Good Morning,

Markets are softer this morning with corn down 5, what down 6 and soybeans unchanged.

Overall the markets look to start the week off on the right foot ahead of tomorrow’s Stocks and Planting Intentions report. The average guess on corn acreage to be 94.3M acres, soybean acreage at 84.9M acres, and wheat acreage just shy of 45M acres. Corn stocks are expected to fall 5.7% from March 2019 while soybean stocks are projected 17.8% lower than year ago. Both should be considered neutral/friendly.
Corn has been held back by the slide in ethanol production and demand. Nearly 3B gallons of US ethanol production has been taken offline. In the past week alone nearly 1B gallons of capacity has been cut basically reducing the corn grind by about 90M bu. a month. A big problem has been plants finding sufficient storage as consumption of gasoline has plummeted following the US Government stay at home orders. It is highly likely that we could see as much as a third of the industry shutter its doors by the middle of April. A move that would cause about 150M bu. per month loss for the grind.

Have a Safe Day!

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

Good Morning,

Markets were mixed overnight with corn down 2, soybeans up 3 and wheat up 11. It’s been a wild week in all markets and I doubt that it will be any different in the coming weeks as we continue in uncharted waters.
There are two ways to look at the market after this week’s trade: 1. The CBOT is up 3 on the week for corn and up 20 on the week for soybeans. 2. The markets are still so low that no one can make a profit with cash corn sub $3.20 and cash soybeans sub $8.20. Unfortunately #2 is the one that is the most important when it comes to cash flow, but the fact that we are up on the CBOT is encouraging given the difficult times we are in.
Traders are anxiously awaiting next Tuesdays USDA Stocks and Planting intentions report to see if there are going to be any reductions in the size of last years crop. Producers and traders have been arguing that the USDA missed the size of last years crop and that it is much smaller than reported. If the USDA doesn’t make any adjustments Tuesday, then the trade will have to move on with these numbers. If there is a reduction in stocks or for some reason projected acres, (currently estimated at 94 million) traders should actively take advantage of any rally to get old crop corn priced. If the markets were to rally on any drop in stocks, I believe it will be short lived as it will quickly be given back on a lack of ethanol demand.
Funds are currently short 95,000 corn and long 3,000 bean contracts.

Have a Safe Day!

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

Good Morning,

Markets are softer to start the day with corn and wheat down 2-3 and soybeans up 2.

Reuters released trade estimates yesterday for next Tuesday’s Planting Intentions and Quarterly Grain Stocks reports from USDA. The trade projects corn acreage to be 94.3M acres, soybean acreage at 84.9M acres, and wheat acreage just shy of 45M acres. Corn stocks are expected to fall 5.7% from March 2019 while soybean stocks are projected 17.8% lower than year ago. Both should be considered neutral/friendly

Valero announced that it was declaring force majeure at two of its plants (Albert City Iowa & Albion, Nebraska) that would allow them to not have to honor their producer price contracts for corn and DDGs made at both plants. Valero stated that all of its storage tanks are full and that it cannot continue operations.

Ethanol plants that are still running are seeing losses on the grind over $0.80 a bushel. This story will continue across the Midwest as the ethanol industry comes to grips with Americans who are driving less and a crude oil price war between Saudi Arabia and Russia.

The ethanol plant closures will certainly be problematic and make the uphill climb out of the basement here just that much more difficult for producers that are sitting on unpriced corn and a crop that will not store well. Add on the potential for a 94+ million acre crop that will be put in the ground in the next few weeks and things look bleak.

Have a Safe Day!

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

Good Morning,

Prices at the CBOT trading higher with corn up 3, beans up 1 and wheat up 4 cents. The US Dollar is down at 101.65 and crude oil is down $0.75 to $23.35.
The Trump administration struck a deal with Senate Democrats and Republicans on an historic rescue package that tees up more than $2 trillion in spending and tax breaks to bolster the hobbled U.S. economy and fund a nationwide effort to stem the coronavirus. The legislation was still being drafted but Senate Majority Leader McConnell said the Senate would vote on it Wednesday. It would still have to pass in the House before it gets to President Donald Trump’s desk.
For individuals the package provides direct payments to lower- and middle-income Americans of $1,200 for each adult, as well as $500 for each child. Unemployment insurance would be extended to four months, the benefits would be bolstered by $600 weekly and eligibility would be expanded to cover more workers.
The coronavirus bill provides for $50B in funds to the CCC and directs the USDA to provide several avenues of relief to the American farmer including MFP payments and an aid program for US cattleman. Potential payment would likely dwarf last years payments as they essentially to farmers to “farm for the government.” Expectations are that the USDA will wait until after spring planting is complete before announcing any payments and how they will be distributed to avoid any distortions in planting intentions.
Cash markets will have to be watched closely today as China was reportedly inquiring about 250 TMT of US corn out of the Gulf. If the rumors are true it would push total Chinese purchases over the last week or so to 1.0 MMT and fulfill Beijing first allocation of duty-free import licenses.

Have a Safe Day!

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

Good Morning,

Markets are mostly higher as fears that US processing plants could close due to infections of the COVID-19 virus continues to rise. The infections could prove challenging as workers and truck drivers who potentially have contracted the disease cause a reduction in processing capacity. Most millers/processors have contingency plans they can put into place to keep plants running; however, many questions remain as to just how world supply chains and logistics will handle this situation as the spread of the virus continues to quicken.
Corn continues to struggle as the fall in crude oil prices weighs on ethanol demand. Besides the price war between the Russians and the Saudis, US ethanol will struggle with reduced domestic demand as American shelter in place and curtail their gasoline demand.
Beans are seeing strength after Chinese soy meal futures closed up the limit due to the tight supplies as livestock producers there restock their feed needs. Prices there are getting a boost from the policy that any vessel offloading soybeans must clear a 14-day quarantine in an effort to fight the spread of COVID-19. That’s not to say it all will come from the US as some 11 MMT of beans are in transit from Brazil and will arrive in the weeks ahead. Nevertheless, the restocking of the Chinese pipeline will be an important feature in any recovery in prices heading into planting season here in the US.

Have a Safe Day!

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