Good morning,

Corn is up 4 and soybeans are up 20 to start the day.

The markets sold off yesterday on reports that Russia had pulled some troops back from the boarders and that the Russian/Ukraine issue was de-escalating some with talks.

Wednesday Russia said more troops are withdrawing along the Ukraine border, it published video that it said showed tanks, infantry fighting vehicles and self-propelled artillery units leaving the Crimean Peninsula, which Moscow seized from Ukraine in 2014.
The Kremlin said NATO’s assessment was wrong. Moscow’s ambassador to Ireland said forces in western Russia would be back to their normal positions within three to four weeks.

U.S. President Joe Biden said on Tuesday that more than 150,000 Russian troops were still amassed near Ukraine’s borders and an invasion remained “distinctly possible”. He said Washington had not yet verified any pullout.

The forecast in South American this morning is back to hotter.  The temp maps have brought back the dome again this morning.  It’s been increasing and decreasing every other day since last Friday.  La Nina is still around, more centered in Southern Brazil than Argentina.  The second crop corn in Brazil is going to need a significant change to wetter weather, otherwise they look to sustain crop losses too.  Argentina, we see some rain in the South, where the North will be mostly dry.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are getting hit hard this morning with corn down 18, soybeans down 10 and wheat down 22.

Russia said on Tuesday some of its military units were returning to their bases after exercises near Ukraine and mocked repeated Western warnings about a looming invasion, but NATO said it had yet to see any sign of de-escalation on the ground.

Russia did not say how many units were being withdrawn, and how far, after a build-up of some 130,000 Russian troops to the north, east and south of Ukraine that has triggered one of the worst crises in relations with the West since the Cold War.

NATO’s chief welcomed signals from Russia in the past two days that it may be looking for a diplomatic solution but urged Moscow to demonstrate its will to act.

A USDA attaché in Brasilia estimated 2021/22 Brazilian soybean production at 134.5 MMT, actually above the USDA’s 134.0 MMT Feb figure, with exports seen at 86.8 MMT, below the 90.5 MMT Feb WASDE number.

The forecast in South America is a lot cooler this morning.  The hot air mass has lessened overnight in both of the maps, see below.  Storms moved through Northern Brazil overnight with totals of .25-2 inches.  Southern Brazil and Argentina saw no rain, and none is forecast over the 10 days.  The 11–15-day forecast is moving to wetter and shows that a pattern change in in the making for Argentina to much wetter.

There is really nothing in these markets that can be seen as strength, weakness or stability. With Funds building longs and so many unknowns being traded that are not fundamentally in the markets right now there is risk to the upside and downside. Buy on the dips and sell on the rallies is the best course of action.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Corn is currently up 6 and soybeans are up 18 to start the day.

Corn futures went from 16 higher ot 8 lower yesterday showed the uncertainty of corn demand at these price levels. Exports are slow and US ethanol demand is not a real strong driving force for prices at these levels. Soybeans saw a similar selloff as they were trading 38 higher and closed 21 lower on the day. We broke thru resistance levels and set new highs in both commodities but failed to maintain.

Argentina’s Buenos Aires Grains Exchange yesterday cut their 2021/22 corn production estimate from 57 to 51 MMT; the Rosario Exchange last month reduced their own number from 56 to 48 MMT and is warning of further potential cuts due to low early yields and ongoing dryness. The Rosario Exchange warned of a possible soybean disaster on par with 2018 due to continue La Nina conditions, with their estimate down sharply last month to 40.5 MMT, compared to a 38 MMT harvest in 2018. The B.A. Exchange has ’21/22 soybeans pegged at 42.0 MMT, down two million tonnes last week.

The Biden Administration announced it would not be using the enforcement measures of the Phase1 deal and was instead building “a coalition to show a united front against China”. A relatively unspecific response after the Administration showed ire in the fact the deal was not being honored in its eyes. The expected cancellation of corn by China showed up in the Export Sales report today, along with 145 tmt of unknown, it cut the total net sales for the week to 589 tmt, which was very near to the bottom of expectation and nearly 1/3 the volume of a year ago on the same week.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are firm this morning with corn up 11 and soybeans up 32 to start the day.

In the  USDA report yesterday, they left US corn carryout the same, dropped beans by 25 million, and added 20 million to wheat.  In South America they dropped the Argentina corn crop 1.9 mmt to 52.1, dropped soybeans 2 mmt to 44.5.  Brazil corn was cut by 1.4 mmt to 113.6 and beans were cut 5.3 mmt to 133.7 mmt.  They reduced production and again took the more middle of the road approach.  Those cuts in Argentina are very slight, as is the reduction of Brazilian corn.  Conab released their soybean and corn crop estimates, and they were down sharply in soybeans, 15 mmt lower to 125.6 mmt.  The corn estimate was 112.3 down from 112.9.

The Biden administration is considering a new China tariff probe if current talks fail to persuade Beijing to follow through on its promised purchases of U.S. goods, energy and services, officials from the largest U.S. business lobbying group said on Wednesday. China met less than 60% of its purchasing goal, failing to make good on its promise to increase U.S. purchases by $200 billion above 2017 levels during 2020 and 2021 – a two-year period disrupted by the COVID-19 pandemic and supply chain bottlenecks.

We are still in the process of creating a top in beans.  The corn market acts like it has gone far enough and will probably struggle at some point to move higher.  There will be a reversal at some point in this market, could it be today or tomorrow?  Prices are very high and you’d be crazy not to add sales on the rally, especially as it matches up with the insurance price now.  Something always changes, we just never know what that new input will be.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are higher this morning with nearby corn up 7and summer thru fall up 3. Soybeans are up 14.

The February USDA report is usually relatively tame; however, I don’t know if that will be the case this year. Current high prices, the continued South American drought, and issues between Russia and Ukraine are all factors that can wreak havoc on these markets depending on what the USDA does.  Of particular note is what the USDA does with the South American data.  There is no doubt their crop has been severely impacted by a drought that has lasted months; the only question is how aggressively the USDA reduces the crop size in its report today.
The USDA WASDE will be released at 11am with the following expectations heading into the report:

2021/22 US Ending Stocks (million bu)

2021/22 World Production (million tonnes)

2021/22 World Ending Stocks (million tonnes)

 Updated models continue to show Northern Brazil getting above normal rainfall in the coming 8-10 days, causing delays in harvest.  As for Southern Brazil and Argentina, the story stays the same:   above normal temps and below normal rainfall.  Extreme heat with temps in the mid 90’s spiking into the lower 100’s arrive this weekend and stick around next week.  Damage is being done to the crop; the only question is how bad.  Brazilian cash prices for corn and beans are nearing record highs.

We expect quiet, choppy trade for much of today as participants set themselves up for the USDA report.  The bulls better hope the USDA delivers with material cuts to expected stocks today.  The Fund position size is very long and price risk is real if the USDA disappoints.  We are not sure what happens this afternoon.  As noted before, this report is typically a snoozer but this year is likely to be different.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com