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 Harker Speech at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., and Dairy Products Sales at 2:00 P.M.
Our prayers go out to all of our friends affected by Acts of God in the many regions of our country. The wildfire at Smokehouse Creek is only 3% contained as of Thursday night. As of this morning reports of high winds and no rain are making these fires more treacherous. It is estimated the fire has covered 1.075 million acres – making it bigger than Rhode Island – becoming the largest blaze in Texas history, according to the Texas A&M Forest Service.
South American weather focus has a wetter Brazilian forecast beyond March 7th, with long-term climate concern unchanged. The EU & GFS models have trended wetter in central and northern Brazil in the 6-10 day period, which keeps moisture adequate for recently planted safrinha corn in Mato Grosso and Goias. Concern remains centered on Mato Grosso do Sul where 30-day rainfall has been recorded at just 45-50% of normal. Stress there has been compounded by the heat, with high temps reaching the upper 90’s this week. Heat and dryness continues in central/northern Brazil for another 3-4 days before a minor pattern change occurs. An expansive pattern of lite but daily showers will be established in Brazil beginning Tuesday & Wednesday. The GFS 8-day change in soil moisture has the nearby forecasts benign. Given safrinha corn moisture demand are at the lowest currently, but odds are high that soil moisture loss resumes beyond early March. Key is whether 5-7” of rain falls in Brazil between March 15th– April 15th .
Central US weather pattern has moisture coming from the west with 12 ft. of snow falling in the Sierra Nevada Mountains and the storm is burying cars and houses. Precipitation to expand into Western Midwest, while the Southern & Northern Plains stays arid. The forecast is wetter in the 6-10 day period. The EU and GFS lack agreement on the exact placement and intensity of precipitation next week, but ARC bets that rain & snow expands into the drier areas of Eastern Nebraska, Iowa, and the Upper Great Lakes. Soaking rain is still offered to the Southeast. Unfortunately the EU’s precipitation 6-10 day model keeps the HRW Belt arid, with fire risks elevated. May corn needs a technical close above 434, the 20-day moving average which has provided resistance since November. Analysts are pegging seasonal lows were scored last week. ARC also points out, spot corn in China settled at $8.70 (weeks high), while Brazil’s cash market did not follow the CBOT lower. Grain futures came in mixed in the overnight with wheat values sagging as Russian fob price offers are in retreat. The summer row crop futures of corn & soybeans are higher on Brazilian basis cash bids while CBOT wheat reflects the ongoing weakening price trend of European/Russian wheat on old crop oversupply. The USDA & WASDE will be watching to see if China stays active in the world grain and soybean markets this week. Reuters reported China purchased more than 20 cargoes in recent weeks or 1.2 MMT’s. The US supplied 3-4 cargoes of sorghum while China booked over 16 cargoes of Ukraine corn according to exporters with China’s known 2023/24 purchases nearing 20 MMT’s prior to the midpoint of the international crop year. China also booked 17-20 cargoes of South American soybeans last week which rallied fob premiums. China need to secure 1.90 MMT’s of soybeans per week on average. On Friday’s USDA and WASDE updates on South American crop sizes will be the focus. The USDA has a history of waiting until March to make sizable adjustments based on actual harvested yield data. Private Brazilian soybean and corn production are under WASDE. I am following ARC’s lead expecting short covering to be featured into Friday’s report as Brazilian soybean harvest surpasses 50% completed with rising cash basis bids. Also the Commitment of Traders showed soybeans were net short 8,000 contracts less than the COVID pandemic lows.
Texas Panhandle & Oklahoma Need Rain ASAP. The Corn & Ethanol Report 03/04/2024
We kickoff the day with Export Inspections and Fed Harker Speech at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., and Dairy Products Sales at 2:00 P.M.
Our prayers go out to all of our friends affected by Acts of God in the many regions of our country. The wildfire at Smokehouse Creek is only 3% contained as of Thursday night. As of this morning reports of high winds and no rain are making these fires more treacherous. It is estimated the fire has covered 1.075 million acres – making it bigger than Rhode Island – becoming the largest blaze in Texas history, according to the Texas A&M Forest Service.
South American weather focus has a wetter Brazilian forecast beyond March 7th, with long-term climate concern unchanged. The EU & GFS models have trended wetter in central and northern Brazil in the 6-10 day period, which keeps moisture adequate for recently planted safrinha corn in Mato Grosso and Goias. Concern remains centered on Mato Grosso do Sul where 30-day rainfall has been recorded at just 45-50% of normal. Stress there has been compounded by the heat, with high temps reaching the upper 90’s this week. Heat and dryness continues in central/northern Brazil for another 3-4 days before a minor pattern change occurs. An expansive pattern of lite but daily showers will be established in Brazil beginning Tuesday & Wednesday. The GFS 8-day change in soil moisture has the nearby forecasts benign. Given safrinha corn moisture demand are at the lowest currently, but odds are high that soil moisture loss resumes beyond early March. Key is whether 5-7” of rain falls in Brazil between March 15th– April 15th .
Central US weather pattern has moisture coming from the west with 12 ft. of snow falling in the Sierra Nevada Mountains and the storm is burying cars and houses. Precipitation to expand into Western Midwest, while the Southern & Northern Plains stays arid. The forecast is wetter in the 6-10 day period. The EU and GFS lack agreement on the exact placement and intensity of precipitation next week, but ARC bets that rain & snow expands into the drier areas of Eastern Nebraska, Iowa, and the Upper Great Lakes. Soaking rain is still offered to the Southeast. Unfortunately the EU’s precipitation 6-10 day model keeps the HRW Belt arid, with fire risks elevated. May corn needs a technical close above 434, the 20-day moving average which has provided resistance since November. Analysts are pegging seasonal lows were scored last week. ARC also points out, spot corn in China settled at $8.70 (weeks high), while Brazil’s cash market did not follow the CBOT lower. Grain futures came in mixed in the overnight with wheat values sagging as Russian fob price offers are in retreat. The summer row crop futures of corn & soybeans are higher on Brazilian basis cash bids while CBOT wheat reflects the ongoing weakening price trend of European/Russian wheat on old crop oversupply. The USDA & WASDE will be watching to see if China stays active in the world grain and soybean markets this week. Reuters reported China purchased more than 20 cargoes in recent weeks or 1.2 MMT’s. The US supplied 3-4 cargoes of sorghum while China booked over 16 cargoes of Ukraine corn according to exporters with China’s known 2023/24 purchases nearing 20 MMT’s prior to the midpoint of the international crop year. China also booked 17-20 cargoes of South American soybeans last week which rallied fob premiums. China need to secure 1.90 MMT’s of soybeans per week on average. On Friday’s USDA and WASDE updates on South American crop sizes will be the focus. The USDA has a history of waiting until March to make sizable adjustments based on actual harvested yield data. Private Brazilian soybean and corn production are under WASDE. I am following ARC’s lead expecting short covering to be featured into Friday’s report as Brazilian soybean harvest surpasses 50% completed with rising cash basis bids. Also the Commitment of Traders showed soybeans were net short 8,000 contracts less than the COVID pandemic lows.
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn