Good morning,

Corn is up 10 and soybeans are up 20 to open the week.

Money movements and positioning ahead of Wednesdays report is going to have the markets bouncing all over ahead of its release. Estimates for the report can be found below. Once the report is past us, we will return to weather trade which can make predicting movements very difficult as forecasts change, and differing forecasts emerge.

The 10-day forecast clears out from the recent wet pattern in the Eastern US. Most rain moves to the South, and the West stays dry. There is not much rain in the forecast for the Central US over the next 14 days. Temps are supposed to heat up in the West.

Crop ratings are expected to be better in this afternoon report as last weeks rains improved conditions. Historically the markets struggle to move higher coming out of the 4^th of July weekend. In most years the southern crop is close to tassel and pollination and if we have adequate rain and favorable forecasts (this year’s scenario) traders will assume a short position. I am not sure what will happen this year, but with the southern crop slightly behind its normal pace and so many political factors at play its too hard to predict.

On Friday, the Supreme Court ruled that the Environmental Protection Agency does have the jurisdiction to issue waivers to refiners that had previously not been granted waivers. It does not dictate that waivers be given. This comes down to this Administration as well as future Administrations. The Biden Administration argued before the Supreme Court on this issue last spring on the side of the biofuel industry. However, it also said a couple weeks ago that it was considering ways to provide relief to refineries from the blending mandate which is giving mixed signals. What will happen is unknown, but any political move to reduce blending could dramatically impact commodity prices!

My advice and the safest play would be for producers to have 50-60% of their new crop sold prior to Wednesday’s report. The fact that you can lock in $5 corn for fall delivery and 5.25-5.30 for next spring makes this an easy call for me. If we were to get 94-95+ million acres in Wednesday’s report and forecasts stay favorable this market will sell off fast. (We lost 90 cents in new crop prices over the last two weeks on weather alone)

USDA June 1 US Grain Stocks (million bushels)

USDA Acreage Report (million acres)

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Weaker markets to end the week is the way it’s starting out. Corn is down 14 and soybeans are down 17 out of the gates.

Rain is the market mover this morning. All the Midwest has received and will continue to receive rain over the next 7-10 days based on current forecasts. The heaviest amounts with reports of 6-9 inches along the northern area s of Missouri and southern portions of Iowa is what we are hearing. With temperatures in the low to mid 80s forecasted for the 7-10 day models and continued rain, this crop is going to be looking very good coming out of the 4^th of July weekend.

Weather may be in the driver’s seat, but there is little doubt that traders have circled June 30th on their calendars and are anxiously awaiting the USDA’s Quarterly Stocks and Planted Acres report.  Historically, corn acres have increased in the June report compared to the March intentions report 12 of the last 17 years.  Estimates for next week’s report range from 92 to 97 million acres.  The consensus appears to be between 92.5 and 93.5 million acres.  If acres come in higher, which is definitely feasible, then this should add further pressure to futures prices.

The clock is ticking on old crop corn and unfortunately, I don’t see us testing our highs set in May. We should be able to hold the mid to low $6 level for a little while with demand remaining constant. I would advise producers to get sales on the books for any fall corn that you need to move immediately and get some sales and offers on for late winter to early spring of next year to be safe.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Markets are sharply lower to open the day with corn down 15 and soybeans down 25.

With the markets acutely focused on Midwest weather, overnight prices have declined as forecasts continue to show a wet, rainy period ahead for much of the grain growing region.  Significant rainfall is forecast for the Midwest over the next 5-7 days.  Some forecasting models (GFS/EU) are now calling for flooding rains with amounts expected between 4-8″ in parts of IA, IL and IN.  These areas need rain, without a doubt, but would likely prefer for it not to come all at once.  Regardless, the market is viewing the rainy weekend forecast as favorable for the new crop yield prospects.
In other news, a survey by Farmers Business Network is expecting the USDA report due next week to show a total of 86.5m acres of soybeans planted, down from the 87.5m forecast in the March 30th report.  FBN expects that farmers opted to swap beans for corn to take advantage of the surge in corn prices earlier this year.  This same survey also expects next week’s report to show an increase in corn acres from 91.1m to 92.9m acres.  If FBN is correct and the soybeans acres do disappear from next week’s report, then we would expect the market to react favorably to this bullish news.  As for the corn acreage, FBN’s estimate of a 1.8m acre increase falls well below the 3-4m acres that much of the industry is expecting the report to reflect.

