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 Core PCE Prices MoM & YoY, Personal Income MoM , Personal Spending MoM, PCE Price Inex MoM & YoY at 7:30 A.M., Michigan Consumer Sentiment Final, Michigan 5-Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions Final, and Michigan Inflation Expectations at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Cattle on Feed at 2:00 P.M.
The Bureau of Economic Analysis 3rd estimate for Q3 GDP showed that the US economy grew by 3.1% during the quarter up from 2.8% in the previous estimate. This beat the 3% growth in the 2nd quarter and 1.6% in the 1st quarter. Personal spending increased fastest since Q 1 2023, rising to 3.7 vs. the previous estimate of 3.5%. Consumption of goods rose by 5.6%, and spending on services increased by 2.1%, and investment in equipment jumped by 10.8%. Government consumption rose by 5%, and net trade was less negative than in the previous estimate. Nominal GDP rose $358 Bil from the last quarter to $29.3 trillion. However, the cost of this economic growth was an additional $633 Bil of federal debt. Which rose to a record $36 Trillion. From 1960-1980, every dollar of federal debt added $3 to GDP. Since 2008, the Federal debt has grown significantly faster than GDP.
CBOT Corn Recovers at Chart Support; Rallies Struggle as Export Demand Cools and Ethanol Margins are Red:
March CBOT corn bounced at it’s 20-day moving average amid weakness in the US dollar and a recovery in the Brazilian real.US supply risks center on USDA’s final yield on Jan 10th , but Ag Resources (ARC) uses retests of $4.50 to catch up on cash sales. It’s difficult to bullish of corn without prolonged heat/dryness in Argentina and S Brazill. The US’s dominance of world corn trade is beginning to fade. US corn export sales in the week ending Dec 12th totaled 46 Mil Bu, vs. 37 Mil the previous week but near unchanged from mid-December a year ago. Beginning in Feb, importers will begin to cover forward needs with South American origin. Sales stay in a range of 35-55 Mil Bu through winter, but additional non-US supply dislocation is needed to pull 24/25 US end stocks below 1.7 Bil Bu. Additionally, ARC’s long term work features a loosening of global supply & demand as more land is available to seed corn in the US in spring as a repeat of crippling Black Sea drought unlikely. Near-term strength must be sold. Resistance sits at $4.454-$4.50 March CBOT, and $4.40-$4.45 basis December.
US Dollar Reprieve Sparks Grains Spike. The Corn & Ethanol Report 12/20/2024
We kickoff the day with Core PCE Prices MoM & YoY, Personal Income MoM , Personal Spending MoM, PCE Price Inex MoM & YoY at 7:30 A.M., Michigan Consumer Sentiment Final, Michigan 5-Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions Final, and Michigan Inflation Expectations at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Cattle on Feed at 2:00 P.M.
The Bureau of Economic Analysis 3rd estimate for Q3 GDP showed that the US economy grew by 3.1% during the quarter up from 2.8% in the previous estimate. This beat the 3% growth in the 2nd quarter and 1.6% in the 1st quarter. Personal spending increased fastest since Q 1 2023, rising to 3.7 vs. the previous estimate of 3.5%. Consumption of goods rose by 5.6%, and spending on services increased by 2.1%, and investment in equipment jumped by 10.8%. Government consumption rose by 5%, and net trade was less negative than in the previous estimate. Nominal GDP rose $358 Bil from the last quarter to $29.3 trillion. However, the cost of this economic growth was an additional $633 Bil of federal debt. Which rose to a record $36 Trillion. From 1960-1980, every dollar of federal debt added $3 to GDP. Since 2008, the Federal debt has grown significantly faster than GDP.
CBOT Corn Recovers at Chart Support; Rallies Struggle as Export Demand Cools and Ethanol Margins are Red:
March CBOT corn bounced at it’s 20-day moving average amid weakness in the US dollar and a recovery in the Brazilian real.US supply risks center on USDA’s final yield on Jan 10th , but Ag Resources (ARC) uses retests of $4.50 to catch up on cash sales. It’s difficult to bullish of corn without prolonged heat/dryness in Argentina and S Brazill. The US’s dominance of world corn trade is beginning to fade. US corn export sales in the week ending Dec 12th totaled 46 Mil Bu, vs. 37 Mil the previous week but near unchanged from mid-December a year ago. Beginning in Feb, importers will begin to cover forward needs with South American origin. Sales stay in a range of 35-55 Mil Bu through winter, but additional non-US supply dislocation is needed to pull 24/25 US end stocks below 1.7 Bil Bu. Additionally, ARC’s long term work features a loosening of global supply & demand as more land is available to seed corn in the US in spring as a repeat of crippling Black Sea drought unlikely. Near-term strength must be sold. Resistance sits at $4.454-$4.50 March CBOT, and $4.40-$4.45 basis December.
Have A Great Trading Day!
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn