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

January 7, 2019

Good Morning,

Weather is not the only thing that is unseasonable this week as we found out on Friday that the USDA will not be releasing its Crop Production report this coming Friday. The US government shutdown is entering its third week, with no end in sight. The USDA had delayed several major US and world reports because of the shutdown and has said they will set a new date for the Crop Production report once funding is restored. The lack of key data for traders has and will lead to a lot more speculative trading until we can confirm numbers.
The fundamental news that we have to trade for the time being is South American weather and US trade talks. Below normal rainfall and above normal temps are forecasted for Brazil over the next two weeks. Argentina on the other hand is wetter with heavy storms every 1-3 days over the next two weeks.
Chinese and US officials are meeting in Beijing this week for the first face to face talks since President Trump and President Xi Jinping agreed in December to a 90 day truce in the trade war.

Didion is currently offering a contract allowing you to sell cash corn for February 2019 delivery at $3.70 with a potential contract for December 2019 delivery at $4.00. Call for details.

Have a Safe Day!

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

January 4, 2019

Good Morning,

Currently corn is up 2 and soybeans are up 4 on carryover from yesterday’s trade strength. Traders are adding premium to the market due to dryness in parts of Brazil and flooding in northern Argentina. Rain is expected for the dry areas of Brazil over the weekend and dry for next week. This dryness could have a big impact on the second crop corn plantings.
The USDA will announce their decision today on whether the January 11 final production, Dec 1 grain stocks and winter wheat seedings will be released on the 11th at it regular time or if it will be delayed due to the government shutdown.
Producers with old crop corn to move before spring planting should be paying close attention to the markets and looking to lock in cash or basis contracts. Look to make sales before grain needs to be sold in March to pay bills for spring planting and basis levels widen out. Any potential rally in corn futures will also put pressure on basis levels.
Didion is currently offering a contract where you can sell cash corn for February 2019 delivery in the $3.65-3.70 range with a potential contract for December 2019 delivery at $4.00. Call for details.
Have a Safe Day!

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

January 3, 2019

Good Morning,

Corn is up 1-2 this morning as traders continue to look for direction from the other markets as trade awaits any positive news from the demand side. The USDA’s chief economist said they will decide tomorrow if they will delay the crop reports scheduled for January 11th due to the partial government shutdown. There has been no deal or indication that a deal would happen to end the shutdown. President Trump and key Democrats are meeting tomorrow as Democrats take over the House today.
Soybeans are up 5-6 this morning after yesterday’s strong performance on rumors China was looking to buy 1-2 mmt of US soybeans. US and Chinese officials are set to meet face to face starting January 7th.
I would advise producers to get firm offers in with your local grain buyers for the 2018 and 2019 crops. I don’t expect any adjustments in the USDA’s Supply and Demand charts to be big enough to move the grain markets significantly higher. With more corn acres next year and South American soybean starting to hit the market place in the next couple weeks, I expect more sideways movement in the markets with few opportunities to capture higher prices. The best chance to catch higher prices on any bounce are with firm offers. Producers should target $3.50-$3.75 for their next old crop sales and 3.70-3.75 for their next new crop sales. We are currently in the 70th percentile for the last five years with prices in the $3.70-3.75 range for fall 2019 delivery. Any sale that can be made at or above this percentile is strongly recommended. If we increase corn acreage in 2019 by 4-5 million acres next year and drop yield back to 175 bpa we could very easily push next year’s carryout over 2.0 billion bushels. This is why I would advise producers to have a minimum of 20% of your fall corn sold at this level.

Have a Safe Day!

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

December 31, 2018

Good Morning,

Ag futures prices are trading lower as traders look to put an end to what has been to say the least a very tumultuous 2018. Grain markets are closed New Year’s Day. March corn continues to hang around the $3.75 price level. After a difficult second half to December, March beans are up 5 and trading within striking distance of the psychologically important $9 level to close out the year.
Grain markets and financial markets alike are eager for more news concerning U.S.-China trade negotiations, after President Donald Trump reports he had a “very good call” with Chinese President Xi Jinping last Saturday. News of the phone call between the two Presidents is helping to support the summer row crops with President Trump proclaiming that “big progress” is being made on a variety of trade and IT/IP fronts between the two nations.

I look for the markets to close lower today with month end and year-end sales as traders regroup to start the New Year.

Have a Safe and Happy New Year!!!

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

December 28, 2018

December 28, 2018

Good Morning,

Corn opened up two, and Soybeans up ten. Low trade volume with the second to last trade day of the year. There has been a lot of uncertainty between the trade war and government shutdown still in the picture, trade is looking for any ideas on volumes that could possibly be booked on Chinese purchases. With that being said, USDA weekly export numbers will not come out today due to the government shutdown.

Brazil’s Mato Grosso region has questions on their potential soybean yields, as some farmers are reporting dryer conditions. Do not expect any major yield adjustments, but be aware of some of those headlines on South American crops affecting our markets.

My belief is that with end of month/year positioning there looks to be a more positive than negative start to 2019. News about a US trade delegation came in yesterday, with a date of January 7th meeting in Beijing. Watch for news from this, as China could be potential buyers of corn, ethanol, and ddgs. Take time to call and talk on either basis or cash levels before or after the holidays. Current cash levels to keep in mind: March $3.50, $3.70 July, and $3.75 December.

Have a Great Weekend!

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