Good Morning,

We are seeing a slight rebound in the markets this am with corn up 1 and soybeans up 6. Profit taking is the only reason for the market uptick this am as reports of good yields and more tariff news.

China announced another round of retaliatory tariffs of 5-10% on US goods and products in response to the US tariffs yesterday. Trade meetings were to be held next week, but will now likely be canceled. The executive from one of China’s biggest soybean crushers sat on a panel at a Kansas City agricultural
exports conference, listening to an expert beside him explain why China would remain dependent on U.S. soybeans to feed its massive hog herds; when his turn to speak came, Mu Yan Kui told the international audience of soy traders that everything they just heard was wrong; then Mu ticked off a six-part strategy to slash Chinese consumption and tap alternate supplies with little financial pain. Just one prong of the strategy Mu detailed – to slash soymeal content in pig feed – could obliterate Chinese demand for U.S. soybeans if broadly adopted; cutting the soy ration for hogs from the typical 20 percent to 12 percent would equate to a demand reduction of up to 27 million tons of soybeans per year. An amount equal to 82 percent of Chinese soy imports from the United States last year.

Informa projected that U.S. corn plantings would rise to 93.044 million acres in 2019 compared to the U.S. Department of Agriculture’s 2018 figure of 89.1 million acres. Informa projected a drop in U.S. 2019
soybean plantings to 82.27 million acres, down from the 2018 figure of 89.6 million acres.

Have a Safe Day!

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

Good Morning,

The markets are trading mixed to start the week as traders prepare for a new round of tariffs from President Trump on China. This also weighing on the outside markets with China saying it’s ready to respond.
November soybeans are lower as well with futures back near last week’s lows as traders worry that this latest round of trade war rhetoric from the White House could lead to China walking away from plans for sitting back down at the negotiating table.
In an interesting turn of events, the President Trump did offer to cut the effective tariff rate to 10% from 25%. Regardless, the market will be concerned with the timing for the activation of the new set of tariffs. Should they be delayed for a month, this would leave open the possibility that some sort of deal could be worked out by trade negotiators for both sides in a fresh round of talks set for the end of the month.

Have a Safe Day!

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

Good Morning,

Corn and soybeans are currently trading even this morning. World trade watches, as no major events have happened in trade negotiations to make stability for supply and demand. Beyond that-the U.S. is having a great start to harvest with this dry stretch in the lower Corn Belt. This is another event that producer are likely going to cross off the list that could have been a catalyst for a market rally.

Producers that have been holding out to market the last of their old crop corn and make sales for fall delivery timeframes have run out of time. This week’s report gave us additional bearish news that will not be updated until November. Cash levels and basis levels have both dropped in the last couple months as we moved closer and closer to harvest. Look for basis levels across the country to widen as space becomes an issue with carryout from last year and the size of this year’s corn and bean crop. Producers should be actively locking in Basis levels for any grain they need to move.

Have a Great Weekend!

Mitch Giebel
920-348-6861
mgiebel@didionmilling.com

Good Morning

Yesterday’s WASDE report was a shocker to say the least. Expectations for corn yield were in the 177.4 bpa range compared to 178.4 in August. But favorable weather and record ears and ear weights drove the forecast to 181.3 bpa. This would eclipse the 2017 record yield of 176.6 by 4.7 bpa. Ending stocks were increased by 90 million bu. to 1.774 billion bu.
Soybean yields were increased 1.2 bpa from last month to 52.8 bpa. Carryout of soybeans now stands at 845 million bu. leaving the soybean stocks to use ratio just under 20%. (Producers that attended last Fridays meeting may recall what that means for cash prices). Despite the higher yield projections, soybeans managed to trade higher yesterday on rumors that the US is going to propose new Chinese trade talks. (Buy the rumor – sell the fact?)

Ethanol production for the week ending 9/7 averaged 1.02 mil barrels a day which is down 6% from a week ago and 3% from last year. Stocks totaled 22.9 mil barrels which is up 1% from last week and 8% from last year.
Weekly export sales were strong for both corn and beans. Corn came in at 30.5 mln bu. while soybeans were reported to be 25.5 mln bu. Both more than double their 10 week average.

Producers that have been holding out to market the last of their old crop corn and make sales for fall delivery timeframes have run out of time. Yesterday’s report gave us additional bearish news that will not be updated until November. Cash levels and basis levels have both dropped in the last couple months as we moved closer and closer to harvest. Look for basis levels across the country to widen as space becomes an issue with carryout from last year and the size of this years corn and bean crop. Producers should be actively locking in Basis levels for any grain they need to move.

Here are yesterday’s numbers:

USDA 2018/19 US Production (billion bu)
USDA Sept 12 Average Estimate USDA August
Corn Yield 181.3 177.8 178.4
Corn Production 14.827 14.529 14.586
Soybean Yield 52.8 52.2 51.6
Soybean Production 4.693 4.649 4.586

USDA 2018/19 Ending Stocks (billion bu)
USDA Sept 12 Average Estimate USDA August
Wheat .935 .941 .935
Corn 1.774 1.639 1.684
Soybeans .845 .830 .785

Have a Safe Day!

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

Good Morning,

Softer markets prior to the release of today’s USDA Crop Production and S&D report. Corn is currently down 1 and soybeans are down 4. The report will be released at 11am today. Estimates listed below and will be updated with today’s numbers after they are released. The primary focus of today’s report appears to be on yield with many believing the 178 bpa mark is critical to the balance sheet. The range of estimates is 175-180 bpa.
The soybean market has continued to drift lower and is currently trading at new contract lows for SX at $8.24. The USDA average yield guess for today is 52.2 bpa, above last month’s yield of 51.6 bpa. The range of estimates is 50.9 to 53.8.
Yesterday’s crop conditions report showed US corn conditions increase 1% to 68% G/E. They put harvest at 5% completed, 86% dented and 35% mature. Wisconsin was 70% dented compared to 55% on average and 21% mature compared to 10% on average.
The US/China trade war doesn’t seem to be close to resolution. The US threatens more tariffs, China is not accepting license applications from US companies, confirming fears that US company operations in China and access to its markets may be disrupted. China revised its 2018/19 soybean imports forecast to 83.65 mmt, down 10.2 mmt from last month’s forecast.

USDA 2018/19 US Production (billion bu)
USDA Sept 12 Average Estimate USDA August
Corn Yield 181.3 177.8 178.4
Corn Production 14.827 14.529 14.586
Soybean Yield 52.8 52.2 51.6
Soybean Production 4.693 4.649 4.586

USDA 2018/19 Ending Stocks (billion bu)
USDA Sept 12 Average Estimate USDA August
Wheat .935 .941 .935
Corn 1.774 1.639 1.684
Soybeans .845 .830 .785

Have a Safe Day!

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