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May 05 | Closing Market Report · Closing Market Report

• cmr260505 - Ag Markets with Naomi Blohm - Data Center Discussion with Google's Liz Scwhab - Ag Weather with Don Day Todd Gleason: From the land grant university in Urbana Champaign, Illinois, this is the closing market report. It is the fifth day of May 2026. I'm Extension's Todd Gleason. Coming up, we'll talk about the commodity markets with Naomi Blohm at totalfarmmarketing.com. And we'll hear an interview that I did last week with a member of Google's Data Center and Infrastructure and Energy team. You want to be sure to hear that right here on this Tuesday edition of the closing market report from Illinois Public Media. It is public radio for the farming world. Todd Gleason services are made available to WILL by University of Illinois Extension. 00:39 Ag Markets with Naomi Blohm Todd Gleason: Naomi Blohm from totalfarmmarketing.com out of West Bend, Wisconsin, now joins us to take a look at the marketplace. Hi Naomi, thanks much for being with us. I want to look back at the trade, not for today, but from yesterday because there were some really good numbers that came out yesterday. We had a turnaround Tuesday today, but what was the importance of yesterday? Naomi Blohm: December corn was the hot subject. The Dec 26 contract traded to a fresh two-and-a-half-year high yesterday, and closing above $5 was very significant from a technical perspective. The traders today were very curious if it could be another close above $5 today or not. It was a little bit of a turnaround Tuesday. But a two-and-a-half-year high, $5 corn, we never thought we'd get here months ago, and here we are. So on the December corn, we did see a lot of cash sales today for old crop and new crop. We saw a lot of hedging take place today just because of the $5 handle. If by chance it can work a little bit higher, the next target would be about $5.125, and then it would be $5.25. But we have to keep in mind we need some legit fresh bullish news to make that happen. The funds are getting pretty long in the marketplace, close probably now to about 300,000 contracts long. And we're also just in that seasonal timeframe where between Mother's Day and Father's Day is a lot of times when we find our spring-summer high. I think that's why you saw the turnaround Tuesday like we did today, because people recognize the value of $5 corn. And on those November beans yesterday, all the way up to the $12 price point, that was significant resistance. $12.005 was the high yesterday. That was the top of an uptrend line that had been established since August. Also, if you look at a daily chart, the swing objective was met. So if you take the high from last November to the low from January, and then resistance from February, you take that 70-cent price difference and add it to the breakout of $11.30, that's why we got to $12 yesterday. So it was major resistance in two different components, so the turnaround Tuesday today made some sense on some profit taking. Todd Gleason: I bet given what you told me about corn, you're saying, you know what, probably better put the order in just in case it gets filled overnight at this time, so that you make sure you've got some new crop sales done or something done there. And if that's your worst sale, good for you. If not, at least you got started. No cancel is close this time around, right? Naomi Blohm: Yes, exactly. It's tremendous value. And next week is going to be a big week. We've got a USDA report Tuesday. They're going to have the new crop data on it, and usually, it's not bullish. And then we've got maybe some decisions on E15, and then we've got President Trump and President Xi probably getting together next week. So we could see major volatility next week. It could be higher, lower, just depending on what news transpires out of all of those events. But again, you've got some pretty amazing value in front of you, so don't ignore it. Todd Gleason: It'd be interesting to see how the crop progress plays into next week's WASDE. They don't often change acreage, but when things are moving as quickly as they have, particularly for corn planting, soybeans too, this year, east of the Mississippi River primarily, sometimes USDA surprises folks and doesn't use what they released at the Ag Forum. So I wonder if you've thought about acreage changes and what they might do? Naomi Blohm: I guess I've thought about it, but I'm a little skeptical that the USDA will do anything right now. I'm curious if they would. It would be a big surprise if they did. Usually they kind of stick with that March 31st number, then they give us a huge yield number. But the question will be what they do with demand there. With crop planting as good as it's going, corn is 38% planted, kind of the same as a year ago. Beans are 33% planted, ahead of a year ago. And I know this week there's a lot getting done. So we're going to have a big planted number next week, Monday. Without any dramatic weather news or a major war escalation, it might be hard for the grain markets to get much traction. Again, unless to your point, something of a bullish surprise occurs on that report next week. Todd Gleason: How are farmers in Wisconsin doing? They have been behind because it's been so very wet. Naomi Blohm: Yes, I went down to Platteville this weekend to see an Oscar spring football scrimmage. Down by Platteville, they are planting pretty well. But when you get by Madison, there was not a lot of fieldwork getting done. Over the past couple of days there's been a lot more done. Where I live on the northeastern side of the state, I have literally heard I'm mudding it in multiple times in conversations today. Guys are trying to get something done, but we are just so chilly up here and still trying to dry out from all that rain we had a couple of weeks ago. I think we are starting to see some progress. Todd Gleason: Thank you much, Naomi. Naomi Blohm, of course, is with totalfarmmarketing.com. 06:11 Data Center Discussion with Google's Liz Schwab Todd Gleason: Up next, we'll hear a series of excerpts from an interview I did with Liz Schwab. She's with Google's data center team as an energy and infrastructure manager. I started by asking her why it was that Google had contacted me and had a data center push on with local media. Liz Schwab: Data centers are in the news, right? A lot of the concerns and misconceptions, and even excitement, comes from just a lack of understanding and awareness of what data centers do, what they power, and importantly, how they operate. It's really understandable that the average layperson who's very busy with their day-to-day life doesn't have the time to read up on how data centers operate and the economic development process. So you see some of the reports out there or stories online, and it of course drives concerns. So that's part of why I really appreciate the time with you today, is to get our message out there, talk to the American public more about what data centers do and how they can be developed responsibly so that we can continue to power the digital and cloud services we all rely on, while also protecting our natural resources, supporting the grid, and doing it all responsibly. Todd Gleason: I have been to protests and to county meetings both on this topic in the last week and a half, two weeks. Those who are at these protests and meetings do ask the question, what exactly does a data center do? So in short, what is it that's housed there? What does it do? Liz Schwab: A data center basically houses thousands of high-tech computers called servers that power digital services, the internet, and the cloud as we know it. So when you're looking up directions to avoid a traffic jam on the way to work, or you're storing your family's photos, you're streaming your favorite service, or you have a small or large business and you're operating in the cloud, all of those things depend on data centers. Todd Gleason: Why is it that we need hyperscale-sized data centers, and why is there a push for so many of them across the nation? I can think of just three in the state of Illinois that are proposed at this time. Liz Schwab: I think it helps to take a step back. I think you and I are probably old enough to remember when we all had servers underneath our desks. We've steadily moved more and more away to having on-site or on-prem computing. The benefit of that, when we go to a hyperscale data center campus, is that we enjoy so many efficiencies in the energy use, in the computing, in the amount of processing we get out of every chip and every server is drastically improved. That allows us to do more with limited amounts of energy. That's really the benefit of hyperscale campuses. Todd Gleason: Limited amounts of energy, however, these are generally sited next to a substation because they use so very much energy, and those locally are fearful that it will drive electrical rates higher. Is there factual evidence one way or the other that Google has as it's related to electrical rates? Liz Schwab: There's actually a lot of factual evidence that large energy users like data centers can put downward pressure on rates and actually lower rates. It's understandable why there's a misconception out there. Before working on data centers, I couldn't tell you the first thing about the electricity system, the regional transmission organizations, FERC, how utilities work, right? It's a really complex system. When you get a new large load user like a data center, what we basically do is distribute those fixed costs over a broader denominator. It's almost like inviting a wealthy roommate into your house who's willing to fund a new roof, upgrade the electrical, and put new windows in. A large energy user brings a much broader use base to the system and can help actually modernize the grid for everyone else. States that have an increase in load growth have actually seen a flattening of their average residential utility rates. There's a great study from the Lawrence Berkeley National Labs from last year that shows that. Of course, every state is a little different in terms of how their electricity system is regulated and structured, but our commitment is to always pay for the electricity and the infrastructure that we use and more, to make sure we're investing in that shared system. Todd Gleason: How should county boards go about making sure that those who are building data centers—and Google may be an investor, but may very well not be the builder—are paying for the infrastructure upgrades? Liz Schwab: I think that's generally done at the utility and PUC level for the energy portion. But of course, there's a lot of other infrastructure, like roads or water or other infrastructure that we are also committed to paying for. Those are the right questions to be asking. No municipality, city, or county should be bearing the bill for a new data center. In fact, it's the opposite. If our project needs to widen a road or fund other infrastructure, that should be done in a way that benefits the broader community and actually allows that municipality to fund something that maybe otherwise they would have had to wait a long time for or pass a special bond for. With the presence of a company like Google, we can come in and fund that as part of a larger project. Todd Gleason: Tell me about water usage of data centers, both closed-loop and not closed-loop water usage. Liz Schwab: Water use, I think it's helpful to take a step back here too. The reason why companies like Google even pursue water cooling in the first place is because it actually helps you lower your electricity use. So it's a bit of a trade-off in terms of resource use, and it's always a locally driven decision. So when Google looks at a new site and what the right cooling design should be, one of the first things we start with is the watershed health of that site. We work with local, state, federal officials, data sets, hydrologist experts to study that watershed. If it's healthy, both from a volumetric and quality perspective, we can then take that next step to talk with a water utility and see if the water infrastructure is adequate. Throughout all of that, we are transparent, we report our annual water usage, and we commit to replenishing 120% of the water that we use. So where we do pursue water cooling, we aim to leave the system better than when we found it. Todd Gleason: Do you make the initial assessments that are done by outside sources available to the residents of the area prior to the time that these are approved? Liz Schwab: We work really closely with local officials to determine what those cooling decisions will be. We're always happy to share those assessments. It's generally done with local experts to begin with, so they sometimes know and work closely with us already. We're always happy to share those assessments, and the local water utility is also often mandated to do so. We work with them as well to share what impact, if any, our project might have on the system. Generally, it's Google being able to fund some upgrade or backup or duplication of the system in terms of additional infrastructure investments. Todd Gleason: Many are concerned about water contamination as well. Can you give me some information about that related to data centers? Liz Schwab: I think this is another misconception that data centers are somehow dirtying water and spitting it back out somewhere. When we use water for cooling, it sometimes goes direct to the chip, to the computer chip, to the servers. It will go through a pretty rigorous process to be cleaned, treated, brought to the right temperature before it's ever sent back out to the local municipal water authority. Of course, there are stringent regulations at all levels to ensure that's done in a responsible way, and we adhere to those and generally try to surpass any of those regulations. But really, it's some minerals or a metallic load that water could potentially pick up if you're doing direct cooling like that, and then there are ways to treat that water and ensure it's returned cleaner than when we got it. That's both an economical and environmentally friendly way to go where we have access to that. Todd Gleason: One of the other concerns many residents have is sound, particularly from the generators. How loud are these when they're at maximum volume and for how long? Liz Schwab: I think there are two different types of sound you can think about with a data center. If there's a grid outage, that's really the only time that a data center will be running backup generators. Just like a hospital or a police station or other critical services, data centers will have backup generation to ensure that basically the computers don't melt, that life-saving equipment, lights, communications, etc., are all on board. Those, if they're running, will be louder than your average operational day. I can picture, I live in the Northeast, when we have a blizzard or a power outage and our neighbors' generators kick on, you can hear them. That is a really rare occurrence, happens maybe a couple of hours a year depending on grid outages. During regular operations, the cooling equipment is actually fairly quiet. It depends on local zoning and local noise ordinances, which we of course adhere to. But an average across most US localities is a nighttime average of 55 to 60 decibels for light industrial facilities. That's about the sound of a dishwasher. So if you were standing at the property line, it would sound like a dishwasher in your kitchen. Most people don't live at the fence line of a data center. So they're actually a really quiet and unobtrusive industrial neighbor compared to a lot of other uses. Todd Gleason: Two final questions for you, and then maybe something else. Are there setbacks that Google thinks about that are good neighbors? Is it a mile, a half mile, something like that around these data centers? Liz Schwab: It really depends. I know that's an unsatisfying answer, but if you think of all the variation in types of sites around the country or just around the state of Illinois, you could be adjacent to a highway. You probably don't need much of a setback from a highway. But then you think about a residential subdivision, and of course you need some significant setbacks. Perhaps more importantly, you need berms and shrubbery, and you want to design the site in a certain way so the cooling equipment is shielded with a building. There's all different types of creative ways that we can explore to make sure that the data center is designed in a way that's not bothering neighbors, and that's part of the process we go through with local officials during zoning and approvals. Todd Gleason: There is concern on the data centers being located, for instance, inside the MISO, which is the Midwest area electrical grid, that there will be so many of them that it creates enough strain on the system that it may cause it to be detrimental to it. Has Google thought about this, and how do you ameliorate that kind of issue? Liz Schwab: As you can imagine, our sites being up and running and reliable is of the utmost importance to us. It's important to our customers, both our individual users as well as our enterprise customers, public sector, government customers. So we care about this issue a lot. We depend on it, our employees live in these communities, and it's a business interest as well. All the incentives are aligned in the right place here. We put our money where our mouth is, so we bring on significant new energy generation and we fund upgrades to the grid wherever we operate to make sure our presence is adding to grid resilience. The other thing for your listeners to understand is that there are robust regulatory processes in place. Utilities and regulators at the PUC, the state, the regional MISO, as well as the federal level, are all in place to help protect grid reliability. Grid reliability really is the number one job of all of those regulators, and we rely on their expertise and deep partnerships just as well. Todd Gleason: Does Google actually build data centers? Or are you just an investor in companies that build data centers? There is a difference in the answer to your