Good Morning,

Markets are higher this morning on comments from China and reports from the UN regarding locusts.

The UN issued a warning regarding a large swarm of locusts that have migrating across East Africa with fears of them spreading to India and South East Asia. The migration which has already traveled across most of Africa, the Red Sea and a substantial part of the subcontinent, reached close to China’s Southwestern border over the weekend according to reports.

China has committed to boosting its purchases of goods and services from the US by 200 billion dollars as part of the two year agreement. The US goods eligible for tariff exemptions include agriculture and energy products like pork, beef, soybeans, liquefied nature gas and crude oil. It also looks like exemptions will be imposed on denatured ethanol, wheat, corn and sorghum. Chinese firms can start submitting applications on March 2nd for duty free import licenses.

Brazil is going to see above normal rains over the next 10 days. Temps will be on the cooler side, but this forecast is wetter than last week. Southern Argentina will be drier going out into Feb 28th. The break in the line of storms is right at the Norther growing region. This has kind of been their weather pattern for the whole season. Ten to fifteen days of dryness followed by a 1-2 inch timely rain. Brazil on the other hand just keeps looks wet, followed by more wet.

Corn is up 3, soybeans up 2 and wheat is up 12 to start the morning.

Have a Safe Day!

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

Good Morning,

Reminder that there are no markets today in observance of the Presidents Day holiday.

Producers should be actively monitoring and moving grain in their bins this winter due to quality issues that are going to make this crop one you DO NOT want to store very long. 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 going to cover demand and widen basis. Basis sales for June and July are also advised as I expect these levels to widen out after we get this year’s crop in the ground. New crop prices are at very attractive levels ($3.65-3.85 range) for fall and beyond. If we get anywhere near the acres planted that producers are planning this spring, these levels will evaporate quickly.

Have a Safe Day!

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

Good Morning,

Markets are mixed this morning with corn down 1 and soybeans up 1.
Tomorrow marks 30 days since the US and China signed the Phase 1 trade agreement. The pros will be on watch for signs that China is opening their Ag markets by either issuing duty-free import licenses and by some other sort of tariff reductions.

Yesterday’s export sales report showed another poor week of movement. The USDA’s newly adjusted forecast calls for a 340 million bushel decline year over year. More talk about Asia buying Ukraine over US origin corn. Ukraine corn into Japan and Northern China is currently $4/MT cheaper than US corn. Ukraine corn into Southern China currently $19/MT cheaper. This is concerning to traders and should be to producers as well. Regardless of the “Phase One” deal, the Chinese will buy when prices are favorable and right now they are not.
We have not seen much movement in the funds positions over the last 3 weeks in corn as they maintain a net short position of 69,000 contracts. Their soybean position has not moved dramatically but has narrowed to short 57,000 contracts in the last week.

Markets will be closed on Monday in observance of the Presidents Day holiday.

Have a Safe Day!

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

Good Morning,

Markets are mixed this morning with corn off 2 and soybeans up 5.

Traders will be watching to see if China follows through with their pledge to open their markets to US Ag goods on February 15th as stipulated in the Phase 1 trade deal. Treasury Secretary Muchin has indicated that the implementation of the deal has slowed due to the coronavirus.

A surge in confirmed cases of coronavirus after the province at the epicenter of the outbreak revised its method for counting infections has the pros taking a cautious approach early in the trading session. Officials there added nearly 15,000 cases to their latest estimates of infections and raised deaths by 242 to 1,367 total (2.2% mortality rate). The additions raised the total number of people infected in Hubei by 45% to 48,206. The global tally increased to about 60,000. While disturbing, the jump is actually due to old cases that were reclassified after a new group of patients were diagnosed through the use of CT imaging scans rather than previous method of nucleic acid testing kits.

South American weather models are in good agreement in calling for reduced rains over the next 10 days for Argentina. Rains are slated to begin later today and push north; however, the latest runs do not have the jet stream dropping as far south that will keep the heavier rains centered on the northern half of the country. No extreme heat is seen. Farmers in Brazil will welcome the forecasted drying trend that will help advance soybean harvest and the planting of winter corn.

Have a Safe Day!

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

Good Morning,

Yesterday’s report did nothing to hurt the market, but also nothing to support it either. The report was the usual February changes that had been expected by the market. Cutting exports in corn made sense and further cuts will be coming unless China is going to make up the difference. Some of the US exports can be back loaded, so cutting back the entire pace lost could be premature. Corn exports are expected to expand next year and be back closer to the 2017/2018 levels. The USDA raised ethanol by 50 million bushels, which kept the carry out for corn the same.
Soybeans saw an increase in exports of 50 million bushels as we are ahead of pace and China will be seeking more beans in the future. Ending stocks for soybeans were 425 million bushels. The big challenge will be competing with Brazil’s biggest crop that keeps getting bigger and its currency which is at record lows versus the dollar. Brazilian beans were increased to 125 mmt. This is a 7 mmt increase from last year.
South American weather forecast are drier today, but still have some rain coming. Argentina will see regular rain in the coming days, helping soybeans pod. The key right now is that no extreme heat is forecasted.

Have a Safe Day!

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