Good Morning,

Report Day!!

The USDA will release their October Supply and Demand report at 11am today. Like every report there has been a lot of anticipation building for this one. Yield and stocks will be the big focus. Below are the estimates for today’s report. Check back at 11am for today’s numbers.

USDA 2020-2021 US corn and soybean production (billion bu)
USDA Oct. Average Est. USDA Sept.
Corn Production 14.722 14.808 14.900
Corn Yield 178.4 177.7 178.5
Corn Acres 82.527 83.321 83.473
Soybean Production 4.268 4.282 4.313
Soybean Yield 51.9 51.6 51.9
Soybean Acres 82.289 82.922 83.020

USDA 2020-21 Ending stocks(billion bu)
USDA Oct. Average Est. USDA Sept.
Wheat .883 .887 .925
Corn 2.167 2.113 2.503
Soybeans .290 .369 .460

I believe it is very important for producers to keep in mind how long the funds positions currently are. They are long 156,000 corn and 278,000 soybean contracts. If the data in today’s report produces a negative response, the market is vulnerable to a quick washout given the magnitude of the funds length. Take some risk off because this recent climb will end at some point!

Have a Safe Day!

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

Good Morning,

Markets are higher this morning led by soybeans and wheat weather threats and strong demand.

Chinese buying continues to build ahead of tomorrow’s report. We could see another 4-6 cargoes of beans and even some corn to be reported in the next few days. The Chinese haven’t bought any corn in the past couple of weeks as their focus has been soybeans. The Chinese are said to be securing beans for December/January and corn for the April/May time frame as they monitor South American weather that is delaying planting.
The bottom line is that dry areas of Mato Grosso and surrounding districts will see showers, but farmers will be faced with a difficult decision on whether that will provide enough moisture to risk planting soybeans, with a hot dry forecast in place for the following week, or whether they will continue to wait. The final size of the Brazilian crop is not yet in question. There’s still time to produce a good crop. But the delays could significantly lengthen the U.S. export season this winter, further reducing U.S. soybean supplies, which is why we see continued buying in the U.S. market this morning.

We have had a very nice run in corn and soybeans over the last few weeks that has given producers the opportunity to lock in some positive margin. I would advise producers to continue to make sales as this market climbs because there is a limit to the upside. Ethanol margins are shrinking fast and as we head into the winter driving months’ demand for ethanol will shrink. Let’s not forget how quickly the market fell out of bed in March when COVID-19 hit. With the cold and flu season approaching fast and no end in sight for COVID we could fall again at any time.
Get sales on the books and offers in with your buyers today so that if we get a bearish surprise in tomorrow’s report you are covered.

Have a Safe Day!

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

Good Morning,

Markets are higher again this morning with corn up 4, soybeans up 9 and wheat up 15. Yesterday and today’s rally are a result of European and South American weather issues. These issues are pushing Wheat and Soybeans higher and pulling corn along with it.
Friday’s WASDE report from the USDA holds upside price risk on yield and on the inclusion of the FSA acreage data. The October report is where the USDA takes data from the FSA and RMA data and adjusts the planted acres. Yield numbers on corn are expected to drop slightly to 177.7 which is down from the September 178.5 estimate. Soybean estimates are expected to remain unchanged if not higher due to favorable weather. Ending stocks for corn are estimated at 2.113 billion bushel while soybeans are estimated at 390 million bushel.

December corn continues to hang around the $3.88 range on the CBOT and should trade within a 10-15 cent range of this level for a while. With a 2 billion bushel carryout expected now and the majority of harvest ahead of us it will be difficult to get to the next target level ($4.05) until harvest is wrapped up and we have a better idea of production.

Have a Safe Day!

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

Good Morning,

Markets are flat to start the week with corn and soybeans trading unchanged while wheat is up 8. Wheat has been the upside leader with Russia facing another two weeks fo dry weather for their winter wheat areas. Corn and soybeans are feeling the pressure of harvest and the beginning of the rainy season in Brazil.
Chinas current holiday which began last Thursday has been extended to 8 days offering a ling anticipated break for many as the country tries to get back on its feed after the Covid-19 outbreak.
The USDA is expected to lower its corn and soybean production estimates on Friday. This could tighten supplies ahead of Brazil’s safrinha crop season but should remain adequate. The dry weather in Brazil could delay the soybean planting due to La Nina dryness which will push harvest there into February. This could increase US prices of soybeans thru the winter months while end users wait on the south American crop. Producers should take advantage of this opportunity by storing soybeans into January-February timeframe.

Have a Safe Day!

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

Good Morning,

The USDA threw the traders a curveball yesterday with a bullish September 1st stocks report and wave of unexpected revisions. This helped add some much needed life into the markets and should add support moving forward. While the old crop stocks dropped, early indications on the 2020 crop are much better than expected. I continue to receive reports of record yields in MO, IL, IA, MN and WI. The common theme in all of these reports is test weight! I have been charting test weights for the last 6 years and each of the last five years we have continued to drop. In 2015 the average test weight was 57.4 while the 2019 crop averaged 53.4. Early indications are that this years crop is going to bounce back to the 56+ range which will add up quickly and add to producers production and bottom lines. Each producer will have to monitor his or her own situation but a 5% increase in bushels due to test weight will add up fast in your bins and may result in the need to make more sales this fall.
Yesterday’s rally showed the funds adding 40,000 corn and 30,000 soybean contracts to their already long position. The funds are currently long 111,000 corn and 216,000 soybean contracts.
Harvest should progress nicely over the next couple of weeks with dry/cool weather prevailing across the Midwest through the weekend. However, the ridge/trough pattern will progress east allowing the ridge return to the central US bringing with it warmer/dry weather next week.

Have a Safe Day!

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