June 22, 2018

Good Morning,

Corn is trying to stay above water literally despite tariffs and favorable weather. Yesterday we saw corn close 3 higher and this morning it is trading unchanged.
The current weather maps look good but there are conflicting reports for the June 28-July 5h forecasts. Some models are showing above normal temperatures and lower precipitation. This is the period when some areas of the southern corn-belt will be starting to tassel.
There have been some yield extrapolations based on crop conditions that are showing a 180-183 bpa range for corn. A 183 yield would keep stocks unchanged from last year with no acreage adjustments. I am expecting an increase in acres on next Fridays report which could send the markets lower. It is still too early to forecast the final score(yield), but we are just about to half time of this game and the crop is has a big lead!

I would strongly advise producers to make sales and have firm offers in on old and new crop before next Fridays report. Reference the charts in our “Market Insight” section on didionproducers.com to see where the market historically trends heading into the first of July. We are still able to get $3.50-$3.60 cash for July by utilizing an accumulator contract.(call for more details)

Have a Safe weekend!

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

June 20, 2018

Good Morning,

The markets are steady to open the morning with corn up 1 and soybeans down 1. The markets are trying to navigate the trade fears and leaving fundamentals on the sidelines for now. We have no fundamental reason for corn and soybeans to be trading as low as they have been for the last few days, but political strength is and will continue to pressure the markets. Yesterday the European Union triggered its first phase of retaliation to the US by releasing a list of products that will have a 25% tariff applied. Soybeans were not on this list, but corn was.

The drought monitor shows improvement for central North Dakota this week as well as some drought receding in Kansas. The drought classification worsened in areas of Southern Iowa and Northern Missouri. Forecasts call for favorable temperatures and moisture over the next week with the first week of July looking warmer and drier for the Midwest.

Weekly exports released this morning were terrible for corn and disappointing for soybeans. Corn came in at 6.5 million bu. compared to the ten week average of 32.6 million. Soybeans came in at 11.1 million bu. compared to the ten week average of 13.2 million. Both are hanging slightly above USDA projections but have fallen in the last few weeks.

The Funds are short 95,000 corn and 69,000 soybean contracts after yesterday’s trade.

Until we see some progress made on the trade wars I do not expect the markets to move higher.

Have a Safe Day!

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

June 19, 2018

Good Morning,

Back at it again!! The markets are down sharply this morning after President Trump announced another set of 10% tariffs on $200 billion in Chinese imports later yesterday. There is no proposed date on when this round of tariffs will go into effect. The last round of tariffs are expected to begin July 6th. China’s Foreign Ministry on Tuesday urged the US to stop its damaging words and deeds after Trump made the most recent threats. The Chinese ministry said that it did not want a trade war, but was not afraid of one.
Last nights crop progress report showed US corn at 78% good/excellent, up 1% from last week. This compares to 67% last year and 71% on the five year average. Wisconsin came in at 90% good/excellent compared to 71% last year and 76% for the five year average.
December corn hit a new contract low of 3.68 overnight and the front month corn hit its lowest level since January.
Corn and soybeans are trading 8 and 24 lower respectively this morning.

Have a Safe Day!

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

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