September 17, 2019

Good Morning,

After a strong Monday and quiet markets overnight the markets have opened lower today as rain has been added next week for the dry southern areas and no indications of a frost threat well into October.
Sources say that President Trump is tentatively backing a plan to increase biofuel blending.
China appears willing to make good on their promises to secure more US Ag products with another gesture of goodwill again this morning. This morning they purchased another 260 MT of soybeans for the 2019/20 marketing year. (Let’s not get too excited, they can cancel just as quick)
Last night’s crop ratings had corn harvest at 4% complete which is slightly behind the 5 year average of 7%.
Basis was starting to strengthen last week across the Midwest with lower CBOT prices. But Friday and Mondays rally in the CBOT has resulted in numbers slipping back down. This is a sign that producers and commercial elevators were heavy sellers on the short rally and end users are filling their pre harvest needs.
Producers should take advantage of any CBOT or basis bounce for the old crop or any fall bushels that they have left to move. Harvest has hit central IL which is going to put pressure on basis regardless of the crop size as stocks increase. I would advise producers with adequate storage for their fall corn to have 50 % of your crop sold and sit tight on the remaining portion until late winter/early spring.

Have a Safe Day!

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

September 12, 2019

Good Morning,

USDA report out today at 11am will dominate the markets today with traders positioning ahead of the release and reacting after. There will be a lot of data released today (see below) but the main focus pre report seems to be focusing on what the USDA will use for corn yield. Private estimates are divided greatly with a range of 163-171.5 bpa which means we have room for a surprise in either direction. The USDA used 169.5 bpa in their August report.
President Trump announced he will delay the 5% tariff increase on some of China’s goods by two weeks, now to be implemented October 15th, in a sign of good will ahead of the trade talks next month.
If you have old crop corn to move or are looking to price more new crop bushels, give us a call to hear some of the unique options that we are offering.

2019/20 Production (Billion Bu)
USDA Sept. Avg. Est. USDA Aug.
Corn Yield 168.2 167.2 169.5
Corn Production 13.799 13.672 13.901
Bean Yield 47.9 47.2 48.5
Bean Production 3.633 3.577 3.68

2018/19 Ending Stocks (Billion Bu)
USDA Sept. Ave. Est. USDA Aug.
Corn 2.445 2.401 2.360
Soybeans 1.005 1.054 1.070

2019/20 Ending Stocks (Billion Bu)
USDA Sept. Ave. Est. USDA Aug.
Corn 2.190 2.002 2.181
Soybeans .640 .660 .7550

Have a Safe Day!

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

September 11, 2019

Good Morning,

Corn finally stopped the free fall yesterday as it jumped up to challenge the 10DMA and closed up 7 cents for December futures. Some of the strength today could be attributed to the unexpected 3% drop in crop ratings last night, and we were also probably looking at some short covering by managed money ahead of Thursdays report.
Ethanol discussions have hit a roadblock with the biofuel lobby telling the administration it will accept no compromise and will only be satisfied if the EPA reallocates the full measure of the SREs(small refinery exemptions) to other refiners to make up for the loss in RIN (renewable identification number) values it experienced this year.
After yesterday’s buying, the funds are now short 151,000 corn contracts with momentum still heavily to the short side.
Estimates for Thursdays report are expecting a reduction of 2 bpa for corn yield to 167.2 and total production to drop to 13.672 billion bu. down from 13.901 in August. 2018-19 corn stocks are estimated at 2.401 billion bu which is up from the August report by 41 million. Estimates for the 2019-20 corn stocks are 2.002 billion bu. down 179 million bushel.

Overnight markets are lower as traders continue to position ahead of tomorrows report.

Have a Safe Day!

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

September 9, 2019

Good Morning,

Weakness late last week and overnight in the corn market as weather forecasts for the month of September continue to show above normal temperatures for most of the Midwest. These warmer temperatures are easing traders fears of the crop not finishing. As a result traders have now taken the market to new contract lows. As of Fridays close, the funds are short 155,000 contracts. They have been sellers of corn in 9 of the last 10 trading sessions.
The September USDA S&D report will be released Thursday at 11am. The trade is looking for corn production of 13.672 billion bushels, down from last month at 13.901. Soybean production is expected to come in at 13.672, down from last month at 13.680. Old crop corn stocks are expected to rise by 40 million bushels, and bean stocks are supposed to decline by 15 million.

Have a Safe Day!

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

September 6, 2019

Good Morning,

It looks like the markets are going to finish the week the way started it on a downward trend. Corn is currently down 2. Here are some market movers this week and in the coming weeks:

• China and the US plan to hold talks in October which will be the 13th time, lets hope its lucky #13.

• Ethanol production for the week averaged 1.013 million barrels per day which is down 2.41% vs last week and down 6.81% from a year ago. This was the lowest production week since early April with stocks sitting at 23.8 million barrels as gasoline demand starts its seasonal decline.

• Early yields from the south are all over the board, but most are higher than early expectations.

• US weather forecasts remain favorable with no season ending freeze in sight.

Not a lot of upside at the moment as traders continue to trade the lack of demand for US corn and soybeans. Unless something dramatic happens on the demand side of the equation, we are guaranteed to end up with a carryout north of 2 billion bushels. 2 billion bushel carryout equals prices in the $3 – $3.50. Many producers are still sitting on old crop corn that they want/need to move before harvest and the market is not offering many opportunities. If you are one of these producers, give us a call to see what options we have to add to your bottom line in these tough times.

Have a safe weekend.

