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

September 13, 2018

Good Morning

Yesterday’s WASDE report was a shocker to say the least. Expectations for corn yield were in the 177.4 bpa range compared to 178.4 in August. But favorable weather and record ears and ear weights drove the forecast to 181.3 bpa. This would eclipse the 2017 record yield of 176.6 by 4.7 bpa. Ending stocks were increased by 90 million bu. to 1.774 billion bu.
Soybean yields were increased 1.2 bpa from last month to 52.8 bpa. Carryout of soybeans now stands at 845 million bu. leaving the soybean stocks to use ratio just under 20%. (Producers that attended last Fridays meeting may recall what that means for cash prices). Despite the higher yield projections, soybeans managed to trade higher yesterday on rumors that the US is going to propose new Chinese trade talks. (Buy the rumor – sell the fact?)

Ethanol production for the week ending 9/7 averaged 1.02 mil barrels a day which is down 6% from a week ago and 3% from last year. Stocks totaled 22.9 mil barrels which is up 1% from last week and 8% from last year.
Weekly export sales were strong for both corn and beans. Corn came in at 30.5 mln bu. while soybeans were reported to be 25.5 mln bu. Both more than double their 10 week average.

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. Yesterday’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 years corn and bean crop. Producers should be actively locking in Basis levels for any grain they need to move.

Here are yesterday’s numbers:

USDA 2018/19 US Production (billion bu)
USDA Sept 12 Average Estimate USDA August
Corn Yield 181.3 177.8 178.4
Corn Production 14.827 14.529 14.586
Soybean Yield 52.8 52.2 51.6
Soybean Production 4.693 4.649 4.586

USDA 2018/19 Ending Stocks (billion bu)
USDA Sept 12 Average Estimate USDA August
Wheat .935 .941 .935
Corn 1.774 1.639 1.684
Soybeans .845 .830 .785

Have a Safe Day!

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

September 12, 2018

Good Morning,

Softer markets prior to the release of today’s USDA Crop Production and S&D report. Corn is currently down 1 and soybeans are down 4. The report will be released at 11am today. Estimates listed below and will be updated with today’s numbers after they are released. The primary focus of today’s report appears to be on yield with many believing the 178 bpa mark is critical to the balance sheet. The range of estimates is 175-180 bpa.
The soybean market has continued to drift lower and is currently trading at new contract lows for SX at $8.24. The USDA average yield guess for today is 52.2 bpa, above last month’s yield of 51.6 bpa. The range of estimates is 50.9 to 53.8.
Yesterday’s crop conditions report showed US corn conditions increase 1% to 68% G/E. They put harvest at 5% completed, 86% dented and 35% mature. Wisconsin was 70% dented compared to 55% on average and 21% mature compared to 10% on average.
The US/China trade war doesn’t seem to be close to resolution. The US threatens more tariffs, China is not accepting license applications from US companies, confirming fears that US company operations in China and access to its markets may be disrupted. China revised its 2018/19 soybean imports forecast to 83.65 mmt, down 10.2 mmt from last month’s forecast.

USDA 2018/19 US Production (billion bu)
USDA Sept 12 Average Estimate USDA August
Corn Yield 181.3 177.8 178.4
Corn Production 14.827 14.529 14.586
Soybean Yield 52.8 52.2 51.6
Soybean Production 4.693 4.649 4.586

USDA 2018/19 Ending Stocks (billion bu)
USDA Sept 12 Average Estimate USDA August
Wheat .935 .941 .935
Corn 1.774 1.639 1.684
Soybeans .845 .830 .785

Have a Safe Day!

