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The October 16th edition of the Closing Market Report, hosted by Todd Gleason, provides an overview of agricultural markets, shifting consumer demands, and weather forecasts. Market analyst Mike Zuzolo discusses recent trends in the commodity markets, highlighting the influence of inflation, the value of the dollar, and new European export routes on crop prices. The program also features insights from CoBank's Brian Earnest, who explains how the increasing use of GLP1 medications is altering meat consumption, driving demand for protein-dense, leaner beef cuts and poultry. Finally, Eric Snodgrass offers an agricultural weather update, detailing a recent cold front across the Corn Belt, the upcoming harvest window, and the anticipated effects of a strong El Niño winter on both North and South American agriculture.

01:15 Ag Markets with Mike Zuzolo, Global Commodity Analytics and Consulting
07:53 GLP1s and Demand for Animal Proteins
10:59 Ag Weather with Eric Snodgrass, Nutrien Ag Solutions

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Todd Gleason: From the Land Grant University in Urbana Champaign, Illinois, this is the Closing Market Report. It is the 16th day of October. Coming up we’ll talk about the ag markets with Mike Zuzolo and the weather forecast with Eric Snodgrass. We’ll also hear a short snippet from today’s Chicago Federal Reserve agricultural conference related to GLP1s and how they are driving protein and red meat consumption in the United States, and we’ll do all of that right here on this edition of the Closing Market Report, followed up of course by Commodity Week on our home station that’ll show up on many of these radio stations too over the weekend. In Chicago, December corn for the day settled at $4.74 and a quarter, 3 and 3/4 of a cent lower. The March at $4.86 and a half, down 4 and a half, and May futures $4.93 and a half, down 4 and a half cents. November soybeans $12.61 and a quarter, a penny and 3/4 lower. January $12.75 and 3/4, down 2 cents, and the March contract at $12.84 and a quarter, down 2. Bean meal off $2.70, the bean oil 2 cents lower. Soft red winter wheat down 9 and a half at $6.60 and a half, and the hard red also December contract 9 lower, it finished at $7.04 a bushel.

01:15 Ag Markets with Mike Zuzolo, Global Commodity Analytics and Consulting
Todd Gleason: Mike Zuzolo globalcomresearch.com out of Atchison, Kansas, now joins us to take a look at the marketplace. Hi Mike, thanks for being with us.

Mike Zuzolo: Great to be back with you, Todd. Thanks for having me, and a happy Friday to you.

Todd Gleason: Hey, and thanks for joining the commodity week discussion which folks will hear on our home station in its entirety coming up. Many of these stations will carry it over the weekend. Yesterday afternoon when we talked, just a, an interesting and different kind of commodity week program this week.

Mike Zuzolo: Yeah, you know, I think we’re at a generational shift and that was what was so valuable for me to talk to Chip and Naomi about, um, because they’ve been around a long time like you and I have been, and it just feels differently what we’re going through right now. And you and I’ve talked a lot about the 1980s and President Reagan and Japan and their currency and how we’re trying to do the same or similar with China and get our trade balanced. And, and, you know, the currencies and the interest rates playing a big, big role in our commodity markets. And fortunately, that was the one piece of big good news I felt like this week. It didn’t look like it by the way we closed the week down, um, which I think was more fund rebalancing. But after the two big inflation numbers came out and came out hotter than expected, we actually saw the dollar make a top for the week it looks like, and maybe that gives the bond yields a look of a top for the week as well. So I’m, I’ve been very nervous, and we talk about this in more detail on the commodity week, been very nervous about the Federal Reserve at the end of the month and then right after that comes the midterm elections. And been very nervous about the dollar appreciating, uh, especially depending on how that election goes. And so it wasn’t all bad this week. So I liked the way the macro set up for the most part, along with the fact that we got the crude oil market back in terms of, uh, friendliness and, and putting some premium back in there.

Todd Gleason: Well, there is more premium back into the crude oil market. I do want to talk about the ag commodities directly though. What happened today and what has you watching things closely?

Mike Zuzolo: Well, the export sales probably were the final nail in the coffin. I don’t want to say nail in the coffin, but it is close to that end-of-the-month uh, uh, celebration we all know about in the holidays. Um, we had a 4% lower wheat export sale than the four-week average. Soybeans down 40%. Both the product markets were on the low end, if not on the bottom. This follows a disappointing crush which, well, you and I talk about on commodity week, and how that skewed by the harvest progress in in states like Iowa. But, but I think what we saw today on Friday is is something we’ve seen most of this week. And again, I think the funds who are very long the soy complex just decided to rebalance and let go of some of their longs, even though we’ve seen good export demand. Um, and from China, we’ve seen good Asian export demand on the corn. One piece of the puzzle, I think Friday that added to the wheat looking more like soybeans Thursday, we made a nine-week high in soft red wheat. By Friday’s close, we were hitting new one-week lows. And I think the big reason that was, was because there is talk in Europe that Russia is going to get a pretty successful alternative supply route set up on the export market for wheat. Go through the Baltics instead of the Black Sea. The numbers being thrown around are 3, 3 and a half million tons for the month of September, October. That gets you close to that, you know, 5 and a half million tons that we’ve been used to seeing from them. So I think that finally came in and just asserted itself and added to let’s go ahead and liquidate longs if you’re in a fund community.

