The markets have been on a steady climb since early December and continue to find strength in the days following the January WASDE. March futures closed 14 cents higher last week while May and July futures closed 13 and 12 cents higher respectively. The funds continue to build their long position in corn ending the week long 327,163 contracts. They are now long 65,327 soybean contracts which marks a significant swing from the short that has been carried since January of 2024.

Corn was driven by three key items last week. The first one is a market that is trying to find a balance after the USDA adjusted the supply and demand numbers. This caught the funds by surprise and now they want to add more length. The second is a slightly dryer shift in the Argentina 10 day forecast ahead of their critical growing season. The third is political with recent communications between President elect Trump and Chinese president Xi Jinping. In 2020 Trump negotiated a Phase 1 agrement that would have the US shipping 39 billion dollars worth of ag goods to China.  This agreement was accomplished, and then the Biden Administration abandoned the agreement. Is the Trump Administration going to restart the agreement or pursue a separate path? The Trade is trying to position itself for what is expected to be an active Administration on day one.

Are the markets peaking after the recent fund buying that has taken place?  I believe they are entering overbought conditions with an export market that I expect to tail off in the coming months. With no markets on Monday as the trade observes Martin Luther King Day, and an inauguration taking place, the markets are poised to have some volatility when they open on Tuesday. We will all have to wait to see what happens when the tariffs start to fly.

Upcoming reports

The markets found new life on Friday with the USDA’s final production report of the 2024 crop. Several surprises resulting in March, May and July corn finishing the week 20-22 cents higher in all months. The funds were massive buyers of corn and soybeans on Friday ending the week long 281,896 corn and short 16,184 soybean contracts.

Friday’s report brought a significant revision to the US corn yield that saw the number drop from 183.1 in November to 179.3 on Friday. This tied the largest yield reduction in history. The only other time we saw this big of a change was 2020 when we lost the same bushels due to Derecho. The biggest yield reductions in the major corn growing states came in IN (-11) MN (-9), KS (-9), OH (-8). IL and IA dropped 1 and 2 bushel per acre respectively. The drop in yield along with a slight increase in harvested acres resulted in a production number that was lowered by 276 million bushels from last month. Total corn use was reduced by 75 million bushels from last month on a combination of a lower feed and residual use (-50 million bushels) and exports (-25 million bushels). The reduction in supply outweighed the reduction in use, leading to ending stocks of 1.540 billion. The projected ending stocks of 1.540 billion bushels is a 10.19% stocks/use ratio which is the tightest we have seen in a few years.

Production (billion bushel)

Acres (million acres)

Yield (Bushels per Acre)

US Ending Stocks (billion bushels)

World Ending Stocks (million  tons)

We could see some follow through buying early this week before trader’s attention turns back to South American weather and any policy changes that we may see with a new President. Look for prices to remain supported by today’s report well into the spring/summer months when the US will have a better grasp on the potential size of the 2025 crop.

Good morning,

USDA report out at 11:00am today. Estimates for today’s report are listed below.

Production (billion bushel)

Acres (million acres)

Yield (Bushels per Acre

US Ending Stocks (billion bushels)

World Ending Stocks (million metric tons)

Garry Gard

ggard@didioninc.com

920-348-6844

Good morning,

Corn is down 1 and soybeans are up 7 to start the day.

Following a rough day yesterday, corn and soybeans have rebounded overnight and appear to be led by higher veg oil prices. Short covering in front of the weekend is to be expected. The US dollar continues to march higher and South American weather remains generally favorable for crops. Traders remain concerned about what government policies will look like in 2025 and beyond, adding more pressure to the markets.

The Buenos Aires Exchange reported Argentine soybean planting at 20% done this week, up a strong 12% from last week due to better moisture supplies; corn planting hit 39% done with wheat planting at 17% complete. Brazilian rains again fell in the north yesterday and coverage and amounts look strong through most of the country’s crop areas over the next week-plus.

Look for the markets to continue their sideways trend in the coming weeks as there is little fundamental news to give us direction. Expectations for Q1 appear to be lower with sufficient stocks and a party change in the Whitehouse that has traders questioning export business. Time will Tell!

Have a Safe Weekend!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

WASDE report out at 11am today. This will be the last update we have on the 2024 production until the final report is released in January. Expectations are listed below.

USDA 2024/25 US Carryout (Billion Bushels)

USDA 2024 US Production (Billion Bushels)

USDA 2024 US Yield (Bushels per acre)

Expectations are for a slight drop in yield, but I am thinking we may see an increase. Locally and outside of the state I have been hearing a lot of very good numbers. Yes, there were wet spots in field and some “0 bushel” areas, but the good ground was really good. Reports across the Midwest of emergency ground piles are very common. Exports have been good, and domestic demand has been good, but we will need a lot more of that over the next 9 months to move corn prices higher. With the expectation for Trump to put new tariffs in place when he is in office, it will be difficult to keep exports high. Following today’s report we will not have an update on production until the final is released in January.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com