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 MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.m., GDP Growth Rate QoQ 2nd Est, Corporate Profits QoQ Prel, FDP Piece Index QoQ 2nd Est, Goods Trade Balance Adv, Retail Inventories Ex Autos MoM Adv, Wholesale Inventories MoM Adv, Core PCE Prices QoQ 2nd Est, GDP Sales QoQ 2nd Est, PCE Prices QoQ 2nd Est, and Real Consumer Spending QoQ 2nd Est at 7:30 A.m., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Mester Speech at 12:45 P.m., Fed Beige Book at 1:00 P.M., and Dairy Products Sales at 2:00 P.M.
With the Mortgage Bankers Association data this morning, the mortgage demand has collapsed to near 30-Year lows, and home sales volume has fallen to 12-Year lows, housing prices continue to advance. The Case-Shiller House Price Index in September marked the 7th consecutive month higher and was up 0.7% from August and was 3.9% higher than a year ago. Higher prices were also confirmed by the Federal Housing Finance Agency’s monthly price index, up 0.6% from August and 6.1% higher than a year ago, setting a new all-time high of 414.76. Housing prices in all regions of the country were higher, with the New England region marking the best gain of 11% versus a year ago. Home purchases in the last decade were fixed at 3-5%, and refinance demand soared from 2020-2022 when rates fell below 3.5%. Homeowners are reluctant to trade these mortgages for a new 7.%% mortgage, keeping inventories low and driving home prices higher.
Argentine weather pattern outlook stays favorable, while heat and dryness impact Brazil the next 4-5 days. Farmers are hoping a lasting pattern change in December would be so desirable. We will be watching this weather factor and patterns with other fundamentals as we gear up for the market to get hot. The grain futures are mixed this morning ahead of First Notice Day tomorrow for December futures. Liquidation for stale positions in December corn has been ongoing which has pushed futures down to $4.50/Bu while wheat tries to bounce. December rainfall across the northern half of Brazil will direct the soy complex in the coming weeks while China continues to secure US soybeans for February. Cash connected sources indicated that China secured another 4-8 cargoes of US soybeans on Tuesday. CBOT open interest fell sharply with December futures liquidation. Corn open interest fell 51,592 contracts with soybeans off only 369 contracts. Soybean Meal open interest was down 7,837 contracts and soybean oil of 7,682 contracts. The big falls in open interest clears the deck for the South American growing season with manage money traders seeing the falling US dollar as a chance to return to the raw material markets. Brazilian weather the next couple of weeks should tell the tale and paint a picture of rising volume and open interest. In the overnight electronic session the December corn is currently trading at 450 which is 1 cent lower. The trading range has been 453 to 450.
On the Ethanol Front Erin Voegele with Ethanol Producer Magazine reports, Amber Wave, a company affiliated with Summit Agricultural Group, on Oct 30launced production at its wheat protein facility in Phillipsburg, Kansas. The facility also has the capacity to produce 50 million gallons per year (MMgy) of advanced ethanol from wheat feedstock. The biorefining complex is located at the site of the former Prairie Horizons Agri-Energy LLC facility, which was acquired by Summit Agricultural Group through its investment affiliate Summit Ag investors in mid-2021. Following the acquisition, Summit retrofitted the existing corn ethanol plant to produce ethanol from wheat starch and constructed a state-of-the-art wheat protein ingredients facility at the plant site. In its announcement, Amber Wave confirmed the bio refinery began production on Oct 27 and is now producing AmberPro Vital Wheat Gluten, a domestic source of gluten for commercial bakeries, feed ingredient plants, alternative meat manufacturers, pet food processors, and specialty feed companies. A full copy of Amber Wave’s announcement is available on the Summit website. There were no trades or open interest in ethanol futures.
Traders Clear The Decks. The Corn & Ethanol Report 11/29/2023
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.m., GDP Growth Rate QoQ 2nd Est, Corporate Profits QoQ Prel, FDP Piece Index QoQ 2nd Est, Goods Trade Balance Adv, Retail Inventories Ex Autos MoM Adv, Wholesale Inventories MoM Adv, Core PCE Prices QoQ 2nd Est, GDP Sales QoQ 2nd Est, PCE Prices QoQ 2nd Est, and Real Consumer Spending QoQ 2nd Est at 7:30 A.m., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Mester Speech at 12:45 P.m., Fed Beige Book at 1:00 P.M., and Dairy Products Sales at 2:00 P.M.
With the Mortgage Bankers Association data this morning, the mortgage demand has collapsed to near 30-Year lows, and home sales volume has fallen to 12-Year lows, housing prices continue to advance. The Case-Shiller House Price Index in September marked the 7th consecutive month higher and was up 0.7% from August and was 3.9% higher than a year ago. Higher prices were also confirmed by the Federal Housing Finance Agency’s monthly price index, up 0.6% from August and 6.1% higher than a year ago, setting a new all-time high of 414.76. Housing prices in all regions of the country were higher, with the New England region marking the best gain of 11% versus a year ago. Home purchases in the last decade were fixed at 3-5%, and refinance demand soared from 2020-2022 when rates fell below 3.5%. Homeowners are reluctant to trade these mortgages for a new 7.%% mortgage, keeping inventories low and driving home prices higher.
Argentine weather pattern outlook stays favorable, while heat and dryness impact Brazil the next 4-5 days. Farmers are hoping a lasting pattern change in December would be so desirable. We will be watching this weather factor and patterns with other fundamentals as we gear up for the market to get hot. The grain futures are mixed this morning ahead of First Notice Day tomorrow for December futures. Liquidation for stale positions in December corn has been ongoing which has pushed futures down to $4.50/Bu while wheat tries to bounce. December rainfall across the northern half of Brazil will direct the soy complex in the coming weeks while China continues to secure US soybeans for February. Cash connected sources indicated that China secured another 4-8 cargoes of US soybeans on Tuesday. CBOT open interest fell sharply with December futures liquidation. Corn open interest fell 51,592 contracts with soybeans off only 369 contracts. Soybean Meal open interest was down 7,837 contracts and soybean oil of 7,682 contracts. The big falls in open interest clears the deck for the South American growing season with manage money traders seeing the falling US dollar as a chance to return to the raw material markets. Brazilian weather the next couple of weeks should tell the tale and paint a picture of rising volume and open interest. In the overnight electronic session the December corn is currently trading at 450 which is 1 cent lower. The trading range has been 453 to 450.
On the Ethanol Front Erin Voegele with Ethanol Producer Magazine reports, Amber Wave, a company affiliated with Summit Agricultural Group, on Oct 30launced production at its wheat protein facility in Phillipsburg, Kansas. The facility also has the capacity to produce 50 million gallons per year (MMgy) of advanced ethanol from wheat feedstock. The biorefining complex is located at the site of the former Prairie Horizons Agri-Energy LLC facility, which was acquired by Summit Agricultural Group through its investment affiliate Summit Ag investors in mid-2021. Following the acquisition, Summit retrofitted the existing corn ethanol plant to produce ethanol from wheat starch and constructed a state-of-the-art wheat protein ingredients facility at the plant site. In its announcement, Amber Wave confirmed the bio refinery began production on Oct 27 and is now producing AmberPro Vital Wheat Gluten, a domestic source of gluten for commercial bakeries, feed ingredient plants, alternative meat manufacturers, pet food processors, and specialty feed companies. A full copy of Amber Wave’s announcement is available on the Summit website. There were no trades or open interest in ethanol futures.
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Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn