March 24, 2021

Good Morning,

 

Corn markets is unchanged and soybeans are up 5 to start the day.

 

Crude oil is off sharply which and had some traders very nervous that we may see a selloff in other commodities.

Last Spring when Covid shut down the World economy, it all started with crude oil and US stocks. Crude oil closed terrible yesterday, and we are not sure how other markets will follow.

The Chinese stock market has also followed the path of crude oil, as it has wasted bullish traders over the last few weeks.  This is another thing that had us worried yesterday, watching other markets come apart and especially this one.

US weather is going to be wet into April 3rd.  Drought conditions in the central US will ease a little more each day.  The Southern planting region is going to see delays with some areas getting heavy rain in the next week.  The Western region up into the Dakotas still has no chances of rain in the next week.

Planted acres will be a record large combined for corn and beans in next weeks report. We could see corn acres at 96+ on the report which would set this market back significantly. Make sure you have sales on and offers in place prior to the report. $5.50 old crop corn and $4.50 new crop corn are very profitable and should be captured.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 23, 2021

Good Morning,

 

 

Corn planting across the south is accelerating with Texas now 38% complete vs. 34% on the 5 year average while Louisiana is 52% planted vs 30% on average and Mississippi is 11% complete vs. 3% average. Hopefully the early planting progress rolls into the northern states in the coming months with the warmer temperatures that we have been seeing. Private analyst IEG Vantage (formerly Informa) released their estimates for US corn plantings at 94.3 million acres compared to the USDA February Outlook expectation of 92.0 million. They estimated soybeans at 89.7 million compared to the USDA’s Feb estimate of 90.0. We will see several more estimates coming this week.

Brazilian soybean harvest has nearly caught up with 60% now complete compared to 63% on average for this week. Mato Grosso is 92% harvested compared to 94% average. The safrinha corn crop is nearing 86% planted compared to 95% on average.

Corn is unchanged and soybeans are 10 higher to start the day.

 

Be sure to get sales on and firm offers in place before next Wednesday’s report!

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 22, 2021

Good Morning,

Markets are down sharp to start the week with corn off 8 and soybeans off 7.

Favorable weather continues to be the case in South America. Fronts are bringing rain to previously parched areas of Argentina. The forecast is consistent with where we left things off on Friday.  A total flip to a wet pattern in Southern Brazil and Argentina, while North and East Brazil will be very dry.  Argentina saw totals last week of over 2 inches and look to get another 2-5 inches this week.  A high pressure ridge has set in Brazil that is keep the rain out for the next 10 days.  There are also some indications that we could see a flow of moisture return to Brazil for the safrinha corn areas which would be beneficial to the crop.

Private survey based planting intention estimates should start to come out this week and will provide info for the markets to trade. Next Wednesday 3/31 is when the USDA will release planting intentions.

I would advise producers to have 40-50% of their new crop sold prior to this report to protect against any bearish numbers. If the USDA gives us 93+ million acres of corn, this market could sell off in the new crop.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 17, 2021

Happy St. Patrick’s Day!

 

Traders are taking their pot of gold this morning as they sell off some of their longs. Corn is currently down 4, soybeans down 11 and wheat is down 5.

Despite rumors and confirmation yesterday of additional sales the markets are trading lower today.

China has bought some US corn ahead of the meeting tomorrow in Alaska, which also has had no effect on corn prices in China.  There is supposed to be another sale announced to China today in corn of somewhere between 400,000 to 800,000 mt.  The USDA confirmed a sale of 1.156 mt yesterday, but this sale is old news to traders as it was made weeks ago, just not announced to who it was made.

The market continues to be choppy with very little connection between old and new crop values. Recent trade has shown strength in the old crop with new crop fading. The March 31 report is going to be the next mover and while no one knows where acres will come in, I fear that it could be bearish the market. (mainly new crop) If you are a producer, make sure you have enough sales on that if the crop report comes out with 96-98 million acres you will be ok. On the flip side, end users should look to protect themselves the other way if we see anything sub 93 million acres that they are ok.

Before you dig into that corn beef and cabbage and start drinking your green beer today, give your local buyer a call and put some firm offers in place for old and new crop corn. Who knows, maybe the luck of the irish will be with you and some of them will get hit!

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

March 16, 2021

Good Morning,

 

Softer markets to start the day with nearby corn unchanged and new crop corn down 5. Soybeans are 1-3 lower across the board.

Corn planting in the south is off to a good start. Planting in TX was reported at 26% complete vs. 10% last week and 26% on average. LA corn is 14% planted vs. 5% on average. Early spring weather has helped the south and expectations are that we may see the same in the Midwest.

Brazil saw another good week of soybean harvest last week that shows them 46% complete compared to 34% the previous week and 55% on average. Mato Grosso is 80% complete which is just shy of the 88% for the 5 year average. Safrinha corn planting jumped to 72% compared to 50% the previous week and 90% on average.

The funds took advantage of the expanded position limits yesterday and added 25,000 corn and 3500 soybean contracts to their positions. All of this length was added in the nearby contracts while the new crop prices fell. Funds are now long 356,000 corn and 135,000 soybeans.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 15, 2021

Good Morning,

 

Markets are mixed this morning with old corn up 3, new corn down 2 and soybeans down 9. Soybean prices appear to be taking a hit with concerns of a larger issue with the African Swine Flu in China.

The forecast for Argentina and Southern Brazil is much wetter than any of the models from last week.  A current cold front is going to open Argentina up for rain over the next 10 plus days.  One rain system will hang around for the next couple days producing .2-1 inches, followed by another that will bring 1-2 inches later this week.  Temps will be below normal as it rains in the South. The weather improvement can help their crop, but is coming a little late to dramatically change production. Brazil Safrinha corn crop is 77% planted, up 20% on the week vs 89% a year ago. Argentina corn is 4% harvested vs 8% a year ago. Brazilian soybeans are 45% harvested, up 12% on the week vs 58% a year ago.

New speculative trade position limits go into effect today for the grains with spot month limits essentially doubling and total positions held allowances increasing substantially. These new limits are going to increase volatility to the up and downside.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 11, 2021

Good Morning,

 

Markets are up slightly and trying to regain some of yesterdays losses. Yesterday we saw corn down 11, soybeans down 31 and wheat down wheat down 5.

There were many reasons for the nasty break in futures yesterday in the CBOT.  Technical meltdown, trading through several levels of stops.  Overbought conditions, without any substantial break in corn futures.  A weather model that increased rain totals for Argentina for up to 2.5 inches.  African Swine Flu breaking out in new areas of China.

CONAB raised their estimate of the Brazilian soybean crop to 135.1 MMT from 133.8 last month compared to the USDA at 134.0 MMt. They also raised their estimate of total corn production to 108.1 MMT up from 105.5 MMT previously.

 

Weekly export sales came in on the low end for corn at 15.6 mln. bu. compared to the ten week average of 66.5. Soybeans came in at 12.9 mln. bu. compared to the ten week average of 22.5.

 

Chinese soybean processors are taking down time for maintenance due to the slow arrival of Brazilian soybeans. Yet, soymeal prices remain soft. It’s not a good sign when soymeal futures in China are down when crushers are taking down time. That suggests soft demand due to a resurgence in African Swine Fever cases.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 10, 2021

Good Morning,

This morning corn is down 9 and soybeans are down 23. A technical meltdown developed overnight, high prices are going to have big ranges and moves.  This is just going to be part of things moving forward.  It will probably get even worse with the expanded position limits that go into place next Monday.  The drop is blamed on wet weather for Argentina and Southern Brazil, but this could be the beginning of a lower technical trade.  Volatility will rule this market all the way to the end.
Not that anyone should have expected much out of the USDA yesterday and most expected very few if any changes.  The USDA delivered to the expectations and delivered a dud of a report.  They made no changes to US corn, beans or wheat.

U.S. domestic ending stocks were left unchanged from February at 1,502 million bushels versus the average trade estimate of 1,460 million and the range between 1,302 and 1,561 million.  No other adjustments were made to any of the supply or demand figures on the domestic balance sheet.  The projected average farm price was also left unchanged at $4.30/bushel.  World corn ending stocks increased 1.14 MMT from February to 287.67 MMT versus the average trade estimate of 285.3 MMT and the range of estimates between 282 and 287 MMT.  Notable changes included a 650,000 MT increase in projected imports for Southeast Asia (SEA) to 18.7 MMT.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

March 8, 2021

Good Morning,

 

Another sharply higher Sunday night trade fades into the early AM hours.  Improved rain chances in Argentina and a USDA crop report coming Tuesday have held prices at bay.  Look for the market is going to chop around today and tomorrow.

Tomorrow the USDA will release their monthly WASDE report. The trade est. US 2020/21 corn carryout at 1,470 mil bu vs USDA 1,502, soybean at 117 mil bu vs USDA 120, US 2020/21 wheat carryout at 839 mil bu vs USDA 826, World 304.3 mmt vs USDA 304.2. Trade est Brazil soybean crop near 133.1 vs USDA 133, Argentina near 47.4 vs USDA 48, Brazil corn crop near 108.3 vs USDA 109, Argentina near 47 vs USDA 47.5

I would guess the USDA comes out with something very close to what the trade estimates have.  They will want to see what the future holds for corn and bean exports, as they have vaporized as of late.  Brazil and Argentina crops are unknown, with the majority of harvest yet to develop.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

March 4, 2021

Good Morning,

 

Stronger markets this morning after a weak overnight session. Corn is up 5 and soybeans are up 30.

 

The 6% drop in the Brazilian currency over the last few trading sessions plus weakening values for corn in Argentina have caused the recent setback in the markets. Traders remain fearful of increased supply from South America and less demand for US corn as Argentina corn prices have shifted below US values.

The trade was expecting weekly corn export sales of 400-800 mt, soybeans 100-500 mt.  Actual sales were 115,900 mt of corn, 334,000 mt of beans. Bean sales were split between Mexico, Germany and Japan.   China is obviously waiting for Brazilian beans.

The outlook for the next week remains hot and dry for Argentina, which should continue to stress crops going through the reproductive phase of development. Very heavy rains remain in place for much of Brazil, other than Rio Grande do Sul at the far southern tip of the country. However, that pattern is expected to change by mid-month. Rain chances start improving significantly for Argentina after March 12th. This should be able to recover a part of the lost production potential for Argentina’s corn and soybeans.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com