Good Morning,

Corn is unchanged and soybeans are up 7 to open the week. Reports from Ag Secretary Sonny Perdue last Friday after the markets had closed that China had committed to buy an additional 10 million metric tons of soybeans has added some short term support to the markets. Whether these are old or new crop beans remains to be seen. Perdue also said that China is interested in corn, ethanol, dried distillers grain, beef and poultry. President Trump has said that he will hold off increasing tariffs for now because substantial progress has been made in talks with China.
Mexico stepped up to purchase just under 280 mt of corn overnight in an apparent attempt to secure grain ahead of any Chinese activity.
Fridays Cattle on feed report showed cattle marketed during December was 99.4% of last year, placed on feed was 98.2% of last year and cattle on feed was 101.7% of last year. All three were below trade estimates.

Have a Safe Day!

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

Good Morning,

Corn is up 6 and soybeans are up 11 to open the day after traders got acreage estimates from the Ag outlook forum. Corn planted acres for this coming year were estimated at 92 million acres which is up 3.3% from last year’s 89.1 million acres. Soybean acres are estimated at 85.0 million acres which is down 4.7% from last year’s 89.2 million acres. While corn acres are up 2.9 million acres, they are below what traders have been expecting for this coming year. While todays data is giving live to the markets, it is important to keep in mind that these estimates do not include farmer surveys like the March 29th report will.
Optimism and rumors that China is proposing to buy $30 billion a year of US agriculture products as a possible trade deal between the two countries. The offer to buy the extra farm products would be part of the memorandum of understanding (MOU) under discussion by US and Chinese negotiators in Washington and would be on top of pre-trade war levels and continue for the period covered by the memorandum. The 6 MOU’s include general agreements on: 1. Forced Technology & Cyber Theft, 2. IP Protection/Rights, 3. Services, 4. Currency, 5. Non-tariff barriers to trade and 6. Agriculture.
Producer selling across the Midwest has been steady for the last month despite stagnant prices on the CBOT. Some areas of the country are seeing basis levels narrow as weather has hampered delivery of grain. Other areas of the country are seeing basis levels widen or bids totally removed as end users are bought up. My projection is that we will see more of the latter in our area as end users continue to get bought up and on farm/commercial stocks remain high. I would advise producers to make cash sales or at least lock in basis on any old crop that remains uncommitted.

Have a Safe Day!

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

Good Morning,

Trade is quiet this morning after a three day weekend for traders. Corn is currently down 1 and soybeans are down 4. News this week will continue to focus on the US-China trade, export data and the Ag Outlook Forum.
China has trade representatives in Washington DC to resume talks with the hope of making some progress ahead of the March 1st deadline.
The USDA will release six weeks of export data on Friday, which will be the last of the reports that have been delayed due to the government’s last shutdown.
The USDA Agriculture Outlook Forum starts on Thursday in Washington and will give us the first look at their 2019/2020 Supply and Demand expectations. This report will also show the first “guess” on planted acres for this coming year. While this report doesn’t carry the weight of the March 29th prospective plantings report, it will carry more weight than it has in the past. With the large carryout in soybeans, we will need to see bean acres limited in this report to keep soybeans from free falling.
Weather in South America has turned dry for Argentina. Very little rain is forecast for the next two weeks. Dryness in the Southern growing area could have an impact on soybeans. Above normal rainfall is forecast for most of the Brazilian growing area. Southern Brazil should see good rains over the next two weeks. Harvest in Northern Brazil should move to 50% complete in the next week.

** Reminder that tomorrow is the last day to sign up for our Fall APC contract. **

Have a Safe Day!

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

Good Morning,

Valentine’s Day and there is no “Love in the Market”! Corn is trading 3-4 lower while soybeans are trading 12 lower.
Talk this morning of surprise cancellations of US soybean sales to China and unknown destinations has the markets reeling. No confirmation of why the sales were cancelled, but some speculation that China space for soybeans is full and the spread of African swine fever may be reducing hog herd numbers more than China was expecting or reporting. This could reduce the demand for Chinese soybean imports to below 85 mmt.

Private analyst Informa released their 2019 acreage estimates and has corn acres at 91.6 million which is up 2.5 million from 2018. Soybean acres are estimated at 86 million, down 3.2 million from 2018. This comes as no surprise to this trader who has been hearing higher corn acres from farmers and seed sales reps for the last several months. Unless mother nature changes their plans we will see a bump in corn acres this year and 2.5 million could be the low end.

Have a Safe Day!

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

Good Morning,

We saw some strength in the markets yesterday and are taking some of those gains back today. Yesterday’s rally appears to be the same old “buy the rumor, sell the fact” trading. Rumors that China may buy corn and soybeans as part of a deal with the US. So far these are only comments and have not been backed with actual purchases. Also aiding yesterday’s rally were comments from President Trump that he is open to extending a March 1 deadline to raise tariffs on Chinese products if the two sides are near an agreement. These comments are the strongest indication yet that he is willing to give Beijing more time to firm up a deal to head off the White House’s threat to more than double the rate of tariffs on $200 billion in Chinese imports. By extending the deadline, he could be paving the way for a potential meeting with President Xi to close the deal.
The Ag markets need to get this situation resolved quickly with money managers having moved huge amounts into cash instead. The survey from Bank of America showed that 44% of net allocations to cash reached its highest level since the 2009 financial crisis. With so much money sitting on the sidelines and the funds short, if the trade war with China can be resolved, prices could turn much more favorable.

Have a Safe Day!

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