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Dec 15 | Closing Market Report · Closing Market Report

• 0:00
  Todd Gleason: From the Lende Grant University in Urbana Champaign, Illinois, this is the closing market reported as the December 2025. I'm extension's Todd Gleeson. Coming up, we'll talk about the commodity markets with Kurt Kimmel. He's at agmarket.net, and we'll hear from Scott Irwin, a presentation he made during the farm assets conference on Friday in Bloomington, Illinois, particularly as it relates to 45 z and the impact it could have on corn bases around ethanol plants starting January 1. There could be an enormous impact.
• 0:36
  You'll wanna hear about that. We'll also talk today, as usual, with Mark Russo. He's at Everstream Analytics on this Monday edition of the closing market report that's coming to you today from the Illinois Farm Economic Summit in DeKalb. We'll be in Peoria tomorrow and Mount Vernon on Wednesday. More on that as we make our way through this edition of the program right here on Illinois Public Media.
• 1:01
  Oh, and you can register for the events as well at willag.org. Just a quick note, because of a technical issue here in DeKalb, I'm not able to contact Kurt Kimmel for the day. Todd Gleason's services are made available to WILL by University of Illinois Extension. But today, I'm coming to you from the Illinois Farm Economic Summit in Kalb, but you can join us, the PharmDoc team, tomorrow or on Wednesday, either in East Peoria, we'll be at the Paradise Hotel and Casino, or at the Doubletree on Wednesday in Mount Vernon for this series of summits, your chance to hear directly from the PharmDoc team. I must tell you, it has been a fantastic event today all day long.
• 1:47
  There are more members of the PharmDoc team traveling this year than ever before. You will want to be there. The cost is $100. You can find all the details online at willag.org and wait to register. Walk ins are certainly welcome.
• 2:01
  Do register before you come because it'll be easier. We're going to send you to the website one way or the other to make those payments. Again, you can join us at the casino. That's the Paradise Hotel and Casino in East Peoria on Tuesday tomorrow. Doors open at 07:30.
• 2:18
  Program starts at eight. We wrap up at the noon hour. Same thing happens in Mount Vernon and the Doubletree on Wednesday. Now on Friday of last week, one of the team members who's not traveling with us this week, Scott Irwin, made a really interesting presentation, particularly if you're selling corn after the first of year. He says you might wanna sharpen your pencil up because according to him, the new 45 c credits kicking in on January 1 are gonna change everything, all the math for ethanol plants and potentially for your bottom line.
• 2:56
  He talked about all kinds of biofuels. I've got six minutes for you from a forty five minute presentation. He'll start with what he thinks about sustainable aviation fuel or SAF.
• 3:10
  Scott Irwin: I'm a big bear on SAF. It's not going anywhere in The US until we mandate it. Simple as that. Okay. Here's the key.
• 3:18
  This is the good stuff. The credits for 45Z are keyed to carbon intensity scores, which the previous panel talked a lot about. And I've been using the latest Greek model that has been released by the Department of Energy to come up with these numbers. A Midwest soybean oil biodiesel plant is expected starting in 2026 to get 61¢ a gallon. If you are a California RD plant using tallow, you are going to get 68¢.
• 3:58
  So these guys are getting less than they got before. The Midwest Corn Ethanol plant, here is a key mind boggling number of acronyms, right? CCS. Anybody know what CCS stands for? What?
• 4:20
  Excellent. You are a winner. Bingo.
• 4:27
  capture or it's carbon sequestration. If you're a Midwest corn ethanol plant and you haven't done CCS, you're going to get 11¢ per gallon of ethanol produced. If you get rid of all your CO2, my calculation is 94¢ a gallon. As Todd says, you wonder why we're building pipelines and who's going to pay for it. Right there.
• 4:58
  Okay, here's where things get really interesting. Now, the people in the BBD industry hate when I say this, but I'm 99.9999%. I'm correct. No impact. Okay?
