Good Morning,

Markets are calm this morning with the markets closing at 12 and most traders off for the holidays. Corn is up 1 and soybeans are up 3 at the time of this writing.

Chinese bean demand has been the catalyst for markets this week. China is expected to import more than 100 million tonnes of soybeans in 2020, a record high, said an executive with leading state-owned grains trader COFCO on Tuesday, as rebuilding of the country’s huge hog herd boosts demand for the protein. This has moved the needle on the bean market and thus pulled other commodities along as traders expect stocks to get even tighter in US soybeans.

The forecast for Argentina is wetter over the next 10 days, and the Southern Brazil forecast is much drier.  Rain totals in Argentina range from .5 inches to 2.0 on the model run.  If this hold true, it would be the best chance of rain in a month for Argentina.  The last forecast change failed to hold up, with only trace amounts falling.  The rain period is for Dec 26th-30th.  Northern Brazil with see normal rain into the end of December.  Temps are in the 100’s for Northern Brazil, and Argentina will be 80’s-90’s.

Funds are long 310,000 corn and 240,000 soybean contracts after yesterdays close. This is a signal that we could see some profit taking in the next week with month and year end profit taking.

Have a Merry Christmas!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Overnight markets had corn unchanged and soybeans up 10.

Weekly corn export sales totaled 75.6 mb, the second largest week of sales for that date on record and sharply higher than the level needed weekly to hit the USDA forecast. Total commitments of 1.634 bb now account for 61.6% of the USDA’s estimate, the second highest ratio on record going back to 1990. The only area of the export sales report to raise an eyebrow at is the weekly shipments needed to hit the USDA mark which now stands at 60.4 mb. This would be a new record shipment pace from now through August with the second largest average program being 57.3 mb shipped per week in 2017/18. While Mexico was the largest buyer at 28.2 mb, China did show for 6.3 mb.

The well-followed firm Informa released their estimates for the January report and expect the USDA to cut their national average corn yield to 174.1 bushels per acre (bpa) vs. the USDA at 175.8 bpa in December. If demand estimates were left unchanged from the December WASDE, carryout would drop to 1.558 bb and a stocks/use ratio of 10.5%. This would be the tightest stocks/use ratio since 2013/14’s 9.2% but would still not support prices above $4.50 on the CBOT based on historical stocks/use ratios. The January USDA reports could prove to be some of the more important in recent history, especially depending on how South American weather fares the next 30-days.

With shortened trading hours and days in the coming weeks and traders on holiday and year end vacations, I would expect markets to trade sideways in the coming weeks. The interest and market movers continue to be South American weather and the January crop report.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Markets are quiet this morning with corn unchanged, soybeans up 5 and wheat down 10. Coming into this morning the thought was that markets would trade higher with the US administering Covid-19 vaccines starting this week.

The U.S. Food and Drug Administration gave emergency approval to Pfizer’s Covid-19 vaccine late last week, with CDC giving its rubber stamp on Sunday. The first of the supplies have already been shipped around the country, with medical teams expected to start administering doses of it today. Covid-19 will likely continue to make headlines until our society reaches herd immunity. That means that enough people have antibodies from having contracted the illness, combined with those who have antibodies from the vaccine, to slow the spread of the virus and it starts to disappear. Health authorities believe that could happen by June. The vaccine will first be given to healthcare workers and to high risk individuals – such as the elderly. This should further reduce the death rate from the virus as one of the first indications of progress, along with reducing pressure on hospital ICU bed utilization.

China is fixated on a zero-tolerance policy for Covid-19. It locks down large population centers if it finds a few cases of the virus. Most concerning to U.S. producers are the steps it is taking against imported meat. The central government gave responsibility for managing the risk of Covid on imported meat to local provinces and cities. Nobody wants to be held responsible for an outbreak, so they’re going overboard with restrictions. Today’s China Direct newsletter from our Shanghai office describes a story that went viral in China about how consumers in Hubei were being fined for buying imported pork from a common online delivery platform. The city had previously banned the sale, purchase or storage of imported frozen products. Furthermore, a sample from that batch of Brazilian pork had tested positive for the coronavirus, leading authorities to require citizens of that city to pay to be tested, in addition to the fine for possessing the imported meat, while being confined to home isolation for the quarantine period. These obstacles are creating fear among consumers, making them wary of buying imported pork.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Markets are quiet this morning with corn and soybeans trading 1 lower and 1 higher respectively. This will probably be the case moving forward until we get updated supply estimates for the United States in January. In yesterday’s report the USDA left the U.S. corn balance sheet completely unchanged this month as was expected. Weekly ethanol production and exports have been good enough to justify current estimates and feed/residual won’t be updated until December 1 stocks data can be incorporated. On the global front, the USDA cut the Argentine corn crop to 49.0 million metric tons (mmt) vs. 50.0 mmt last month and 51.0 mmt last year. The USDA left their estimate of the Brazilian corn crop unchanged at 110.0 mmt even though Brazil’s state forecaster CONAB is at 102.6 mmt. It was encouraging to see the USDA raise their estimate of Chinese corn imports to 16.5 mmt from 13.0 mmt last month. Considering China already has 11.3 mmt worth of corn imports on the books, the USDA’s estimate of 16.5 mmt could still prove too small.

The December WASDE wasn’t much of a feature for soybeans either, although carryout and the stocks/use ratio tightened further. In general, soybeans remain in a consolidative mode much like corn, making day-to-day price action difficult to manage. South American weather remains the largest factor, at least until the focus can be brought back to the United States in January.

As I have been saying for the last few weeks, South American weather and Chinese sales/cancellations are going to be the market movers for the foreseeable future. While I believe China will continue to buy US soybeans with the later supply from South America expected, I have heard from some very reliable sources that they expect China will cancel some of the purchases currently on the books.

With corn and soybean cash prices at profitable levels for both old and new crop corn, producers should be making sales. We may see a late winter/early spring acreage push, but nothing is guaranteed. As the saying goes “A bird in the hand is worth 2 in the bush”! Let’s take the bird and make sure we can farm another year.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

December 10, 2020

Good Morning,

Markets are quiet after the release of todays USDA report. Corn is currently unchanged and soybeans are up 8. Here are todays numbers.

USDA 2020/21 US grain ending stocks (Billion bu.)

USDA 2020/21 World ending stocks (Billion bu.)

As expected no real surprises. South American weather and Chinese purchases or cancelations will move the market either direction until the January report.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com