Good morning,

Weak follow thru in the markets this morning with corn down 6, soybeans down 4 and wheat down 20.

Today marks the one-year anniversary of the Russian war with Ukraine.  One year ago today, Russian tanks rolled into Ukraine and escalated a conflict in the region that had been ongoing for years.  On this somber anniversary, the US has announced new military support for Ukraine and sanctions against Russia.  Ukrainian President Zelenskyy praised his “invincible” country and vowed to continue the fight.
It is important to note on this anniversary that world wheat prices today are well below the levels they were at when the war started a year ago.  This is shocking considering the conflict is between two of the world’s most important wheat exporters.  Wheat prices shot up following the start of the conflict, but its been a long and eventful year and the war has not created the global shortage of wheat that many feared.  In fact, Russia is expected to export a record amount of wheat this year.  In addition, the Ukraine grain export corridor was reopened in July, and Black Sea wheat exports this crop year is expected to be at or above record numbers.  All of this is amazing considering what most feared would happen because of the fighting that began one year ago today.
This morning, soybean prices are lower as the market considers a smaller Argentine bean crop.  Yesterday, the Buenos Aries Grain Exchange reduced their estimate of the crop to 33.5 MMTs.  This is down considerably from their initial call for 48 MMTs.   The BAGE dropped its crop rating to a record low 3 percent.  Argentina is the world’s largest soymeal exporter and will be forced to import beans from Brazil this year.
Yesterdays Ag Outlook Forum painted the “perfect” picture for what we could see this coming year. Keep in mind that the acres are estimated guesses and not based on surveys and that the yield is trendline. 181.5 may be a reach, but with today’s technology and good weather they are attainable. Acres are probably in line based on economics and the acres we had last year.

The markets have been stuck in a neutral pattern for the last few months, but have definitely turned bearish the last two days. We have thrown all kinds of bullish news at the markets and it has failed to move higher. Despite a lower Argentina crop projection, War in Ukraine, political battles, this market ultimately comes down to supply and demand. Unfortunately for the US, the demand side of the equation is getting worse vs. better. Within the next few months the focus will shift solely to new crop stocks and the early indications for that are significantly higher than they were in 2022. Yesterdays Ag Outlook Forum numbers may be the high point of the season, but we will have to take a lot off of them to concern the market.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Overnight corn was up 1 while soybeans were down 5 and wheat was down 2.

Mexican lawmakers published a legal order yesterday that will allow the continued import of GMO corn for feed and industrial uses, modifying the previous ruling of a full ban of GMO corn for all purposes by March 2024. Most US corn exports to Mexico are yellow corn for livestock feed use, so this change is significant in easing the recent tensions. The updated guidelines will still ban GMO corn imports used for human consumption; this is essentially entirely white corn. They will also keep the proposed ban on the use of glyphosate by March 2024.

A small amount of rain is moving through Argentina today. Totals are .1-1.25 inches with about 20% coverage.  Additional showers are forecast in the next 24 hours for Northern Argentina.  The Southern half of Argentina will remain dry for the next 10 days. Temperatures will be in the 70-80’s.  North and Central Brazil will be dry until the weekend where rain is forecast for 1.00-3.5 inches.  Temperatures look to be normal.

Have a safe day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Quiet markets to start the week with corn up 1 and soybeans up 2.

Argentina’s weather forecast looks drier this morning sustaining concerns about the size of its corn and soybean crops. The smaller corn crop should directly impact U.S. corn exports later this year, but the Brazilian crop is just now being planted. Argentina’s soybean crop is increasingly at danger of slipping below 40 million metric tons, with some private estimates already in the mid-30s. I believe it’s too early in the growing season to go that low yet, but I have no doubt that we could end up there or even a bit lower if drought pressures continue. U.S. soybean exports should drop off in the weeks ahead, while corn shipments rise slightly.

The military shot down three suspicious objects threatening U.S. airspace over the weekend, in addition to the Chinese balloon shot down last week. The U.S. Air Force says that it has not yet been able to identify the three objects shot down over the weekend, but the incidents continue to create public outcry against China’s spying activities. The latest object shot down on Sunday was floating at around 20K feet over Lake Huron. An object was shot down near Deadhorse, Alaska on Friday, and another over Canada’s Yukon on Saturday. We do know that the first one shot down off the South Carolina Coast last week was of Chinese origin, with listening devices suspended from it, although China claims that it was collecting weather information. Regardless, the increased incidences are pushing tensions between China and the United States to high levels once again. It has not thus far had a direct impact on the trade of commodities, but it does contribute to China seeking alternative sources to reduce its dependency on U.S. sources as much as possible.

Have a safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are higher off a forecast of lower rain totals for Argentina next week, plus crude oil is up significantly lending strength to corn and bean oil.  Corn is currently up 4 while soybeans are up 9.

Rain coverage and amounts are expected to be lighter for Argentina next week.  Forecast totals are for .12-1.25 inches and coverage of 50-60%.  Brazil will see scattered showers of .5-1.5 inches during the same period.  Some heat is forecast at the tail end of the models for Argentina and Southern Brazil.

Yesterday’s export sales report featured corn sales that came in towards the high side of expectations while soybeans sales fell towards to low end of expectations, a reversal of what we have become accustomed to this year. Regardless, corn sales remain solidly behind the pace needed to meet the USDA’s annual estimate. Corn sales are 243 mbu (13%) behind the USDA’s projected pace. Cumulative soybean sales are 165 mbu (8%) ahead of pace. The USDA did not touch export demand for either commodity in this week’s WASDE report, but I think they will have to address the growing gaps in both corn and soybeans sometime this spring.

This market has and will continue to struggle to move higher with the lack of demand and a South American crop that is starting to come off. Aside from spring US planting delays, we will continue to trade sideways in the next couple months.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are unchanged to start the day with the USDA report behind us and South American weather, harvest data and size now the focus.

Yesterday’s USDA WASDE report was rather uneventful, as expected, with only limited U.S. balance sheet revisions being made and South American adjustments, mainly Argentina, continuing as further developments on the potential size of their corn and soybean crops are awaited. The most notable surprise of the report was the lack of a downward revision in the U.S. corn export projection, which was widely anticipated.

The only change to the U.S. corn balance sheet this month was a 25-million-bushel reduction in corn for ethanol usage to 5.250 billion bushels, now reflecting 76 million bushel reduction from last year’s 5.326 billion.

USDA 2022/23 US Carryout (billion bushels)

USDA 2022/23 South American Production (million tonnes)

USDA World 2022/23 Carryout (million tonnes)

Weekly exports came in at 45.7 million bushels for corn which is above the 10 week average of 31.0 million bushels and the second highest in the last 10 weeks. This week’s sales were made up of Japan, Unknown and Mexico. We are currently 243 million bushels behind the pace needed to meet the USDA’s projections for the year.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com