Todd Gleason: Just to be clear, this is not the Arctic route that we’ve been worried about uh, across the…

Mike Zuzolo: Right. That’s right. It’s not the Arctic route, it’s the Baltic route.

Todd Gleason: Yeah, this is the Baltic route. Uh, has to be land-based or rail-based, I would think, too, correct?

Mike Zuzolo: Part of it is, yes, that’s exactly right. And I think this is where it feels and smells a lot like the Strait of Hormuz to me. And again, we we bring that up when it comes to what’s happening in uh, both those areas of the world and whether Iran and Russia really want lower commodity prices. I have no doubt that Russia wants to sell wheat, but I don’t think they want lower wheat prices or crude oil prices. I think they want to put pressure on the West. And, you know, well, you can see and hear more of that on the commodity week. But for me, I’m very dubious that they’re going to be successful in this, especially with Ukraine now ramping back up on their offensive tactics with drone strikes. So it seems to me that we’re going to be, it’s going to be a very tough winter for both those countries unfortunately.

Todd Gleason: Yeah, and just thinking about that because the Middle East uh tends to be their primary uh buyer for wheat, that is a Russia, and generally going straight south is well, the shortest route. Having to go to the west and then all the way around the outside of Europe, just a long haul. Uh, and there are a lot of costs that are involved both with freight uh as it relates to ocean freight and rail or trucking freight both. So we’ll, we’ll see how the basis reacts and what that actually means uh, for the price of wheat going forward. What else have you been watching uh, over the last week or so?

Mike Zuzolo: Yeah, I think the the market is starting to think more about the corn yield versus soybean yields again. If I’d have to guess, Todd, because we are seeing a situation where the corn did not take out last week’s lows, and it, and it closed while it was near last week’s lows, it didn’t take it out. While, as I said, the, the soft red wheat made a nine-week low on Friday, and the soybeans made a seven-week low on Friday. So that is optimistic. One of the things that I’ll be watching most closely next week will be the fact that the US corn price is still around $2.20 a ton in the Gulf, while Romania, the next cheapest that can compete with us, is around $2.70. Uh, Argentina is probably maybe just a little bit lower than that. Um, but you’re looking at France trading at almost $350 a ton. So, we closed this week with Paris futures at $8.50, $8.60, and Paris French cash at $8.85. Uh, we still have that huge difference that uh, I think we’re going to have to come to grips with at some point. And, and I think we’ll meet somewhere in between, but I think we need a wheat low first.

Todd Gleason: Thank you much. We appreciate it, and glad you were on commodity week, too.

Mike Zuzolo: You bet. Thanks for having me as always.

Todd Gleason: That’s Mike Zuzolo. He is with globalcomresearch.com out of Atchison, Kansas.

07:53 GLP1s and Demand for Animal Proteins
Todd Gleason: Well this morning the Chicago Federal Reserve hosted the Midwest Agriculture Conference. It kicked off with a session exploring demand for corn and soybeans, which also included a quick discussion of how GLP1s are driving consumer preferences as it relates to red meat. Brian Earnest is the lead protein analyst for CoBank. He was asked if his analysis shows new demand for corn being led by the poultry sector.

Brian Earnest: So, I do think GLP1 usage is playing into it, and I didn’t touch on that much, but we’ve, we’ve done a lot of work like thinking about is is usage going to continue to expand. I think I heard the the number last year was like 1 in 4 households has a GLP1 user uh, in the US, and a lot of those users are the decision maker for the household in terms of the groceries that they are buying. Um, what I think about, you know, is is occurring, uh, and we’re finally starting to see some good data on survey data on what GLP1 users are doing, what their dollars, what they’re spending their money on animal protein. Uh, chicken works very well uh with a a GLP1 user who is trying to reduce caloric intake, but also increase protein as a portion of their their caloric intake. So we need, you know, very, very protein-intense uh food items for for users. Uh, and also thinking about portion control is very important. Um, you know, what I’m I’m seeing in the data, it suggests that GLP1 users are willing to pay a little bit more for quality. So when we think about the beef side of the equation, they’re uh, they’re more receptive to a high-quality beef item, but they may not need a tomahawk ribeye, you know, to to satisfy their itch on on beef for the day. It may be a higher-quality ground beef item in a small 4-ounce portion. And this is where when you you talk about bigger beef carcasses, we’ve got more of that product going into uh ground format. But we’re also adding more fat to these animals uh, in the US. And if you don’t have the lean content to blend with that, I think that plays into why we’re seeing more imports uh, you know, from from beef outside of the US is we we have to fit this gap in terms of lean beef availability. Some of that plays into the GLP1 era and and what we’re seeing there.