• 5:14
  Biodiesel and RD is going to get less of a tax credit than they got before. But it does not matter economically because the RIN price and the tax credit move opposite. You lower the tax credit, the RIN price goes up and we're at the same place. Oh, but here's here's my my big drum load please. This is this is the big moment in the presentation, Todd.
• 5:50
  For an ethanol plant starting on 01/01/2026, I'm assuming no CCS. The RIN prices are irrelevant in this case. There's no offset. 11¢ times 2.95 gallons of ethanol per bushel is 32¢ per bushel of corn. In little over two weeks, at least from an economic standpoint, pretty much every ethanol plant in The US has just had a helicopter of cash flown in over the Corn Belt and it's dropping 32¢ of cash per bushel of corn they're buying.
• 6:44
  I think farmers might be interested in how that 32¢ might be shared. What? Well, this is going to be, I think something that is going to bust out that I can't find anybody else thinking about it, quite frankly, but myself. I think ethanol plants know this and I don't think that they really want it publicized. But it's out there and it's going to be a big issue in negotiating prices with ethanol plants.
• 7:31
  I mean think about it, you know they're getting this and for 32¢, I could ship corn all over Illinois to somebody who will share 15 or 20¢ with me. So watch the basis at ethanol plants after the first of the year. I think it's going to be incredibly interesting. I can't really ever recall this much money being at play on a given date. Now, with CCS, it's a ridiculous number.
• 8:19
  $2.77 bushel corn. But that's maybe I shouldn't even put that number up there because to get a lower CI score and a bigger credit, you have to spend money. So this will this is the gross amount and but still, and I do, I am I market the grain for our farms in Iowa and we sell grain to a local ethanol plant, I'm going to be having a phone call with their buyer after the first of the year and I'm going to ask them these questions. I suspect they're going to be not happy to have that conversation, but they're going to have it with me. I recommend every farmer have the same conversation.
• 9:07
  Todd Gleason: You are going share that with everybody, right? That conversation you have with your local corn farmer at the ethanol plant?
• 9:15
  Scott Irwin: Wasn't planning on it.
• 9:19
  Todd Gleason: Don't worry, I'll record it.
• 9:20
  Scott Irwin: So I got my five minutes, I'm done and I I gotta tell you how much I appreciate. I was really worried this presentation. Presentation. I'm thinking this is gonna go terrible with all this junk in here, but I deeply appreciate that you guys all hung in there with me. Thank you very much.
• 9:43
  Todd Gleason: I was University of Illinois agricultural economist. A small portion of a forty five minute presentation he made Friday at the Farm Assets Conference in Bloomington, Illinois over the winter break. I'll try to bring you all of that, if possible, during the closing market report between Christmas and New Year's at some point. Be sure to tune in for the program at willag.org online or at WILL AM five eighty or many of these radio stations over that time frame. Also, if you'd like to see the other agricultural economists,
• 10:17
  Juo-Han Tsay: the
• 10:17
  Todd Gleason: FarmDoc team, you still can. We'll be in Mount Vernon on Wednesday, and we'll also be in East Peoria tomorrow. You can find all the details about the Illinois Farm Economic Summits online at willag.org. The closing market report is a production of Illinois Public Media. We're celebrating forty years of our programming established in 1985 and more than 10,000 episodes.
• 10:57
  Our theme music, by the way, is written, performed, produced in courtesy of Logan County, Illinois farmer, Tim Gleason. Today we're traveling with the PharmDoc team. You can always visit with us tomorrow and or Wednesday. Tomorrow we'll be in East Peoria at the Paradise Hotel and Casino in the hotel. And then on Wednesday, we'll be in Mount Vernon at the Doubletree.
• 11:28
  Doors open at 07:30. We'll begin at 08:00. We run through the noon hour and finish up with lunch. The cost is a $100. Welcome for walk ins.
• 11:38
  However, go to willag.org, willag.org. That's willag.org. Hit the link for where you'd like to see the PharmDoc team, either in East Peoria or in Mount Vernon, and fill that out before you come because when you come, you're going to have to open that same page and fill it out, so you may as well get it done at your desk when you have the opportunity or someplace that's easier rather than your phone. Now one of the people that you will hear tomorrow morning or on Wednesday morning is Rohan Tsai. She is with the Department of ACE Agricultural and Consumer Economics, part of the FarmDoc team, and talking about the price of farmland.
