Good morning,

Markets are mixed this morning with corn up 1 and soybeans down 7. Weather and US-China tensions lead the news today.
China advanced its law restricting the freedoms of Hong Kong today, taking the action despite threats for sanctions from the United States. Negotiations with China are most effective when done within the context of relationship. It’s a part of their culture. President Trump was very effective at developing and maintaining a relationship of respect with President Xi Jinping through the tensions of the trade negotiations, even in the rocky times of that process. That respect allowed the negotiations to continue. But that relationship is being tested currently and stretched thin to the point of breaking as President Trump has lost patience with the Chinese leadership’s poor handling of the coronavirus that allowed it to rapidly spread to the rest of the world, and now its aggressive stance on Hong Kong, on top of its spread of military might in the South China Sea while saying it was not doing so. China moved forward with tough restrictions on Hong Kong and the world now waits for President Trump’s response, which is expected to elicit another response from Xi. (seems like a soap opera)
Weather remains favorable for most of the Midwest over the next couple weeks with warm temps and adequate rainfall. Locally things could not be much more ideal with humid temps and rainfall the last few days the crop is popping out of the ground at a fast pace. I have not heard of any emergence issues from any producers in our draw area.

Have a Safe Day!

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

Good Morning,

Overnight corn and soybeans were each down 1-2 cents while wheat was down 9. Look for traders to close the week on a down note today as they head into a 3 day weekend with favorable good planting progress, favorable growing weather and continued Chinese-US tensions.
Basis levels have narrowed across the country as more ethanol plants come back on line with margins improving in the last couple weeks. Farmer selling across the country has been steady despite the low prices as producers continue to need cash flow and monitor their bins. I have heard some talk of producers possibly sitting on grain going into late summer in hopes of higher prices and using the government payments to meet their cash needs. While this may be an option it is not one I would suggest for multiple reasons.
1. The 2019 crop is poor quality with lighter test weight, higher foreign material and higher damage. This all translates to difficulties storing and preventing things going bad in the bin.
2. With a big crop on the horizon, storage will be at a premium this fall with farmers rushing to make space in late August and September ahead of the new crop. This will depress basis levels on top of CBOT prices that will falter as new crop in the south hits the pipeline.
3. The IL river is essentially closed due to flooding which is limiting the loading of barges. This will make it difficult to get all the grain down the river before it closes for work on its lock and dam system in July. These bushels will fill any local markets and work their way north which will depress basis levels.
4. With projections of a 3 + billion bushel carryout next year does anyone expect CBOT prices to rally between now and harvest? In all of my conversations with producers, end users, traders and market experts, no one has a reason for the market to rally for old or new crop.
Producers should take advantage of markets that are currently buying corn at the $3.00 range, add on the .335 cents you will receive from the government and consider $3.335 a great sale. (There may be other state or federal payments that can be added on top of this at a later date) I would also suggest producers lock in some new crop sales at the $3.00 level as this may be as good as it gets. I would not be surprised if the government comes out with a payment for new crop somewhere down the line that would add some premium on top of this making it a good sale.

Reminder that there will be no markets on Monday.

Have a Safe Memorial Day Weekend!

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

Good Morning,

Markets are quiet to start the day with corn and soybeans unchanged.

Weekly export sales came in below the 10 week average for corn at 34.8 million bushel compared to 47.1 on the ten week average. Soybeans were stronger and the best in the last 10 weeks at 44.3 million bushels as we continue to see Chinese sales ramp up.

