Good Morning,

Monday’s big selloff in the markets was the sudden spread of coronavirus outside of China, particularly in South Korea, Japan, Italy and Iran. There are currently 53 known cases in the US.
Markets are trying to bounce back today but so far it has been a struggle with corn and soybeans only up 1 each while wheat is down 5. Traders and end users are reluctant to start any rally as the tears of the expanding outbreak continue to be a major driver that is linking traders around the world.
According to analysis by research firm Capital Economics, COVID-19 will cost the world economy over $280 billion in the first quarter of this year, meaning that global GDP will not grow from one quarter to the next for the first time since 2009. China’s growth is expected to slow to 4.5% over the same period. The slowdown may also undermine US plans to massively boost exports of ag goods, energy and services to China, hampering any potential recovery in farming communities. World supplies of grain are robust and South American corn and soybeans are now cheaper than those out of the Gulf.

Brazil continues to have great weather with rains continuing to increase the size of their crop. Crop progress remains strong and planting of Safrina corn crop is now close to 80% complete.

There are still some very good basis levels trading for corn delivery into the spring months. There is very little carry in the market which indicates that now is the time to be making cash sales. Commercial elevators are aggressively selling to end users due to the lack of carry which is covering demand and resulting in basis widening. Elevators with ground piles will begin picking them up in the next two months which will lead to a surplus of grain in the pipeline as well. I would advise producers to be locking in sales for any cash that is needed in the next 30 days. Basis for June and July are also advised while looking to lock in the cbot during planting season. New crop sales for this fall should be in place or made to get you to 20% sold.

Have a Safe Day!

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

Good Morning,

Today is a risk off day that could lead to many more as there appears to be serious concern over the spread of the coronavirus. Corn is down 6, wheat down 16 and soybeans are down 16 to start the day.
US equity futures tumbled alongside stocks in Europe and Asia on Monday as authorities struggled to keep the coronavirus from spreading more widely outside China. Safe havens including treasuries and gold jumped. Equity futures are pointing to declines that would have Wall Street down almost 4% since Wednesday as the deadly virus spread in countries including Italy and Iran.

The risk-off mood hardened as the epidemic spread to more than 30 countries, with South Korea reporting a jump in infections and Italy locking down an area of 50,000 people near Milan. Finance chiefs and central bankers from the largest economies met at the G-20 in Saudi Arabia over weekend and warned that they saw the virus bringing downside risks to global growth.
Governments and companies are curbing travel and trade in an attempt to contain a novel pathogen that can be transmitted by people without symptoms. Adding to the anxiety Monday was China announcing an easing of the quarantine of Wuhan, only to retract the statement hours later. Beijing did impose a total ban on the trade and consumption of wild animals, but it seems a like it’s a case of “too little, too late”.

Have a Safe Day!

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

Good Morning,

USDA Secretary Perdue spoke this morning about their new initiative meant to increase US farm productivity while reducing agriculture’s impact on the environment. The USDA’s goal is to align resources to help reduce food waste by 50% and cut nutrient runoff by 30%.

The USDA’s Chief Economist also spoke this morning touching on trade and just what the USDA envisions for its 2020 WASDE forecast on acres, yield and stocks. Last year’s planting difficulties resulted in a 13M fewer soybean acres, equivalent to more than 600M bushels. Lower carry-in supplies, support an increase in soybean area to 85M acres. Corn area is expected to rise 4.3M acres to 94M following last year’s prevented plantings, supported by new crop prices that are relatively favorable to corn.
These initial ideas indicate the expectation that we see a rebound in acreage to 224M after being significantly impacted by flood last year. This is still moderately below projections provided from 2015-2018. Corn at 94M, while up significantly from last year, it was pretty much in line with expectations. 85M acres of beans was also in line with the average guess.
The 2020/21 corn average farm price expectation was put at $3.60/bushel and compares to 2019/20’s estimated $3.85. USDA sees the 2020/21 U.S. average farm price for soybeans at $8.80/bushel vs an estimated $8.75 for 2019/20.
Corn and soybeans are both trading 1-2 lower to start the day.

Have a Safe Day!

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

Good Morning,

Markets are higher this morning on comments from China and reports from the UN regarding locusts.

The UN issued a warning regarding a large swarm of locusts that have migrating across East Africa with fears of them spreading to India and South East Asia. The migration which has already traveled across most of Africa, the Red Sea and a substantial part of the subcontinent, reached close to China’s Southwestern border over the weekend according to reports.

China has committed to boosting its purchases of goods and services from the US by 200 billion dollars as part of the two year agreement. The US goods eligible for tariff exemptions include agriculture and energy products like pork, beef, soybeans, liquefied nature gas and crude oil. It also looks like exemptions will be imposed on denatured ethanol, wheat, corn and sorghum. Chinese firms can start submitting applications on March 2nd for duty free import licenses.

Brazil is going to see above normal rains over the next 10 days. Temps will be on the cooler side, but this forecast is wetter than last week. Southern Argentina will be drier going out into Feb 28th. The break in the line of storms is right at the Norther growing region. This has kind of been their weather pattern for the whole season. Ten to fifteen days of dryness followed by a 1-2 inch timely rain. Brazil on the other hand just keeps looks wet, followed by more wet.

Corn is up 3, soybeans up 2 and wheat is up 12 to start the morning.

Have a Safe Day!

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

Good Morning,

Reminder that there are no markets today in observance of the Presidents Day holiday.

Producers should be actively monitoring and moving grain in their bins this winter due to quality issues that are going to make this crop one you DO NOT want to store very long. There are still some very good basis levels trading for corn delivery into the spring months. There is very little carry in the market which indicates that now is the time to be making cash sales. Commercial elevators are aggressively selling to end users due to the lack of carry which is going to cover demand and widen basis. Basis sales for June and July are also advised as I expect these levels to widen out after we get this year’s crop in the ground. New crop prices are at very attractive levels ($3.65-3.85 range) for fall and beyond. If we get anywhere near the acres planted that producers are planning this spring, these levels will evaporate quickly.

Have a Safe Day!

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