Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
We kickoff the day with Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY, House Price Index MoM & YoY, House Price Index, CB Consumer Confidence, New Home Sales, New Home Sales MoM, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Index at 9:00 A.M., NY Fed Treasury Purchases 4.5 to 7 years, Dallas Fed Services Index and Dallas Fed Services Revenues Index at 9:30 A.M., 2-Year Note Auction at 12:00 P.M., Cold Storage at 2:00 P.M., API Energy Stocks, Building Permits Final, and Building Permits MoM Final at3:30 P.M.
On the Corn Front yesterday the USDA announced the cancellation of 327 tons of corn to China. This has me wondering if their good economic numbers last week were just a mirage or are they going to have another COVID shutdown, the last sense I have they are playing Russian Roulette with prices between Brazil and the US. The question is with time a factor will they be able to import later at cheaper prices. This will be the cat and mouse game with the Chinese known as shrewd buyers. Abnormally cold temps will be ongoing the next 10 days across the Northern Plains and Midwest. Freezing and near freezing lows are expected in the next couple of days like last night. The lack of soaking rain forecast across the Corn Belt is favorable, but progress/germination stay sluggish nearby. Snow cover remains in place in North Dakota and Minnesota. Brazilian corn futures and FOB basis levels collapse in the last week, (*Again This could also have triggered the China cancellations*) May and July futures dropped to 537-543 a bushel. A record crop is probable, but the cash market there will not be fully replenished until the second half of summer. Yet, it’s clear Brazilian corn prices have been the world market’s downside leader. Brazilian production will exceed 125-126 MMT’s vs. the USDA’s projected 125, amid late planting in the center-south and as the wet season looks to be ending. In the overnight electronic session the July corn is currently trading at 606 ½ which is 1 cent lower. The trading range has been 610 ½ to 606 ¼.
On the Ethanol Front the EPA generated 1.91 billion Renewable Identification Numbers (RIN) in March up from 1.82 billion last year under the Renewable Fuel Standard (RFS). As the EPA takes their bows let’s not forget their shotty history whether it be the Gold King Mine Animas River toxic spill that poisoned many other rivers connected to the Animas as we have to remember these people were appointed and not voted in by choice for their jobs. And once again the political football this administration plays in the energy industry and farm industry where they are forcing their narrative down the US taxpayers throat. With the tax and spend administration they are fighting common sense to repeal of the sustainable aviation fuel (SAF), clean fuels, clean hydrogen and renewable diesel/biodiesel, along with the scaling back of 45Q tax credit for carbon capture and storage (CCS). With the US economy in shambles with layoffs and bankruptcies the administration wants to force and push when the infrastructure and technology is not quite there. And the US taxpayer, energy sector and farm sector are getting more than pinched, they are getting robbed for the administrations narrative and the government continues to write checks it cannot cash. There were no trades or open interest in ethanol futures.
Have An Excellent Trading Day!
Dan FlynnQuestions? Ask Dan Flynn today at 312-264-4374