REGISTER - go.illinois.edu/AllDayAgOutlook
- Greg Johnson, TGM TotalGrainMarketing.com
- Nick Seiter, ILLINOIS Extension Field Crops Entomology
- Drew Lerner, WorldWeather.cc
★ Support this podcast ★
- Greg Johnson, TGM TotalGrainMarketing.com
- Nick Seiter, ILLINOIS Extension Field Crops Entomology
- Drew Lerner, WorldWeather.cc
Creators & Guests
What is Closing Market Report?
Celebrating 40 Years | 10,000 Episodes
Established 1985
The Closing Market Report airs weekdays at 2:06pm central on WILL AM580, Urbana. University of Illinois Extension Farm Broadcaster Todd Gleason hosts the program. Each day he asks commodity analysts about the trade in Chicago, delves deep into the global growing regions weather, and talks with ag economists, entomologists, agronomists, and others involved in agriculture at the farm and industry level.
website: willag.org
twitter: @commodityweek
From the Lend de Grand University in Urbana Champaign, Illinois, this is the closing market report. It's the twelfth day of February '20 '20 '5. Happy birthday to my bride, Claire Ann. Coming up in this half hour, we'll talk about the commodity markets with Greg Johnson. He's at TGM.
Speaker 1:That's Total Grain Marketing. We'll hear from Nick Snyder. I spoke with him earlier today as I've been emceeing the crop management conference on campus, and we'll also take up the weather forecast with Drew Lerner at World Weather Incorporated. No update of the commodity markets just before the one o'clock hour. We did have trade of about 17¢ lower in the soybeans and 5¢ higher in the corn.
Speaker 1:Todd Gleason services are made available to WILL by University of Illinois extension. Greg Johnson now joins us from TGM. That's Total Grain Marketing in the elevator that belongs to FS here in Champaign County. Hi, Greg. Thanks for being with us today.
Speaker 1:I wanna talk about that soybean market, which has, taken a pretty good nosedive through the day on this Wednesday. As you and I are talking, it's down around $16.17 cents. What happened?
Speaker 2:I think we're just seeing some profit taking, really. The report the USDA report yesterday kept everything unchanged on The US side and actually lowered the Argentine crop more than what the, traders were anticipating. So it you would have thought that this would have been a, kind of a you know, we dodged a bullet, and maybe things, you know, would would hang in here. But, you know, I think what's going on is, we've ran beans up so much, in the last month or so that, we're seeing a little bit of profit taking. And the other thing is the private analysts down in Brazil, are raising the crop, up to around a 72, hundred and 70 three million metric tons.
Speaker 2:Even though the USDA kept Brazil unchanged at $1.69, the the private analysts are a little bit higher than that. So I think that is just weighing on the markets, primarily today.
Speaker 1:I was a bit surprised, I think, yesterday that USDA managed to lower the size of the Argentine soybean crop. I thought maybe it was still too early in the season for them to take that kind of move. They're generally fairly cautious. Again, as you just mentioned, some Brazilian private, forecasters are raising the size of that crop. USDA did not.
Speaker 1:I guess this will still have to play out through the month of February and March. We'll get a good idea by the time we get to the March what that crop really looked like, I suppose.
Speaker 2:Yeah. They're they're finally starting to get some better harvest weather, so I think they're somewhere around 20% harvested in Brazil. But as you said, another three or four weeks, and they should have, you know, two thirds of the crop, three fourths of the crop harvested, and and we should have a much better idea, you know, if the private analysts are right in upping their their estimates for the Brazilian crop or not.
Speaker 1:So not much changed yesterday with USDA figures, particularly for the domestic side. They did change, on both corn and soybeans by 10¢. 1 went up corn and one went down 10¢, the season's average cash price. They didn't change anything as it's related to consumption on either. Do you suppose they maybe should have, or are you satisfied with what those numbers look like?
Speaker 2:Yeah. I I think, they're they're okay for now. I mean, you know, demand has been really, really good, from both an ethanol point of view and from an export point of view. Feed usage, though, continues to be the the albatross. It's, kinda weighing over the market.
