Good Morning,

Markets are slightly higher this morning with corn and soybeans up 2 and wheat up 5. Traders will be closely watching today’s unemployment report, the OPEC+ meeting and the USDA midday report. Estimates for today’s unemployment report range between 5 and 7 million. These numbers are staggering and are expected to grow. The question is how many of these are temporary vs. permanent.
Expectations from today’s OPEC+ meeting are for production to be cut by 10 million barrels per day. This should support crude oil, but offer very little help to ethanol which is in need of a demand increase. Even with the dramatic decline in production we continue to see stocks increase as social distancing has all but eliminated consumer travel. At the current pace we have cut corn for ethanol demand by about 40 million bushel per week. If this continues thru the end of May (which is a modest expectation) we will add 320 million to the balance sheet. Most expectations are that even if we come off of the “Safer at Home” and consumers are allowed to travel, they will do so at a very low rate well into the fall or next winter given the unknowns.
The USDA will release their S&D report at 11am this morning. The key number in today’s report will be corn carryout which is expected to increase from 1.892 billion to 2.004 billion due to the drop in ethanol grind.

Ending Stocks
April 9 Average Est. March #
Corn 2.092 2.004 1.892
Soybeans .480 .430 .425
Wheat .970 .940 .940

Today is the last day of trade for the week as the markets will be closed tomorrow in observance of Good Friday.

Have a Safe Day!

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

Good Morning,

Markets are unchanged this morning in all commodities ahead of tomorrow’s WASDE update. Traders are anxious to see what the USDA does with the corn for ethanol demand side of the balance sheet. This will be the first official report that addresses the recent slowdown in ethanol production.

There are rumors circling that the Chinese are inquiring about US corn. The rumors come at the same time as China announced that they will release 500 TMT of soybeans from their state reserve through COFCO. The move is seen as a way to ease the tightness in supplies of beans as additional crush plants come back online.

The White House is developing plans to get the US economy back in action that depend on testing far more Americans for the coronavirus than has been possible to date. The effort would likely begin in smaller cities and towns in states that haven’t yet been heavily hit by the virus. Cities such as New York, Detroit, New Orleans and other places the president has described as “hot spots” would remain shuttered.

The planning is in its early stages. But with encouraging signs that the outbreak has plateaued in New York after an aggressive but economically costly social-distancing campaign, President Donald Trump and his top economic advisers are once again boldly talking about returning Americans to work.

Producers with old crop corn should be getting this crop moved! Elevators and end users across the country are seeing quality issues from producers that are delivering every day. As we have stated all along, this is not a crop you want to store into late summer regardless of how good you think you are doing with maintaining quality. While the basis and cash price may not be what you want, you need to move it while it is still marketable. Demand for old crop corn has dropped dramatically with ethanol plants slowing down or shutting down. I would advise locking in basis contracts to move the grain and plan to price it sometime before the July 4th weekend.

Give us a call to find out what delivery slots we are still buying for before they are filled up.

Have a Safe Day!

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

Good Morning,

Positive signs (fewer cases & deaths) have lifted equities and most other macro markets, including modest gains in corn and beans. Wheat is weaker based on better than expected crop conditions.

The corn markets seem to be in a “Turnaround Tuesday” mood for the summer row crops. The wheat is seeing a little pressure after better than expected rating on the initial crop rating release of the spring yesterday afternoon. NASS estimated that 62% of the US winter wheat crop is rated Good-To-Excellent (GTE). This would be the best since 2010 and suggests that abandonment will be the lowest in a decade.

Wall Street is rallying alongside stocks in Europe and Asia amid continuing optimism the spread of the coronavirus may be slowing in several major economies.
Oil gained on signs the world’s biggest producers are moving toward a deal to call off their price war. It sounds as if the Russians and Saudis are making progress on their pact that would see them and the rest of OPEC+ cut global oil production by a massive 10%. The thinking right now is that the US will participate in the new oil cartel, but whether or not they participate in the production cuts remains open for discussion.

Producers across the Midwest have become a lot more active in the fields over the last week with the warmer temperatures. The major weather models are in agreement in calling for a few more warm days ahead before some cooler temps settle back in over the central US late this week and into next week when a trough dips south out of Canada. The next few days should be pleasant with highs expected to reach into the 60s and 70s across much of the Corn Belt. before things cool off this weekend.

Have a Safe Day!

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

Good Morning,

Markets are higher this morning with corn up 1, beans up 1 and wheat up and wheat up 5 to start the day.
OPEC is scheduled to hold a virtual meeting on Monday to discuss a new agreement to reduce output. Traders are expecting some sort of resolution between Russia and Saudi Arabia to bring the oil war to an end. President Trump indicated that his conversations with Russia’s President Putin and Saudi Arabia’s Crown Prince suggested that they were willing to cut 10-15 million barrels per day. However I don’t expect to see much support in the corn market as ethanol producers won’t see any relief until people return to more normal driving patterns.
With the drop in ethanol prices, plants shutting down, storage tanks filling and demand down as people stay home and leave their cars in the garage it could be a long time before there is demand in the ethanol industry again. I do not expect much of an upside in old crop corn with the sudden lack of demand and expectations for large new crop acres. The 2019 crop has a lot of quality issues which is going to make it even more difficult for producers sitting on unpriced inventory. New crop prices do not show a lot of upside potential at the present time and if we get anywhere near the acres projected in Tuesday’s report we will be looking at a 2.5-3.0 billion bushel carryout. Those type of numbers are going to make the current fall prices of $3.20 look good.
At Didion we are currently buying old crop corn for the summer months to fill our mill needs. Quality will be monitored closely and we will be sticking very tightly to our discount schedule as everything we will be buying will have to go to our mill.

Have a Safe Day!

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

Good Morning,

Markets are a little stronger this am with corn up 3 and soybeans up 2. The US Dollar is higher at 100.15, the Dow is up 500 points and crude oil is up $5.25 to $25.50 after China announce they would buy crude oil for their strategic reserves.
Oil prices have jumped on expectations Saudi Arabia and Russia will ease the pressure off the oil market. Crude oil is up nearly 20% on the day to trade back above $24 a barrel after President Trump told CNBC’s Joe Kernen he spoke with Russian President Putin and Saudi Crown Prince Bin Salman, adding he expects both countries to cut production by about 10M barrels.
The news of Beijing pledging to take advantage of the 60% decline in crude oil prices to increase their strategic reserves has helped place a bid beneath the corn market this morning. The idea is that the Chinese intend on securing enough oil for about 90 days or somewhere in the area of 900M barrels. President Trump will meet with US oil industry executives tomorrow. The trade will be watching China closely in terms of their buying.
Look for choppy grain trade continues as the break in prices at the end of last month starts to uncover new buyers as we head into a new month and quarter. The combination of the Chinese decision to buy crude and the potential truce between the Saudis and Russians in their price war likely provides some measure of confidence to traders that was clearly lacking yesterday.

Have a Safe Day!

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