Good Morning,

Corn is struggling to find its direction on the CBOT as traders continue to watch the Pro Farmer tour reports and news regarding the Biofuels industry. Lower projected yields continue to come from the tour which is not in line with the USDA’s numbers from last week. This is supportive to the markets, but is being met with reports of more and more ethanol plants slowing down or shutting down due to terrible margins. President Trump is set to meet with the USDA’s Perdue and the EPA’s Wheeler today to discuss potential options to support Biofuel producers.
The ProFarmer Tour pegged corn in Illinois at 171.1 bpa, down 10 bpa from the USDA’s August estimate. On the Iowa leg, corn yields in western part of the state were better than expected, but surveyors will still need to work their way through the eastern portion today before can get an accurate feel of just how ProFarmer’s estimates stack up against the USDA forecast for Iowa of 191 bpa.

It will be interesting to see just how ProFarmer ends up calculating their estimates when they release them during their final meeting Friday. The lack of muturity has been a big problem throughout the Tour, but in particular across the northern third of Illinois. Normally participants take more than 200 samples in order to help build their forecast; however, so much corn was planted in June and beans in July that they were only able to get just a fraction of the sample size they were expecting due to the lack of maturity.

Late yesterday a story broke about the USDA pulling all of its staff from the annual crop tour after an employee was threatened by an angry farmer. Frustrations have only grown over the past few weeks after this month’s WASDE crop report appeared to ignore the damage from this spring’s historic flooding. When you factor in all the additional stress placed on producers due to the trade war with China, falling farm income and tighter credit conditions, it is not tremendously surprising that farmers have begun to vent.

Have a Safe Day!

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

Good Morning,

Weakness in the markets yesterday as rains passed through Iowa, Illinois and Indiana with total rainfall much better than the models had predicted. The markets have opened lower this morning with corn down 1 and wheat down 3.
Prices are usually at their lowest of the season in corn and wheat going into the end of August. All the storage and dp contracts for corn and beans go off at the end of the month. The 31st of August, many times has marked the low price period for the year. The threat of an early frost or subpar yields appear to be the biggest thing producers are holding on to help move prices higher. Unfortunately basing your marketing on these two items may not be beneficial. End users have enough on the books for the first quarter, and there is no rush to further book grain. Prices also have a habit of holding back until crop insurance prices are set in October.
The Pro Farmer corn yields for Indian were 161.5 BPA, compared to 166 by NASS. Indiana soybean pod counts were 924 vs 1,312 last year. Nebraska corn yield was 172.5 vs NASS of 186. Nebraska pod counts were 1,210 vs 1,299 last year. We’ve thought that beans will be down in yield between 20 and 40 percent on most farms with short beans, late development and low pod counts.
Yesterday morning POET, the nations largest ethanol producer, announced that they will be making some operational changes due to market conditions.
1. POET Bio-refining – Cloverdale will idle production indefinitely.
2. Half of POET bio-refineries will run at reduced production rates
We have had reports of many other plants slowing or closing down due to poor
I would advise producers that are sitting on old bushels that need to move before harvest to lock in basis very soon. Once the calendar turns to September the gates will open regardless of cash prices as most producers and elevators will empty out their remaining stock to make room for this years crop. Producers needing to make new crop sales should consider making fall basis sales vs. the CH to give them a little more time to market once the crop is in the bin.

Have a Safe Day!