Weekly exports came in below the 10 week average for corn with 8.5 million bushels sold compared to 11.2 for the 10 week average. Soybeans came in slightly above with 5.2 million compared to 3.5 million.

Producers should be actively making sales for new crop for any fall bushels that they need to move. I expect next weeks acres to be 3-4 million acres higher and the current weather trend is going to add yield. $4.90-5.00 fall corn is well off the highs, but significantly above anything we have seen in the past several years.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Corn is currently down 2 and soybeans are up 3 to start the day. We have seen the old crop to new crop inversion get bigger over the last several days and it looks to continue as we approach first notice day.

On Tuesday afternoon, there were rumors circulating that China purchased 8-10 cargoes of U.S. new crop soybeans.  This helped to offset the early overnight selling that was based solely on a forecast that shows several rain events in IA and into Northern IL.  Despite the Chinese news, the market’s attention is expected to quickly shift back to US weather where the forecast shows improving chances of significant rainfall in the Eastern portion of the Midwest, including IA.  It is not yet clear if the forecast rain is enough to alleviate current drought conditions.  According to USDA data, 41% of US Midwest soils are in drought.  The NW and Northern Plains remain hot and dry with more heat called for in the coming 7-10 days.

The weather models are still calling for rain across the Central US in the next week.  Depending on the model, some of the heaviest rainfall has shifted to the South and East.  The market will be focused on any updated forecast and changes to the expected rainfall amounts, particularly in IA and West.  Heat continues in the Plains with the latest models calling for even hotter temperatures for the Upper Plains over the coming 7-10 days.
A report from Reuters yesterday suggested that US ethanol production will contract in the coming months due to tighter than expected corn supplies and higher costs.  We have seen it before; ethanol plants simply will not run if producing in the red.

Corn prices in China have dropped to the lowest levels since December due to record imports.  Imports of the grain to be used in feed has increased 5x this year compared to last and are expected to reach a record amount this year.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

The rollercoaster continues this morning as corn is down 9 and soybeans are down 2 to start the day.

The USDA dropped US corn rating to 65% G/E last night vs. 68% last week. NE led the way at 83% G/E with OH, IN and WI next in line. WI came in at 69% G/E which is down from last weeks 71%. The most notable drops were in MN which was down 8% at 50% and IA which was down7% at 56%. While numbers were down, most expect they will turn higher next week as the rains we received across the corn belt late last week were very beneficial and hadn’t yet impacted the crops as of this survey time.

The weather models are calling for rain across the Central US in the next week.  Amounts are in a wide range of 2-6 inches.  Illinois and Missouri have the most rain in the forecast and it tapers off as you move West.  Its going to be hot in the far Western plains and relatively mild in the Central US.  The actual timing of the rain is for this Thursday/Friday and then again around July 4th.

China soybean imports totaled 9.0 million tons in May, lower than last May. On the other hand, June imports are projected at 11.6 million tons, the all-time high monthly imports, primarily due to massive arrivals of Brazilian soybeans (11.4 million tons). In addition, 8.3 million tons of soybeans have departed from the loading ports and will arrive in China in July. According to Refinitiv’s trade flows, the majority of Chinese imports in June/July will be originated from Brazil. Meanwhile, China resumes soybean imports from Argentina and Uruguay in June/July after negligible imports over the past half year.

China’s imports of American goods slowed again in May, putting the purchase targets agreed with the U.S. in the 2020 trade deal even further out of reach.  China bought almost $10 billion worth of manufactured, agricultural and energy goods from the U.S. in May, the lowest monthly total since October 2020. That took total imports to almost $157 billion since January 2020, which equates to 41.4% of the targets the two nations agreed at that time.
Producers should be actively making sales ahead of next Wednesdays USDA report. If we get more acres(which is expected) and weather stays the course, this market could have another setback that we don’t rebound from.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com