Good morning,

The grain markets have opened quieter this morning with corn unchanged, soybeans unchanged and wheat down 4.

The U.S. banking system is stabilizing after strong actions from regulators, but further steps to protect bank depositors may be warranted if smaller institutions suffer deposit runs that threaten more contagion, U.S. Treasury Secretary Janet Yellen plans to tell bankers on Tuesday. Surprisingly, the financial markets appeared to have little effect on the grain markets over the past week. Prices were in the process of forming bottoms as the funds had liquidated most of their long corn and soybean oil positions.

Russian President Vladimir Putin and Chinese leader Xi Jinping discussed Beijing’s proposal for a ceasefire in Ukraine during a first day of talks in Moscow and they were meeting again on Tuesday, the Kremlin said.  No progress has been made as Russia stands firm in their position.

Russia laid out its reasoning for only agreeing to a 60-day extension of the Black Sea grain export deal, looking for the restoration of access to the SWIFT financial system for the country’s agriculture bank, along with the resumption of farm machinery supplies and the unblocking of foreign ag assets. Putin also suggested free grain shipments to African countries, noting that Ukraine exports were prioritizing European destinations. Russia also claims that “no official notifications” were received from the other parties to the deal saying they were against the 60-day term, and Putin followed that up by warning that Russia could drop the grain deal when the 60 days ended.

The USDA reported a two-point increase in Kansas winter wheat ratings this week, from 17% to 19% good/excellent, with number two acreage state Texas up from 17% to 23%, while OK fell from 30% to 29% g/ex, and CO fell from 40% to 36% this week. TX corn was 40% planted, up from the 35% 5YA.

Corn seeding is almost complete in LA.  Seeding in MS is 7% complete with AR at 1%.  Progress will be slow as heavy rains have fallen in the South.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

The markets are taking a beating again today with corn down 10, soybeans down 12 and wheat down 18.

The USDA cut the Argentina crop by a record 8 mmt of beans and 7 mmt of corn in yesterday’s report.  The USDA also lowered corn exports by 75 million bushels while raising bean exports by 25 million bushels.  They also reduced crush by 10 million bushels resulting in a carryout of 210 million bushels.  The wheat balance sheet was left alone.

Following the report, the market quickly faded in all commodities.  Corn headed back to the recent low and wheat made a new one.  Elevators and crushers are oversupplied with soybeans as Brazil continues to ship new crop. Short-term supplies will flood the market, but now the long-term outlook is in jeopardy as Argentina will not be able to export many beans or oil to China.

Brazil’s Conab raised their 2022/23 corn production estimate from 123.7 to 124.7 million tonnes this morning, with first crop output up from 26.46 to 26.76 MMT, and second crop output up from 95.0 to 95.6 MMT. Soybean production was cut from 152.9 to 151.4 MMT this month.

The Rosario Exchange yesterday cut their 2022/23 Argentine soybean export estimate from 34.5 to 27.0 MMT, the worst on record since the turn of the century when the Exchange began keeping records. Corn output was slashed from 42.5 to 35.0 MMT.

Right now the market is discounting the losses in Argentina as US supplies and Brazil’s crop size outweigh the losses. I don’t think we continue to trend lower, but unless we have a spring planting delay, we could easily see another 25-50 cent drop in the market.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Markets are slightly higher to start the day with corn up 2 and soybeans up 3.

The USDA is releasing their crop report this morning.  Many in the industry expect a drop in corn exports of 25-50 million bushels and a rise in soy exports with wheat unchanged.  The crop size in Argentina will be the market mover today as drought during February has yield prospects dramatically reduced.  The USDA has Argentina beans in February at 41 mmt with the trade estimating that the crop size will be reduced to 36.5 mmt.  The corn crop in February was 47 mmt and trade is looking for a cut down to 43.5 mmt.  Some private sources say the crop is closer to 27-30 mmt in beans and 35-39 mmt in corn.

The forecast models call for a lengthy period of hot/dry weather across Argentina as a high-pressure ridge has set up.  Very little rain is offered, and only light showers are forecast in the south of Argentina.  Scatter showers were seen in North Central Brazil overnight with totals of .2-1.25 inches.  Temps will be normal for Brazil and above normal for Argentina over the next week.

