Buyers Beware. The Corn & Ethanol Report 03/28/2023

We start the day with Goods Trade Balance Adv, Retail Inventories Ex Autos MoM Adv, and Wholesale Inventories MoM Adv at 7:30 A.M., Redbook YoY at 7:55 A.M., S&P/Case-Shiller home Price MoM & YoY, House Price Index MoM & YoY, and House Price Index at 8:00 A.M., CB consumer Confidence, Fed Barr Testimony, Richmond Fed Manufacturing Index, Richmond Fed manufacturing Shipments index, and Richmond Fed Services Index at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Services revenues Index at 9:30 A.M., 5-Year Note Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.

On the Corn Front prices surged to their highest level in 1 month, however, could not punch through resistance of the 50-Day Moving Average at 656 ½ while the 100-Day Moving Average is 660. The USDA reported a private export sale yesterday of 112,000 MT of old crop corn to unknown destinations. Weekly Export Inspections data showed 666,325 MT of corn was exported during the week ended March 23^rd. This was down from 1.19 MMT last week and was only 41% of the same week last year. Mexico was the top importers for the week. The USDA had the season’s total shipment at 18,194 MMT, compared to 20.045 MMT last year. The US export market is picking up for old crop but new crop is minimal. As we move ahead in planting season with concerns of tar spots or the official name of Phyllacora maydis may concern buyers for new crop US corn. This is a reality of global shortages concerns. The key for the moment is Fridays Prospective Plantings and traders wondering what acreage that could suffer from the tar spot disease, this could be a telling sign for US exports in the future. An old friend of mine and awesome grain trader reminded me, “it is not what you plant but what you grow.” Weather with rains leaving wet leaves on corn and moderate temperatures will have this fungi playing a part in what farmers, importers, and traders think. If we have ideal growing conditions it should be a non-factor, but weather in South America and the US will be a gamechanger in the near future. In the overnight electronic session the May corn is currently trading at 648 which is a ¼ of a cent lower. The trading range has been 648 ¼ to 644 ½.

On the Ethanol front the US Department of Commerce’s International Trade Administration has announced its Renewable Energy and Energy Efficiency Advisory Committee will hold a hybrid meeting on April 4^th in Washington, D.C. The REEEAC provides the Department of Commerce with advise from the PRIVATE SECTOR on the development and administration of programs and policies to expand the export competitiveness of U.S. renewable energy and energy efficiency products and services They have a lot of work ahead of themselves to find renewable energies that focuses on technologies, equipment, and services to generate electricity, produce heat, and power vehicles from renewable sources, such as solar, wind, biomass, hydropower, geothermal and hydrogen. If this is going to work the private sector as always will make it work. However, don’t give up on internal combustion engines yet. 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