November 19, 2019

Good Morning,

The markets look to stage a Turnaround Tuesday after reports out yesterday morning on CNBC that President Trump was not prepared to rollback US tariffs on Chinese goods. Additionally, it has been reported that the two sides continue to butt heads over the size of US Ag purchases. The word that we are getting is that President had not made a final decision on the tariffs; however, the situation remains fluid with negotiations on a Phase 1 deal occurring on a daily basis.
Prices on the board continue to look cheap and should help to entice some activity in the export markets. For the second consecutive day we have a sale of corn to Unknown Destination reported on the daily system and beans out of the Gulf are the cheapest in the World. With US grain and soy now much more competitively priced we have begun to see business pick up. Yesterday we saw a sale for 132 TMT of corn to Unknown and then again today we got another for 191 TMT of corn to Unknown Destinations.
Now that the US harvest is nearly complete, the pro’s focus will now shift to South American weather and at least for now the forecast looks pretty favorable over the next couple of weeks. The major models remain in good agreement in calling for an active wet weather pattern settling in for the balance of November.
The December corn board is currently trading 27 cents below this same date last year. Cash prices this fall have been much better than last fall and its all due to basis levels across the Midwest. This is one big reason that I believe producers should be locking in basis contracts for fall and spring/summer delivery. Any move higher in the CBOT is going to result in weaker basis levels.

Corn is up 3 and soybeans are up 4 to start the day.

Have a Safe Day

Garry Gard
920-348-6844
ggard@didionmilling.com

November 15, 2019

November 15, 2019

Good Morning,

Corn is down 2 and soybeans are up 4 to start the day.

More back and forth talks about the US and China, and more of the same coming out of the White House. Comments that they are getting close to a partial deal continue to be the talk, but still no deal.

The decision by China to allow US poultry into the country had to have helped, lifting the ban from 2015. If the US government is feeling the doors more wide open a trade agreement is much more likely. Unfortunately this has nothing to do with more free trade, and everything to do with rampant food inflation brought by AFS.

I still believe that we are along ways away from any deal getting done that would significantly support US grain markets. In my opinion, the Chinese still hold the key to getting a deal done with all the pressure on President Trump.

South American weather has been very favorable with rains moving across Brazil and Argentina which is very welcome. There are only small pockets of Argentina and North Eastern Brazil that remain dry. This should support their intentions to plant more corn and beans than last year which will continue to put pressure on US exports.

Forecasts locally for the next week look favorable for harvest progress with slightly warmer and dryer conditions in the forecast thru next Thursday.

Have a Safe Weekend!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 13, 2019

November 13, 2019

Good Morning,

Prices over at the CBOT were a little lower last night with follow-through buying absent after the pros were remained in the dark on any new detail of the Phase 1 trade agreement. Corn is down 2, soybeans are down 1 and wheat is down 4 cents.

Radar shows more snow moving out of the western Corn Belt this morning. Accumulations with this system don’t look to be especially heavy and will likely melt quickly with temperatures expected to moderate early next week. Mother Nature looks like she will cooperate into early December and allow harvest to get back on track. Corn harvest last night was reported at 66% complete for the US compared to the 5 year average of 85%. Wisconsin came in at 30% compared to the 5 year average of 65%. This is the third slowest pace for corn harvest on record, with the rates across the upper Midwest and Plains running well behind normal rate.

President trump offered no details on the trade situation in yesterday’s speech which left traders with no direction on the trade front. Fundamentals will be the trade for now as we are still dealing with a 1.91 billion bushel carryout.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 12, 2019

November 12, 2019

Good Morning,

Overnight corn and beans were unchanged after yesterday’s selloff of 14 cents in soybeans and 4 cents in corn. The markets were under heaving fund selling yesterday with traders monitoring comments from President Trump. The markets closed at their lowest level since the September stock report. The USDA’s November report removed most any chance of bullish surprises with acreage and yield. One bit of hope to hang on to is the correlation to the direction of the Oct-Nov yield change compared to the Nov-Jan yield change. (chart below)The problem with this is that we need to wait two months for the data and it may be too late for the market to react. Once we get into January the trade will start to focus on the coming years acres and production instead of what is behind us. With ta 167 bpa yield and planted acres at 94 million, next years carryout looks to be right in line with this years at 1.906 billion bushels. Keep in mind this is using a 167 bpa, which is what we are using this year with poor growing conditions. The more this increases, the less likely we are to see this corn market at the current levels next year.
I would advise producers to take advantage of historically strong basis levels for the crop they are harvesting now and start to lock in some of next years production at current cash levels.

NASS crop progress will be out later today with expectations for corn harvest to be 65% complete and soybean harvest 85% complete. Drying issues continue with the shortage of LP and the crop not drying down much in the field with later planted varieties. This reminds me of 2009 only on a larger scale when harvest drug into December.

The trade will be awaiting President Trump’s update on the Phase 1 deal with China later today.(11am central) My guess is that he would be positive about the trade deal, but not commit to anything. Any negative comments from the President today could be volatile to the markets.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 11, 2019

Good Morning,

Happy Veteran’s Day and Thank You to everyone that has and still does serve our nation!

Weaker markets to start the week off with corn down 2 and soybeans down 9.
The trade negotiations with China appear to have slowed again over the weekend as president Trump denied that he has agreed to rollback tariffs.

With Fridays report behind us and no major surprises in the USDA’s numbers from the October report, traders will now have little fundamental news to move the markets for a couple months. The weekly progress report will be delayed until tomorrow due to Veterans Day. Trade is looking for tomorrows report to show 65% of the nations corn and 85% of the nations soybeans harvested.

There are no major weather changes in the 1-5 day forecast for Brazil with rains still expected to help replenish the moisture profiles across the central and northern soybean growing regions.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 8, 2019

Good Morning,

Quiet markets to open the day as traders await the 11am WASDE report. (Estimates listed below) Heading into today’s report the spec funds are carrying a rather large short position in corn and long position in soybeans given the private estimates for today’s report. This could set up for some major reversal trade if today’s numbers come in near the private estimates. I personally think today’s report is going to show a higher yield in corn and unchanged harvested acres. While the major focus will initially be on yield and acres, the final ending stocks number will set the tone for trade after today up to the January report. If ending stocks are not lowered (due to decreased production or increased demand) we will see a lid on the market at least until the next WASDE report. (January)

China made headlines yesterday when it stated that it agreed to a deal with the US to roll back many of the tariffs imposed during the trade war. That suggests that China is trying to use the media to leverage the trade talks, putting the pressure on the US to agree to such in order to get phase one deal done. President Xi knows that President Trump needs a political win in the upcoming election in the face of the House’s impeachment inquiry and knows that Trump would not want to be seen as the one who failed to get the deal done.

Corn
USDA November Ave. Estimate USDA October
Production 13.661 13.643 13.779
Yield 167.0 167.5 168.4
Harvested Acres 81.815 81.455 81.815
Ending Stocks 1.910 1.817 1.929

Soybeans
USDA November Ave. Estimate USDA October
Production 3.550 3.510 3.550
Yield 46.9 46.6 46.9
Harvested Acres 75.626 75.422 75.626
Ending Stocks .475 .428 .460

Be sure the check back in after 11am for today’s numbers.

*We are currently NOT discounting or rejecting for vomitoxin*

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 5, 2019

Good Morning,

The corn market it trading 2 lower and soybeans are 3 lower this morning as trade continues to position ahead of Fridays report. Funds are currently short 102,000 corn and long 74,000 soybean contracts.
Last nights crop progress report showed US corn harvest 52% complete compared to 41% last week and 75% on the five year average. Wisconsin came in at 21% complete compared to 51% on average. Soybean harvest was reported at 75% complete compared to 87% for the five year average. Wisconsin came in at 62% complete compared to 85% for the five year average. Favorable weather this week across the US should bump both of these numbers significantly by next Monday.

Brazilian soybean growers have planted 46% of the estimated area in the 2019/2020 crop, below the level of 60% seen last year. Despite the slower pace of planting compared to 2018, soybean planting is above the five year average of 43%. Brazil will harvest an estimated record 121 million tons of soybeans this year after increasing planted acres by 1.3% to 90 million acres.

Positive news this morning is that trade talks are reaching the critical final stages of a “Phase 1” deal, but both sides are doing some last minute haggling to benefit their side. While these talks and negotiations are not new, the progress definitely is. My personal opinion is that the Chinese hold more power in these negotiations at this point that President Trump. I think they can wait him out thru the next US Presidential election before they have to give in. If he wins the next election then they come back to the drawing board. If he loses (which would most likely happen without him reaching a deal), then they get someone new to deal with.

If you are going to be short on space for fall bushels give us a call to find out what great alternatives we have to paying storage.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 4, 2019

Good Morning,

Lower in corn and higher in soybeans to start the week. Corn is currently down 3 and soybeans are up 5. Harvest pressure is weighing on the corn markets as producers made decent progress over the weekend. Progress is expected to reach 55% complete over eth weekend as there were no major weather issues across the Midwest to slow down the farmers. The five year average for this date is 74%.
Fridays WASDE report will be the focus of most traders this week as they debate where the USDA will put yield and harvested acres. This will be the agencies last report and last chance at an adjustment until the final report in January. One private analyst on Friday estimated the corn production at 13.911 billion bushels, up from their previous estimate of 13.887. They also increased their yield to 170.0 bpa, up from 169.3 last month.
Support in the bean market is coming on the heels of Bloomberg reporting that President Xi of China is going to schedule a visit to Washington DC to meet personally with President Trump in the next couple weeks. The thinking is that the purpose of this visit is to sign the Phase 1 agreement.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

November 1, 2019

Good Morning,

Markets are slightly firmer to end the week with corn up 1 and soybeans up 4 to start the day. Yesterday’s export sales report showed corn in the middle of the range of expectations but expectations are low with the trend of lower weekly volumes. US corn continues to lag South American offers in the November thru January time slot.
Weather forecasts remain colder and wetter for the first half of November with the second half showing normal temperatures and near to below normal precipitation.
One week from today the USDA will issue its last Crop Production and Supply and Demand report for the year. Traders and producers are hoping for a drop in yield and harvested acres in this report to support and possibly give the market a little life. It is interesting to note that in 21 of the last 28 November WASDE reports, the trend in yield has been to follow the October report. (Exp – If the October report had an increase in yield, the November report would also have an increase) Based on early reports from the fields this year I would not be surprised to see an increase in yield next Friday. We continue to receive reports locally and across the Midwest that yields are much better than expected.
I would advise producers to take advantage of the historically tight basis levels we are seeing across the Midwest to get some basis sales made for November thru July. Lock in the basis levels and price it out when the CBOT breaks out of the current sideways trend.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

October 31, 2019

October 31, 2019

Happy Halloween, Merry Christmas,

Not sure what we should call today with the snow flying like its December 30th. The markets are weaker this am with corn down 5 and soybeans down 4. A lot of the pressure is coming from news that Chile has cancelled the APEC meeting that was supposed to take place in November. This is the meeting where Chinese president Xi and US President Trump were to sign a phase 1 agreement. Rumors this morning are that Chinese sources are suggesting a long term agreement with the US is doubtful unless Trump rolls back tariffs. The White House says that they still want to sign the agreement in November but an alternative meeting sight or date for the signing is still unknown.
Producers that have been in the fields and have grain dried in your bins should take advantage of these “non-harvest” days to move corn to town on any fall contracts you may have. This will keep you from battling harvest lines in the coming weeks when everyone is in the field and trying to move grain to town.

While it may seem bad right now, here is a reminder that it can always be worse! (North Dakota 3 weeks ago.)

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com