December 31, 2019

Good Morning,

Markets opened softer this morning with corn down 1 and soybeans down 4 as traders wrap up trading for the year.
South American weather remains bearish the markets with very favorable weather over the last week and forecasts for decent precipitation in the 1-5 day forecast. With the lack of any weather concerns for South America and in most cases very favorable weather it will be hard to rally the market on weather.
Yesterday’s export inspections came in below the range of expectations with 409 mmt which is less than half the level seen last year. We are currently 17 weeks into the marketing year and we are 390 million bushel behind last year. The US continues to struggle with not being the most competitive corn on the market with Argentina and Ukrainian corn both less expensive after freight.
Vice Premier Liu He has accepted an invitation to lead a delegation to the US this Saturday where he is expected to sign the phase one deal that would significantly de-escalate the US-China trade war. This is positive news, but I think we need to realize that the damage that has been done over the 18 months is going to linger for years to come. During this trade war, we have invited Brazil, Argentina and Ukraine to the soybean production party and they will remain competitive going forward.
I would advise producers to put offers in with your buyers for old crop corn and soybeans before the January 10th Production and S&D report. I would target $3.99-$4.08 on the CH CBOT and $9.60-$9.85 on the SH CBOT. Looking back over the last 5 years we have struggled to trade above these levels.

I would like to thank all of you for business in 2019 and look forward to serving your grain marketing needs in 2020. May you and your family have a prosperous new year!

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

December 26, 2019

Good Morning,

Opening calls are mixed to slightly higher as some traders return from the holiday break. Most of the global markets will remain closed which will limit volume in the ag sector. Optimism over the China trade deal and a winter storm that is set to hit the Dakotas and northern Minnesota this weekend into early next week will add some support to the trade. Snowfall of 8-16 inches is expected from Central Nebraska to northern Minnesota and eastern North Dakota. This storm will be very similar to the one that hit this area in October.
Favorable South American weather is in the forecast with moderate rainfall for Brazil over the next 6-10 days and rainfall finishing by Tuesday in Argentina then turning drier over the next 6-10 days.

Today’s light volume could create swings in the market giving traders and producers an opportunity to cash in ahead of the New Year.

Have a Safe Day!

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

December 24, 2019

Good Morning,

Markets are quiet overnight and this morning as traders take time away from the markets to celebrate the holidays. The CBOT closes at 12:05 today and will re-open at 8:30 am on Thursday morning.

Merry Christmas to you and your families from all of us at Didion!

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

December 20, 2019

Good Morning,

Corn and beans slightly higher this morning as they trade 2 and 4 higher respectively.

A Chinese consulting company that works with the Government, says that China will have no problem meeting the 40 billion dollars in US goods. They estimate that China will begin purchasing in February and secure 45 mmts of beans, 8 mmts of corn, 5 mmts of wheat and 8 mmts of DDG’s. Livestock would be limited to 1 mmts of US pork and poultry. There is no mention of ethanol, which makes me think this list is far from complete or correct. It’s going to take a mix of many products to get to the 40 billion!
Rains have started to develop in Southern Argentina and will continue into the weekend. Totals should be from .5 to 2.5 inches. A couple system are set to move through in the next couple days. Brazilian will see the same normal weather pattern of rains of 1-3 inches every few days.

Funds are short 95,000 corn and 91,000 bean contracts after yesterday’s trade. I expect their short bean position to be erased in the coming weeks especially if China looks to buy 45mmt of beans. Corn could see some strength on bean follow thru, but I don’t expect much before the January WASDE.

Have a Safe Day!

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

December 16, 2019

Good Morning,

Markets are higher this morning with corn up 4 and soybeans up 8. Fund managers are starting to reduce their short position as they begin to get a better understanding of the Phase 1 trade deal and the potential for a purchase of $40 Billion of US Ag products.
Both sides are still working on the language of the deal thoughts are that it could get signed in early 2020. Keep in mind this is the fifth time during the US/China trade war that a deal has been prematurely declared. Expect more bumps along the road before the deal is done and take advantage of the higher trade when presented because it may not last long.
A high pressure ridge is in place over Northern Brazil and Southern Argentina that will keep the forecast dry over much of the next 10 days. The extended outlook shows improved chances for remain across the dry areas. Extreme heat is lacking and the current pattern is not threatening to the crop.
Over the next couple weeks the markets could be very erratic with some shortened trading sessions and with traders exit early for the holidays. This could work for or against producers. My advice would be to take advantage of any spikes we see between now and the end of the year.

Have a Safe Day!