• 12:21
  We're only gonna talk to you a little bit about one item out of those things that you covered today. I was very interested in a question that the audience members asked as it was related to the impact that solar and wind energy were having on the price of farmland in Illinois. Has there been one?
• 12:43
  Juo-Han Tsay: So big picture of that is the rate of return of those solar farm is usually 6% to 8% because we see the rental from solar probably three times higher than what we receive right now from the cash rent. But in terms of whether we see the impact of solar on the farmland impact, I would say that it's just probably several parcels really close enough to the transmission line. If we look at the regional, the county or the whole state of Illinois, we do not see, so far we do not see solar have any or renewable energy have anything impact on the front end values.
• 13:25
  Todd Gleason: So really the impact is based on right away for the transmission line and where that solar farm might be actually placed and outside of that. So it's a very small footprint, would suppose. Does the same thing go for wind?
• 13:43
  Juo-Han Tsay: Yes. In recent years, we do see more and more farms participate in the solar project, but they are also very early on stage of this contract. So in terms of that, probably 90 80% to 90% of these farms may not go to the development phases. So may they may not have long term impact on their farmland value in Illinois enough.
• 14:08
  Todd Gleason: This historically is not that much different than when coal mines were working through the process, I think, relatively speaking, of trying to site potentially a new coal mine somewhere, and they would buy up the rights to mine underneath property and pay that, but not actually pay out anything ever because they just didn't put a coal mine in place. Sort of a similar function over time. Back to the impact, I was surprised by this correlation that when you were asked about international investment in farmland, that you pivoted to solar and energy farms. Why was that the case?
• 14:57
  Juo-Han Tsay: So we do see I know in Illinois people care about whether we have foreign ownership for our farmlands. We do not see that many percentage here in Illinois. If we see some that that a lot of them is coming from Canada or European company and through energy farm And then have some solar and wind project through the energy global energy farm or energy firm. So that's kind of like what we see for those international investors.
• 15:32
  Todd Gleason: What is it that a producer or a landowner, I suppose, should really think about as it's related to turning properties over for a solar or a wind farm from your perspective?
• 15:46
  Juo-Han Tsay: So I think right now if so based on the USDA report right now you have to if you're a foreign ownership you have to report to the USDA but we do not restrict you what you can do on the farm so far so yeah I think that will have some impact to the farmland but then so far we see we don't have enough for the ownership that cause any increase or decrease to our farmland values.
• 16:18
  Todd Gleason: Thank you very much.
• 16:20
  Juo-Han Tsay: You're welcome.
• 16:21
  Todd Gleason: Rohan Se is a member of the Farm Doc team traveling with us for the Illinois Farm Economic Summit. You can come see her in person along with the rest of the team in East Peoria at the Paradise Hotel tomorrow. Doors open at 07:30 a. M. Or in Mount Vernon at the Doubletree on Wednesday.
• 16:39
  Programs at both places start at 08:00. Do register ahead of time. You can do that at willag.org, willag.org. Let's turn our attention now to the weather forecast. Mark Russo is here.
• 17:06
  He's with Everstream Analytics. Hello, Mark. Thank you for being with us. Cold and blustery day still today. It was just frigid over the weekend, and that Saturday, five to seven inches of snowfall was really tough across Central Illinois and parts of the Midwest.
• 17:26
  Can you tell me about the transition that apparently is gonna take place from that and why we had it to something a whole lot warmer in the coming week?