Todd Gleason: Brian Earnest is an animal protein analyst for CoBank. He was speaking this morning at the Chicago Federal Reserve’s Midwest Agriculture Conference. He says as GLP1 usage expands among household grocery decision makers, consumer habits are shifting towards protein-dense, portion-controlled meals. Surveys suggest this specific demand for smaller, leaner, and higher-quality cuts is driving increased poultry consumption and necessitating more lean beef imports to blend with fatter domestic beef cattle carcasses.

10:59 Ag Weather with Eric Snodgrass, Nutrien Ag Solutions
Todd Gleason: Let’s turn our attention now to the global growing regions and what’s been happening in each of them. Eric Snodgrass is here. He’s with Nutrien Ag Solutions and Agrible. Hello Eric, thank you for being with us. We had so much to cover, let’s start um, here in the United States. We’ve had some rainfall across much of the Corn Belt over the last 24 hours or so. It’s also brought with it uh, cooler weather. That’s new and different. Tell me about what took place.

Eric Snodgrass: Yeah, we had our first big cold front of the fall come through, and uh, I don’t know about you, Todd, I have, I have 15 white pine trees in my backyard, and my backyard is now orange because all of those needles have fallen. So my son has got some work uh cut out for him uh later on this weekend or next week to get those things uh out of there. But anyway, yeah, a front came through, knocked our temperatures way back over where we’ve been, and uh, brought in a lot of drier air now. So this is going to dry out very quickly even after the rain we saw. And Todd, to be honest, it’s it’s not going to last long. We’re going to rebound in temperatures very quickly, but it’s going to be a chilly weekend. But we are going to see another pretty wide-open harvest uh window that’s that’s there now and it’s probably going to last for several days into next week. So this, this introduction of drier air and this cold front is our just typical fall setup. And we’ve got um, frost and freeze advisories all around us. Uh, I don’t know if we’re going to, I don’t know if we’re going to touch a freeze here. We might get down into the uh mid–30s, but uh, I know north of us and west of us are going to certainly get that uh first good frost of the year. But it’s it’s it’s right on time, Todd. Our typical first date is mid-October, and here we are having our first uh bout of mid–30s.

Todd Gleason: So I’m interested in the much drier air. I want to know what impact do you think that will have on the ability for producers west of the Mississippi River uh, and their uh, chances of really being able to run fast and hard as things dry out?

Eric Snodgrass: Yeah, I think they’re going to get the chance. But Todd, I’ll tell you something. I pulled up the data earlier uh, this morning from Des Moines, uh, just looking at a, you know, a central western Corn Belt city. And uh right now, when you look back since 1981, Des Moines is having its second driest year on record. You know what number one was? 1993. So they, you’re right, they have got to dry down across big sections of that area, and I think they’re going to get an opportunity to do that. And with the temperatures already rebounding into early next week, I think they’re going to also go back over to a, a situation where it’s going to be um, you know, warm enough to help all of that happen pretty quickly. But I do have a question for you, Todd. You know, with, with the wind that came through here, we had gusts at times in the 30 plus mile an hour range, and we’re not done with the wind just yet by the way. It’s still got some stronger winds coming through. You know, over in the western Corn Belt, some of those gusts were 40 plus miles an hour. And I’ve heard a lot of folks talking about just compromised stalk health late. I think some of that is because of all the rain, okay. We had three massive rainfall time periods, one in June, one in August, and one in September. But then, honestly, from from September 1 until October 15, so up until basically yesterday, that timeframe also was the record hottest for the same 45 days. So we kind of put a lot of extremes in terms of temperature and precipitation, and I’m wondering uh, you know, do, did we, with a wind that came through like that, did it knock the tops off the, you know, the stalks off? Have you, have you heard anybody report that?

Todd Gleason: So I haven’t heard anybody talk about that. But as you were discussing that I was thinking the bigger problem would be if ear drop took place.

Eric Snodgrass: Yeah, yeah. Right. So knocking the top out is one thing, you can still go get the ear. But if ear drop actually took place for some reason, that means you just simply are not going to get that yield. We’ll have to watch for it, I suppose.

Todd Gleason: What else is next in the Corn Belt? I do have a question too, which is here, things moved fairly quickly. A lot of corn is gone. Folks are going to want to do fall field work, apply anhydrous ammonia, those sorts of things. What do you have in mind for them?

