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Daily Insights

May 24, 2024

Good morning,

Markets are quiet to start the day with both corn and soybeans up 1 cent.

The direction of the grain markets is starting to change slightly as planting progress figures track near average and concerns around a 2019 type situation dissipate. While the crop will get planted, we must acknowledge planting conditions have not been ideal during the last couple weeks and questionable stands are out there, especially in IA where rains have been the heaviest.  I don’t think we have enough concern to warrant a yield cut from the USDA in June. We may learn new information in the coming weeks that could change that, but I wouldn’t project it today. I want to continue to reiterate the importance of taking advantage of this weather premium to make sales of both old and new crop corn.

There will be no markets on Monday as the trade honors Memorial Day.

 

Have a Safe Weekend!

 

Garry Gard

920-348-6844

ggard@didioninc.com

 

May 21, 2024

Good morning,

Markets are softer to open the day with corn down 3 and soybeans down 10.

Planting progress moved ahead of the rains and traders are saying it was better than expected by about 3 points. Corn planting progress advanced from 49% to an even 70% complete as of Sunday night, just below the 71% five-year average pace. Emergence of rose from 23% to 40% this week, a point ahead of average.

Soybean planting advanced from 35% to 52% complete which is ahead of the 49% 5 year average. Emergence went from 16% to 26%, ahead of the 21% 5 year average.

Rains spanned across the central/northern corn belt over the past 24 hours, heaviest from NE through IA into southern WI, and that system remains in the northern belt through today. Extended maps remain on the wet side of normal but finally start to push those heavy rains out to the southeast, with drier weather moving in from the northwest by the 11-15 day in particular. Temps remain above-normal right into early June.

There are plenty of weather problems around the world so I don’t think the set back in the markets goes much further. The maps don’t show a significant change in the weather yet, but wet weather markets are hard to get moving.  We may have to get closer to the prevent plant date to see if there is a story.

Have a safe day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

May 13, 2024

Good morning,

Markets were softer overnight with corn down 1 and soybeans down 4.

Expectations were for minimal changes to both corn and soybean carryout for 23/24 and that is essentially what we saw. The corn carryout was taken down 100 mbu thanks to a 50 mbu increase to both export and ethanol demand. The soybean balance remained unchanged as expected.

There were some adjustments to South American production. Argentina corn was lowered 2 million tons while Brazilian corn was lowered 2 million tones and soybeans 1 million tons. The market rallied sharply after the report, but it really felt like we were trading weather after the news. The largest input of the day late on Friday was the COT report. Massive fund buying was noted, and based on late week action we can probably start assuming the short fund position in our grain space is mostly liquidated. So, will they get long for a shot at a weather problem this summer? We don’t see it, but momentum is real. Once it gets rolling, it’s hard to stop.

This past week brought at least a half an inch of rain to a majority of the central and eastern corn belt with some heavier totals in northern and western IA and parts of the SE belt. We currently have some rain moving across eastern NE and through IA and that system could expand throughout the day. The next 7 days are expected to be dry for a majority of the northern belt including northern IA, but the southern and eastern corn belt is expected to receive heavier rains. The current 6-10 looks wetter than normal, especially for IA and the current 8-14 day continues to hold chances for precipitation above normal and brings in some cooler temps.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

May 10, 2024

Good morning,

 

Corn and soybeans are both trading about 3 cents higher this morning as we await the USDA report at 11:00am.

 

Here are the estimates for today’s report:

 

USDA 2023/24 Carryout (billion bushels)

USDA May USDA April Average Estimate
Corn 2.022 2.122 2.100
Soybeans .340 .340 .339
Wheat .688 .698 .696

 

 

USDA 2024/25 Carryout (billion bushels)

USDA May USDA April Average Estimate
Corn 2.102 NA 2.284
Soybeans .445 NA .431
Wheat .766 NA .786

 

USDA 2023/24 South American Production (million tonnes)

USDA May USDA April Average Estimate
Argentina Corn 53.0 55.00 52.14
Argentina Soybeans 50.0 50.00 49.61
Brazil Corn 122.0 124.00 122.40
Brazil Soybeans 154.0 155.00 152.63

 

The weather outlook for the next 7-10 days has shifted slightly to the drier side which should allow planting progress to remain on pace with the 5 year average. Look for Monday afternoons progress to show minimal change from the average.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

May 8, 2024

Good morning,

 

Corn and soybeans are back to selling mode with corn trading 7 lower and soybeans 9 lower to start the day. The recent rally may not be over, but it is struggling to sustain momentum as planting progress rolls along and we are still in the very early stages of the season.

 

A national labor strike is planned across Argentina tomorrow which includes the Oilseeds Processors Union in a protest against tax hikes and the privatization of state assets.  Another crop report is due out this Friday, which may hold the market at bay until released.  The South American crop has been diminished, but so far, the USDA has accounted for almost none of it.  Traders are not betting long and may be added a few short here this morning.

 

In the U.S., the rains for this week have been highly advertised and expectations are that there will not be a lot of planting progress. Next week is still up in the air as there is still disagreement in the models. The CDC is calling for above normal temperatures in both forecasts, with the 6-10 day above normal rainfall the 8-14 dries out.

 

The Funds are still holding heavy shorts in corn and beans.  It’s unusual for them to hold short beans of over 100,000 for very long, a lot of the time they only get that short right ahead of harvest. There have hardly been any price reactions to issues in South American, Europe or India.  This recent rally is the best we’ve had in a long time, and massive amounts of cash grain moved yesterday and the day before.  Wet weather rallies are usually hard to develop and don’t have a lot of legs.

 

Rallies need to be rewarded by making both old and new crop sales. These rallies will not have a long tail because the US crop will get in the ground and the South American crop will get harvested. There is a gap in the December corn futures at $5.03 that I have been targeting as our top, but it may take some time to get there if we do. The last .15 cents has been tough to get, so we may or may not get there.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com