Good Morning,

Markets continue to trade sideways as we finish out the month. There has been a fair amount of producer selling the last few days locally and across the country as producers price DP bushels or storage bushels before the September 1 storage charges kick in. This has resulted in elevators gaining ownership and making sales to end users. Basis levels in several areas have pulled back (widened) due to the selling as their needs ahead of new crop get filled.
Weekly US corn export sales for 2019/20 came in at 4.68 MMT which was the lowest new crop sales for this timeframe since 2005.
Forecasts for the 10-15 day range are slightly below normal but there is no fear of an early frost at this point. In my opinion even if we do get an early frost, it will likely only result in a day or two of higher trade and then traders will sit back and wait for the final production numbers to come in January. No one should expect the markets to react to an early frost the way they did to the wet spring weather. Demand has disappeared and until this comes back the markets will have limited upside.

Reminder that the markets will be closed on Monday for Labor Day.

Have a Safe Labor Day Weekend!

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

Good Morning,

Grain markets are slightly higher this morning with corn up 3 and soybeans up 5.

We saw some strength in the markets yesterday as Ag Secretary Perdue said that President trump is going to come up with something for the ethanol industry to help create demand that will support the US Farmer. To me this sounds very similar to the comments we have been hearing for the last year and a half about negotiations with China. What is being said and what is actually getting done are two different things. Ethanol margins remain under pressure forcing plants across the Midwest to slowdown or shutdown despite lower corn prices.

The FSA took an unusual step on Tuesday afternoon of updating the reported “certified acreage” and “prevent planting” data instead of waiting until the standard monthly update on September 12th. They increased planted acreage by 821,000 acres from their July report. With this adjustment they are now 3.3 million acres below the USDA’s August report of 90.0. The 3.3 million acres is only 3.5% below the total USDA acres. Soybean acreage was increased by 783,000 acres in their report and now is only 1.9 million below the USDA’s 76.7 million. In my opinion this only strengthens the USDA’s report as there is a large contingency of producers that do not file with NASS and do not carry crop insurance.

So far we don’t see any evidence of a frost/freeze event for much of the next couple of weeks with the forecast actually offering a chance for a little warming in the 11-15 day period. Weather models are going to struggle right now as they try to determine precisely where Hurricane Dorian will make landfall and its ensuing track. Dorian is expected to become an intense category 3 storm when it does come ashore causing considerable damage throughout the Southeast in the process.

Look for the markets to trade sideways to slightly lower as we approach first notice day for September contracts and a three day weekend.

Have a Safe Day!

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

Good Morning,

NASS reported crop conditions for corn at 57% Gd/Ex and 55% Gd/Ex for soybeans. Rating were up 1% from last week. 27% of the corn crop is in the dent stage vs 46% of the 5 year average and 71% is in the dough stage, vs 87% on average. 79% of the beans are setting pods with average at 91%. Almost 20 million acres of beans are not setting pods yet.
While there is no threat of frost in the 15 day forecast, some private forecasts look for a cool down in the coming weeks, and a loss of growing degree days looks imminent according to some forecast. The Artic Polar Vortex is expected to break South from Canada and move in the Central US. Temps similar to the Spring are forecast to return, cooler nights in the 40 and 50’s.
Chinese officials deny that any call took place over the weekend about China wanting to hold talks geared toward a resolution to the current trade war so for now the saga continues. While traders will continue to look for news from the trade issue, it has become something to trade when there is no other news as most anticipate this to drag on. Personally I believe the Chinese will hold tight until the 2020 US Presidential election to see if they can get a new leader to negotiate with. Regardless of when a deal gets worked out, the US famer has taken a hit that he will not recover from. The Chinese have found several new sources and alternatives for the commodities that we used to export.

Corn is currently down 1 and soybeans are down 8 to start the day.

Have a Safe Day!

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

Good Morning,

Commodities were showing some life this morning after President Trumps early morning tweet calling Chinese President Xi a “great leader representing a great country and that talks are continuing”. This is a complete 180 from Friday’s comments where he called Xi our enemy. With nothing else to grab headlines traders are looking for something to give them direction and this was it overnight. In other trade news the US and Japan appear to have come to an agreement over the weekend which should allow for increased US products to be exported to Japan. (Agricultural, Industrial products and digital commerce)
Last week’s Pro Farmer tour pegged the US corn crop at 163.3 bpa versus the latest USDA forecast of 169.5. On average the Pro Farmer tour has been 3 bpa below the USDA final number in January. Last week’s tour results have had very little impact on traders as demand continues to be the issue regardless of what yields come out this year. Poor ethanol margins that have resulted in plants slowing down or shutting down in the east over the last couple months is now hitting WI. There are official and unofficial reports of plants that have slowed down in the Badger state due to poor margins.

Have a Safe Day!

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

Good Morning,

Markets are on the slide again this morning after China revealed its counter measures to the US tariffs expected to be implemented on September 1. Reports are that China will put 5% to 10% import tariffs on $75 billion in US goods coming into the country. The tariffs will be applied in two steps, matching the US tariffs implementation on September 1 and December 15. The total tariff list includes over 5000 goods coming from the US to China. China also said that is will resume additional tariffs on US auto and auto part imports, while indicating that crude oil is among the products that will face a 10% tariff.
Reports that President Trump will meet with the EPA and USDA office to talk about different options regarding ethanol and the exemptions to 31 oil companies that was proposed. The blow back in the industry has made the Trump administration look further into the impact this policy would make and possibly take a different course.
Pro farmer will release their US corn yield sometime later today. The tour found Iowa corn at 182.8 down from last years 188 bpa, and NASS estimate of 191 bpa. Minnesota corn was estimated at 170 bpa vs. NASS 173 bpa.
We may not agree with the USDA’s projections of the size of this years crops (acres and yield), due to prevent plant and late planted acres that will not meet historical yield potential but those numbers may be irrelevant. If no one can afford to purchase a product the lack of demand will keep prices from rallying. The law of supply and demand is at work and needs to be kept in mind by producers that are expecting a big move in the markets in the coming months. The lack of demand is and will keep prices from rallying unless there are some dramatic changes. The markets always end up at the level where supply and demand meet and as of right now that price appears to be lower.

Have a safe day!

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