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

Good Morning,

A drop in crop condition ratings and early results from the ProFarmer Crop Tour had the markets higher overnight, but have since lost that strength. The corn market is currently down 4 with soybeans unchanged.
The tour reported 154 bpa for both S. Dakota and Ohio on their first leg. This was off 6 bpa for Ohio and 3 for SD from last week’s August forecast from NASS. Soybean pod counts disappointed as well with S. Dakota coming in at 833 versus 1024 last year and a 3-yr average of 965. Ohio’s pod count was off even more with just 764 pods versus 1248 last year. For some perspective, Ohio’s 3-yr average sits at 1137.
August is nearly over and maturity seems to be a major concern for the surveyors on both legs of the tour that may leave some farmers hoping for higher temperatures to try to help push these crop over the finish line. Today the tour will be checking fields in Iowa, Minnesota and Indiana as they work their way to middle and hold their meeting on Thursday to release their final yield estimates.
Unfortunately for producers with unsold old crop and unpriced new crop the biggest issue is demand! Regardless the size of this years crop, exports have been poor and domestic demand is diminishing daily with poor margins. Every week we hear of more ethanol plants that are slowing down or shutting down until things turn around. Unfortunately the turn around doesn’t look like it will be anytime soon!
I would advise producers that are sitting on old bushels that need to move before harvest to lock in basis very soon. Once the calendar turns to September the gates will open regardless of cash prices as most producers and elevators will empty out their remaining stock to make room for this years crop. Producers needing to make new crop sales should consider making fall basis sales vs. the CH to give them a little more time to market once the crop is in the bin.

Have a Safe Day!

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

Good Morning,

I am back in the saddle again after a short break from the morning commentary! For those that are regular readers of the Didion Morning Market commentary you may have noticed the commentary has been written by Drake Bliss the past two months. Drake joined us this summer as an intern from Kansas State. Friday was his last day as he headed back to Kansas to prepare for his Senior Year at Kansas State. I would like to thank Drake for his contribution to our team this summer and wish him the best in his final year of school.

Softer markets to open the week with corn down 5 and soybeans down 6. Timely weekend rails over dry areas are adding pressure to prices this morning. The funds sold off more than 60,000 contracts in corn last week leaving them long about 13,000 contracts. The Dow is off to a good start following comments from Commerce Secretary Ross that the US will extend a 90 day exemption for US customers from a ban on doing business with China’s Huawei Technologies. President Trump indicated over the weekend that negotiations were doing very well with China and that they are talking.

The Pro Farmer tour is off and running this week and traders will be keeping an eye on the feedback from this group as they work their way thru OH, IN, IL, IA, NE, SD and MN. Early reports from the first morning are showing what every area in the Midwest has “variability”.

The pendulum has definitely swung and I look for them to take a short position home by the end of this week if weather and the crop tour continue to be bearish.

Have a Safe Day!

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

Good morning,

Grain markets were steady through the overnight of trade as they try for another recovery effort despite the August report still looming in the mind of traders and the bearish outlook in extended weather forecasts. Currently corn is up 5 cents and soybeans are up 8 cents. The weather development for the last half of August continues to look good for crop development. The rains are increasing this morning with some action in KS, NE, and MO. Also, there is a system moving through our area this morning here in WI that should bring a good amount of rain. Chances for rain continue through as late as Sunday for much of the Corn Belt then early next week turns drier before more rains emerge on the forecasts in the 6-10 day time frame. For the 11-15 day period, precipitation is expected to be scattered but mostly below normal and it is expected that temperatures will be above normal through August. President Trump seems to be a little more optimistic about the trade negotiations, however, China continues to snub the U.S. side of the talks. This is leaving the market confused about the situation and ultimately wanting more concrete proof rather than words. Going forward, markets will be looking heavily into the development of the talks hoping for progress to be made. The Pro Farmer crop tour will be making its way through the U.S. growing region next week. It is expected that the market will look to the results of the tour to see what they come up with for yield. The track record for this crop tour is very questionable, but with some uncertainty still in the yield potential for this year’s crop it should grab the attention of the markets nonetheless. Weather and trade talks will be the main focus of trade heading into harvest. My advice for producers would be to actively watch the markets and sell when you see an adequate bump in prices. I think trade will be volatile in the weeks to come and ultimately range bound. Taking advantage of the highs will definitely prove beneficial in marketing any remaining old crop.

Have a great Friday!

Drake Bliss
920-348-6817
dbliss@didionmilling.com