Good Morning,

Last night’s planting progress showed US corn at 27% complete vs. 7% a week ago and 20% on the five year average. The major corn growing states all came in well above average and are as follows:

Iowa 39% complete 20% average
Illinois 37% complete 31% average
Nebraska 20% complete 16% average
Minnesota 40% complete 19% average
Indiana 18% complete 11% average

Wisconsin came in at 11% complete vs. a five year average for this week of 5%.

Soybean progress was reported at 8% complete compared to 4% on the five year average.

Yesterday’s selloff in corn was tied to planting progress and crude oil. Crude oil values fell $4/barrel to less than $13/barrel. Ethanol demand has been crippled by the drop in crude oil and the decrease in travel by consumers. Several states are revealing their plans to reopen while others are clamping down for another 30 days. Worldwide infections are at 2.98 million. World deaths are now over 206,000. The US’s confirmed number of cases is 966,000 with 48,000 deaths.
Producers need to be moving old crop corn and making new crop sales! Demand destruction in the ethanol industry is not going to come back until consumers get back on the roads. With low crude prices and stocks of ethanol and crude at all-time highs I do not expect to see demand back for another 12+ months. Cash prices for fall corn are currently hovering around $2.90-3.00/bu. Barring any growing issues this spring/summer, these prices will be much better than what we see this fall. My advice is to be pro-active in marketing this year.

Have a Safe Day!

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

Good Morning,

After a weekend of favorable weather and lots of activity in the fields across the Midwest, the markets are taking a hit. Corn is currently down 9, soybeans down 4 and wheat down 7.

• Fridays USDA Cattle on Feed Report showed all US cattle on feed as of April 1 at 11.297 million head, 94.5% of last year. March placements came in at 1.557 million head which is 77% of last year and well below the guess of 79%. Cattle marketed during March were reported at 2.01 million head which is 113% of last year’s numbers.
• Crude oil is down over $5 and trading below $12/bbl again this morning as the nation and world continues to limit travel.
• Planting progress this afternoon is expected to show significant progress across the US, especially in the West. IA, MN, NE, ND, SD, WI all had very favorable weather over the last 7 days for field work. In last week’s progress report IA was 2% complete, but is expected to surpass 50% in this week’s report.

December futures continue to grind lower with the lack of demand and now planting progress and crop size weighing on the market. CZ0 has closed lower ten of the last 14 weeks. CZ0 is currently trading at 3.30 and is projected by many experts to trade sub $3 by the time we get to fall.

Have a Safe Day!

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

Good Morning,

Markets are higher this morning with corn up 4 and soybeans up 10.

The catalyst for the recovery are reports that Chinese interest for US beans and other Ag products is improving. Newswires carried a story that the Chinese intended on making good on their commitments from the Phase 1 trade deal as they look to bolster their state reserves noting that the bulk of the business would come from the US. They did not set a timetable but the reports did note that they would be seeking 20 MMT of corn to go along with 10 MMT of soybeans.
Brazilian soybean exports for April are on pace to surpass the May 2018 record high of 453.7M bu. Brazilian farmers are taking advantage of a weak real and strong export demand and booking significant sales for the 2020/21 marketing year. Growers in Mato Grosso have already sold 82% of their 2019/20 soybean crop and 55% of their corn. In Parana, 54% of this year’s soybean crop is contracted for sale, compared to 35% a year ago.
Brazilian farmers are looking at long-term sales as well, booking 30% of new crop Mato Grosso soybeans. On average, only 4% of the new crop is contracted at this time of year. Growers in Brazil’s largest agricultural state had sold 23% of the 2020/21 corn crop as of late March, which is well over a year from being harvested.
The US EIA released its weekly Petroleum Inventory Status report and despite a 4.5% increase in weekly gasoline demand, ethanol production set yet another record lower week for output, falling a mere 294M gallons per day to 23.6B gallons per day. Weekly ethanol output has dropped more than 45% since states started putting restrictions on movement in an effort to combat the transmission of COVID-19 went into place a little over a month ago.

Have a Safe Day!

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

Good Morning,

Energy prices have become a complete disaster in the last two trading sessions. Yesterday we saw something we’ve never seen before with crude oil futures trading negative in delivery. May crude closes out in delivery today and is trading up 33 dollars a barrel. Yesterday prices went from 17.80 in the overnight session to -40 at one point. If anyone had the ability to store crude oil they could have taken delivery, and payed you to do it. Some readers want to know if this is possible in other commodities like corn, beans or gold. These commodities are storable, and commercial banks or end users would line up to buy gold for less than its worth during delivery, same with corn or beans. Some producers have asked if this could possibly happen in corn, soybeans or other commodities. My answer to that would be NO. These commodities are storable and there would be someone lininkg up to buy and store these if they become too cheap in an attempt to use or sell them later. While crude oil may be storable, the storage capacity is limited.
Nass has reported 7% of the corn crop planted, and 2% of the bean crop. Seeding will dramatically expand this week with field conditions improving. Some of the ground is working up the best in 5 years.

Have a Safe Day!

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

Good Morning,

Markets were weaker this morning with corn down 4 and soybeans down 6.

Weather over the weekend was favorable across most of the Midwest for fieldwork with extended forecasts calling for warmer and drier weather. The 6-10 day weather brings much warmer weather which will see planting progress really ramp up. Expectations for this afternoons planting progress are 6-8% complete on corn with the average being 9%.
The USDA announced a $16 billion dollar package with $3.9 billion to row crops, $5.1 billion to cattle, $2.98 billion to dairy, $1.6 billion to hogs and $1 billion to specialty crops. This is designed to cover a portion of losses from January 1 thru April 15th and then April 15th to the fall. There are many more questions than answers in the package that was released, but it does appear that it only targets unsold grain in the growers inventory.
May crude oil plummeted to a new twenty-year contract low this morning trading at $10.77/barrel as stocks continue to climb with no driving demand.

I cannot emphasize enough that anyone that needing to move old crop corn anytime this spring or summer should get sales on the books! Either cash or basis sales should be made because the end use is not going to be what we are accustom to seeing in the past. I can account for a demand destruction of more than 40 million bushels in Wisconsin alone due to the current situation in the Ethanol industry. This is not confined to WI as every state is dealing with the same issue. There is going to be a lot of old crop corn to move and with another big crop expected this coming fall we are looking at depressed prices for another 12 months +. End users are not going to want to be carrying much of this old crop when we hit September and October due to the quality as they will look to purchase higher quality corn from the 2020 crop. You should also be looking to make some new crop sales for the crop that is going in the ground now. Fall cash prices are hovering around $3/bu and I could easily see them trading in the $2.50-$2.70 range this fall. Basis levels this fall could easily fall to -50 to -60.

Have a Safe Day!

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