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

Good Morning,

Markets are quiet ahead of the potential storm that comes today. USDA report out at 11am (numbers below) and Chinese and US trade talks begin in Washington today. Both could send the markets in a bullish or bearish direction. Any drop in yield or harvested acres could add more anxiety to the markets while an increase in either would most definitely ease concerns and send the markets south. As you can see by the estimates below, the market is looking for a drop in yield and acres which sets the stage for a big shock if yield is actually reported higher. (we have seen this before!) With very little harvest actually completed nationally the majority of the yield report will come from satellite data and weather models from September.
The Chinese and US high level trade talks kick off today and we should expect to see a lot of headlines from these meetings over the next couple days.

My advice to producers is to take some risk off at current levels (set a floor) and add firm offers for additional sales above the market if we get any spike on the report’s release. These firm offers will have to be in by 10:45 in order for us to get them entered.

Be sure to check back after 11am for the updated report.

2019/20 US Production (Billion Bu)
USDA Oct Ave. Est. USDA Sept.
Corn Yield 168.4 167.5 168.2
Corn Production 13.779 13.684 13.799
Corn Harvested Acres 81.8 81.649 82.017
Soy Yield 46.9 47.3 47.9
Soy Production 3.55 3.583 3.633
Soy Harvested Acres 75.6 75.705 75.866

2019/20 Ending Stocks (Billion Bu)
USDA Oct Ave. Est. USDA Sept.
Wheat 1.043 1.015 1.014
Corn 1.929 1.784 2.19
Soybeans .460 .521 .640

Have a Safe Day!

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

Good Morning,

Markets are softer again this morning with both corn and soybeans down 1. Traders are waiting on Thursdays WASDE and Production reports. Private analysts are expecting to see a 1.8 bu/acre(167.5) cut in corn yield and 400,000 acre(81.6) cut in harvested acres. The USDA has historically saved its big harvested acre cuts for October as they become more confident in the completeness of the FSA certified acreage reporting process. I don’t expect any big yield reductions on Thursday as harvest progress has not advanced enough to justify big adjustments.
Tensions between the US and China are rising just as trade talks are scheduled to begin. China is indicating this morning that they are already planning to leave the talks one day early. This could be the backlash in response to the Commerce Departments move. The Commerce Department on Monday put a number of Chinese entities, including surveillance technology company Hikvision on an export blacklist that prohibits American firms from doing business with them unless they have a US government license to do so.
If you are a producer that historically stores grain at your local elevator you should give us a call to find out how we can add $ dollars $ to your bottom line with our storage alternative.

Be sure to get your firm offers in with us before Thursday’s crop report. I look for this one to spike when the report is released and then fade into the close.

Have a Safe Day!

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

Good Morning,

Quiet markets to start the day/week off as corn is up 1 and soybeans are unchanged. There is a lot of news that could move the market this week and direction is TBD.
1. US and China trade talks resume this week as the Chinese delegates are in Washington to continue negotiations. Last week’s thoughts were that something would get done this week, but over the weekend the officials from China said they would not be bringing any full scale concessions to the table this week. This is disappointing as President Trump has maintained he wants 100% or no deal will get done. While it doesn’t look like a full scale trade deal will get done this week, I just hope things don’t go south again.
2. USDA Crop production and Supply and Demand numbers will be released on Thursday at 11am. After last month’s Stocks report traders are anxious to see what the USDA will show for yield and harvested acres estimates in this report.
3. Forecasts for freezing temps and snow in the Dakotas, Minnesota and parts of Northwest Iowa later this week and into the weekend could set harvest back for those areas. Temperatures locally will drop next weekend, but most areas don’t appear to have any killing frost in the forecast.
Producers locally are reporting that they will be heading to the fields as early as this afternoon to start bean and corn harvest. With the first half of the week looking dry it should allow most to get out and work out the bugs.

Look for some positioning ahead of Thursdays report as traders are currently short 140,000 corn contracts.

Be sure to get your firm offers in with us before Thursday’s crop report. I look for this one to spike when the report is released and then fade into the close.

Have a safe day!

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

Good Morning,

The markets got a boost this week from some active short-covering by the funds after the surprisingly bullish report from the USDA to kick off the week. While things cooled off as the week wore on, fund managers are still maintaining a good-sized net-short position and are currently short 137,000 corn contracts.
The latest weather forecasts are a little warmer, but not warm enough to keep things above freezing in the Dakota’s and portions of the western Corn Belt over the next week. Eventually the more seasonally cool temperatures will move over the rest of the Midwest, but big threats to national yield estimates from frost/freeze will be limited.
Next week could be an interesting one. The early yield reports we are hearing on corn are all over the board from last year. Beans sound as they may end up being lower than last year. Weather outlooks continue to show the mercury dropping and fields too wet to make any progress getting anything in the bin. Additionally, we will get to see the latest estimates on production from our friends over at the USDA. And if that weren’t enough the Chinese negotiating team will be sitting down in high-level meetings with their US counterparts in Washington DC. Let’s hope something can get done there because we are in need of some bullish news for traders to react to. Any bullish news should be countered with sales by producers as it won’t last long!

Have a Safe Weekend!

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