Sep 17 | Closing Market Report

- Greg Johnson, TGM TotalGrainMarketing.com
- UofIL Grain Outlook Discussion from FPS
- Drew Lerner, WorldWeather.cc

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Creators and Guests

Host

Todd E. Gleason🎙🇺🇸

University of Illinois

Guest

Drew Lerner

Meteorologist - World Weather

Guest

Greg Johnson

FS Total Grain Marketing

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

Todd Gleason: 00:00

From the land grant university in Urbana Champaign, Illinois. This is the closing market reported. It's the September 2025. I'm extension's Tug Gleason. Coming up, we'll talk about the commodity markets with Greg Johnson at TGM.

Todd Gleason: 00:14

He's at Total Grain Marketing right here in Champaign County, the elevator system. They've been taking in both corn a little bit and soybeans. We'll discuss yields in the area with him and what that means in a broader perspective. Then we'll turn our attention to a conversation I had with ag economist Nick Paulson and Joe Jansen during the Farm Progress Show at the end of the month of August. We talked about crop size and what that really means.

Todd Gleason: 00:42

As we move forward, we'll turn our attention to the weather forecast too with Drew Lerner at World Weather Inc. In Kansas City on this Wednesday edition of the Closing Market Report from Illinois Public Media. It is public radio for the farming world online on demand at willag.org. That's willag.0rg. Todd Gleason services are made available to WILL by University of Illinois Extension.

Todd Gleason: 01:10

Greg Johnson from TGM. That's totalgrainmarketing.com right here in Champaign County, an elevator system. Thank you, Greg, for being with us first. Still taking in soybeans, I'm sure. How's that crop doing in our area?

Greg Johnson: 01:26

The early planted beans and early maturity beans seem to be faring very well, all things considered, how how dry it was in August and the September. The yields are all over the place, depending on if you got a pop up shower or not. But in general, in general, and this is very general, I would say in Champaign County, bean yields are down probably 13% from last year. So if you had 80 bushel beans last year, you're probably looking at 70 bushel beans this year. If you had 75, you're probably looking at 65.

Greg Johnson: 02:02

But the range is anywhere from 48 to 88. There are some areas that did get some rains in August that other people didn't get, and we're seeing yields in the 80s. I don't think there's a lot of that this area because for the most part, we missed those rains, but there are areas that did get those rains, and and we have been hearing some reports of beans in the eighties. But to to counteract that every time that, we hear an 80 bushel yield, we hear a 55 to 65 bushel yield. So I I would say in you know, it's hard to generalize, but I would say if you have to come up with an average, I would say bean yields are down about 13%, so far.

Greg Johnson: 02:41

And following that up, most farmers think that the early beans, the early maturity beans, and the early planted beans will be their best. They they expect the yields on the later planted and fuller season beans to be a little bit less than than what they're seeing right now. So that's that's probably my takeaway right now on the soybean on the soybean yields.

Todd Gleason: 02:59

Are corn trucks beginning to trickle in too?

Greg Johnson: 03:01

Yeah, there's demand for corn. There's still a premium for quick shipment corn. So a lot of elevators, ourselves included, are offering half price drying. Today is our last day of half price drying. And so we are seeing some farmers try to find some drier corn.

Greg Johnson: 03:17

In places it is down around 20%, but in other fields it's still 26, 27, 28%, which is too wet even for the half price drying. So, but the good news is the corn is drying down. And once again, it feels like the corn in general was not hurt as badly by the dry August and September weather as what the beans were. So while bean yields may have been down 13%, I would say corn yields are down less than 10%, probably 9%. So, you know, corn yields are hanging in there, and we'll have to wait and see whether the later planted corn yields are anywhere, you know, suffering comparable to what we think the beans, later planted beans are, compared to the early planted beans.

Greg Johnson: 04:03

But, in general, I think the corn is okay. It's good. It's off of last year's crop, but we have to remember last year was a record crop before down 10% off of a record crop. It's still not bad, but I understand with the input costs where they are and the prices where they are, we certainly would like to have more bushels, but that dry August and first half September probably really impacted the yields in Champaign County.

Todd Gleason: 04:29

Now in Champaign County, we're kind of in the midst of the target area for really dry conditions that moves to the South and the West mostly. If you go north and west, do west of, us, I would think you're hearing much better corn, yields or at least early yields.

Greg Johnson: 04:47

Exactly. Yeah. McLean you don't have to go any farther west than McLean County. I think the Southeast part of McLean County is in you could include that in the kind of the dry pocket with Champaign County. But as you get into the Bloomington area and then go north and west from there, we've heard some very good yields comparable to last year, if not better than last year in some places.

Greg Johnson: 05:08

And that stands to reason because they had a lot more rain. I mean, you remember in June, July and August, the rains came across from the West and they hit Iowa, they hit the Western and Northern part of Illinois. And then when they got to just past McLean County, they seemed to fizzle out and it was more the hit and miss pop up showers from their east and south. And that's what we're seeing in the yields. We're seeing variable yields hitting, know, some are good, some are not so good, but as you get to the West and to the North, it seems to be more consistently better yields for both corn and soybeans.

Todd Gleason: 05:43

What yield do you think nationally the trade is targeting at this point? Is it where USDA is or a bit lower than that? And how much of a difference does that make going forward?

Greg Johnson: 05:55

I think the trade is looking for another two to three bushel drop. I think that's what they're trading, that one eighty five, one eighty six type number. And and that sounds encouraging, and maybe it keeps us from revisiting contract lows. But you have to remember when the government's August 12 report came out and they came up with that 188.8 bushel crop, they also raised exports, they raised feed demand, and they raised ethanol demand. And I would say I haven't seen any indication as to why feed demand should be increased.

Greg Johnson: 06:31

You know, maybe they know something we don't know, but, exports are certainly strong. I can understand why they raised exports, but I just kinda wonder if their formula says, well, when we grow more crops, we have to expand the demand as well, we'll see whether that follows suit or not. So, as far as an impact on price, we've already rallied 40¢ in corn, and I know it was from an extremely low number, but, December corn is 40¢ off its low. You could argue it's 50¢ off its high for the year, but, we're kind of right in the middle on corn whereas beans are close to the top of the range for soybeans. So as far as corn yield is concerned and what the trade is expecting, I think they're expecting a smaller drop, but that could be associated also with a drop in demand if they do lower the yield.

Greg Johnson: 07:20

So the carryout might be a 1.9 to 2,000,000,000 bushel carryout when it's all said and done. So I'm not sure even if they lower the yield by a couple of bushels, what kind of a price impact that will have necessarily right away.

Todd Gleason: 07:34

You know, the futures market always looking forward ahead of where USDA tends to be on the idea that they have a better idea, at least until the second set of numbers comes out in October of what the crop size is. And even then, they'll continue to wait until, the January's. But you you have to think about that through the process and what it means is related to your bottom line and when you might have bills coming due and particularly what to do with crop that why the whether it's corn or soybeans that's growing going across the scale and and what your in charge might be, I suppose.

Greg Johnson: 08:11

That's right. And keep in mind too that even if they lower the yield, the government has raised the corn acreage number each of the last two months, so in each of the last two reports. So that offsets a lower yield to some extent. So we're still looking at a pretty good production number on the corn side. Now on the beans, you know, they lowered the bean acres, obviously, when they raised the corn acres.

Greg Johnson: 08:33

And so if you if bean yields come down another half a bushel on top of the lower acres, all of a sudden, you know, you can make an argument for bean prices to maybe bounce a little bit in the short run. And I say in the short run because keep in mind, we probably here in The US will plant more beans next year due to the higher input costs for corn. And we know that South America, primarily Brazil, will be increasing bean acres, maybe not to the extent that they have in the past, but at least another million acres more of beans this year than what they planted last year. So I don't want to get long term bullish beans, but we could see a little bit of a pop, but that may be a selling opportunity for both the 25 crop and something we haven't talked about much is the '26 crop. It's not too early to start thinking about getting some new crop bean sales made for '26 if we see another 20 to 30¢ rally in those prices.

