November 9, 2018

Good Morning,

Markets are lower this morning as traders make adjustments following the USDA’s decision to go back and alter 10 years worth of Chinese balance sheets for corn, beans and wheat. In particular it was the sharp rise in China’s corn stocks by 149 MMT that weighed on prices yesterday despite the 1.7 bu. reduction to the yield estimate for US corn. The 1.7 bu/acre reduction took the US yield to 178.9 which would still be a record yield by 2.3 bu/acre!
In the last 18 years the USDA has lowered their yield estimate in the November report from the October report only 9 times. Only twice have they raised the yield from the November to January report. Of these two years (2008 & 2009) only 2009 saw a significant change.
Ultimately yesterday’s news was in the world carryout and until we lower production or increase demand the prices we are seeing now are not going to change.

Delivery Reminders for Didion –
1. We are only accepting November contracted corn. December contracts will have to hold off until December.
2. We are still buying spot and Last Half November corn.
3. All loads must be scheduled prior to delivery. This allows us to manage space and keep you from waiting in long lines.
4. Plan ahead when scheduling your loads. We would recommend you call at least 1 day in advance to schedule your loads.

Have a Safe weekend!

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

Good Morning,

Markets are up 1 this morning as traders anxiously await the USDA’s numbers that will come out at 11am. (Estimates are listed below)

US Production (billion bushels/million acres)
USDA November Avg. Estimate USDA October
Corn Production 14.721 14.778
Corn Yield 180.0 180.7
Harvested Area 81.749 81.767
Soybean Production 4.676 4.690
Soy Yield 52.9 53.1
Harvested Area 88.303 88.348

US 2018/19 Ending Stocks (billion bushels)
USDA November Avg. Estimate USDA October
Wheat .958 .956
Corn 1.773 1.813
Soybeans .898 .885

2018/19 World Ending Stocks (billion bushels)
USDA November Avg. Estimate USDA October
Wheat 259.45 260.18
Corn 158.82 159.35
Soybeans 110.91 110.04

Production estimates are lower than the October report for corn and soybeans but how much lower today’s report comes in will dictate what the markets do. I believe the current estimates have already been traded but feel we could see a short spike up if the numbers do come at these levels. Long term a 1.7 US carryout and a 158 world carryout are neutral to negative the markets long term. We need the US stocks to Use ratio to drop below 10% in order for us to see CBOT prices trade above $4. With a 1.7 US carryout and current use at 15.105 we are looking at a 12% stocks to use ratio. Ending stocks will need to drop below 1.6 in order for us to reach a number below 10%.

Check back at 11am for the updated numbers.

Have a Safe Day!

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

Good Morning,

Futures are trading lower in corn and soybeans with the Democrats seizing the House of Representatives, while the Republicans held onto the Senate in the Mid-Term Elections. Ultimately, little changed with the outcome of the election other than the White House now has to face a new hurdle in order to pass any legislation. The President still essentially holds the reigns in the renegotiating of the trade policies with China and has broad powers to cut and approve deals.

Look for traders to quickly turn their attention to tomorrow mornings USDA S&D report. Traders want to be long of corn/wheat and short of soybeans into the actual numbers. It wouldn’t be too big of a surprise to see a cut to 2018 production a little, though any reduction in yields could easily be offset by weaker demand. Ethanol production has been slow as the industry struggles with poor margins.
Tomorrow’s report will be the last yield and production update until the final in January. I would advise producers with any bushels that need to be sold between now and January to take off some risk today before tomorrow’s report. While the private analysts are expecting a lower yield tomorrow, we all know that these reports have been known to throw us a curveball!

Have a Safe Day!

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

Good Morning,

Corn and beans are both trading lower this morning down 1 and 4 respectively. Traders are watching three things for direction going forward:
1. Today’s election results.
2. Thursdays USDA S&D report.
3. Chinese and US trade talks.

Today’s mid-term elections have been billed in the media as a referendum on President Trump’s first two years in office. It goes without saying that the White House’s trade war has led to frustrating 5 to 6 months for American farmers as they got caught in the crossfire. However, there has been a dramatic shift in rhetoric from both sides in the past week. The idea of some sort of a truce or halt to the trade war materializes when Presidents Trump and Xi sit down at the G20 meeting at the month is gaining significant traction.

Estimates for the USDA report are calling for a yield reduction from the October report in corn from 180.7 to 180.0 and soybeans from 53.1 to 53.0. Ending stocks in corn are estimated at 1.78 billion bushels while soybeans are estimated at 900 million bushels. Both of these levels would indicate plenty of grain and sideways markets.

Last night’s Harvest Progress report showed the US is 76% complete on corn compared to 68% last year and a five year average of 77%. Wisconsin is reported at 59% complete this week compared to 35% last year and 51% on average. It is still early, but the trade doesn’t look for a significant change in next weeks numbers with the weekend and early week rains.

We have a HOT DEAL for producers looking to move corn in April/May this coming year. You can lock in a basis of -10 CK19!! Give us a call for details.

Make sure you get out and Vote today!!

Have a Great Day!!

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

Good Morning,

After mutual statements of optimism about trade talks from Presidents Trump and Xi yesterday, the markets responded with sharp price gains led by soybeans. While this was a great move in the markets (corn up 3 and soybeans up 30) producers need to remember that this was just a knee jerk reaction to a “tweet” by our president and holds no water until a deal is reached. We have seen the market move both ways over the last several months on comments that were made. We also need to remember that if a deal is worked out, the Chinese have found protein replacements for US soy products over the last six months which means their demand will not come back to previous levels. We also have to look at how competitive our soybean prices are on the world market. Prior to yesterday’s rally, US soybeans were $.70/bu. more expensive than Brazilian soybeans! What could be key for the US is if we can get a deal done in the very short term with China. We have about a 10 week window before South American soybeans become readily available again.
Next Thursday’s USDA report will be the focus of traders early next week. Yesterday private analyst FC Stone pegged the corn yield at 181.4 vs. their October estimate of 182.7 and dropped their soybean yield from 54 to 53.2.
Market movers the next 5 trading days will be:
Harvest Progress
Election Results
USDA Report

We have a HOT DEAL for producers looking to move corn in April/May this coming year. You can lock in a basis of -10 CK19!!! Give us a call for details.

Have a Safe Weekend!

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