Speaker 2:That that, you know, doesn't look like that's gonna change anytime soon. So I think all in all, I think the the government said, let's just wait another month. And, you know, they have lowered the carryout every month since May, when they first started, with 2,200,000,000.0. And now we've got it down to just over 1,500,000,000.0. So they've knocked a lot of the of the, carryout off of that corn crop.
Speaker 2:And so, you know, that's probably enough for now, until we get a little bit further along and see if this demand export demand, for example, is front end loaded or if it continues to be strong. And if so, then, you know, we could we could probably see another cut to the ending stocks number at some point in time.
Speaker 1:You know, you and I have been around long enough to understand that the market has lulls, in it where, the trade itself doesn't move the market a lot, particularly, and we are at lower price levels. So after 12 in into that 1920 period time frame, or, actually, after '14, but prior to that in the early two thousands as well. And when you look and talk about that 1.5, what, 4,000,000,000 bushel carryout. It sounds like a small number, but and I've hit this a couple of times. The stocks to use ratio is still at 10.19%, which seems like it's adequate.
Speaker 2:It it it is adequate. I think it's the trend, that that's what's been catching a lot of attention is, like I said, you know, we started at 2.2, and then the next month, we go to 2.1 and then two point o and so on and so forth. So this is the first, month where we haven't had a reduction in the ending stocks. So that's, probably, and and like I say, we've dropped it so much in the last six, seven months that maybe we're just due for a pause. And, you know, we'll have to wait and see what happens after this.
Speaker 2:And, as you said, nine nine, 10 percent stocks to use ratio is not burdensome. It's not screening for rationing type prices. So we're just kinda waiting to see how the, you know, double crop, safrinha crop does in Brazil because, you know, with the bean harvest being delayed by two to three weeks, that double crop corn is gonna be planted two to three weeks later, and that could raise the odds of that pollinating and filling during some hotter and drier weather on down the road. But, again, it's it's too early to know that for sure.
Speaker 1:So while trendy ending stocks had been trending lower, that has at least paused at this point. We'll have to have some understanding of whether that'll move very much based on consumption going forward at this time. And the trend of corn had been higher, will it pause and go sideways?
Speaker 2:I think so. I think the farmers have done a really good job of selling old crop corn into this rye into this rally. Ever since that January crop report, we've been buying a lot of corn. I've talked to other elevator managers. They seem to think that farmers are 80% sold on both old crop corn and beans, and, obviously, the farmers are wishing they wouldn't be that heavily sold.
Speaker 2:At this time last year, they were probably 30% sold, and so they didn't wanna and and that turned out to be the wrong thing. So this year, they went the other way and probably sold a little bit more than what they normally would have at this time of year. So, I I think we're seeing the farmers sell into this rally, and that's why we've seen basis levels kinda weaken. You know, they're they're it's almost like fall harvest. We've got a glut of corn, and so the market is trying to incentivize farmers and elevators to hold on to that corn until we actually need it later on this spring and summer.
Speaker 1:Thank you very much, Greg. I appreciate it. We'll talk with you again next week, and looking forward to having you at the Beef House in Covington, Indiana.
Speaker 2:Sounds good. Looking forward to it, Todd.
Speaker 1:That's Greg Johnson. He's with TGMtotalgrainmarketing.com, the elevator that belongs to FS right here in Champaign County. And Greg will be with us at the Beef House on Tuesday, March in Covington, Indiana. I hope you will join us too. We have a great day planned for you.
Speaker 1:Greg will set on the soybean panel along with Ellen Dearden and Danny Poff in the morning. That same day, we'll hear from Joe Jansen, agricultural economist, who have set the table, relatively speaking, as it relates to fundamentals within the marketplace. Joanna Colussy will be there to talk about South American weather and crop prospects. Of course, she specializes in Argentina and Brazil. We'll also also hear about the price of land from Bruce Sherrick and the rest of the farmdoc team, including Scott Erwin, Gary Schnittke, Nick Paulson, and Jonathan Koppas will be there in the afternoon, along with our corn panelist, Mike Zuzlow, Sue Martin, and Brian Stark.
Speaker 1:You should be too, but you can't be unless you sign up. Register today, the cost is just $40. You won't find a better bargain anywhere. Thanks so much for signing up. Do that right now at willag.0rg, and we look forward to having you at the thirty fifth annual All Day I Got Look at The Beef House in Covington, Indiana.
Speaker 1:Well, throughout the day today, I am helping to emcee the University of Illinois Crop Management Conference. Nick Sider, entomologist, kicked it off this morning to talk about insects, particularly in corn and soybeans to those who were gathered here. This is a continuing education project for producers and those who work in the fields across the state of Illinois. Happens actually not only here, but in other states as well. Nick, why is it that it's important that producers and others who are handling products in the field go through continuing education?
Speaker 3:Yeah. Well, things are changing all the time. You know, we're dealing with a biological system. It doesn't stay the same. I work on insect pests.
Speaker 3:They're constantly overcoming, you know, the tools that we throw at them. We constantly have new pests or perhaps sporadic pests that we haven't seen in a while, sneaking up on us. And it's really something if you're not continuing to learn, if you're not staying up to date, you're you're going to fall behind relatively quickly.
Speaker 1:So one of the pests that you talked about for a good portion of the time this morning was the corn aphid, a pest that is sporadic every twenty or thirty years. Mhmm. Something that producers and those who are in the audience may not see again in their working career, possibly, but that's something that they probably need to understand how it works. I thought it was fairly interesting, particularly as you were discussing how aphids, particularly this aphid works, and that they have a bypass system within, their digestive system, which essentially says not enough proteins coming in with what I'm eating off of this plant, mostly water and sugar. I'm just gonna bypass that around the midgut.
Speaker 1:And how efficient an ape it is, how easy the dang dang thing is to kill too.
Speaker 3:Yeah. They're they're a really interesting critter for a variety of reasons. So, yeah, they've got that that really protein limited diet. They have to concentrate that protein down to be able to extract it effectively. The other interesting thing about aphids is the way that they reproduce.
Speaker 3:So they're asexual. They reproduce extremely fast. That means these populations build up very rapidly. They also have a tendency to collapse very rapidly, so they're susceptible to a variety of different predators or variety of different diseases. They're also liable to take off and leave if that plant is no longer a good plant for them.
Speaker 3:So as soon as the quality starts to decline, they start to produce a winged form. You know, so they produce these individuals that are devoting resources to wings that they would have been devoting to reproduction if the plant was good. And then once those hit adulthood, they feed a little bit and then take off and go look for a better situation, a better quality plant somewhere.
Speaker 1:You said you've watched them in the field. They're bad flyers.
Speaker 3:They're yeah. They're bad at it.
Speaker 1:They're just really bad flyers. And did I hear you say that, they don't lay eggs and that they're born pregnant?
Speaker 3:That's right. With corn leaf aphid, they only reproduce asexually, and they give birth to live young. And those live young are clones of the mother aphid. And most aphid species do this, but, some others we have, like the the soybean aphid, for instance, they go through asexual cycles and sexual cycles. They kinda go back and forth.
Speaker 3:They do lay eggs when it's time for them to overwinter. With corn leaf aphid, there's no overwintering. They're not capable of that. They're not a temperate species, really. They're kind of a subtropical species.
Speaker 3:They need to be feeding to survive, and they only reproduce asexually. So there's no males known. There's no eggs known. It's just a mama aphid and her baby aphids, which are all clones of the mama. For an hour.
Speaker 1:I learned so very much from you. Thank you for that. Just one takeaway, I think, for those who are listening, especially in the Eastern Illinois area as it's related to western corn rootworm. That changed in the mid nineteen nineties where it started to, lay its eggs in bean fields rather than corn fields so that it could survive the following year because of the crop rotation. Still hasn't really adapted to that in our area.
Speaker 1:The one takeaway is that if somebody happens to find western corn rootworm in first year corn or corn after corn, you wanna know about it, particularly in East Central Illinois.
Speaker 3:Yeah. That's right. We're we're constantly trying to collect populations to look at what's going on with these populations in terms of, BT resistance and in terms of other characteristics as well. The the characteristic you mentioned, that rotation resistance, we simply haven't seen that in East Central Illinois over the last five, six, seven, ten years. We've seen very little of it.
Speaker 3:We're kind of interested to know what happened there. But generally speaking, we're not seeing injury in first year corn in East Central Illinois, which is not something I would have been able to say ten, twenty years ago.
