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Jan 06 | 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 celebrating 40 years on the air and more than 10,000 episodes. It's the 6th day of January 2025 . I'm Illinois Extension's, Todd Gleeson. Coming up, we'll talk about the commodity markets with Curt Kimmel. He's at AgMarket.net.
• 0:20
  We'll explore the agricultural news for the day, including some information out of China about updating its varieties and genetic modification availability on corn, soybean, wheat, and cotton. Then we'll take up the weather forecast, particularly in Argentina. We'll do that with Mark Russo at Everstream Analytics as we wrap up this edition of the Closing Market Report from Illinois, Public Media. It is public radio for the farming world online on demand anytime you'd like to hear us at WILLAg.org.
• 0:54
  announcer: Todd Gleason services are made available to WILL by University of Illinois Extension.
• 0:59
  Todd Gleason: March corn for the day settled at $4.57 and 3 quarters. That was up 7 since the May contract at 465 and a quarter, also up 7 for the day. The December futures, 4.45 and a half, up 4 3 quarters. March beans at 9.97 and 3 quarters, 6 higher. The May at $10.8 and 3 quarters of a cent up a nickel.
• 1:21
  And November, soybeans at $10.13, 4.75 higher. The bean meal, dollars 307.30 down a dollar 30. The bean oil at $40.33.40 higher. Soft red winter wheat up 11 and a quarter. They settled at $5.40a half.
• 1:38
  The hard red at 5.53a quarter, 14 and a quarter cents higher. Live cattle futures at a $195.20, up a buck 15. Feeders a dollar 37a half higher at 265.55, and lean hogs for a £100 down a dollar 12 and a half at $79.65. Crude oil, $73.49 a barrel down 47¢. Diesel fuel or heating oil, just about unchanged to $2.35.3, and the gasoline wholesale price per gallon down a penny and 9 tenths at $2.3.4 of a cent.
• 2:13
  The Dow Jones Industrial Average now at 43,078. That's just about 57 points higher. We're now joined to take a look at these numbers by Curt Kimmel. He is with agmarket.net out of Normal, Illinois. Hi, Curt.
• 2:27
  Thanks, for being with us on this Monday. A recovering, I suppose. I I don't know how much snow you had. I only had about 3, 4 inches here, so it wasn't terrible. I suspect you had maybe about the same where you are.
• 2:39
  Curt Kimmel: Just a little bit less. I think we're 1 to 2 inches. Thank goodness we did not have the ice first and have snow on top of ice. But, yeah, you don't have to go very far south of you or I, and the totals, escalate in a hurry for sure.
• 2:54
  Todd Gleason: Yeah. And out to the west, a whole lot more. Once you get to Kansas, those those folks really got lambasted of over that time frame. And I don't know whether that had much of an impact in the cattle market or not. Maybe you can make a a a comment on that, and then tell me a little bit about what's been happening, with corn, soybeans, and wheat too.
• 3:13
  Curt Kimmel: Yeah. Our our, the ag ag market's a division at JSA, John Sturte, associate. And we have an office. Our main office there is Saint Joseph's just right outside Kansas well, near Kansas City. And, they were looking at 10 inches or or snow.
• 3:29
  And I believe he ended up with about 14 inches of snow, so it it could be a little while before they get dug out. Now in the, weather in the west, it kinda helped in the wheat, giving the moisture a little bit of wheat moisture there. And, you know, hopefully, we'll have some moisture later on when it really counts in the spring, but just not the, livestock sector with these frigid temperatures and and, snow events. It's slowing down transportation, but it was well advertised ahead of time. So as we clean up the the roads and so forth, barring no additional storm systems tracking across the Midwest, we look for transportation to reopen here fairly quickly and and see a more normal, marketing pattern here as we move forward, Todd.
• 4:17
  Starting out to 2025 here, 1st full week of trade, of course, market psychology momentum. I I guess going into year end, the market gave you hope, and they take hope away. But, gosh, watching a lot of these ball games here over the last week, 2 weeks, 3 weeks, it kinda reminds me of the same situation here. The camera guy needs to be focused on the game, but they had a camera guy focusing on the crowd. These games were so up and down.
• 4:47
  I wish they kept the video, of of all the, fans' reactions. Yeah. Yeah. Yeah. Oh, no.
• 4:53
  Oh, no. Oh, yeah. Yeah. Oh, no. No.
• 4:55
  And I think that's gonna be the trend here as the bull and bear both are gonna have an opportunity to be right and a big opportunity to be wrong.
• 5:03
  Todd Gleason: Yeah. So what does that tell you about what producers should be thinking, looking forward, and marketing both in old and new crop?
