February 17, 2021
Good Morning,
Softer markets to open the day with corn and soybeans both down 3 and wheat is down 15. Concerns over the damage to wheat in the plains has raised some red flags as initial reports are the damage will be minimal which is leading to weakness in those markets today.
The US Outlook Forum is Thursday through Friday, which is probably why some banks are taking profits. March options also expire on Friday which could take another large portion out of the long position. Funds are long 374,000 corn and 160,000 soybeans heading into todays trade.
Ethanol plants across the country have been slowing production due to high corn prices and a spike in spot natural gas. Margins have gone to negative, with some the worst levels in many years.
Today is the last day to sign up for our Average Price Contract (APC). Contact Drake, Mitch or myself for more details or to sign up. This looks like a great year to utilize this contract with the volatility in the markets.
Have a Safe Day!
Garry Gard
920-348-6844
February 16, 2021
Good Morning,
Corn is up 6, soybeans up 13 and wheat up 10 this morning following the cold three-day weekend.
Frigid US weather and reflation concerns are supporting the markets this morning. With China still on holiday and the Ag Forum coming later this week, I would expect choppy trade this week. Wheat is the leader this morning as the historic winter weather has some traders concerned about potential winter kill.
Brazil weather will be mixed over the next ten days to two weeks. Southern parts of the nation will experience good drying conditions favoring soybean maturation and harvesting as well as Safrina crop planting. Argentina weather is becoming more tenuous with restricted rainfall over the next ten days to two weeks. Scattered showers and thunderstorms in the coming week will be sporadic and light leaving some areas quite dry while others get enough rain to slow drying rates to buy more time for crops.
We are currently 52% priced for the February crop insurance with corn currently at $4.51 and soybeans currently at $11.66.
Have a Safe Day!
Garry Gard
920-348-6844
February 15, 2021
Good Morning,
No markets today as the trade observes Presidents Day!
Have a Safe day and stay warm.
Garry Gard
920-348-6844
ggard@didionmilling.com
February 12, 2021
Good Morning,
Markets have turned lower this morning with corn down 2 and soybeans down 4.
Today is Chinese New Year, and most everything is closed in China. US markets will be closed for President’s Day on Monday. The US Ag Outlook Forum will meet next week and we will see their projections next Friday.
I am not expecting much for trade today. The market will be plenty volatile next week. I think the funds who are now long 325,000 corn and 168,000 bean contracts will want to remain long soybeans, but corn could be a bumpy ride. Corn prices are at a level that wheat is replacing it in rations which could add to the ending stocks number.
Have a Safe Day and Stay warm!
Garry Gard
920-348-6844
February 10, 2021
Good Morning,
Turnaround Tuesday and Wednesday? Corn is down 12 and soybeans are down 26 to start the day as the markets follow thru on yesterdays selloff.
Markets are correcting sharply after a dud of a USDA crop report yesterday. The funds are holding record long positions in corn, meaning a correction is unfolding of greater magnitude. The Funds held somewhere between 320-340 thousand contracts at the high on Jan 13th before the position was liquidated on a dollar fifty break and eventual low with a fund position close to 80,000 long. The current bean position is probably a little North of 200,000 this morning. The USDA didn’t alter much on the crop report, which just about anyone could have guessed. They are taking the approach that the market will figure it out on its own and have little interest in lowering carryout much further. Crop insurance is set in February, so it may not be in their best interest to chop 300 million bushels out of the corn carryout.
This market could still head higher in the coming weeks and months, but fundamentally this corn market is too high given the stocks that we have on hand and historical price charts. After yesterday’s adjustments we are still north of a 10% stocks to use ratio which would imply that this market is close to a dollar too high. This recent setback needs to be a reminder to anyone holding grain that the markets will not continue to run higher and the floor could fall out at anytime. (Remember what happened 12 months ago!)
Have a Safe Day!
Garry Gard
920-348-6844