Speaker 1:So if you find those in your fields this coming year or you happen to have them last year and didn't tell anybody, contact Nick Seider at the University of Illinois. Nick, thank you so much. We're here at the University of Illinois crop management conference on campus. There's another one next week in the northern part of the state. You can find that on our website at willag.org.
Speaker 1:Just look for the items in red. Let's check out the weather forecast for the global growing regions, North And South America, for today. We'll talk with Drew Lerner as we usually do on a Wednesday. He's with World Weather Incorporated in Kansas City. How are things in your part of the world today, Drew?
Speaker 4:Well, they're pretty good. I'm actually in Canada today, so it's cold. Well, it is
Speaker 1:a long ways from Kansas City.
Speaker 4:Yes. It is. Yes. It is. But, I think the last couple days here, it's been, we've peaked out at zero degrees.
Speaker 4:So, and that's Fahrenheit. And their nighttime lows have been down about minus 20 something or other. So, it'll grow some hair on your chest. Let me tell you.
Speaker 1:How far north of the border are you?
Speaker 4:I am I in the Edmonton area right now, and it's kinda central to North Central Alberta from a crop perspective, I guess. And I I've been touring I went up pretty far to the north on the edge of, crop country yesterday. So pretty far to the north there.
Speaker 1:I'm thinking that's four, five, six hundred miles. I don't quite remember how far north of of the border it is. But a a long distance. How about that? Now
Speaker 4:Definitely.
Speaker 1:We'll come back to North America in just a bit. But start with the weather in South America. It has improved for crops in Argentina and Brazil both?
Speaker 4:Yeah. In Argentina, the improvement's been underway for a little while in parts of the country. For Brazil, I guess, we're kinda can say the same thing, but the area of greatest concern is Madel Grosso, and the improvement there has been really slow coming around, but it is coming. And, let me start with Argentina, though. We have had some rain of significance multiple times actually over the past week in central parts of Argentina.
Speaker 4:That would be from Southern Cordoba into Northern Buenos Aires and Southern Santa Fe and Southern Entre Rios. And that central part of Argentina represents a big part of their overall crop. And when you add in the northern two thirds of Cordoba where the subsoil has never been critically low, then you've got more than 50 probably somewhere between 5560% of the total crop area has either been alright or is seeing great improvement right now. And I I have to be careful here. Cordoba is the only place where it's been alright.
Speaker 4:The rest of, that Northern Buenos Aires area and Southern Santa Fe and Southern Ontario. Those areas were critically dry there for a while. So they did have some pressure on their production. That's why the numbers from the USDA are down and other private estimates. But the rain is, going to continue for another seven days.
Speaker 4:We are going to send the rain throughout the rest of central and northern parts of Argentina and everybody's gonna get a good drink. And in fact, we're going to spread some of that rain into Uruguay and Rio Grande do Sol, Brazil as well as Santa Catarina and, also Southwestern Paraguay, which encompasses about all of the really dry areas in South America. And we're talking about a fair amount of moisture here. It probably isn't gonna be a fix all for a long period of time, but yet we are going to see a good week of benefit from it. I'm sure the amounts are probably gonna run from two to four inches in some of those areas.
Speaker 4:And there is potential for a few spots in Rio Grande Do Sul, Brazil and some of the Northeastern crop areas in Argentina to get maybe, gosh, I can get upwards to six inches maybe. So we're talking significant stuff here. Now, Southern parts of Buenos Aires and Central And Southern La Pampa, which are the two southernmost provinces in the, in the nation are not going to get very good moisture. Remember Northern Buenos Aires is in good shape and that's a very important crop area but the South is pretty dry and it's going to stay that way probably through a big part of the next ten days. So the temperatures have been hot in the North and this rain event is going to cool things down and then we're going to start at the end of next week and into the second weekend of the two week outlook another round of warming and drying.