• 5:11
  Curt Kimmel: As far as marketing, I think you you have to have some, orders above the market resting there, because what'll happen is cancel it close. You need to put some orders in and leave them there. Because like I say, on the boys' side, if you're wanting to sell some grain, Yeah. I feel good today, but tomorrow would be a different story. Same thing for the buyers.
• 5:32
  Friday, they went home. They're feeling good. Yeah. Oh, gap lower Sunday night, and we'll be able to buy lower, but that was not the case. So from a marketing standpoint of view, I think you've got to have a plan and have some resting orders in place.
• 5:46
  As far as overall big picture, we're pretty well priced up on old crop or protected on old crop corn and beans both. About 50% priced or protected on a new crop. Our main strategy from the mark agmarket.netteamhasbeenusingsomepricefloors. That way things roll over here. You've got some downside coverage, but leave your upside open to make some timely, cash sales as we move into the through the Q1 of 2025.
• 6:16
  Todd Gleason: Friday at 11 o'clock, USDA will update the world ag supply demand ex estimates. It will also release the final crop production figures for, the 2024 growing season in the United States. Grain stocks are due out as well as an updated wheat acreage. Fundamentally, demand for corn looks like what per exports and ethanol and those sorts of things.
• 6:41
  Curt Kimmel: Yeah. We're we're seeing, much better demand picture than, what the bear was kinda looking at. In fact, if you equate that to ending stocks, you know, we're well below the 2,000,000,000 bushel mark, whereas earlier estimates was 2.2, 2,300,000,000 bushels. So a little smaller production, much better in demand. Chunk of that is exports.
• 7:05
  Exports just don't go away. You know, we were fearful of GMO to Mexico. We were fear fearful of trade relations to Mexico. Mexico continues to be our number one, customer. I think it's their growing economy, plus 2 uncertainty on their weather pattern.
• 7:23
  They they just not recovered from an extreme drought last year. So as long as, the administration doesn't upset some relationships here, I think the export market is, somewhat strong. On the ethanol side, a lot of the I can't say a lot, but a few things we're talking about years ago that this ethanol demand is dead. It's topped out at its peak, but we continue to see, strong ethanol production. We see strong ethanol usage.
• 7:54
  And and I think that ethanol is gonna hang in there, especially if we do put tariffs on importing, sugar ethanol or some of these other products coming into the country. That's gonna strengthen our ethanol, demand and consumption here in the US. Plus to Trump's approach on energy, a drill, baby drill, if we're gonna have more supplies of oil to work within through here and as long as this economy stays hopeful and people continue to travel like they are, I see this, ethanol usage, staying fairly strong. So export ethanol usage, and the third one is, of course, feed usage. Feed usage is a dis is a miscellaneous category, of course, but true feed usage is kinda, hanging in through there.
• 8:44
  There's these colder temperatures this winter here. Feed usage should be fairly strong there, Todd.
• 8:50
  Todd Gleason: K. Thank you much.
• 8:51
  Curt Kimmel: Very good. Take care.
• 8:52
  Todd Gleason: You too. Curt Kimmel is with AgMarket.net. The theme music for the Closing Market Report is written, performed, produced, and courtesy of Logan County, Illinois farmer, Tim Gleason.
• 9:08
  In today's agricultural news, and we'll put this first story into a bit of context, it's about total corn production on the planet and where it's produced. The United States, of course, produces more corn than any other nation on the planet at 384,000,000 metric tons.
• 9:26
  It's followed by China. That's the 2nd largest corn crop on the planet. That nation produces something like 292,000,000 metric tons, and the 3rd largest producer of corn is actually Brazil at just a 127,000,000 metric tons. So it's a big deal if China manages to improve its food security and increase its yield. China has approved now 5 gene edited crop varieties and 12 types of genetically modified soybeans, corn, and cotton.
• 10:00
  Reuters says the expanded approvals are intended to boost their high yielding crops, reduce the need for imports, and ensure Chinese food security. The Ministry of Agriculture in China awarded safety certificates to the 17 crop varieties according to a document on its website. The approved gene edited crops include 2 soybean varieties and one each of wheat, corn, and rice. China mostly imports GM crops like corn and soybeans for animal field while cultivating non GM varieties for food consumption. The important part here is that China is now allowing genetically modified corn, soybeans, wheat, and cotton to be grown in that nation over the next 5 years, it is very likely that these crops will increase dramatically the yields of each of those.
• 10:49
  For instance, the Chinese corn crop grown on about the same number of acres as in the United States is now around 75 percent of total production. That number would be expected to jump up dramatically. Turning our attention to something on the national level here in the United States, an early push for national year round e 15 sales is expected as a new congress and administration are seated. Legislative efforts fell short in the last congress, but gave national year round e 15 sales some momentum, says Iowa senator and farmer, Chuck Grassley, who has been in contact with house speaker Mike Johnson.
