Good Morning,

Markets are slightly higher this morning with corn and soybeans both trading 1 higher.
Short covering may be the market mover to close out the week. I doubt the rally will go very far, but any rally is good news. Corn will have a tough time clearing initially 3.30 and then even more difficult at 3.35 ahead of the crop report that is next Thursday. The market has made a habit of dousing out the corn short covering before the crop report is released. The report next week will be bearish to corn again, with the absence of high ethanol use over the past month.
The weather is going to clear of rain until Tropical storm Cristobal makes landfall on Sunday. Rains will develop in New Orleans of up to 5 inches before moving up Monday and Tuesday into the Central US. Today’s model shows most of the rain covering from south of Kansas City, strait up to Des Moines and directed to Green Bay. The East looks to get less than an inch, where the west central belt can get as much as 2-3 inches, with isolated areas of 5 inches.

The temperature forecast looks a lot warmer for the next 14 days. Temps break down with the tropical storm moving in, but they slowly build back warmer on June 16-18th. This may be the beginning of another high pressure ridge.

Look for prices to remain depressed and trading in the 10-15 cent range we have seen over the last month. Producers should be actively selling cash and new crop corn in the $3-$3.20 range when/if it is obtainable. In my opinion we have 3 weeks for weather to move the markets higher. If we don’t see any major weather issues by the 4th of July the window will close and prices will start to head lower.

Have a Safe Day!

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

Good Morning,

Corn is down 2 while soybeans and wheat are both trading 3-5 higher overnight. Favorable weather nearby and in the extended forecasts continue to keep the funds short the corn board. Funds are estimated to be short 275,000 contracts. Money has been flowing into the equity sector but they are reluctant to invest in commodities until they see better evidence of demand. Right now Crude oil appears to be the best investment in the eyes of investors. With the USDA’s forecast of 3.3 billion bushels of surplus stocks in the next year, it is going to take a major event to change everyones thoughts.
Traders will begin to focus on next week’s WASDE report which could offer additional changes in demand but isn’t likely to see any major alterations. Ethanol production has increased, but unless it rises dramatically in the coming weeks the USDA’s current estimate will have to come down by 100 mb.
Look for prices to remain depressed and trading in the 10-15 cent range we have seen over the last month. Producers should be actively selling cash and new crop corn in the $3-$3.20 range when/if it is obtainable. In my opinion we have just over 3 weeks for weather to move the markets higher. If we don’t see weather issues by the 4th of July weekend the window will close fast.

Have a Safe Day!

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

Good Morning,

Overnight the markets were sharply lower with corn, soybeans and wheat all down 6-7 cents. This morning corn opened 5 lower while soybeans and wheat were 3 and 8 lower respectively.

President Trump announced significant sanctions on China Friday afternoon. The president formally withdrew U.S. membership, and therefore funding, from the World Health Organization for its role in helping China cover up the risks associated with the coronavirus. He formally removed “special status” for Hong Kong, which allowed both U.S. companies and the U.S. government to do business in Hong Kong as if it were a separate entity from China. That will have a notable adverse economic impact on both Hong Kong and on China. The president also called for increased scrutiny of Chinese companies doing business in our financial markets. This, combined with previous sanctions on government retirement accounts investing in Chinese businesses, is just the beginning of what he can do to control capital flowing into China.
Reports out of China are that the state buyers have been told to halt purchases of US pork and soybeans. These two commodities are what China has been buying the largest volumes of in recent months. China can manage short term on existing supplies and shipments that are on their way from Brazil, but will be back in the market later this summer when that supply dries up.
Favorable weather across the Midwest over the weekend and forecasts for the 7-10 day will keep weather from adding any life to the markets.
Continue to make sales on any small rally and take advantage of $3 cash and new crop sales when available. If we don’t see weather move this market in the next 4 weeks, we may very well be out of opportunity for the bulls. Historically we do not see weather rallies in the market after the 4th of July.

Have a Safe Day!

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

Good morning,

Markets are mixed this morning with corn up 1 and soybeans down 7. Weather and US-China tensions lead the news today.
China advanced its law restricting the freedoms of Hong Kong today, taking the action despite threats for sanctions from the United States. Negotiations with China are most effective when done within the context of relationship. It’s a part of their culture. President Trump was very effective at developing and maintaining a relationship of respect with President Xi Jinping through the tensions of the trade negotiations, even in the rocky times of that process. That respect allowed the negotiations to continue. But that relationship is being tested currently and stretched thin to the point of breaking as President Trump has lost patience with the Chinese leadership’s poor handling of the coronavirus that allowed it to rapidly spread to the rest of the world, and now its aggressive stance on Hong Kong, on top of its spread of military might in the South China Sea while saying it was not doing so. China moved forward with tough restrictions on Hong Kong and the world now waits for President Trump’s response, which is expected to elicit another response from Xi. (seems like a soap opera)
Weather remains favorable for most of the Midwest over the next couple weeks with warm temps and adequate rainfall. Locally things could not be much more ideal with humid temps and rainfall the last few days the crop is popping out of the ground at a fast pace. I have not heard of any emergence issues from any producers in our draw area.

Have a Safe Day!

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

Good Morning,

Overnight corn and soybeans were each down 1-2 cents while wheat was down 9. Look for traders to close the week on a down note today as they head into a 3 day weekend with favorable good planting progress, favorable growing weather and continued Chinese-US tensions.
Basis levels have narrowed across the country as more ethanol plants come back on line with margins improving in the last couple weeks. Farmer selling across the country has been steady despite the low prices as producers continue to need cash flow and monitor their bins. I have heard some talk of producers possibly sitting on grain going into late summer in hopes of higher prices and using the government payments to meet their cash needs. While this may be an option it is not one I would suggest for multiple reasons.
1. The 2019 crop is poor quality with lighter test weight, higher foreign material and higher damage. This all translates to difficulties storing and preventing things going bad in the bin.
2. With a big crop on the horizon, storage will be at a premium this fall with farmers rushing to make space in late August and September ahead of the new crop. This will depress basis levels on top of CBOT prices that will falter as new crop in the south hits the pipeline.
3. The IL river is essentially closed due to flooding which is limiting the loading of barges. This will make it difficult to get all the grain down the river before it closes for work on its lock and dam system in July. These bushels will fill any local markets and work their way north which will depress basis levels.
4. With projections of a 3 + billion bushel carryout next year does anyone expect CBOT prices to rally between now and harvest? In all of my conversations with producers, end users, traders and market experts, no one has a reason for the market to rally for old or new crop.
Producers should take advantage of markets that are currently buying corn at the $3.00 range, add on the .335 cents you will receive from the government and consider $3.335 a great sale. (There may be other state or federal payments that can be added on top of this at a later date) I would also suggest producers lock in some new crop sales at the $3.00 level as this may be as good as it gets. I would not be surprised if the government comes out with a payment for new crop somewhere down the line that would add some premium on top of this making it a good sale.

Reminder that there will be no markets on Monday.

Have a Safe Memorial Day Weekend!

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