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

Good morning,

The markets gapped higher overnight due to dry weather in Southern Brazil and Argentina and the buildup of Russian troops on the Ukraine border.   Corn is currently up 8 while soybeans and wheat are up 25 and 5 respectively.

A report from Reuters this morning said that U.S. officials called on Monday for “concrete action” from China to make good on its commitment to purchase $200 billion in additional U.S. goods and services in 2020 and 2021 under the “Phase 1” trade deal signed by former President Donald Trump.

The official’s said Washington was losing patience with Beijing, which had “not shown real signs” in recent months that it would close the gap in the two-year purchase commitments that expired at the end of 2021.

The comments come a day before the U.S. government is due to release full-year trade data that analysts expect to show a significant shortfall in China’s pledge to increase purchases of U.S. farm and manufactured goods, energy and services.  Through November, China has only met about 60% of the goal.

There is a WASDE report out on Wednesday with expectations for US carryout to be 1.512 billion bushels of corn, 629 million bushels of wheat and 310 million bushels of soybeans. The South American crop is expected to be reduced a couple mmts for corn and beans in Brazil and Argentina.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are steady this morning with corn up 2 and soybeans down 2 to start the day.

We saw more selling yesterday in the markets yesterday with news out of China. There was some talk about a cancellation of 13 million bushels of corn from China; it was a logistics issue, not a demand one.

I don’t think that the market will fall that far; we may enter a consolidation period during the month of February.  The insurance price is going to be record high for farmers, but so are inputs and the price to put this crop into production.  We have a crop report next week that may not be very helpful.  We could see prices come off a little more next week.

Light rains fell overnight in parts of Southern Brazil and Argentina. Other than the major rain that moved through Southern Argentina a few weeks ago, most amounts and coverage have been spotty.  The forecast for the next 10 days has very little rain coming.  Temps have started to heat up in some areas with high 90’s to 100’s.  La Nina is still very prevalent in Southern Brazil and Argentina; crop losses are probably over a billion bushels of beans now.  Second crop corn will be the next issue.

Have a safe day!

Garry Gard

920-348-6844

ggard@didioninc.com