January 28, 2019

Good Morning,

Commodities are taking back Friday’s gains this morning with corn down 2 and soybeans down 9. Improving forecast for South America has soybeans trading lower. The mid-range models have the high pressure ridge that has dominated weather pattern for weeks looking to shift to the east allowing for seasonal rains to move back into Brazil and away from Argentina.
The government is open from the partial shutdown, but President Trump says he would be willing to do it again if demands aren’t met by February 15th. USDA Chief Economist says the February report scheduled for the 8th will be on time. The delayed data from the missed January report will be included. The annual Ag outlook forum will also remain as planned for February 21 and 22 if the government remains open thru then.
Trade talks with China appear to be back on track but concerns over a lack of progress have traders unwilling to take positions.

Have a Safe Day!

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

January 25, 2019

Good Morning,

Unchanged markets on the open this morning as we continue our winter doldrums. The fact that we have the 50, 100 and 200 day moving averages are all within 10 cents of each of other in the CH19 is another reminder of how uneventful this market has been.

Ethanol production for the week averaged 1.031 million barrels which is down 1.9% from last week and down 2.92% from a year ago.

Private analysts Informa released their estimates for the 2019 growing season yesterday and numbers were in line with what most were expecting. They project 91.5 million acres of corn which is 2.4 million above last year. They projected soybean acres at 86.2 million acres which is 2.9 million below last year.
I would not be surprised to see this acreage shift in 2019, and if we do it could make the current prices we are paying for fall and next summer look very good. At 91.5 million acres and a national yield of 178(2018 average) we could end up with a carryout of 2.8 billion bushel! If we dropped yield to 175 we would still have a carryout of 2.5 billion bu. In my opinion we would need to drop yield to 160 (a number we haven’t seen since 2013) which would result in a carryout of 1.3 billion to get the markets excited.
This is the time of year when many producers get caught focusing on the marketing of their old crop and don’t give enough attention to new crop prices. Don’t miss these new crop opportunities!
October and November cash prices are in the $3.60-$3.70 range while spring and summer of 2020 prices are in the $3.85-$3.95 range.

Have a Safe Day and Stay warm!

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

January 24, 2019

Good Morning,

Corn and soybeans are both trading 2-3 lower this am. Traders remain unwilling to take a position as the wait for a trade deal with China continues.
Weather in South America appears more bullish today as a high pressure ridge is forecasted for Central Brazil in the next two weeks. This ridge will bring below normal rain and above normal temps. The dry area in Southern Brazil will stay dry for the next two weeks as well. Argentina looks to remain wet, but more of a normal pattern.
Corn has hovered around $4 for the December CBOT for the last two months. Prices for corn in January are rarely the high for the year. If prices drop off of the current highs, 90% of the time we take the January highs out later in the year. In the last 10 years beans have spent more than 80% of their time at $9 or above. While these statistics are interesting and would tell one not to sell, we have never experienced the current situation we are in. With Chinese trade issues, US government shutdowns and the ample stocks in both corn and soybeans I would not be willing to bet on this market.

Have a Safe Day!

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

January 23, 2019

Good Morning,

33 days into the partial government shutdown and who knows how many days into the US-China negotiations and neither one seem to have made any advancement. China proposed a 1 trillion dollar spending spree over 6 years to cut the trade deficit which was rejected by the US who wants it cut to a couple years. Talks were planned for later this week in Washington between US and Chinese senior officials, but has been canceled because there is a lack of progress. As I stated in my comments yesterday, the lack of progress on both of these issues will keep commodities in a tight trading range with the lack of any fundamental news. Producers should use caution on any unpriced grain that they currently have in storage. If/when the US issues get resolved, we could see a flood of information that will make the markets very volatile. Its anyones guess as to which direction the reports could send the markets so reducing risk is the safest option.

All Farm Service Agency (FSA) service centers will be open beginning January 24 to provide the majority of FSA services needed by farmers and ranchers during this critical time of the year for agricultural operations. Additionally, the limited FSA loan services initially made available at certain FSA county offices beginning January 17 will continue January 22 and 23.
The U.S. Department of Agriculture (USDA) has recalled more than 9,700 FSA employees to keep offices open from 8 a.m. to 4:30 p.m. weekdays beginning January 24. For the first two full weeks under this operating plan (January 28 through February 1 and February 4 through February 8), FSA offices will be open Mondays through Fridays. In subsequent weeks, offices will be open three days a week, on Tuesdays, Wednesdays, and Thursdays.
Agricultural producers who have business with the agency should contact their FSA office to make an appointment. The deadline to apply and complete applications for the Market Facilitation Program has been extended to February 14. Other program deadlines may be modified and will be announced shortly.

Have a Safe Day!

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

January 22, 2019

Good Morning,

Corn and soybeans are unchanged this morning after the extended holiday weekend. Recent rains in the dryer areas of Brazil and dryness in the areas of Argentina that have been excessively wet could weigh on the markets this week. Forecasts for Argentina and Brazil look favorable in the 7-10 day outlook as the weather patterns look to shift from their recent issues.
We are currently in the 32nd day of the US Government shutdown which has resulted in the lack of key reports that traders are anxiously awaiting. With the lack of these fundamental reports the markets will continue to trade technical data.
Chinese officials will be in Washington this week to meet with US officials as they continue to work thru trade issues.

Producers with old crop corn to move before spring planting should be making sales with the forecast for no significant moves higher between now and spring. I would look to make sales prior to the March 29th planting intentions report. Producers that typically move grain in the mid-summer months should be making cash sales with current prices in the $3.65-3.70 range and lock in basis on a good portion on their remaining bushels. US Carryout of corn is going to be large again this year which will make current levels look very attractive.
Corn quality has also been an issue this year with higher levels of toxins in this year’s crop. Higher vomitoxin levels have resulted in many Midwestern producers scrambling to find a market for their grain as many ethanol plants and livestock producers have been discounting or rejecting loads with higher levels. Producers should be pulling grain out of their bins on a regular basis to monitor quality and prevent increased contamination of any toxins. Lighter test weight and poorer quality grain should not be stored into the summer months.
Have a Safe Day!

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

January 17, 2019

Good Morning,

While export demand has been slow or at least slow to be reported for the last couple weeks, the domestic demand has remained steady on the ethanol front. U.S. ethanol production for the week ended January 11th averaged 1.051 mil barrels per day (up 5.10% versus a week ago, down 0.94% versus a year ago); stocks totaled 23.351 mil barrels (up 0.42% versus a week ago, up 2.67% versus last year); corn use for the week was 108.5 mil bu (103.2 mil last week and versus the 107.5 mil bu needed to meet USDA projections).
Andrew Wheeler the acting administrator for the Environmental Protection Agency said a rule to allow sales of higher-ethanol blends of gasoline year-round is being delayed by a partial government shutdown.
U.S. Secretary of Agriculture Sonny Perdue announced that many Farm Service Agency (FSA) offices will reopen temporarily in the coming days to perform certain limited services for farmers and ranchers. The U.S. Department of Agriculture (USDA) has recalled about 2,500 FSA employees to open offices on Thursday, January 17 and Friday, January 18, in addition to Tuesday, January 22, during normal business hours. The offices will be closed for the federal Dr. Martin Luther King, Jr. holiday on Monday, January 21. Reopened FSA offices will only be able to provide the specifically identified services while open during this limited time.

Services that will not be available include, but are not limited to:
• New direct or facility loans.
• New Farm loan guarantees.
• New marketing assistance loans.
• New applications for Market Facilitation Program (MFP).
• Certification of 2018 production for MFP payments.
• Dairy Margin Protection Program.
• Disaster assistance programs, such as:
• Livestock Indemnity Program.
• Emergency Conservation Program.
• Wildfires and Hurricanes Indemnity Program.
• Livestock Forage Disaster Program.
• Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish.

