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 Inspections and Fed Cook Speech at 19:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.m., Loan Officer Survey at 1:00 P.M., and Crop Progress at 3:00 P.M.
The November Jobs report showed that the US economy added 150,000 jobs in October, which fell short of the average trade estimate of 179,000 jobs. The October figure was the lowest since June and 2nd lowest since December 2020. Moreover the September jobs figure of 336,000, which was exclaimed as a blockbuster at the initial release, was revised down by 39,000 jobs to 297,000. Every single jobs report in 2023 has been revised lower ether in the initial revision or the 2nd revision. Adding to the doubt and sobriety, government and healthcare were the top 2 job-adding industries for the month and manufacturing lost 35,000 jobs. Average Hourly Earnings were up 4% from a year ago, which was the smallest annual increase since June 2021. It’s also worth remember that the average monthly inflation rate in the last year has been 8%. The stock market rallied following the report release on the idea the disappointing jobs number leads to another month of pause for the Fed Funds rate in December. The US dollar fell sharply as debt continues to soar adding supplies of dollars in circulation. I am inclined to believe the Fed will not raise rates at the FOMC meetings December 12th & 13th meeting, boy the Vegas odds are off the last week of January 2024.On the Corn Front we’re trading steady to a tad higher with weather premium to corn and soybean prices due to threatening South American weather. However, Friday’s Commitments of Traders showed managed money was extremely short wheat and corn, while holding a modest long in soybeans, (estimated at 30,000 contracts as of Friday’s close), and a sizable long position in soybean meal. Ag Resources (ARC) estimates funds are long 114,000 contracts of soybean meal as of Friday’s close, while a modest net-short 3,000 contracts of soybean oil. The position risk in the market should adverse Brazilian weather persists through November is the big fund short in corn, wheat, and soybean oil. We have Export Inspections and Crop Progress today, and on Thursday the USDA will release
The November crop report and WASDE data. The industry expects little change in US corn and soybean yields with corn expected to gain .3 bpa to 173.3 bpa and soybeans unchanged at 49.6 bpa. In the overnight electronic session the December corn is currently trading at 477 ¼ which is unchanged. The trading range has been 480 to 476 ¾.
On the Ethanol Front UNICA, the Brazilian sugarcane industry association, has announced both sugarcane processing and ethanol production were up during the first half of October. Ethanol sales were also up when compared to last year at this time. Brazil’s domestic sales during the first half of October included 782.01 million liters of hydrous ethanol, up 15.95%, and 435.96 million liters of anhydrous ethanol, down 4.49%. Total ethanol sales so far this season reached 16.59 billion liters, up 2.87% from 2022. Sales included 9.67 billion liters of hydrous ethanol, up 1.49%, and 6.92 billion liters of anhydrous ethanol, up 4.86%. There were no trades or open interest in ethanol futures.
Cheaper US Dollar & Flash Sales. The Corn & Ethanol Report 11/06/2023
We kickoff the day with Export Inspections and Fed Cook Speech at 19:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.m., Loan Officer Survey at 1:00 P.M., and Crop Progress at 3:00 P.M.
The November Jobs report showed that the US economy added 150,000 jobs in October, which fell short of the average trade estimate of 179,000 jobs. The October figure was the lowest since June and 2nd lowest since December 2020. Moreover the September jobs figure of 336,000, which was exclaimed as a blockbuster at the initial release, was revised down by 39,000 jobs to 297,000. Every single jobs report in 2023 has been revised lower ether in the initial revision or the 2nd revision. Adding to the doubt and sobriety, government and healthcare were the top 2 job-adding industries for the month and manufacturing lost 35,000 jobs. Average Hourly Earnings were up 4% from a year ago, which was the smallest annual increase since June 2021. It’s also worth remember that the average monthly inflation rate in the last year has been 8%. The stock market rallied following the report release on the idea the disappointing jobs number leads to another month of pause for the Fed Funds rate in December. The US dollar fell sharply as debt continues to soar adding supplies of dollars in circulation. I am inclined to believe the Fed will not raise rates at the FOMC meetings December 12th & 13th meeting, boy the Vegas odds are off the last week of January 2024.On the Corn Front we’re trading steady to a tad higher with weather premium to corn and soybean prices due to threatening South American weather. However, Friday’s Commitments of Traders showed managed money was extremely short wheat and corn, while holding a modest long in soybeans, (estimated at 30,000 contracts as of Friday’s close), and a sizable long position in soybean meal. Ag Resources (ARC) estimates funds are long 114,000 contracts of soybean meal as of Friday’s close, while a modest net-short 3,000 contracts of soybean oil. The position risk in the market should adverse Brazilian weather persists through November is the big fund short in corn, wheat, and soybean oil. We have Export Inspections and Crop Progress today, and on Thursday the USDA will release
The November crop report and WASDE data. The industry expects little change in US corn and soybean yields with corn expected to gain .3 bpa to 173.3 bpa and soybeans unchanged at 49.6 bpa. In the overnight electronic session the December corn is currently trading at 477 ¼ which is unchanged. The trading range has been 480 to 476 ¾.
On the Ethanol Front UNICA, the Brazilian sugarcane industry association, has announced both sugarcane processing and ethanol production were up during the first half of October. Ethanol sales were also up when compared to last year at this time. Brazil’s domestic sales during the first half of October included 782.01 million liters of hydrous ethanol, up 15.95%, and 435.96 million liters of anhydrous ethanol, down 4.49%. Total ethanol sales so far this season reached 16.59 billion liters, up 2.87% from 2022. Sales included 9.67 billion liters of hydrous ethanol, up 1.49%, and 6.92 billion liters of anhydrous ethanol, up 4.86%. There were no trades or open interest in ethanol futures.
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Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn