Good Morning,

A drop in crop condition ratings and early results from the ProFarmer Crop Tour had the markets higher overnight, but have since lost that strength. The corn market is currently down 4 with soybeans unchanged.
The tour reported 154 bpa for both S. Dakota and Ohio on their first leg. This was off 6 bpa for Ohio and 3 for SD from last week’s August forecast from NASS. Soybean pod counts disappointed as well with S. Dakota coming in at 833 versus 1024 last year and a 3-yr average of 965. Ohio’s pod count was off even more with just 764 pods versus 1248 last year. For some perspective, Ohio’s 3-yr average sits at 1137.
August is nearly over and maturity seems to be a major concern for the surveyors on both legs of the tour that may leave some farmers hoping for higher temperatures to try to help push these crop over the finish line. Today the tour will be checking fields in Iowa, Minnesota and Indiana as they work their way to middle and hold their meeting on Thursday to release their final yield estimates.
Unfortunately for producers with unsold old crop and unpriced new crop the biggest issue is demand! Regardless the size of this years crop, exports have been poor and domestic demand is diminishing daily with poor margins. Every week we hear of more ethanol plants that are slowing down or shutting down until things turn around. Unfortunately the turn around doesn’t look like it will be anytime soon!
I would advise producers that are sitting on old bushels that need to move before harvest to lock in basis very soon. Once the calendar turns to September the gates will open regardless of cash prices as most producers and elevators will empty out their remaining stock to make room for this years crop. Producers needing to make new crop sales should consider making fall basis sales vs. the CH to give them a little more time to market once the crop is in the bin.

Have a Safe Day!

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

Good Morning,

I am back in the saddle again after a short break from the morning commentary! For those that are regular readers of the Didion Morning Market commentary you may have noticed the commentary has been written by Drake Bliss the past two months. Drake joined us this summer as an intern from Kansas State. Friday was his last day as he headed back to Kansas to prepare for his Senior Year at Kansas State. I would like to thank Drake for his contribution to our team this summer and wish him the best in his final year of school.

Softer markets to open the week with corn down 5 and soybeans down 6. Timely weekend rails over dry areas are adding pressure to prices this morning. The funds sold off more than 60,000 contracts in corn last week leaving them long about 13,000 contracts. The Dow is off to a good start following comments from Commerce Secretary Ross that the US will extend a 90 day exemption for US customers from a ban on doing business with China’s Huawei Technologies. President Trump indicated over the weekend that negotiations were doing very well with China and that they are talking.

The Pro Farmer tour is off and running this week and traders will be keeping an eye on the feedback from this group as they work their way thru OH, IN, IL, IA, NE, SD and MN. Early reports from the first morning are showing what every area in the Midwest has “variability”.

The pendulum has definitely swung and I look for them to take a short position home by the end of this week if weather and the crop tour continue to be bearish.

Have a Safe Day!

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

Good morning,

Grain markets were steady through the overnight of trade as they try for another recovery effort despite the August report still looming in the mind of traders and the bearish outlook in extended weather forecasts. Currently corn is up 5 cents and soybeans are up 8 cents. The weather development for the last half of August continues to look good for crop development. The rains are increasing this morning with some action in KS, NE, and MO. Also, there is a system moving through our area this morning here in WI that should bring a good amount of rain. Chances for rain continue through as late as Sunday for much of the Corn Belt then early next week turns drier before more rains emerge on the forecasts in the 6-10 day time frame. For the 11-15 day period, precipitation is expected to be scattered but mostly below normal and it is expected that temperatures will be above normal through August. President Trump seems to be a little more optimistic about the trade negotiations, however, China continues to snub the U.S. side of the talks. This is leaving the market confused about the situation and ultimately wanting more concrete proof rather than words. Going forward, markets will be looking heavily into the development of the talks hoping for progress to be made. The Pro Farmer crop tour will be making its way through the U.S. growing region next week. It is expected that the market will look to the results of the tour to see what they come up with for yield. The track record for this crop tour is very questionable, but with some uncertainty still in the yield potential for this year’s crop it should grab the attention of the markets nonetheless. Weather and trade talks will be the main focus of trade heading into harvest. My advice for producers would be to actively watch the markets and sell when you see an adequate bump in prices. I think trade will be volatile in the weeks to come and ultimately range bound. Taking advantage of the highs will definitely prove beneficial in marketing any remaining old crop.

Have a great Friday!

Drake Bliss
920-348-6817
dbliss@didionmilling.com

Good morning,

Grain markets were mixed through the overnight of trade with corn and soybeans trading higher and wheat trading lower. Currently corn is up 2 cents beans are up 3 cents and wheat is up 3 cents. The rebounds being made by corn and beans remain a bit shaky at this point. The weather forecasts are calling for rains that will cover the bulk of the Midwest through the weekend with the heaviest amounts expected to fall in Iowa and surrounding states. Extended forecasts are showing that decent rains are expected to fall in the Corn Belt in the next 6-10 day time frame then give way for drier days in the 11-15 day time frame. Temperatures are expected to remain above normal through the end of August for the major growing regions of the U.S. Another reason that the rebounds remain on shaky footing is because the demand situation seems to be in shambles for both corn and beans. Total demand for corn fell by 125 million bushels and total demand for beans fell by 104 million bushels. I believe the fall in demand that was printed in August’s report was the biggest driver in market reaction, especially in the corn market. It would be very beneficial for the markets if the trade disputes were solved sometime in the near future, however, with the way things are going now I believe it is highly unlikely we will see a deal get done anytime soon. Markets will definitely keep an ear open regarding that situation and any beneficial news will surely be welcomed. Since the report was released on Monday, the markets haven’t shown a whole lot of life and I think the markets are susceptible to even further declines. New buying has really been absent since the report and the markets are deeply oversold. I think the markets may have to run out of selling before any buying occurs which makes prices susceptible to additional declines. Going forward, I would advise producers to actively watch the markets and any decent bump in prices should be taken advantage of. The corn market is expected to be choppy going into harvest and once corn finds its fair values they should trade within a range. Taking advantage of any little surges in the market will prove beneficial going forward!

Have a great day!

Drake Bliss
920-348-6817
dbliss@didionmilling.com

Good morning,

Grain markets dropped sharply in yesterday’s trading session in response to the USDA releasing data that showed higher than expected crop volumes. Markets continue to price in the data this morning and try to find fair values for many of the commodities across the board. Corn is currently down 11 cents, soybeans are up 13 cents, and wheat is down 2 cents. The data came as a huge shock to the system as many traders were expecting the report to be quite bullish, especially in the corn market. However, the USDA had other things in mind and threw another curveball our way. The report printed corn production higher than all estimates in both a larger acreage number and a higher yield number. The larger area in corn production came at the expense of the soybean area as the soybean acres decreased by a fair amount. Going forward, there is really no longer a debate regarding the acreage numbers as the FSA certified report really verified the governments planted numbers plus or minus 1 million acres. With no area updates from the government until the October report, I believe markets will now shift their attention to yield and demand over the course of the next couple months. In the immediate future, the markets will continue to deal with the fallout from yesterday’s report. The corn market especially has some a lot of work to do to find fair values as liquidation will be the theme over the next few sessions. Once the new lows are established, I expect trade to ultimately become range bound and remain choppy as the yield debate will be a theme until producers can get into the fields and know what is really out there. The weekly crop progress report was released yesterday afternoon. It came in estimating the corn condition ratings at 57% GTE (56% GTE expected, 57% GTE last week, 70% GTE last year, 69.4% 5-year average). The soybean condition rating came in unchanged once again at 54% GTE (53% GTE expected, 54% GTE last week, 66% last year). To give a recap, I included the USDA’s numbers that were released with yesterday’s report.
USDA 2019-20 Corn and Soybean production

USDA Aug. 2019-20 estimate Average of analysts’ estimates Range of analysts’ estimates USDA July 2019-20 estimate
Corn
Planted Acres 90.000 87.998 83.494-89.800 91.700
Harvested Acres 82.000 80.050 76.114-81.900 83.600
Yield 169.5 164.9 161.0-167.2 166.0
Production 13.901 13.193 12.723-13.550 13.875
Soybeans
Planted Acres 76.700 81.006 78.000-83.500 80.000
Harvested Acres 75.900 79.890 77.300-82.800 79.300
Yield 48.5 47.6 46.0-49.0 48.5
Production 3.680 3.800 3.633-3.974 3.845

USDA 2018-19 U.S. Grain and Soybean ending stocks
USDA Aug. 2018-19 end-stock estimates Average of Analysts’ estimates Range of Analysts’ estimates USDA July 2018-19 end-stock estimates
Corn 2.360 2.392 2.220-2.490 2.340
Soybeans 1.070 1.065 0.988-1.124 1.050

USDA 2019-20 U.S. Grain and Soybean ending stocks
USDA Aug. 2019-20 end-stock estimates Average of Analysts’ estimates Range of Analysts’ estimates USDA July 2019-20 end-stock estimates
Corn 2.181 1.620 1.281-1.900 2.010
Soybeans 0.755 0.821 0.607-0.950 0.795

Have a great day!

Drake Bliss
920-348-6817
dbliss@didionmilling.com