Good Morning,

The markets are trading slightly higher as it tries to recover from yesterday’s selloff. We opened firm coming back from the Christmas Holiday yesterday before a lack of willing buyers due to any export data. With a lack of fundamental inputs, the pros will turn to the charts for direction. Fund managers are basically flat the beans, wheat and liquidating some of their long position in corn. The question for today is whether the rally in the grain markets can be sustained?

Farmers and ranchers need to prepare for more losses in their next-biggest Asian market, Japan. Japan, unlike China, isn’t moving to block US goods by retaliating for the White House’s tariffs. Instead, it is taking the opposite approach and accelerating an ambitious market-opening agenda with more than three dozen countries and excluding the US. Beginning on December 30th the Japanese will begin cutting tariffs and easing quotas on products sold by some of America’s biggest agricultural competitors including Canada, Australia, New Zealand and Chile as part of the new 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Have a Safe Day!

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

Good Morning,

Corn and soybeans were each down 3 overnight. I look for light trade and little movement either direction this week as traders enjoy the holiday week. Shortened trading hours this week with the markets closing at 12:05 pm today and closed tomorrow.
The Chinese Ministry of Commerce stated on Sunday that China and the US held a vice-ministerial level call on Friday, the second such call in a week, to have a deep exchange of views on trade imbalances and the protection of intellectual property. No further details were released, but the ministry’s web page stated that the two countries made new progress on the issues and discussed timetables, further calls and mutual visits.
While I don’t see an immediate impact, the current government shutdown could impact the grain markets in the coming weeks. Traders are looking forward to the January 11th Crop Production and S&D report to see what the final yield for the 2018 crop is going to be and if stocks will be adjusted due to lower ethanol demand and lower exports. The shutdown means that traders may have to wait longer for this report as the following are USDA activities that would not be continued:
• NASS statistics, World Ag Supply and Demand Estimates reports, and other ag economic and statistical reports and projections.
• ERS Commodity Outlook Reports, Data Products, research reports, staff analysis and projections. The ERS public website would be taken offline.
Activities that would continue in the short-term:
• Some farm payments including direct payments, market assistance loans, market facilitation payments and disaster assistance programs.
• Trade mitigation purchases made by USDA’s Ag Marketing Service.

Have a Merry Christmas!

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

Good Morning,

Markets are steady this morning with corn up 1 and soybeans up 5. Lack of any news and holiday season have the markets stagnant for the time being.
President Trump announced that a second round of payments would be coming for US farmers for soybeans. The President also told the Fed not to make another mistake and raise interest rates too much.
President Xi Jinping told an audience of party officials, military leaders that “no one is in a position to dictate to the Chinese people what should and should not be done” in a speech. “There is no textbook of golden rules to follow for reform and development in China, a country with over 5000 years of civilization and more than 1.3 billion people”. Who these comments were exactly referencing was not stated, but most believe it was the US.
I would advise producers to start looking to make sales for October/November of 2019 at the current levels. We are currently in the 70th percentile for the last five years with current prices in the $3.70-3.75 range. Any sale that can be made at or above this percentile is strongly recommended. If we increase corn acreage in 2019 by 4-5 million acres next year and drop yield back to 175 bpa we could very easily push next year’s carryout over 2.0 billion bushels.

Have a Safe Day!

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

Good Morning,

Grain markets have opened steady this morning with corn down 1 and soybeans up 3. The watch continues for any additional reports of Chinese business. Most traders appeared to be disappointed with last week’s totals but remain optimistic about future sales. The chance of any big export numbers in the coming months is limited as the deals are still not worked out and South American bean harvest is only a couple months away from hitting the ports. The Trump administration has set March 2nd as the firm deadline for arriving at a deal with China. If nothing is completed by that date additional tariffs of $200 billion will be imposed on Chinese goods.
There are still no firm details on the 2nd part of the MFP payment to farmers to help offset the trade war with China. Some traders are speculating that an announcement will come in conjunction with the signing of the new farm bill as early as next week.
We continue to be stuck in a sideways trading range between $3.80 – 3.88 for March futures. Barring any news on trade talks this range should hold thru the end of the year.

Have a Safe Day!

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

Good Morning,

Buy the rumor, sell the fact reaction in the markets yesterday resulted in the soybeans selling off which pulled corn lower. Chinese soybean sales numbers that were not even close to the 5 to 8 MMT rumors that came from last week’s meeting had traders in a sell mode. In positive news the Chinese did announce that beginning January 1, they would suspend their tariffs on $126 billion of US automobiles and products. This is another confirmation of the Presidents promise that tariffs on US autos would revert back to the 15% level before the trade war began.
I would advise producers to start looking at making sales for October/November of 2019 at the current levels. We are currently in the 70th percentile for the last five years with current prices in the $3.70-3.75 range. Any sale that can be made at or above this percentile is strongly recommended. If we increase corn acreage in 2019 by 4-5 million acres next year and drop yield back to 175 bpa we could very easily push next year’s carryout over 2.0 billion bushels. This is why I would advise producers to have a minimum of 20% of your fall corn sold at this level.

Have a Safe Day!

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