question if we do this, but the people providing the data centers don't understand how many of them are out there or what it's doing to the grid. Liz Schwab: Most of the industry does a little bit of both. There's actually a third category where we lease space in someone else's data center. Whenever we can, it's usually most cost-efficient for us to build our own data centers. So we prefer that, and we can control more of the process. But there are also opportunities that might come to us from a developer where we might work with a third party to build the data center and then we buy it or lease it. It will still look and feel like a Google data center at the end of the day. It's still our name on the sign outside, but perhaps another company built it. Then that third category is co-location or third-party data center service providers where you will have a data center operator lease out space within the facility, where you might have multiple companies leasing out certain parts or certain amounts of computing capacity. Todd Gleason: Anything I didn't ask you, Liz, that I should have? Liz Schwab: No, I don't think so. We covered a lot. Thank you for bringing me on. Todd Gleason: You're welcome. That's Liz Schwab. She is an infrastructure and energy manager for Google's Data Center team. They reached out to me to do this interview. 23:03 Ag Weather with Don Day Todd Gleason: Let's check the weather forecast for the Corn Belt today. We're joined by Don Day. He's at Day Weather in Cheyenne, Wyoming. Don, I say for the Corn Belt, but I'd like to begin where you are because apparently it is snowing there today. Don Day: Yeah, we're looking at an intermountain west and western high plains early May snowstorm, which for a lot of folks will sound awful, but it's going to bring tremendous help to some really dry areas of eastern Colorado and western Kansas wheat country, and far southern/southwest Nebraska as well. We're going to get some very beneficial moisture out of this that they could really, really need. There are certainly concerns, especially tomorrow night, of some freezing temperatures. But usually when you get a wet snow like this, that wetness can help lessen that impact a little bit. So yes, it's snowing, but there are more smiles than frowns. Todd Gleason: What water equivalent do you think you'll have by the time it's finished up? Don Day: There will be many areas that have more than an inch of water, and some mountain locations two to three inches worth of water. So for that part of the country, that's quite a bit. Todd Gleason: That was my next question, an inch of rainfall here is fantastic and fairly normal, an inch of water there in one fell swoop has to be a lot. Don Day: It is, and it's something that you really hope happens in spring. Todd Gleason: Okay, so let's move out of there. Let's begin in Nebraska, I think there are still really dry parts of Nebraska, Kansas, Oklahoma, Texas. Tell me about those areas. Don Day: Nebraska in particular has been one area that has had the worst luck of any state in the lower 48 in terms of getting precipitation. This most recent storm is a good example of that. Extreme southwest and southern Nebraska is getting precipitation, but the rest of the state isn't. As we get on into the end of the week, into the weekend and early next week, there's going to be a little bit of shower and thunderstorm activity and a little bit of help, but that slow-moving big spring storm has just eluded most of Nebraska and some portions of that northwest Corn Belt, and that's going to continue. The bias of the better precipitation chances will be in the central and southern areas. Todd Gleason: It will be a problem for the Ogallala Aquifer, for the Colorado River. How much of a problem do you think for that service area? Don Day: That's the thing. The South Platte and North Platte rivers that come together in southwest Nebraska and help with that whole aquifer situation, they're not only dealing with a very dry winter, but a very low snowpack. So this spring moisture that's coming is really, really critical. But there are areas of central and western Nebraska that are continuing to see drought conditions worsen in the spring, which is the exact opposite of what you want to see. Todd Gleason: Across the state line into western Iowa, are they suffering as well? Don Day: That's certainly been drier. That's kind of been an extension of Nebraska. Now you get into eastern and southern Iowa, it's a little bit of a different story. But eastern Nebraska, western Iowa over the next seven days, not seeing much. Todd Gleason: And in Illinois, Indiana, and Ohio? Don Day: Those central and southern counties of both of those states, three states—Indiana, Illinois, and Ohio—are going to be right along a frontal boundary that's going to bring some coolness but an active area of showers and thunderstorms. This is going to be especially true here in the short term, but also as we get into the end of the week. There's going to be some more cool air coming in, but we see the most consistent moisture in those states in the southern counties. Todd Gleason: You keep talking about cool air. In the Great Lakes area, the northern part of the Corn Belt, does that cause an issue? Will we get cold enough for freezes and frosts? Don Day: I don't think so. If we do see temperatures approaching those values, it will be up in northern Wisconsin, northern areas of Minnesota, northern Michigan. But we're certainly looking at the next week ahead, temperatures are going to be below average. We have a very impressive deep area of low pressure over Hudson Bay that continues to just pump cool Canadian air into the central and eastern United States. And for another week, that'll be the trend. Todd Gleason: Thank you much. We'll talk with you again next week. Don Day: Sounds good. Todd Gleason: That's Don Day. He is with Day Weather in Cheyenne, Wyoming. You've been listening to the closing market report on this Tuesday afternoon. You can find it online right now if you'd like to listen again at willag.org. I'm Todd Gleason.