Good Morning,

Volume and trade action slowed through the overnight of trade as traders are waiting to see the USDA report that is set to be released at 11 a.m. The markets have consolidated over the course of the last 24 hours and corn and soybeans are currently down a cent this morning. Typically, the July WASDE report is a quiet one as the USDA adopts the June acreage number and leaves yield unchanged. With this year being a non-typical one, it will be interesting to see if the USDA breaks its normal tendencies and makes bigger changes to the supply side of the equation than in years past. This is impossible to know prior to the data being released and leaves the market susceptible to a surprise in trade this afternoon. However, market analysts have predicted what the numbers on the report could be and are as follows:

USDA 2019-20 corn and soybean production:
USDA July 2019-20 Estimate Average of analysts’ estimates Range of analysts’ Estimates USDA June Estimate
Corn Production 13.875 13.664 13.100 – 13.960 13.680
Corn Yield 166 165 162 – 167 166
Soy Production 3.845 3.883 3.738 – 4.100 4.150
Soy Yield 48.5 48.6 47 – 51 49.5

USDA 2018-19 U.S. grain and soybean ending stocks:
USDA July 2018-19 end-stocks estimates Average of analysts’ estimates Range of analysts’ estimates USDA June 2018-19 end-stocks estimates
Corn 2.340 2.197 2.065 – 2.295 2.195
Soybeans 1.050 1.044 0.935 – 1.137 1.070

USDA 2019-20 U.S. grain and soybean ending stocks:
USDA July 2019-20 end-stocks estimates Average of analysts’ estimates Range of analysts’ estimates USDA June 2018-19 end-stock estimates
Corn 2.010 1.692 1.450 – 1.975 1.675
Soybeans 0.795 0.812 0.558 – 1.040 1.045

The numbers that analysts are predicting set the tone for more of a bearish response in the corn market and more of a bullish response in the soybeans market. Though the initial reaction to the report may be sharp, I think the markets will shift their attention back to the weather and keep eyes on extended forecasts.

Have a great day!

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

Good Morning,

Ag markets are trading lower with corn down 8, beans down 4 and wheat off 6 to 8 cents. Technical selling and concerns over a bearish report from the USDA on Thursday have prices on the defensive to start the day. The funds are long almost 200k contracts of corn so a little profit taking following the last week’s recovery is not a huge surprise.

With 96% of the beans now planted according to the USDA, the trade will refocus its attention to crop conditions and how the wheat harvest is progressing. Wheat harvest is now 47% complete. Crop conditions still look good with 64% of the winter wheat crop rated Good-To-Excellent (GTE). Unsurprisingly corn gained 1% to 57% GTE while beans pulled back 1% to 53%.

Despite the potential for new business from China when and if trade negotiations pan out, the trade continues to struggle to rally back to pre-trade war price levels. A big part of that is the ongoing African Swine Flu (ASF) problem that has government officials culling animals. Additionally, the expansion of Chinese domestic production of soybeans just exacerbates the problem of the expanding stockpile of world supplies. Both are a direct result of the trade war and are likely to have lasting implications on just how much the Chinese will need to secure. The ASF has helped to encourage their population to seek out other types of proteins like beef. Likewise the increase in bean acreage over there will decrease their dependency on the US for soy.

The weather models are in fair agreement in calling for a tropical system to move out of the Gulf and over the Delta and Southeast for the next 7 to 10 days. The system looks like it will trek further east than we had seen in previous runs and bring meaningful rains to the Delta up through Illinois and Indiana. Beyond that it looks like we will see a return to more normal summer weather. Latest longer-term runs show no set up that is too threatening. We may get some ridging developing beginning around the 18th that could have temps across the Midwest heating up into the lower 90’s, but nothing that looks to be too strong.

Have a Safe Day!

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

Good Morning,

Markets have opened higher this morning due to the big shift in the extended weather forecast. Corn is currently up 2 and soybeans are up 3. Traders are definitely eyeing the hot and dry weather forecast that is expected to linger across much of the Corn Belt for the next 2 to 3 weeks. This is a pretty big shift in the weather pattern for much of the U.S. This change in weather should be beneficial for root depth and early crop development initially, but with the lack of rain expected traders are nervous to how this will affect yield. With the yield disputes still in question, markets will be extra sensitive to any weather concerns going forward. We will have our weekly crop progress report released this afternoon after the close of trade and this Thursday the July WASDE report will be released. We will see if any improvements in the crop conditions are enough to quell some of the fear regarding the yield debate or if the hot and dry forecast will keep the trend higher. If you are still sitting on any old crop corn, I would consider selling some amount as we are seeing better prices for the nearby months rather than the deferred. Also, I would recommend getting some new crop corn on the books and locked in at profitable levels that may not be here by the time of harvest.

Have a great day!

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

Good Morning,

Markets have opened lower this morning after Wednesdays big run up that was led by acreage talks, yield discussions, opinions on weather forecasts and a shortened week of trading. There will not be a lot of traders in the markets today as many exited the markets at noon on Wednesday for an extended holiday break.
The weather forecast for the next 14 days looks mostly dry which is a big change from the past month. There is a ridge building next week that will last for almost 14 days bringing drier and warmer temps. Fortunately the majority of the heat will be in the Southern US away from the major growing areas.
Weekly exports for the week show corn at 6.9 million bu. which is down from the 10 week average of 13.6 million. US corn exports are 350 million bushels below last years pace for this same timeframe. These export numbers should not come as a surprise as US corn compared to Brazilian corn delivered to Mexico and Japan is between .20 and .70 cents/bu. more expensive. This also helps explain why southern end users in the US (Poultry/Cattle) are importing corn from South America at cheaper rates than they can buy US corn.
Corn is currently down 5 and soybeans are down 13.

My advice to producers is to continue to take advantage of the great markets we have seen over the last month. Basis levels across the US have strengthened for old crop and the CBOT seems to have found a stable trading range. The late planted corn and lack of acres have already been traded for the most part and this market is not going to keep running higher despite what some may think should happen. At the very least you should have firm offers in on old and new crop corn with your buyers. Producers should also be making sales for the 2020 crop as I do not expect prices to be at the current levels a year from now when we have 5-10 million more corn acres in the ground.

Have a Safe Day!

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

Good Morning,

Markets are currently down, but are expected to remain steady throughout the day. Corn is down 2 cents and soybeans are down 9 cents. Through the overnight of trade, markets seemed to have consolidated a bit after the weekly crop progress report was released yesterday afternoon. Crop ratings came in essentially unchanged from the prior week’s report. Corn remains at 56% good to excellent on a national level and Wisconsin corn is right at that mark with 56% good to excellent as well. To a bit of a surprise, we did see some big drops in the ratings of the ECB states with IL dropping 5% good to excellent, IN dropping 4%, and OH dropping 8%. However, those drops in ratings were made up from the increases we saw from the corn out west and that is how we remain unchanged on a national level. Soybeans came in at 54% good to excellent on a national level and 61% good to excellent here in the state of Wisconsin. With the markets now moving on from last Friday’s acreage/stocks report and the fact that the re-survey data won’t be here until August, I think the attention will shift back to the weather. The yield debate will definitely be brought into the spotlight in the weeks to come. The weather outlook does seem to have more normal temperatures on the horizon and above average precipitation. Most are viewing this as ideal weather for early crop development, which will probably keep the markets from entering into any rally soon. Weather will definitely be the big driver of the markets here in the next few weeks since yield will be determined from how this corn develops. I would recommend calling in the next few days before the holiday to discuss opportunities of locking in old crop or new crop at profitable levels.

Have a great day!
Drake Bliss
920-348-6817
dbliss@didionmilling.com