Good Morning,

On Friday private analyst Informa released its crop estimate for the US which came in at 176 bpa and a 14.392 billion bu. production for corn. This is 2 bu. less than FC Stone released on Wednesday, but 2 bu higher than the USDA has been using.

There was no new news in regards to the US and China negotiations over the weekend. Canada’s Foreign Minister did say he is keen on concluding NAFTA negotiations and is ready to talk at any time. The US and Mexico are expected to meet again this week to work on a resolution as well.
Tariffs are not the only issue that could be affecting soybean trade in the near future. China is likely to cut imports of soybeans by more than 10 million tons this year thanks to new soymeal technology and the use of supplements such as sunflower seeds and palm seeds. The use of low protein formula in animal feed could cut China’s annual demand for soymeal by 7% or 5 million tons of soybeans.

The market has been in a short term uptrend over the last couple weeks and we could see additional buying as traders position themselves ahead of Fridays report. The USDA will release its Supply and Demand and Crop Production report on Friday at 11am. This report will show their results of a state by state survey for yield and production on corn and soybeans.

Have a Safe Day!

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

Good Morning,

The US Midwest weather forecast had no major changes as close to average rains and no prolonged heat looks to continue. A front looks to bring rainfall to most areas of the Midwest thru the first half of next week. The 11-16 day forecast has mostly average to above average temps with average precip for the Midwest.
Informa will release its production/yield estimates this afternoon. Expectations are for their numbers to mirror FC Stones estimates which were released on Wednesday. Right now it appears the markets are trading a 176-178 bpa yield in corn and a 49-51 bpa in soybeans. Look for traders to start gearing up for next Fridays report early next week. The funds are currently short 133k corn and 65k soybean contracts.
Demand for corn has continued to be strong and if prices remain low, the export demand could bring carryout below 2 billion bushels even with a yield of 178. (view chart below).

18/19 USDA June est Projection #1 Projection #2 Projection #2
Planted Acres 89.1 89.1 89.1 89.1
Harvested Acres 81.8 81.8 81.8 81.8
Yield 174 178 183 185
Carry in 2027 2163 2163 2163
Production 14230 14569 14969 15133
Available 16307 16782 17182 17347
Feed Use 5425 5375 5375 5375
Industrial Use 7105 7105 7105 7105
Ethanol Use 5625 5625 5625 5625
Exports 2225 2400 2400 2400
Total Use 14755 14880 14880 14880
Carryout 1552 1902 2302 2467

In my opinion only a yield of 174 or less will move this market higher. The export estimates above in projection 1,2 and 3 are assuming that trade negotiations between the US and our partners gets worked out. China is preparing to retaliate in the escalating trade war on tariffs on about $60 billion worth of US goods. The import tax could range in rates of 5 to 25 percent. The implementation date of the taxation will be subject to the actions of the US. This statement came in response to yesterday’s news that President Trump would like to increase tariffs up to 25 percent.

Have a Safe Day!

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

August 2, 2018

Good Morning,

Markets currently trading three higher on corn, and five lower on soybeans. Yesterday’s loss of seven cents was attributed to a couple different factors, including: much favorable forecast change, and rumors of larger tariffs on imports from China.

FC Stone released yield estimates of 178.1 bushel for corn and 51.5 bushel for Soybeans. Reports are coming in across the Midwest of elevators and farms a like with large quantities of old crop corn to move before fall. This is concerning for farmers with an expected large harvest soon approaching and higher demand for truck drivers taking away from grain hauling. USDA had ethanol yield at 2.88 gl/bu in May, below last year, and another reason demand has gone up.

Below are firm offer levels to consider:

Old Crop – Call for options
Fall Delivery – $3.65-3.75
Spring 2019 Delivery – $3.80-3.90
Summer 2019 Delivery – $3.90-4.00

Have a Great Day!

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

August 1, 2018

Good Morning,

Markets currently trading two lower on corn and fourteen lower on soybeans. Lower market is led by a much more unstable forecast, versus yesterday’s outlook, as well as profit taking at the beginning of the month.

With the first day of August upon us, we need to realize what seems to be a great crop overall. Most areas to the south are well developed, and our area is pretty far along on development. August updated yield report is just around the corner, and likely not going to lower corn yield from 174. With these pieces of news, below are some targets to consider if we do see some hot/dry weather premium:

Old Crop – Call for options
Fall Delivery – $3.65-3.75
Spring 2019 Delivery – $3.80-3.90
Summer 2019 Delivery – $3.90-4.00

Have a Great Day!

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

Good Morning,

Significantly stronger markets this morning with corn up 5 and soybeans up 20 to start the day. Reports from Bloomberg that the US and China are going to resume trade talks has traders optimistic that demand will resurface sooner rather than later for beans. Some added heat in the forecast could add to worries in parts of IA and MO, but may be welcome for the rest of the Midwest as heat could add to the test weight.
Last nights crop conditions report showed corn unchanged at 72% G/E, but I view this number as misleading. Corn conditions dropped in every state except MN, SD, CO, TX, PA and NC. Of those, only MN and SD produce any volume of corn. The worst state continues to be MO which came in at 33% G/E. WI dropped 2% to 81% G/E. Soybeans were similar with the US ratings unchanged at 70% G/E. The only states to increase were SD, IA, MS, NC. MO is also the lowest here at 40% G/E.
Corn has traded higher 11 of the last 12 days with today’s rally. The funds bought 6000 sb and 7000 corn contract yesterday. They are estimated to be short 133k corn and 63k soybeans. With today being month end I would expect to see more buying as traders cover their shorts. Do not be surprised if we see some retracement tomorrow with the beginning of the month.

Producers should be putting in firm offers for new crop (fall/spring and next summer delivery). I would target the following levels for sales:

Fall Delivery – $3.65-3.75
Spring 2019 Delivery – $3.80-3.90
Summer 2019 Delivery – $3.90-4.00

Have a Safe Day!

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