Mixed Earnings & Bank Fears Continue To Pressure US Futures. The Corn & Ethanol Report 04/26/2023

We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Mortgage Applications at 6:00 A.M., Durable Goods Orders MoM, Durable Goods Ex Transportation MoM, Goods Trade Balance Adv, Retail Inventories Ex Autos MoM Adv, Wholesale Inventories MoM Adv, Mon Defense Goods Orders Ex Air, and Durable Goods Orders ex Defense MoM at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., 2-Year FRN Auction and 17-Week Bill Auction at 10:30 A.M., 5-Year Note Auction at 12:00 P.M., and Dairy Products Sales at 2:00 P.M.

On the Corn Front the surprise was Planting Progress continues to be ahead of schedule. As of April 23^rd 14% of the US corn crop is planted. That is a jump of 6% from last week and 3% above the five-year average. According to the report, of the top 18 corn-growing states, North Dakota and South Dakota are the only two states that have not yet started planting. Weather will continue to be a challenge in these planting stages as we move closer to May. The weather temperatures will play a huge part as Brazilian basis is the lowest in the world for exporting. The question remains as in the U.S., what yields will they produce? Economic news and weather should dominate this market in the coming weeks. The Kremlin stated that it is reviewing a UN proposal to keep the Ukraine Grain Export Corridor open, but also released pessimistic comments on new banking proposals that include JP Morgan and Turkish banks under tight scrutiny. Russia’s envoy to the UN stated that no real progress to ending the Russian sanction demands has been achieved to keep the grain corridor open. Vessel owners will not allow their ships to enter the Black sea due to the 3 weeks remaining before the corridor extension ends May 18^th. Negotiations continue but Russia is taking a hardline on its demands. Adding to the drama Poland has stated that it will keep its ban on Ukraine grain into the end of the year. CBOT volatility will stay extreme into August as stocks of major grain exporters are historically tight. In the overnight electronic session the July corn is currently trading at 608 ¾ which is 1 cent higher. The trading range has been 612 to 607.

On the Ethanol Front a Nebraska state Bill to increase ethanol use advances. Nebraska is the second state in producing ethanol, however, their usage of the product is slim, but despite aa filibuster to keep the status quo. The bill was not adopted to force consumers to purchase E15 but to give them an option. It will increase ethanol usage and will require gas retailers that replaces pumps to use 50% to E15. This will not apply to smaller retailers. This move will help consumer savings at the pump and move to show farmland growth and yields are necessary to fill the void of historic lows in corn stocks. There were no trades or open interest in ethanol futures.

Have An Excellent Trading Day!

Dan Flynn

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