Good morning,

All commodities are quiet this morning ahead of the 11am WASDE report. Guesses for todays report are listed below.

USDA 2022/23 US Carryout (billion bushels)

USDA 2022/23 South American Production (million tonnes)

USDA World 2022/23 Carryout (million tonnes)

The USD Report is today at 11:00 central time.  Cuts to South American production are expected and not a lot else. This is normally not much of a market mover, and we expect the same today.

There was another pop-up thunderstorm in Argentina last night producing .1-.8 inches of rain in Southern Cordoba and Buenos Aries.  Conditions will be hot and dry for the next few days before rain sets in this weekend.  Rain will fall into next Wednesday with totals of .5-2.0 inches.  Temperatures will also be cooler into next week.  There is another period of dryness after this storm and then another move to wetter in the extended model.  The forecast has definitely changed as Argentina is seeing regular rains.

Brazil cut their official second-crop corn production estimate from 96.2 to 94.9 MMT due to a slow early soybean harvest and subsequent corn planting delays. Corn planting progress stands at 12%.

The USDA is expected to decrease the Argentina crop in soybeans down 3 mmt to 42.5 mmt and corn down 2-3 mmt at 48-49 mmt.  More than half of the corn and bean crop was planted late in Argentina this year, so improved rain could stabilize or increase yields.  Most are penciling in a loss of 10 plus mmts.

The rest of the changes by the USDA should be minimal.  My guess is that corn exports come in lower and most other categories stay about the same.  The forecast for rain and cooler temperatures will hold any rally back today in soybeans.  Meaning we can rally today but think it fails by the weekend as good rain coverage comes to Southern Brazil and Argentina.

Have a Safe Day!

Garry Gard

ggard@didioninc.com

920-348-6844

Good morning,

Markets are weaker this morning with corn down 4 and soybeans down 9.

Tomorrow morning the USDA will release its February WASDE report. Historically this in an uneventful report as traders watch South American harvest numbers and shift their attention to the US planting season and the March 31^st acreage and stocks report. US stocks are expected to increase due to lagging exports and lower ethanol usage of corn.

The USDA is expected to decrease the Argentina crop in soybeans and corn. More than half of the corn and bean crop was planted late in Argentina this year, so improved rain can stabilize to increase yields.

Past that, new-crop corn and soybean values are both strong heading into 2023, but that key SX/CZ ratio is still lingering near the bottom of its usual range at this point in the year; U.S. farmers will be itching to plant corn at $6 per bushel and with fertilizer prices now depressed. For now, the grain markets are mixed heading into the report, with soybeans generally acting as the buoy due to stronger usage and tighter ongoing stocks, ratcheting only slightly lower off recent move highs this month.

USDA 2022/23 US Carryout (billion bushels)

USDA 2022/23 South American Production (million tonnes)

USDA World 2022/23 Carryout (million tonnes)

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Stronger markets to start the day. Corn is up 3 and soybeans are up 6.

Weekly exports had another decent week with corn coming in at 35.8 million bushels and soybeans at 42.1 million bushels. Despite the decent numbers, corn is still 235 million bushels behind the USDA’s projections for this year.

Trader’s are expecting big things from China as their economy reopens for the first time in three years.  Additional demand for food and energy are believed to be the driving force.  Index funds have been buyers which has put crude oil at the top of the recent range.

A USDA attaché in Beijing said that China is set to import “a substantial amount” of Brazilian corn in calendar 2023, without giving an exact number; imports are priced competitively with local supplies, despite a strong 2022 harvest in the North China Plain. End users are mixing more corn in feed rations due to higher prices for wheat and sorghum.  China has only bought 3.7 mmts of US corn this year, down 70% from last year.  Brazil will have as much as 50 mmt of corn for export if crops sizes stay large.

Mexico’s Deputy Ag Minister yesterday said the country’s goal is to reduce yellow corn imports by 30-40% by 2024. Mexico buys 16 mmt of US yellow corn from US exporters.  Sometimes Mexico is the US’s largest export customer taking 600 plus million bushels.

Producers should take advantage of any small rallies to unload old crop corn. We need something bad to happen with weather in South America for corn to push above $7. I look for the markets to ease lower late today and tomorrow.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Rain in Argentina and Southern Brazil have the market lower to start the week. Corn is currently down 10 and soybeans are down 20. More rain is in the forecast as the weather has shifted to wetter for the end of January and the beginning of February.  Rain totals over the weekend totaled .70-3.5 inches in Argentina.  Coverage was 80% and more is on the way.  Midweek another storm system is expected to produce .5-2.5 inch of rain this week.  Northern Brazil and Central Brazil will see normal rain in the next two week.  Temps are hot in Argentina in the 90’s to 100’s but are expected to cool off in the next week.  The long-term forecast is moving to cooler and wetter.  The forecast has shifted to bearish.

Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle on feed as of January 1 at 11.682 million head, or 97.1% of last year, above the average trade estimate of 96.8%. December cattle placements came in at 92.0% of last year, above the 91.0% guess, with December marketing’s at 93.9% of last year, below the estimated at 94.7% figure.

The rally we saw following the USDA report has come and gone as we are now trading favorable weather. The markets are currently headed lower with favorable South American weather and China on New Year holiday break. The funds have been buyers recently, so the downside is elevated. I look for lower trade this week and into the first of February as we don’t have much bullish news to focus on.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

The markets are steady this morning with corn down 1 and soybeans down 3.

Something a little unexpected happened after the lower open yesterday.  New investor flows of money moved into the ag markets.  Corn open interest was up 19,026 contracts and beans were up 5,178.  Goldman is said to be pushing some investment money into the commodity index products.

Some pop-up showers developed overnight in Argentina. Totals of .1-.7 inches fell with more on the way tomorrow.  Three storm systems are projected to move through in the next two weeks.  Take a look at the 10 day forecast below, it shows up to 4-5 inches falling in some areas over the next week with total coverage at basically 100%.  The heat also moves out and normal temps are forecast next week.

Brazil’s Ag Minister yesterday said crop production could be increased by 5% per year for “several years” without deforestation, due to the conversion of pastureland; the country has over 370 million acres of pastures with low productivity, and nearly 100 mln ac of that could be converted into crops.

There are comps in the past that can be used to apply to current market conditions and the one that comes to mind is 2013 corn. Corn doesn’t normally make the high in January, more normal would-be June.  So why sell.  I think this is part of a potential unwind that we have going right now.  2013 was a serious unwind with each rally lower than the last.  The highs in 2013 were made at the peak of the 2012 drought, with the last decent rally during September. This is obviously weather dependent as hot dry weather could change the course.  If crop conditions improve in SA and US weather is normal for once, prices will go down.

Producers should be selling more crop that they normally would and doing it now.  Current values for old and new crop corn are profitable and should be taken advantage of.  Let someone else pray for higher prices later.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com