August 9, 2023
Good morning,
Corn is down 2, soybeans are up 5 and wheat is down 17 to start the day.
Wet and cool weather prevails around the Midwest in the 1–5-day range but does appear to be moving out around the 22nd of August with a hot air mass expected to build by then. Current and forecasted rains will improve crop conditions and potential of both corn and soybeans.
Traders will begin to position for Fridays USDA report which will be interesting. The average trade guesses for Friday’s report is calling for a 2 bpa drop in the national corn yield from 177.5 bpa down 175.5 bpa. Soybean yields are expected to drop almost a bushel from 52 bpa down to 51.3 bpa. No material changes are expected for old crop carryout. While corn production is expected to dip 185 mbu, the carryout is expected to fall less than 100 mbu to 2.168 bln thanks to about 90 mbu of expected demand rationing. Soybean production is expected to dip about 50 mbu while carryout is expected to decline about 30 mbu to 267 mbu.
With US prices still at a significant premium to South American corn prices we are going to be stuck in the sub $5 levels on the CBOT. We would need a major drop in yield to get stocks to a concerning level and that doesn’t appear to be in the cards. Producers should be getting rid of any old crop bushels they have and make new crop sales for bushels they are not able to store.
Have a Safe Day!
Garry Gard
920-348-6844
August 7, 2023
Good morning,
Markets are lower to start the day with corn down 6 and soybeans down 40 on favorable weekend rains.
The weekend rainfall totals were the heaviest of the summer and it’s weighing on beans this morning. Prices opened sharply lower again leaving a gap behind. We’ll see if the beans can hold around the $13 area. Corn has broken through the $5 level and may continue lower if weather conditions remain the same and Friday’s report doesn’t give us support.
Crop conditions out this afternoon that could see a slight improvement on the good/excellent. After the weekend rains traders expect ratings in beans to take the big jump next week. There is a USDA Crop Report on Friday where the traders will focus on what the USDA does to corn and soybean yields.
Weather and tensions in the Black Sea continue to dominate grain headlines and price action, but Friday’s August WASDE report will shift into the spotlight this week as traders start to position themselves for the USDA’s balance sheet adjustments.
Have a Safe Day!
Garry Gard
920-348-6844
August 4, 2023
Good morning,
Markets had some life last night and early this morning with corn up as much as 14 and soybeans as much as 16. The rallies have been limited and corn is currently trading 3 higher and soybeans are 6 higher.
The overnight rally was the result of Ukraine bombing a Russian navel ship in that was carrying grain. This is the first Russian ship that has been hit, which had traders thinking about interruptions of wheat exports.
An OPEC+ ministerial panel which met on Friday made no changes to the group’s current oil output policy after a Saudi decision to extend its voluntary production cut into September helped oil prices rally further.
The panel, called the Joint Ministerial Monitoring Committee, can call for a full meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known as OPEC+, if warranted.
Oil prices rose more than 14% in July compared with June, the biggest monthly percentage increase since January last year, as tighter supply and rising demand outweighed concern that interest rate hikes and stubborn inflation could hit economic growth.
Historically August is a low in the markets as there is not a lot of action or news to move things higher. I believe we could still test the December lows around 4.81, but do feel that we will fill the GAP at 5.24 from the end of July.
Have a Safe Weekend!
Garry Gard
920-348-6844
ggard@didioninc.com
August 2, 2023
Good morning,
Corn is down 5, soybeans are down 15 and wheat is down 11 to start the day with better weather and lack of concern over the Russian-Ukraine conflict.
Russia again struck Ukraine’s inland port on the Danube River this morning, damaging a grain silo on Ukraine’s main alternative route for grain exports without the Black Sea deal. The port is just across the river from NATO member Romania. Meanwhile, officials in the Kremlin today restated their position that Russia would return to the Black Sea deal “immediately” when their “interests are upheld”, meaning all restrictions on Russian grain and fertilizer exports are cleared—including payments, logistics, and insurance.
The forecast maps have quite a bit of rain in them this morning. Very heavy rains to the West and the Southeast. Temps look to be normal over the next 10 days.
Markets were higher across the board initially last night but have since sold off. The weather forecast has the Funds convinced that we can achieve better than trendline yields in soybeans and that the corn crop is getting much better.
Producers should be cleaning up sales on any old crop corn and soybeans that they have left in the bins. With each day that passes, new crop harvest will be making its way north and demand is dwindling.
Have a Safe Day!
Garry Gard
920-348-6844
July 31, 2023
Good morning,
Markets are sharply lower this morning with weekend rains that came in better than expected. Corn is down 16, soybeans down 37 and wheat is down 28 to start the day.
The weekend saw rains move across Northern Illinois and into Indiana and Ohio. More rains are forecast in the Central US this week. Temps back off and a more active weather pattern is developing.
Despite further escalation of the Russian attack on Ukraine’s grain export infrastructure, the market sees the current weather forecast as less threatening to production.
We should start to see some private yield estimates circulate this week ahead of the USDA’s August WASDE which will be released August 11th.
The extreme volatility looks to continue with better weather in the forecast. The Fund position was about even in corn to finish the week, which is a little longer than was being recorded. I am not sure where the market bottoms out, but if the funds decide to take a short position, they could move futures well below $5.
Have a Safe Day!
Garry Gard
920-348-6844
