February 5, 2019

February 5, 2019

Good Morning,

Corn and beans are both down a couple cents this morning and wheat is down 4. There is a lack of fresh news with Asia closed to celebrate the Lunar holiday and before Fridays WASDE report from the USDA.
President Trump will speak to the nation this evening in the first State of the Union address of 2019. It will likely include an upbeat message regarding the renegotiating of agreements with major trading partners like the USMCS and the recent success in the negotiations with China. The hope is that things will continue to progress and we can get a new signed trade agreement in place by the end of February.
Friday we get a look at the February S&D report from USDA after January’s was skipped due to the government shutdown. The average guess has total corn production coming in around 14.5B bu. last year on 81.7M acres, for an average yield of just under 178 bpa. All those numbers would be down slightly from the last USDA report in November. Soybean production estimates are expected to be near of 4.57B bu. on 88.2M acres with an average yield of 51.8 bpa. USDA’s November estimates were for 4.600 billion bushels with average yields of 52.1 bpa.
Don’t forget to make sales and get firm offers in with your buyers ahead of Fridays report.

Have a Safe Day!

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

February 4, 2019

Good Morning,

The markets on Friday were full of rumors about China’s intentions to purchase US beans, and possibly corn, wheat and ethanol. The early strength the faded towards the close with no confirmation. Traders will wait to see if the USDA puts out any notices of those sales today. We are expecting no new business with China this week as they are observing their lunar holiday.
The USDA will release the regular February Supply and Demand report this Friday along with the delayed January reports, including the December quarterly stocks report, winter wheat planting intentions and final corn/bean production yield estimates.

I would advise producers to make sales and get firm offers in before this Fridays report as we could see volatile trade in either direction upon the release of Fridays data.

Have a Safe Day!

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

February 1, 2019

Good Morning,

As the Midwest rises out of the deep freeze we have been in the last few days the markets are also trying to rise up. Corn is up 2 and soybeans up 12 this morning. The corn market is trading higher while being pulled along with the bean market as trade talks with China progress.
This week’s trade talks were thought to be positive with comment that there has been much progress made toward resolving structural issues. Comments were that there is a lot of work left to do to totally resolve trade differences and discussions are expected to continue over the next thirty days. The March 1 deadline is still in place.
Next Fridays USDA S&D report will be the next day of data that traders have been anxiously awaiting.

I would advise producers to make sales and get firm offers in before this report as we could see volatile trade in both directions.

Have a Safe day!

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

January 30, 2019

Good Morning,

Slightly stronger markets expected this morning with corn and beans both up 2. Traders are hopeful that some news will leak out of Washington in regards to the Chinese/US trade talks.

It seems rather unlikely that with this one meeting the trade war will be over, but rather the most probable outcome for these talks is that nothing absolute actually comes out of them other than an extension of the current truce into spring. As far as Chinese purchases of US Ag products, it is wait and see at this point and leaves the commercials at a distinct advantage in the markets.

Hopefully the return of the export sales can help level the playing field. The USDA announced on Tuesday that export sales since mid-December will be released in parts over the next several weeks instead of all at one time. This is a different policy than what was done following 2013’s shut down. This Thursday’s report will include export demand through the week ending December 20th. Next Thursday’s will include sales through the week ending Dec 27th.

The market won’t be fully caught up on sales until Feb 20th, assuming the US government can strike a funding agreement. Remember that right when the government reports stopped that US corn and wheat were becoming the world’s cheapest feed.

Have a Safe Day!

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

January 29, 2019

Good Morning,

Trade talks are expected to begin this morning in Washington as the traders remain hesitant to get too short or long until we know more about the outcome of the negotiations. With 4 weeks of trade data looming on the horizon we could see a lot of volatility in the coming week as reports start getting released by the USDA. Next Friday’s Crop Production report is the most anticipated by traders.
Producers are advised to lock in basis on any old crop sales you have left to make. With a large surplus of grain there is very little chance for basis to improve. Any move higher in the CBOT due to reports is only going to widen basis levels across the country as more grain moves.
Corn is currently down 2 and soybeans are down 5.

Reminder that Didion Grain receiving will be closed on Wednesday 1/30/19.

Get out of the cold on Thursday and Friday this week and come visit us at the Corn Soy Expo in Wisconsin Dells. https://cornsoyexpo.org/

Have a Safe Day!

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

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