Confirmation Recession Is Here. The Corn & Ethanol Report 07/28/2022

We start off the day with MBA Purchase Index (22/Jul), MBA Mortgage Applications (22/Jul), and MBA 30-Year Mortgage Rate at 6:00 A.M., Durable Goods Orders MoM (Jun) Durable Goods Orders Ex transportation (Jun), Goods Trade Balance Adv (Jun), Retail Inventories Ex Autos Mom Adv (Jun), Wholesale Inventories MoM Adv (Jun), Hon-Defense Goods Orders Ex Air (Jun) and Durable Goods ex Defense MoM (Jun) at 7:30 A.M., Pending Home Sales MoM & YoY at 9:00 A.M. EIA Energy Stocks at 9:30 A.M., 2-Year FRN Auction at 10:30 A.M., Fed Interest Rate Decision at 1:00 P.M., Fed Press Conference at 1:30 P.M. and Dairy Products Sales at 2:00 P.M.

On the Corn Front the market closed higher with a the bullish fundamental news we have been speaking about. There is definitely a scary export market to the world and war and weather are not helping. As we are in pollination season weather will continue to factor and play a critical factor and could be a game changer. The Global Forecast System (GFS) is calling for drier and warmer weather between August 2^nd to the 9^th. The model shows that a high pressure ridge is merging with the west heat ridge and could move into the eastern Corn Belt. Some say the forecast is exaggerated, but this is no time to fool with Mother Nature. Whispers that funds may start buying again, unless they quietly re-entered the Market. Exports have not been strong with many variables coming into play, like a slumping supply chain due to energy and transportation issues as this economy seems to rollover versus two years ago. In the overnight the September corn is currently trading at 603 which is 6 cents higher. The trading range has been 603 ½ to 591 ¾.

On the Ethanol Front Archer Daniels Midland Co. reported ethanol-related business segments gained ground from good gasoline demand, strong ethanol blending economics and $50 million in COVID-19 relief funds during the second quarter. With the Fed Decision today and GDP tomorrow, can this market continue at the current pace? We will watch the energy and corn prices to get an education. Last night’s American Petroleum Institute showed draws in crude oil of 4.04M barrels and with further release of the Strategic Petroleum Reserve (SPR’s) you can add to that draw. Gasoline had draws of-1.06M barrels, distillates were negative -550K barrels while Cushing showed builds of +1.09M barrels. There were no trades or open interest in ethanol futures.

Have A Great Trading Day!

Dan Flynn

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