Good Morning,

Markets are neutral this morning after trading lower overnight. Corn is down 1 and soybeans are up 2 at this time.
Traders continue to monitor Chinese movements as they continue their buying spree of U.S. Ag commodities. The U.S. Trade Representative’s office stated at the end of last week that Chinese purchases to date for the current calendar year total near $23 billion, which is near two-thirds of the phase-one trade agreement for 2020. It still doesn’t mean that all those purchases will be shipped and most likely will not. But it does mean that we could still reach record levels for the current year.

Strong soybean demand is already a known factor, with the possibility of more demand in early 2021 if Brazil’s export season is delayed due to late planting. Soybean planting progress in Brazil is at 24.3% as of Friday, up from 9% the previous week, but down from 30.7% the previous year. Mato Grosso is a key production state for both soybeans and for safrinha corn to follow the soybean crop. Planting progress there reached 31% as of Friday, up from 0.5% the previous week. Soybean demand could also end up being much stronger in early 2021 if La Nina results in a hot dry summer for Argentina and southern Brazil.

But traders are also watching China’s corn market, which saw cash prices top $10 per bushel in southern areas of the country last week amid tight supplies. Farmers aren’t selling, believing that prices will go higher, but current high prices are rapidly pulling wheat into feed rations – likely displacing more than 20% of the corn feeding.

The Chinese Communist Party has been making a big deal about being self-sufficient in corn production in recent months. Allowing prices to remain high is one way of achieving that objective, while opening the floodgate to imports would make such a goal of self-sufficiency even harder to achieve.

I would not be surprised to see some fund liquidation this week heading into the month end and US elections.

Have a Safe Day!

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

Good Morning,

Corn is up 2 and soybeans are down 4 to end the week. For the week corn is up 13, soybeans up 17.

On Thursday, funds were net sellers of 5,000 SRW Wheat; bought 8,000 Corn; bought 2,000 Soybeans. Managed funds are net long 61,000 contracts of SRW Wheat; long 253,000 Corn; net long 256,000 Soybeans.

U.S. ethanol production for the week ended October 16th averaged 913,000 barrels per day (down 2.56% versus a week ago, down 8.33% versus a year ago); stocks totaled 19.721 mil barrels (down 1.43% versus a week ago, down 7.69% versus last year); corn use for the week was 90.7 mil bu (93.1 mil last week) and versus the 97.7 mil bu needed to meet USDA projections.

Crude oil is in one of the least volatile trading ranges in history. The energy department and those around the world see 40 dollars a barrel as an acceptable price, with transportation flat since June. Prices are just above break even for many refineries.

With no carry in the board and basis levels still firm producers are actively selling corn right out of the field. With prices ranging between $3.90 – $4.00 for October thru December producers should continue to move their grain.

Have a Safe Weekend!

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

Good Morning,

Markets are stronger again overnight with corn up 3 and soybeans up 9.

President Trump threw his support behind a $2.2 trillion stimulus package yesterday raising optimism on Wall Street that has supported all markets. Crude oil prices are higher while an increase in fund money flow is supporting the grain markets. Increase in Chinese demand has continued to support the markets over the last few weeks. Funds are now long an estimated 215,000 corn and 244,000 soybean contracts. We are getting to the point where some selloff could be expected with the election only two weeks away. Will traders hold a long position going into an election that could drastically change foreign relations one way or another?
Soybean demand should remain strong throughout the year if China follows thru and takes all of the purchases they have been making. This should continue to hold or pull corn higher to some degree. The biggest concerns could be favorable weather in South America, political agendas and the lack of a cure/vaccine for COVID-19.
Prices are at very good levels for nearby thru next summer and should be captured by all producers. Producers should also be looking to lock in some sales for the fall of 2021 with prices in the $3.75 range. Let us not forget the fear that hit all markets in March of 2020!

Have a Safe Day!

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

Good Morning,

Markets were down sharply overnight and early this morning with a concern over the lack of fiscal stimulus and a second wave of COVID-19. Since the open both markets have rebounded slightly with corn now trading unchanged and soybeans down 3.

Markets look like they are reacting to new Covid cases around the World. New lock downs are developing across Europe. The British Government banned indoor gatherings in London to slow the spread of infection. The US Sec Treasury also stated that getting a stimulus agreement before the November election is going to be difficult and House Democrats are showing no sign of approving a new package.
The bean market has really picked up in volatility over the past 10 days. With the fund position so large, it makes the environment exceedingly dangerous if the relationship with the US and China were to completely come off the rails.

With the recent rally and a great marketing opportunity, producers are advised to make corn sales for O/N at $3.70, December 3.80 and early 2021 in the 3.85 range. Producers should also be watching summer of 2021 and get firm offers in for $3.90-$4.00 range.
Soybean harvest is almost complete which means corn harvest will be in full swing for everyone. This will put pressure on basis in areas for the next month or so.

Have a Safe Day!

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

Good Morning,

The crop report that was released Friday had only a few surprises and that was the acres reduction for both corn and beans. Close to million acres of each were taken off the balance sheet which accounted for most of the drop in production. Yields were mostly left alone with only a .1 bushel decrease in corn, which is kind of surprising, when most thought the reduction would be more. The carry out on corn was reduced but many thought we would be closer to 2 billion bushels. The USDA reduced ethanol demand and feed, while leaving exports alone in corn. Yields have been ranging from 100 all the way up to 290 bushels per acre.

The bean carry was reduced below 300 million bushels, with an increase in exports, while yield remained the same. Yields have been highly variable so far this harvest ranging from 15-90 bushels.

Harvest will be close to 60% completed in beans this afternoon and corn at 45% when the government release updated harvest progress.

The US will also see some rain coming to the Eastern Midwest over the next few days, which many farmers will like, considering how dry conditions have been and how dry soybeans are coming out of the fields.

Have a Safe Day!

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