Good Morning,

Markets are getting hit hard this am with corn down 8-10 and soybeans down 7. Favorable weather forecasts for a warm and wet July are weighing on the crops and outside markets are worried about the rising number of COVID cases leading to a second slowdown in consumer demand.
Over 34,500 new COVID-19 cases were recorded yesterday. This fell just short of the previous record set back on April 24th when New York was in the midst of attempting to control the outbreak there. Both Texas and Florida each hit new records as officials begin to fear that hospitals there could soon be overwhelmed. This has led to Disney delaying the opening of their theme parks in Florida. Elsewhere, Nevada’s Governor has ordered that the public are required to wear masks when they go out. This is a rather predictable disturbing turn of events and we suspect that the next two-weeks will be key.
The potential second wave is proving problematic for public officials across the country who had hoped the disease would subside seasonally like the flu. However, it does not appear to be that type of situation and that COVID outbreaks can just pop up and explode. This is not good news for the hospitality and food service industries who had hoped to get things back on track.
Producers should actively be making sales now for any crop they have to move this fall. The CBOT has no reason to rally and I expect basis levels will widen out with the lack of space to store this year’s crop. My opinion is that while prices may look bleak now, just imagine what they could be this fall with a huge carryout from 2019, a huge crop in 2020 and the strong potential for a second wave of COVID shutting down the country again. $3 corn could look like a great price!

Have a Safe day!

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

Good Morning,

Markets are mostly higher with corn up 3, beans up 1 and wheat unchanged this morning. With only 4 trading sessions remaining between now and the NASS Quarterly Stocks/ Seeding reports I expect to things trade sideways with rallies limited by the favorable weather outlook.
Beijing continues to demand that both US and other major exporters sign coronavirus-free certifications on any meats/ grains shipped there. Tyson Foods has said that they would be willing to offer such certifications in an effort to stave off large losses while other US exporters still refuse. In reality these affidavits lack scientific merit and the precedence they would set would be an unfortunate turn of events as the World economies try to return to normal.
US corn exporter’s face an uphill battle with corn out of the Ukraine and South America both trading at a discount to corn originating out of the Gulf. The Argentine discount to the Gulf continues to widen with them offering corn at 45 over the board as compared to 88 cents over the Gulf. Brazil is running 15 cents cheaper than the US supplies.
Crude oil prices are pulling back better than 1% this morning following a private sector report from the American Petroleum Institute late Tuesday showing a 1.75 million-barrel build last week. Traders are concerned that rising global coronavirus cases might slow the recovery pace, even as shuttered U.S. production starts to come back online.

Same old story – Lack of demand, favorable weather and lack of any political news to move these markets higher. Unfortunately I think this is what producers should expect for the next 12 months given where things are at and headed.

Producers should actively be making sales now for any crop they have to move this fall. The CBOT does not have a reason to rally and I expect basis levels to widen out with the lack of space to store this years corp.

Have a Safe Day!

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

Good Morning,

Futures were down sharply in overnight trade. Corn had been down 8 cents and beans down 14 off of comment that came from US Presidential Aide Peter Navarro. Fox news reported that he said the US Phase One deal was over. President Trump was quick to take to twitter, saying that the trade deal was fully intact, stabilizing stocks and crude oil.

Corn and beans have not recovered the full extent of the losses, and I would blame rain on the radar as the reason. Corn is currently down 4-6 while soybeans are down 1-3.

China is really going to need to pick up the pace of buying if they expect to get to the 36.5 billion dollars in purchases. Time is running out and it is going to get harder for us to make sales the longer this goes. I believe the window for bean purchases will come in late July to early August, but feel that corn may not come at all. China is now having exporters sign paperwork guaranteeing that the soybeans shipped do not contain the Corona Virus which is making many exporters balk at sales.

The window for any weather premium in the market is quickly closing with no major issues to date and forecasts looking very good. Producers should finish selling old crop and get more new crop sales on the books for grain you need to move at harvest.

Have a Safe Day!

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

Good Morning,

High-level meetings between Secretary of State Pompeo and a Chinese Communist Party Politburo Yang in Hawaii yesterday were productive. Pompeo was able to secure new assurances that China would still comply with the Phase 1 trade deal and its associated Ag purchases. Beijing promised to accelerate the purchases of US Ag goods going forward.

Rumors are that China was seeking offers on ethanol, HRW wheat, soybeans and corn following the meeting in Hawaii. While it always nice to hear that export business with China is encouraging, at this point, the demand will have little impact near-term on the longer-term oversupply issues we face.

Weather models look to be in good agreement in calling for a progressive weather pattern developing over the next 2 to 3 weeks as a series of high pressure ridge and troughs push east. Fortunately, none of the ridges look to be particularly strong and with all the moisture moving up from the Gulf will provide daily chances for showers and storms through the 4th of July holiday.

The rumors of Chinese demand are helping to support prices. I do not recommend chasing any rallies at this point due to the favorable weather outlook. Any rally should be rewarded with old and new crop sales.

Have a Safe Day!

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

Good Morning,

Markets are trading lower as spillover selling from the outside markets casts a shadow over the CBOT Ag complex. Corn is down 4, beans down 5 and wheat down 6 cents.

Trader are paying close attention to the price of gasoline as the US economy tries to shake off the COVID induced recession. Weekly gasoline disappearance will be of particular interest to the pros through the summer.

Traders are also interested in how the spread of the disease plays out in the other less developed countries of the world like Brazil and India. Brazil itself has seen total infections surpass the UK. Likewise in India, Doctors there continue to report that the number of new cases is continuing to steadily rise. The economic impacts of COVID will likely be felt in the world’s export markets as emerging market consumption growth is struggles over the next several months.

Crop ratings for Monday are expected to at least hold steady or gain a point in corn at 75-76%gd/ex. Bean ratings may jump a couple point to 73-74%gd/ex. Over the weekend I traveled a lot of central to southwest WI and saw some great looking crops. There are some areas where corn is a little uneven, but overall things looked great. Reports from a coworker who traveled from Kansas city to Cambria this weekend sounded about the same. The crop is off to a great start and this week’s heat along with a lot of the side dressing that is taking place will definitely make pop!

Have a Safe Day!

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