Good Morning,

The markets found their lead in the stock market as the US Dow Industrial rallied 800-1000 points yesterday. The COVID19 dampened the market early as the US reported its second death from the disease. Both individuals who have passed from the disease have had compromised immune systems but the spread of the virus isn’t being taken any less lightly.
Markets are higher this am as traders expect some coordinated action to be announced after an emergency G-7 call this morning. Lack of news from this call would likely produce another sell off in the markets so be careful not to get too greedy on any nearby sales you need to make.

The averaging period is complete, and the corn price average used for insurance is $3.88,
soybeans $9.17, and Spring Wheat is $5.56. It’s interesting to note that the corn and soybean
prices logged in February for the RP Insurance program have a 76% correlation with the MY(marketing year) average price of the last 9 years, the Spring Average base price for RP has exceeded the average MY price received by farmers as recorded by the USDA. This is even more important when considering at least 15% of the corn/soybean/wheat bushels are uninsured under the RP program and open to risk to the producer. 2020’s corn support price is 12 cent lower than last year, and if that is a general indicator of the average price received in the coming MY, then average prices are going to be similar or lower to last year. The soybean average price is 37 cents lower than a year ago and despite the lower expected carryout the Feb average implies a lower average priced year.

Have a Safe Day!

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

Good Morning,

Prices over at the CBOT are trading lower again this morning with many traders happy to be turning the page on the calendar from February to March.
Panic around the Globe over more evidence that the coronavirus is spreading outside of China has investors diving for cover into safe-haven assets like Treasuries. There has been and will continue to be a major “Risk Off” attitude amongst traders for the weeks and months to come.
The South American weather models are basically unchanged from yesterday in calling for above normal rain for Brazil and arid weather for Argentina over the next 10 days. There is a chance for some showers in Argentina in the extended outlook, but at this point our confidence is low in the forecast. Yield losses will begin to mount if the pattern continues into late March. Central Brazil still looks wet with expectations for another 3″ to 5″ of rain over the week or so. Farmers in southern Brazil will welcome the drier weather there as the combines get rolling over the next 2 weeks. The forecast for Brazil looks favorable.
Current USDA S&D data shows ample supplies of corn and wheat available while bean supplies are getting tight. With so much grain still available it is tough to talk fund managers into stepping up to buy the grains. In my opinion the chances of China following thru on their phase 1 agreement to purchase $40 billion in ag products will not happen. The Coronavirus has resulted in them spending significant money to fight the disease and has reduced the timeframe for them to buy. This is going to keep prices in check and make any sort of rally into the spring very difficult to obtain.

Have a Safe Day!

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

Good Morning,

Monday’s big selloff in the markets was the sudden spread of coronavirus outside of China, particularly in South Korea, Japan, Italy and Iran. There are currently 53 known cases in the US.
Markets are trying to bounce back today but so far it has been a struggle with corn and soybeans only up 1 each while wheat is down 5. Traders and end users are reluctant to start any rally as the tears of the expanding outbreak continue to be a major driver that is linking traders around the world.
According to analysis by research firm Capital Economics, COVID-19 will cost the world economy over $280 billion in the first quarter of this year, meaning that global GDP will not grow from one quarter to the next for the first time since 2009. China’s growth is expected to slow to 4.5% over the same period. The slowdown may also undermine US plans to massively boost exports of ag goods, energy and services to China, hampering any potential recovery in farming communities. World supplies of grain are robust and South American corn and soybeans are now cheaper than those out of the Gulf.

Brazil continues to have great weather with rains continuing to increase the size of their crop. Crop progress remains strong and planting of Safrina corn crop is now close to 80% complete.

There are still some very good basis levels trading for corn delivery into the spring months. There is very little carry in the market which indicates that now is the time to be making cash sales. Commercial elevators are aggressively selling to end users due to the lack of carry which is covering demand and resulting in basis widening. Elevators with ground piles will begin picking them up in the next two months which will lead to a surplus of grain in the pipeline as well. I would advise producers to be locking in sales for any cash that is needed in the next 30 days. Basis for June and July are also advised while looking to lock in the cbot during planting season. New crop sales for this fall should be in place or made to get you to 20% sold.

Have a Safe Day!

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

Good Morning,

Today is a risk off day that could lead to many more as there appears to be serious concern over the spread of the coronavirus. Corn is down 6, wheat down 16 and soybeans are down 16 to start the day.
US equity futures tumbled alongside stocks in Europe and Asia on Monday as authorities struggled to keep the coronavirus from spreading more widely outside China. Safe havens including treasuries and gold jumped. Equity futures are pointing to declines that would have Wall Street down almost 4% since Wednesday as the deadly virus spread in countries including Italy and Iran.

The risk-off mood hardened as the epidemic spread to more than 30 countries, with South Korea reporting a jump in infections and Italy locking down an area of 50,000 people near Milan. Finance chiefs and central bankers from the largest economies met at the G-20 in Saudi Arabia over weekend and warned that they saw the virus bringing downside risks to global growth.
Governments and companies are curbing travel and trade in an attempt to contain a novel pathogen that can be transmitted by people without symptoms. Adding to the anxiety Monday was China announcing an easing of the quarantine of Wuhan, only to retract the statement hours later. Beijing did impose a total ban on the trade and consumption of wild animals, but it seems a like it’s a case of “too little, too late”.

Have a Safe Day!

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

Good Morning,

USDA Secretary Perdue spoke this morning about their new initiative meant to increase US farm productivity while reducing agriculture’s impact on the environment. The USDA’s goal is to align resources to help reduce food waste by 50% and cut nutrient runoff by 30%.

The USDA’s Chief Economist also spoke this morning touching on trade and just what the USDA envisions for its 2020 WASDE forecast on acres, yield and stocks. Last year’s planting difficulties resulted in a 13M fewer soybean acres, equivalent to more than 600M bushels. Lower carry-in supplies, support an increase in soybean area to 85M acres. Corn area is expected to rise 4.3M acres to 94M following last year’s prevented plantings, supported by new crop prices that are relatively favorable to corn.
These initial ideas indicate the expectation that we see a rebound in acreage to 224M after being significantly impacted by flood last year. This is still moderately below projections provided from 2015-2018. Corn at 94M, while up significantly from last year, it was pretty much in line with expectations. 85M acres of beans was also in line with the average guess.
The 2020/21 corn average farm price expectation was put at $3.60/bushel and compares to 2019/20’s estimated $3.85. USDA sees the 2020/21 U.S. average farm price for soybeans at $8.80/bushel vs an estimated $8.75 for 2019/20.
Corn and soybeans are both trading 1-2 lower to start the day.

Have a Safe Day!

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