Good Morning,

Not much life in the market over the past few days, export sales are continuing to not give the market the boost everyone is hoping for. Today US and Chinese trade officials are making plans to talk on Chinese Ag purchases, in return of US dropping some tariffs. Upper Midwest, including locally, looks to have had strong frost and freezing overnight-beyond the normal weather delays we’ve been experiencing this fall.

Locally harvest is starting to be underway for many producers, make sure to contact us for options for delivery and keep posting via text and website for weekend/harvest hours. Contracting, spot, and other options are available.
Corn is currently up one and soybeans down four.

Have a Great Weekend!

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

Good Morning,

Rumors continue to swirl the last two days that the Chinese may be buying 10 mmt of tariff free soybeans with the hope that corn, ethanol and sorghum would be included. Unfortunately traders are failing to rally on these rumors or hold any strength in the markets. Heavy farmer selling as harvest progresses in the US seems to be limiting gains on the CBOT and is starting to force basis levels wider across the US. With producers sitting very “undersold” for the crop that they are currently harvesting and yields coming in better than expected sales are starting to ramp up. If you are in this camp, I would strongly urge you to get basis locked in on any fall deliveries you will have to make.
On the positive side the funds continue to reduce their short position in corn (-68,000 contracts) and add to their long position in soybeans (+63,000 contracts). This trend has been taking place over the last several weeks which is a good sign.
Artic air is coming down from Canada and will remain here until the 4th or 5th of November. This cold air pushes the majority of any rain to the South and East. While it may be cold, at least the rain will be out of the forecast.

Corn and soybeans are both trading 2 lower this morning.

Have a Safe Day!

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

Good Morning,

The saga continues as China wants to negotiate more concessions. Not only do they want to see the October and December tariffs delayed, they want to see some of the tariffs that have been put in place rolled back before they commit to big Ag purchases. For now it appears that we have proposals but no deal.
While the storms were bad, the excessive snow did not cover as big of an area as predicted last week but the idea that some damage has been done should provide support. It will take time before the market can get an idea of how much damage was done by the snow and freezing temperatures over the weekend. I would not expect this to be captured in the November WASDE, but some of it could be.

Corn and beans are lower this morning as things with China have simmered and will take time to get the first phase agreed upon. Both commodities have had a sizable run in the last few days and may be running out of steam for the time being.

Have a safe day!

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

October 14, 2019

Good Morning

The United States and China announced Friday afternoon that they have reached agreement on the framework from which their staff can draft Phase 1 of a trade deal. Drafting that agreement will take the next three to five weeks, but President Trump and President Xi may be able to sign the agreement when they meet at the APEC meeting next month. Some reports indicate that the agreement includes quotas scaling up to $40 to $50 billion per year of agricultural commodities, while other reports indicate that we will see China purchase a combined total of $40 to $50 billion of ag commodities over the next two years.

The United States will suspend implementation of an additional 5% tariff on $250 billion in Chinese good scheduled for Tuesday of this week, but there has been no agreement to suspend the tariffs we have scheduled to go into effect in December. Phase 1 also includes some agreement on currency and on intellectual property right, although much of the IP will be covered in phase 2.
Very few details are available and the markets have grown skeptical of Chinese promises in the past and will want to see proof of purchases and shipments.

Keep in mind that these details have yet to be confirmed by the Chinese media. Our own media is reporting this morning that Beijing is seeking the removal of Dec 15th tariff increase and asking for another round of meetings in late October to further discuss the details Phase 1. This has the banks taking a cautious approach to the all the news as there seems to be some confusion over whether or not this is a new demand that will prevent it signing the “Phase 1 Deal” unless it is removed!

In addition to trade talk cooling, the weather has taken a decidedly cooler tone as well. Saturday was colder than forecast with freezing temperatures proving more widespread across the Plains and western Midwest. The system brought a blizzard with over 2 feet of snow to parts of North Dakota (above). The 2-week outlook looks much more seasonal, allowing the snows to melt and soils eventually firm enough to get the harvest back rolling. Unfortunately we will have to wait until the November WASDE report before we get an idea on just how much damage the USDA feels was done by the storm.

Have a Safe Day!

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

Good Morning,

At some point we as traders and marketers of grain will learn from the past mistakes and realize that when the strong majority is thinking the markets are going to move higher or lower following a report it will actually head the opposite direction. That was the case yesterday as most were expecting the markets to trade higher following the Crop Production and S&D.

Corn production figures came in above the average pre-report estimate and above the high-end of the range of expectations. NASS estimates the average national yield at 168.4 bushels per acre, up 0.2 bushels from last month’s report. Harvested area was lowered by 200,000 acres, but came in 300,000 acres above analysts’ expectations. Production is estimated at 13.779 billion bushels, down 20 million bushels from last month. Beginning stocks were also adjusted lower (-331 million bushels) reflecting the information from the Quarterly Stocks Report released on September 30. What made the report negative was a continued reduction in the overall demand expectations. Food & seed demand was lowered 15 million bushels, demand to produce ethanol lowered 50 million bushels and demand for exports lowered 150 million bushels. Offsetting to a degree was a bump to feed and residual usage of 125 million bushels. Ending stocks are now forecast to be 261 million bushels smaller than last month’s estimate at 1.929 billion bushels but 245 million bushels larger than pre-report expectations.
Soybean ending stocks were lowered again this month due to both decreased production forecasts and slightly higher demand expectations. NASS estimates the national average yield at 46.9 bushels per acre, down 1.0 bushels from last month’s report and lowered harvested area 300,000 acres. Production is now estimated at 3.550 billion bushels, down 83 million bushels from last month. Beginning stocks were also adjusted lower (-92 million bushels) reflecting the information from the Quarterly Stocks Report released on September 30. On the demand side, crush was raised 5 million bushels. Ending stocks are now forecast to be 180 million bushels lower than last month’s estimate at 460 million bushels.

Definitely not the weather we would like to see for harvest progress this morning with rains and cooler temps today. Rains should subside this afternoon but the cooler temps look to be in play for the next week with highs in the mid 50’s.

All markets are higher this morning with corn and soybeans both trading 9 higher as the focus shifts to US weather and the Chinese/US talks.

Have a Safe Day!

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