September 12, 2025 • 27 mins
USDA REPORT DAY Panelists
- Ellen Dearden, AgReview
- Greg Johnson, TGM
- Shane Holtorf, Logic Ag Marketing
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Episode Transcript
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Todd Gleason (00:00):
This is the September 12 edition of
Commodity Week. Todd Gleasonservices are made available to
WILL by University of IllinoisExtension. Well, welcome to
commodity week. I am ToddGleason. Our panelists for the
day include Ellen Dearden.
(00:20):
She's at AgReview in Morton,Illinois. Greg Johnson comes to
us from right here in ChampaignCounty. He's at TGM. That's
totalgrainmarketing.com. AndShane Holtorf is here from Logic
Ag Marketing.
He's in Alta, Iowa. Our thanksto all three of them for joining
us on a very busy Friday. Ithink we'll start with you
(00:42):
today, Ellen Deirden fromAgReview. Morning at eleven a.
M.
Central Time USDA released theSeptember Crop Production and
World and Agricultural Supplyand Demand Estimates. What was
your early assessment of thereport?
Ellen Dearden (00:58):
Well, I thought the headline was the yield
numbers from USDA and corn camein at 186.7, was down about 2.1
bushels to the acre, but largerthan what the trade expected to
see on this report. Beans camein at 53.5, down just a hair
(01:21):
from last month, but a littlebit larger than the trade
expected. So that was theheadline news. However, from my
perspective, the big news wasthe harvested acres coming in
with big jumps in the corn and asmaller jump in the beans. But,
if we're going to harvest90,000,000 acres of corn this
(01:44):
year, those yields at 186 lookpretty large.
USDA assessed production at16,800,000,000 bushels and
that's really more than what thetrade was looking at. So the
immediate reaction on the cornwas to sell off, then it came
(02:06):
back to unchanged, then sold offagain. So I think there's a lot
of numbers here on The USfigures that the trade was
looking at. However, I wentright and looked at, the world
numbers, and I saw that, USDAworld ending stocks numbers on
(02:27):
corn, beans, and wheat were alllower than what the trade was
looking for. And I thoughtinteresting too, that the world
bean oil stocks tightened up.
I thought perhaps with theamount of cheap palm oil
available to the marketplace,that the world bean oil stocks
would, might have been higher.So basically, in The US, the
(02:52):
corn yields were high, high,high West of the Mississippi
River and dropped some East ofthe Mississippi River, but they
were still remained pretty darnhigh.
Todd Gleason (03:04):
Just to go back through some of the numbers that
you came up with, you gave usarea harvested at 90,000,000
acres for corn. Area plantedraised 1,400,000 acres to 98.7.
Yield, as you said, down 2.1bushels to the acre. It's at one
eighty six point seven insteadof one eighty eight point eight.
(03:27):
Those numbers were big.
The objective yield showed alsoone other item. This came from
the executive summary where theears per acre were just really,
really high. They have been ashigh as twenty nine five and
three three assessments that waslast year, but they really
(03:50):
haven't ever finished inanywhere near that high. About
twenty nine seven, I think, thisyear. It's rough to see on that,
but, again, just a biggernumber, more ears per acre, and
more acres to harvest from.
So corn yield and corn totalproduction is up as well.
(04:11):
Anything else that you saw inthose numbers that you think
farmers should take to heart atthis point as they look towards
their own harvest and what theyneed to do?
Ellen Dearden (04:19):
Well, when I look at the corn numbers, we knew
that the corn crop was a bigcrop and to address the ears per
acre, I'm hearing in the WesternCorn Belt just outstanding
stands and that suggests to methat we would see more ears per
acre. But, Brazilian Corn Croptoo, USDA raised that to 135,
(04:46):
and that's up 3,000,000,000metric tons from a month ago. So
we've got plenty of cornfloating around in the world.
We've got to figure out howwe're going to use it and
looking at the supply demandtables. USDA, I guess is content
to say that exports are going tobe strong because they did not
lower feed and residual use ofcorn.
Todd Gleason (05:08):
Do you want to go through some of the soybean
numbers more in-depth for me aswell? I know you talked a little
bit about some of the changes, ayield down 0.1 bushel to the
acre from 53.5 to 52.5. Anythingelse there strike you as unique
and different?
Ellen Dearden (05:22):
Well, on the supply demand sheet, they
increased crush 15,000,000metric tons, but then came back
and decreased exports 20,000,000metric tons. So the ending
stocks of beans, really remainedpretty much in line with what
the trade was looking at, at300,000,000 bushel. It's not
tight, but if we would lose abushel or two on the yield, we
(05:47):
could tighten that thing upagain.
Todd Gleason (05:49):
Oh, and we should probably finish the supply and
demand table up for corn. Theydid raise, what, exports another
100,000,000,000 bushels to2,975,000.000. Right?
Ellen Dearden (06:00):
Yep. And left the price unchanged, which I thought
was interesting too.
Todd Gleason (06:04):
$3.90. So they're looking at ending stocks at
2,110,000,000 bushels thismonth. That was 2.117 last
month. I guess they didn't thinkthat was anything we needed to
change. So, or at least as it'srelated to cash price.
Now farmers, then, according toUSDA, facing exactly mostly what
(06:29):
they were looking at, going intothis, as of August 1, not to
which is different, I think,than what they were thinking at
10:59 this morning that theythought maybe there would be a
lot less crop around and manymore changes in the marketplace
itself. What do you think themarket will do, over the next
couple of hours, I suppose, andthen how it will manage this
(06:52):
going into the fall.
Ellen Dearden (06:53):
I would say if December corn can hold above
$4.2 going into Friday's close,that will be, from my
perspective, a minor victorybecause that's kind of been a
pivot point. We get under that,it's resistance. Get over it,
it's somewhat supportive. So Ithink that this market looks
(07:15):
like it still wants moreinformation to make a move in
either direction from thatstandpoint. The beans, however,
look like they are looking atUSDA numbers and thinking, maybe
we're going to see some loweryields on the next report.
Not much change in the acreagescoming up, so, maybe this ten
(07:37):
forty area is a good area onNovember beans to find support.
Todd Gleason (07:43):
And $4.26, which was the highest the time you and
I talked for the Decembercontract, that feels like that
was an important number to hittoday too, at least to go
through 04/20 and get a bettershot or a better look at what
might the upside potential tobe.
Ellen Dearden (07:56):
Yeah, and that considers that 04/24 to 04/26
has continued to be an areathat, the market gravitates
towards, but then can't quiteget over it. So that's why I'm
going to give myself a littlegrace today and say 04/20 is
going to be kind of an importantclose.
Todd Gleason (08:18):
You watch the livestock very closely, what
things have been happening inthat world that you are
concerned about or that you findof interest?
Ellen Dearden (08:26):
I do think that the correction that we saw this
week in the live cattle and alsoin the feeders, the day we saw
feeders locked down the ninepoint two five dollars limit was
a wake up call that anything canhappen on here. But these
corrections, even though they'repretty broad sweep corrections,
(08:46):
are still healthy for thismarket. Funds have been heavily,
heavily long. The cattle andfeeder cattle in here. And I
would anticipate that thisweek's roller coaster action
likely has shaken some of themout of the long side.
So we may try to go back totrading fundamentals. The cash
fundamentals, fed cattle thisweek, were on the weak side of
(09:11):
things. So maybe we're justready to take a little break.
Todd Gleason (09:15):
Indeed. Thank you much. I appreciate it.
Ellen Dearden (09:17):
Okay. Thank you.
Todd Gleason (09:18):
Ellen Dearden is with AgReview. She's in Morton,
Illinois. Now let's turn ourattention to Greg Johnson. He's
at TGM. That's total grainmarketing, part of the elevator
system that stretches across thesouthern third up to a half of
Illinois into Indiana as well.
He's located in ChampaignCounty. Hi, Greg. Thanks for
(09:39):
being with us again today afterour Wednesday talk about the
marketplace. Your earlyassessment of today's USDA
reports told you what?
Greg Johnson (09:49):
Well, the traders were kind of correct when they
assumed that the yields wouldcome down a little bit, but I
think what took a lot of thetraders by surprise was the
acreage, corn acreage numberwent up again. We went from
ninety 0.6 million two monthsago to 97.3 a month ago, and now
(10:10):
that number is up to 98.7. So ifwe keep going like this, we'll
have 100,000,000 acres of cornplanted one of these months. And
so that is dampening the effectof the lower yield. I think the
traders were, you know,anticipating a lower yield and
we got a lower yield, maybe notquite as low as what some of
them were thinking, but thereare subsequent reports.
(10:33):
But the main thing is the extraacres, in corn, probably mute
the, bullishness of the lowercorn yield production.
Todd Gleason (10:43):
And on the soybean side?
Greg Johnson (10:44):
Soybeans, I don't think the traders were too
disappointed in the fact thatthe USDA only lowered the yield
by a tenth of a bushel from 53.6to 53.5. I think everybody
realizes it's almost impossibleto estimate bean yield until you
(11:05):
get the combine in the field.And so the expectation was that
USDA would probably not changethe soybean yield this month.
They're gonna let the combinesroll here and get a better
number a month from now. So ifwe are gonna see a lower bean
yield, the fact that they didn'tlower it today doesn't mean that
they won't lower it a month fromnow.
(11:26):
So I think the traders are okaywith the bean numbers. USDA did
lower exports. So the carryoutis slightly higher, but a half a
bushel change in the yield willmore than offset that. So all
things considered, I think itwas a friendly report for
(11:47):
soybeans and it was basically aneutral report for corn.
Todd Gleason (11:52):
After we're done talking with you, we'll talk
with Shane Holthorff who is inthe Western Part of Iowa. They
will have a distinct anddifferent version of what this
means to them going forwardbecause of the size of the crop
they have in that state.However, USDA putting both
Illinois and Iowa now at 219bushels to the acre. So it's not
(12:12):
as if we have a small crop in inthe state of Illinois. In our
part of the world, however, ifyou look at the drought monitor,
and we have talked about thisand the meteorologists have
discussed it on the closingmarket report as well, we are in
somewhat of a bull's eye locallyand a drought that spreads to
(12:32):
the South and a bit to the Westor Missouri in parts of the
Delta.
I'm wondering what it might meanfor harvest and when that really
gets fully under the way. I knewyou were taking few soybeans in
on Wednesday when we talked toyou last. Soybeans probably are
gonna turn really fast. Has thatbeen ramping up over the past
(12:54):
two days?
Greg Johnson (12:54):
It has. We've seen our bean receipts increase every
day, and that should continue.The one caveat I would say is
that because we haven't had anyrain, the beans are progressing
at a different rate even in thesame field. So there's still
some immature green beans in thefield, but 95% of the beans
(13:16):
might be ready to cut, but that5% is still immature. And so
some farmers are gonna wait andsee if they just mature on their
own.
Most years, one good rain willeven those beans up and we can
have, you know, pretty uniformconsistent moisture beans. This
year it kind of feels likewithout rain we're going to have
(13:37):
some beans that are extremelydry and other beans that aren't
quite fit, but I think they'regoing to get cut anyway. So
that's where we are on soybeanharvest. With corn harvest, the
corn is drying down, but withthe price where it is and drying
charges where they are, I thinkmost farmers are going to
concentrate on soybeans for awhile, let the corn dry down
(14:01):
naturally. With this ninety,ninety five degree weather, we
could lose almost a point ofmoisture a day.
And so farmers will get thebeans that are ready first and
then approach the corn to try toget that harvested, but I don't
think there's any rush from thefarmer's point of view to get
the corn out any sooner thanthey absolutely have to.
Todd Gleason (14:19):
Now producers locally and those who have had
dry conditions for thirty fiveto fifty five days, for
soybeans, we'll say, I think myearly beans, the ones they're
harvesting now, and you canconfirm this, are pretty good.
But the deeper into the season Iget, the less likely I think
(14:40):
they will be good. I wanna knowabout that locally. And do you
think that will be a similar setof thinking across the whole of
the Midwest just because it hasbeen pretty rain free in lots of
places?
Greg Johnson (14:55):
I would agree 100% with you locally. I think the
early planted beans are going tobe the best beans we see. We'll
see some of those beans aroundhere in the 70s as far as yield
is concerned. And theexpectation, at least mine is
that as we get into the laterplanted beans and the fuller
season beans that we could seethat drop down into the 60s on
(15:17):
the yield. But I don't thinkthat's everywhere because if you
had decent amount of rain inJuly, then even if you got a few
tenths here and there throughoutthe month of August, I think
that might be enough to keepthose bean yields in the
northern part of the state, forexample, in the western part of
the state in Iowa.
(15:37):
I think we could still see somevery impressive yields on the
soybeans even though it wasrelatively dry because I think
they had a little bit moresubsoil moisture to work with.
So yeah, East Central Illinois,I agree with you completely. The
later the beans are, the lowerthe yield will be, but I don't
think that'll be the case. Atleast I'm not expecting that for
the northern and western partsof the state and the Corn Belt.
(16:00):
As far as corn is concerned, thecorn was farther along when the
dry weather hit.
So we will see a 10 to 15 to 20bushel yield drop from last
year, but last year was a recordcrop. So I guess I'm gonna be
optimistic and say the glass ishalf full and say that it's
still gonna be a good crop. ButI agree, it's not gonna be as
(16:22):
good here in East CentralIllinois as what it could have
been, you know, where we weregiven thirty, forty five days
ago. It just looked like we hadpotential to have another record
crop of corn, and I don't thinkthat's going be the case now.
Todd Gleason (16:34):
You mentioned a 70 bushel yield, but not an 80 or a
90 or an 85 bushel yield forsoybeans. I'm wondering, given
that number and the thought thatthis will tail off as we go
deeper into the season at leastlocally, whether that has
changed your thoughts, relatedto how much storage you need and
(16:55):
or how much basis depreciationthere might be for both corn and
soybeans going through the fall?
Greg Johnson (17:01):
Yes. First of all, when I say beans in the 70s, I'm
saying that's an average. Whenyou have an average, you're
going have some fields that are10 bushels better and some
fields that are 10 bushelsworse. But the point is I think
the yield goes lower as we getinto the fuller season beans.
Yeah, beans in the 70s, but wecould have beans as low as 55
(17:23):
and we could have beans up in85, but in general that's where
I think we're gonna be.
So the overall smaller crop Ithink keeps the basis from
dropping anymore. I don't thinkwe have to worry about extremely
wide basis. I think we'll haveenough room to put this crop
away. Yes, there'll be some cornpiles outside because we're not
(17:44):
shipping beans, so those beanswill take up corn space and some
corn will have to go on theground. But the corn export pace
is very good.
I expect elevators to be able tosell corn. You know, may not be
right when they want to, thetrains may be a little delayed,
but over the course of the fallharvest, I think corn will move
and that will eliminateextremely wide basis levels,
(18:08):
which we could have had if thiscrop would have been 10 bushels
higher in corn and five bushelshigher in beans.
Todd Gleason (18:14):
Is that a local phenomenon or one that would be
wider spread across the Midwest?
Greg Johnson (18:21):
I can't really speak for the Midwest, but I
know here we were concernedabout what we were gonna do with
the big crop. And now ourexpectations are that we're
gonna handle 15 bushels an acreless corn than what we thought
forty five days ago and probablyfive bushels less beans per acre
than what we thought forty fivedays ago. So that's certainly
(18:42):
the expectation in East CentralIllinois. I don't know that
that's everywhere else. So ifthe crops are big enough to the
North and to the West, maybe wedo see some weakening of basis
in those areas.
But I think Illinois, Indiana,Ohio, the Southern half of
Illinois anyway, Indiana andOhio, I think those areas are
(19:05):
going to be deficit, moistureareas, lower yields, and so I
don't think basis levels willneed to get a whole lot worse in
southern in the Southern half ofIllinois and then all of Indiana
and Ohio.
Todd Gleason (19:17):
Hey, thank you much. I appreciate it.
Greg Johnson (19:19):
Hey. Thank you, Todd.
Todd Gleason (19:20):
Greg Johnson is with TGM. That's
totalgrainmarketing.com. He'sright here in Champaign County,
Illinois. Let's move from thispart of the world in, the
Eastern Side Of The MississippiRiver to the Western Side. Shane
Holtorf joins us from Logic AgMarketing.
He's in Alta, Iowa. Thank you,Shane, for being with us. Again,
(19:44):
remind us exactly where you arebecause we only talk to you
periodically. So where is Alta?
Shane Holtorf (19:49):
Yeah, Todd. Thanks again for having me on as
always. Alta sits, I'm going tocall it in the Northwest Corner
of Iowa. So we're about, 10miles north of Highway 20 and,
70 miles east of the, SouthDakota border there.
Todd Gleason (20:07):
Okay. So I know pretty much where you are. I
think some of the rest of thecrew will as well. Tell me about
the crop there, and then we'lltake a look at what you thought
of today's USDA report. How'sthe corn crop and the beans for
that matter in your area?
Shane Holtorf (20:21):
Yeah. So, been an interesting summer. You know, we
had moisture aplenty May, June,July, and then in August it
stopped raining. Our lawns areall pretty well dead here and
it's been interesting. So Ithink we have some corn out
there that is really, reallygood And we have some corn out
(20:43):
there that's going to disappointsome folks.
You know, with the wet spring,we saw a lot of disease come in.
Southern rust, as everyone'sbeen tossing about, even with
some fungicide applications, itstill managed to find its way
in. I think we're going to havea very good crop. We probably
(21:04):
lost the top end from guys thathave went in and got some corn
started. I've heard yields fromanywhere from 140 to two
seventy.
This general area has done abouttwo forty to two fifty on
average the last couple ofyears. In the Far Northwest
corner of Iowa, they had aderecho early on in the year, or
(21:27):
I should say midway through thesummer and appeared that
everything got out of it okay.As they started chopping, they
realized that maybe the damagewas a little worse than they had
thought. And so they're prettydisappointed with the yields up
there. So it's in one word, veryvariable.
So on the bean side of things, Ithink we're going to see them
(21:52):
average to a touch aboveaverage. You know, they didn't
like the wet start, but theyreally settled in late in the
summer and things look reallygood. Disease pressure. Yeah, a
little bit, but not as much onthe corn as on the corn side.
Todd Gleason (22:06):
Historically, I believe you're in crop reporting
district number four. It's theWestern District in Iowa.
Whether it's four or not, Idon't quite recall. It is the
largest producing corn producingcrop reporting district in the
state. Do you have a recordcrop?
Shane Holtorf (22:23):
I don't believe we have a record crop this year.
Just just with what we saw onthe disease pressure side of
things and some of the damagethroughout the summer, I'm going
to say that that we're a littlebit soft of a record.
Todd Gleason (22:37):
And how does it compare to previous years? I
know you had several years thatweren't very good.
Shane Holtorf (22:42):
Yeah. So our last our last two years have been
really, really good. I shouldsay the last three years have
been, have been really good. I'mgoing to say that we're, we're
probably going to be on par withthe last, the last couple of
years. You know, I would saythat the, the top end potential
was, was far more, early on inthe summer.
(23:02):
And then we just, you know, keptstaying wet, staying wet,
allowed some of that disease tocreep in and, and take our top
end off, you know, on, on my ownfarm. I had some yield numbers
in mind in early June and I wasout walking the field and I know
that's a dangerous game to play,but I've, I've probably trimmed
my expectations up on my ownstuff by about 30 bushel to the
(23:25):
acre since June. So
Todd Gleason (23:27):
Yeah. If I remember correctly, there are
about eight ethanol plantswithin an hour's drive of where
you are, I think. Yep. So yougenerally have really good
basis. Is that maintained orhave they backed off on because
of the size of the crop.
But but what are they tellingyou about how they view what's
coming to them this fall?
Shane Holtorf (23:49):
Yeah. So the interesting piece there is,
there is still a lot of physicalinventory out in the country,
both sitting in the elevatorshands and the farmers hands. And
so they haven't gotten veryaggressive on basis. You know,
the last couple of years in thistimeframe basis got crazy good
until we got into the guts lotof harvest. And, and I just
(24:12):
don't think we're going to seethat.
You know, we've been actuallywriting a lot of basis contracts
here lately just because wethink it's going to be a little
bit different than it has in thelast few years, you know, more
so to what we're carrying overfrom last year's crop than what
we're expecting on this year'scrop. The same could be said for
the bean side of things as well.
Todd Gleason (24:33):
So you're expecting to break how much?
Shane Holtorf (24:36):
On the basis side of things, you know, in this
general neck of the woods, we'veseen mid forties, pretty
standard for basis. And I couldsee us in the, in the gut slot
widen out to, and that's on thecorn side, somewhere around 60.
We see bean basis right now fromanywhere, from 70 to 85 under.
(25:00):
And, you know, I think we couldslide that, you know, close to a
buck probably during the gutslot of harvest. I really hope
I'm wrong.
But you know, we've, we've got alot of opportunity to chew it up
with, crushed plants and thatdemand has been strong. So I'm
hoping if we can get throughharvest, we'll see it rebound
relatively quickly.
Todd Gleason (25:20):
You'll feel pressure, I would assume, from
the North Dakota side notpushing beans out the PNW.
Right?
Shane Holtorf (25:26):
Correct. Yeah. I mean, they're was I see the
other day, they're a buck 60under on basis, and, you know, I
don't know what the rail freightto bring those down is, but it,
you know, it's going to coveritself if they decide to go that
route.
Todd Gleason (25:40):
Give me your assessment of today's USDA
reports.
Shane Holtorf (25:43):
Sure. You know, I guess the report is probably
about what what I expected here.Just kind of, you know, some
moderate changes. What'sprobably shocking to me is what
we've done post report on thetrade side. Before I jumped on
the call, I think we were upseven and a half on December
corn and 14 on beans.
(26:04):
And so excuse me, yield, youknow, we kind of talked with our
customers there in August thatwe believed that that would be
the largest corn yield that weprinted mainly to the disease
pressure. They had talked abouta lot of connections, Minnesota,
Illinois, other parts of Iowa,and it kind of echoed the same
(26:24):
thing. What shocked me probablythe most was tacking on another,
you know, 1,300,000 acres of,you know, anticipated harvest
there. So left the left theproduction, you know, relatively
the same in line with what themarket was thinking here. And
(26:44):
so, you know, this is a toughtime of year.
We're a lot more reliable andpredictable than the August
yield estimates. But, buttruthfully, I think we need to
wait for the combines to run to,to kind of help us hone that in.
You know, on the bean side,again, not a lot changed from an
acreage perspective or really ayield perspective. You know, as
(27:08):
we look at this, we sit with the300,000,000 bushel carry out,
which, which isn't overburdensomething, but it's, it's
comfortable. And, you know, sofrom our perspective, you know,
I think everyone's got the samethought is we'd love to start
seeing some flash sales in themorning from, you know, quote
unquote unknown to be able tostart chewing some of that up a
Greg Johnson (27:30):
little bit.
Todd Gleason (27:31):
Hey. Thank you much, Shane. I appreciate it.
Shane Holtorf (27:33):
Yeah. You bet. Thanks, Todd.
Todd Gleason (27:34):
Mhmm. Shane Holtorf is with Logic Marketing.
He is in Alta, Iowa. Joined ushere on Commodity Week. Our
thanks go to Shane along withGreg Johnson and Ellen Dearden
on University of IllinoisExtension's Todd Gleason.
This is the September 12 edition of
Commodity Week. Todd Gleasonservices are made available to
WILL by University of IllinoisExtension. Well, welcome to
commodity week. I am ToddGleason. Our panelists for the
day include Ellen Dearden.
(00:20):
She's at AgReview in Morton,Illinois. Greg Johnson comes to
us from right here in ChampaignCounty. He's at TGM. That's
totalgrainmarketing.com. AndShane Holtorf is here from Logic
Ag Marketing.
He's in Alta, Iowa. Our thanksto all three of them for joining
us on a very busy Friday. Ithink we'll start with you
(00:42):
today, Ellen Deirden fromAgReview. Morning at eleven a.
M.
Central Time USDA released theSeptember Crop Production and
World and Agricultural Supplyand Demand Estimates. What was
your early assessment of thereport?
Ellen Dearden (00:58):
Well, I thought the headline was the yield
numbers from USDA and corn camein at 186.7, was down about 2.1
bushels to the acre, but largerthan what the trade expected to
see on this report. Beans camein at 53.5, down just a hair
(01:21):
from last month, but a littlebit larger than the trade
expected. So that was theheadline news. However, from my
perspective, the big news wasthe harvested acres coming in
with big jumps in the corn and asmaller jump in the beans. But,
if we're going to harvest90,000,000 acres of corn this
(01:44):
year, those yields at 186 lookpretty large.
USDA assessed production at16,800,000,000 bushels and
that's really more than what thetrade was looking at. So the
immediate reaction on the cornwas to sell off, then it came
(02:06):
back to unchanged, then sold offagain. So I think there's a lot
of numbers here on The USfigures that the trade was
looking at. However, I wentright and looked at, the world
numbers, and I saw that, USDAworld ending stocks numbers on
(02:27):
corn, beans, and wheat were alllower than what the trade was
looking for. And I thoughtinteresting too, that the world
bean oil stocks tightened up.
I thought perhaps with theamount of cheap palm oil
available to the marketplace,that the world bean oil stocks
would, might have been higher.So basically, in The US, the
(02:52):
corn yields were high, high,high West of the Mississippi
River and dropped some East ofthe Mississippi River, but they
were still remained pretty darnhigh.
Todd Gleason (03:04):
Just to go back through some of the numbers that
you came up with, you gave usarea harvested at 90,000,000
acres for corn. Area plantedraised 1,400,000 acres to 98.7.
Yield, as you said, down 2.1bushels to the acre. It's at one
eighty six point seven insteadof one eighty eight point eight.
(03:27):
Those numbers were big.
The objective yield showed alsoone other item. This came from
the executive summary where theears per acre were just really,
really high. They have been ashigh as twenty nine five and
three three assessments that waslast year, but they really
(03:50):
haven't ever finished inanywhere near that high. About
twenty nine seven, I think, thisyear. It's rough to see on that,
but, again, just a biggernumber, more ears per acre, and
more acres to harvest from.
So corn yield and corn totalproduction is up as well.
(04:11):
Anything else that you saw inthose numbers that you think
farmers should take to heart atthis point as they look towards
their own harvest and what theyneed to do?
Ellen Dearden (04:19):
Well, when I look at the corn numbers, we knew
that the corn crop was a bigcrop and to address the ears per
acre, I'm hearing in the WesternCorn Belt just outstanding
stands and that suggests to methat we would see more ears per
acre. But, Brazilian Corn Croptoo, USDA raised that to 135,
(04:46):
and that's up 3,000,000,000metric tons from a month ago. So
we've got plenty of cornfloating around in the world.
We've got to figure out howwe're going to use it and
looking at the supply demandtables. USDA, I guess is content
to say that exports are going tobe strong because they did not
lower feed and residual use ofcorn.
Todd Gleason (05:08):
Do you want to go through some of the soybean
numbers more in-depth for me aswell? I know you talked a little
bit about some of the changes, ayield down 0.1 bushel to the
acre from 53.5 to 52.5. Anythingelse there strike you as unique
and different?
Ellen Dearden (05:22):
Well, on the supply demand sheet, they
increased crush 15,000,000metric tons, but then came back
and decreased exports 20,000,000metric tons. So the ending
stocks of beans, really remainedpretty much in line with what
the trade was looking at, at300,000,000 bushel. It's not
tight, but if we would lose abushel or two on the yield, we
(05:47):
could tighten that thing upagain.
Todd Gleason (05:49):
Oh, and we should probably finish the supply and
demand table up for corn. Theydid raise, what, exports another
100,000,000,000 bushels to2,975,000.000. Right?
Ellen Dearden (06:00):
Yep. And left the price unchanged, which I thought
was interesting too.
Todd Gleason (06:04):
$3.90. So they're looking at ending stocks at
2,110,000,000 bushels thismonth. That was 2.117 last
month. I guess they didn't thinkthat was anything we needed to
change. So, or at least as it'srelated to cash price.
Now farmers, then, according toUSDA, facing exactly mostly what
(06:29):
they were looking at, going intothis, as of August 1, not to
which is different, I think,than what they were thinking at
10:59 this morning that theythought maybe there would be a
lot less crop around and manymore changes in the marketplace
itself. What do you think themarket will do, over the next
couple of hours, I suppose, andthen how it will manage this
(06:52):
going into the fall.
Ellen Dearden (06:53):
I would say if December corn can hold above
$4.2 going into Friday's close,that will be, from my
perspective, a minor victorybecause that's kind of been a
pivot point. We get under that,it's resistance. Get over it,
it's somewhat supportive. So Ithink that this market looks
(07:15):
like it still wants moreinformation to make a move in
either direction from thatstandpoint. The beans, however,
look like they are looking atUSDA numbers and thinking, maybe
we're going to see some loweryields on the next report.
Not much change in the acreagescoming up, so, maybe this ten
(07:37):
forty area is a good area onNovember beans to find support.
Todd Gleason (07:43):
And $4.26, which was the highest the time you and
I talked for the Decembercontract, that feels like that
was an important number to hittoday too, at least to go
through 04/20 and get a bettershot or a better look at what
might the upside potential tobe.
Ellen Dearden (07:56):
Yeah, and that considers that 04/24 to 04/26
has continued to be an areathat, the market gravitates
towards, but then can't quiteget over it. So that's why I'm
going to give myself a littlegrace today and say 04/20 is
going to be kind of an importantclose.
Todd Gleason (08:18):
You watch the livestock very closely, what
things have been happening inthat world that you are
concerned about or that you findof interest?
Ellen Dearden (08:26):
I do think that the correction that we saw this
week in the live cattle and alsoin the feeders, the day we saw
feeders locked down the ninepoint two five dollars limit was
a wake up call that anything canhappen on here. But these
corrections, even though they'repretty broad sweep corrections,
(08:46):
are still healthy for thismarket. Funds have been heavily,
heavily long. The cattle andfeeder cattle in here. And I
would anticipate that thisweek's roller coaster action
likely has shaken some of themout of the long side.
So we may try to go back totrading fundamentals. The cash
fundamentals, fed cattle thisweek, were on the weak side of
(09:11):
things. So maybe we're justready to take a little break.
Todd Gleason (09:15):
Indeed. Thank you much. I appreciate it.
Ellen Dearden (09:17):
Okay. Thank you.
Todd Gleason (09:18):
Ellen Dearden is with AgReview. She's in Morton,
Illinois. Now let's turn ourattention to Greg Johnson. He's
at TGM. That's total grainmarketing, part of the elevator
system that stretches across thesouthern third up to a half of
Illinois into Indiana as well.
He's located in ChampaignCounty. Hi, Greg. Thanks for
(09:39):
being with us again today afterour Wednesday talk about the
marketplace. Your earlyassessment of today's USDA
reports told you what?
Greg Johnson (09:49):
Well, the traders were kind of correct when they
assumed that the yields wouldcome down a little bit, but I
think what took a lot of thetraders by surprise was the
acreage, corn acreage numberwent up again. We went from
ninety 0.6 million two monthsago to 97.3 a month ago, and now
(10:10):
that number is up to 98.7. So ifwe keep going like this, we'll
have 100,000,000 acres of cornplanted one of these months. And
so that is dampening the effectof the lower yield. I think the
traders were, you know,anticipating a lower yield and
we got a lower yield, maybe notquite as low as what some of
them were thinking, but thereare subsequent reports.
(10:33):
But the main thing is the extraacres, in corn, probably mute
the, bullishness of the lowercorn yield production.
Todd Gleason (10:43):
And on the soybean side?
Greg Johnson (10:44):
Soybeans, I don't think the traders were too
disappointed in the fact thatthe USDA only lowered the yield
by a tenth of a bushel from 53.6to 53.5. I think everybody
realizes it's almost impossibleto estimate bean yield until you
(11:05):
get the combine in the field.And so the expectation was that
USDA would probably not changethe soybean yield this month.
They're gonna let the combinesroll here and get a better
number a month from now. So ifwe are gonna see a lower bean
yield, the fact that they didn'tlower it today doesn't mean that
they won't lower it a month fromnow.
(11:26):
So I think the traders are okaywith the bean numbers. USDA did
lower exports. So the carryoutis slightly higher, but a half a
bushel change in the yield willmore than offset that. So all
things considered, I think itwas a friendly report for
(11:47):
soybeans and it was basically aneutral report for corn.
Todd Gleason (11:52):
After we're done talking with you, we'll talk
with Shane Holthorff who is inthe Western Part of Iowa. They
will have a distinct anddifferent version of what this
means to them going forwardbecause of the size of the crop
they have in that state.However, USDA putting both
Illinois and Iowa now at 219bushels to the acre. So it's not
(12:12):
as if we have a small crop in inthe state of Illinois. In our
part of the world, however, ifyou look at the drought monitor,
and we have talked about thisand the meteorologists have
discussed it on the closingmarket report as well, we are in
somewhat of a bull's eye locallyand a drought that spreads to
(12:32):
the South and a bit to the Westor Missouri in parts of the
Delta.
I'm wondering what it might meanfor harvest and when that really
gets fully under the way. I knewyou were taking few soybeans in
on Wednesday when we talked toyou last. Soybeans probably are
gonna turn really fast. Has thatbeen ramping up over the past
(12:54):
two days?
Greg Johnson (12:54):
It has. We've seen our bean receipts increase every
day, and that should continue.The one caveat I would say is
that because we haven't had anyrain, the beans are progressing
at a different rate even in thesame field. So there's still
some immature green beans in thefield, but 95% of the beans
(13:16):
might be ready to cut, but that5% is still immature. And so
some farmers are gonna wait andsee if they just mature on their
own.
Most years, one good rain willeven those beans up and we can
have, you know, pretty uniformconsistent moisture beans. This
year it kind of feels likewithout rain we're going to have
(13:37):
some beans that are extremelydry and other beans that aren't
quite fit, but I think they'regoing to get cut anyway. So
that's where we are on soybeanharvest. With corn harvest, the
corn is drying down, but withthe price where it is and drying
charges where they are, I thinkmost farmers are going to
concentrate on soybeans for awhile, let the corn dry down
(14:01):
naturally. With this ninety,ninety five degree weather, we
could lose almost a point ofmoisture a day.
And so farmers will get thebeans that are ready first and
then approach the corn to try toget that harvested, but I don't
think there's any rush from thefarmer's point of view to get
the corn out any sooner thanthey absolutely have to.
Todd Gleason (14:19):
Now producers locally and those who have had
dry conditions for thirty fiveto fifty five days, for
soybeans, we'll say, I think myearly beans, the ones they're
harvesting now, and you canconfirm this, are pretty good.
