July 2, 2018

Good Morning,

 

My hope was that the end of June would mean better things to for the markets but the first trading day of July is not looking that way. Corn is down 7, soybeans down 12 and wheat is down 8 to start the month. During the month of June, corn was down 42 cents, Soybeans were down $1.54 and wheat lost 83 cents.

Fridays acreage and stocks report did very little to stop the bears with higher acres and quarterly stocks in corn reported. Corn acres jumped to 89.1 million which is a million more than the March report. There is talk that this number could increase when the final acreage comes in January. With acres at 89 million plus and a yield of 175 bpa and demand remaining unchanged we would be looking at a carryout of 1.6 billion bushel which would signal higher prices. Keeping demand at last years level with the current tariff talks will be very difficult. Traders will be closely monitoring any potential trade talks this week with Friday being the tariff implementation date set by the Chinese. The 25% tariff will keep the markets under pressure as we wait for updates.

Weekend rains west of the Mississippi with nearly all of Iowa and many parts of Nebraska and Southern Minnesota receiving modest rains eased the concerns of the hot weekend temperatures. Weather forecasts show temporary relief to start the week before a hot and muggy Fourth of July. Low 90’s are expected in most of the Midwest by the middle of the week with a cooler trend and less humid by the weekend.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

 

June 29, 2018

Good Morning,

 

Corn is up a couple cents this morning after yesterday’s selloff at the closing. As expected we saw traders add to their short positions in corn and soybeans as they prepare for today’s report. Today’s USDA report, warmer temperatures and month end positioning could make for some very volatile trade today. Funds were short 92,000 corn contracts after yesterdays close.

Reports out overnight that China will relax restrictions on foreign investment in some industries including auto, banks and agriculture is being viewed as a step toward resolution of the trade conflict.

The US Midwest weather forecast has no major changes as ridging with hot temperatures will occur next week. The 11-16 day forecast has the ridge moving out with some rains and slightly cooler temps.

 

Below are today’s estimates.

 

USDA Quarterly Stocks (billion bu)

USDA June 1, 2018 Ave. Estimate USDA June 1, 2017
Corn  5.306 5.268 5.229
Soybeans  1.222 1.225 .966
Wheat  1.100 1.090 1.181

 

 

USDA Prospective Plantings (million acres)

USDA June 1, 2018 Ave. Estimate USDA March, 2018
Corn  89.1 88.562 88.026
Soybeans  89.5 89.691 88.982
Wheat  47.8 47.124 47.339

 

 

Check back at 11:00am for todays numbers.

 

Have a Safe Weekend and Stay Cool!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

June 28, 2018

Good Morning,

Look for the markets to remain quiet today with the next USDA report coming out tomorrow at 11am and with no tariff news expected. Expectations for tomorrows reports appear bearish with estimates that both stocks on hand and acreage will be higher. If acreage is only slightly higher I would view it as neutral the markets. But if we get an acreage bump to 89.0 million or more and stocks at 5.3 billion bu. or higher, it could push the markets to new contract lows.
Weekly export sales of corn jumped this week to 33.5 million bu. which is back in line with the ten week average after only 6.5 million last week. Soybean sales were slightly higher at 13.2 million bu. New crop sales of both were strong with corn at 25.1 and soybeans at 23.6.
The numbers and trader reaction to tomorrow’s report are unknown, but regardless of how these numbers come out, we will struggle to move this market higher without some sort of positive trade news with China.

Producers should have firm offers in for old crop slightly above the current levels in case we would see the market initially move higher after tomorrows numbers are released. $3.40-3.50 range would be my target. New crop offers should be handled very similar with offers in the $3.50-3.60 range for fall delivery. I would not recommend any sales for next spring and summer at this time in hopes that our political issues can be resolved by that time.

Have a Safe Day!

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

June 27, 2018

Good Morning,

Corn is up 3 and soybeans are up 9 to start the day. Short term buying or the start of something better is the question. My guess is short term buying as traders begin to position ahead of Fridays report.
Average trade guesses for Friday’s acreage report are 88.56 million acres vs. March’s report of 88.03 million acres. Average guesses for quarterly stocks are 5.268 million bu. compared to last year’s 5.229 for the same time period. 13 of the last 18 years the June acreage report is higher than the March report. Of those 18 years, 6 times it has come in higher in the final report(January).
The 6-10 day weather forecasts are calling for above average temperatures and a lack for precipitation for much of the corn belt. There is adequate soil moisture to withstand the heat and dryness for some time but any prolonged periods of dry and hot weather could produce some issues. The 11-15 day forecast calls for rain in the eastern portion of the corn belt.
Concerns about Chinese demand continue to hang over the market and news that the US intends on unveiling a host of new restrictions on Chinese investment in the US this Saturday, June 30th.
Fundamentally I do not believe we should not be trading as low as we are, but politics has the markets are struggling to find any traction. Producers sitting on old crop corn are running out of time to move it and may not be given many more opportunities. Historically the June Acreage report and July 4th weekend bring an end to any old crop marketing opportunity for producers. This year the end appears to have come much earlier, but time will tell.

Have a Safe Day!

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

June 26, 2018

Good morning,

Slightly higher markets overnight as we see some retracement after yesterday’s big selloff. Corn was up 3 and soybeans up 5 overnight. Crop conditions last night declined slightly from 78% G/E to 77% but it is the fourth highest rating for this week in history. Conditions declined the most in Kansas and Colorado. Wisconsin came in at 87% G/E compared to 90% last week. This compares to 75% on the 5 year average. National soybean conditions remained unchanged at 73% G/E compared to 68% on average.
I would not be surprised to see some more selling ahead of Fridays USDA report as traders are currently short 76,000 corn and 45,000 soybean contracts.
Concerns about Chinese demand continue to hang over the market following last week’s meltdown and news that the US intends on unveiling a host of new restrictions on Chinese investment in the US next Saturday, June 30th. This did little to calm fears with China expected to retaliate to any new news.
Fundamentally I do not believe we should not be trading as low as we are, but politics has been the “Trump” card as of late and the markets are struggling to find any traction. Producers sitting on old crop corn are running out of time to move it and may not be given many more opportunities. Historically the June Acreage report and July 4th weekend bring an end to any old crop marketing opportunity for producers. This year the end appears to have come much earlier, but time will tell.

Have a Safe Day!

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

June 25, 2018

Good Morning,

Commodities open with a weaker tone this morning as weather forecasts have changed and tariff news remains unchanged. Conditions have been favorable with the forecast showing rain in the next 5 days for the corn belt. The extended forecasts for the first week of July remain warmer with less precipitation, but have cooled since Fridays forecast. Traders will be watching forecasts for the first couple weeks of July for any indication that it gets hotter and drier with pollination expected those weeks for most of the corn belt.
The USDA Acreage and Stocks report is out this Friday at 11am. Corn acreage is expected higher than the March report which could push corn lower. Historically the USDA does not adjust yield until the July or August report after the pollination period. The USDA is currently using an 88 million acres and a 174 bushel per acre yield average for their balance sheet. These numbers would suggest a 1.6-1.7 billion bu. carryout. If we increase acres to 89 million this would increase to 1.8-2.0 billion bu. Acres remaining the same and in increase in yield to 180 bpa(several analyst expectations as of now) would result in a 2.0-2.1 billion bu. carryout with the same acreage. All of these estimates assume that total use remains the same. With the current trade situation around tariffs, demand could drop and increase ending stocks to last years levels!
Fundamentally I do not believe we should not be trading as low as we are, but politics has been the “Trump” card as of late and the markets are struggling to find any traction. Producers sitting on old crop corn are running out of time to move it and may not be given many more opportunities. Historically the June Acreage report and July 4th weekend bring an end to any old crop marketing opportunity for producers. This year the end appears to have come much earlier, but time will tell.

Reminder that we will be closed for grain receipts on Tuesday 6/26/18.

Have a Safe Day!

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

June 22, 2018

Good Morning,

Corn is trying to stay above water literally despite tariffs and favorable weather. Yesterday we saw corn close 3 higher and this morning it is trading unchanged.
The current weather maps look good but there are conflicting reports for the June 28-July 5h forecasts. Some models are showing above normal temperatures and lower precipitation. This is the period when some areas of the southern corn-belt will be starting to tassel.
There have been some yield extrapolations based on crop conditions that are showing a 180-183 bpa range for corn. A 183 yield would keep stocks unchanged from last year with no acreage adjustments. I am expecting an increase in acres on next Fridays report which could send the markets lower. It is still too early to forecast the final score(yield), but we are just about to half time of this game and the crop is has a big lead!

I would strongly advise producers to make sales and have firm offers in on old and new crop before next Fridays report. Reference the charts in our “Market Insight” section on didionproducers.com to see where the market historically trends heading into the first of July. We are still able to get $3.50-$3.60 cash for July by utilizing an accumulator contract.(call for more details)

Have a Safe weekend!

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

June 20, 2018

Good Morning,

The markets are steady to open the morning with corn up 1 and soybeans down 1. The markets are trying to navigate the trade fears and leaving fundamentals on the sidelines for now. We have no fundamental reason for corn and soybeans to be trading as low as they have been for the last few days, but political strength is and will continue to pressure the markets. Yesterday the European Union triggered its first phase of retaliation to the US by releasing a list of products that will have a 25% tariff applied. Soybeans were not on this list, but corn was.

The drought monitor shows improvement for central North Dakota this week as well as some drought receding in Kansas. The drought classification worsened in areas of Southern Iowa and Northern Missouri. Forecasts call for favorable temperatures and moisture over the next week with the first week of July looking warmer and drier for the Midwest.

Weekly exports released this morning were terrible for corn and disappointing for soybeans. Corn came in at 6.5 million bu. compared to the ten week average of 32.6 million. Soybeans came in at 11.1 million bu. compared to the ten week average of 13.2 million. Both are hanging slightly above USDA projections but have fallen in the last few weeks.

The Funds are short 95,000 corn and 69,000 soybean contracts after yesterday’s trade.

Until we see some progress made on the trade wars I do not expect the markets to move higher.

Have a Safe Day!

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

June 19, 2018

Good Morning,

Back at it again!! The markets are down sharply this morning after President Trump announced another set of 10% tariffs on $200 billion in Chinese imports later yesterday. There is no proposed date on when this round of tariffs will go into effect. The last round of tariffs are expected to begin July 6th. China’s Foreign Ministry on Tuesday urged the US to stop its damaging words and deeds after Trump made the most recent threats. The Chinese ministry said that it did not want a trade war, but was not afraid of one.
Last nights crop progress report showed US corn at 78% good/excellent, up 1% from last week. This compares to 67% last year and 71% on the five year average. Wisconsin came in at 90% good/excellent compared to 71% last year and 76% for the five year average.
December corn hit a new contract low of 3.68 overnight and the front month corn hit its lowest level since January.
Corn and soybeans are trading 8 and 24 lower respectively this morning.

Have a Safe Day!

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

June 18, 2018

Good Morning,

Great weather and trade wars continue to take their toll on the markets heading into this week. The forecast fo the Corn Belt features continued heat early this week before the front stalls over the Midwest bringing rain from Nebraska to the Ohio River Valley from midweek onwards. The heat that we saw this weekend will be pushed south with cooler Canadian air ushering in more seasonal temps across the Midwest.
Late on Friday, China retaliated by applying a 25% tariff on a slew of US AG products that included meats, dairy, soybeans and grains. The response was expected after China provided the US frequent warnings of its intentions following our own announcement of tariffs earlier in the day. Subsequently, China’s offer to buy another $70 billion of US Ag and energy goods is now off the table and US – China trade negotiations will have to restart from scratch.
Anyone looking for a rebound in the markets to make old and new crop sales before harvest may have run out of time! The weather has been just about ideal and crop conditions will remain high in the G/E category. The only bump that we can hope for right now is the US working out its trade issues with China to increase demand.

Have a Safe Day!

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