Todd Gleason: 09:26

And, D. Tay, thanks much. I appreciate it. And I don't know. In October, somebody might be rooting for a 100,000,000 corn acres.

Todd Gleason: 09:33

Doubt it. But but it is a nice round figure.

Todd Gleason: 09:38

We'll talk to you later, Greg. Thank you. I appreciate it much.

Greg Johnson: 09:41

Thanks, Todd.

Todd Gleason: 09:41

That's Greg Johnson. He is with TGM. That's totalgrainmarketing.com. You're listening to the closing market report from Illinois Public Media on this Wednesday afternoon. Let's step back to the Farm Progress Show.

Todd Gleason: 10:02

Nick Paulson and Joe Jansen join me on stage there in the University of Illinois tent to talk about marketing and this year's crop. Of course, we started with yield and acreage, just like today, while those numbers have both been updated from USDA, on that date, there were still expectations, like today, for a really big crop from a really big acreage number and a really big yield number. Joe Jansen picks up that thought.

Joe Janzen: 10:33

Yes. A massive US acreage number for corn, combined with what will be record yields. I feel pretty confident saying that at this point. Those two things together are gonna mean a lot of bushels of corn that need to find a home once we start combines rolling here in October. We'll come back

Todd Gleason: 10:50

to you and talk to you a bit more about marketing. Nick Paulson is with us, ag economist. He works closely with Gary Schnicki. He and Gary actually put together the budgets, crop budgets that you might use, the supply and demand tables. What has changed in your supply and demand tables from the first set that you started with for this coming marketing year or the crop we're about to harvest to now?

Todd Gleason: 11:15

So for

Nick Paulson: 11:16

the 2025 crop, things have improved, in terms of the projected returns that we're looking at for corn and soybean acres in Illinois. But the bad news about that that goes along with that improvement is that we're still looking at a projection for negative returns to cash rented farmland. Owned farmland, particularly if it's, you know, paid for is a different story. But on average on cash or underground, we're looking at 2025 being the third consecutive year of negative returns. Some of that in Illinois has been improved relative to what we thought earlier in the crop year because of some of those better yields even though they they often come with lower prices.

Nick Paulson: 12:04

And then the other I mean, the big shifter that's that's happened in our 2025 budgets and even in some of our adjustments to the 2024 crop year numbers is some of the government assistance that's come in. For 2024, we're crediting the the E cap payments that that were authorized in December and a lot of farmers received in March and April because they were associated with 2024 economic losses. And then for 2025, we've got the impacts of OB3 and the changes to the commodity programs that came about there, higher reference prices, strengthened ARC program, higher subsidy rates on crop insurance. So a lot of modifications to the support programs we have that are gonna lead to, what we think will be larger payments that that help close that gap between the the larger negative return number you're looking

Todd Gleason: 12:56

at in May and the smaller negative return number we're looking at now. When we talk about that supply and demand budget, what number have you plugged in as a season's average cash price for corn and for soybeans for that matter?

Nick Paulson: 13:11

So for for 2025, you know, we base the number we put in our budgets is, you know, again, our best estimate of what we think Illinois farmers will receive throughout the marketing year for the crop produced that year. So for the 2025 crop, our update last week, we moved corn down to $3.95. And if I remember right, we moved our bean price down to $10.10. Arguably, you know, if I talk to Joe, those might even be optimistic at this stage. You know, but again, we look at futures contracts during the marketing year.

Nick Paulson: 13:47

So harvest bids, springtime bids, adjust for average basis. We we we factor in the WASDE, we factor in what we hear from farmers throughout Illinois on crop yields and, you know, that's that's where we're at. But having that that corn prices starts with a three is definitely a shock relative to where we've

Todd Gleason: 14:06

been at for the last seven to eight years. If he actually talked to you, what number would you use?