Eric Snodgrass: Well, I’m mainly just worried about soil temperatures at this point because like I said, we rebound in temperatures pretty quickly next week. We might be back up into the 70s and low 80s as, you know, as early as midweek. So this got a cool weekend, but it’s not like here to stay. And the problem is, is this maintaining those soil temperatures down there between 50 and 55 is going to be challenging for us. I honestly don’t see us getting anywhere close to that until we start November. And it may even be a few days into November until we really get into a place where those soil temps are cooperative for that fall application. Uh, we will need some more moisture though at that time, too, just to do those operations. And while we do have a nice big long break in precipitation happening for us here, um, you know, we honestly, we need to get a couple of November early storm systems to come through to just help out with the soil moisture as we go into do that fall field work. So I think we’re going to have to be quite patient on both accounts, uh, and it may take us all the way to the end of the month before we get what we’re kind of looking for there.

Todd Gleason: University of Illinois recommendations 50 degrees and cooling before the anhydrous rigs run. Do we know anything more about winter yet?

Eric Snodgrass: Well we do, NOAA released its big winter forecast, and it is uh, it’s as El Nino as you could ever ask for. And yes, this El Nino is still breaking all the records, it is still an absolute powerhouse. Honestly, Todd, it’s in a class of its own, which means, you know, yeah, I could look back at all the big historic El Ninos and make a case for it, but it’s going to do its own thing. And right now, I’ll tell you, here’s the big thing for North America. If you’re in the northern tier of states, so think Montana, the Dakotas, Minnesota, Wisconsin, I’m concerned that it’s going to be too mild of a winter and too dry. I think the Cascades and the Rockies are not going to have as much snow, the northern Rockies, versus the Sierra Nevada and the southern Rockies, and the whole southern tier of the US having storm system after storm system after storm system for, for months on end. So what I think, Todd, is that, yeah, we’re going to knock drought way back. It’s going to probably go from where it is today, about 75%, down to maybe 30, 35% by the time we get into April. But the thing about it is where the drought will linger, and I’m, I’m concerned about the Canadian Prairie, the northern tier of the US, uh, going into a winter without much snow and without much um, way of, of moisture. So that’s going to be the biggest concern I think across the United States.

Todd Gleason: So a long-term drought in that western part of North America continues. What about in South America?

Eric Snodgrass: Well, South, this is what’s odd, Todd. I, my early predictions were late monsoon, not an early monsoon. It’s going to be problematic. And I was right, it hasn’t started yet. But it’s still rained throughout all the way to the Center-West where Mato Grosso is. And how it rained is big cold fronts that don’t just come up out of the south and stop when they get to Paraguay or maybe Mato Grosso do Sul, they’ve raced all the way north and hit the Amazon. So it’s been cool, it’s been a cool spring because of how far north those fronts have made it. But it’s brought rain, and as a result they are planting fast across the Center-West, they’re planting quickly across the southern growing areas too. Now, the longer out I look, Todd, the more I see the Amazon struggling with moisture for the next few months. And that is really one of the biggest source regions for the moisture that comes through and makes it rain on the Cerrado. I’m not calling for any sort of a, you know, major deviation from yield on it, but I just don’t know that their monsoon is really going to behave as it typically would. But with everything in Brazil, it’s always the same thing. I could predict and forecast all day long, but when it comes to Brazil it’s a prove it type situation. You got to prove to me that there are actually problems before I ever believe anything I see in any of these weather forecast models.

Todd Gleason: Are there actually problems in southern Brazil?

Eric Snodgrass: I would have thought because of how wet it’s been, but they’re still planting, and no one’s complaining. So I, I just don’t get it, Todd, I, I sometimes wake up and I’m like, oh yeah, well, I see this, this, and this, this is what we should expect. And uh, they’re like, nah, we’re going to go ahead and just plow right through this and get it done. And maybe it’s just, maybe I just need to rework the way I think about Brazilian agriculture again and again and again, because I keep missing it and assume there are problems when they don’t show up.

Todd Gleason: Anything else before I let you go?

Eric Snodgrass: I would just say again, this El Nino is punching way above its weight class, and it could give us a pretty wild ride this winter. And Todd, people are going, well, how much snow are we going to get? And I’ll be honest with you, man, I have no idea. All I will tell you is most of winter will be mild for us, but when it decides to get cold this winter, it will be sharp and it’ll be severe. That’s what El Ninos are known for. So let’s get prepared for that.

Todd Gleason: Thank you much, Eric. We appreciate it.

Eric Snodgrass: Yeah, you bet.

Todd Gleason: That’s Eric Snodgrass. He is with Nutrien Ag Solutions and Agrible, joined us on this Friday edition of the Closing Market Report that came to you from Illinois Public Media.