World Economy Braces For Stagflation. The Corn & Ethanol Report 06/06/2022

We kickoff the day with Export Inspections at 10:00 A.M., 3-Month and 6-Month Bill Auction at 10:30 A.M. and Crop Progress at 3:00 P.M.

On the Corn Front Argentina faces $1.85 billion in extra freight costs to export corn and soybeans. Canada’s decline nearly 37% week-on-week to 387,200 mt and lack of rain or excess precipitation in Canada’s crop producing provinces Alberta, Saskatchewan and Manitoba. Managed money cuts net-long corn to 31 week low. With the Ukraine and Black Sea exports in doubt I just see a huge void that needs to be filled and the US is just starting an active hurricane season in the Atlantic. We also have other Acts of God with La Nina forecasts. In the overnight electronic session the July corn is currently trading at 735 ¾ which is 8 ¾ cents higher. The trading range has been 741 to 731 ½.

On the Ethanol Front the corn lobby wins big as the EPA finalizes record ethanol blending requirements. Joe Kakesh, general counsel for renewable fuels industry group Growth Energy welcomed the finalize 2022 requirements and put it in the context of greenhouse gas emissions and record fuel prices. Kakesh told the Washington Examiner that “biofuels continue to play a critical role in mitigating climate change and most importantly , today in lowering prices at the pump for drivers across America.” There was zero activity in the ethanol futures with the July contract settlement price at 2.160.

On the Crude Oil Front this market is chugging along like a yo-yo already with 280 point range with products lower. In the overnight electronic session the July crude oil is currently trading at 11903 which is 16 points higher. The trading range has been 12099 to 11819.

On the Natural Gas Front Germany is planning to wean itself off Russia gas. Forecast for heat and stumbling Production has lifted natural gas futures early. Also, the tropical storm is out in the Atlantic with no current threat to the US shoreline. In the overnight electronic session the July natural gas is currently trading at 9.141 which is 0.618 higher. The trading range has been 9.184 to 9.155.

Have A Great Trading Day!

Dan Flynn

Questions? Ask Dan Flynn today at 312-264-4374