Good Morning,

Markets are quiet to start the day with corn and soybeans unchanged.

Weekly export sales came in below the 10 week average for corn at 34.8 million bushel compared to 47.1 on the ten week average. Soybeans were stronger and the best in the last 10 weeks at 44.3 million bushels as we continue to see Chinese sales ramp up.

The USDA’s CFAP announcement has generated as many questions as answers regarding payment, qualifying production, and qualified inventories. The FSA is trying to catch up with training to get the answers needed on a granular level that are so important. According to the announcement producers will be paid based on inventory subject to price risk held as of January 15, 2020. A single payment will be made based on 50% of a producers 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by 50% and then multiplied by the commodity’s applicable payment rate. (Corn rates are .32/bu for the CARES Act and .35/bu for the CCC payment, soybean rates are .45/bu for CARES Act and .50/bu for the CCC payment) This means that producers will receive $.335 per bushel of corn that they had price risk on as of January 15th and $.475 per bushel of soybeans that they had price risk on as of January 15th. The big question that is still trying to be clarified is what qualifies as “price risk”? In early conversations with county agents, here is my understanding of what would be considered to have price risk:
1. Any bushels that you had stored on farm or in an elevator that had no contract in place for those bushels.
2. Any bushels that you had stored on farm or in an elevator that had an open component on the contract.
A. Example – If you had a basis contract in place for June delivery of corn that you had stored on farm or in elevator, but had not set the futures price on it yet.
B. Example – If you had a HTA(Fixed Futures) contract in place for June delivery of corn that you had stored on farm or in elevator, but had not set the basis on it yet.
3. In the examples above, June delivery is just used as an example. As long as the contracts were not priced as of January 15th, you could have delivery anytime after that.
4. The only bushels that would not qualify for payment would be bushels that you had been paid on or had set a price on prior to January 15th.
A. Example – If you had a contract in place for June delivery of corn and the basis and futures price had been established.
5. APPLICATIONS are not being taken until MAY 26, 2020.

** The above explanations are only my interpretations based on information I have read and discussed with certain officials. You should talk with your local FSA official before counting your $. Keep in mind this information is all new so there is a learning curve for your local agent, give them time to get trained***

We will be happy to help you with documentation needed to apply for this payment, but ask that you confirm with your local FSA agent to get details of exactly what you need to make everyones time more efficient.

Have a Safe Day!

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

Good Morning,

The markets are off to a positive start this morning with corn and wheat up 2 while beans remain unchanged. While the news of people starting to come back out of their lock downs and resume a portion of what their pre-virus lives were helps the economy and markets, it’s a long way from where we were. We will most likely never see the pre-virus days again when it comes to socializing, travel patterns, business operations, etc. Everyone will move at a different pace so we must adapt and move forward.
Last night’s planting progress showed significant progress over the previous week with corn hitting 80% planted across the country. Corn jumped from 67% the previous week and is above the five year average of 71%. WI came in at 81% complete compared to 59% last week and 59% on average. WI is 52% ahead of where we were last year at this time. Nationally soybeans came in at 53% complete compared to 38% last week and 38% for the five year average.
The only state to be running behind their average is North Dakota where only 20% of the crop has been planted. Current estimates are predicting 800,000 prevent plant acres for ND but that may be partially offset by South Dakota where more corn acres have been planted.

Today is one of the “bounce” days that I have been referencing in recent commentary as the times when producers should be actively making sales. Don’t miss these opportunities!

Have a Safe Day!

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

Good Morning,

Corn is unchanged and soybeans are up 5 to start the week.

Support for all markets is coming as America continues to reopen without any major resurgence in the coronavirus. Additional support is coming from reports that an experimental vaccine has showed hope in early tests. A vaccine is considered a crucial step toward lifting social distancing measures and safely reopening economies, schools and events around the globe. While the timeline may be a ways out, progress is being made and hopes are that we could have a vaccine by the end of the year.

Most areas of the Midwest received at least an inch of rain since Friday, with many areas accumulating as much as four to five inches of precipitation. After a week of mostly soggy weather, planting progress in most of the Midwest may ease in this week’s Crop Progress report. But the recent rainfall will likely bring todays total back closer to the 5 yr average. Most of the corn belt will enjoy warm and sunny skies for the first have of this week. Warmer temperatures late this week and into the weekend should help soils dry out and increase emergence across the Midwest.

Chinese buying of soybeans and corn continue but gains will be limited by large supplies and expectations for good crops this year. Producers are advised to be making cash sales and new crop sales on any bounce in the market (1-5-10 cents) because they will be very limited.

Have a Safe Day!

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

Good Morning,

Markets re slightly higher this am with corn up 2 and soybeans up 2. Prices are receiving a boost from the energy complex this morning as ethanol production follows energy demand higher amid the COVID-19 pandemic’s recovery. Recent export sales to China also helped to underpin strength to soybeans. A soggy weekend weather forecast that would limit planting progress also contributed to this morning’s gains.
The Trump Administration moved to block shipments of semiconductors from chipmakers to China’s Hauwei this morning. The company depends on them for future growth meaning the White House’s move could cause problems for the Phase 1 trade pact. We await Beijing’s response.

With great planting progress and favorable weather so far this growing season the markets are not only going to struggle to move higher, but struggle to stay where they currently are. Carryout expectations of 3 billion plus that we saw in this weeks report are not going to lead to anything positive in the markets.

Make cash sales and new crop sales on any bounce in the market(1-5-10 cents) because they will be very limited.

Have a Safe Weekend!

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

Good Morning,

Yesterday’s report came in pretty close to the middle of expectation. With terrible demand in the first quarter of the year, the USDA made cuts across the board. The numbers that hurt are the new crop balance sheet for corn. Ethanol is expected to bounce back in production, but not nearly enough. Feed and exports are expected to gain some demand back, and some would say the USDA’s forecast would be too large. The phase one deal was supposed to support corn, beans and wheat prices, but the Corona Virus has slowed that. The carryout in corn is really big at 3.3 billion bushels, which is the the largest since the 80’s, when the government had to start set aside programs and government storage. (Set aside programs are desperately needed now in my opinion) The bean carryout was not nearly and negative at 400 million bushels, but when you add them all up it’s going to be a continuation of a tough year.
The US House is expected to vote on a new relief bill for 3 Trillion dollars Friday. The bill is named the Heroes Act, and will still have to pass the Senate next. In the bill, 16.5 billion dollars will be marked for direct farm payments, and also send financial assistance to the Ethanol industry. The USDA will be briefing on 16 billion dollars worth of aid that would be available in June or later. The USDA would like to get the money out to farmers before the Heroes Act would pass in June, and set up another round of payments for fall.
Beans have the best chance to rally long term in my opinion. Corn could get better if crude oil would get back to the mid 30’s but an increase in prices will result in an increase in production and reset the whole thing again. China has the ability to make the US carryout in beans disappear if they buy what they say they are going to, but when has that happened?
Markets are lower today with corn down 4 and soybeans down 9. As I stated in Mondays commentary, producers should take advantage of any bounce in the market because there is little to no reason for this market to move higher and the longer you hold out the worse it could get.

Have a Safe Day!

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