• 11:27
  Chuck Grassley: And I text to him why we need e 15 year round, and I included in that text that, even oil companies would agree to it because it's very difficult to have 8 states having one mixture and the other 42 states another mixture.
• 11:47
  Todd Gleason: Over at the Renewable Fuels Association, CEO Jeff Cooper says year round sales are needed to soak up a bumper corn crop. This despite the record or near record ethanol production now taking place and the record or near record ethanol exports.
• 12:03
  Geoff Cooper: We're gonna need to see even higher levels of ethanol exports and, frankly, higher levels of domestic consumption here through e 15 and and other higher blends.
• 12:11
  Todd Gleason: And demand from developing markets like sustainable aviation fuel propelled by a hoped for 45 z clean fuel tax credit. And that's a look at today's agricultural news. Up next, I'm sure you'll vividly recall Donald Trump sparked a trade war during his first administration when he imposed tariffs on China and other countries. It tanked the price of soybeans, corn as well. Many US business sectors also felt the impact, and the president-elect is proposing more tariffs for his second term, including with our trade partners like Canada and Mexico.
• 13:00
  Jim Meadows from Illinois Public Media takes a look at what 4 more years under president Trump might look like from an Illinois perspective.
• 13:10
  Jim Meadows: JC Reitmeier is a corn and soybean farmer in Central Illinois. He's also the outgoing co president of the Champaign County Active Senior Republicans, which celebrated Donald Trump's election victory at a recent meeting. Many in the group are looking forward to Trump's return to the White House. Reichmeier said the new Trump administration will face a big challenge when it tries to bring up prices for his crops.
• 13:37
  JC Reitmeier: A lot of the big buyers have gone to South America and other countries to get their corn and soybeans and work out in the dust again. We're just gonna have to get our exports built back up.
• 13:48
  Jim Meadows: Illinois is the number one state in the nation for producing soybeans and number 2 for corn. A large share of those crops are sold to other countries, notably China, which is the largest buyer of US soybeans and 3rd largest buyer of its corn. But when the Trump administration imposed tariffs on Chinese goods in 2018, China retaliated with tariffs on US crop exports, especially soybeans. Joe Janssen is an agricultural economist at the University of Illinois. He says the tariffs caused Chinese buyers to look elsewhere.
• 14:24
  Joe Janzen: What we saw at that time was prices for soybeans in the United States went down. Prices for soybeans in other parts of the world, particularly Brazil, went up.
• 14:33
  Jim Meadows: Brazil surpassed the US and soybean exports to China about a decade ago, and the US China trade war only widened the gap. And if new tariffs are imposed and China continues to retaliate, Brazil is ready to take even more of the USA's market share. That's according to U of I Ag Economics researcher Joanna Colussi.
• 14:56
  Joana Colussi: If China would like to buy more soybeans from South America to replace the amount of soybeans that they would buy here in the US, given the numbers so far or given the situation, until now, South America will be able to match this demand.
• 15:13
  Jim Meadows: Despite gains for some US industries like steel and aluminum, a review by the Tax Foundation, a generally pro tax cut think tank, concluded that tariffs under presidents Trump and Joe Biden have had a net negative impact on the US economy. In a December news conference, Trump repeated his belief that tariffs could be an effective tactic for working out bilateral trade deals with other countries.
• 15:40
  Donald Trump: I always said to me, tariffs, the most beautiful word in the dictionary. It'll make our country if you go back and look at the 18 nineties, 18 eighties, McKinley, and you take a look at tariffs, that was when we were at our proportionately the richest.
• 15:54
  Ryan Whitehouse: I, again, respectfully disagree with the incoming president.
• 15:57
  Jim Meadows: That's Ryan Whitehouse with the Illinois Farm Bureau. He and other Midwest farm groups say tariffs on imported goods will hurt everyday Americans.
• 16:07
  Ryan Whitehouse: When you add cost to something, someone's gotta pay for that. And whether that be solely by the consumer or even a partial share with the producer and the manufacturing and the consumer, the consumer is still paying more.
• 16:22
  Jim Meadows: Back in Champaign County, farmer JC Reitmeier maintains his faith in Donald Trump, but
• 16:28
  JC Reitmeier: I'm not sure if tariffs are gonna do it. Tariffs are a bad thing in my point of view.
• 16:33
  Jim Meadows: Reitmeier thinks the talk about tariffs is mostly hype, and he hopes it stays that way at least when it comes to agricultural commodities and the crops he grows. I'm Jim Meadows, IPM News.
• 16:47
  Todd Gleason: By the way, there was news on the tariff front earlier today. A newspaper report explained that the incoming administration was exploring the possibility of putting tariffs only on critical imports. In social media, President-elect Trump said that story incorrectly stated that his tariff policy would be pared back. Let's turn our attention now to the weather forecast. Mark Russo is here.
