Good Morning,

Markets are lower today following yesterdays surge in the markets.

Uncertainty over supplies and fund short covering have led to the recent rally following the USDA’s WASDE report. The trade is still debating the damage from Monday’s derecho and the FSA acreage data have left many unknowns regarding the 2020 corn and soy crops. Traders have begun to price in the FSA farm Program participation data that showed 9M acres were enrolled in PP with nearly 5.4M being corn and 1.2M for beans. This was a 5M acres decline from the seeding forecast provided by NASS in March. Of the nearly 9M acres, the decline was led by the Dakotas that saw a 2.6M acres decline followed by a combined 1.3M loss in the southern Midwest and Delta for Louisiana, Mississippi and Arkansas.

I would caution reading into this too much as 2020 has been a less than normal year to say the least. Initial FSA data that comes out in August is often difficult to assess. Given that there was no penalty for farmers who enrolled late this year, comparing this year to any other years data would be difficult at best.

The total acres enrolled in the US farm programs totaled just 226M acres. This was down some 7M acres from last year when the horrendous weather last spring made enrollment a hot topic. But what is most glaring is the 19M drop from 2018’s figures. If PP acres are included this year’s totals enrollment in 2020 is off more than 17M from last year. In my opinion it is too early to make any fast judgement of the NASS data until we get a more information from them in September/October. NASS is not expected to update their numbers on 2020 planted acres until the October report.

With that said we still have the largest corn stocks in 33 years with both ethanol and feed demand overstated. Now there is a gap in the charts in December corn up at $3.42 that is a likely target, but there should be some decent resistance in that area given the enormous carry out possibilities.

Bottom line is that producers should reward the recent rally by making new crop sales! This crop is not getting smaller and prices will fade heading into harvest.

Have a Safe Day!

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

Good Morning,

Markets were higher overnight with corn up 6 and soybeans up 10. Concerns over a dry LH August and ideas that China has more to buy is moving the market today.
The USDA pegged the 2019/20 corn carryout at 2.228 billion bu. The 2020/21 carryout is expected to be 2.756 billion bu. They increased the corn yield to 181.8 bu/ac vs last months 178.5 bu/ac. The USDA estimated new record corn yields in Minnesota, Wisconsin, Michigan and South Dakota.(WI is projected to be 181 bpa. The USDA did acknowledge the yield estimate in the
Midwest may be already obsolete as it prefaced the report with a statement that all estimates
were prior to the storm that crossed the US a couple days ago. The trade is onto speculating how much yield can be trimmed from the IA/IL region as part of the wind damage. Derecho discussions continue with how much crop was lost to the high winds. Iowa’s Ag Dept. said that 10 mln acres of Ag land was “affected” by the winds. Of the 30 mln acres of Ag land in Iowa there are 13.5 mln corn, 9.3 mln soy, and 1 mln hay. Only the corn crop was really affected in any way. Declarations like this usually precede requests for Federal funds. By no means is this much of an estimate of actual damage to the crop. “Pro”Farmer starts its Midwest “virtual” tour August 17th which should shed some light on the damage. The real answer will not be known until the combines hit the field this fall.
The 2019/20 US soybean carryout was estimated at 615 million bu. while the 2020/21 carryout is expected to be 610 million bu. WASDE projected soybean yields to average 53.3 bpa compared to 49.8 last month. Record yields are expected in Nebraska, South Dakota, Missouri, Indiana, Michigan, Illinois and Ohio.
The biggest surprise to me was that they increased feed usage by 75 million bushels to 5925. This 6% year over year growth assumes livestock consumption will exceed its normal per head usage due to a larger crop.

Have a Safe Day!

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

Good Morning,

Report Day!

The USDA will release their S&D estimates at 11 am today with the expectations for larger corn and soybean yields due to favorable weather. Estimates are listed below and will be updated shortly after the report’s release.

USDA Production (Billion Bu)
USDA August Ave. Estimate USDA July
Corn Production 15.278 15.174 15.000
Corn Yield 181.8 180.5 178.5
Soybean Production 4.425 4.254 4.135
Soybean Yield 53.3 51.2 49.8

2019-20 US ending stocks (Billion Bu)
USDA August Ave. Estimate USDA July
Corn 2.228 2.271 2.248
Soybeans.615 .617 .620

2020-21 US ending stocks (Billion Bu)
USDA August Ave. Estimate USDA July
Corn 2.756 2.80 2.648
Soybeans .610 .524 .425

Monday’s Derecho storm potentially impacted some 10 million acres (4 million hectares) of Iowa farmland and millions of bushels of grain storage in the top U.S. corn growing state, Iowa Agriculture Secretary Mike Naig said; early estimates show that tens of millions of bushels worth of commercial grain storage – as well as millions of bushels of on-farm storage bins owned by producers – were either impacted, destroyed or severely damaged by the storm. Unfortunately these “potentially” damaged acres has not affected the markets at all. Maybe we will see some impact long term but for the time being the markets are content with this year’s potential crop.

Have a Safe Day!

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

Good Morning,

Markets are a little higher to start the day with what looks to be some short covering ahead of tomorrrow’s report. Corn is up 3 and soybeans are up 2.
Crop ratings last night dropped 1% to 71 percent good to excellent for corn. Beans increased 1% to 74% good to excellent on of the highest ratings on this date ever. Nass ratings suggest corn and bean yields at 5 plus percent above trend. Some expect a major increase in yield on tomorrow’s crop report. WASDA will use some combinations of vegetative grow and average ear weights. FSA will also release acres that have been certified this year tomorrow. We will get to see from year to year data changes. Prevent plant acres will also be in the report.

Trade average guess for the US 2020 corn crop is 15,170 mil bu with a range of 14,915-15,401. The average trade guess for US 2020 beans are 4,258 mil bu with a range of 4,135-4,399. Average trade guess for wheat is 1,833 mil bu with a range of 1,799-1,856.

The average guess for corn carry out is 2,800 mil bu with a range of 2,622-3,061. The guess for soybeans is 525 mil bu with a range of 430-689. The trade guess on wheat is 947 mil bu with a range of 899-1011.

Get your sales made and firm offers in place ahead of tomorrows report. Expectations are for the markets to continue to trend lower with a big crop on the horizon.

Have a Safe Day!

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

Good Morning,

Markets look to continue the weekly trend of lower trade. Corn is down 2 while soybeans and wheat are down 4 and 5 respectively.
Next Wednesday’s USDA report will be the main focus for traders to begin next week and early indications are that the market could head lower into and after that report. Private estimates for corn have been coming in at a yield of 180 bpa + while soybeans have been coming in at 51 bpa +. The USDA’s July estimate had corn at 178.5 and soybeans at 49.8. Ideal weather over the course of the growing season and forecasts for more of the same down the stretch will continue to push yields higher.
Traders are also taking a risk off approach with political tensions on the rise. Late Thursday President Trump signed an executive order prohibiting US residents from doing business with Chinese companies WeChat and Tik Tok. It was the latest in a series of events that has led to rising tensions between the two nations. Delegates from the two economic superpowers are scheduled to sit down on August 15th to discuss the Chinese progress in fulfilling the agreed upon Phase 1 trade deal.

Producers should be locking in sales for corn they have to move this fall. Space is going to become tight everywhere which will be reflected in basis widening.

Have a Safe Day!

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