March Madness Is Upon Us. The Corn & Ethanol Report 03/17/2023

We kickoff St. Patrick’s Day with Industrial Production MoM & YoY, Manufacturing Production MoM & YoY and Capacity Utilization at 8:15 A.M., Michigan Consumer Sentiment Prel, Michigan 5-Year Inflation Expectations Prel, Michigan Consumer Expectations Prel, Michigan Current Conditions Prel, Michigan Inflation Expectations Prel, 4-Week & 8-Week Bill Auction and XCB Leading Index MoM at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M. and Cattle on Feed at 2:00 P.M.

On the Corn Front as we spoke before, there was a sense exports would pick up as Brazil exports slow as there 2^nd harvest time is now. The Ukraine corridor remains open, and for how long? Vladimir is negotiating and playing games with the UN. Argentina is going through a horrific drought the likes have not been seen in 60 years. Some farmers have said they have never seen it this bad. With all the wildcards and shakes & bakes in the market the USDA announced a large sale of corn to China, for the third day in a row. Yesterday’s purchase was 641k tons (25 million bushels) bringing the weekly old crop purchases to 75 million bushels. The market has firmed up as farmers and traders always thought it was just a matter of time when the US export market picks up. We will see if this rally is sustainable and let’s not forget the March 31^st Grain Stocks and Prospective Plantings.  In the overnight electronic session the May corn is currently trading at 637 which is 4 ¼ cents higher. The trading range has been 638 ¾ to 633.

On the Ethanol Front Senators Amy Klobuchar (D-Minn) and Deb Fischer (R-Neb) introduced on Tuesday legislation that would make higher-ethanol blends available year-round, a top priority among Midwestern lawmakers. The Sale of E15 which is 15% ethanol rather than 10% ethanol, is restricted in the summer months. Last year with gas prices already too high, prices spiraled out of control following Russia’s invasion of the Ukraine, President Biden suspended the restrictions. The Environmental Protection Agency (EPA) announce a proposed rule that would authorize it’s sale year round, but it would not take effect until 2024. Another bureaucratic mess and just another day for the EPA. “Enough is enough- it’s time to remove the burdensome and nonsensical barrier that has blocked consumer access to cheaper, cleaner E15 for too long,” RFA President Geoff Cooper said in a statement. “With the summer driving season right around the corner, we call on Congress to move quickly and adopt the legislation as soon as possible.” It is time to walk the walk and not talk the talk. There were no trades or open interest in ethanol Futures.

Happy St. Patrick’s Day!

 

Have A Great Trading Day!

Dan Flynn

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