Good morning,

Report Day!

We have seen a lot of volatility since last years January WASDE report that has pushed corn and soybeans prices to record levels. As COVID concerns continue, South American weather uncertainty and global demand unknown today’s report could push or pull the market in unexpected and violent ways. My opinion is that we will see higher production that should mostly be offset by domestic demand from Q4, but that is just an opinion, and I would suggest heading into this report on the safe side. Safe meaning a good portion of old and new crop sales locked in at present levels with offers for additional sales if we see algorithm trading kick in right after the report.

Here are todays estimates. Final numbers will be updated shortly after the 11:00 am release.

USDA 2021 Harvested Acres (Mln Acres)

USDA 2021 Yield (Bushels per acre)

USDA 2021 Production (Billion Bushels

USDA 2021/22 US Carryout (Billion Bushels)

Today’s carryout will set the bar and give us direction moving forward. Any surprising numbers in today’s report will most likely be traded today and tomorrow before we resume trading South American weather.

Have a Safe day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Corn is up 1 and soybeans are down 4 to start the morning.

The U.S. Supreme Court on Monday turned away an industry group’s bid to revive a decision made by the Environmental Protection Agency under former President Donald Trump to allow expanded sales of gasoline that has a higher ethanol blend, called E15.

The action by the justices dealt a blow to the ethanol industry, which wants to increase sales and access to E15. Growth Energy, a biofuels industry group that had filed a petition asking the justices to review a lower court’s ruling vacating the Trump administration E15 policy, expressed disappointment in the Supreme Court’s decision.
The forecast for South America looks a little different from yesterday.  The biggest change is in the long-term temperature maps.  The hot air mass that has been sitting over Southern Brazil and Argentina looks to be backing off.  Current temps are in the 100’s where the crop is seeing maximum stress.  There was also no rain overnight, which is supposed to happen later this week.  Most of the rain that they will see is forecast into Northern Argentina and Eastern Brazil.

This crop report is going to have some wild volatility in it.  We have the final corn and bean yield as well as changes in carryout due to exports and use.  South American production will be taken down, but probably on a slow step by step basis.  The other big one here is the stocks report where we’ve seen all kinds of grain found and lost over the years.  This stocks report could be even more unpredictable because of the port closure in New Orleans back in September and October.  My recommendation is to remove any risk you have in the market and sit on the sidelines until Thursday or Friday when we will be back to trading weather. Small old and new crop sales are advised ahead of the report to lock in current margins.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Weaker markets to open the week with corn down 5 and soybeans down 15.

Markets initially reacted to a change in the weather maps to wetter, with lower trade last night flowing into this morning. We’ll have to see if the banks want to come out of some of these long positions.  You can portion out another sale on this market peak.  We also have the USDA Report coming on January 12th.  The market will expect to see reductions of Brazilian and Argentina production, but the adjustments will be slower to come as that is the way it’s done at the USDA. I am not overly bearish but think the weather forecast is going to stop the rally for now.
Argentina will face intense and prolonged heat coupled with little or no rain through Jan. 12, fueling concerns over corn and soybean crops, according to a report from Buenos Aires Grain Exchange. The forecast for South American is going to be very hot this week with temperatures reaching as high as 112 degrees.  A storm system is building in the 10-day outlook that had been showing up on the extended forecast last week.  There is more rain on the extended forecast as well in the long-range map this morning.  The temperature map also backs off in the heat department as dome is going to be much smaller moving forward. Northern Brazil will also see lighter rains over the next week.  This forecast has been moving to drier for Northern Brazil and wetter for Southern Brazil and Argentina since last Tuesday.
Trade is all about weather today and I would expect a lower closed today as the markets appear to have reached a top for now. With the USDA report out on Wednesday I would look for a little more profit taking leading up to that report.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Corn is down 3, soybeans are unchanged and wheat is down 7 to start the day.

Traders are coming to grips with the change to wetter weather in Southern Brazil and Argentina.  Much of the crop has been lost, but this forecast change could stabilize yield.  However, we won’t know much for another 7-10 days if this will actually even happen.

The forecast for South America is the same this morning.  Hot, dry conditions prevail over the next 7-10 days.  A reprieve of the dryness is forecast starting around January 14th to 15th.  Rain is expected to fall of .5 to 2 inches in the driest areas of Southern Brazil and Argentina.  It took a couple days for most traders to come on board with this change, as it could just as easily have been an anomaly in the models.  The dome is still prevalent in the back end of the models, just not quite as intense.

Next Wednesday the USDA will release their final report for the 2021 crop. Historically this is a big report and despite the estimates not showing much change, I would expect this one will have something to fire up the traders. (up or down) If you have old or new crop corn to move, I would suggest taking off some of the risk ahead of this report to prevent getting caught by any bearish numbers that could be released.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Corn is down 3, soybeans are down 13 and wheat is down 15 to start the day. The combination of the Fed raising rates and a change to slightly wetter weather in Argentina has the market lower today.

The Federal reserve signaled that there is a possibility of faster than expected rate hikes and stimulus withdrawal.  Minutes from the Fed’s December meeting had shown that a tight jobs market and unrelenting inflation could require the U.S. central bank to raise rates sooner than expected and begin reducing its overall asset holdings.  This has put some pressure on commodities overnight.

Total DOE weekly fuel ethanol production declined slightly this week to 1.048 million barrels per day, down from 1.059 mln bpd last week but still above 935k bpd on the comparable week last season.

USDA Export sales were:  48,600 mt of wheat, 256,100 mt of corn, 382,700 mt of beans, 22,800 mt of sorghum, 3,900 mt of beef and 19,400 mt of pork.  Slowest sales of the season.

The forecast for weather in South America for the next 7-10 days is very hot and dry in Southern Brazil and Argentina.  There is however a significant change to wetter weather from Jan 14-22nd. This rain must happen, but for now the forecast will drive the market.  It is going to be really hot over the next week in Argentina with temps in the 100’s.  This is the most stressful weather they have seen in years.

Have a safe day!

Garry Gard

920-348-6844

ggard@didioninc.com