Daily Insights

JUNE 3, 2021

Good Morning,

Corn is down 5, wheat is down 9 and soybeans are down 2 to open the day.

The market is trading weather this morning with Minneapolis wheat as the leader. Corn was lower yesterday after the USDA put out crop ratings that were much better than many would have guessed. There is still rain around the Midwest, so we don’t see the weather as that crazy bullish; we do respect the heat and it may be an indication of more to come.

China hailed on Thursday the resumption of “normal discussions” with the United States on the trade and economic fronts, apparently keen to move beyond a trade war as it said both sides aimed to resolve issues pragmatically.
China’s Vice Premier Liu He, who has led trade negotiations with the United States, has held two video calls with U.S. Trade Representative Katherine Tai and Treasury Secretary Janet Yellen in a week, marking the first formal engagement between the two sides on trade and economic issues under the Biden administration.
The EIA released updated ethanol production information today in its weekly Petroleum Inventory Status report. Total stocks were up 608 million barrels while production was up 23 million barrels. As summer approaches, fuel demand is increasing with last week’s report showing a 15% increase in daily gasoline consumption since early March 2021.

Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com

JUNE 2, 2021

Good morning,

Markets are down 4 in corn and up 10 in soybeans to open the day.

Yesterday’s strong markets were driven by the funds as they added to their long positions with the start of a new month and talk that China would continue to buy and take delivery of previous purchases.

In yesterday afternoons first crop condition rating for the season, the US corn crop was rated 76%. Below are where the major corn producing states came in:
NE = 88%
IL = 80%
IA = 81%
OH = 79%
MN = 76%
IN = 74%
WI = 81%

There are several stories of producers having to re-plant frost damaged beans and corn from last weeks frost, but these areas are very limited and will have little to no impact on the markets. I toured a large portion of our draw area over the last 3 days and saw very few areas of great concern. Most of the damage I saw was corn plants with nipped leaves or areas that the plant had already begun to shoot new leaves.

The US weather forecast into June 12 has taken a lot of the rain out. Heavy rains will fall in Texas and on over to New Orleans. Amounts of up to 7-10 inches are expected. The Central and Western Midwest opens up with a high pressure ridge building a dome that pushes the precipitation to the far North and South. There are some spotty rains in the Northwest of North Dakota. One of the private forecasts that I follow has more rain in it than this model. They have a storm showing up on June 11th and moving through most of the Midwest for the next few days.

Have a Safe Day!

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

JUNE 1, 2021

Good morning,

Corn and soybeans are starting the month off with a Bang! Corn is up 35 and soybeans are up 45 early this morning.
Rumors, facts, and more rumors seem to move the market day to day. Last week there was talk of China cancelling old crop purchases that pushed the markets lower. This lower trade resulted in them buying more old and new crop corn. Today the talk is that China is going to be loading out almost all the old crop corn we owe them.
This afternoon’s planting progress is expected to be 97% complete compared to 88% on average. Crop ratings are expected to be rated 70% Good/Excellent. While it is still very early, if we do see a 70% G/E, this would be a good indicator as to where the final yield will be. In 11 of the 15 years where the first crop rating was 70% or higher, the final yield was above the USDA’s May estimate. This years May estimate was 179.5 bpa.
In my opinion US weather is not bullish at this point. We have adequate rain across most of the Midwest with warming temperatures that will move the crop along. Last week’s lower temperatures/frost affected very few acres. There will be some replanting taking place in the northern states, but that is very minimal.

Have a Safe Day!

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

MAY 28, 2021

Good morning,

Markets opened lower today with corn down 5 and soybeans down 10.

Yesterdays limit higher close was just another volatile day in the markets with no solid reason for the speculative trade. We have seen limit lower and limit higher trade days this week as trade continues to make big swings on rumors and fund positioning.
A cool stretch of weather has some traders monitoring potential frost damage in the northern trade areas, but it currently looks like this will be avoided. The only real potential appears to be in the Northern ND area. The US weather is going to have to turn away from the wet outlook we have been seeing before any weather premium is going to be added.

The 7 day and 10 day forecast has a lot of rain for Missouri, Kansas and Illinois/Indiana South. Most of the heavy rain is in Kansas down into Texas where amounts will top 3-4 inches. The whole South and East are also supposed to get moderate to heavy rain. The only dry area is up in the Dakota’s and in Minnesota. Temps will back to more normal next week after this cold front moves out.
The market appears to be setting back after yesterdays big rally as we head into a three-day weekend. There will be no markets on Monday and trade will resume Tuesday morning.

Thank you to all the military service men and women who have and are currently serving our country. We would not have the freedoms we have today if not for your service.

Have a Safe Memorial Day!

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

May 27, 2021

Good Morning,

Markets have bounced higher this morning with corn and soybeans both up 18.

Weekly export sales this morning showed old crop sales slightly above estimates at 21.9 million bushels for the week. New crop sales were very strong at 224 million bushels. This has been the trend over the past couple weeks as China continues to buy US new crop corn and soybeans.
Ethanol production leveled off last week, though there are still optimistic signs for the industry as the summer travel season approaches. For the week ending May 21, ethanol output fell 2% to 42.5 million gallons/day. Ethanol inventories fell to the lowest level since 2016 as the industry adjusts production capacity to current blending demand levels.
China is clamping down on some corn imports amid concern that overseas purchases have spiraled out of control, prompting several feed mills to cancel their U.S. cargoes. Chinese customs authorities are restricting imports into free trade zones, which aren’t counted toward an official annual purchase quota, according to people with knowledge of the matter.
China’s crackdown on corn purchases is targeted at businesses that have set up blending facilities in the free trade zones, according to the people familiar with the matter. These facilities allow firms to mix the imported corn with other raw materials to produce livestock feed that enable them to profit from zero-tariff imports, the people said.

US weather is bearish and the rain coming though should continue to weigh on prices, but it looks like we are going to pause for now. Demand is still really good for corn and the funds have liquidated over half of their position.

Have a Safe Day!

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

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