Producers with old crop corn to move before spring planting should be making sales with the forecast for no significant moves higher between now and spring. I would look to make sales prior to the March 29th planting intentions report. Producers that typically move grain in the mid-summer months should be making cash sales with current prices in the $3.65-3.70 range and lock in basis on a good portion on their remaining bushels. US Carryout of corn is going to be large again this year which will make current levels look very attractive.
Corn quality has also been an issue this year with higher levels of toxins in this year’s crop. Higher vomitoxin levels have resulted in many Midwestern producers scrambling to find a market for their grain as many ethanol plants and livestock producers have been discounting or rejecting loads with higher levels. Producers should be pulling grain out of their bins on a regular basis to monitor quality and prevent increased contamination of any toxins. Lighter test weight and poorer quality grain should not be stored into the summer months.

Have a Safe Day!

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

January 16, 2019

Good Morning,

Prices are trending higher this morning as they recover from yesterday’s selloff following comments from US Trade representative Robert Lighthizer who reportedly said they made no real progress over the last week in talks with Chinese officials.
The market appears to be focusing its attention on the S. American weather forecast with the latest showing a drier outlook for Brazil over the next two weeks.
With the lack of USDA reports to confirm or deny any rumors of export sales, the market will continue to trade S. American weather and trade rumors. Any rally in the markets should be sold as the long term outlook is a carryout in corn and soybeans that will not be reduced significantly to push the markets significantly higher.

Have a Safe Day!

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

January 14, 2019

Good Morning,

Soybeans and wheat are lower to open the week while corn continues it sideways pattern. Recently the only market movers we have seen are coming from the soybean market. China confirmed its total soybean purchases were 5.72 mmt in December. This was below the 6.5 mmt that traders were expecting. This was the lowest December purchase since 2011.
Rains in Northern Argentina and Southern Brazil over the weekend continue the flooding potential. The forecast calls for more rain in those areas this week while central and northern parts of Brazil are expected to remain dry.
Producers with old crop corn to move before spring planting should be looking to make sales with the forecast for no significant movements higher between now and spring. I would look to make these sales prior to the March 29th planting intentions report. Producers that typically move grain in the mid-summer months should look to make some cash sales with current prices in the $3.75-3.80 range and lock in basis on a good portion of the remaining bushels. US carryout of corn is looking to be large again this year which would make current basis levels very attractive.

Have a Safe Day!

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

January 11, 2019

Good Morning,

Markets are slightly higher this morning after yesterday’s selloff. Yesterday’s weakness was felt in all commodities as bullish updates from China and the US didn’t come. Funds sold 12,000 contracts of corn and 8,000 contracts of beans.
South American weather hasn’t been ideal, but production updates from their government indicate they anticipate the crop to be 95.6 mmt which is up 15.6 mmt from last years.
Look for the markets to remain in a sideways pattern as traders monitor South American weather and the daily saga between the US and China. Traders are hopeful that we will see a China trade deal soon or at least an additional good faith purchase as negotiations progress. The US government shutdown could impact any sales news with the lack of weekly export reports.

Have a Safe Weekend!

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

January 8, 2019

Good Morning,

Corn is up 1 and soybeans are down 1 to start the morning. Crude oil is up 80 cents this morning but still lingering below the $50/barrel mark that we have been stuck in for the last month. With US/China trade talks progressing, US Commerce secretary Wilbur Ross says both sides can make a deal that works for both. There were rumors yesterday that China bought at least 3 cargos of US soybeans through March, with some sources hearing as many as 25 cargos had traded. These rumors cannot be confirmed due to the government shutdown. In addition to soybeans there continues to be interest in China purchasing corn and wheat from the US in significant quantities. While they are only rumors at this point, it does show that there is a lot of interest in the US and China moving forward.

Have a Safe Day!

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