21:47
  Speaker 7: Well, I'm really keeping an eye on the weather and the rain that is and is not falling. I had some sad clients in Nebraska and parts of Iowa who just are getting missed by this rain that was supposed to hit them today. So just, again, the importance of weather watching and seeing what actually transpires over the twenty four hours.
• 22:04
  Todd Gleason: Greg Johnson on your list?
• 22:06
  Speaker 8: Well, we're all focused on the talks between US and China, but I'm curious as to what the impact will be with some of the trade deals when if and when they get done with some of the other countries, namely Japan and India. You know, will that have an impact on corn and soybean prices? Or does that just mainly provide leverage for The US when when it's finally going to negotiate with China?
• 22:30
  Todd Gleason: And Arlen Suderman from Stonax.
• 22:33
  Speaker 9: Well, my first thoughts were of, the China. Again, the trade pause or the tariff pause that we got over the weekend, and what does that mean for the chances of getting a more comprehensive trade deal. But we probably have to talk about, the disappointment that led to limit down soy oil prices on this Thursday, with, the RVO rumors going around regarding biomass diesel production.
• 23:00
  Todd Gleason: Arlen Suderman is with Stonax out of Kansas City. He joined our commodity week conversation along with guest panelists, including Naomi Bloom of totalfarmmarketing.com out of West Bend, Wisconsin, and Greg Johnson from TGM. That's total grain marketing from right here in Champaign County. You can hear the whole of the program up online right now at willag.org, w I l l a g 0 r g. And many of these radio stations will carry the program over the weekend.
• 23:29
  You've been listening to the closing market report on this Friday afternoon. I'm University of Illinois Extension's Todd Gleeson. Doctor. JACKSON: