Speaker 1: From the Land Grant University in Urbana Champaign, Illinois, this is the closing market report. It is the February 2026. I'm Extinction's Todd Gleason. Coming up, we'll talk about the commodity markets with Mike Zuzlow. We'll look forward to next week's discussion in Washington DC about the farm bill, and we'll talk too with Eric Snodgrass of Nutrien Ag Solutions on this Friday edition of the closing market report from Illinois public media.

March corn for the day settled at four thirty eight and three quarters, five and a half higher. The May at $4.48 and a half up a nickel, and December at $4.69 and a half, 2 and a half cents higher. March soybeans at $11.57 and a up 9 and a half cents. November, three quarters higher at $11.28 in a quarter. The March soft bread winter wheat, 19 and a half cents higher.

It settled at $5.91 in a quarter, and the hard red March at $5.72 in three quarters finished 21 and a quarter since higher on this Friday afternoon. Mike Zuzula, globalcommresearch.com out of Atchison, Kansas now joins us to talk about an interesting marketplace for the day. Looks like the market's thinking there's going to be an awful lot going on in the world over the weekend. What is it that drove the price of wheat higher today?

Speaker 2: Yeah. You're right, Todd. The the week had until Friday when we saw first notice day and end of the month come in and some, key developments in the world news and geopolitics had been still on a course of mostly domestic fuel policy and, you know, some whispers about the EPA and what they could send to the Trump administration and the White House and later in the week. And this was interesting because Reuters broke a story about the idea that the waivers for ethanol, specifically, may be only cut in half as far as the big refineries only getting half the waivers and having to produce the other half physically is is what they're thinking. And before that story broke, I was sending a chart of d six RINs to clients and subscribers saying, we're at almost a two year high on d six RINs.

What do they know that we don't know? And that that kinda matched up at the end the week. But then Friday hit, and it really was geopolitics. And it really came in strong with what we've talked a lot about the crude oil and the wheat market, that strong price relationship, positive price relationship between the two Really founded upon a surge, a one year high actually in soft red wheat was made on Friday and and really founded upon what seems to be a breakdown in US Iran negotiations. And, also, a fresh war that kinda popped out of nowhere if you ask me, and it's between Pakistan and Afghanistan.

And and one side's quoting it as, quote, an open war. So geopolitics ruled the day on Friday. End of the month probably saw a lot of short covering. I'll be interested to see the commitment of traders report even though it won't reflect the later part of the week.

Speaker 1: Okay. So what does that mean about Monday, and what will you watch?

Speaker 2: Yeah. The big thing is Friday was wheat and crude lead and the dollar weaker joining the stock market while the precious metals continued the sharp higher move and making close to new monthly highs in both. And so that sets us up for the idea that the the dollar is not a safe haven if The US does go ahead through either the proxy of Israel or they both together attack or do something militarily against Iran, then I think you have the idea then that this is probably just the beginning of short covering because it it probably adds to and historically speaking, I think this is valid, adds to the idea of a more of a regional war, especially given that Russia and China are heavily involved in in Iran and, obviously, in the Black Sea. So it's heavy commodity areas that we're talking about.

Speaker 1: Okay. So from recent wars, the Ukraine Russia war, the beginning of that, this drove the wheat market really high, but that may have been because Russia is such a player in the wheat market. The are there any similarities here that would continue that kind of drive higher, or or maybe it's just crude oil that's the problem?

Speaker 2: No. It's interesting you talk about this because I'm gonna be doing a blog post this weekend talking about exactly that. What what does Russia have in common with wheat and crude oil? And it's that that's what's funded their war. And not only that, but the dollar ruble became so important after 2022.

And then more recently, the sanctions became more important, and and that was not, you know, open economics. That was, you know, a policy move as well. So we had to figure that one out. But that's why I think since early twenty twenty five, we have had such a strong positive price relationship between the two because sanctions have tightened more, giving more credence to the upside potential in wheat and crude. But at the same time, as those sanctions were put in place, the ruble continued to drop towards the dollar.

So your answer and and point you know, spot on as you usually are is, what does the ruble do in the midst of all this? Does it stay steady and stronger like the Chinese currency? Because they're not directly impacted, and it's more what's happening in The Middle East. And if that's the case, if the, you know, the the Chinese currency is at mid twenty twenty three levels, and if the ruble and the Chinese currency stay strong, I could see why the dollar would remain weak, and therefore, the commodity upside would be probably greater.

Speaker 1: Okay. So something we will have to watch and something I'm sure we'll take up in more detail when you're here on Tuesday of next week at the Beef House.

Speaker 2: Oh, I can't wait. I'm so excited. We're we're watching the weather, and, that's the only thing that's gonna hold me back because I can't wait to get over there and see all you folks.

Speaker 1: Well, it looks like it's gonna be rainy, but but only rainy. So I I'm hopeful that we have a great day. It's it should be fantastic. Anything else before I let you go?

Speaker 2: No. I think that'll do it for today, Todd. Have a great weekend, sir.

Speaker 1: Oh, you too. That, of course, is Mike Zusolo. He's at globalcommresearch.com out of Atchison, Kansas, and will join us at the Beef House for the All Day Ag Outlook next Tuesday. You can too. You need to purchase your tickets, though, at willag.org, willag.or University of Illinois Extension's Todd Gleason.

Jonathan Kopp, as policy specialist with the FarmDoc team, the College of Agricultural Consumer and Environmental Sciences at the U of I, now joins us. Hi, Jonathan. Thanks for being with us. Next week, the house of representatives will take up a farm bill. I'm hesitant, I guess, to call it a farm bill.

It's been called a skinny farm bill. What is it? What kind of legislation are they working with?

Speaker 3: I mean, I I don't think that I think you're right to struggle with this. I don't think there's any way this can can can be considered a farm bill considering your what they did in reconciliation last year. And this is this is largely and unfortunately, a lot of things that were not a priority for reconciliation, that they're basically extending a bunch of authorizations of important programs and policies, right? Things like rural development, obviously research and so forth. So, but it's certainly not a farm bill.

I would say my biggest concern is not as it's not a farm bill, but we're not fixing the problems they created in reconciliation that we've been talking about things in crop insurance, things in Title I, the commodity programs, those are not being fixed. They are not, I don't think incorporating the absolute set of real problems staring down farmers right now, such as the tariff and market challenges, the vast uncertainties that the president has created with the Supreme Court knocking down the tariffs and whatever happens now. So it seems to me, if to work on this legislation in Congress, it should be focused on what is really a set of concerns at the moment. One of which is the conservation reserve program, which I think you want to talk about. But to me, yeah, I think calling us a farm bill is a real disservice to everybody.

And I'm afraid this is more of a political effort to avoid having to deal with or talk about a farm bill in the upcoming campaigns than it is addressing problems and policy issues.

Speaker 1: Let's name it an ag policy addendum. I think that's what

Speaker 3: that that that's what

Speaker 1: I'm gonna call it, an ag policy addendum. So what is in the ag policy addendum? What things are they taking up?

Speaker 3: Yeah. I mean, it's mostly so as you know, in a in a farm bill, right, you have this huge undertaking in which you're reauthorizing programs. You're hopefully making adjustments to policies based on what we've seen the last five or six years and what we're concerned about or what the issues are at the moment. Really what this is, is Congress hasn't passed a full farm bill. In reconciliation and the one big beautiful bill act last year, they cut SNAP by $200,000,000,000 They doubled farm subsidy payments.

They made some really problematic concerns in crop insurance or changes in crop insurance. And then they left everything else that would be in a farm bill to the side because they, for whatever reason, they didn't take it all up in reconciliation. And so these are all the things they didn't do or deal with in reconciliation last year. And so that's things like the farm credit programs, the FSA loan programs, the rule development, and most of those are appropriated. And so the authorization dates, they're changing the authorization dates, right?

So moving everything to 2031, like they did with subsidies and so forth last time around or last summer. So that's mostly what it is. There's some concerning provisions in there, like for example, inexplicably, they're taking a billion dollars out of the environmental quality incentives program, which is the most oversubscribed conservation program at a time of real economic stress and challenge for farmers. Don't understand why you would do that. They're not looking at changes in the conservation reserve program to help with these challenges in uncertain times.

But they are reauthorizing the authorizations, which I don't want to downplay the importance of that. I certainly don't downplay the programs. Much of that includes research title. But the appropriators can fund those programs even without the changing the date. So it isn't as if those programs go away if they don't pass this.

And frankly, I don't know if there's a path through congress for this bill anyway.

Speaker 1: Well, that was my next question, really, and you just answered it was that without the other side of the aisle, which may be difficult without the snap appropriations, can you push a farm bill even an addendum through in any form, even if it's just about changing dates?

Speaker 3: Again, I don't know. I don't I mean, what we've seen out of congress does not give us much much optimism here. There's not a lot of confidence that Congress is going to deal with this in an election year with the tariff problems and the appropriations challenges and so forth. So it's a shortened calendar. It's a more difficult legislative environment even than it was last year, which is extraordinarily difficult.

So there's not a lot of time. There's not a lot of political will. We have a huge campaign and a huge election coming up with a lot of controversial issues swirling around. It's tough to see how this gets, too much traction. Then you layer in what you just referenced, which was the reconciliation last year cut snap by $200,000,000,000 and doubled farm program payments.

It broke the car. It violated the cardinal rule of farm bill politics. So I don't know that there's I don't know how much, you know, cooperation and so forth there is to do anything right now. And so it's again, it it just raises more questions than it answers.

Speaker 1: And and let me ask a secondary question about that cardinal rule because, it is politics, and it could be divided republican democrat, and that's how it will be divided in the votes. But this is really farm versus the, snap issue, and that's what, 40 house representatives in agricultural districts? It's an extraordinarily small number versus and then versus the rest, which be Republicans and Democrats both that don't have as much invested in the ag side.

Speaker 3: I mean, I don't I struggle with with that a little bit because it, again, we're this isn't addressing issues even for farmers. So I I I don't know, you know, what is the sort of end game with this legislation. I do agree that the cardinal rule was built around this idea that there was a coalition and that coalition spanned the farm, you know, support section farmers, or those farmers that receive benefits from it. And it spanned the challenges around conservation and natural resource issues and expand food assistance for rural communities all the way up to cities. So, right, this is a pretty big coalition and it was successful for fifty years.

And so as you say, in politics, right? And who knows? We're in a sort of uncertain, unusual political environment. But in general, if you break a coalition, if you sort of go against the the cardinal rule that holds the coalition together to get you the votes and deals with broad constituencies, that's why the coalition works. When you when you break that, then that that leaves, you know, who to your point, who are your allies?

Who who wants to vote for this? You know, what what areas are what areas are providing the momentum, the the political pressure to get things done? Otherwise, you know, you're you're in a you're in a political deficit, I guess is one way to think about it.

Speaker 1: Jonathan, thank you. Yeah, that's Jonathan Coppas. He is an ag policy specialist in the Department of Agriculture and Consumer Economics here on the Urbana Champaign campus of the University of Illinois. Joined us on this Friday afternoon edition of the closing market report from Illinois Public Media. If you can stay with us for the whole hour, you'll hear all of our Commodity Week programming coming up in the second half hour.

If not, it's up online right now @willag.org, and many of these radio stations will carry it over the weekend while you're at willag.org, and I think you should go there this afternoon. Do pick up your tickets for the all day agricultural outlook. That is Tuesday at the Beef House in Covington, Indiana. Eric Snodgrass will be in the house from Nutrien Ag Solutions to take a look at the weather forecast on that day. Speaking of in the house, he's not here in Champaign County today, but rather in San Antonio, Texas in the house at the Commodity Classic where he's speaking.

Hey. Thank you so much, Eric, for taking time out of a really busy schedule today to talk with us. What's the weather like there in San Antonio?

Speaker 4: Well, Todd, I I started off the week in Fargo, so it was minus five when I left to come down to San Antonio. I got there. It was 92 degrees. So we set a actually, interestingly enough, we had our first 100 degree reading in the Continental United States down in Southern Texas yesterday. So it's hot.

Like, I I I was sweating. I called my wife. I'm like, I'm not let's not jump over spring. I I I I really wanna I'd like to transition before we get into this kinda heat.

Speaker 1: Well, let let's do talk about that transition. And the heat that you've got, that reminds me that it's not been hot, but it's been dry. I guess it's been kind of warm too, and we'll be warm here today. But let's talk about the really dry conditions here and the upcoming rainfall next week. What does it look like from your viewpoint?

Speaker 4: I mean, Todd, from my viewpoint, it's huge. I mean, all I've been talking with you about since, I mean, last August is the fall drought, the overwinter drought, and how we just have to be patient. How many times is it? We just gotta be patient. Well, patience is we're about to run out of it, and the atmosphere is about ready to deliver.

So this is amazing. Right now leaving Africa, I'm talking like just South Of The Sahara, The jet stream pattern that's gonna hit us is already cranked from there through the Arabian Peninsula, over the Himalayas, into parts of China. It's left the West Coast excuse me, the East Coast Of China, and it's on its way. And that's a lot of momentum. And what it's gonna do is it's gonna start to kick off systems that come out of the Southern Plains and come straight to the Delta, Mid South, Midwest.

And before we get there, I mean, that's soon. But before we get there, we've got a little system sneaking through on Sunday into Monday that's gonna spread a little bit of snow for parts of the of the state that I think are north about I 72. Then you're south of that, it's gonna be rain. But that's not the main event. The main event is following.

And even though the drought monitor right now shows 75% coverage in the Lower 48 for abnormally dry and above, think I we're gonna wipe a whole lot of that out in the next thirty days, starting with the Delta Region, parts of like the Arkansas Valley, Tennessee Valley, the Red River Of the South, and then the Mississippi and Ohio. So get ready. I I think you're gonna see a lot of storms, a lot of rain, and it's coming here.

