Good morning,

Corn is up 4 and soybeans are down 3 as we start the week.

The lead story this morning is about trade talks with China.  U.S. Trade Representative Katherine Tai on Monday will seek new talks with China over its failure to keep promises made in a “Phase 1” trade deal struck with former president Donald Trump, but will not pursue “Phase 2” negotiations over Beijing’s state subsidies and other structural issues.

Senior Biden administration officials said Tai will pursue a virtual meeting with Chinese Vice Premier Liu He to discuss the trade deal “soon” while starting a “targeted” process to revive exclusions for certain Chinese imports from punitive U.S. tariffs.  Tai will deliver long-awaited remarks outlining the Biden administration’s China trade strategy at the Center for Strategic and International Studies, a Washington think-tank, at 10 a.m. EDT.  The coronavirus pandemic hit Chinese purchases of U.S. goods hard, and they have been running at only 62% of the target, according to estimates by Chad Bown, a senior fellow at the Peterson Institute for International Economics.

Trade issues with China and better than expected bean yields have the bean market lower again this morning. China is on holiday, so any increased buying may be limited. The Funds are long corn again and long very few beans.  The wheat market is caught in the middle with a small net long.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are higher this morning as traders prepare for the 11am Stocks report. Corn is up 7 and soybeans are up 8 at the time of this writing.

Here are the estimates for today’s report that will be released at 11am.

USDA September 1 U.S. Grain Stocks (billion bushels)

The USDA will release Sep 1 stocks today. Trade est US Sep 1 wheat stocks 1,852 vs 2,158 ly, corn 1,155 vs 1,919 ly, soybeans 174 vs 525 ly.  Over the last few USDA stocks report, USDA numbers were below trade est, futures were sharply higher. Feed demand will have to have fallen off a cliff for this report to be bearish as stocks were exhausted to finish the season.  Drought conditions and early maturity have started an early harvest where supplies moved into the system in early September instead of October.  Supplies also weren’t able to leave the US Gulf with shutdowns in New Orleans.  There could easily be some comingling of old and new crop stocks on this report.  Premiums were also high with corn and beans trading 1 dollar over to get supplies to market.

The US Government came to an agreement to avoid a shutdown, with funds available until December.  One thing at a time, the debt ceiling will be next followed by debates re: the relief and infrastructure bills.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

We saw a nice bump in the markets yesterday, but unfortunately there was not much to fuel that rally which has led to the markets trading lower this morning. Corn is currently down 3 and soybeans are down 6. We are in the time of year where the traders will continue to see yield reports on the high and low end and trade based on their bias. I would expect the markets to remain choppy all thru harvest as data continues to come in. Generally, yields are coming in less impressive in IL/IN but better in IA.

Harvest progress was reported at 18% complete last night compared to 10% last week and 15% for the 5-year average. Old crop basis levels continue their decline as processors are seeing new corn. We have seen Midwest basis levels drop 10-50 cents in the last two days depending on your market area.

We will have the USDA stocks report out on Thursday with the average guesses for September 1 2021, corn carryout at 1.167 billion bushel. Soybeans are projected at 172 million bushels while wheat is projected at 1.857 billion bushels. My thought is that regardless of how low corn and bean stocks are on Thursday’s report, we will not see much of a market reaction due to harvest pressure.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Corn and soybeans are continuing their selloff this morning with corn down 8 and soybeans off 4. Carryover from yesterday’s Stock collapse after the news of Evergrande’s collapse is one of the factors moving things lower. China’s central bank is expected to add additional liquidity to the market and no one really knows exactly what they plan to do with Evergrande Group.  The company is massive, with a value equal to about 2% of the GDP in China.  The Autumn Festival Holiday ends today.  Real estate is the primary investment method in China where there is a massive amount of cash paid into these homes.  It’s not like the US where lenders typically require 20% down on investment, China pays much, much more of the total equity.  Investors own multiple homes similar to where US investors may own stocks.

National corn and soybean condition ratings each rebounded by a point this week, to 59% and 58% good/excellent, respectively; the former remains below 61% last year and the 64% five-year average, with the latter below 63% LY and the 64% 5YA. Corn harvest moved from 4% to 10% this week, up from 8% LY and the 9% 5YA pace, with corn maturity up from 37% to 57%, above 56% LY and the 47% 5YA. 58% of soybean had dropped leaves as of Sunday night, up 20 points on the week and above 56% LY and the 48% 5YA; harvest of that crop was initially reported 6%, basically even with 5% LY and the 6% average pace. Winter wheat planting rose from 12% to 21%, ahead of 19% LY and the 18% 5YA, with emergence initially reported at 3% done, basically even with 3% LY and the 2% five-year average pace.

There are a few storms moving through the Central US this morning.  We are seeing light rain in Western Chicago.  Rain is going to hang around the Eastern US for the next week, where the West will primarily be dry.  Hard wheat is getting planted out West with no rain in the forecast to help early development.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Weaker markets to start the week as corn is down 6 and soybeans are down 18.

Property developer Evergrande Group in China missed its debt payment and is in default.  Shares of the company are down to a couple dollars from values of 15 dollars a year ago.  This highly leveraged property company was making news late last week with the amount of debt that they owe.  Some close to the company say the firm owes more than 52 billion dollars this year.  The question has risen, is Evergrande Group too big to fail?  The sheer scale of Evergrande’s debt burden also contributes to the low likelihood of a bailout. Standing in excess of $300 billion, Evergrande’s liabilities exceed Huarong’s total liabilities of 238 billion.   By bailing out its most bloated property developer right now, Beijing would shoot itself in one foot to save the other. A $300 billion bailout would just transfer the liability to the government and worsen the government’s preexisting debt hangover. US Stocks are liquidating on the news falling sharply early this morning.

There is a significant change to wetter in Brazil in both the short range forecast and the long range this morning.  A pattern change was hinted at starting at the beginning of last week and today it is much wetter.  The forecast from September 28th through October 6th has substantial rains coming into the driest areas of Brazil.  This looks to be the beginning of the rainy season.
Most markets are down on the news out of China this morning. We’ll see how Stocks and Energy handle the break this morning.  Crop yields will be rolling in this week and so far, they are varying greatly with record yields and disappointing yields reported. I recommended selling on the rally last week, if you needed to unload anything at harvest. There are quick ship premiums that can be had, but will soon diminish. Take advantage of $5+ prices to lock in margin for fall and beyond. There are few guarantees in life and high grain prices are not one of them.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com