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Daily Insights

June 13, 2022

Good morning,

 

Weaker markets to start the day with corn down 5 and soybeans down 32.

 

Last Friday’s crop report brought few surprises as the USDA changed very little on the balance sheets.  The only major adjustments were a reduction of 200 million bushels of corn exports and a slight increase in beans exports.

 

USDA 2021/22 US Carryout (Billion Bu)

  USDA June Ave Est. USDA May
Corn 1.485 1.437 1.440
Soybeans .205 .218 .235
Wheat .655 .666 .655

 

 

USDA 2022/23 US Carryout (Billion Bu)

  USDA June Ave Est. USDA May
Corn 1.400 1.340 1.360
Soybeans .280 .307 .310
Wheat .627 .614 .619

 

The forecast for the Central US is moving into a hot dry pattern.  The weather pattern that is setting up has almost no rain for the Central US over the next two weeks.  The hot air mass is entering the US today and builds into the very end of the 15-day model run.  This dome locks out almost a storm activity pushing all the rain into the Northern US and Canada.

 

Today’s US crop conditions in corn are expected to remain steady at 73% G/EX with the first soybean ratings of the season expected to come in between 68%-72% G/EX. Spring wheat planting progress will be monitored closely with just 82% planted last week and wet conditions lingering last week in ND & MN. Some corn acres in those areas will likely be switched to soybeans as well.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

 

June 2, 2022

Good morning,

Corn is unchanged while soybeans and wheat both opened 20 higher this morning.

We have not had a massive liquidation in the corn market for months, but have definitely seen it this week. December corn traded below 7 dollars for the first time in 8 weeks. We have basically wiped out the rallies seen in corn and wheat over the last couple months. We are now back to where it all started in the spring when India announced they would limit exports on wheat.

Ukraine’s grain traders’ union UGA estimated 2022 wheat production at 19.2 MMT, down 42% from last year’s record 33 MMT harvest; corn output is seen at 26.1 MMT, down from 37.6 MMT last season. They expect Ukraine to export 10 MMT of wheat and 15 MMT of corn from the new harvest, assuming export capacity through border crossings in doubled. Meanwhile, the country’s foreign ag ministry said they were working with international partners to create a United Nations-backed mission to bring back grain shipping route, while the U.S. is attempting to help with temporary storage containers and boost overland shipping corridors.

Any rallies to test the recent highs is going to be challenging with the crop progress and favorable forecast we have on the horizon. My advice is to continue to move old crop corn at $7+ levels and put more new crop sales on to get at least 40-45% sold.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

 

May 31, 2022

Good morning,

 

Markets are sharply lower to open the day with wheat down 44, corn down 11 and soybeans down 6. Weakness in the wheat market is leading the drop with comments from Russian President Putin indicating that he would be willing to help open corridors for Ukrainian wheat exports to leave the Black Sea.

Ukraine on Friday estimated a 38% drop in the country’s grain production this season, to 66 million tones. Wheat is projected 44% lower and corn 35% lower from 2021. The Ag Ministry reported the 2022 spring planting is almost complete with acreage 22% lower than last season.

 

The northwest corn belt continues to get crushed by heavy rains with a cold extended forecast in Minnesota and the Dakotas into mid-June.

 

Today’s market action is a good reminder that the rallies like we saw on Friday are great selling opportunities. Supply and Demand is constantly changing with US corn and soybean prices at current levels we are not competitive in the world market and will struggle to move enough grain to create a supply issue this year.

 

Be sure to get your old and new crop firm offers in with your buyers so that any opportunities that arise are not missed.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

 

 

May 25, 2022

Good morning,

Markets are sharply lower again this morning with corn down 12, soybeans down 20 and wheat down 20.

China has signed a phytosanitary agreement with Brazil to import the country’s corn, following record Chinese corn imports last year and in the face of reduced supplies from Ukraine. China is also rumored to have bought anywhere from 250-400,000 tonnes of corn from Brazil for shipment September thru October. This agreement and these purchases could result in China canceling US purchases that are currently on the books. I don’t feel this will happen, but it will most likely limit additional new sales.

A statement by Russian Deputy Foreign Minister Rudenko stated that Russia is in touch with the UN on a potential food export corridor in Ukraine. The reopening of ports would need to include dropping western economic sanctions but could lead to exports in the coming months. The question is how much could be exported, will the damaged ports in Ukraine be operable anytime soon and lastly who will enter the ports to load grain if the war is still taking place?

The selling this week is most likely the markets selling off the longs that they have maintained for so long in the ag markets. With good planting progress, favorable weather and potential limited exports moving forward the markets are taking a breather.

The selloff in the ag commodities this week is a reminder that the sky is not the limit and for anyone to think these markets are stable or heading higher needs to be cautious. Two weeks ago the talk was $9 corn, last week it was $8 corn, will it be $7 next week??? I am not saying we don’t have a chance to see $8 corn again, but I am not going to guarantee it. Get new crop sales on the books at current levels if you don’t have any made because they are profitable levels. Old crop sales should continue to be made as well on any small bounce in the market.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

 

 

May 24, 2022

Good morning,

 

Markets are down sharply to start the day with corn off 12, soybeans off 4 and wheat off 14.

 

Corn planting progress came in at 72% (+23%/wk) vs 68% estimate and compared to the ten-year average of 81%. MN jumped to 60% (+25%) and SD came in at 62% (+31%) while ND still is well behind with just 20% corn planted (+16%) and compared to 81% last year and the ten-year average of 68%. The Prevent Plant option date starts May 25th for ND.

Soybean planting progress came in at 50% (+20%) vs 73% last year and just behind the ten-year average of 55%. Spring wheat planting remains well behind at 49% (+10%) vs 93% last year and compared to the ten-year average of 82%. ND was just 27% complete and plants 5.2 million spring wheat acres, 46% of the total crop.

Great progress over the last week and a forecast that bodes well for more progress in the next 10 days is going to pressure the markets. ND may be behind and approaching the PP date, but as I have mentioned in past reports that prices are doing their job and have producers planning to stretch the planning date well into June with cash prices showing better ROI than Prevent plant.

 

Have a Safe Day!

 

Garry Gard

920-348-6844

ggard@didioninc.com

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