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 Export Sales, Unemployment Rate, Nonfarm Payrolls, Participation Rate, Average Hourly Earnings MoM & YoY, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls. And Nonfarm Payrolls Private at 7:30 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Total Vehicle Sales.
On the Corn Front summer storms with high volume rains in some areas have the grain complex still riding the short side of the market. Where rain is needed, it is nil, so my advice going into the weekend, is do not be stunned with Monday’s Crop Progress report. Regardless of the rains in some areas, I anticipate a sharp deterioration in corn ratings. Abnormally dry conditions has also emerged in the eastern Corn Belt. The Drought Monitor also showed bigger drought conditions in Missouri and Central Illinois. Brazil is expected to have a huge 2nd crop has also has pressured the market. As I mention before, and it may be redundant, “It is not what you plant but what you grow.” And I still stand with farmers prediction over a year ago, we may see food shortages, especially if we see mid-June rains dry up in the atmosphere, failing to materialize. Traders are not expecting much in this morning’s Export Sales. Bulls in this market continue to laugh in the face of danger. We should get an education how stressed the crops are in the early going, with the chop continuing until there is no doubt in reality. In the overnight electronic session the July corn is currently trading at 584 ½ which is 8 cents lower. The trading range has been 592 ½ to 582.
On the Ethanol Front production rebounded to 1,004 tbd last week, above 983 tbd from the week before, however it is still below the pace needed to reach the USDA usage forecast of 5.250 billion bushels. There was 101 million bushels of corn used in the production process or 14.37 million bushels per day. In the month-to-year to date there has been 3.774 billion used, or 14.1 mbd, an annualized pace of 5.140 billion. Yesterday’s monthly data showed there was 416 million bushels of corn used in April 23rd for ethanol production bringing year-to-date consumption to 3.40 billion bushels down 4.5% from a year ago. As we focus on drought forecasts we are waiting corn used for ethanol in next Friday’s WASDE report. There were no trades or open interest in ethanol futures.
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