Good Morning,

Lower to start the week following Friday’s bearish USDA report and trade negotiations that have turned negative. Corn is down 8 and soybeans are down 16 to open the week.
U.S. and global inventories were large in Fridays report for corn and soybeans. 2018/2019 US ending stocks were estimated at 2.095 billion bushel for corn and 995 million bushels for soybeans. 2019/2020 ending stocks were estimated at 2.485 billion bushels for corn and 970 million for soybeans. Both of these numbers are weighing heavily on the market and will for some time in my opinion. I do expect the corn carryout for the 2019/20 year to drop due to lower yield, but it will have to drop significantly from the 176 bpa estimate in order to move the market.
Talks between the US and China went nowhere last week and there appears to be no end in sight as the two parties battle over three issues. President Trump ordered the US trade representatives on Friday to start the process of raising tariffs on all remaining imports from China. The fear of traders this morning is what retaliation will the Chinese take against the US. US Agriculture Secretary Sonny Perdue said on Friday that President Trump has asked him to create a plan to help American farmers cope with the heavy impact of the US-China trade war on agriculture.
The US Midwest weather forecast has some spotty showers across the Midwest this week, but things should be mainly dry across the region into the weekend.

Have a Safe Day!

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

Good Morning,

Futures are steady in corn and soybeans this morning.

The trade continues to maintain its risk-off attitude with the Trump Administration bumped tariffs on $200B in goods from China to 25% and filing paperwork overnight to begin the process of applying a new 25% duty on an additional $325B in products. Additionally we have the monthly WASDE report from the USDA due out at 11 am CST. The pros are all over the place on their estimates for new crop corn and bean production, so volatility could be extremely high as traders digest the information.
China has promised to retaliate to the tariffs, but exactly how remains unknown. The goal is for US representatives to push Vice Premier Liu to agree to the deal crafted over the last several months and to prevent the Chinese from dragging the process out to make it an issue in the 2020 ballot.

The Trump Administration unveiled a new tool in the negotiating process, Vice President Pence, who was in Minnesota as he spoke about the government providing additional aid to US farmers to help offset the impact of the trade war. These payments would ratchet up the pressure on the Chinese delegation to come to an agreement. Just this morning President Trump hinted that he would be willing to use some of the money accrued through the tariffs to purchase US Ag products to provide for humanitarian assistance programs in poor and starving countries. Traders appear willing to wait for more details of the program before getting too excited.

Have a Safe Day!

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

Good Morning,

Corn and Soybeans are off to a rough start this morning trading 9 and 17 lower respectively.
The Chinese trade delegation will begin talks in Washington this morning as all eyes will be watching for any signals from these talks over the next two days. The stress that this meeting is putting on ahead of a full on Asian tariff is nothing we have seen before. It’s a very minor part of the deal that appears to be hanging up the deal as most parts of the deal have already been worked out. One change that the Chinese were looking for had to do with a tax from 2018. The Chinese have asked to be refunded, and the Trump Admin said that was unacceptable.
The USDA crop report will be out at 11am tomorrow. Very few changes are expected to come inn on the balance sheets. Corn carryout will likely remain above 2 billion bushels. They may adjust exports down, while feed and ethanol will probably cancel each other out. Soybean carryout will be close to 900 million bushels and we may see another reduction in exports as China has bought very little in the last 4 weeks. The wheat carryout will be close to 1 billion bushels which is similar to last month.
Weather has not been a factor in the markets so far this spring and until the trade wars are settled, there is very little chance of weather becoming the market mover. Late planted corn and soybeans which result in lower yields is irrelevant if we don’t see an increase in demand!

Congratulations to those who took advantage of yesterday’s $3.40 cash offer! These sales are looking very good this morning.

Have a Safe Day!

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

Good Morning,

The markets were quiet overnight after yesterday’s selloff with corn unchanged and soybeans down 2.
What is being viewed as positive news at the end of yesterday’s trade was comments from the Chinese delegation that said they will travel to the US this week for trade talks despite what Trump tweeted. China’s top trade negotiator Liu He will be in the US for hopefully the final talks ahead of Friday’s threat of increased tariffs. If the trade does not make progress and higher tariffs from the US go into place, future talks will fall apart. President Trump will raise tariffs to 25% Friday and add 325 billion in Chinese goods not currently covered. Virtually all Asian imports will be affected.
Last night’s crop progress report showed corn planting at 23% complete compared to 36% last year and 46% on the five year average. Wisconsin was reported at 7% complete compared to 13% last year and 24% on the five year average.

Have a Safe Day!

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

Good Morning,

Oh how a weekend can change the direction of the markets! When we left on Friday all things pointed to higher markets this week, with forecasts for wet weather in the 10-15 day stretch and talks between the US and China making significant progress and potentially getting done this week. Fast forward 48 hours and the weather forecast has much less rain in the forecast and a simple “Tweet” has the deal with China looking like it may not happen. Yesterday President Trump tweeted that 10% tariffs paid by China on $200 billion in goods will rise to 25% on Friday because progress is continuing “Too Slowly”. Chinese delegation was scheduled to resume talks in Washington on Wednesday, but the latest news has some questioning if this will actually take place.
Corn is currently down 8 and soybeans are down 18. Look for traders to keep a microscope on the news out of Washington as the negotiations have now taken precedence over the weather.
As I stated in my comments on Friday, weather markets are very short lived and can change in a heartbeat. The same is true in politics as we all well know. Make sure you are actively selling any small rally in the markets.

Have a Safe Day!

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