The USDA’s CFAP announcement has generated as many questions as answers regarding payment, qualifying production, and qualified inventories. The FSA is trying to catch up with training to get the answers needed on a granular level that are so important. According to the announcement producers will be paid based on inventory subject to price risk held as of January 15, 2020. A single payment will be made based on 50% of a producers 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by 50% and then multiplied by the commodity’s applicable payment rate. (Corn rates are .32/bu for the CARES Act and .35/bu for the CCC payment, soybean rates are .45/bu for CARES Act and .50/bu for the CCC payment) This means that producers will receive $.335 per bushel of corn that they had price risk on as of January 15th and $.475 per bushel of soybeans that they had price risk on as of January 15th. The big question that is still trying to be clarified is what qualifies as “price risk”? In early conversations with county agents, here is my understanding of what would be considered to have price risk:
1. Any bushels that you had stored on farm or in an elevator that had no contract in place for those bushels.
2. Any bushels that you had stored on farm or in an elevator that had an open component on the contract.
A. Example – If you had a basis contract in place for June delivery of corn that you had stored on farm or in elevator, but had not set the futures price on it yet.
B. Example – If you had a HTA(Fixed Futures) contract in place for June delivery of corn that you had stored on farm or in elevator, but had not set the basis on it yet.
3. In the examples above, June delivery is just used as an example. As long as the contracts were not priced as of January 15th, you could have delivery anytime after that.
4. The only bushels that would not qualify for payment would be bushels that you had been paid on or had set a price on prior to January 15th.
A. Example – If you had a contract in place for June delivery of corn and the basis and futures price had been established.
5. APPLICATIONS are not being taken until MAY 26, 2020.

** The above explanations are only my interpretations based on information I have read and discussed with certain officials. You should talk with your local FSA official before counting your $. Keep in mind this information is all new so there is a learning curve for your local agent, give them time to get trained***

We will be happy to help you with documentation needed to apply for this payment, but ask that you confirm with your local FSA agent to get details of exactly what you need to make everyones time more efficient.

Have a Safe Day!

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

Good Morning,

The markets are off to a positive start this morning with corn and wheat up 2 while beans remain unchanged. While the news of people starting to come back out of their lock downs and resume a portion of what their pre-virus lives were helps the economy and markets, it’s a long way from where we were. We will most likely never see the pre-virus days again when it comes to socializing, travel patterns, business operations, etc. Everyone will move at a different pace so we must adapt and move forward.
Last night’s planting progress showed significant progress over the previous week with corn hitting 80% planted across the country. Corn jumped from 67% the previous week and is above the five year average of 71%. WI came in at 81% complete compared to 59% last week and 59% on average. WI is 52% ahead of where we were last year at this time. Nationally soybeans came in at 53% complete compared to 38% last week and 38% for the five year average.
The only state to be running behind their average is North Dakota where only 20% of the crop has been planted. Current estimates are predicting 800,000 prevent plant acres for ND but that may be partially offset by South Dakota where more corn acres have been planted.

Today is one of the “bounce” days that I have been referencing in recent commentary as the times when producers should be actively making sales. Don’t miss these opportunities!

Have a Safe Day!

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

Good Morning,

Corn is unchanged and soybeans are up 5 to start the week.

Support for all markets is coming as America continues to reopen without any major resurgence in the coronavirus. Additional support is coming from reports that an experimental vaccine has showed hope in early tests. A vaccine is considered a crucial step toward lifting social distancing measures and safely reopening economies, schools and events around the globe. While the timeline may be a ways out, progress is being made and hopes are that we could have a vaccine by the end of the year.

Most areas of the Midwest received at least an inch of rain since Friday, with many areas accumulating as much as four to five inches of precipitation. After a week of mostly soggy weather, planting progress in most of the Midwest may ease in this week’s Crop Progress report. But the recent rainfall will likely bring todays total back closer to the 5 yr average. Most of the corn belt will enjoy warm and sunny skies for the first have of this week. Warmer temperatures late this week and into the weekend should help soils dry out and increase emergence across the Midwest.

Chinese buying of soybeans and corn continue but gains will be limited by large supplies and expectations for good crops this year. Producers are advised to be making cash sales and new crop sales on any bounce in the market (1-5-10 cents) because they will be very limited.

Have a Safe Day!

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