Good Morning,

Markets have bounced higher this morning with corn and soybeans both up 18.

Weekly export sales this morning showed old crop sales slightly above estimates at 21.9 million bushels for the week. New crop sales were very strong at 224 million bushels. This has been the trend over the past couple weeks as China continues to buy US new crop corn and soybeans.
Ethanol production leveled off last week, though there are still optimistic signs for the industry as the summer travel season approaches. For the week ending May 21, ethanol output fell 2% to 42.5 million gallons/day. Ethanol inventories fell to the lowest level since 2016 as the industry adjusts production capacity to current blending demand levels.
China is clamping down on some corn imports amid concern that overseas purchases have spiraled out of control, prompting several feed mills to cancel their U.S. cargoes. Chinese customs authorities are restricting imports into free trade zones, which aren’t counted toward an official annual purchase quota, according to people with knowledge of the matter.
China’s crackdown on corn purchases is targeted at businesses that have set up blending facilities in the free trade zones, according to the people familiar with the matter. These facilities allow firms to mix the imported corn with other raw materials to produce livestock feed that enable them to profit from zero-tariff imports, the people said.

US weather is bearish and the rain coming though should continue to weigh on prices, but it looks like we are going to pause for now. Demand is still really good for corn and the funds have liquidated over half of their position.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

Good Morning,

Commodities have been a yoyo this morning. Corn and soybeans opened slightly lower (2-3 cents) then sold off dramatically (15-20 cents) and have now bounced back to unchanged. Welcome to Volatility! Yesterday was a huge risk off day in the corn market as technical trading kicked in as limits were hit.
Corn futures have lost nearly a dollar in the past week which represents the largest percentage drop for a July futures contract since 1973! Favorable weather forecasts for the central US has funds lightening their previously long positions. We also continue to hear rumors regarding China canceling or rolling old crop corn purchases. While these have not been confirmed, where there is smoke there is fire.
The 10 day forecast for South American weather remains much the same today. Complete dryness will be ongoing in Mato Grosso, Goias and Minas Gerais, which combine to total half of Brazil’s corn growing area. The lack of rain will also keep river levels historically low in parts of Brazil, Argentina and Paraguay. This will lead to increased freight charges and logistical headaches for the coming months.
Argentine port workers said on Tuesday they would hold another 48-hour strike starting at midnight today (Wednesday), after a similar strike halted agricultural exports from the country last week. Port workers in the country are unhappy with measures being taken as the pandemic persists and are asking to be deemed ‘essential workers’ and, thus, become eligible to receive the vaccine.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

Good Morning,

Looks like the funds are going to be selling out another large chunk of their position again this week. News is pretty limited this Monday AM. Crop progress is expected to show 91-92 percent of the corn planted and 80-84% of the beans planted. June 1st will be the first crop ratings this year. The warmer temperatures and scattered showers over the past week will also help coax emergence rates higher. Last week, 41% of 2021 planted corn had emerged. Emergence rates pulled away from the five-year average of 35% for the week after posting a 21% rise over the previous week’s readings.
Political turmoil is back at play in Argentina, disrupting grain flows once again. A 48-hour port workers strike is planned this week to protest slow COVID-19 vaccination rates, following another strike last Wednesday through Thursday.
Weather is mostly ideal for the majority of the US. Temps are warm until a cool front is going to arrive Wednesday bringing rain with it. Fund selling hasn’t slowed recently and traders positions are getting smaller by the day, eventually we will find a bottom. This may just be a retest of the low in corn today. Beans are going down much slower as the fund position is mostly liquidated.

China has been buying a lot of corn out of the Ukraine. Last week they bought 4.5 mmts from the Ukraine while also buying 11.5 mmts of US corn. The purchases had no effect on the market.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

Good Morning,

Markets are down 3 in corn and unchanged in soybeans this morning after trading as much as 10 lower overnight.

Corn prices rebounded yesterday, while beans and wheat traded both sides of unchanged. The technical traders are indicating the lows early this week could be the bottom on old crop corn moving thru the summer while soybeans and wheat may set new lows. Currently I believe the lows in old crop corn that were placed on Monday and new crop corn that were placed on Wednesday could be the lows for the short term. This is all provided we don’t see some old crop cancelations from the Chinese buyers which is becoming more and more a possibility.
End users in the south and east including chicken giant Perdue Farms have already purchased the most Brazilian soybeans since 2014, when huge sales to China forced the U.S. to boost imports. Brazil has also sold a large amount of the oilseed to Mexico, which usually secures supply from its North American neighbor. Brazil is scheduled to ship 150,000 to 180,000 metric tons of soybeans to the U.S. this year, with poultry and livestock producers in the southeastern U.S. taking advantage of the lower prices in the world’s top exporter, according to data compiled by Bloomberg. Mexico has also bought more than 700,000 tons and is close to surpassing last year’s record.
The 10 day forecast for US weather has active storm systems over most of the Central Belt. There are spotty rains forecast out into next Wednesday. After that there are am active combination of systems moving around the Midwest into June 3rd. Thursday, Friday and Saturday have the biggest chances a week out and then the heaviest chances are Monday Tuesday. The near term forecast is mostly dry which will allow planting to finish up. We don’t see much rain for the Dakota’s, but overall the weather is pretty bearish. Temps will also warm up and should push emergence.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com

Good Morning,

Corn is up 9 and soybeans are down 4 to start the day.

Corn planting progress was reported at 80% complete vs 67% last week, and 78% a year ago. Corn emerged 41% vs 20% last week, and 40% a year ago. WI came in at 78% complete which is up 29% from last week. Soybeans planted was 61% vs 42% last week, and 51% a year ago. Soybeans emerged 20% vs 10% last week, and 16% a year ago. WI came in at 63% complete compared to 34% last week and 29% on average.
The USDA confirmed the sake of another 53.5 million bushels of new crop corn to China this morning as buyers continue to take advantage of the recent price break. This brings total new-crop corn purchases to China to roughly 320 million bushels. We have seen the focused buying of corn switch from old to new crop over the last couple weeks and I believe this trend will continue. What is currently unknown is whether or not these purchases are new or just the roll of old crop to new crop sales. If the later is the case, we could be in for a major board adjustment lower in the coming months.

The market will try to bounce today after hitting the skids since the crop report. This may take a few days to form a low as the US weather is against it.

Have a Safe Day!

Garry Gard
920-348-6844
ggard@didionmilling.com