May 25, 2022
Good morning,
Markets are sharply lower again this morning with corn down 12, soybeans down 20 and wheat down 20.
China has signed a phytosanitary agreement with Brazil to import the country’s corn, following record Chinese corn imports last year and in the face of reduced supplies from Ukraine. China is also rumored to have bought anywhere from 250-400,000 tonnes of corn from Brazil for shipment September thru October. This agreement and these purchases could result in China canceling US purchases that are currently on the books. I don’t feel this will happen, but it will most likely limit additional new sales.
A statement by Russian Deputy Foreign Minister Rudenko stated that Russia is in touch with the UN on a potential food export corridor in Ukraine. The reopening of ports would need to include dropping western economic sanctions but could lead to exports in the coming months. The question is how much could be exported, will the damaged ports in Ukraine be operable anytime soon and lastly who will enter the ports to load grain if the war is still taking place?
The selling this week is most likely the markets selling off the longs that they have maintained for so long in the ag markets. With good planting progress, favorable weather and potential limited exports moving forward the markets are taking a breather.
The selloff in the ag commodities this week is a reminder that the sky is not the limit and for anyone to think these markets are stable or heading higher needs to be cautious. Two weeks ago the talk was $9 corn, last week it was $8 corn, will it be $7 next week??? I am not saying we don’t have a chance to see $8 corn again, but I am not going to guarantee it. Get new crop sales on the books at current levels if you don’t have any made because they are profitable levels. Old crop sales should continue to be made as well on any small bounce in the market.
Have a Safe Day!
Garry Gard
920-348-6844
May 24, 2022
Good morning,
Markets are down sharply to start the day with corn off 12, soybeans off 4 and wheat off 14.
Corn planting progress came in at 72% (+23%/wk) vs 68% estimate and compared to the ten-year average of 81%. MN jumped to 60% (+25%) and SD came in at 62% (+31%) while ND still is well behind with just 20% corn planted (+16%) and compared to 81% last year and the ten-year average of 68%. The Prevent Plant option date starts May 25th for ND.
Soybean planting progress came in at 50% (+20%) vs 73% last year and just behind the ten-year average of 55%. Spring wheat planting remains well behind at 49% (+10%) vs 93% last year and compared to the ten-year average of 82%. ND was just 27% complete and plants 5.2 million spring wheat acres, 46% of the total crop.
Great progress over the last week and a forecast that bodes well for more progress in the next 10 days is going to pressure the markets. ND may be behind and approaching the PP date, but as I have mentioned in past reports that prices are doing their job and have producers planning to stretch the planning date well into June with cash prices showing better ROI than Prevent plant.
Have a Safe Day!
Garry Gard
920-348-6844
May 23, 2022
Good morning,
Corn and soybeans are weaker this morning with corn down 3 and soybeans down 18.
The Chinese capital Beijing extended its work-from-home requirement for many of its 22 million residents to stem a COVID-19 outbreak, while Shanghai deployed more testing and curbs to hold on to its hard-won “zero COVID” status after two months of lockdown. Six of the city’s 16 districts have told all residents to work from home and avoid gatherings and said those who have to go to work should have a negative PCR test taken within 48 hours.
Ukraine hopes to export 1.5 million metric tons of grain this month, up from just over 1 mmt in April. I think that 1.5 mmt may be overly optimistic, but they could come close to that target, as they continue to make improvements in the logistics necessary to move grain over land to the west. Even so, that’s still less than a fourth of their monthly exports prior to the war. Spring planting is in its final stages in Ukraine amid shortages of fuel, fertilizer, and chemicals.
Planting progress should show corn at close 70% planted and beans at close to half. The weather over the next 10 days will remain wet. If the crop were planted this forecast would be bearish, but it is not. Canada is also seeing planting delays and their forecast is wet as well. High corn prices are doing their job and pushing producers in the Dakotas and Minnesota to plant corn past their prevent plant dates as returns are greater than PP payments.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didioninc.com
May 18, 2022
Good morning,
The markets are down sharply this morning with corn down 12 soybeans down 5 and wheat down 32.
Rains are falling around the Central US and amounts have been from .20-.80 inches. So far light rains, with more forecast into Wednesday of next week. Temps will be on the cool side. It looks like Iowa, Minnesota and the Dakota’s are going to see their planting window go wide open in the next 10 days as much of the rain into the South and East. Newly planted crops will start in excellent conditions for Illinois and there is plenty of time to plant soybeans. Much of the corn has been planted in the past 48 hours.
Monday’s planting progress was exactly what the trade was expecting (49%) which spawns the question whether the US corn yield is less with half of the crop planted in the US by the middle of May and a reasonable planting window for most of the Midwest ahead. Historical performance of years that have made the 49% level by MidMay are not known for below trend yields without a major summer event. One of the greatest deviations from trend to the upside was 2009 which was 48% planted by week 19 (this week). That year the yield was 8% above trend. At the same time the fastest modern planting year on record (2012) was 25% below trend by the final tally due to drought. The takeaway from the progress logged by the government is the yield prospect in the US is very much a 50/50 item based on summer weather.
Have a safe day!
Garry Gard
920-348-6844
May 16, 2022
Good morning,
Higher markets to start the week with corn up 18, soybeans up 10 and wheat leading the charge up 60.
India will ban exports of wheat going forward. India usually grows a wheat crop of close to 100 mmts each year. Of this they have exported as much 8.2 mmt last year and were projected to do so again. India is only a factor in exports every few years and they mostly edge the line of deficits. There have only been about 6 years in the last 20 that India exported more than 3 mmt’s of wheat.
Ukraine spring grain planting was reported as reaching 70% last week but farmers are starting to suspend activities due to shortages of resources, such as fuel and fertilizer, and a lack of overall rain in western regions.
US corn planting is expected to come it at 42% complete this afternoon. ( I personally think we are closer to 60% complete based on what I have seen and heard locally and from producers in IA and IL. ) Planting should make a substantial gain this week as mostly scattered showers are forecast. We could be off to a better start than most traders know as May planted corn can yield well. (Locally we have seen corn out of the ground in 5 days thanks to ideal conditions.)
It looks to me like we may be hitting the top this week what the market can do. Many “experts” are calling for corn to move into the 8-dollar trading range. This appears to be the ceiling that we cant break thru without some major summer weather issue.
Have a Safe Day!
Garry Gard
920-348-6844
