Good Morning,

Mixed markets overnight as old corn was up 1 and new corn down 1. Soybeans were up 11. USDA stocks report will be released at 11am today and all estimates are for lower carryout in corn and soybeans. I believe yesterdays strength was positioning ahead of todays report.

The Russian Government signed off the export duty that will start on June 2nd.  The tax will be 70% above the export price base of 200 dollars per metric tonne.

According to agribusiness consultancy AgRural, as of Feb. 4, Brazilian farmers had managed to double the area harvested to 4%, from 2% in the previous week. Yet harvesting is still way behind historical averages for this time of the season. Last year, farmers had reaped 16% of the cultivated area at around this time. Because of planting delays and the rains that have recently disrupted work in top grain states like Mato Grosso, the pace of harvesting is the slowest in 10 years.
USDA is expected to estimate US corn carryout near 1,392 mil bu versus 1,552 last month.  USDA is expected to estimate US soybean carryout near 123 mil bu versus 140 last month.  USDA is expected to estimate US wheat carryout near 834 mil bu versus 836 last month.  The Brazilian corn crop is expected to be 108.4 mmt and beans at 132.4.  The Argentina corn crop is expected to be 47 mmt and beans at 47.6 mmt.  China corn imports are expected to be 20 mmt for corn and 101 mmt for beans.

The last crop report came in very close to pre-trade estimates, and this one will very much be the same.  The record exports are easy for the USDA to quantify as shipments have been keeping up with the pace of sales.  The USDA is unlikely to change much to the Brazilian and Argentina crops until more is know from harvest.  This isn’t really a very big or import report here today.  The more volatile one is the planted acres at the end of March, which will have record corn acres.

February 2020/21 US Ending Stocks (bil bu.)

February 2020/21 World Ending Stocks (mil. Metric tons)

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Stronger markets to open the week with corn up 7 and soybeans up 10.

The United States exported $28.75 billion of agricultural goods and related products to China in 2020, data from the U.S. Department of Agriculture showed on Friday, missing the $36.5 billion targeted under the Phase 1 trade deal. Beijing and former U.S. President Donald Trump signed the deal in January 2020 after two years of acrimony and a steep slump in imports by one of the biggest buyers of U.S. farm goods. The missed target was widely anticipated despite a recent uptick in sales of corn and soybeans to China. U.S. President Joe Biden’s administration has said the deal is under review.
The crop report will be out tomorrow at 11 and stocks in corn, beans and wheat are expected to decline.  The USDA probably takes a middle of the road approach on this report again.  Carryout of 1,400 for corn, 120 for beans and 830 for wheat are the average trade estimates.  News is pretty limited this morning as we wait for the crop report tomorrow.

Have a Safe day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Markets are 2 higher in corn, 10 higher in soybeans and 7 higher in wheat to open the day. Crude oil is up 40 and US stocks are up 130.  The 1.9 trillion dollar aid package passed the US Senate dropping the dollar and sending stocks higher.

The corn fund position is still holding up toward record long with a crop report coming next Tuesday.  The bean position is long but nowhere near what it was when we were 14.40 futures.  The wheat position is slightly short, which is signaling a low for the week.  After yesterdays close the funds were long 380,000 corn, 157,000 soybean and 60,000 wheat contracts.

China’s Veterinary Association did confirm that a strain of African Swine Flu was found this week.  They do not expect damage to the growing hog industry as the strain is not as deadly as the previous strain.
The Buenos Aires Grain Exchange lowered the corn crop estimate for Argentina to 46 mmt which is equal to their soybean crop at 46 mmt.  They are saying that the soybean crop is 19 percent good to excellent vs 65 last year and corn at 24 percent good to excellent vs 59 last year.  These are the worst condition ratings we have seen posted for the Argentina crop.  The Southern Argentina corn bean crop are probably going to show much worse yields than expected come harvest.

We only have a couple trading sessions before the USDA release the February crop report.  The trade looks for US corn carryout near 1,392 mil bu vs USDA 1,552, soybean 123 vs 140 and wheat 834 vs 836.  After all the sales made to China in the last month, the USDA is going to want to reduce carryout and raise exports.  The recent corn sale would take out 300 million bushels of carryout that was done just in the last week.

Have a safe day and stay warm!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Markets were stronger overnight but have opened lower this morning. Corn and beans are down 3 and 5 respectively.

Weekly export sales came in at a near record 292 million bushel for corn.

Actual sales lived up the hype with 7,436,500 mt of corn, 643,100 wheat, and 824,000 mt of beans.  Sales were good in all commodities, even at these higher prices.  You kind of have to wonder where China is going to put all these products and if they will actually take delivery of them.
US Ethanol production for the week ended Jan 29 totaled 936,000 bls per day (up 0.3% vs a week ago, down 13.4% vs a year ago); Stocks were 24.3 mil bls (up 3.0% vs a week ago, up 3.6% vs a year ago); Corn use 94.6 mil bu vs 94.3 mil last week and 94.6 mil needed to meet USDA projections.

US ethanol inventories have returned to highs last seen in the early days of the Covid-19 pandemic, according to data from the EIA. The EIA reports that ethanol inventories rose 714,000 barrels in the past week to 24.32 million barrels — the highest inventories have been since early May. The inventory build-up appears to show the effect of coronavirus on people using their vehicles regularly. Meanwhile, ethanol production only inched up 3,000 barrels daily to 936,000 barrels per day.

Trade in both directions and big swings are to be expected in the current market place headed into spring and early summer. Timing of your sales is going to be the challenge. With prices at record levels for the last several years, producers and commercials have been active sellers. This is filling the pipeline at local end users which is making it difficult for producers to move unsold corn and beans nearby for any cash needs.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com

Good Morning,

Markets are lower to start the day with corn down 4 and soybeans down 10.

Looking at the positions, the funds are incredibly long corn.  The long position of 400,000 is back towards a record.  Price risk is very high in corn, similar to when beans were loaded up 300,000 long a few weeks ago.  The corn market is at risk of a 20 cent lower day at any time.  The volatility has been increasing since the January 12th report, so the down days are going to be more extreme as well.  There has been an awful lot of 6 dollar corn price talk in the community, from traders I know who rarely even trade corn. We are likely getting to the point where the corn market is going to reset the range with another correction.  How much more can the funds buy and where does it drop to when they take profits?

News is pretty limited, and that probably has a lot to do with overnight trade. New crop corn has been unmoved and has mostly settled into prices close to 4.40 for many days. Big acres on the horizon for both corn and beans will keep next fall’s futures more subdued.  Traders are really bullish corn, but I view it as dangerous.  Getting caught up in the bullish euphoria and buying in on the 400,000 long position in corn looks like a bad idea for traders right here, until there is a substantial clean out of position.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didionmilling.com