• 17:36
  Mark Russo: Sure, Todd. Before getting into the the pattern change, I did wanna mention that with this snow event over the weekend, at least the one good news from it here is that it did protect the with the Midwest soft red winter wheat from any kind of freezing issues as we saw temperatures drop below zero, in some cases, well below zero down to minus 10, minus 11 in areas of Central Illinois, Central Indiana. But, well, the reason they got that cold was because of the fresh snow cover and the radiational radiational cooling conditions that occurred here the past couple of mornings. But in terms of extreme cold and extreme snow, that that is going to be changing as we go through this week. In fact, by the latter part of this week, temperatures will be climbing back up to warmer than normal levels across actually much of the Midwest and look to stay that way through next week and even beyond that time frame as well.
• 18:35
  Now with this warm up to well above, and some cases even potentially some record warmth here, there will still be additional precip, but most of that will now be in liquid form versus frozen form.
• 18:48
  Todd Gleason: Because we are in mid December and moving into the heart of winter soon enough, does this warm up impact places that would normally have snow cover from now through the spring thaw? And what issues might it create agriculturally? You talked about soft red winter wheat in Illinois, but there will be other places with winter wheat crops that might have issues, I would think.
• 19:14
  Mark Russo: Yeah. With at least some of this more extreme cold directed lately in the Midwest, that's really the biggest risk of any of any issues could be for the plains hard red winter wheat belt, the big time cold that stayed out of that area. And they are in a warmer and drier pattern. And again, with this melt off, we're going see a lot of the Central US now being in a drier and warmer pattern. If the pattern were to abruptly turn cold again at some point, which maybe happens later in January.
• 19:49
  But if that does occur, then that is something to keep an eye on for any kind of winter kill threats. Then in terms of soil moisture, even with the hard red winter wheat belt being on the drier side, that would have to continue into the spring and during spring development to become an issue. So we got a long ways to go before that.
• 20:12
  Todd Gleason: Turn your attention to South America. What's your assessment of weather there going forward?
• 20:17
  Mark Russo: Yeah. Going forward, weather conditions across virtually all of South America will continue to be in good shape with that timely rains, a lack of any kind of heat, any areas that do miss out on rains that look smaller in scale versus anything that large, wide scale or large. So for right now, looking out through the end of the month and even in the first few days of January, we're not seeing any large scale problematic weather, and that's gonna continue to keep growing conditions in good shape as we head towards the heart of the season.
• 20:53
  Todd Gleason: In any given week, I talk through five to six of you. I think you all have been fairly much in agreement that La Nina has been weakening and not really even an issue from Argentina, though I did see something online in another publication suggesting that it could be or even would be. Are you still of a mind, and it sounds this is the case, that this weakening La Nina probably won't have an impact?
• 21:20
  Mark Russo: Oh, we're not there yet here, Todd. We got to get through January and into February. And again, looking out into early January, we don't see any problems here developing, but we would be surprised if we didn't have at least, you know, a two to three week stretch of pretty hot or dry weather at some point during the January, February or early March timeframe. But that happening is much different than happening now. With the favorable weather up to this point, this is certainly avoiding any kind of big crop issue right now and especially Argentina.
• 21:58
  Todd Gleason: Yeah, so mostly an Argentina problem if it were to develop that way and not much for the Center West or Mato Grosso, I take it, right? Yeah.
• 22:06
  Mark Russo: Right, yeah. No issues and kind of now we're going to be watching the end of the rainy season and how that relates to corn planting since, again, conditions are in pretty good shape there.
• 22:20
  Todd Gleason: Hey, thank you much. I do appreciate it.
• 22:22
  Mark Russo: You're welcome, Todd.
• 22:23
  Todd Gleason: That's Mark Russo. He is with Avastream Analytics and joined us on this Monday edition of the closing market report that came to you from the Illinois Farm Economic Summit being held in DeKalb. We'll be in Peoria tomorrow. You can join us there, the whole of the PharmDoc team more than ever before members of the PharmDoc team traveling this winter on the winter meeting season in East Peoria tomorrow at the Paradise Hotel and Casino and in Mount Vernon at the Doubletree on Wednesday. The doors open at 07:30 each of those mornings, and we'll begin our program at 8AM.
• 22:59
  We go through the noon hour, and the $100 bill includes your lunch. Register now at willag dot org. That's willag.org. I'm Todd Gleeson.