June 18, 2018

Good Morning,

Great weather and trade wars continue to take their toll on the markets heading into this week. The forecast fo the Corn Belt features continued heat early this week before the front stalls over the Midwest bringing rain from Nebraska to the Ohio River Valley from midweek onwards. The heat that we saw this weekend will be pushed south with cooler Canadian air ushering in more seasonal temps across the Midwest.
Late on Friday, China retaliated by applying a 25% tariff on a slew of US AG products that included meats, dairy, soybeans and grains. The response was expected after China provided the US frequent warnings of its intentions following our own announcement of tariffs earlier in the day. Subsequently, China’s offer to buy another $70 billion of US Ag and energy goods is now off the table and US – China trade negotiations will have to restart from scratch.
Anyone looking for a rebound in the markets to make old and new crop sales before harvest may have run out of time! The weather has been just about ideal and crop conditions will remain high in the G/E category. The only bump that we can hope for right now is the US working out its trade issues with China to increase demand.

Have a Safe Day!

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

June 15, 2018

Good Morning,

The markets are sharply lower again this morning with the expectations that President Trump will announce the implementation of new tariffs on Chinese imports today. There is also talk of a second list of tariffs that are expected early next week if the Chinese retaliate. With these announcement’s coming today, it is expected that the Chinese will retaliate with their own list of tariffs. It is expected that soybeans will be on Chinas list of goods.
Mexico is considering striking a $4 billion annual import of US corn and soybeans if President Trump escalates a trade spat with new tariffs on goods from Mexico.
After yesterdays close, the funds are reported to be long 1700 contracts of corn and short 12,000 contracts of soybeans. They have liquidated 176,000 contracts of corn and 102,000 contracts of soybeans in the last month. If we can get the trade tariffs out of the news this market should stabilize for the short term. Weather still remains favorable but I feel we have 3 more weeks of opportunity before this crop is made. If we fail to see any dry patterns in the Midwest over the next three weeks look for the markets to repeat last years levels.

Have a Safe Day!

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

June 14, 2018

Good Morning,

The next 48 hours are going to be very critical to the long term trade as the world waits to see if the US follows thru on its Chinese tariffs that are supposed to be implemented tomorrow. Traders are fearful that if these tariffs are implemented, we will see retaliation tariffs from the Chinese that will greatly impact the farming sector. President Trump is meeting with advisors today considering the tariff situation.
Weekly exports increased in both corn and beans for the week ending 6/7/18. Corn came in at 36.9 million bushels while soybeans were at 19.1 million bushels. This is the highest bean export since early April. Both corn and soybeans were slightly above the 10 week average.
Yesterday afternoon private analyst Informa released their estimate of the 2018 corn acreage. They had corn at 88.7 million acres vs. the USDA’s March number of 88.0. Soybeans were at 89.9 vs. the USDA March number of 89.0. The USDA will release its June acreage and yield estimates on 6/29/18. Historically the June acreage for corn compared to the March intentions has increased 13 of the last 18 years. With the expectation for more acres and an above trend line yield the markets will remain under pressure unless weather becomes an issue.
Political pressure has the corn market trading 9 lower this morning and soybeans down 7. This is just move supporting evidence why producers need to actively sell rallies like we saw on Tuesday! Look at charts under Market Insight on our web page for historical trends in June.

Have a Safe Day!

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

June 13, 2018

June 13, 2018

Good Morning,

Corn is down one and soybeans down ten to start the day off. Mixed emotions shown to the market today between decreased stocks and more tariff news. USDA pegged stocks to use at 10.8% yesterday, which is the tightest level since 2013, this tighter supply could lead to buying in the coming days. Trump is threatening he could impose tariffs by Friday on Chinese goods.

Biofuel reform news has taken a back seat since last week, when the Trump Administration said they were not going to reform for aid to oil refiners. Though, on Tuesday, EPA officials have given hope that higher ethanol blend gasoline could still happen.

It’s great that smaller stock numbers have gotten attention, in hopes of finding some support level and direction for making sales. We aren’t to the middle of June yet, with that being said, there is a lot of weather and forecast change that can happen yet. If the market does keep climbing: make sales and offers, do not bank on huge weather premiums.

Have a Great Day!

Mitch Giebel
920-348-6861
mgiebel@didionmilling.com

June 12, 2018

Good Morning,

Additional technical selling in corn, beans and wheat yesterday as traders continue to unwind their long positions with good crop ratings and favorable weather. Yesterday’s weekly corn ratings dropped 1 point to 77% G/E which compares to 67% last year and 70% for the 5 year average. Wisconsin remained unchanged from last week at 91% G/E. The early condition of this years crop is going to make it very difficult to rally this market, which is why I believe producers should have firm offers in just above the market for old and new crop corn. Producers should have 70-80% of their old crop sold and 40-50% of their new crop booked at this point. Sales for the 2019 crop of 10% are also recommended.

The USDA S&D report will be out at 11am today. Below are today’s estimates. Check back shortly after 11 for the real numbers.

USDA 2017-18 ending stocks (billion bu)
USDA June 12 Ave Est. USDA May
Corn 2.166 2.182
Soybeans .522 .530
Wheat 1.079 1.070

USDA 2018-19 ending stocks (billion bu)
USDA June 12 Ave. Est. USDA May
Corn 1.663 1.682
Soybeans .417 .415
Wheat .958 .955

Have a Safe Day!

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

June 11, 2018

Good Morning,

Favorable weekend rains across the US along with continued fund liquidation has the markets seeing red this morning. So far this morning corn is down 3, soybeans down 7 and wheat is down 4. After Fridays close the Funds were long 60,000 corn and 36,000 soybean contracts. For reference they were long 188,000 corn and 125,000 soybeans one month ago. With this afternoon’s crop conditions report and tomorrows USDA Supply and Demand report on the horizons I look for traders to reduce these positions more today. Reminder that tomorrow’s report will not have any change to acres or yield. Any adjustments to acreage and yield will come in the June 29th acreage report.
I don’t expect the markets to remain in these current levels much longer. There is a lot of investment money that has moved to the sidelines in the last week that I expect to re-enter the market in the coming weeks. Whether they will push the markets lower or higher will all be driven by weather.

Have a Safe day!

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

June 8, 2018

Good Morning,

Steady markets to start the day after a bad week for the grains. Corn has traded lower 4 days this week losing 15 cents while soybeans have traded lower all 5 days this week losing 48 cents as of 830 am. There are several factors pressuring the markets this week, but here are the main ones:
1. Weather is favorable. Warm and wet weather across the Midwest has this crop off to one of the best starts in history.
2. Poor export numbers in soybeans and corn the last few weeks.
3. Political tensions between the US and several of our trade partners as trade wars escalate. China and Mexico are the largest.
An improved weather forecast that is trending cooler and wetter for the Midwest next week has been encouraging additional liquidation of long positions that traders hold. With the funds still long 113,00 corn and 60,000 soybean contracts and no major Midwest drought in the forecast I would expect more volatility in the coming weeks. Iowa, the #1 corn producing state (20% of US total) is off to a great start with 81% of the crop rated good/excellent.
There has been limited progress on the China trade negotiations, but President Trump plans to leave the G7 summit hours earlier than planned after a war of words broke out between him and the leaders of France and Canada over trade.
I don’t believe now is the time to be making sales of new crop, but would strongly advise producers to have firm offers in place. This market is very volatile and any rally we may see will be very short lived. Old crop offers should be in place as well, but at much lower levels than we were looking for two weeks ago. Next Tuesdays S&D report could add more pressure to the downside for commodities if we see larger inventories.

Have a Safe Weekend!

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

June 7, 2018

Good Morning,

Wheat continues its run higher this morning while corn and soybeans trade 1 higher and 2 lower respectively. Weather issues in Russia and the plains of the US are supporting wheat. Meanwhile favorable US weather is pressuring US corn and soybeans.
Concerns over the size of South America’s crop seem to be depressed for now as trade believes that the US can outgrow any world supply problems.
Next Tuesday’s S&D report should show a lower Brazilian crop along with higher export numbers for corn which should offer some support to the markets. Soybean export projections are expected to drop which should continue to pressure the markets.
Weekly export sales came in slightly below the ten week average for corn at 33 million bushels. Soybeans continue to lag the ten week average at 6.1 million bushels for the week ending 5/31/18. The reduction in soybean sales to China has brought the export pace back to the USDA’s projected level. We are currently about 110 million bushels behind last year’s pace.

Do you have firm offers in with your buyers for old and new crop? Don’t wait until you are done with your planting, spraying, side dressing to get this done. “I didn’t have time to call” is not a good excuse. Marketing your grain is the most important part of running a successful operation. Take a minute today to call and talk to your buyer.

Have a Safe Day!

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

June 6, 2018

Good Morning,

Corn is up slightly this morning with technical indicators turning bullish and weather forecasts having some uncertainty in the 10-14 day range. Weather models agree that the 10 day forecasts show above average rainfall and moderate temperatures. Look for the risk premium that is currently in the market to hold until we get agreement on the 10-14 day outlook.
Yesterday morning China offered to purchase nearly $70 billion of US farm and energy products over a year if the Trump administration abandons threatened tariffs according to trade officials.
President Trump rejected an RFS deal allowing ethanol that is exported to be eligible for biofuel credits and allowing E-15 sales year round.
Summer weather is everything when it comes to final yield for corn. Rainfall and temperatures in June are a good preamble to Julys weather, which is the biggest driver of corn yield Long term studies indicate the weather in July is twice as important as June weather. With ample moisture and ideal temperatures in May and the start of June we have corn conditions close to all-time highs in the US. Below is a chart of the best week 21 Good/Excellent Corn condition ratings in the last 20 years. Note that a 178 yield in the US could offset any concerns arising about corn production around the world. With the potential for corn acres to be higher in the June 29th report this would reduce the concern even more.

Year G/E Rating in WK 21 Percent of Trend
2018 79 ?? 2018 trend + 178 bpa
2015 74 102.6
2010 76 100
2007 78 101.5
1999 75 99.5

There is a lot of growing season left, but we are currently off to one of the best starts in history. If weather remains adequate we could be looking at record crops for the third year in a row. Is your marketing plan prepared for prices we have seen the last couple years if carryout remains high? Historically the best prices received by producers are sales that are made 4-6 months in advance of the delivery timeframe. Give your buyer a call today to get caught up on sales and put offers in for the coming year.

Have a Safe Day!

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

June 5, 2018

Good Morning,

Monday was a tough day in the commodity markets with every commodity closing double digits lower on the day. Corn was down 10, soybeans down 19 and wheat was down 18 on the day. Favorable US weather along with US and China trade negotiations stalling weighed heavily on the markets. The high pressure ridge that looked like it could move into the corn-belt as of last Friday, looks less likely to push as far East as originally forecasted.
Last night’s planting progress was reported at 97% complete vs. 95% on average. Crop conditions came in at 78% G/E compared to 71% on average. Weather will continue to be the market mover with the current trend lower as we get favorable temperatures and moisture.
Yesterday was a very weak close with CN8 breaking the 200 day moving average for corn and could signal additional selling today. Look for resistance near 3.85 CN8 and support near 3.75 CN8.

Have a Safe Day!

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