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 at 7:30 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services PMI Flash at 8:45 A.M., Existing Home Sales, Existing Home Sales MoM, and CB Leading Index MoM, and EIA Natural Gas Stocks at 9:30 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Cattle on Feed and Milk Production at 2:00 P.M.
The US Census Bureau reported that housing starts in May were down 5,5%from April and fell 19.3% from a year ago to 1.277 Mil homes. This was the largest year-over-year decline since April 2023 and the lowest housing starts since June 2020. Single-family starts were down 5.2% and the lowest since last October, while starts for buildings with 5 units or more were down 10% at a 2-month low. Additionally, building permits fell for the 3rdconsecutive month in May, were 4% lower than a year ago, and were the lowest since June 2020, suggesting that a further erosion in housing starts can be expected in the coming months. No wonder they stopped calling it Bidenomics when the real feel is anemicnomics and positive jobs numbers count for non- US citizens and the enemy. The playbook is right before your eyes. People along the Coast of Texas remain on alert late Thursday after officials warned of elevated water levels and heavy rainfall as deadly Tropical Storm Alberto dissipated over northern Mexico. CBOT Ag futures are slightly higher as wheat and soybeans reconcile deeply oversold technical conditions and as the EU & Canadian weather models keep in place a pattern of warmth/heat and dryness east of the Mississippi River into the opening days of July. Ag Resources (ARC) notes the EU ensemble model has performed incredibly well in the US over the last 30 days. and this model features Central US pattern stagnation into July 5th . Heat in the E Midwest moderates only briefly next week. World weather issues are numerous. China’s monsoon stays south of major crop areas for another 10 days. Mat 1st-June 20th rainfall in Shandong, Henan, and Habei provinces – which produces 20% of Chinese corn and 60% of winter wheat- has been recorded at just 5-40% of normal. Mexican vegetation health as of June 16th was abysmal, and while desperately needed rainfall lies ahead, much of this in the short term will come via tropical storm, and so corn seeding in E Mexico will be delayed until very early July. Argentine corn yields have fallen precipitously in the last 30-days as corn impacted by stunt disease is gathered. A pattern of net soil loss resumes in the Ukraine. ARC acknowledges normal seasonal trends turn downward in July if a US weather threat is absent, and at that pace of winter wheat harvesting in the US and Russia will be swift, but be cautioned against chasing breaks ahead of the N Hemisphere growing season. A US corn yield below 177 drops major exporter corn stocks/use in crop year 24/25 to 8.2% – which rivals the levels of 2011-12 and 2021-22. Be prepared for volatility as forecast begin to peak deeper into July. Managed funds this morning are estimated to be net short a combined 374,00 contracts in corn, soybeans, and Chicago wheat – a sizable short for mid-Jun. It’s the partial short covering of this position that provides fuel for rallies over the next 30-60 days. Spot Paris milling wheat is up 1.75 euro/MT. Paris corn is up .50 euro/MT. Dalian corn in China is up $0.1/Bu at $863. Dalian soybean meal fell $3/MT to $387. Malaysian palm oil overnight settled 58 ringgits lower. WTI crude is in chop mode for the moment cross currents abound. US dollar strength has kept new investment in the Ag markets limited. But weather issues and rising Indian cash wheat prices must not be ignored. The strategy remains to only sell cash grains on rallies. If that is not enough, lets talk about human consumption in corn which is about 2% of the crop. We use this for feed, energy and many other uses in everyday life. US ethanol stocks hit a one-month high as exports slumped while production picked up and gasoline demand rose to a 32-week high, according to the latest EIA data released yesterday. US ethanol stocks were up 2% to 23.6 million barrels in the week ending June 14th, which was the highest volume since the week ending May 17th and up 4% on the year. The rise in inventory was mainly led by a 5% increase in stock on the Gulf coast, where much of US ethanol exports take place, to 4.3 million barrels. Meanwhile, ethanol exports from the US slumped 39% last week to an 11-month low of 76,000 barrels per day, placing June exports so far around 101.000 bpd. Gasoline demand in the week ending June 14th rose 4% to 9.38 million bpd and was up 2% in comparison to the same period in 2023. It was the highest figure since the week to November 3rd last year. Refiner and blender ethanol output was up 2% to a fresh 3-week high of 931,000 bpd and was also up 3% on the year. Finally, US ethanol production levels rose 3% on the week and were up a marginal 0.5% year-on-year to a two-week high of 1.o6 million bpd.