• 17:25
  He's with Everstream Analytics. Hello, Mark. Thanks for being with us today. Hope you had a great winter break.
• 17:30
  Mark Russo: It was very nice. Thank you, Todd. I'm glad to be here.
• 17:33
  Todd Gleason: I sent my son back home over the weekend. He lives, in Junction City. He's the director of the Kansas State 4 h camp, and that's about 12 miles south of there. I had a discussion, thinking, you know, if you don't leave Friday, he wanted to you're not gonna make it. And holy smokes, That part of Kansas all the way to Kansas City, was just shut down.
• 17:59
  A huge storm there. Here, 3 inches where I am, not so bad this morning to clean up, but, man, they're still cleaning up out there, I suppose.
• 18:07
  Mark Russo: Yeah. That zone of north central, northeastern Kansas, they're the biggest snows of the past 30 years within that area. You know, in and around a foot and even prior to that, a little bit of, light icing, as well to make the transportation conditions basically as bad as it as it gets. That's swath of, of snow, yeah, did extend east, although totals at least closer to, like, 6 inches in around Saint Louis and then down towards Carbondale. But then actually then that kind of switched back to to freezing rain and ice, you know, resulting in, in in in issues down there.
• 18:42
  This storm right now is kinda wrapping up across the mid Atlantic area here, right now. And, ultimately, you know, the first big storm and for of the basically, the winter, let alone 2025 and, quite a doozy here across the central and eastern US.
• 18:59
  Todd Gleason: How long will the snow stick around?
• 19:01
  Mark Russo: Looks like it's gonna stick around for a while. This temperature pattern upcoming, you know, we've switched to a colder than normal pattern that looks to be in place across much of the central US over the next 2 weeks. This does not look like any kind of extreme or record setting cold, but more of a, you know, 2 to 3 week period of moderate cold here, below normal temperatures, you know, occurring during, you know, the heart of winter here in January. And, also there will be some, you know, additional snow systems moving through.
• 19:31
  Todd Gleason: And as nice as December was and as warm as it was, I figured we might pay for it at some point, but apparently not just yet or in total at this point. Let's switch, continents, and we'll go to South America. Argentina has been watched closely as it relates to dry and, warm hot weather, actually, in some of the growing region, particularly for corn and soybeans. What do we know today about the changing conditions, if at all, there?
• 20:00
  Mark Russo: Yeah. This current period of dryness and heat in Argentina, which really started, well, from a heat standpoint started over a week ago and dryness started about, you know, 2, two and a half weeks ago or so. This looks to persist here for at least another 10 to 12 days. So that will continue to decrease soil moisture, increase crop stress, and put a lot more emphasis on rains returning to Argentina later this month and in February. As it looks right now, the next window of opportunity for better rains is during, the second half of this month.
• 20:36
  So kind of beyond January 16th. There is debate though in the exact timing of it since we have seen a lot of volatility and model guidance with, you know, projecting rains coming up only to be pushed back. So, given everything, we feel that this second half of the month will be a general more favorable pattern for rain. But, you know, when exactly is that start of that window? Is it January 16th or is it the 20th or 26th?
• 21:03
  That's the big question right now.
• 21:05
  Todd Gleason: If I had talked to you a week ago, I think you would have told me that it that that time frame was still the same, second half of January, but you would have been, more confident about it coming earlier rather than later. Is that correct?
• 21:19
  Mark Russo: That is correct. Even though that, you know, initially looked like rain activity would begin, you know, during well, the middle portion of January or starting after the January 10th, 11th time frame. So that's obviously been pushed back and some of these longer term projections that we've seen in model guidance have just failed to roll forward here. And as a result, the longer duration, drier and hotter pattern.
• 21:43
  Todd Gleason: Are you concerned that persistence will become a problem and actually not develop into rainfall?
• 21:50
  Mark Russo: Right now, we're not overly concerned given the fact that it's been really tough to see long term dryness in Argentina this season. But and and computer model guidance continue to suggest, better rains here later this month. The issue though or the thing to watch is with the La Nina event, which again historically, La Ninas tend to produce more dryness and heat at times in Argentina. That has really not occurred up until now, and so this is really the first time, that we're beginning to see La Nina basically flex its muscles. And, you know, because of that, and it's definitely something to watch where we could see at least for this middle to end of the growing season compared to the first half, we could now begin to finally see some more longer periods of dryness and heat.
• 22:42
  Todd Gleason: Thank you very much, Mark.
• 22:43
  Mark Russo: You're welcome, Todd.
• 22:44
  Todd Gleason: Mark Russo is with Everstream Analytics, joins us here on the closing market report each and every Monday afternoon. The closing market report is a production of Illinois Public Media.
• 22:55
  Our program began in January
• 22:55
  of 1985. We're celebrating 40 years, some ten