Expect More Volatility. The Corn & Ethanol Report 05/08/2023

We kickoff the week with Wholesale Trade Inventories MoM, Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-6 Month Bill Auction at 10:30 A.M., Loan Officers Survey at 1:00 P.M., and Cop Progress at 3:00 P.M.,

On the Corn Front the bulls and bears slugged it out in Friday’s trading session with bears in a firm hold sank the market lower. The bears seem move more serious short but will be a wildcard in the long-term. The CFTC Commitment of Traders revealed there was a large speculative short position. We could see a short-covering rally and with volume and open interest bouncing around in a pinball machine as every grain traders loves a bull market dare I say watch for a key reversal. The Ukraine, Russia, Turkey and the United Nations on Friday failed to authorize any new ships under a deal allowing safe Black Sea exports of Ukraine grain, which Moscow has threatened may 18^th over obstacle to its own grain  and fertilizer exports. The market is trading as many hurdles that will lead to further volatility expected as we anticipate an interesting market trade in this 2023 planting season.  With weather still a hot topic in South America, Ukraine exports drying up, add in US weather with a weak economy, it could be a bull market the closer we get to summer sifting through Breaking News latest headline. In the overnight electronic session the July corn is currently trading at 598 ½ which is 2 cents higher. The trading range has been 600 to 595.

On the Ethanol Front more politics as Max Graham reported, wrote Congress mandated that refiners nearly quintuple the amount of biofuels in the nation’s gasoline supply over the next 15 years. The Environmental Protection Agency or EPA was too optimistic, and some research would emit at least 20% fewer greenhouse gasses than conventional gasoline. Scientist say the EPA was too optimistic, and some research shows that the Congressional Mandate did more climatic harm than good. A 2012 study found that producing and burning corn-based fuel is at least 24%more carbon-intensive than refining and combusting gasoline. The biofuel industry and Department of Energy vehemently criticized those findings, with  nevertheless challenges widespread claim that ethanol is is something of a magic elixir. “There’s   an intuition people have that burning plants is better than using fossil fuels,” Timothy Researchinger who is a senior researcher at the Center for Policy research on Energy and the Environment at Princeton University and an early skeptic ethanol was also quoted, “Growing plants is good, burning plants isn’t.” There were no trades or open interest in ethanol future.

Have A Great Trading day!

Dan Flynn

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