Joe Janzen: 14:12

I I think, you know, that that USDA season average price number is is a pretty good starting point. We're really early in the marketing year. So I think yeah. You look at what where cash bids are at today for new crop corn and beans, and you'd have to say a number right around 4 and right around 10. And if you're 5¢ off of that, I mean that's well within you know, we look at farmer, you know, marketing data, how are farmers doing on on grain marketing?

Joe Janzen: 14:39

And the one thing we can say is the range of outcomes is pretty wide. And so if we're quibbling about 5 or 10¢ here at this stage in the game, I I you know, that's well within the margin of error. But right around four, right around 10, that seems pretty consistent with where we're at today.

Todd Gleason: 14:56

Yeah. And sometimes that USDA number stays pretty steady through the year, but depends on what's happening in the marketplace. For instance, last year, it started much higher than it finished for both corn and soybeans. It would be nice if it moved the other direction this year. Let's talk a little bit about what the fall might look like.

Todd Gleason: 15:15

Clearly, the negotiations with China remain an issue. They will not be resolved quickly, I suppose. Or at least at this point, the only goal post we have is sometime in November for their next the next time that the president will turn his attention to it if it's not been resolved to that point. How does that impact what happens in the fall as it's related to both corn and soybean basis if China continues to take zero soybeans?

Joe Janzen: 15:47

Yeah. It is I I think mainly a soybean story because we are seeing really strong export sales movement for for corn, new crop corn, but that's other countries that we have had maybe better news on the trade front with. Although I I say better news, but it it sounds like that those things can be reversed pretty quickly. So we've made a lot of new crop corn sales to Korea, and we've had good news about trade with Korea. But at the same time, I've heard the president say some very negative things about Korea in the last week.

Joe Janzen: 16:14

And so I I try and take all of these things with a grain of salt. I think on the trade front, the biggest thing is soybeans to China, as you mentioned. We have made zero new crop export sales to China. We typically have between two and ten million metric tons of sales on the books at this point. 15 to 20% normally.

Joe Janzen: 16:33

It can be yeah. It it should be a big number, and it's not. I would imagine if I were China, I am not gonna make any sales until there is a a that you can deliver that as a win to The United States in whatever trade negotiations that are ongoing. So the problem here is that we're not I don't think we're gonna see a lot of news on that front until we get through harvest. And so that harvest low, that sort of gut slot of harvest pricing anomaly where, you know, we just don't get out we don't have a lot of strength in pricing at harvest time typically.

Joe Janzen: 17:09

I don't see how we're gonna get there because there's not gonna be this, you know, trade win to kinda get us there in the next, say, two to three months.

Todd Gleason: 17:16

It was Joe Jensen, agricultural economist from the University of Illinois speaking during the Farm Progress Show in Decatur at the end of the month of August. He was joined by his colleague, Nick Paulson. You're listening to closing market report on a Wednesday afternoon. Our theme music is written, performed, produced in courtesy of Logan County, Illinois farmer Tim Gleason. The weather is next.

Todd Gleason: 17:44

Drew Lerner is now here. He's with World Weather Incorporated in Kansas City. Hi, Drew. Thanks for being with us. Let's begin with harvest weather across the Midwest.

Todd Gleason: 17:55

Can you work your way from the Northwest, I suppose, to the Southeast across the Corn Belt?

Drew Lerner: 18:01

Certainly. You know, we start off here not too bad. The the soil moisture situation varies mostly in a favorable range. There are a few pockets that are a little bit wet, but mostly not. But that may change as we go forward through this next seven day period.

