August 29, 2018

Good Morning,

Corn opened the day 1 higher with a market that appears oversold and is looking for a reason to stabilize or turn slightly higher. Good weather and pressure from soybeans has kept pressure on the market this week. With yesterday’s trade, December corn has closed lower in seven of the last eight sessions. The selling pressure has corn and beans testing their July lows as farmers clean out bins in preparation for harvest. The “forced” selling of old corn and soybeans has resulted in seasonal lows in late August and September the last few years and will do the same this year.
Producers with old crop corn or soybeans to move and sales that need to be made before the new year have run out of time and will have to deal with the current prices. At this point in the game, a 5-10 cent move higher would be a miracle without some political help. Producers with bins to clean out or new crop sales to make should give us a call to discuss Accumulator options that will help add to your bottom line.

Have a Safe Day!

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

August 28, 2018

Good Morning,

Weaker markets this morning with corn down 2 and soybeans down 11. News that the US and Mexico had reached an agreement on trade along with news that Canadian Trade Minister is scheduled to meet with his counterpart in Washington DC has help to increase the optimism that negotiations will produce a new NAFTA by the end of the week. President Trump continues to highlight the fact that the US farmer will be one of the largest beneficiaries of the new deal between the US and Mexico as they are the biggest buyer of US corn.
The USDA announced a farm aid package totaling 4.7B for losses incurred through the White House’s trade war with China. Soybean farmers have obviously taken the brunt of the retaliatory efforts from China and as such will receive the bulk of this payment. According to the package outlined yesterday, soybean farmers will receive $1.65/bu. times .50% of their 2018 production. Corn farmers are left feeling slighted as they are only scheduled to receive just $.01/bu. and no payments for wheat growers. The USDA has not ruled out a second round of financial aid in December should the trade war with China stretch into this winter.

Have a Safe Day!

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

August 27, 2018

Good Morning,

This morning corn is down 2 cents and soybeans are down 13 cents. December corn is down nearly 30 cents for the month and Soybeans are down over 75 cents for the month with a week to go.
Pro Farmers tour ended last week and they project the national corn yield to be 177.3 bu/acre +/- 1% (175.5 to 179.1) This compares to the USDA’s August estimate of 178.4. It is interesting to note that Pro Farmer has underestimated the final number 6 years in a row by a range of 120 to 650 million bushels. This would result in a yield of 178.1 to 185.1. Weakness in soybeans and wheat continue to add more pressure to the corn complex.
The US and China trade talks are idle with no new tariffs in place. The lack of Chinese demand and increases in yield estimates for this year’s soybean crop have soybeans trending towards contract lows. As of this morning November soybeans are just 15 cents off the contract lows.
As of Fridays close, funds were short 69k corn contracts and 55k soybean contracts. I look for lower markets this week with month end and the start of new crop contracts just 5 trading days away. Producers with old crop to price have run out of time and should get things priced now. Any new crop sales that will have to be made before the end of the year should be priced now as well. I would advise holding off on pricing any grain that can be stored on farm in hopes of rallies this winter or early next spring.

Have a Safe Day!

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

August 23, 2018

Good Morning,

Corn is currently down three, and soybeans down seven. Similar to last year, it’s tough to find bullish news at the end of August. Currently we are facing trade war headlines, great weather, a lot of old crop yet to move, and having to price CU18 by end of month/month end positioning. The only potential that I see is either coming to the new month and supply and demand reports.

With crop tours projecting strong yields and great weather forecasts, not much is still standing between having a strong harvest come fall. With that being said we need to really look at options to move remaining old crop corn, whether being cash, basis, or other options. Please call to discuss what can be done.

Have a Great Day!

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

August 22, 2018

Good Morning,

Corn is currently down three, and soybeans down eleven. Market continues to slip as ProFarmer Tour continues to see great yield, overall. Yesterday, Nebraska yield estimated at 179.2 versus the 3-year average of 163.1. With this being said, there is still a lot of ground to cover, surprises could still be in store for their later yield checks on the tour. Chinese officials are still in the U.S. on talks about a resolution to the trade war.

With crop tours projecting strong yields and great weather forecasts, not much is still standing between having a strong harvest come fall. With that being said we need to really look at options to move remaining old crop corn, whether being cash, basis, or other options. Please call to discuss what can be done.

Have a Great Day!

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

August 21, 2018

Good Morning,

Crop conditions came in lower than analysts expected with corn at 68% good to excellent, and soybeans at 65% good to excellent. Bigger news of the ProFarmer Tour stated above average expectations for South Dakota and parts of Ohio with the first day completed. South Dakota estimated at 178 versus a three year average of 154 bpa. The final yield estimates will be releases at 1:30 on Friday.

