July 23, 2018
Good Morning,
Favorable rains locally over the weekend have the crops looking very good in our area as we work thru the crucial pollination and development stage. The extended 6-10 day and 8-14 day forecast looks drier with temps above normal for the Corn Belt. The driest areas could be the Dakotas, MN, WI and northern IL.
Friday’s cattle on feed report showed 11.3 million head in large feedlots, the largest number since records started in 1996. This is 4% more than a year ago. June placements came in at 101.3% of last year while marketing’s came in 100.9% of last year.
The markets are slightly higher this morning with corn up 1 and soybeans up 3. Will the funds start buying in an attempt to extend last week’s rally in the markets? Demand remains strong, but political pressure will keep the markets in check for some time. This afternoon’s crop conditions report should show a slight decline in crop conditions, but traders will likely wait for the USDA’s August production forecast before confirming a bottom is in place.
Producers looking to move old crop and clean out their bins before the 2018 crop starts to come off should give us a call to discuss special options that we have for you.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
July 20, 2018
Good Morning,
Nice rains falling across the state overnight and this morning that will maintain or increase the size of this years crop. Most of our producers have said that their corn has tasseled or will be in the next week. This rain along with favorable temperatures will ease any concerns that may have existed. Current weather and forecasts for the majority of the Midwest growing areas appears to be the same with Northern Missouri and a small area in Southern Iowa being the only major areas with moisture concern.(see map below)
President Trump continues to “poke the bear” as he said he is willing to impose $505 billion worth of tariffs on China if they continue to retaliate to his requests. This tariff would represent the total value of American imports from China. US trade officials have said that their main trade focus is getting NAFTA 2.0 completed by the end of the year.
While trade talks and tariffs with China are the main headline, there are several other countries with tariffs and trade issues with the US. Yesterday’s export sales report did show a cancellation of EU corn sales which is believed to be related to the 25% tariff on US imports. No one knows if or when these issues will get resolved. Regardless of the timeline, we should not expect an immediate rebound in the markets when things get worked out. Producers need to find a way to cover their operating costs with the current price structure.
Have a Safe Weekend!
Garry Gard
920-348-6844
July 19, 2018
Good Morning,
The markets have moved sideways the last 3 days with trade war news and weather both uneventful this week. While there are no formal meetings scheduled between the US and China to discuss trade issues, the US and Mexican officials have agreed to expedite negotiations in order to reach a preliminary deal by late August.
Old crop weekly exports were better than last week in corn and soybeans but both were below their ten week average. New crop exports were strong with corn at 30.5 million bu. and soybeans at 22.5 million bu.
The US Midwest weather has rain and temperatures running slightly below average into the weekend which will aid in pollination and filling of kernels. The 11-16 day forecast has average temperatures and close to average rainfall for the Midwest.
I look for the markets to continue their sideways pattern as traders wait on any news from the political front and continue to monitor what effects the recent heat wave may have had on the crop size.
Producers looking to move old crop and clean out their bins before the 2018 crop starts to come off should give us a call to discuss some special options that we have for you.
Have a Safe Day!
Garry Gard
920-348-6844
July 17, 2018
Good Morning,
Slightly higher markets overnight as we saw some short covering in corn and soybeans from yesterday spill over into the night session. Slightly lower crop ratings may move the market a little higher when we open this morning, but the ratings are still historically high so any long term moves are doubtful.
Corn came in at 72% G/E for the US compared to 64% last year and a 5 year average of 70%. Wisconsin came in at 82% G/E compared to 75% for the five year average. Soybeans came in at 69% G/E for the US compared to 61% last year and a five year average of 67%.
The US has filed claims with the WTO against China, the EU, Canada, Mexico and Turkey after those countries filed complaints about the Presidents steel and aluminum tariffs. There is some talk that US and China may be talking about trade issues. New $200 billion dollar tariff is due in early September. There may be dialog to resolve issues before then compared to talks last week that China would not meet until after the midterm elections. Some also feel that US soybean export prices are 23% below Brazil and have almost priced in the current 25% tariffs. Unfortunately this is not something that is going to move prices higher for US producers.
Producers looking to move old crop and clean out their bins before the 2018 crop starts to come off should give us a call to discuss some special options that we have for you.
Have a Safe Day!
Garry Gard
920-348-6844
July 16, 2018
Good Morning,
Last week saw fund selling pound the markets lower with both speculators and index funds as big sellers. Hedge funds were sellers for the 7th consecutive week. Their position has gone from 216,000 contracts long to 73,000 contracts short. In that span we saw corn go from $4 to $3.40. Thursdays USDA report did little to move the markets despite giving us bullish news with lower stocks in the 2017-18 and 2018-19 crops.
Fundamentally the corn markets remain undervalued by at least 30 cents in my opinion. But rainfall amounts from 1-3 inches fell in areas of Kansas, Illinois, Eastern Iowa and Southern Wisconsin. Showers and moderate temperatures are expected in much of the Midwest during the next two weeks which will be ideal for pollination.
With no major reports to be released until the August 10th S&D report I would expect weather to be the main market mover for the next couple weeks. The next USDA report historically comes with yield adjustments as they will give state by state forecasts.
Producers looking to move old crop and clean out their bins before the 2018 crop starts to come off should give us a call to discuss some special options that we have for you.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