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

September 10, 2018

Good Morning,

Corn has opened the week down 2 while soybeans are up 5. Most of the focus will be on Wednesdays USDA Crop Production and quarterly stocks report. Estimates are for corn yield and production to drop slightly from the August report. Estimates for beans are for higher yield and production. I would not be surprised to see higher production in both crops given the weather most of the US had in August. There are some trade estimates that 2018/19 soybean ending stocks could reach 1 billion bushels! The lack of exports combined with bigger yields could make this a reality.
Weather maps show most of the Midwest should be warmer and drier for the next 10 days which will result in a ramped up pace of corn harvest in IL, IA, MN. I am expecting producers in WI to start before the end of the month given how fast the crop has changed over the last two weeks.

Below are estimates for Wednesdays report:

USDA 2018/19 US Production (billion bu)
USDA Sept 12 Average Estimate USDA August
Corn Yield 177.8 178.4
Corn Production 14.529 14.586
Soybean Yield 52.2 51.6
Soybean Production 4.649 4.586

USDA 2018/19 Ending Stocks (billion bu)
USDA Sept 12 Average Estimate USDA August
Wheat .941 .935
Corn 1.639 1.684
Soybeans .830 .785

Have a Safe Day!

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

September 6, 2018

Good Morning,

Corn and Soybeans are both up two this morning, and it looks like we are going to have a dry stretch of weather! Trade is watching to see if the US and Canada form a trade deal by Friday. With a large crop starting to be taken off in the Southern Corn Belt, and a five month high trade deficit of $50 billion, it is extremely important the US can get good trade deals in place soon.

Several yield numbers have been coming in from parts of Illinois, a common theme seen is yield consistent with last year or 10-15 bushels higher. Each day these reports are creeping North, with similar expectations in mind. Make arrangements now to capture a more favorable basis than what is to come.

I would advise making cash sales or basis sales for any bushels that you will have to move this fall. We’ve seen fall basis widen in the past week in most areas, and expect this to happen again. Consider some levels for firm offers:
September $3.30
October/November $3.35-$3.40
December $3.50

Have a Great Day!

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

August 31, 2018

Good Morning,

Corn and Soybeans are both currently up three. Today is the last day of pricing on 2017-18 marketing. Markets could possibly see a couple cents added back next week, when rolling into the new month. Overall, do not expect any huge rallies, as weather is no longer playing a pivotal role in the 2018 crop.

FC Stone estimated the monthly corn yield for the US at 177.7 bpa yesterday.

I would advise making cash sales or basis sales for any bushels that you will have to move this fall. Not only do I expect space to be short, I also anticipate basis levels widening in the coming weeks.

Have a Great Holiday Weekend!

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

August 30, 2018

Good Morning,

Slightly higher markets overnight with both corn and soybeans up 2.

The annual US soy exporters conference wrapped up yesterday without any known sales to Chinese buyers which is a sharp contrast to previous years where billions of dollars worth of soybeans have been signed over to China. The US China trade dispute has obviously had a huge impact on soy product prices, but things will get even worse in the coming months with no export demand and a record harvest on tap.
Canada has returned to the table to discuss a NAFTA 2.0 with the US. The Canadian delegation says that an agreement is possible by Friday, but is doubtful it will happen that quickly. With the US securing a deal with the EU, Mexico and possibly Canada there appears to be building pressure for China to become more agreeable on a trade deal. (don’t expect anything soon)
Producers that do not have storage or are going to be short of storage this fall should be looking to lock up space quickly. In my opinion there are a few things are going to contribute to this falls space shortage.
1. Wheat still being stored in commercial elevators due to toxin issues this past summer that kept them from shipping the 2018 crop.
2. Record soybean production due to acres and great growing conditions will fill a lot of corn space.
3. Lack of soybean exports forcing commercials to sit on soybeans.
4. Carryout of corn and soybeans from the 2017 crop that is still in commercial and producer bins.
5. Average or better than average US 2018 corn crop that will be the last one to the table looking for space.

I would advise making cash sales or basis sales for any bushels that you will have to move this fall. Not only do I expect space to be short, I also anticipate basis levels widening in the coming weeks.

Have a Safe Day!

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