Good Morning,

President Trump suggested on late Monday that enough progress had been made in negotiations with the Chinese that he intended on signing Phase one of the trade deal in November. This coincides with an article out of the South China Morning Post this AM reporting that Chinese President Xi and President Trump are tentatively expected to meet on November 17 with the aim of signing an interim trade deal. If everything goes smoothly, the two leaders are expected to come face-to-face immediately after the Asia-Pacific Economic Cooperation (APEC) summit in Santiago, Chile.
China still desires the cancellation of some of the existing and planned tariffs in exchange for the large purchases of US Ag products. Export demand remains lackluster and it is assumed that the Chinese will want to secure the good based on the market conditions. This should help support spot-market prices below $9 in beans and $3.80 in corn.
That has much as much to do with South America, at this point, as anything. Ag products are squarely in the Argentine President’s cross hairs and all the uncertainty surrounding his new plan. News that Argentina was looking at raising export taxes on soybeans to 25% and corn to 7% has led to all FOB offers beyond November/December being pulled. This is huge for us given how cheap Argentine grain has been with wheat the cheapest in the world by about $10/MT and corn running about 25 cents over the board versus 58 cents over out of the Gulf.
Last nights corn harvest progress report showed the US increase by 11% from the previous week and now sits at 41% complete compared to 61% on average. A huge increase in IL to 54% was the big surprise for the week. WI is reported at 13% complete.

Snowfall over the last 24 hours should slow harvest progress in some areas of the Midwest, especially in soybeans. This will lead to an increase in corn harvest as producers that have been working to finish up soybeans will now switch to corn for the remainder of the week while beans try to dry out.

Don’t forget to join us for lunch today as Compeer Financial will be serving bag lunches from 11:00am – 1:30pm.

Have a Safe Day!

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

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