Good morning,

Markets are higher this morning with corn up 5 to start the day with traders looking at long term weather forecasts.

A high-pressure ridge is setting up in the Central US driving rain away from the dome.  Temps start to heat up in the Central US but are not that hot.  The 10-day forecast is dry in a very large area.

The drought alarms are being sounded by a few market participants. When compared to this week last year parts of the western corn belt (mainly NE, NW IA, KS and parts of MO) are dry. The extreme drought conditions are confined to eastern NE and KS and much less widespread across the western belt. We do have areas that will need to see a more normal rain pattern develop throughout the growing season, but we a long way off from calling this 2012.

Ukraine accused Russia of preventing the flow of grain out of the port of Pivdennyi. Ukrainian officials claim that Russia has not allowed Pivdennyi to receive any ships since May 2nd in retaliation for Russia’s inability to export ammonia via pipeline. Under the recently renewed agreement, the ports of Odesa, Chornomorsk, and Pivdennyi are covered to export food and fertilizer. The port of Pivdennyi is the largest port included in the deal when it comes to export volume. This clear violation of the deal has not been commented on by Russia, but it looks as though they are holding this port hostage unless they can move ammonia via pipeline to the port for export.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Grain markets are finally showing something other than red this morning. After selling off most of the week we have corn up 12 old crop and 7 in the new crop. Soybeans are up 5 and wheat is up 3.

It looks like a major market low in new crop corn and beans that was formed yesterday on the lower open.  That was day three of severe liquidation of speculative longs, while the Funds piled into short positions in corn and wheat at the beginning of the growing season in the US.  The Funds are probably going to show up as short beans on the CFTC report this afternoon.  Yesterday I saw commentaries that corn was headed to 4 dollars and beans down to 10 dollars as inflation adjusted prices with these carryout’s by the USDA at 2,200 in corn and 330 in soybeans warranted such a move. I don’t think we get that low, especially this early with a long growing season ahead of us. Upside moves will be tough given the lack of demand for old and new crop commodities. Brazilian corn into China is currently .65/bu cheaper than US corn which explains the recent cancellations.

A decrease in open interest in corn is a good sign that a low is being put in place as the at least the Funds are adding even more to short positions.

The Wheat Quality Council Tour estimated Kansas wheat yields at 30.0 bpa at the conclusion of their three-day tour, down from a five-year average of 45.6 bpa and the lowest since at least 2000, though still above the USDA May estimate of 29.0 bpa.

When you look at the map of US weather over the next ten days you can see the formation of a doom of dry air setting up over the Central US.  Rain is pushed up into the Canadian Prairies where it’s been very hot and dry over the past few weeks.  Rain is also pushed out into Texas, Oklahoma, and Kansas.  Much has been made this week about the influence of an El Nino pattern producing above average yields.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Grain markets are showing a little sympathy this morning after last week’s selloff. Corn is currently up 11 in old crop and 4 in new crop. Soybeans are up 17 and wheat is up 20.

Few changes were made on Friday to old crop stocks.  The bearish new crop balance sheet came in about 100 million bushels to the high side for corn and 30 million bushels for soybeans.  Believe it or not the first balance sheet in soybeans tends to be the highest of the year. Beans over time have tended to beat the USDA demand estimates.  Corn, however, is not the same as demand can be more erratic.  With crop losses in Argentina and lower production in the Ukraine, this is probably one of the years demand could perform better than the USDA expectations.   The USDA is also using a corn yield that is 5 bushels better than the record of 177, which is attainable, but needs close to ideal weather to achieve.

USDA 2022/23 Carryout (Billion Bushels)

USDA 2023/24 Carryout (Billion Bushels)

Rain was widespread across the Plains and Midwest over the weekend and continued in the southern Plains up into the central belt this morning.  US weather is still leaning on the wet side, amounts will be less than last week.  The Dakotas look drier this week with only small amounts of rain in the forecast.  Kansas is going to get rain, but it’s too late to help wheat at this point.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

All commodities are taking a hit this morning with corn down 12, soybeans down 18 and wheat down 11.

Corn planting progress came in at 49% complete this week, up from 26% last week, 21% last year, and the 42% five-year average; corn emergence doubled to 12%, up from 5% LY and the 11% 5YA. Soybean planting rose from 19% to 35% done, up from 11% LY and the 21% 5YA, with emergence there initially reported at 9%, above 3% LY and the 4% 5YA.

Reports out this morning that China has cancelled another 11 million bushels of old crop corn purchases. This is the third cancellation in the last 3 weeks which brings totals over 30 million bushels. China has more than 100 million bushels of old crop corn on the books, but traders are now wondering how much of this will also be cancelled in the coming weeks and months.

Chinese customs reported April soybean imports at 7.26 mmt below a year ago levels of 9 mmt.  January through April are up 7% at 30.29 mmt.  The downturn in imports suggests the world economy won’t be able to count much on China’s domestic engine of growth, and as the nation re-exports some of its imports, it also reinforces the extent of weakness in some of its major trading partner economies.

The Funds see ending stocks growing this year to 2 billion bushels which we will likely see on the USDA crop report on Friday.  New crop bean ending stocks are expected to move close to 300 million bushels as well.  The slowing Chinese economy, bank default risk and high interest rates a putting a lid on prices. I usually don’t suggest selling in a down market, but if you have old crop left to move it may be time. If you are less than 40% sold on new crop, I would suggest adding to your sales.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Old crop corn is up 1 while new crop corn is down 3 to start the day. Favorable weekend planting and a nice forecast are keeping pressure on the new crop markets. This afternoon planting progress should be a little better than 50% completed in corn and 35-40% in soybeans.  Winter wheat is expected to be 1-2 percent better in the ratings.

We will have the May WASDE report released on Friday which will include the USDA’s first official 2023/24, new crop, balance sheet estimates.  Typically, this report does not hold too much of a surprise as the demand ideas for the coming year were laid out as part of the February Ag Outlook Forum numbers. The supply side assumptions are mostly in place, as well, as they are likely to use the March Prospective Plantings report acreage estimates and the yield assumptions released in February. For old crop, the focus remains squarely on the demand side of the balance sheet, which has not been all that supportive with the recent Chinese cancellations of U.S. corn purchases and ethanol production continuing to run at overall disappointing levels.

Producers should be actively locking in old crop basis levels as they are very attractive and may start to fall off if demand continues to disappoint. New crop sales should be made to get approximately 40% or more of your fall bushels moved.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com