Good Morning,

Markets are higher this morning with corn up 2, beans up 7 and wheat up 16. Wheat is providing the boost this am as dry weather in Russia and additional rainfall in the plains provide support following Friday’s selloff.
Traders continue to focus on Chinese trade talks and Mexican tariffs. The recent escalation of rhetoric between Beijing and Washington following the Trump administration’s new tariffs on $300B of Chinese goods has made the meeting between the President’s of the world’s two biggest economies at the upcoming G20 meeting in Japan critical to finding a solution. If not I fear that this will continue to drag out long enough to become an issue in the 2020 elections.
Look for planting progress on corn to be 70-75% complete this afternoon with soybeans coming in around 40-50% complete. Temperatures look more seasonal and that will help going forward.

Have a Safe Day!

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

Good Morning,

News from the White House that it would place a 5% tariff on all imported products from Mexico beginning June 10th in attempt to stem the flow of illegal immigration has the CBOT Ag complex under pressure. Corn is down 6, beans down 3 and wheat down 12 cents.

While the weather has been a driver of the markets over the last couple weeks, fund managers are concerned about Trumps plan to close the boarder. The announcement on the tariff included the threat to increase the duty 5% every month until it reached 25% unless the Mexican government makes significant progress in solving the problem.

Given that Mexico imports more than 600M bu. of corn and 140M of soybeans the impact could be another significant hurdle for the US Ag markets. South American crops are huge and these new tariffs could easily have the Mexicans turning there for cheap imports.

Weather models are in good agreement that Mother Nature is finally going to cooperate a little over the next week. Forecasts show a warmer and drier outlook that should allow a significant amount progress be made in getting crops in the ground. Those in the eastern Corn Belt can expect a dry window that should last until the middle of next week.

Have a Safe Day!

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

Good Morning,

Markets are higher this am with corn up 8 and soybeans are up 7 to start the day. Additional rains fell across the US again overnight. Major weather models continue to show a moderation in this springs weather pattern over the next week to ten days. While rains won’t completely shut off, the drier weather will be welcome as it should be enough for more crops to get planted.
With this morning’s rally it looks as though the funds have exited their record short position in corn and should now be long. How long are the traders willing to be in this market is unknown. I believe with the exit of their short position we will see the daily volatility decrease and not have as many big daily rallies.

Have a Safe Day!

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

Good Morning,

Markets are higher following an extended weekend that gave us the weather they were forecasting, wet! The forecast has heavy rains moving through the Midwest from Tuesday through Thursday this week. Another similar system builds on Sunday that builds into Tuesday of next week. After this system some heavy rains hold in the West covering Kansas and Missouri. We don’t see any organized storm systems after June 8th and temperatures will warm up. We are at risk of a change in the weather for the better now. A forecast change will increase the volatility in prices. There will definitely be prevent plant acres this year, but prices and a government payment are going to keep that lower than expected. The longer this market rallies, the more corn that will get planted late. Planting progress is expected to be 60-70 percent planted in corn, 30-35 percent in beans this afternoon. We have 35 million acres of corn to plant and roughly 60 million to go in beans. There was a lot of corn planted around our area over the weekend and I have talked to more and more producers that are done with corn. I talked with a producer in central IL (Champaign) who said the current prices have them planning to go well past their prevent plant dates because the revenue is better. They are changing out seed for shorter day corn. (switching from 118 day to 110 day)
Usually in a weather market you should sell each week the market is up. There will be a day that we start the morning sharply lower, and high of the market will only be obvious from the back side of the hill. If you have corn planted, I recommend scaling into sales on this rally. Don’t get caught in a bullish mood and miss an opportunity to market at profitable levels.

Have a Safe Day!

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

Markets closed higher today on continued wet forecasts thru the weekend. This has led to a mass exit of the funds short position that they have been carrying for the last several months. Funds have reduced their short position in corn by over 250,000 contracts in the last two weeks. Corn is the only commodity they are getting out of at a rapid pace as they remain short 153,000 contracts in the bean market. There are no markets on Monday, so Tuesdays trade could be interesting depending on how the weather models look compared to todays. We will also get a planting progress update on Tuesday afternoon that is expected to jump into the 65-70% complete range. While this may be behind normal, it would be a number that should slow the markets climb.
Yesterdays USDA announcement(info below) is going to result in alot more acres getting planted to some commodity this year that may have went to prevent plant previously. The exact $/acre have not been confirmed, but some analysts are projecting that the payment will be close to $50/acre.

The USDA announced a support program yesterday for farmers impacted by “Unjustified Retaliation and Trade Disruption”. Here are the details:
“Market Facilitation Program (MFP) for 2019, authorized under the Commodity Credit Corporation (CCC) Charter Act and administered by the Farm Service Agency (FSA), will provide $14.5 billion in direct payments to producers.
Producers of alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat will receive a payment based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. Those per acre payments are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions. Moreover, total payment-eligible plantings cannot exceed total 2018 plantings.
Dairy producers will receive a per hundredweight payment on production history and hog producers will receive a payment based on hog and pig inventory for a later-specified time frame.
Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.
These payments will help farmers to absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities, and to expand and develop new markets at home and abroad.
Payments will be made in up to three tranches, with the second and third tranches evaluated as market conditions and trade opportunities dictate. The first tranche will begin in late July/early August as soon as practical after Farm Service Agency crop reporting is completed by July 15th. If conditions warrant, the second and third tranches will be made in November and early January.
Additionally, CCC Charter Act authority will be used to implement a $1.4 billion Food Purchase and Distribution Program (FPDP) through the Agricultural Marketing Service (AMS) to purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry, and milk for distribution by the Food and Nutrition Service (FNS) to food banks, schools, and other outlets serving low-income individuals.
Finally, the CCC will use its Charter Act authority for $100 million to be issued through the Agricultural Trade Promotion Program (ATP) administered by the Foreign Agriculture Service (FAS) to assist in developing new export markets on behalf of producers.”
Reminder that there will be no markets on Monday.

Have a Safe Weekend!
Garry Gard
920-348-6844
ggard@didionmilling.com