Speaker 1: So the rainfall in East Central Illinois won't alleviate the drought just yet, but it'll begin the process, and you're

Speaker 4: really That's right.

Speaker 1: You're really thinking that as you look forward through the springtime that we'll get enough rain to make it all up?

Speaker 4: Well, Todd, that's the always the thing I try to start off with at your all day outlook. I'm like, alright. Are we gonna have tight windows or not? I do see two pretty active weeks coming up here. The question is, can we get into April and have things back off a bit?

Now to be honest, I'd love to break the drought in March and then get back to normal in April rather than what we did last year, which was crank everything up in April, cutting our windows down pretty tight, and and it didn't get that warm. Well, this go around, I think what we're gonna see is March is gonna be mild. The March, I'm worried about being a little cool. But some of my analogs, which are years where there was an El Nino that developed in spring and summer, they actually we actually had more open windows than average. And so what's interesting is all of the models are saying prepare for a wet spring for Eastern Corn Belt and Us.

And my analog's like, it's not that bad. I I think we're gonna find windows to get things done based off of what analogs based on El Ninos typically do. So there's a lot of competition, and I have to figure it out before I talk to all your folks on Tuesday.

Speaker 1: Alright. So we'll see you on Tuesday, and we'll talk more about that competition. But can you give us a little peek into what you think things might look like?

Speaker 4: Yeah. I I mean, based on what I know right now, if the Northeast Pacific goes warm and the Atlantic is warm and the Equatorial Pacific is warm, every long range model is going to predict above average precipitation for us all summer. Now that brings its own set of problems like we saw last year with fungicide application hitting down that tar spot in Southern Rust. You know, we're gonna have to think through that process. But if the forecast holds and it is warm in the oceans like I suggested, then we're gonna have all the heat in the Western Side Of The United States.

We're gonna see a whole bunch of ridge riding thunderstorms all summer, and it's gonna be one of those stormy summers. Plus El Ninos typically correlate with near average to slightly cooler than average summer weather. So, Todd, here's the thing. I'm at Commodity Classic. Remember what I told everybody last year at this time?

Oh, we're all worried about drought. We're worried about drought. We're about drought. All the models showed drought, and then it rained like mad. Now listen.

This is not how we forecast, but I'm gonna tell you, all of the models right now show wet, and I have to just wonder, like, are they gonna burn me again? And I need to be watching out for something else. So I am jaded and skeptical, and I I have lost a lot of confidence. You know, there's no swagger in my step as I wander around the country forecasting weather because it's just I I'm not sure yet. This El Nino's gonna be a tricky one to figure out.

Speaker 1: Alright. Well, you sound like a journalist, a little cynical about the whole thing. That that's the way I am each and every day of my my existence. Anything else in The US before I turn your attention to South America?

Speaker 4: No. I would just say the last holdout's probably gonna be Nebraska North. I think they're gonna be the last to get the moisture in there, desperate for Nebraska.

Speaker 1: Okay. Now South America, what do you see there?

Speaker 4: Again, another forecast where we were picking up on a dry signal in Southern Brazil that could have lasted a few weeks. And I wake up this morning to see the new model runs, all of the models. And they're drier for the next ten days, not terribly hot, but drier. And then they're trying to bring in plenty of rain in week two to these dry spots. So every time I think I see a problem, the atmosphere just comes in with corrective action in Brazil.

But remember, it's gonna be March or not March. Excuse me. April into May and early June that's gonna decide the size of their corn crop down there. And I still see some uncertainty with some problems possibly on the drier side of average south and on the wetter side of average north for their safrinha corn. And we'll get that news right about the time we got a crop established here in The States, so it could be something to watch going into our spring.

Speaker 1: Okay. Have fun there in San Antonio. I know you're speaking today. Yeah. Hope that goes well.

And then we'll look forward to having you at the Beef House in Covington, Indiana. Sometimes you try out a new speech with us. Is that gonna be the case?

Speaker 4: I'm gonna

Speaker 3: be sure.

Speaker 4: I've been reading a good book. I would like share some of the stories out of it. But to be honest with you, the only thing on my mind is I had to give up my tickets tonight to the Illini Michigan game because of this. So I'm bummed about that, but I will hopefully, when I see you on Tuesday, we're talking about a victory there.

Speaker 1: Indeed. Eric Snodgrass is with Nutrien Ag Solutions and Agrabal joined us on this Friday edition of the closing market report from Illinois Public Media. If you can stay with us, our commodity week program is up next on our home station. If not, you'll hear it on many of these radio stations over the weekend, and it's up online at willag.org, where right now you can also still purchase your tickets for Tuesday's all day ag outlook at the Beef House in Covington, Indiana.