Chinese trade negotiations are picking up again today thru Thursday. Nothing solid will come of this, but more ground work is being made. Beyond this, NAFTA continues to negotiate as well.

With crop tours projecting strong yields and great weather forecasts, not much is still standing between having a strong harvest come fall. With that being said we need to really look at options to move remaining old crop corn, whether being cash, basis, or other options. Please call to discuss what can be done.

Have a Great Day!

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

August 17, 2018

Good Morning,

Corn is currently trading up one, and soybeans down nine. This coming week brings the ProFarmer Tour, which will give real data from fields across the Corn Belt. Coverage will be well maintained after each day, as this is a great benchmark for what can be expected come fall. Both NAFTA and Chinese trade war talks are remaining positive, though nothing solid has come out yet.

Markets aren’t expecting any huge rallies, with the large crop expected, make sure to take advantage of small rallies like we saw yesterday. If you have old crop remaining, September corn is at $3.40 cash. Get offers in if you believe there will be a small rally or call today and ask about other specialty contracts we have to get the bins cleaned out.

Have a Great Day!

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

August 16, 2018

Good Morning,

Grain markets opened higher this morning with corn up 4 and soybeans up 17. Soybeans are getting support from news that broke last night that the Chinese are sending a delegation to Washington DC later this month to discuss a solution to the trade war. There are also talk that China has entered the bean market with rumors of 15 cargos bought last week and 12 cargos bought early this week for September. The majority of the soybeans are coming from Brazil with 1 cargo coming from Argentina. Weekly export sales released this morning show old corn at 13.3 million bu. and new corn at 41.1 million bu. New crop sales are the largest in the last ten weeks. Old crop soybean sales were 4.9 million and new crop beans were 21.0 million. New crop is slightly above the ten week average.
Ethanol production for the week averaged 1.072 million barrels per day which is down 2.55% from last week but up 1.23% from a year ago. Ethanol stocks are up 5.4% compared to a year ago with production up 2.34% while gasoline demand is down 1.22%. Report out today showed that agricultural export prices fell 5.3% in July from the previous month, which is the biggest drop since October 2011.

Today’s jump in the markets is great news, but producers need to keep in mind that these are just rumors of talks that will/may happen and there is no resolution. We also need to remember the size of the crop that is in the fields now is going to put a lot of pressure on the markets in about a month when harvest begins in the I states.

Have a Safe Day!

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

August 13, 2018

Good Morning,

The selling continues!! Corn is down 4 and soybeans are down 8 as last Friday’s WASDE reports continue to weigh on the markets. The report that was a copulation of producer and field sample surveys forecasted record yields in both corn and soybeans. Corn came in at 178.4 bpa and soybeans at 51.6 bpa. Higher production in both resulted in greater ending stocks, particularly soybeans where the stocks to use ratio jumped to 18.44%. Corn stocks to use ratio is currently projected at 11%. The current price of corn on the CBOT is the lowest price we have seen with the stocks to use ratio this low since the inception of the RFSII mandate. The 178.4 bpa appears to be strongly driven by higher population counts combined with kernel length counts. The remainder of the season will prove whether the USDA’s assumptions of test weight support the 178 number.
It was interesting to note that the majority of the increase in yield came from less than half of the major corn producing states. Crop problems in some states were more than offset by the following states:

Illinois = 20 bpa above trend
Indiana = 16 bpa above trend
Iowa = 12 bpa above trend
Nebraska = 12 bpa above trend

Despite the record yield projections in corn, the market in my opinion is still undervalued considering the stocks to use ratio. Historically a stocks to use ratio of 10-12% equates to a cbot price of $4. We are currently trading at $3.70 for the CZ18 contract. Is this underpriced due to tariff issues, or will we see the market come back to the $4 level without tariff resolutions is the question. I believe that without some tariff resolution, we will not see $4 on the CBOT prior to harvest.

Have a Safe Day!

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

August 10, 2018

Good Morning,

Markets were quiet overnight and should open the same this morning as traders await the 11am release of production estimates from the USDA. This will be the only news traded today and could set the tone for the coming weeks as harvest in the south begins to work its way north. Below are the estimates for today’s report. Be sure to check back at 11am for today’s numbers.

Production (Billion Bu)
USDA August 10 Average Estimate USDA July
Corn Production 14.586 14.411 14.23
Yield 178.4 176.2 174.0
Soybean Production 4.586 4.407 4.310
Yield 51.6 49.6 48.5

Ending Stocks (Billion Bu)
USDA August 10 Average Estimate USDA July
Corn 2.027 2.0210 2.0270
Soybeans .430 .460 .465

Have a Safe Day!

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