But the deeper into the season Iget, the less likely I think
(14:40):
they will be good. I wanna knowabout that locally. And do you
think that will be a similar setof thinking across the whole of
the Midwest just because it hasbeen pretty rain free in lots of
places?
Greg Johnson (14:55):
I would agree 100% with you locally. I think the
early planted beans are going tobe the best beans we see. We'll
see some of those beans aroundhere in the 70s as far as yield
is concerned. And theexpectation, at least mine is
that as we get into the laterplanted beans and the fuller
season beans that we could seethat drop down into the 60s on
(15:17):
the yield. But I don't thinkthat's everywhere because if you
had decent amount of rain inJuly, then even if you got a few
tenths here and there throughoutthe month of August, I think
that might be enough to keepthose bean yields in the
northern part of the state, forexample, in the western part of
the state in Iowa.
(15:37):
I think we could still see somevery impressive yields on the
soybeans even though it wasrelatively dry because I think
they had a little bit moresubsoil moisture to work with.
So yeah, East Central Illinois,I agree with you completely. The
later the beans are, the lowerthe yield will be, but I don't
think that'll be the case. Atleast I'm not expecting that for
the northern and western partsof the state and the Corn Belt.
(16:00):
As far as corn is concerned, thecorn was farther along when the
dry weather hit.
So we will see a 10 to 15 to 20bushel yield drop from last
year, but last year was a recordcrop. So I guess I'm gonna be
optimistic and say the glass ishalf full and say that it's
still gonna be a good crop. ButI agree, it's not gonna be as
(16:22):
good here in East CentralIllinois as what it could have
been, you know, where we weregiven thirty, forty five days
ago. It just looked like we hadpotential to have another record
crop of corn, and I don't thinkthat's going be the case now.
Todd Gleason (16:34):
You mentioned a 70 bushel yield, but not an 80 or a
90 or an 85 bushel yield forsoybeans. I'm wondering, given
that number and the thought thatthis will tail off as we go
deeper into the season at leastlocally, whether that has
changed your thoughts, relatedto how much storage you need and
(16:55):
or how much basis depreciationthere might be for both corn and
soybeans going through the fall?
Greg Johnson (17:01):
Yes. First of all, when I say beans in the 70s, I'm
saying that's an average. Whenyou have an average, you're
going have some fields that are10 bushels better and some
fields that are 10 bushelsworse. But the point is I think
the yield goes lower as we getinto the fuller season beans.
Yeah, beans in the 70s, but wecould have beans as low as 55
(17:23):
and we could have beans up in85, but in general that's where
I think we're gonna be.
So the overall smaller crop Ithink keeps the basis from
dropping anymore. I don't thinkwe have to worry about extremely
wide basis. I think we'll haveenough room to put this crop
away. Yes, there'll be some cornpiles outside because we're not
(17:44):
shipping beans, so those beanswill take up corn space and some
corn will have to go on theground. But the corn export pace
is very good.
I expect elevators to be able tosell corn. You know, may not be
right when they want to, thetrains may be a little delayed,
but over the course of the fallharvest, I think corn will move
and that will eliminateextremely wide basis levels,
(18:08):
which we could have had if thiscrop would have been 10 bushels
higher in corn and five bushelshigher in beans.
Todd Gleason (18:14):
Is that a local phenomenon or one that would be
wider spread across the Midwest?
Greg Johnson (18:21):
I can't really speak for the Midwest, but I
know here we were concernedabout what we were gonna do with
the big crop. And now ourexpectations are that we're
gonna handle 15 bushels an acreless corn than what we thought
forty five days ago and probablyfive bushels less beans per acre
than what we thought forty fivedays ago. So that's certainly
(18:42):
the expectation in East CentralIllinois. I don't know that
that's everywhere else. So ifthe crops are big enough to the
North and to the West, maybe wedo see some weakening of basis
in those areas.
But I think Illinois, Indiana,Ohio, the Southern half of
Illinois anyway, Indiana andOhio, I think those areas are
(19:05):
going to be deficit, moistureareas, lower yields, and so I
don't think basis levels willneed to get a whole lot worse in
southern in the Southern half ofIllinois and then all of Indiana
and Ohio.
Todd Gleason (19:17):
Hey, thank you much. I appreciate it.
Greg Johnson (19:19):
Hey. Thank you, Todd.
Todd Gleason (19:20):
Greg Johnson is with TGM. That's
totalgrainmarketing.com. He'sright here in Champaign County,
Illinois. Let's move from thispart of the world in, the
Eastern Side Of The MississippiRiver to the Western Side. Shane
Holtorf joins us from Logic AgMarketing.
He's in Alta, Iowa. Thank you,Shane, for being with us. Again,
(19:44):
remind us exactly where you arebecause we only talk to you
periodically. So where is Alta?
Shane Holtorf (19:49):
Yeah, Todd. Thanks again for having me on as
always. Alta sits, I'm going tocall it in the Northwest Corner
of Iowa. So we're about, 10miles north of Highway 20 and,
70 miles east of the, SouthDakota border there.
Todd Gleason (20:07):
Okay. So I know pretty much where you are. I
think some of the rest of thecrew will as well. Tell me about
the crop there, and then we'lltake a look at what you thought
of today's USDA report. How'sthe corn crop and the beans for
that matter in your area?
Shane Holtorf (20:21):
Yeah. So, been an interesting summer. You know, we
had moisture aplenty May, June,July, and then in August it
stopped raining. Our lawns areall pretty well dead here and
it's been interesting. So Ithink we have some corn out
there that is really, reallygood And we have some corn out
(20:43):
there that's going to disappointsome folks.
You know, with the wet spring,we saw a lot of disease come in.
Southern rust, as everyone'sbeen tossing about, even with
some fungicide applications, itstill managed to find its way
in. I think we're going to havea very good crop. We probably
(21:04):
lost the top end from guys thathave went in and got some corn
started. I've heard yields fromanywhere from 140 to two
seventy.
