Good Morning,

Markets are softer again this morning with both corn and soybeans down 1. Traders are waiting on Thursdays WASDE and Production reports. Private analysts are expecting to see a 1.8 bu/acre(167.5) cut in corn yield and 400,000 acre(81.6) cut in harvested acres. The USDA has historically saved its big harvested acre cuts for October as they become more confident in the completeness of the FSA certified acreage reporting process. I don’t expect any big yield reductions on Thursday as harvest progress has not advanced enough to justify big adjustments.
Tensions between the US and China are rising just as trade talks are scheduled to begin. China is indicating this morning that they are already planning to leave the talks one day early. This could be the backlash in response to the Commerce Departments move. The Commerce Department on Monday put a number of Chinese entities, including surveillance technology company Hikvision on an export blacklist that prohibits American firms from doing business with them unless they have a US government license to do so.
If you are a producer that historically stores grain at your local elevator you should give us a call to find out how we can add $ dollars $ to your bottom line with our storage alternative.

Be sure to get your firm offers in with us before Thursday’s crop report. I look for this one to spike when the report is released and then fade into the close.

Have a Safe Day!

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

Good Morning,

Quiet markets to start the day/week off as corn is up 1 and soybeans are unchanged. There is a lot of news that could move the market this week and direction is TBD.
1. US and China trade talks resume this week as the Chinese delegates are in Washington to continue negotiations. Last week’s thoughts were that something would get done this week, but over the weekend the officials from China said they would not be bringing any full scale concessions to the table this week. This is disappointing as President Trump has maintained he wants 100% or no deal will get done. While it doesn’t look like a full scale trade deal will get done this week, I just hope things don’t go south again.
2. USDA Crop production and Supply and Demand numbers will be released on Thursday at 11am. After last month’s Stocks report traders are anxious to see what the USDA will show for yield and harvested acres estimates in this report.
3. Forecasts for freezing temps and snow in the Dakotas, Minnesota and parts of Northwest Iowa later this week and into the weekend could set harvest back for those areas. Temperatures locally will drop next weekend, but most areas don’t appear to have any killing frost in the forecast.
Producers locally are reporting that they will be heading to the fields as early as this afternoon to start bean and corn harvest. With the first half of the week looking dry it should allow most to get out and work out the bugs.

Look for some positioning ahead of Thursdays report as traders are currently short 140,000 corn contracts.

Be sure to get your firm offers in with us before Thursday’s crop report. I look for this one to spike when the report is released and then fade into the close.

Have a safe day!

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

Good Morning,

The markets got a boost this week from some active short-covering by the funds after the surprisingly bullish report from the USDA to kick off the week. While things cooled off as the week wore on, fund managers are still maintaining a good-sized net-short position and are currently short 137,000 corn contracts.
The latest weather forecasts are a little warmer, but not warm enough to keep things above freezing in the Dakota’s and portions of the western Corn Belt over the next week. Eventually the more seasonally cool temperatures will move over the rest of the Midwest, but big threats to national yield estimates from frost/freeze will be limited.
Next week could be an interesting one. The early yield reports we are hearing on corn are all over the board from last year. Beans sound as they may end up being lower than last year. Weather outlooks continue to show the mercury dropping and fields too wet to make any progress getting anything in the bin. Additionally, we will get to see the latest estimates on production from our friends over at the USDA. And if that weren’t enough the Chinese negotiating team will be sitting down in high-level meetings with their US counterparts in Washington DC. Let’s hope something can get done there because we are in need of some bullish news for traders to react to. Any bullish news should be countered with sales by producers as it won’t last long!

Have a Safe Weekend!

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

Good Morning,

Better US weather forecasts, fund consolidation and increasing yield reports have led to softer markets the last two days. With a lack of fresh news in the market traders appear poised to wait on next which could have a lot of market movers. Next Thursday’s Crop production and S&D report will give us an updated look at planted and harvested acres, yield and demand updates. Private analyst FC Stone released their estimates yesterday and put corn yield at 169.3 bpa which is above the USDA’s September estimate of 168.2. This should be a reminder to producers that things are not bad everywhere especially in the west.
Next week will also bring the Chinese trade team to Washington DC to continue talks on trade and tariffs. This may sound like a broken record, but there has been a lot of positive news in the past month with tariff delays that has most feeling that things are finally moving in the right direction.
Export sales this morning were on the low end with 19.4 million bushel compared to trade estimates of 15.7-31.5. Soybean sales were also soft at 38.1 million bushel compared to trade estimates of 33.1-51.4.
I would encourage producers to not only be looking at your 2019/20 crop marketing plan, but start to take action on the 2020/21 crop. With the strong potential for 94-95 million acres of corn to be planted this market has a much greater downside than upside. I would recommend locking in some cash sales at $3.85-3.90 range to take some risk off the table.

Have a Safe Day!

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

Good Morning,

As expected the USDA had a issue estimating the size of last year’s corn and soybean crops! For months many have argued that they were too high…and they were proven correct in the end. NASS revised down 2018 bean production by a record 116M bu. with yield down 1.0 bpa to 50.6 bpa. Planted area dropped 300k acres as well to 89.2M acres with harvested area down 400k acres to 87.6M acres.

September 2018/19 corn stocks missed the average guess by over 320M bu. at 2,114 Mil Bu due to enlarged feed/residual use. This would mean we saw record corn feed/residual use in the 4th quarter.

The bears will struggle to sustain much downside pressure until the trade has a better idea about 2019 corn and soybean yields. Following a miss of more than 2.5% by the USDA on both corn and beans, traders will question the methodology that they used to calculate the size of the 2018 crop when it is likely being applied to the calculations for 2019 crops. One possible culprit to the miss could be the cold/wet harvest weather we saw last fall.

There is no evidence of a Midwest frost/freeze into the middle of October and this should allow crops to continue to mature, but temperatures will be becoming more seasonally cool across the northern Corn Belt which slow things down some.

While yesterday’s report put a spark in the markets, the long term issue remains demand. Until we see a shift in exports or domestic demand this market has no reason to move dramatically higher or lower. The current stocks to use ratio sits at 13% with the USDA’s latest number. We would have to drop yield to 164 bpa to get stocks below 10% which is historically the level we need for corn to trade above $4 on the CBOT.

This morning corn is up 2 and soybeans are up 5.

Have a Safe Day!

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