Drew Lerner: 18:19

We will see rain often enough in Minnesota, the Eastern Dakotas, parts of Iowa that we will moisten up the ground enough that we'll probably bring a little bit of a delay to some of the crop maturation and early season harvest progress. Shouldn't be a big deal as long as we do get back into some sunshine as we move into the second week of the outlook, which I believe will take place. There will be some other opportunities for rain, but not quite as persistent as this. As we move to the central part of the Midwest, a lot of variation present at the moment is really quite dry in in many areas. We have had a few strong thunderstorms in our pocket or two.

Drew Lerner: 19:01

I'd say the bottom line is really not too bad. It's been very warm. Of course, temperatures in the middle and upper nineties. That's been accelerating drying between rain events. And the ground is really quite dry and the crop continues to experience at least the late crop, a little bit of stress.

Drew Lerner: 19:19

But I think most folks are focused in on the, the maturation and harvest rate and this rain that's in the Northwestern part of the Corn Belt will be advancing to the Southeast as we go forward through the next few days and into the weekend. And so we will see some disruption to farming activity, but we will also put a little bit of moisture in the ground. I don't think there's too many guys who will complain about that. It's the Eastern Midwest, of course, that's driest actually from Central And Southern Illinois and parts of Missouri down to the Delta, the Tennessee River Basin, and then eastward into Ohio and Kentucky. And that's the area that's chronically dry.

Drew Lerner: 19:58

There's all kinds of concern about water levels on the rivers and whether or not we're going to be able to have moisture for the planting of winter crops. Some of this is a little premature. You know, we've got still a few weeks ahead of us where we can see a lot of change take place. But from a harvest perspective, it's a really good environment. Now the rain that is in the Western part of the Corn Belt here, the next few days will eventually work its way into Indiana, Ohio, Kentucky, and Michigan.

Drew Lerner: 20:28

That will likely take place over the course of the weekend into early next week. There will be some disruption, obviously, to farming activity, but, again, this isn't gonna last forever. And I think we'll go back into a more favorable pattern here in the not so distant future.

Todd Gleason: 20:42

Speaking of patterns, sometimes at this time of the year, we do get a change of pattern with the change of season. Do you see that happening?

Drew Lerner: 20:49

Probably not in a big way, at least not for a little while yet. We will see a ridge of high pressure returning to the middle of North America as we get into the last days of September and into early October. That will once again bring back some pretty favorable harvest conditions. I think October may switch it up a little bit. You know, the key here is really the tropics.

Drew Lerner: 21:13

If we can get something to develop in the Caribbean and, into the Gulf Of America and bring some moisture up into the Delta that could change a lot of the perspective, but that is not in the cards at the moment. So I think for the most part, any seasonal change is probably still a few weeks away.

Todd Gleason: 21:30

In South America, what do you see in Brazil, particularly Mato Grosso as they begin their growing season?

Drew Lerner: 21:35

Well, just in the last twenty four hours, there have been a few scattered thunderstorms in the Northwest Of Mato Grosso that has generated upwards to about six tenths of an inch of rain. That may not sound like much, but you gotta start somewhere. That is the first rain of the season, and we will see more of it. We're gonna see some sporadic showers for the next few days. The better chance for rain, though, from Mato Grosso and Center West Brazil in general is going to occur next week.

Drew Lerner: 22:03

We have a cold front that will cut across the country, and it will scatter rain and thunderstorms from Mato Grosso into Minas Dres, maybe even Sao Paulo and part of Parana. So we will have some moisture to plant with. And there's some models suggesting the front will come back to the south and generate another opportunity for rain as we get to the end of this month. So I think we're on the right road for a normal start to the planting season.

Todd Gleason: 22:28

Hey. Thank you much. I appreciate it. We look forward to talking with you again next week.

Drew Lerner: 22:32

You bet. Have a good week.

Todd Gleason: 22:34

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. This is public radio for the farming world online on demand anytime you'd like to listen to us at willag.org, willag.0rg, or search it out by name, the closing market report in your favorite podcast applications.

Todd Gleason: 22:59

You can look for commodity week in those same podcast applications as well. Thank you for joining us again on this afternoon, and have a very safe harvest. I'm Todd Gleason.