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

December 13, 2019

Good Morning,

Markets are higher this morning with corn up 4 and beans up 11. The catalyst has been media reports suggesting that President Trump has signed off on a Phase 1 trade deal. While this is great news, Beijing has not said that the two sides have reached an agreement yet.
The deal presented to the President included a promise to buy more US agricultural goods. Officials also discussed possible reductions of existing duties on Chinese products. Terms of the deal would halt duties on $156 billion in Chinese goods and is thought to roll them back on another $360 billion goods by some 50%. The legal text has not been finalized and the White House has not commented, but if these rumors are true we can expect a reduction on the imposed Chinese tariffs and Beijing to start buying $50 billion of US AG products annually beginning in 2020.
While this is great news, producers need to keep in mind that this has not been signed and even if it does, it is just phase 1 and is not going to send the markets thru the ceiling. This is merely a small step in the right direction and there are a lot of details to be worked out.
This is the time of year when producers need to keep three things in mind:
1. Don’t get complacent – Just because harvest is compete doesn’t mean that your work is done. Now is the time to focus on the tough part of farming…. Marketing your crop! You know what you have from this year’s harvest so make plans to market it. You should also be making plans and offers to market next year’s crop. Most of you are already buying your seed for next year so you should also be marketing that crop.
2. Be Disciplined – Talk to your grain buyer, lender, advisor and make plans for how you are going to market this year and next year’s crop. Get firm offers in with your buyers and stick to these firm offers.
3. Diversify and be flexible – Put offers in and make sales for multiple years. 2019/20 crop, 2020/21 crop. Use different marketing tools (basis, HTA, cash, accumulators) to spread out your risk.
You typically get 1 or 2 opportunities to market your crop at decent prices and the only way to successfully hit them is to be disciplined and have offers in place to sell when they happen.

Have a Safe Day!

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

December 12, 2019

Good Morning,

News is limited overnight, but meetings are taking place in Washington today. A decision regarding new tariffs will start being made today as President Trump meets with his trade team. Whether additional tariffs are added or held off, or some tariffs pulled back will indicate how close the US Government is to a phase one deal with China. You can expect leaks and erratic trade in equities and commodities into Friday’s close.

US export sales were 502,700 mts of wheat, 873,500 mts of corn up 60% from last week and 28% from the prior 4. Bean sales were 1,050,100 mts up 54% from last week and down 17% from the 4 week average, with China taking the bulk of the sales. Argentina corn was sold into Brazil yesterday, which shows Brazil has exhausted supplies, yet some corn still remains in Argentina at cheap CIF than the US.

Look for choppy trade to continue into Friday with anticipation of what may or may not be done on the trade front.

Have a Safe Day!

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

December 10, 2019

Good Morning,

Prices are mixed with corn and beans trading higher and wheat down a couple. Soybeans are getting a boost from a report on Bloomberg that USDA Secretary Perdue indicated that the US is unlikely to impose new tariffs on China come December 15th. Outside markets are quiet with the US House expected to go ahead with approval of the USMCA trade agreement. The USDA’s December crop report is due out at 11 am CST.

Typically the December report is one of the least exciting of the year and I expect them to leave any major adjustments to US production for the January report. There may be some tinkering with the corn exports, but really there shouldn’t be any real big surprises.

Ending stocks for corn are estimated at 1.859 billion bushel for December compared to 1.910 in November. Soybean stocks are estimated at 472 million bushel compared to 475 million in November.

While soybeans finished off of their highs yesterday, it was a good start to the week as the soybeans continue to try and erase the loses of November here in December. With harvest coming so late for many this year it was as if we made our harvest lows during Thanksgiving. Pulling the tariffs is a good thing, but many traders remain wary after having been burned so many times.

Corn harvest was reported at 92% complete nationwide vs 89% last week and 100% historically. Wisconsin came in at 74% complete compared to 66% last week and 95% historically.

Have a Safe Day!

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

December 9, 2019

Good Morning,

Good morning, beans traded higher overnight, with corn and wheat slightly lower. US stocks were down slightly and crude oil is down 60. Over 60,000 contracts of beans traded last night, expecting purchases from China this week ahead of the December 15th tariff deadline. China has waived tariffs for soybeans and pork for now. New tariffs on 156 Billion dollars worth of Chinese goods could be imposed this week. Pulling the tariffs is a good thing, but as many times as traders have been burned so many times, there are still a lot of non-believers.

Corn harvest is expected to be somewhere close to 92% complete this afternoon. Weather looks better this week, and harvest will be mostly complete by next Monday.

Argentina is still on the dry side early in this growing season. Some rain may start to develop in the Northern Corn area, but the South looks dry for the next 10 days. Brazilian weather looks the same with regular rains coming weekly. Rainfall totals in Brazil with range between 1-5 inches. Temps will be very normal, in the 80’s to lower 90’s.

Tomorrows USDA S&D report isn’t expected to provide any big changes as most are expecting the January 10th Production and S&D report to be the next potential market mover.

Have a Safe Day!

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

December 2, 2019

Good Morning,

Corn is up 1 and soybeans are down 1 to start the month.

President Trump is reinstating tariffs on steel and aluminum from Argentina and Brazil, criticizing the cheapening of their currencies. Brazil steel accounts 3.5% of US steel consumed. The tariff would be set at 25% on steel and 10% on aluminum. He also called for the Federal Reserve to loosen monetary policy.

The Argentine weather forecast remains dry for the next 10+ days due to a high pressure ridge that has set up. Temps have been normal, this is their first real shortfall in rain this season. Weather for Brazil looks normal as ever, with rain continual over the next 10 days. Totals from the model below show 2-5 inches of accumulation coming.

Corn harvest is expected to show 90% harvest tonight, with the Northern harvest lasting well into December or spring for some areas farther north.

Producers should be talking to their buyers and bankers to get a plan in place to take advantage of the historically tight basis levels posted now thru spring. The market is telling us to sell the crop now. If you are of the opinion that the CBOT is going to rally sometime in the next 9 months look to re-own your grain on paper. March 2020 calls are cheap insurance that will keep you in the game in the event of a CBOT rally. This will also allow you to move your grain in the short term and avoid dealing with quality issues this year’s crop has.

Have a Safe Day!

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