March 2, 2021

Good Morning,

 

Mixed markets this morning with corn down 1 and soybeans up 3.

China has been holding off on any purchases of beans, while they wait for Brazilian shipments.  They have backed off the crush pace to bridge the gap until South American supplies arrive.

 

Kansas HRW good/excellent conditions fell 3% to 37%, Oklahoma fell 2% to 46% g/e, and Texas was down 2% to 28% g/e.  The freeze and dry temps are leading to more deterioration of the wheat crop.  This will lead to more soybean, milo, corn and other small grain acres being planted in these areas.

 

Ag Rural is reporting that 25% of the Brazilian harvest is complete vs 40% last year.  They also raised the size of the Brazilian crop to 133 mmt vs the previous forecast of 131.7 mmt. The 10 day forecast and the 11-15 are both dry for Argentina this morning.  Limited rainfall is expected over the next two weeks.  Temps are also going to move into the mid 90’s to 100 degrees over this same timeframe.

 

Producers should be active sellers of new crop corn and soybeans ahead of the March 31st planting intentions. With crop insurance coverage price for corn at $4.58 and soybeans at $11.87 we should see a record number of acres in the report.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

March 1, 2021

Good Morning,

 

Overnight markets had old corn down 1, new corn up 2 and soybeans up 11. Prices rallied up again strongly last night only to fizzle out in the early AM.  This has been a pretty reliable pattern over the last couple months.  Expect a really choppy week as we wait for two crop reports headed towards us in the next 4 weeks.  Volatility is going to remain very high.  Funds are estimated to be long 358,000 corn and 165,000 soybeans heading into the new month.

Brazil shipped out 2.5 mmt of beans last week putting February shipments at 4.5 mmt.  Normally they would move 7 mmt or higher.  March looks to get back to normal shipping 2 mmt plus a week.
Forecasts for South America are consistent with Friday’s forecasts. Limited rain for Argentina and most of Southern Brazil. Northern Brazil will see rain over the next week. The 11-15 day forecast has some rain chances for the south.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

February 26, 2021

Good Morning,

 

Weaker markets to open the day with corn currently down 4 and soybeans down 6. Markets have rebounded from the overnight session that saw corn down 10 and soybeans down 20+.

Many factors added to the selloff in prices yesterday; first notice day liquidation, a model change in weather and weak exports across the whole host of commodities. Any kind of change can cause a purge of the longs.  I expect more opportunities moving forward, but the volatility will continue throughout the year.

 

The South American weather forecast has flip flopped from yesterday’s wet weather in Southern Brazil and Argentina.  This is not the first or last time that model has or will do this. Today’s forecast doesn’t matter, other than it is back to bullish.  What will matter is if the rain is on for next week this Sunday night.  Forecasts are for rain to get moved back a bit and will show up in the 11-15 day period instead.  Temps will remain high is Southern Brazil and Argentina until there is a break down of the ridge.

Us weather looks favorable for crops. Kansas City Based World Weather Inc released the following information yesterday.

“Temperatures will be trending unusually warm across much of the U.S. Plains and into Canada’s Prairies during the first week of March. Temperature anomalies will become above to, in some areas, well above average. The warmth will reduce snowpack and raise soil temperatures bringing more wheat in the southern Plains, Delta and southeastern states out of dormancy and help lift soil temperatures enough in the southern states to support some spring planting and germination. Cooling is a possibility after the first week of March; though, there is uncertainty as to how much cooling occurs and exactly what areas will be impacted.”

 

 

Have a Safe Day!

 

Garry Gard

 

February 25, 2021

Good Morning,

 

Markets are down hard this morning with contract roll and much better weather in South America.

 

Today is the roll day for March futures, all long positions need to be move or else face delivery. The market is putting the squeeze on anyone that was holding a long position in the March futures. Anyone holding a long position at the close of trade today will be forced to deliver.

U.S. Ethanol production for the week ended Feb 19 totaled 658,000 bls per day (down 27.8% vs a week ago, down 37.6% vs a year ago); Stocks were 22.8 mil bls (down 6.2% vs a week ago, down 7.8% vs a year ago); Corn use 66.5 mil bu vs 92.0 mil last week and 95.7 mil needed to meet USDA projections. Cold weather has hampered plants the last couple weeks and slowed consumer driving. Many plants reduced production greatly due to the cold weather and natural gas issues.

***A very significant change in the weather for Southern Brazil and Argentina.***

The current forecast for Southern Brazil and Argentina has little rain, but moving out 5-7 days has a major storm coming in on a breakdown of the ridge.  The Ridge is going to move North putting drier weather where Brazil needs it most. The forecast could prove to be a bust, but this is the map for now, and we have to respect significant changes in the weather.  This forecast has 2 inches of rain coming when Argentina needs it most.

If you haven’t sold much new crop corn, today may be the day to do it. I am not expecting this market to continue the selloff, but we could hit some technical triggers that move this market lower. Heading into the March 31st planting intentions I would suggest being 50%+ sold on new crop corn. I expect 93-94 million corn acres on that report which could push markets lower. This is “IF” we have a favorable spring for planting. If weather is good, we could easily see 94-96 million acres.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

February 23, 2021

Good Morning,

 

Stronger markets to open the day with corn up 6 and soybeans up 30. Soybeans are leading the way with interest in South American weather on traders minds today.

