September 25, 2020

Good Morning,

Corn and soybeans are both up 2 to start the day as we look to end the first week in over a month with lower prices. The markets have had a nice rally starting in the middle of August and recently topping out last Friday. Harvest pressure and outside market concern had traders taking risk off this week in all markets.

The next two weeks will see harvest progress move along very quickly. By next Friday there will be a lot of soybeans cut, and some corn. Harvest progress on Monday should be 15 plus percent for corn and 15-20 percent for beans.

The US weather will remain mostly clear for the next two weeks There is a small storm system setting up for the 27-29th of September, but amounts will be pretty light. Temps will move to freezing levels in the Northern grain belt the middle of next week, which actually will aid harvest.

Exports were massive again this week, and the market not only failed to react positive, but sold off on the news. Most feel China has bought most of what they want for now. There has been so much corn and beans booked, I’m not sure we can even meet their needs and ship this amount on a timely basis. China is also going to be on holiday starting the first week of October, which could put some weakness into the beans market with a lack of purchases while many trades will be out.

Have a Safe Day!

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

September 23, 2020

Good Morning,

Markets were softer overnight and appear to be on the defensive as a stronger dollar is taking its toll on the commodities. Concern over rising COVID cases across both the US and Europe are also weighing on prices.

Harvest continues to roll on as weather is dry where the corn is ready and is drying down fast where it isn’t. Locally we have seen producers taking off soybeans and corn in the last few days with moistures coming in very dry for this time of year. With 60’s to 70’s in the forecast for the next two weeks we expect to see harvest start to ramp up pretty quickly.

The 6-10 day forecast for the Midwest continues with dry weather for the week across the region but we could see a front come thru over the weekend and another front early next week. Rainfall amounts will be light and favor the northeast. Temps will be above average over the next 5 days.

Congratulations to producers who took advantage of yesterday’s December offer. Not only are you locking in a good price for new crop corn, but you are being proactive in coring your bins to help maintain quality in the grain you store.

Producers and traders have become very bullish the markets in the last few weeks with the recent rallies that have given life to the market but they need to be cautious and keep history in mind. Remember how quickly things changed back in March when COVID was the headline and taking over all sectors. At anytime this could flare up again and current markets could plummet to the levels we saw in April, May and June! Don’t let the opportunities to sell corn at $3.30-3.70 pass you by!

Have a Safe Day!

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

September 21, 2020

Good Morning,

The markets are down sharply this morning with corn off 7, soybeans off 16 and wheat off 12. The approaching harvest and weak outside markets have taken some of the wind out of the bulls sails. Rising COVID infection numbers in Europe and reports that the UK is preparing for another lockdown have soured the mood this AM.

The markets remain dependent on continued buying from China to maintain these price levels. Again this morning we have activity on the daily system with China stepping up to purchase 132 TMT of soybeans to go along with a sale to Pakistan for 132 TMT of soybeans and another sale for 171 TMT to Unknown.

Other non-Chinese demand is limited as end-users and importers appear unwilling to chase the market higher. Gulf premiums are running $1.32 over on corn and $1.36 over on soybeans. With US grain economically unattractive, all this means is that the Chinese demand will be a key driver for this week’s price action.

Harvest in the Delta is advancing with harvest in the Midwest kicking off later this week for many. Interior basis levels have begun to weaken. Chinese demand is the key going forward.

Have a Safe Day!

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

September 18, 2020

Good Morning,

Prices are higher to finish the week with corn up 2 and soybeans up 9 to finish the wek.

It is a same story on a different day as soybeans score new highs for the rally which is dragging the grains along for the ride. Fund managers appear willing to continue to extend their length until someone or something pushes back. Farmers have been modest sellers on the rally, but most are waiting until they run the combines before becoming too aggressive.
China’s vegoil markets have been rising rapidly as reports of increasing consumer demand coupled with China actively booking palmoil imports. The big rally in prices there has spilled over into our soyoil and soybeans. Futures are now back to their best level since January and in a position to challenge the a monthly downtrend on the charts that goes all the way back to 2008.
President Trump announced a new $13B package of CFAP overnight that is expected to be outlined at some point today by the USDA. This second round of CFAP is designed to help cover farm losses related to COVID-19 for the period of April through December. The program will raise pressure on Congress to replenish the CCC with additional funding considering they will need approximately $7B for crop revenue payouts. The CCC is looking for reimbursement for around $30B in payments made to US farmers in 2019. If all aid is utilized it would raise the total government aid provided to farmers in 2019 to a record $50B.

Have a Safe Day!

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

September 15, 2020

Good Morning,

Markets are lower this morning with corn down 3 and soybeans down 6 as traders look to take some profits from the recent rally in all commodities with weather looking very favorable for harvest in the coming weeks.

Crop condition ratings slipped a little more this week with corn losing 1% and beans losing 2% to 60% and 63%, respectively. The bean drop was bigger than what the trade was expecting. 41% of the corn is now mature with 5% of the crop in the bin. 37% of the beans are dropping leaves with the USDA set to begin reporting harvest data next week.

China continues to secure US soybeans on a seemingly daily basis with Sinograin the reported buyer. The talk is that the Chinese bought another 6 to 10 cargoes of US beans again on Monday. We have confirmation of some of that business on the daily system this morning with the announcement of a sale for 132 TMT of soybeans to China along with another 132 TMT sale of beans to Unknown and 120 TMT of corn to Unknown.

The EPA denied 54 retroactive waivers of the RFS. There are still 14 applications that remain pending. What happens with those remaining ones is uncertain with gasoline consumption clearly down here in 2020. Also in question is what about all the promised government funding for refiners.

The corn and soybean markets may encounter more hedge pressure next week as harvest gains steam.

Have a Safe Day!

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

September 11, 2020

Good Morning,

Markets are firmer to start the day with corn up 2 and soybeans up 9 ahead of todays report. Estimates for todays report can be found below and will be updated after the 11am release.

2019/20 carryout (billion bu.)
September 11 report Ave. Est. August report
Corn 2.253 2.234 2.228
Soybeans .575 .600 .615

2020/21 carryout (billion bu.)
September 11 report Ave. Est. August report
Corn 2.503 2.451 2.756
Soybeans .460 .465 .610

2020 Yield(bpa)
September 11 report Ave. Est. August report
Corn 178.5 178.3 181.8
Soybeans 51.9 51.8 53.3

2020 US Production (billion bu.)
September 11 report Ave. Est. August report
Corn 14.900 14.898 15.278
Soybeans 4.313 4.295 4.425

Make sure you have firm offers in for corn and soybeans ahead of the report, the highest prices are often seen 3-5 minutes after the report is released.

Reminder that we will be open for grain receiving on Saturday from 7-5.

Have a Safe Day!

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

September 9, 2020

Good Morning,

Markets are lower overnight and this morning as Fridays report becomes the focus for traders. Last nights crop ratings showed corn dropping slightly to 61% G/E while soybeans remained unchanged at 65% G/E. Corn % dent jumped to 79% which is up 16% from last week and 8% higher than the average. This should come as no surprise as this years crop has been ahead on maturity all season.
Fridays report will be the focus for traders as they look to see where production and carryout end up. Current estimates show the 19/20 corn carryout up slightly from the August report(6 million bu) while the 20/21 carryout is down 305 million bu. Yield estimates are guessed at 178.3 bpa which is off from the USDA’s August estimate of 181.8. 2020 US production is estimated at 14.898 billion bu.
While these numbers do appear to be bullish the markets, we are still looking at stocks to use ratio north of 15%. Historically we need this percentage below 10% to see corn near $4/bu!
Take advantage of the recent rally and don’t get caught speculating on how high prices may go. Manage your risk and you will sleep better at night!

If you have old crop corn to move call to find out what options we have for you. In addition to solid prices we have a couple other options that will allow you to finish cleaning out your bins.

Have a Safe Day!

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

September 8, 2020

Good Morning,

Markets are quiet this morning with corn and soybeans both hovering around unchanged following the three-day weekend. The recent rally has given producers a good opportunity to market grain ahead of the upcoming harvest.
Friday we get a look at the USDA’s September Crop report. This will be one of the most important reports in years following the derecho event in Iowa coupled with the flash drought yield losses.
President Trump vowed to end America’s reliance on China. The President threatened to punish any American company that creates jobs overseas and forbid those doing business with China from winning any federal contracts. The worsening political rhetoric has the pros wondering if Beijing will fulfill it pledges on purchases for the Phase 1 trade agreement. China has been a sizable buyer of US beans, corn and even wheat, but continue to lag on other Ag products, manufactured goods and energy. Money managers will likely pay close attention to this situation to see what China’s reaction to President Trump’s new hardline stance is.
The weather models are in agreement as they offer consistently cool/wet outlook for this week. Extended forecasts show some warming and drying out next week. In the meantime low temperatures will dip into the mid to lower 30’s across North Dakota and far northern Minnesota tonight. Otherwise there is no frost event on the radar that would lead to a premature end to the 2020 growing season.

Have a Safe Day!

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

September 2, 2020

Good Morning,

Markets are unchanged in corn and up 2 in soybeans to start the day. The volume of trading was down from the previous two overnight sessions as concerns over crop yields fades and traders look to bank some profits from the recent rally. Chinese demand is a must for the price levels to hold.

China has been actively booking corn out of the US over the last two weeks. Based on the size of the purchases the past two days it suggests that it is Sinograin/COFCO rather than individual buyers. Exporters report that the corn is being sold for February/March shipment out of the Gulf. Unfortunately this appears to come at the expense of the soybeans which has seen their pace slow. The review of the Phase 1 trade deal now has passed with all parties agreeing that China is working to fulfill its pledge. China already has large volumes of corn and soy purchased through December.

After letting the duty-free ethanol imports from the US expire yesterday, Brazil and the US have tentatively worked out a deal to extend the duty-free imports for another 90 days. No new demand is expected as the margins are currently negative to import US ethanol, but the deal buys the Brazilians time to see who wins the election as well.

Informa is expected to release their corn and soy estimates this morning.

Historical charts and trends tell us that the market has put in its high and we could start to slide into late October before we will see a bounce.

Producers should continue to make new crop sales at current levels for any space needs as harvest pressure will be working its way north in the coming weeks.

Have a Safe Day!

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

August 28, 2020

August 28, 2020

Good Morning,

Corn market down 1 and soybean up 5 this morning as traders look to consolidate this week’s gains heading into the weekend. It has been a good week in the markets as we have traded higher 4 of the 5 days in corn and 5 of 5 in soybeans. Export sales of corn and soybeans to China and unknown destinations along with dry weather (not here!) have added premium to the markets short term.
While I don’t believe the markets are going to crash short term I would advise producers not to become too bullish as there is still a huge crop in the country even with lowered yields.
Below I have put together some scenarios showing what our stocks to use ratio could look like based on lower yields than currently projected. The USDA is currently using 181.8 bpa and Pro Farmer came out with a 177.5 bpa last week. As you can see either one of these results in a huge carryout. In order for us to get a stocks to use ratio below 10% (historically what we would need to see corn near $4/bu) we would need yield to drop below 165 bpa which is below last year’s yields.

Have a Safe Day!

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