Good Morning,

Markets are higher this morning with corn up 1, beans up 1 and wheat up and wheat up 5 to start the day.
OPEC is scheduled to hold a virtual meeting on Monday to discuss a new agreement to reduce output. Traders are expecting some sort of resolution between Russia and Saudi Arabia to bring the oil war to an end. President Trump indicated that his conversations with Russia’s President Putin and Saudi Arabia’s Crown Prince suggested that they were willing to cut 10-15 million barrels per day. However I don’t expect to see much support in the corn market as ethanol producers won’t see any relief until people return to more normal driving patterns.
With the drop in ethanol prices, plants shutting down, storage tanks filling and demand down as people stay home and leave their cars in the garage it could be a long time before there is demand in the ethanol industry again. I do not expect much of an upside in old crop corn with the sudden lack of demand and expectations for large new crop acres. The 2019 crop has a lot of quality issues which is going to make it even more difficult for producers sitting on unpriced inventory. New crop prices do not show a lot of upside potential at the present time and if we get anywhere near the acres projected in Tuesday’s report we will be looking at a 2.5-3.0 billion bushel carryout. Those type of numbers are going to make the current fall prices of $3.20 look good.
At Didion we are currently buying old crop corn for the summer months to fill our mill needs. Quality will be monitored closely and we will be sticking very tightly to our discount schedule as everything we will be buying will have to go to our mill.

Have a Safe Day!

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

Good Morning,

Markets are a little stronger this am with corn up 3 and soybeans up 2. The US Dollar is higher at 100.15, the Dow is up 500 points and crude oil is up $5.25 to $25.50 after China announce they would buy crude oil for their strategic reserves.
Oil prices have jumped on expectations Saudi Arabia and Russia will ease the pressure off the oil market. Crude oil is up nearly 20% on the day to trade back above $24 a barrel after President Trump told CNBC’s Joe Kernen he spoke with Russian President Putin and Saudi Crown Prince Bin Salman, adding he expects both countries to cut production by about 10M barrels.
The news of Beijing pledging to take advantage of the 60% decline in crude oil prices to increase their strategic reserves has helped place a bid beneath the corn market this morning. The idea is that the Chinese intend on securing enough oil for about 90 days or somewhere in the area of 900M barrels. President Trump will meet with US oil industry executives tomorrow. The trade will be watching China closely in terms of their buying.
Look for choppy grain trade continues as the break in prices at the end of last month starts to uncover new buyers as we head into a new month and quarter. The combination of the Chinese decision to buy crude and the potential truce between the Saudis and Russians in their price war likely provides some measure of confidence to traders that was clearly lacking yesterday.

Have a Safe Day!

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

Good Morning,

Markets are softer on the open with corn and wheat down 2 and soybeans down 4. Look for quiet trade ahead of this morning’s USDA report which will be released at 11am. Estimates are listed below.

USDA Quarterly Stocks (Billion Bushels)
USDA March 1, 2020 Average Estimate
Corn 7.953 8.125
Soybeans 2.253 2.241
Wheat 1.412 1.432

USDA Prospective Plantings (Million Acres)
USDA March 1, 2020 Average Estimate 2019 Final
Corn 96.99 94.328 89.7
Soybeans 83.51 84.865 76.1
Wheat 44.65 44.982 45.2

I would not be surprised by a significant change in the corn stocks report, and it could be in either direction, but my bias is to the downside. Up to 1.2 billion bushels of corn were still in the field when USDA last surveyed in December. The USDA asked farmers to estimate bushels in the field, and it considered those bushels “stored on the farm.” Much of that corn has been harvested, giving farmers a better idea of its yield and quality which is what could move stocks dramatically either way in today’s report. Unfortunately even if the stocks come in lower, demand for corn in the ethanol industry is falling like a rock and will not be coming back anytime soon. Add on a 92-93 million acre corn crop at trend line yield and we have no reason to move the market higher.

Check back after 11am for the updated numbers in today’s report.

Have a Safe Day!

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

Good Morning,

Markets are softer this morning with corn down 5, what down 6 and soybeans unchanged.

Overall the markets look to start the week off on the right foot ahead of tomorrow’s Stocks and Planting Intentions report. The average guess on corn acreage to be 94.3M acres, soybean acreage at 84.9M acres, and wheat acreage just shy of 45M acres. Corn stocks are expected to fall 5.7% from March 2019 while soybean stocks are projected 17.8% lower than year ago. Both should be considered neutral/friendly.
Corn has been held back by the slide in ethanol production and demand. Nearly 3B gallons of US ethanol production has been taken offline. In the past week alone nearly 1B gallons of capacity has been cut basically reducing the corn grind by about 90M bu. a month. A big problem has been plants finding sufficient storage as consumption of gasoline has plummeted following the US Government stay at home orders. It is highly likely that we could see as much as a third of the industry shutter its doors by the middle of April. A move that would cause about 150M bu. per month loss for the grind.

Have a Safe Day!

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

Good Morning,

Markets were mixed overnight with corn down 2, soybeans up 3 and wheat up 11. It’s been a wild week in all markets and I doubt that it will be any different in the coming weeks as we continue in uncharted waters.
There are two ways to look at the market after this week’s trade: 1. The CBOT is up 3 on the week for corn and up 20 on the week for soybeans. 2. The markets are still so low that no one can make a profit with cash corn sub $3.20 and cash soybeans sub $8.20. Unfortunately #2 is the one that is the most important when it comes to cash flow, but the fact that we are up on the CBOT is encouraging given the difficult times we are in.
Traders are anxiously awaiting next Tuesdays USDA Stocks and Planting intentions report to see if there are going to be any reductions in the size of last years crop. Producers and traders have been arguing that the USDA missed the size of last years crop and that it is much smaller than reported. If the USDA doesn’t make any adjustments Tuesday, then the trade will have to move on with these numbers. If there is a reduction in stocks or for some reason projected acres, (currently estimated at 94 million) traders should actively take advantage of any rally to get old crop corn priced. If the markets were to rally on any drop in stocks, I believe it will be short lived as it will quickly be given back on a lack of ethanol demand.
Funds are currently short 95,000 corn and long 3,000 bean contracts.

Have a Safe Day!

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