October 5, 2018

Good Morning,

Weather finally appears to be getting the attention of traders as harvest delays continue across the Midwest. With forecasts for rain thru the middle of next week for the majority of the upper Midwest we are seeing the funds cover some of their long standing short positions. The concern over lost yield in soybeans and poor quality in corn due to the excessive rains has gained some momentum this week.
The funds have reduced their short corn position by 22,000 contracts in the last week. Soybeans shorts have only been reduced by 5,000 in the last week.
While we have seen and may see some more short covering with the weather premiums the size of this years crop does not appear that it is going to shrink enough to send the markets significantly higher. I look for this to be confirmed next week in the USDA’s October S&D report that will be released on Thursday. Private analysts are expecting both corn and soybeans to be higher than the USDAs September report by as much as 1 bpa on corn and beans.

Producers should take advantage of the recent rally by making small sales for December and January to core out there bins with prices in the $3.50-3.60 range. Producers should also be making small sales for the fall of 2019 with prices in the $3.70 range.

Have a Safe weekend!

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

October 4, 2018

Good Morning,

Corn and soybeans are both up 1 to start the day. Export sales released this morning showed corn at 56 million bushel which is down from last week but well above the ten week average of 27 million. Soybean exports also came in at 56 million bushel which is significantly above the ten week average of 18 million.
Weekly ethanol production dropped for the second straight week to 1.015 million barrels per day compared to 1.036 last week and 1.051 the week before. It is still above this time last year. With most ethanol plants taking their fall shutdowns in late September thru mid October these drops are not only expected but needed to help reduce stocks.
The USDA S&D report will be released a week from today. Look for the traders to position themselves between now and then for any surprises. Private surveys will be released in the next few days with the expectation that many are looking for larger corn and soybean yields.

Reminder – All loads need to be scheduled prior to delivery.

Have a Safe Day!

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

October 3, 2018

Good Morning,

Commodities are unchanged this morning with a lack of follow through buying after a couple days of higher trade in the corn and bean markets. There has been some technical buying and short covering after Monday’s news of Canada and the US coming to an agreement on NAFTA.
December corn is trying to hold above its 50 day moving average and is currently trading at $3.68.
Forecasts for the next 10 days are calling for extended periods of rain impacting harvest activities throughout the central US. An estimated 35-40% of the corn and bean crops will be directly impacted by this weather with soybeans being the most susceptible to loss.
President Trump is expected to visit Council Bluffs, Iowan next Tuesday to announce the lifting of the summer ban on higher ethanol blends of gasoline and to possibly announce tighter restrictions on the trading of ethanol blending credits.
Producers should be looking to add to their corn sales for this winter and next spring at current levels. Sales of $3.60-3.65 for January thru May are now obtainable. Producers should also be looking to put small sales on for next fall in the $3.70 range.

Reminder – All loads need to be scheduled prior to delivery.

Have a Safe Day!

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

October 1, 2018

October 1, 2018

Good Morning,

Friday’s bearish stocks report from the USDA put pressure on the markets to end the week and month. This will add more pressure to the markets longer term if yields for the 2018 crop continue to be good.
The markets are higher this morning on the heels of a surprise development that the US and Canada reached a last minute deal last night on a new NAFTA accord. This agreement should lead to a late November signing ceremony to seal the deal. With this news I would not be surprised to see additional fund buying to start the 4th quarter that could lead to a small rally.
Fridays report made it clear that if the market is going to rally it is going to be if we can get a robust export program in place.
Forecasts for the week remain cool and wet which should ease some of the harvest pressure in the south that has resulted in long lines and limited space. Producers in WI and MN should take note of these issues and make sure you have a plan for fall bushels.

Reminder – All loads being delivered to Didion must be scheduled. (Contract and spot bushels)

Have a Safe Day!

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

September 27, 2018

Good Morning,

The three big commodities are trading close to unchanged this morning with corn and beans up a half and wheat down 1. Corn yields continue to be all over the board with the majority of them coming in higher than last years record numbers.
There is optimism over a new trade deal with Japan as the trade prepares for tomorrows September Grain Stocks and Small Grains report. The deal would substantially boost exports of beef, pork, wheat and a host of other ag commodities.
Tomorrow the USDA will release its quarterly stocks report for September. The fact that it comes at a month end could add to the volatility in the markets as traders look to position themselves ahead of the October business. Estimates for tomorrow’s numbers are 2.002 billion bushel for corn compared to 2.293 last year. Soybeans are estimated at 394 million bushel compared to 302 million last year. Wheat is estimated at a staggering 2.350 billion bushel compared to 2.266 last year. (Report will be released at 11am)
It is interesting to note aht while China openly turned its back on the US soybeans for more expensive beans out of Brazil, the total US inspection are running about 8% higher than this time last year. Despite these numbers traders will key in on the USDA’s forecast for a record production as long as the US and China remain at odds.

Have a Safe Day!

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

September 24, 2018

Good Morning,

Corn is 1 higher and soybeans are 8 lower to open the week. Rumors and harvest pressure continue to move the bean market lower. Last Thursday we saw soybeans make a move higher on rumors that China bought up to 15 cargos of beans from Argentina that would come indirectly from the US. This morning news that China has cancelled the upcoming tariff talks with the US. The US recently implemented 10% tariffs on $200 billion of Chinese goods which is expected to be retaliated with China putting tariffs on $60 billion of US goods.

