Good Morning,

The day is off to a very rough start after President Trump spoke in a prime-time address from the Oval Office, announcing sweeping new restrictions on travel from Europe and scattered executive actions to help workers and businesses rocked by what he labeled a “foreign virus.” The situation is evolving so quickly that even he misspoke when he was “suspending all travel” from Europe and suggested they would also apply to trade. The President later tweeted that trade wouldn’t be affected and the Department of Homeland Security clarified that the restriction applies generally to foreigners who’ve been in Europe within 14 days.
Unfortunately, grain and soy markets are following equity markets lower over worries that all of this turmoil surrounding this virus will slow the world Ag trade. South America continues to be an aggressive seller with Argentine corn offered about $0.18 under the US for April, but $0.41 under for July. Soymeal out of Brazil is being offered $25 less than shipments originating out of the Gulf. Adding further pressure are Russian wheat values that have fallen to new seasonal lows.

There is no way of knowing where or when this will end. Risk appetite has disappeared, dramatic (panic) action is being taken against Covid-19 creating panic and the impact on jobs and the world economy cannot be estimated – but it won’t be favorable. The virus will get worse before getting better. It will end sooner than later. People will eat. Grains will be sold. Grain will be moved. Crops will get planted. Animals will be fed. Foods will be made and consumers will continue to buy.

Producers that need cash flow in the next couple weeks should pull the trigger now and make the sales as there doesn’t appear to be an upside on the horizon. Producers that have grain in storage and are financially stable should still be moving grain to maintain quality in bins. Give us a call to find out what options we have for cash and deferred pricing of corn.

Have a Safe Day!

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

Good Morning,

There were few changes in yesterday’s WASDE report for corn and beans which was expected. Corn ending stocks came in at 1.892 which was unchanged from last month. Soybeans also came in unchanged from last month at 425 million bushels. The next major report from the USDA will be the Prospective Plantings report that will be released at 11am on March 31.
The number of coronavirus cases is now near 120,000 with the number of deaths over 4,300. The virus continues to spread around the World and continues to have significant financial impacts on everyone. Crude oil is down again today after a slight recovery on Tuesday following Monday’s big selloff. Crude is currently trading in the $30-33/bbl range with private analysts projecting $20/bbl in the coming weeks/months. The US Government is looking to take steps to head off massive deflation by cutting rates and the President is discussing tax cuts. The Fed is worried about the lack of spending by consumers and don’t want to see businesses failing.
Corn is down 2 and soybeans are up 2 to start the day.

Have a Safe Day!

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

Good Morning,

Markets are sharply lower this morning as they deal with spillover selling from crude oil that is off 10% and stock markets around the world that are under serious pressure.
The situation we are witnessing today seems to have no equal in oil market history. Crude oil crashed more than 30% after the breakup of the OPEC+ alliance triggered a dangerous all out price war as both Russia and Saudi Arabia vowed to flood the market with cheap oil. Crude futures are having to deal with their second largest decline on record in the opening seconds of trading in Asia, behind only the plunge during the Gulf War in 1991. The Saudi price cuts pressured prices to levels we haven’t seen since 2016.

The losses are not contained to Wall Street as markets from Europe to Asia posted losses of between 3 to over 6.5% as fund managers run for the exits as 16M people in northern Italy were put on mandatory quarantine in an effort to slow the spread of the COVID-19 virus across the region. The confirmed infections around the Globe virus has now topped 111,000 with deaths now approaching 3,900 worldwide. Cases in the US are pegged at 566 with 17 deaths attributed to the disease.

There are rumors that China did secure US Hard Red Spring wheat, DDGs and some sorghum, but the quantities are unknown. While a positive sign the purchases are not enough to alter the negative landscape across the markets caused by the COVID-19 outbreak. Worries are growing that we will see US Government intervention in effort to avoid clusters similar to what we are seeing in Italy where a third of the population is under quarantine as they try to slow the spread of the disease. Over 40 states have now confirmed cases of the COVID-19 virus and fears that the containment policies are beginning to fail.

Have a Safe Day!

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

Good Morning,

The Ag markets will have to contend with another risk off day as worries over the coronavirus grow along with concerns over a potential global recession. This had yields on 10-year and 30-year US bonds dropping to record lows as the expanding health crisis risks disrupting global supply chains. The latest leg of the sell-off kicked off in Asia where stock markets slumped more than 2% and then was followed by losses of up to 4% in Europe despite concerted efforts from central banks and governments to soften the blow from the virus.
With all the carnage we are seeing on Wall Street it is easy to forget that we need to be on the lookout for new demand from China. We have heard talk for a couple days and now we have confirmation over the wire that the Chinese are issuing their duty-free import licenses. The licenses are valid for 1 year and apply to all 696 goods that were subjected to Beijing’s retaliatory tariffs. This includes corn, beans, wheat, DDGs, ethanol and meat.
The Chinese purchases will be based on how competitive US Ag products are versus those originating out of other world exporters. We will likely have to contend with Brazilian soybeans, Argentine corn and wheat from several nations that are currently cheaper. This is where the slide in the US Dollar comes into play and could help to change the landscape back into the favor of the American farmer. My concern is that the money that the Chinese have spent to fight the virus and the time that has been lost is going to result in them coming up very short of the Phase One deal.

Have a Safe Day!

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

Good Morning,

Market is currently down three on corn and four on soybeans. Monday thru Wednesday we saw a rally back of close to twenty cents. With that being said, consider getting some sales on to reward the market move, or confirm offers with your buyer.

Secretary of Agriculture Sonny Perdue announced on Wednesday that he believes China will start buying soybeans in late spring and summer, as China has yet to be seen confirming their commitment to purchasing U.S. farm goods. Along the government theme, EPA is mulling ideas to help oil refiners with measures to comply with the ethanol blend rates.

Argentine farmers and exporters are showing warning signs of smaller soybean crops. This comes from an imposition of 33% tax for soybean and export for farms over 37,000 bushel production, this affects ¼ of their farmers who produce ¾ of the crop.

Make sure to call and talk about sales, we were recently reminded the market can take away twenty cents just as quick as we had it added back.

Have a Great Day!

Mitch Giebel
920-348-6861
mgiebel@didionmilling.com