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 NY Empire State Manufacturing Index at 7:30 A.M., Fed Bostic Speech at 7:45 A.M., Fed Kashkari Speech at 8:15 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., NOPA Crush at 11:00 P.M., Fed Barkin Speech at 11:30 A.M., Crop Progress, Net Long-term TIC Flows, Overall Net Capital Flows, and Foreign Bond Investment at 3:00 P.M., and Fed Cook Speech at 4:00 P.M.
On the Corn Front old crop corn rose 75 million bushels to 1.417 billion bushels, which was 60 million above expectations. That change on the balance sheet was due to reductions in exports. The new crop led the way with the bears, with this year’s ongoing rapid pace of planting in the principal Midwest, cheap Brazilian corn offers as USDA printed on Friday a massive build in global stocks in 23/24. USDA’s logic makes perfect sense-supply issues can be solved in 2023 following demand destruction this year if the weather patterns are normal. But there is a enormous burden being placed not only on US yield performance this summer, but also in South America next winter and spring. US cash basis remains elevated. Implied summer feed demand increase due to US HRW wheat yield losses. The US cash corn market stays strong through mid-August. Mother Nature is in the drivers seat insuring market volatility and like recent years- extremely low global carryover stocks, which implies even modest N hemisphere yield loss could extend the bull cycle another year. Rallies are selling opportunities, but it is hard just to pick an entry level to go short in this oversold market. Last year Funds were long 340,000 contracts and this year are short 109,000 contracts. Extreme weather is likely to continue globally with record warm ocean temperatures, and dryness has been building across the SW Midwest, we will keep you posted on further developments. Its all about weather and yields. It’s not what you plant but what you grow. In the overnight electronic session the July corn is currently trading at 591 ½ which is 5 ¼ cents higher. The trading range has been 591 ¾ to 581 ½.
On the Ethanol Front Friday’s report predicting a record corn crop with 1% growth for ethanol use. The 2023-24 corn outlook is for larger production, greater domestic use and exports, and higher ending stocks. The corn crop is projected at a record 15.3 billion bushels up more than 10% from last year and expectations on increases in both acres and yields. Also Alto Ingredients, Inc. released Q1 financial results on May 8th, reporting improving margins and progress with several ongoing plant improvement projects. There were no trades or open interest in ethanol futures.
Have A Great Trading day!
Dan FlynnQuestions? Ask Dan Flynn today at 312-264-4374