The USDA is going to reduce crops today in Argentina and it’s just a matter of how much. They may not move on a reduction of corn exports yet as business can certainly move to the US in the coming months. Overall, I look for little response to todays report as the biggest report/news will come in a couple weeks when the USDA releases is March 31^st Grain Stocks and planting intentions report.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Corn and wheat are weaker to start the week while soybeans show the strength. Currently corn is down 3, wheat is down 10 and soybeans are up 14.

Several Argentine agricultural companies on Friday said they had slashed their forecasts for this season’s soybean and corn harvests due to a historic drought and mid-summer frosts, which they warned could cost the country more than $20 billion.

Argentina, the world’s top exporter of soybean oil and soymeal and the third-biggest corn exporter, has been hit by a severe drought described by the Rosario grains exchange in Santa Fe province as the worst in 60 years. On Thursday, the Buenos Aires grains exchange said it would in the coming weeks further cut its current soybean harvest forecast of 33.5 million tonnes, without saying by how much. The latest estimates mean Argentina would produce 38% less soy and 30% less corn than initially forecast. CREA said the forecasts could be revised further downwards in coming weeks.

Brazil’s biosecurity agency approved the use of a genetically modified wheat variety on Friday, making the country the second in the world (after Argentina) to grant permission for GMO wheat. Also, the country’s Ag Ministry on Friday said that an additional 90 local firms have been cleared to export corn to China in the first two months of the year, bringing the total to almost 450.

AgRural also said Brazil’s second corn planting, which represents about 75% of the country’s overall corn output in a given year and is cultivated in the same areas as soybeans, had “good progress” in the week.

According to the consultancy, 70% of the expected second corn area has been planted in the center-south region, up from 55% a week earlier but still below the 80% of a year ago as sowing in Mato Grosso do Sul remains delayed.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com

Good morning,

Weak follow thru in the markets this morning with corn down 6, soybeans down 4 and wheat down 20.

Today marks the one-year anniversary of the Russian war with Ukraine.  One year ago today, Russian tanks rolled into Ukraine and escalated a conflict in the region that had been ongoing for years.  On this somber anniversary, the US has announced new military support for Ukraine and sanctions against Russia.  Ukrainian President Zelenskyy praised his “invincible” country and vowed to continue the fight.
It is important to note on this anniversary that world wheat prices today are well below the levels they were at when the war started a year ago.  This is shocking considering the conflict is between two of the world’s most important wheat exporters.  Wheat prices shot up following the start of the conflict, but its been a long and eventful year and the war has not created the global shortage of wheat that many feared.  In fact, Russia is expected to export a record amount of wheat this year.  In addition, the Ukraine grain export corridor was reopened in July, and Black Sea wheat exports this crop year is expected to be at or above record numbers.  All of this is amazing considering what most feared would happen because of the fighting that began one year ago today.
This morning, soybean prices are lower as the market considers a smaller Argentine bean crop.  Yesterday, the Buenos Aries Grain Exchange reduced their estimate of the crop to 33.5 MMTs.  This is down considerably from their initial call for 48 MMTs.   The BAGE dropped its crop rating to a record low 3 percent.  Argentina is the world’s largest soymeal exporter and will be forced to import beans from Brazil this year.
Yesterdays Ag Outlook Forum painted the “perfect” picture for what we could see this coming year. Keep in mind that the acres are estimated guesses and not based on surveys and that the yield is trendline. 181.5 may be a reach, but with today’s technology and good weather they are attainable. Acres are probably in line based on economics and the acres we had last year.

The markets have been stuck in a neutral pattern for the last few months, but have definitely turned bearish the last two days. We have thrown all kinds of bullish news at the markets and it has failed to move higher. Despite a lower Argentina crop projection, War in Ukraine, political battles, this market ultimately comes down to supply and demand. Unfortunately for the US, the demand side of the equation is getting worse vs. better. Within the next few months the focus will shift solely to new crop stocks and the early indications for that are significantly higher than they were in 2022. Yesterdays Ag Outlook Forum numbers may be the high point of the season, but we will have to take a lot off of them to concern the market.

Have a Safe Day!

Garry Gard

920-348-6844

ggard@didioninc.com