Tight Supplies & COVID Closings-Supply/Demand. The Corn & Ethanol Report 02/17/2023

We kickoff the day with Export Prices and Import Prices MoM & YoY and Fed Barkin Speech at 7:30 A.M., CB Leading Index MoM at 9:00 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.

On the Corn Front USDA Agriculture projections for corn stated that, “Baseline projects US corn production to grow over the next decade as yield gains offset a slight decline in acreage. Planted area is projected to steadily decline after 2023/24. Strong response to increased global demand and tight supplies.” The stocks-to-use ratio is expected to rise somewhat rapidly, from 11.6% 2023/24 to 16.0% in 2026/27. Later in the production period, supply and use to grow at similar rates, slowing growth in stocks-in-stocks ratio the report said. With respect to ethanol, the report noted that, “Corn used for ethanol production declines slightly over the projection period, from 5.325 billion bushels to 5.300 billion bushels by 2032/33. Expected declines in motor gasoline consumption constrains ethanol production. The report also addressing long-term corn exports. The USDA explained that, “US corn exports are expected to increase by 11.4 million to 69.2 million tons by 2032/33. Corn prices are expected to fall steadily from a near-record peak of $680 per bushel in 2022/23 to $579 in 2023/24 and continue a downward trend through 2026/27 before stabilizing at $430 through 2032-33 the report said. In the overnight electronic session the March corn is currently trading at 676 ¾ which is ¾ of a cent higher. The trading range has been 677 ¾ to 675. There were no trades in ethanol futures.

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Dan Flynn

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