February 21, 2019

Good Morning,

Corn is up 6 and soybeans are up 11 to open the day after traders got acreage estimates from the Ag outlook forum. Corn planted acres for this coming year were estimated at 92 million acres which is up 3.3% from last year’s 89.1 million acres. Soybean acres are estimated at 85.0 million acres which is down 4.7% from last year’s 89.2 million acres. While corn acres are up 2.9 million acres, they are below what traders have been expecting for this coming year. While todays data is giving live to the markets, it is important to keep in mind that these estimates do not include farmer surveys like the March 29th report will.
Optimism and rumors that China is proposing to buy $30 billion a year of US agriculture products as a possible trade deal between the two countries. The offer to buy the extra farm products would be part of the memorandum of understanding (MOU) under discussion by US and Chinese negotiators in Washington and would be on top of pre-trade war levels and continue for the period covered by the memorandum. The 6 MOU’s include general agreements on: 1. Forced Technology & Cyber Theft, 2. IP Protection/Rights, 3. Services, 4. Currency, 5. Non-tariff barriers to trade and 6. Agriculture.
Producer selling across the Midwest has been steady for the last month despite stagnant prices on the CBOT. Some areas of the country are seeing basis levels narrow as weather has hampered delivery of grain. Other areas of the country are seeing basis levels widen or bids totally removed as end users are bought up. My projection is that we will see more of the latter in our area as end users continue to get bought up and on farm/commercial stocks remain high. I would advise producers to make cash sales or at least lock in basis on any old crop that remains uncommitted.

Have a Safe Day!

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

February 19, 2019

Good Morning,

Trade is quiet this morning after a three day weekend for traders. Corn is currently down 1 and soybeans are down 4. News this week will continue to focus on the US-China trade, export data and the Ag Outlook Forum.
China has trade representatives in Washington DC to resume talks with the hope of making some progress ahead of the March 1st deadline.
The USDA will release six weeks of export data on Friday, which will be the last of the reports that have been delayed due to the government’s last shutdown.
The USDA Agriculture Outlook Forum starts on Thursday in Washington and will give us the first look at their 2019/2020 Supply and Demand expectations. This report will also show the first “guess” on planted acres for this coming year. While this report doesn’t carry the weight of the March 29th prospective plantings report, it will carry more weight than it has in the past. With the large carryout in soybeans, we will need to see bean acres limited in this report to keep soybeans from free falling.
Weather in South America has turned dry for Argentina. Very little rain is forecast for the next two weeks. Dryness in the Southern growing area could have an impact on soybeans. Above normal rainfall is forecast for most of the Brazilian growing area. Southern Brazil should see good rains over the next two weeks. Harvest in Northern Brazil should move to 50% complete in the next week.

** Reminder that tomorrow is the last day to sign up for our Fall APC contract. **

Have a Safe Day!

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

February 14, 2019

Good Morning,

Valentine’s Day and there is no “Love in the Market”! Corn is trading 3-4 lower while soybeans are trading 12 lower.
Talk this morning of surprise cancellations of US soybean sales to China and unknown destinations has the markets reeling. No confirmation of why the sales were cancelled, but some speculation that China space for soybeans is full and the spread of African swine fever may be reducing hog herd numbers more than China was expecting or reporting. This could reduce the demand for Chinese soybean imports to below 85 mmt.

Private analyst Informa released their 2019 acreage estimates and has corn acres at 91.6 million which is up 2.5 million from 2018. Soybean acres are estimated at 86 million, down 3.2 million from 2018. This comes as no surprise to this trader who has been hearing higher corn acres from farmers and seed sales reps for the last several months. Unless mother nature changes their plans we will see a bump in corn acres this year and 2.5 million could be the low end.

Have a Safe Day!

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

February 13, 2019

Good Morning,

We saw some strength in the markets yesterday and are taking some of those gains back today. Yesterday’s rally appears to be the same old “buy the rumor, sell the fact” trading. Rumors that China may buy corn and soybeans as part of a deal with the US. So far these are only comments and have not been backed with actual purchases. Also aiding yesterday’s rally were comments from President Trump that he is open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement. These comments are the strongest indication yet that he is willing to give Beijing more time to firm up a deal to head off the White House’s threat to more than double the rate of tariffs on $200 billion in Chinese imports. By extending the deadline, he could be paving the way for a potential meeting with President Xi to close the deal.
The Ag markets need to get this situation resolved quickly with money managers having moved huge amounts into cash instead. The survey from Bank of America showed that 44% of net allocations to cash reached its highest level since the 2009 financial crisis. With so much money sitting on the sidelines and the funds short, if the trade war with China can be resolved, prices could turn much more favorable.

Have a Safe Day!

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

February 12, 2019

Good Morning,

Corn and Soybeans are slightly higher this morning on news out of Brazil this morning. CONAB(Brazil’s version of the USDA) estimated their corn crop at 91.652 mmt which is up from their January estimate by 460 tmt. They lowered their first crop estimate, but increased the Safrinha estimate due to better weather. While higher, this is still below the USDA’s estimate of 94.5 mmt. CONAB has reduced their soybean estimate by 3.5 mmt to 115.3 mmt due to lower yields. Currently the USDA is projecting 117 mmt for Brazil. While both corn and soybeans are lower than USDA estimates, the world carryout on corn is sitting at 309.78 million tonnes. World carryout on soybeans is sitting at 106.72 million tonnes.
Traders have reduced their long position by 50,000 contracts in corn and 6,000 contracts in soybeans in the last week. Large stocks and the uncertainty of trade with China have soybean traders sitting on the sidelines. Large stocks and the potential for even larger stocks in the coming year with an increase in acreage has corn traders doing the same.
Producers should be making sales or making plans for sales in the next few weeks. With expectations for higher corn acres in the March 31st planting intentions report this corn market could begin to drift lower. $3.50 cash, $3.65 fall are attractive prices for those with less than 50% of your crop sold. Producers should also be making sales for next February and March where prices are .30-.40 cents better than current prices.

Reminder that the markets will be closed next Monday 2/18/19 in observance of Presidents Day.

Have a Safe Day!

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

February 11, 2019

Good Morning,

Markets are lower this morning with corn down x and soybeans down x. Fridays report came as no surprise to most traders as yields were lowered in corn, but ending stocks were higher than estimates by 27 million bushels due to lower ethanol and feed use. Corn yield dropped from 178.9 to 176.4 bpa. Soybean yield dropped from 52.1 to 51.6 bpa. Corn carryout is projected at 1.735 billion bushel compared to 2.140 billion in 2017/18. Soybean carryout is projected at 910 million bushel which is more than double the 438 million bushel in 2017/18.
South America remains ideal to finish out the growing season as regular rain is forecast for most of Brazil and Argentina is expected to dry out next week. There is a chance for rain in Argentina in the ten day forecast that could finish their crop on a high note. Brazilian harvest is 26% complete.
President Trump is considering another shutdown of the Federal Government that would have a deadline of this Friday if his demands are not met by democrats.

Have a Safe Day!

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

February 8, 2019

Good Morning,

Report day and there could be a lot of news in today’s report. Corn is expected to be bullish as exports have been close to record as of this date and feed use has been strong. Ethanol grind is expected to be reduced today, but yield is expected to be down about a bushel. South American corn production is expected to rise back to trend line yield levels or above.
Soybeans will have a bearish carryout number, but stocks are expected to gradually decrease if we can add new sales to China. The US has booked 400 million bushels of sales to China since the last report.
Here are the average estimates for today’s report. Check back at 11am for today’s numbers.

2018 Crop Production (Billion Bu)
USDA Feb Ave. Est USDA Nov.
Corn Yield 177.9 178.9
Production 14.532 14.626
Soybean Yield 51.8 52.1
Production 4.569 4.60

2018/19 US Ending Stocks (Billion Bu)
USDA Feb Ave. Est. USDA Dec.
Wheat .989 .974
Corn 1.708 1.781
Soybeans .926 .955

Have a Safe Day!

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

February 7, 2019

Good Morning,

Markets are trading lower today as traders position ahead of tomorrow’s big report. The past 4 years have resulted in no excitement in the corn market following the final production numbers. Here is what has happened the last 15 years:

Make sure you are calling your buyers to get firm offers in today in case we see a short spike in the market before a selloff.

Have a Safe Day!

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

February 5, 2019

February 5, 2019

Good Morning,

Corn and beans are both down a couple cents this morning and wheat is down 4. There is a lack of fresh news with Asia closed to celebrate the Lunar holiday and before Fridays WASDE report from the USDA.
President Trump will speak to the nation this evening in the first State of the Union address of 2019. It will likely include an upbeat message regarding the renegotiating of agreements with major trading partners like the USMCS and the recent success in the negotiations with China. The hope is that things will continue to progress and we can get a new signed trade agreement in place by the end of February.
Friday we get a look at the February S&D report from USDA after January’s was skipped due to the government shutdown. The average guess has total corn production coming in around 14.5B bu. last year on 81.7M acres, for an average yield of just under 178 bpa. All those numbers would be down slightly from the last USDA report in November. Soybean production estimates are expected to be near of 4.57B bu. on 88.2M acres with an average yield of 51.8 bpa. USDA’s November estimates were for 4.600 billion bushels with average yields of 52.1 bpa.
Don’t forget to make sales and get firm offers in with your buyers ahead of Fridays report.

Have a Safe Day!

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

February 4, 2019

Good Morning,

The markets on Friday were full of rumors about China’s intentions to purchase US beans, and possibly corn, wheat and ethanol. The early strength the faded towards the close with no confirmation. Traders will wait to see if the USDA puts out any notices of those sales today. We are expecting no new business with China this week as they are observing their lunar holiday.
The USDA will release the regular February Supply and Demand report this Friday along with the delayed January reports, including the December quarterly stocks report, winter wheat planting intentions and final corn/bean production yield estimates.

I would advise producers to make sales and get firm offers in before this Fridays report as we could see volatile trade in either direction upon the release of Fridays data.

Have a Safe Day!

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