November 27, 2019

Good Morning,

Markets are lower today with corn and soybeans both trading 1 lower. The markets will be closed tomorrow for Thanksgiving. The markets will have a shortened trading session on Friday when they will close at 12:05pm.
US weather will continue to make it difficult for northern growers to complete harvest fortunately most of our area should only see rain with very limited snowfall. Temperatures dropping next week should firm things up and allow combines to head back to the fields early next week. Weather in South America continues to improve which will support higher production from our neighbors/competitors to the south!
Historically today and Friday are positive days in the markets. Combined with the short positions that traders are carrying at month end we could see some short covering today or Friday.
Weekly export sales will be delayed until Friday due to the holiday.
Strong basis levels continue to keep corn moving while the CBOT fails to show any strength. Producers should be talking to their buyers and bankers to get a plan in place to take advantage of these tight basis levels. 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 and Happy Thanksgiving!

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

November 25, 2019

Good Morning,

Markets are higher with corn up 1, beans up 2 and wheat up 7 cents to kick off the Holiday shortened week. The CBOT will be closed on Thursday in observance of Thanksgiving.
Typically this is a one of the most bullish weeks of the year and with heavy snows (4″ to 20″) on the way for the Upper Midwest and northern Plains, we could still have over 1.25B bu. of corn still sitting in the fields when the system moves through later this week.
China has said it will raise penalties on violations of intellectual property (IP) rights in an attempt to address one of the sticking points in trade talks with the United States. Beijing will also look into lowering the thresholds for criminal punishments for those who steal IP, according to guidelines issued by the government on Sunday. China said it is aiming to reduce frequent IP violations by 2022. This has been one of the White House’s main sticking points during the negotiation process and Asian and World stock markets view the news as bullish.
While the pros wait for some definitive news on some sort of potential resolution to the trade war, the overall favorable weather forecast for South America has help dampen the bulls enthusiasm here in November.

Have a Safe Day!

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

November 21, 2019

Good Morning,

Markets are slightly higher this am in corn and down in soybeans. Corn is currently up 2 and soybeans are down 1.
The Wall Street Journal is reporting this morning that China has invited US Trade Representative Lighthizer and Treasury Secretary Mnuchin to Beijing for some high level negotiations next week ahead of the Thanksgiving Holiday. Chinese and American trade negotiators continue to wrestle with exactly which trade tariffs will be removed as part of a “phase one” deal between China and the United States and under what conditions. Among other things, the White House continues to seek clear commitments on US Ag purchases before they travel. It is worth noting that this is the first time that the Chinese have asked for such an urgent meeting. It would appear as though the President Trump is correct when he says “I can tell you this: China would much rather make a trade deal than I would.”
Weather models are in good agreement for South America too in calling for favorable conditions that will benefit crops. Showers and Storms will dominate that forecast with 10-day totals expected to range between 2″ to 4″. Following the dry spring, the predicted rains will be a welcome sight to farmers there. Northern Brazil is expected to see showers daily and Argentina will see normal rainfall that will aid germination. Overall the pattern looks to be ideal for corn and bean crops with no threat from lasting heat with highs in the 80’s and 90’s.

Locally we are in the heat of harvest with most producers between 50-75% complete and now starting to look for space for a crop that is bigger than most had expected. If you are in this category, make sure you are talking to your grain buyer to find the best options available to move your grain and lock in a profit. Give us a call to discuss if you are looking for alternative choices to paying storage.

Have a Safe Day!

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

November 19, 2019

Good Morning,

The markets look to stage a Turnaround Tuesday after reports out yesterday morning on CNBC that President Trump was not prepared to rollback US tariffs on Chinese goods. Additionally, it has been reported that the two sides continue to butt heads over the size of US Ag purchases. The word that we are getting is that President had not made a final decision on the tariffs; however, the situation remains fluid with negotiations on a Phase 1 deal occurring on a daily basis.
Prices on the board continue to look cheap and should help to entice some activity in the export markets. For the second consecutive day we have a sale of corn to Unknown Destination reported on the daily system and beans out of the Gulf are the cheapest in the World. With US grain and soy now much more competitively priced we have begun to see business pick up. Yesterday we saw a sale for 132 TMT of corn to Unknown and then again today we got another for 191 TMT of corn to Unknown Destinations.
Now that the US harvest is nearly complete, the pro’s focus will now shift to South American weather and at least for now the forecast looks pretty favorable over the next couple of weeks. The major models remain in good agreement in calling for an active wet weather pattern settling in for the balance of November.
The December corn board is currently trading 27 cents below this same date last year. Cash prices this fall have been much better than last fall and its all due to basis levels across the Midwest. This is one big reason that I believe producers should be locking in basis contracts for fall and spring/summer delivery. Any move higher in the CBOT is going to result in weaker basis levels.

Corn is up 3 and soybeans are up 4 to start the day.

Have a Safe Day

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

November 15, 2019

November 15, 2019

Good Morning,

Corn is down 2 and soybeans are up 4 to start the day.

More back and forth talks about the US and China, and more of the same coming out of the White House. Comments that they are getting close to a partial deal continue to be the talk, but still no deal.

The decision by China to allow US poultry into the country had to have helped, lifting the ban from 2015. If the US government is feeling the doors more wide open a trade agreement is much more likely. Unfortunately this has nothing to do with more free trade, and everything to do with rampant food inflation brought by AFS.

I still believe that we are along ways away from any deal getting done that would significantly support US grain markets. In my opinion, the Chinese still hold the key to getting a deal done with all the pressure on President Trump.

South American weather has been very favorable with rains moving across Brazil and Argentina which is very welcome. There are only small pockets of Argentina and North Eastern Brazil that remain dry. This should support their intentions to plant more corn and beans than last year which will continue to put pressure on US exports.

Forecasts locally for the next week look favorable for harvest progress with slightly warmer and dryer conditions in the forecast thru next Thursday.

Have a Safe Weekend!

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

November 13, 2019

November 13, 2019

Good Morning,

Prices over at the CBOT were a little lower last night with follow-through buying absent after the pros were remained in the dark on any new detail of the Phase 1 trade agreement. Corn is down 2, soybeans are down 1 and wheat is down 4 cents.

Radar shows more snow moving out of the western Corn Belt this morning. Accumulations with this system don’t look to be especially heavy and will likely melt quickly with temperatures expected to moderate early next week. Mother Nature looks like she will cooperate into early December and allow harvest to get back on track. Corn harvest last night was reported at 66% complete for the US compared to the 5 year average of 85%. Wisconsin came in at 30% compared to the 5 year average of 65%. This is the third slowest pace for corn harvest on record, with the rates across the upper Midwest and Plains running well behind normal rate.

President trump offered no details on the trade situation in yesterday’s speech which left traders with no direction on the trade front. Fundamentals will be the trade for now as we are still dealing with a 1.91 billion bushel carryout.

Have a Safe Day!

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

November 12, 2019

November 12, 2019

Good Morning,

Overnight corn and beans were unchanged after yesterday’s selloff of 14 cents in soybeans and 4 cents in corn. The markets were under heaving fund selling yesterday with traders monitoring comments from President Trump. The markets closed at their lowest level since the September stock report. The USDA’s November report removed most any chance of bullish surprises with acreage and yield. One bit of hope to hang on to is the correlation to the direction of the Oct-Nov yield change compared to the Nov-Jan yield change. (chart below)The problem with this is that we need to wait two months for the data and it may be too late for the market to react. Once we get into January the trade will start to focus on the coming years acres and production instead of what is behind us. With ta 167 bpa yield and planted acres at 94 million, next years carryout looks to be right in line with this years at 1.906 billion bushels. Keep in mind this is using a 167 bpa, which is what we are using this year with poor growing conditions. The more this increases, the less likely we are to see this corn market at the current levels next year.
I would advise producers to take advantage of historically strong basis levels for the crop they are harvesting now and start to lock in some of next years production at current cash levels.

NASS crop progress will be out later today with expectations for corn harvest to be 65% complete and soybean harvest 85% complete. Drying issues continue with the shortage of LP and the crop not drying down much in the field with later planted varieties. This reminds me of 2009 only on a larger scale when harvest drug into December.

The trade will be awaiting President Trump’s update on the Phase 1 deal with China later today.(11am central) My guess is that he would be positive about the trade deal, but not commit to anything. Any negative comments from the President today could be volatile to the markets.

Have a Safe Day!

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

November 11, 2019

Good Morning,

Happy Veteran’s Day and Thank You to everyone that has and still does serve our nation!

Weaker markets to start the week off with corn down 2 and soybeans down 9.
The trade negotiations with China appear to have slowed again over the weekend as president Trump denied that he has agreed to rollback tariffs.

With Fridays report behind us and no major surprises in the USDA’s numbers from the October report, traders will now have little fundamental news to move the markets for a couple months. The weekly progress report will be delayed until tomorrow due to Veterans Day. Trade is looking for tomorrows report to show 65% of the nations corn and 85% of the nations soybeans harvested.

There are no major weather changes in the 1-5 day forecast for Brazil with rains still expected to help replenish the moisture profiles across the central and northern soybean growing regions.

Have a Safe Day!

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

November 8, 2019

Good Morning,

Quiet markets to open the day as traders await the 11am WASDE report. (Estimates listed below) Heading into today’s report the spec funds are carrying a rather large short position in corn and long position in soybeans given the private estimates for today’s report. This could set up for some major reversal trade if today’s numbers come in near the private estimates. I personally think today’s report is going to show a higher yield in corn and unchanged harvested acres. While the major focus will initially be on yield and acres, the final ending stocks number will set the tone for trade after today up to the January report. If ending stocks are not lowered (due to decreased production or increased demand) we will see a lid on the market at least until the next WASDE report. (January)

China made headlines yesterday when it stated that it agreed to a deal with the US to roll back many of the tariffs imposed during the trade war. That suggests that China is trying to use the media to leverage the trade talks, putting the pressure on the US to agree to such in order to get phase one deal done. President Xi knows that President Trump needs a political win in the upcoming election in the face of the House’s impeachment inquiry and knows that Trump would not want to be seen as the one who failed to get the deal done.

Corn
USDA November Ave. Estimate USDA October
Production 13.661 13.643 13.779
Yield 167.0 167.5 168.4
Harvested Acres 81.815 81.455 81.815
Ending Stocks 1.910 1.817 1.929

Soybeans
USDA November Ave. Estimate USDA October
Production 3.550 3.510 3.550
Yield 46.9 46.6 46.9
Harvested Acres 75.626 75.422 75.626
Ending Stocks .475 .428 .460

Be sure the check back in after 11am for today’s numbers.

*We are currently NOT discounting or rejecting for vomitoxin*

Have a Safe Day!

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

November 5, 2019

Good Morning,

The corn market it trading 2 lower and soybeans are 3 lower this morning as trade continues to position ahead of Fridays report. Funds are currently short 102,000 corn and long 74,000 soybean contracts.
Last nights crop progress report showed US corn harvest 52% complete compared to 41% last week and 75% on the five year average. Wisconsin came in at 21% complete compared to 51% on average. Soybean harvest was reported at 75% complete compared to 87% for the five year average. Wisconsin came in at 62% complete compared to 85% for the five year average. Favorable weather this week across the US should bump both of these numbers significantly by next Monday.

Brazilian soybean growers have planted 46% of the estimated area in the 2019/2020 crop, below the level of 60% seen last year. Despite the slower pace of planting compared to 2018, soybean planting is above the five year average of 43%. Brazil will harvest an estimated record 121 million tons of soybeans this year after increasing planted acres by 1.3% to 90 million acres.

Positive news this morning is that trade talks are reaching the critical final stages of a “Phase 1” deal, but both sides are doing some last minute haggling to benefit their side. While these talks and negotiations are not new, the progress definitely is. My personal opinion is that the Chinese hold more power in these negotiations at this point that President Trump. I think they can wait him out thru the next US Presidential election before they have to give in. If he wins the next election then they come back to the drawing board. If he loses (which would most likely happen without him reaching a deal), then they get someone new to deal with.

If you are going to be short on space for fall bushels give us a call to find out what great alternatives we have to paying storage.

Have a Safe Day!

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