A Special Solstice Strawberry Moon Tonight. The Corn & Ethanol Report 06/21/2024
We kickoff the day with Export Sales at 7:30 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services PMI Flash at 8:45 A.M., Existing Home Sales, Existing Home Sales MoM, and CB Leading Index MoM, and EIA Natural Gas Stocks at 9:30 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Cattle on Feed and Milk Production at 2:00 P.M.
The US Census Bureau reported that housing starts in May were down 5,5%from April and fell 19.3% from a year ago to 1.277 Mil homes. This was the largest year-over-year decline since April 2023 and the lowest housing starts since June 2020. Single-family starts were down 5.2% and the lowest since last October, while starts for buildings with 5 units or more were down 10% at a 2-month low. Additionally, building permits fell for the 3rdconsecutive month in May, were 4% lower than a year ago, and were the lowest since June 2020, suggesting that a further erosion in housing starts can be expected in the coming months. No wonder they stopped calling it Bidenomics when the real feel is anemicnomics and positive jobs numbers count for non- US citizens and the enemy. The playbook is right before your eyes. People along the Coast of Texas remain on alert late Thursday after officials warned of elevated water levels and heavy rainfall as deadly Tropical Storm Alberto dissipated over northern Mexico. CBOT Ag futures are slightly higher as wheat and soybeans reconcile deeply oversold technical conditions and as the EU & Canadian weather models keep in place a pattern of warmth/heat and dryness east of the Mississippi River into the opening days of July. Ag Resources (ARC) notes the EU ensemble model has performed incredibly well in the US over the last 30 days. and this model features Central US pattern stagnation into July 5th . Heat in the E Midwest moderates only briefly next week. World weather issues are numerous. China’s monsoon stays south of major crop areas for another 10 days. Mat 1st-June 20th rainfall in Shandong, Henan, and Habei provinces – which produces 20% of Chinese corn and 60% of winter wheat- has been recorded at just 5-40% of normal. Mexican vegetation health as of June 16th was abysmal, and while desperately needed rainfall lies ahead, much of this in the short term will come via tropical storm, and so corn seeding in E Mexico will be delayed until very early July. Argentine corn yields have fallen precipitously in the last 30-days as corn impacted by stunt disease is gathered. A pattern of net soil loss resumes in the Ukraine. ARC acknowledges normal seasonal trends turn downward in July if a US weather threat is absent, and at that pace of winter wheat harvesting in the US and Russia will be swift, but be cautioned against chasing breaks ahead of the N Hemisphere growing season. A US corn yield below 177 drops major exporter corn stocks/use in crop year 24/25 to 8.2% – which rivals the levels of 2011-12 and 2021-22. Be prepared for volatility as forecast begin to peak deeper into July. Managed funds this morning are estimated to be net short a combined 374,00 contracts in corn, soybeans, and Chicago wheat – a sizable short for mid-Jun. It’s the partial short covering of this position that provides fuel for rallies over the next 30-60 days. Spot Paris milling wheat is up 1.75 euro/MT. Paris corn is up .50 euro/MT. Dalian corn in China is up $0.1/Bu at $863. Dalian soybean meal fell $3/MT to $387. Malaysian palm oil overnight settled 58 ringgits lower. WTI crude is in chop mode for the moment cross currents abound. US dollar strength has kept new investment in the Ag markets limited. But weather issues and rising Indian cash wheat prices must not be ignored. The strategy remains to only sell cash grains on rallies. If that is not enough, lets talk about human consumption in corn which is about 2% of the crop. We use this for feed, energy and many other uses in everyday life. US ethanol stocks hit a one-month high as exports slumped while production picked up and gasoline demand rose to a 32-week high, according to the latest EIA data released yesterday. US ethanol stocks were up 2% to 23.6 million barrels in the week ending June 14th, which was the highest volume since the week ending May 17th and up 4% on the year. The rise in inventory was mainly led by a 5% increase in stock on the Gulf coast, where much of US ethanol exports take place, to 4.3 million barrels. Meanwhile, ethanol exports from the US slumped 39% last week to an 11-month low of 76,000 barrels per day, placing June exports so far around 101.000 bpd. Gasoline demand in the week ending June 14th rose 4% to 9.38 million bpd and was up 2% in comparison to the same period in 2023. It was the highest figure since the week to November 3rd last year. Refiner and blender ethanol output was up 2% to a fresh 3-week high of 931,000 bpd and was also up 3% on the year. Finally, US ethanol production levels rose 3% on the week and were up a marginal 0.5% year-on-year to a two-week high of 1.o6 million bpd.
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Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn