Good Morning,

Markets started off higher this morning but has taken a step back as traders analyze the US weather forecasts for the extended weekend and the USDA’s announcement.

The USDA announced a support program 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.
o 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.
o 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.
o Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.
o 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.
o 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 so making sales today or tomorrow ahead of any potential weather changes may be the safe move.

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

Good Morning,

Markets are higher as prices surge with traders looking to add additional weather premium and shorts run for the exits. Cool wet weather has the attention of traders as the extended outlook appears that it will hamper efforts to get crops in the ground.
Expectations for this afternoons planting progress are around 50% for corn and 25% for soybeans. Locally there was a lot of activity in the last week, so I look for WI to jump considerably as the majority of producers that we talk with are between 50-75% complete with corn planting. The ground that remains unplanted will need some time to dry out, but this week’s weather looks favorable after Tuesday’s showers. Temperatures for the remainder of the week will be in the 70-80 degree range with limited rain.
We still have the trade talks out there that could move the market higher or lower, but the current “kick the can down the road” has traders annoyed with the whole process. Expectations are that the June 20th meeting between the two countries is the next anticipated news date.

Have a Safe Day!

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

Good Morning,

The markets opened sharply higher again this morning as the short positions have gotten nervous and are beginning to run for the exits. The funds are still excessively short the markets and the need for additional weather premium has helped spark the short covering off of Mondays lows. Weather forecasts for the 7-15 day show heavier chances of rain in the front half with chances, but lower in the last half. Planting progress could jump significantly in next Monday’s report with the progress producers have made so far this week, but when the storms actually arrive will dictate have much. Unfortunately a production issue is exactly what we need with our current oversupply.
Producers have been actively making sales of old and new crop over the last three trading sessions and this should continue. Anyone that is sitting on old crop corn or has less than 40% of their new crop sold needs to remember that weather markets are short lived and eventually come to a sudden end. These sudden ends usually do not heed much warning. Producers can currently lock in new crop sales for next spring between $3.80 – $3.90 and should be actively taking part in these markets.
Producers should also be putting in firm offers with their buyers. The markets trade 17.5 hours per day, which is more than anyone can watch the market. By putting in firm offers, you have the opportunity to get contracts filled when you are too busy to watch the market, even in the middle of the night. Firm offers allow you to take some emotion out of the decision making process. Give us a call today to set your targets.

Have a Safe Day!

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

Good Morning,

Lower to start the week following Friday’s bearish USDA report and trade negotiations that have turned negative. Corn is down 8 and soybeans are down 16 to open the week.
U.S. and global inventories were large in Fridays report for corn and soybeans. 2018/2019 US ending stocks were estimated at 2.095 billion bushel for corn and 995 million bushels for soybeans. 2019/2020 ending stocks were estimated at 2.485 billion bushels for corn and 970 million for soybeans. Both of these numbers are weighing heavily on the market and will for some time in my opinion. I do expect the corn carryout for the 2019/20 year to drop due to lower yield, but it will have to drop significantly from the 176 bpa estimate in order to move the market.
Talks between the US and China went nowhere last week and there appears to be no end in sight as the two parties battle over three issues. President Trump ordered the US trade representatives on Friday to start the process of raising tariffs on all remaining imports from China. The fear of traders this morning is what retaliation will the Chinese take against the US. US Agriculture Secretary Sonny Perdue said on Friday that President Trump has asked him to create a plan to help American farmers cope with the heavy impact of the US-China trade war on agriculture.
The US Midwest weather forecast has some spotty showers across the Midwest this week, but things should be mainly dry across the region into the weekend.

Have a Safe Day!

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

Good Morning,

Futures are steady in corn and soybeans this morning.

The trade continues to maintain its risk-off attitude with the Trump Administration bumped tariffs on $200B in goods from China to 25% and filing paperwork overnight to begin the process of applying a new 25% duty on an additional $325B in products. Additionally we have the monthly WASDE report from the USDA due out at 11 am CST. The pros are all over the place on their estimates for new crop corn and bean production, so volatility could be extremely high as traders digest the information.
China has promised to retaliate to the tariffs, but exactly how remains unknown. The goal is for US representatives to push Vice Premier Liu to agree to the deal crafted over the last several months and to prevent the Chinese from dragging the process out to make it an issue in the 2020 ballot.

The Trump Administration unveiled a new tool in the negotiating process, Vice President Pence, who was in Minnesota as he spoke about the government providing additional aid to US farmers to help offset the impact of the trade war. These payments would ratchet up the pressure on the Chinese delegation to come to an agreement. Just this morning President Trump hinted that he would be willing to use some of the money accrued through the tariffs to purchase US Ag products to provide for humanitarian assistance programs in poor and starving countries. Traders appear willing to wait for more details of the program before getting too excited.

Have a Safe Day!

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