Friday we will get a look at the USDA’s grain stocks report and small grain production summary. Funds continued to cover some of their short positions with open interest off nearly 14,500 contracts in corn, just over 4,700 in the beans and almost 2,100 of Chicago wheat to close out last week’s trading.

Didion is Hiring!

If you know someone that is looking for employment or a change let us know. If we end up hiring your referral you could get up to $1000! We have several different openings within our company, here are just a few of them:

Feed Sales Forklift Operator
Grain Merchandiser Marketing Communication Manager
Logistics Manager Biofuels Technician
Grain Facility Maintenance Technician Packaging Production Worker
Miller Safety Specialist

Have a Safe Day!

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

September 21, 2018

Good Morning,

Yesterday’s rally in corn and soybeans was a pleasant surprise fueled by rumors that Argentina may increase its export tax to 33%.(up from 25%) Rumors that China bought up to 15 cargos of Argentine beans that are a replacement of soybeans they sold to China. If Argentine commercials re-export the products, then the country’s taxation scheme would not be applicable on those products. This would mean that any beans that Argentina buys from the US and sells to China would avoid this taxation. (More bean exports for the UW) Brazil appears to be making the same plans as they buy 1.0 mmt of US soybeans. While this may help grain prices for a bit, the US farmer needs a resolution between the Chinese government and US government to eliminate the tariffs that are in place or going to be in place. Until this happens traders will be cautious to be long any commodity.
Reports of yields all over the board continue to roll in from the south on corn and soybeans. The majority continue to be higher than last years levels. Elevators in central IL are hoping for some rain this weekend or early next week to help slow down the harvest pace as they are running into space issues. I have talked to several elevators that said the speed, dryness and size of this years corn and bean crop is putting a lot of pressure on them early in harvest that they are struggling to handle. If this in any indication for the things to come in WI, I would advise producers to make sure you have a game plan! Here are some tips to help avoid harvest issues:
1. Fill elevator/end user contracts first. Don’t wait until your bins are full. If you deliver the first grain harvested you can usually avoid the big harvest rush.
2. Make sure you have enough sales made. Some locations may not be taking new contracts or spot bushels when you run out of room at home. If you don’t like the cash price, make a basis contract. Basis levels are the widest when you and everyone else is looking for a place to deliver.
3. Talk with your elevator/end user to make sure you are in agreement on what contracts you have and what delivery time you have on them.
4. Plan ahead. Make sure you know the hours of receiving. If you are delivering to Didion, YOU MUST SCHEDULE YOUR DELIVERIES! We are still buying and taking spot loads, but the delivery date of these must be scheduled. Call Mitch or Garry to schedule when you would like to deliver.

Have a Great Weekend!

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

September 19, 2018

Good Morning,

We are seeing a slight rebound in the markets this am with corn up 1 and soybeans up 6. Profit taking is the only reason for the market uptick this am as reports of good yields and more tariff news.

China announced another round of retaliatory tariffs of 5-10% on US goods and products in response to the US tariffs yesterday. Trade meetings were to be held next week, but will now likely be canceled. The executive from one of China’s biggest soybean crushers sat on a panel at a Kansas City agricultural
exports conference, listening to an expert beside him explain why China would remain dependent on U.S. soybeans to feed its massive hog herds; when his turn to speak came, Mu Yan Kui told the international audience of soy traders that everything they just heard was wrong; then Mu ticked off a six-part strategy to slash Chinese consumption and tap alternate supplies with little financial pain. Just one prong of the strategy Mu detailed – to slash soymeal content in pig feed – could obliterate Chinese demand for U.S. soybeans if broadly adopted; cutting the soy ration for hogs from the typical 20 percent to 12 percent would equate to a demand reduction of up to 27 million tons of soybeans per year. An amount equal to 82 percent of Chinese soy imports from the United States last year.

Informa projected that U.S. corn plantings would rise to 93.044 million acres in 2019 compared to the U.S. Department of Agriculture’s 2018 figure of 89.1 million acres. Informa projected a drop in U.S. 2019
soybean plantings to 82.27 million acres, down from the 2018 figure of 89.6 million acres.

Have a Safe Day!

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

September 17, 2018

Good Morning,

The markets are trading mixed to start the week as traders prepare for a new round of tariffs from President Trump on China. This also weighing on the outside markets with China saying it’s ready to respond.
November soybeans are lower as well with futures back near last week’s lows as traders worry that this latest round of trade war rhetoric from the White House could lead to China walking away from plans for sitting back down at the negotiating table.
In an interesting turn of events, the President Trump did offer to cut the effective tariff rate to 10% from 25%. Regardless, the market will be concerned with the timing for the activation of the new set of tariffs. Should they be delayed for a month, this would leave open the possibility that some sort of deal could be worked out by trade negotiators for both sides in a fresh round of talks set for the end of the month.

Have a Safe Day!

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

September 14, 2018

Good Morning,

Corn and soybeans are currently trading even this morning. World trade watches, as no major events have happened in trade negotiations to make stability for supply and demand. Beyond that-the U.S. is having a great start to harvest with this dry stretch in the lower Corn Belt. This is another event that producer are likely going to cross off the list that could have been a catalyst for a market rally.

Producers that have been holding out to market the last of their old crop corn and make sales for fall delivery timeframes have run out of time. This week’s report gave us additional bearish news that will not be updated until November. Cash levels and basis levels have both dropped in the last couple months as we moved closer and closer to harvest. Look for basis levels across the country to widen as space becomes an issue with carryout from last year and the size of this year’s corn and bean crop. Producers should be actively locking in Basis levels for any grain they need to move.

Have a Great Weekend!

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