Speaker 4:So, but this should take care of them for a while. I think we should be able to go a full week down the road without any concern and maybe a little longer if we get these bigger rain amounts and that's true for Rio Grande do Sul as well as Argentina. Now on the Brazil side of the fence, we do have some much needed drying beginning to occur across some of the safrinha corn production areas and that early soybean crop is going to be harvested a little bit more aggressively. Now CONAP came out yesterday and released some of the field progress that had taken place over the past week and indeed there was some improvement made but we're still pretty far behind. The good news I think from from their perspective, not necessarily our market side perspective, but from their perspective we are going to see more dry weather and so there is a real good chance that we're going to see the ground firm up and more aggressive harvesting taking place.
Speaker 4:Mato Grosso is, they produce about half of that safrinha corn crop and they are the most behind in getting the soybeans out of the fields and getting the springer crop in and it's still raining there. We've got another two or three days of fairly frequent shower activity but the interesting thing is the rain is becoming more erratic. A lot of it's light and, as we move forward through the weekend and next week, we'll see a further reduction in the rain intensity frequency and significance. So I think we'll end up seeing much better, harvesting and planting weather next week across that entire region there.
Speaker 1:Here in The United States, we have a series of storms that began, I think, yesterday or a little bit earlier than that are sweeping across, the Midwest parts of, The US, between the mountains. What can you tell us about the current one and what we can see in the next five to ten days?
Speaker 4:Yeah. This first system, is is in a big hurry. It's already produced a fair amount of snow across parts of the Central Plains. It's in Iowa and Missouri now and very quickly spreading to the Great Lakes region. As we go forward through this next twenty four hour period, we will lay down a fair amount of snow in that region.
Speaker 4:I think the, the majority of that area is probably going to end up with accumulations that will run in the range of two to around four inches in general. But it is going to be followed by another system, and that second event occurs this weekend, and it will likely come with a little bit more aggressive snow in a few spots. But this system will be more to the north, believe it or not. And, so Michigan and Wisconsin probably see the greater snows there. We're going to see a lot of rain on the south side of the storm, though, and flooding is a pretty good potential here for areas South Of The Ohio River and down into the Tennessee River Basin and parts of the Delta.
Speaker 4:These areas will they've already had a couple of inches of rain the last twenty four hours. They're gonna get two more today, and then they probably get something of the order of one to three and maybe some local four inch amounts over the weekend. So the ground gets progressively wetter there, and the issue will become one of flood potential across some of that region. We got another snowstorm coming up for next week though, and that one will be closely monitored. I did notice the midday today midday model run, did back off on some of the precipitation for the weekend coming up.
Speaker 4:And I'm a little bit questioning that, but it's, it's still a little too early for me to nail that one down. But the bottom line is wave after wave of, moisture coming up for most of the Midwest, but not the upper parts of the region, the Eastern Dakotas, Minnesota, neighboring areas there will continue to have a drier bias.
Speaker 1:Does this flow set up anything for the month of March? Does it change? Have you thought about it?
Speaker 4:Well, you know, we are a bit in a rut here with a lot of cool air coming out of, Canada. And as we get to the last days of February, we are going to see a warming trend. We both temporarily bring the temperatures back up close to normal in The States, and then up in Canada, it'll probably get a little bit warmer than normal. But you've probably heard the rumors that there's a stratospheric warming event that's underway and that's when the the stratosphere, the next level up in the atmosphere from where we live, is going through a rapid period of warming. And when that occurs, that layer of atmosphere expands both upward and downward.
Speaker 4:And when you expand it downward you push the cold air that's in the southern part of the stratosphere and the upper parts of the troposphere where we live further down towards the ground. And so there could be yet another round of cold biased weather that will come in from the Arctic during the month of March. Now there's been a lot of debate about this. Usually when these stratospheric warming events occur, it takes about three weeks, two or three weeks for that colder to get to the surface and then start influencing North America. So the computer forecast models are not picking up on it yet.
Speaker 4:So just be watching for that because it could get colder when we get into the second week of March.
Speaker 1:Thank you very much. I appreciate it.
Speaker 4:Alright. Have a good day.
Speaker 1:You too. That's Drew Lerner. He's with World Weather Incorporated in Kansas City. Joined us on this Wednesday edition of the closing market report that came to you from Illinois Public Media. It is public radio for the farming world.
Speaker 1:We're online today. You can sign up for all day outlook. It's at the beef house in Covington, Indiana on Tuesday, March. I'm extensions, Todd Gleason.