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

September 3, 2019

Good Morning,

Markets are lower this morning as selling pressure from the US Dollar strength is weighing on the markets. The dollars strength is coming as the US and China both went ahead with threats to apply new tariffs on each other over the long weekend. On Sunday the Trump administration went forward with plans for new tariffs on more than $100 Billion of Chinese imports with duties pushed back to December 15th on an additional $200 billion of goods. China retaliated with tariffs on US goods, but filed an official complaint with the WTO over the new tariffs from the US. The US and China have not set a date for new face to face talks with mistrust building on both sides following the weekend tariffs. The markets want to see new negotiations underway as worry begins to grow that China will wait for the 2020 presidential election.

Hurricane Dorian is expected to produce a ridge of high pressure over the South Central US beginning tomorrow and lasting most of the week that will bring with it warmer than normal temps. This will keep the threats of frost for the central US at bay at least into the 20th of September.

Have a Safe Day!

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

August 30, 2019

Good Morning,

Markets continue to trade sideways as we finish out the month. There has been a fair amount of producer selling the last few days locally and across the country as producers price DP bushels or storage bushels before the September 1 storage charges kick in. This has resulted in elevators gaining ownership and making sales to end users. Basis levels in several areas have pulled back (widened) due to the selling as their needs ahead of new crop get filled.
Weekly US corn export sales for 2019/20 came in at 4.68 MMT which was the lowest new crop sales for this timeframe since 2005.
Forecasts for the 10-15 day range are slightly below normal but there is no fear of an early frost at this point. In my opinion even if we do get an early frost, it will likely only result in a day or two of higher trade and then traders will sit back and wait for the final production numbers to come in January. No one should expect the markets to react to an early frost the way they did to the wet spring weather. Demand has disappeared and until this comes back the markets will have limited upside.

Reminder that the markets will be closed on Monday for Labor Day.

Have a Safe Labor Day Weekend!

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

August 29, 2019

Good Morning,

Grain markets are slightly higher this morning with corn up 3 and soybeans up 5.

We saw some strength in the markets yesterday as Ag Secretary Perdue said that President trump is going to come up with something for the ethanol industry to help create demand that will support the US Farmer. To me this sounds very similar to the comments we have been hearing for the last year and a half about negotiations with China. What is being said and what is actually getting done are two different things. Ethanol margins remain under pressure forcing plants across the Midwest to slowdown or shutdown despite lower corn prices.

The FSA took an unusual step on Tuesday afternoon of updating the reported “certified acreage” and “prevent planting” data instead of waiting until the standard monthly update on September 12th. They increased planted acreage by 821,000 acres from their July report. With this adjustment they are now 3.3 million acres below the USDA’s August report of 90.0. The 3.3 million acres is only 3.5% below the total USDA acres. Soybean acreage was increased by 783,000 acres in their report and now is only 1.9 million below the USDA’s 76.7 million. In my opinion this only strengthens the USDA’s report as there is a large contingency of producers that do not file with NASS and do not carry crop insurance.

So far we don’t see any evidence of a frost/freeze event for much of the next couple of weeks with the forecast actually offering a chance for a little warming in the 11-15 day period. Weather models are going to struggle right now as they try to determine precisely where Hurricane Dorian will make landfall and its ensuing track. Dorian is expected to become an intense category 3 storm when it does come ashore causing considerable damage throughout the Southeast in the process.

Look for the markets to trade sideways to slightly lower as we approach first notice day for September contracts and a three day weekend.

Have a Safe Day!

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

August 27, 2019

Good Morning,

NASS reported crop conditions for corn at 57% Gd/Ex and 55% Gd/Ex for soybeans. Rating were up 1% from last week. 27% of the corn crop is in the dent stage vs 46% of the 5 year average and 71% is in the dough stage, vs 87% on average. 79% of the beans are setting pods with average at 91%. Almost 20 million acres of beans are not setting pods yet.
While there is no threat of frost in the 15 day forecast, some private forecasts look for a cool down in the coming weeks, and a loss of growing degree days looks imminent according to some forecast. The Artic Polar Vortex is expected to break South from Canada and move in the Central US. Temps similar to the Spring are forecast to return, cooler nights in the 40 and 50’s.
Chinese officials deny that any call took place over the weekend about China wanting to hold talks geared toward a resolution to the current trade war so for now the saga continues. While traders will continue to look for news from the trade issue, it has become something to trade when there is no other news as most anticipate this to drag on. Personally I believe the Chinese will hold tight until the 2020 US Presidential election to see if they can get a new leader to negotiate with. Regardless of when a deal gets worked out, the US famer has taken a hit that he will not recover from. The Chinese have found several new sources and alternatives for the commodities that we used to export.

Corn is currently down 1 and soybeans are down 8 to start the day.

Have a Safe Day!

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

August 26, 2019

Good Morning,

Commodities were showing some life this morning after President Trumps early morning tweet calling Chinese President Xi a “great leader representing a great country and that talks are continuing”. This is a complete 180 from Friday’s comments where he called Xi our enemy. With nothing else to grab headlines traders are looking for something to give them direction and this was it overnight. In other trade news the US and Japan appear to have come to an agreement over the weekend which should allow for increased US products to be exported to Japan. (Agricultural, Industrial products and digital commerce)
Last week’s Pro Farmer tour pegged the US corn crop at 163.3 bpa versus the latest USDA forecast of 169.5. On average the Pro Farmer tour has been 3 bpa below the USDA final number in January. Last week’s tour results have had very little impact on traders as demand continues to be the issue regardless of what yields come out this year. Poor ethanol margins that have resulted in plants slowing down or shutting down in the east over the last couple months is now hitting WI. There are official and unofficial reports of plants that have slowed down in the Badger state due to poor margins.

Have a Safe Day!

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