Good Morning,

Markets are mixed with corn up 1 and soybeans down 1 as rumors of Chinese demand for US beans and wheat continue to circulate. The talk of China securing additional grain and soy have been making the rounds all week and there are some indications that China has been active in the cash markets overnight.
China has begun securing soybeans out of Brazil for 2022 as the Chinese see a good value in securing supplies from the Brazilians way out. Brazilian farmers are able to lock in some excellent margins exceeding 50% over their variable costs with the Real struggling. The profitable margins will have them seeding their spring crops fence row to fence row when the planters get rolling next month.

Pro Farmer will release its corn yield estimate later today. The Tour has helped reassure the trade that the US summer row crops will be large when the combines begin rolling next month. However, rains will be necessary to put the finishing touches on this year’s crops.

Have a Safe Day!

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

Good Morning,

Markets are lower again overnight as they monitor the Pro Farmer crop tour results and talks or lack there of with China.

Pro Farmer estimated Nebraska corn at 175.1 bushels per acre, up from 172.5 last year and above the 3 year average of 172.4. Bean pod counts were 1,298 pods vs 1,211 last year and above the 3 year average of 1,213.

Indiana corn yield was 179.8 bushels per acre vs 161.5 last year and above the 3 year average of 171.7. Beans pod counts were 1,281 vs 923 last year and again above the three year average of 1.135.

Pro farmer will move through Illinois and Iowa today. They will catch some of I-80 where much of the damage has been done. In Illinois, their path should be through some of the best corn, missing much of the Northern third of the state that has had very little rain in the last 10 weeks.

President Trump has indicated that the US will not meet with China on a 6 month review of the trade deal. Ag sales are on pace, energy is not. With the slowing economy, it would have been impossible for anyone to need a substantial amount of energy, let a long a major increase. China is not looking to secure ethanol as a blending mix for gasoline, instead targeting crude oil, when circumstances return to more normal.

Have a Safe Day!

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

Good Morning,

Markets are lower today following yesterdays surge in the markets.

Uncertainty over supplies and fund short covering have led to the recent rally following the USDA’s WASDE report. The trade is still debating the damage from Monday’s derecho and the FSA acreage data have left many unknowns regarding the 2020 corn and soy crops. Traders have begun to price in the FSA farm Program participation data that showed 9M acres were enrolled in PP with nearly 5.4M being corn and 1.2M for beans. This was a 5M acres decline from the seeding forecast provided by NASS in March. Of the nearly 9M acres, the decline was led by the Dakotas that saw a 2.6M acres decline followed by a combined 1.3M loss in the southern Midwest and Delta for Louisiana, Mississippi and Arkansas.

I would caution reading into this too much as 2020 has been a less than normal year to say the least. Initial FSA data that comes out in August is often difficult to assess. Given that there was no penalty for farmers who enrolled late this year, comparing this year to any other years data would be difficult at best.

The total acres enrolled in the US farm programs totaled just 226M acres. This was down some 7M acres from last year when the horrendous weather last spring made enrollment a hot topic. But what is most glaring is the 19M drop from 2018’s figures. If PP acres are included this year’s totals enrollment in 2020 is off more than 17M from last year. In my opinion it is too early to make any fast judgement of the NASS data until we get a more information from them in September/October. NASS is not expected to update their numbers on 2020 planted acres until the October report.

With that said we still have the largest corn stocks in 33 years with both ethanol and feed demand overstated. Now there is a gap in the charts in December corn up at $3.42 that is a likely target, but there should be some decent resistance in that area given the enormous carry out possibilities.

Bottom line is that producers should reward the recent rally by making new crop sales! This crop is not getting smaller and prices will fade heading into harvest.

Have a Safe Day!

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

Good Morning,

Markets were higher overnight with corn up 6 and soybeans up 10. Concerns over a dry LH August and ideas that China has more to buy is moving the market today.
The USDA pegged the 2019/20 corn carryout at 2.228 billion bu. The 2020/21 carryout is expected to be 2.756 billion bu. They increased the corn yield to 181.8 bu/ac vs last months 178.5 bu/ac. The USDA estimated new record corn yields in Minnesota, Wisconsin, Michigan and South Dakota.(WI is projected to be 181 bpa. The USDA did acknowledge the yield estimate in the
Midwest may be already obsolete as it prefaced the report with a statement that all estimates
were prior to the storm that crossed the US a couple days ago. The trade is onto speculating how much yield can be trimmed from the IA/IL region as part of the wind damage. Derecho discussions continue with how much crop was lost to the high winds. Iowa’s Ag Dept. said that 10 mln acres of Ag land was “affected” by the winds. Of the 30 mln acres of Ag land in Iowa there are 13.5 mln corn, 9.3 mln soy, and 1 mln hay. Only the corn crop was really affected in any way. Declarations like this usually precede requests for Federal funds. By no means is this much of an estimate of actual damage to the crop. “Pro”Farmer starts its Midwest “virtual” tour August 17th which should shed some light on the damage. The real answer will not be known until the combines hit the field this fall.
The 2019/20 US soybean carryout was estimated at 615 million bu. while the 2020/21 carryout is expected to be 610 million bu. WASDE projected soybean yields to average 53.3 bpa compared to 49.8 last month. Record yields are expected in Nebraska, South Dakota, Missouri, Indiana, Michigan, Illinois and Ohio.
The biggest surprise to me was that they increased feed usage by 75 million bushels to 5925. This 6% year over year growth assumes livestock consumption will exceed its normal per head usage due to a larger crop.

Have a Safe Day!

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

Good Morning,

Report Day!

The USDA will release their S&D estimates at 11 am today with the expectations for larger corn and soybean yields due to favorable weather. Estimates are listed below and will be updated shortly after the report’s release.

USDA Production (Billion Bu)
USDA August Ave. Estimate USDA July
Corn Production 15.278 15.174 15.000
Corn Yield 181.8 180.5 178.5
Soybean Production 4.425 4.254 4.135
Soybean Yield 53.3 51.2 49.8

2019-20 US ending stocks (Billion Bu)
USDA August Ave. Estimate USDA July
Corn 2.228 2.271 2.248
Soybeans.615 .617 .620

2020-21 US ending stocks (Billion Bu)
USDA August Ave. Estimate USDA July
Corn 2.756 2.80 2.648
Soybeans .610 .524 .425

Monday’s Derecho storm potentially impacted some 10 million acres (4 million hectares) of Iowa farmland and millions of bushels of grain storage in the top U.S. corn growing state, Iowa Agriculture Secretary Mike Naig said; early estimates show that tens of millions of bushels worth of commercial grain storage – as well as millions of bushels of on-farm storage bins owned by producers – were either impacted, destroyed or severely damaged by the storm. Unfortunately these “potentially” damaged acres has not affected the markets at all. Maybe we will see some impact long term but for the time being the markets are content with this year’s potential crop.

Have a Safe Day!

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