January 29, 2021
Good Morning,
Word of the day or should we say days = VOLATILITY!! The corn market opened 10 higher this morning and in less than 30 minutes is trading 2 higher. Soybeans traded 18 higher and are now down 10! I look for these huge swings to continue for a while until we see some break in the export news. Ranges are expanding with the higher prices. Yesterday saw a 40-cent range in soybeans, with a hard technical break after the US export sales data was digested by the trade. The market has made a habit out of selling off as soon as the numbers are released in the AM. The strong exports in both corn and beans should lead to higher prices, but it’s definitely not going to be easy or straight up.
China is said to be putting together a purchase order of 6-8 mmt of US corn. 2-4 mmts of new purchases have already been completed this week, and there looks to be another 4 on the horizon. It appears that China will book closer to 22 mmt of corn vs the 12 mmt the USDA is expecting. The export program out of the US is like nothing we have ever seen, especially for corn. The reality of these sales is that they have been in the works for a few weeks and were probably executed weeks ago and just now announced.
The new crop corn trading is much less volatile and should stay that way. With the expectation for large, planted acres this coming spring there is little reason to rally that market.
Unfortunately, producers that are sitting on unsold old and new crop are going to drive themselves crazy trying to pick the top in the market, which is not possible! You have a better chance of losing 50 cents than you do of hitting the top. Bottom line = make sales because prices are profitable, and you can reduce stress levels.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
January 26, 2021
Good Morning,
Markets are firm this morning with corn up 15, soybeans up 27 and wheat up 14.
Rumors that China is booking corn and soybeans started the rally last night that has rolled into todays trade. Chinese purchases are due to the slow harvest pace in Brazil that is less than 2% complete at this time. This means that China is filling its February slot with US beans.
Russia has signed the 50 mt tax on export wheat that starts March 1st. There will also be a 10 mt tax on barley and a 25 mt tax on corn. Additional taxes may be levied against new crop production. The Ukraine is expected to limit exports to 24 mmt of corn down from 29 mmt last year. Domestic stocks are low in both the Ukraine and Russia following three years of difficult weather.
Rallies in soybeans and wheat are pulling corn higher. The market is going to be really volatile in the coming weeks as there are a lot less players willing to play in the markets at these high prices.
Producers should continue to take advantage of the rallies and make old and new crop sales. $5+ old crop corn and $4.20+ new crop corn are nothing to pass up. As we saw Friday, it doesn’t take much to sell this market off!
Have a Safe Day!
Garry Gard
920-348-6844
January 25, 2021
Good Morning,
After a massive selloff last Friday and mixed trade overnight, the markets opened stronger this morning. Corn is currently up 8, soybeans up 22 and wheat up 6. If nothing else, Friday’s selloff should be a reminder to those that are long the market (have corn to sell), that these prices can be gone in an instant! The recent prices we have seen should be captured by producers as the funds remain extremely long. We are a long ways from being in the clear with the African Swine Flu and Covid.
Argentina will see above normal rainfall in the Northern half of the crop area over the next 10 days. The forecast is the same as Friday going home, looking for .25-1.5 inches of rain. Temps will heat up to 100 degrees before breaking ahead of a cold front that is going to bring rain. This is week number 4 with rains steadily coming into the forecast for Argentina, the most they have seen since June and at just the right time for bean development.
Continue to make sales of old and new crop on spikes in the market.
Have a Safe Day!
Garry Gard
920-348-6844
January 22, 2021
Good Morning,
Friday and the markets look like they could be headed lower to finish the week.
China reported an outbreak of African swine fever in the southern province of Guangdong – the country’s first reported cases of the deadly disease in almost three months. African swine fever ravaged the pig herd in China, the world’s top pork consumer, after the first outbreak in mid-2018, killing millions of hogs. The industry has recovered, however, with the herd growing by 31% year-on-year to 406.5 million heads by the end of 2020. The Guangdong outbreak occurred on a farm in a county with 1,015 pigs, killing 214 of them, the Ministry of Agriculture and Rural Affairs said in a statement, adding that illegal transportation was the suspected cause.
Fear of covid and a change in relations with China has set the market on its heels. New entrants into the long side of the market are in for a tough day, as the market is going to make them pay to play. For whatever reason the corn market has not broken very much compared to beans and the funds have not sold a lot of corn position recently, but it may be time.
Producers should not panic but the bullish mentality in the market is most likely not going to remain. There are too many things at play for the markets to continue to move higher.
With the funds extremely long, Covid concern around the world, African Swine flu and better South American weather I could see the markets close considerably lower.
Have a Great Weekend!
Garry Gard
920-348-6844
January 20, 2021
Good Morning,
Well maybe not in the grains or the temperatures. Corn is currently down 8 and soybeans are down 24.
We have been long overdue for a correction and it appears to be here. While I don’t believe we set back dramatically, I could see another 10-15 cents come out in the corn market on profit taking.
The U.S. Environmental Protection Agency (EPA) on Tuesday granted three waivers to oil refiners that exempt them from U.S. biofuel blending obligations, a last-minute move before President Donald Trump leaves office on Wednesday. The agency granted two waivers for the 2019 compliance year and one waiver for the 2018 compliance year. The announcement followed four years of controversy around the waiver program under the Trump administration, but left many questions unresolved
Export companies in Argentina are concerned about independent truck owners who are blocking roads as part of a protest over what drivers say are exorbitant taxes and highway tolls, the CIARA-CEC export industry chamber said on Tuesday. Owners and drivers, grouped in the informal TUDA association (Transportistas Unidos de Argentina), began blocking highways over the weekend, making it hard for grains to reach port terminals. The protest adds uncertainty to a sector that was racked by several Argentine port workers’ strikes last month.
Look for trade to continue to take profits and monitor south American weather and strike issues for direction.
Have a safe Day!
Garry Gard
920-348-6844