This general area has done abouttwo forty to two fifty on
average the last couple ofyears. In the Far Northwest
corner of Iowa, they had aderecho early on in the year, or
(21:27):
I should say midway through thesummer and appeared that
everything got out of it okay.As they started chopping, they
realized that maybe the damagewas a little worse than they had
thought. And so they're prettydisappointed with the yields up
there. So it's in one word, veryvariable.
So on the bean side of things, Ithink we're going to see them
(21:52):
average to a touch aboveaverage. You know, they didn't
like the wet start, but theyreally settled in late in the
summer and things look reallygood. Disease pressure. Yeah, a
little bit, but not as much onthe corn as on the corn side.
Todd Gleason (22:06):
Historically, I believe you're in crop reporting
district number four. It's theWestern District in Iowa.
Whether it's four or not, Idon't quite recall. It is the
largest producing corn producingcrop reporting district in the
state. Do you have a recordcrop?
Shane Holtorf (22:23):
I don't believe we have a record crop this year.
Just just with what we saw onthe disease pressure side of
things and some of the damagethroughout the summer, I'm going
to say that that we're a littlebit soft of a record.
Todd Gleason (22:37):
And how does it compare to previous years? I
know you had several years thatweren't very good.
Shane Holtorf (22:42):
Yeah. So our last our last two years have been
really, really good. I shouldsay the last three years have
been, have been really good. I'mgoing to say that we're, we're
probably going to be on par withthe last, the last couple of
years. You know, I would saythat the, the top end potential
was, was far more, early on inthe summer.
(23:02):
And then we just, you know, keptstaying wet, staying wet,
allowed some of that disease tocreep in and, and take our top
end off, you know, on, on my ownfarm. I had some yield numbers
in mind in early June and I wasout walking the field and I know
that's a dangerous game to play,but I've, I've probably trimmed
my expectations up on my ownstuff by about 30 bushel to the
(23:25):
acre since June. So
Todd Gleason (23:27):
Yeah. If I remember correctly, there are
about eight ethanol plantswithin an hour's drive of where
you are, I think. Yep. So yougenerally have really good
basis. Is that maintained orhave they backed off on because
of the size of the crop.
But but what are they tellingyou about how they view what's
coming to them this fall?
Shane Holtorf (23:49):
Yeah. So the interesting piece there is,
there is still a lot of physicalinventory out in the country,
both sitting in the elevatorshands and the farmers hands. And
so they haven't gotten veryaggressive on basis. You know,
the last couple of years in thistimeframe basis got crazy good
until we got into the guts lotof harvest. And, and I just
(24:12):
don't think we're going to seethat.
You know, we've been actuallywriting a lot of basis contracts
here lately just because wethink it's going to be a little
bit different than it has in thelast few years, you know, more
so to what we're carrying overfrom last year's crop than what
we're expecting on this year'scrop. The same could be said for
the bean side of things as well.
Todd Gleason (24:33):
So you're expecting to break how much?
Shane Holtorf (24:36):
On the basis side of things, you know, in this
general neck of the woods, we'veseen mid forties, pretty
standard for basis. And I couldsee us in the, in the gut slot
widen out to, and that's on thecorn side, somewhere around 60.
We see bean basis right now fromanywhere, from 70 to 85 under.
(25:00):
And, you know, I think we couldslide that, you know, close to a
buck probably during the gutslot of harvest. I really hope
I'm wrong.
But you know, we've, we've got alot of opportunity to chew it up
with, crushed plants and thatdemand has been strong. So I'm
hoping if we can get throughharvest, we'll see it rebound
relatively quickly.
Todd Gleason (25:20):
You'll feel pressure, I would assume, from
the North Dakota side notpushing beans out the PNW.
Right?
Shane Holtorf (25:26):
Correct. Yeah. I mean, they're was I see the
other day, they're a buck 60under on basis, and, you know, I
don't know what the rail freightto bring those down is, but it,
you know, it's going to coveritself if they decide to go that
route.
Todd Gleason (25:40):
Give me your assessment of today's USDA
reports.
Shane Holtorf (25:43):
Sure. You know, I guess the report is probably
about what what I expected here.Just kind of, you know, some
moderate changes. What'sprobably shocking to me is what
we've done post report on thetrade side. Before I jumped on
the call, I think we were upseven and a half on December
corn and 14 on beans.
(26:04):
And so excuse me, yield, youknow, we kind of talked with our
customers there in August thatwe believed that that would be
the largest corn yield that weprinted mainly to the disease
pressure. They had talked abouta lot of connections, Minnesota,
Illinois, other parts of Iowa,and it kind of echoed the same
(26:24):
thing. What shocked me probablythe most was tacking on another,
you know, 1,300,000 acres of,you know, anticipated harvest
there. So left the left theproduction, you know, relatively
the same in line with what themarket was thinking here. And
(26:44):
so, you know, this is a toughtime of year.
We're a lot more reliable andpredictable than the August
yield estimates. But, buttruthfully, I think we need to
wait for the combines to run to,to kind of help us hone that in.
You know, on the bean side,again, not a lot changed from an
acreage perspective or really ayield perspective. You know, as
(27:08):
we look at this, we sit with the300,000,000 bushel carry out,
which, which isn't overburdensomething, but it's, it's
comfortable. And, you know, sofrom our perspective, you know,
I think everyone's got the samethought is we'd love to start
seeing some flash sales in themorning from, you know, quote
unquote unknown to be able tostart chewing some of that up a
Greg Johnson (27:30):
little bit.
Todd Gleason (27:31):
Hey. Thank you much, Shane. I appreciate it.
Shane Holtorf (27:33):
Yeah. You bet. Thanks, Todd.
Todd Gleason (27:34):
Mhmm. Shane Holtorf is with Logic Marketing.
He is in Alta, Iowa. Joined ushere on Commodity Week. Our
thanks go to Shane along withGreg Johnson and Ellen Dearden
on University of IllinoisExtension's Todd Gleason.
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