Good Morning,

Markets are unchanged in corn and up 2 in soybeans to start the day. The volume of trading was down from the previous two overnight sessions as concerns over crop yields fades and traders look to bank some profits from the recent rally. Chinese demand is a must for the price levels to hold.

China has been actively booking corn out of the US over the last two weeks. Based on the size of the purchases the past two days it suggests that it is Sinograin/COFCO rather than individual buyers. Exporters report that the corn is being sold for February/March shipment out of the Gulf. Unfortunately this appears to come at the expense of the soybeans which has seen their pace slow. The review of the Phase 1 trade deal now has passed with all parties agreeing that China is working to fulfill its pledge. China already has large volumes of corn and soy purchased through December.

After letting the duty-free ethanol imports from the US expire yesterday, Brazil and the US have tentatively worked out a deal to extend the duty-free imports for another 90 days. No new demand is expected as the margins are currently negative to import US ethanol, but the deal buys the Brazilians time to see who wins the election as well.

Informa is expected to release their corn and soy estimates this morning.

Historical charts and trends tell us that the market has put in its high and we could start to slide into late October before we will see a bounce.

Producers should continue to make new crop sales at current levels for any space needs as harvest pressure will be working its way north in the coming weeks.

Have a Safe Day!

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

August 28, 2020

Good Morning,

Corn market down 1 and soybean up 5 this morning as traders look to consolidate this week’s gains heading into the weekend. It has been a good week in the markets as we have traded higher 4 of the 5 days in corn and 5 of 5 in soybeans. Export sales of corn and soybeans to China and unknown destinations along with dry weather (not here!) have added premium to the markets short term.
While I don’t believe the markets are going to crash short term I would advise producers not to become too bullish as there is still a huge crop in the country even with lowered yields.
Below I have put together some scenarios showing what our stocks to use ratio could look like based on lower yields than currently projected. The USDA is currently using 181.8 bpa and Pro Farmer came out with a 177.5 bpa last week. As you can see either one of these results in a huge carryout. In order for us to get a stocks to use ratio below 10% (historically what we would need to see corn near $4/bu) we would need yield to drop below 165 bpa which is below last year’s yields.

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Have a Safe Day!

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

Good Morning,

We have a positive start to the week with prices up in corn and soybeans. Rumors that the Chinese were sizable buyers of US soy/grain late last week are adding to hopes for additional sales to China this week.

The stock markets are being helped to those new all-time highs on news that the FDA has approved and will expand their blood plasma treatment program in an effort to fight the COVID-19 outbreak. The announcement came as Republican’s kick off their parties convention and Federal Reserve’s Jackson Hole economic conference. Both will be heavily scrutinized for any signs of policy changes.

Traders will be watching closely to see if corn and bean futures are able to penetrate last week’s highs with rains for much of the Corn Belt in the forecast for later this week. For the first time ever it looks like two hurricanes (Marco and Laura) will make landfall in the Gulf at the same time. This will provide widespread chances for meaningful rains across much of the central US. The rains will go a long way towards stabilizing the crop condition ratings.

The bulls will do what they can to maintain upward momentum on prices heading towards the end of the month and the start of harvest. Be on the lookout for late week selling should the rains materialize.

Have a Safe Day!

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

Good Morning,

Markets are mixed with corn up 1 and soybeans down 1 as rumors of Chinese demand for US beans and wheat continue to circulate. The talk of China securing additional grain and soy have been making the rounds all week and there are some indications that China has been active in the cash markets overnight.
China has begun securing soybeans out of Brazil for 2022 as the Chinese see a good value in securing supplies from the Brazilians way out. Brazilian farmers are able to lock in some excellent margins exceeding 50% over their variable costs with the Real struggling. The profitable margins will have them seeding their spring crops fence row to fence row when the planters get rolling next month.

Pro Farmer will release its corn yield estimate later today. The Tour has helped reassure the trade that the US summer row crops will be large when the combines begin rolling next month. However, rains will be necessary to put the finishing touches on this year’s crops.

Have a Safe Day!

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

Good Morning,

Markets are lower again overnight as they monitor the Pro Farmer crop tour results and talks or lack there of with China.

Pro Farmer estimated Nebraska corn at 175.1 bushels per acre, up from 172.5 last year and above the 3 year average of 172.4. Bean pod counts were 1,298 pods vs 1,211 last year and above the 3 year average of 1,213.

Indiana corn yield was 179.8 bushels per acre vs 161.5 last year and above the 3 year average of 171.7. Beans pod counts were 1,281 vs 923 last year and again above the three year average of 1.135.

Pro farmer will move through Illinois and Iowa today. They will catch some of I-80 where much of the damage has been done. In Illinois, their path should be through some of the best corn, missing much of the Northern third of the state that has had very little rain in the last 10 weeks.

President Trump has indicated that the US will not meet with China on a 6 month review of the trade deal. Ag sales are on pace, energy is not. With the slowing economy, it would have been impossible for anyone to need a substantial amount of energy, let a long a major increase. China is not looking to secure ethanol as a blending mix for gasoline, instead targeting crude oil, when circumstances return to more normal.

Have a Safe Day!

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