 

The USDA rated the Kansas winter wheat crop at 40% good to excellent down from 43% .  Last year the Kansas crop was rated at 35% good to excellent.  The expectations were for a larger drop this week after the bitter cold of last week.

Brazilian harvest is near 15% complete vs 31% average.  Brazil’s second crop corn plantings are 15% vs 50% last year.  Wet weather is going to keep the harvest pace slow, and new plantings will be late.  The forecast holds the same wet weather in the North over the next 10 days with up 8 inches projected, its rain just about every other day.  The forecast below has some light rain for Southern Central Brazil and trace amounts for Northern Argentina. Eastern Brazil is going to see moderate to heavy rain in the next week.  The forecast is still bullish this morning following almost exactly the same pattern of the past month plus.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

February 22, 2021

Good Morning,

 

Corn is up 5, wheat is up 9 and soybeans are unchanged to open the week.

 

Funds are long 344,000 corn and 154,000 beans after Fridays close. Look for the markets to have a high level of volatility in the next 28 trading days as we work towards the planting intentions on March 31st.

 

The forecast for Brazil is for heavy rains to continue in the North.  Weekend totals were up to 2.5 inches.  Northern Brazil is expected to get as much as 8 inches in the coming week.  Southern Brazil and Argentina have drought conditions in the 10 day and 15 day forecast.  Little to no rain is forecast for the 5th or 6th week in a row.  Temps will also be on the rise in Southern Brazil and Argentina, pushing into the upper 90s.  The weather forecast is bullish with too much rain in the North and poor rain totals and rising temps in the South.

 

South American weather is bullish and could produce a higher trade.  First notice day is Thursday, so that may have as much impact as anything else.  The Fund roll looks to be going out into new crop beans on the long side as well.  Sunday night have rallied, followed by a more subdued trade by Monday morning.  This is a trend that has been going on for the better part of a month.  The market looks to be stuck in a holding pattern for now.

 

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

 

February 19, 2021

Good Morning,

 

Corn is unchanged to three higher depending on contract month while soybeans are up three to five this morning.

 

This weeks AG Forum did little that wasn’t expected with acres and carryout for 2021. They projected soybean acres at 90 million and corn at 92 million. Carryout was pegged at 1.552 billion bu. for corn while soybeans came in at 145 million. Production for corn came in 7% higher than 2020 based on an increase in acres and yield.

 

Typically this report does not influence trade as it is just a government projection with no producer surveys to back it up unlike the March 31st planting intentions.

 

Look for trade to continue to be volatile heading into spring planting as weather this spring could set the markets tone for the next 12 months.

 

Producers, Traders and speculators that are long corn and soybeans should keep in mind that these recent high prices are doing their job of quelling demand.

  • Ethanol plants that have been down are not starting back
  • Ethanol plants that have been running are slowing down due to economics and recent weather issues.
  • Livestock producers are converting to alternative/cheaper sources.
  • South America is starting harvest and begining to export soybeans and corn that will compete reduce US demand in the coming months.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

 

 

February 17, 2021

 

Good Morning,

 

Softer markets to open the day with corn and soybeans both down 3 and wheat is down 15. Concerns over the damage to wheat in the plains has raised some red flags as initial reports are the damage will be minimal which is leading to weakness in those markets today.

The US Outlook Forum is Thursday through Friday, which is probably why some banks are taking profits. March options also expire on Friday which could take another large portion out of the long position.  Funds are long 374,000 corn and 160,000 soybeans heading into todays trade.

Ethanol plants across the country have been slowing production due to high corn prices and a spike in spot natural gas. Margins have gone to negative, with some the worst levels in many years.

Today is the last day to sign up for our Average Price Contract (APC). Contact Drake, Mitch or myself for more details or to sign up. This looks like a great year to utilize this contract with the volatility in the markets.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didionmilling.com

 

February 16, 2021

Good Morning,

Corn is up 6, soybeans up 13 and wheat up 10 this morning following the cold three-day weekend.

Frigid US weather and reflation concerns are supporting the markets this morning. With China still on holiday and the Ag Forum coming later this week, I would expect choppy trade this week. Wheat is the leader this morning as the historic winter weather has some traders concerned about potential winter kill.

Brazil weather will be mixed over the next ten days to two weeks. Southern parts of the nation will experience good drying conditions favoring soybean maturation and harvesting as well as Safrina crop planting. Argentina weather is becoming more tenuous with restricted rainfall over the next ten days to two weeks. Scattered showers and thunderstorms in the coming week will be sporadic and light leaving some areas quite dry while others get enough rain to slow drying rates to buy more time for crops.

We are currently 52% priced for the February crop insurance with corn currently at $4.51 and soybeans currently at $11.66.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

February 15, 2021

Good Morning,

 

No markets today as the trade observes Presidents Day!

Have a Safe day and stay warm.

Garry Gard

920-348-6844

ggard@didionmilling.com