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 NFIB Business Optimism Index at 5:00 A.M., Fed Chair Powell Testimony at 9:00 A.M., 42-Day Bill Auction at 10:30 A.M., Crop Production, USDA Supply/Demand, WASDE, and EIA Short Term Energy Outlook at 11:00 A.M., 3-Year Note Auction at 12:00 P.M., Fed Bowman & Fed Williams Speech at 2:30 P.M., and API Energy Stocks at 3:30 P.M.
Early Midwest field work is still several weeks away, at least according to the latest weather forecasts that call for another blast of cold air and snow across much of the Midwest tomorrow. However, soil conditions across much of the Midwest are dry, and producers are hoping for a fast snow melt and a quick spring thaw to begin fertilizer application in March. Nitrogen prices followed grain prices lower last fall, and producers saw anhydrous ammonia prices around 4685/ton vs. $800 the previous year. However, the market crept higher through the winter, and the latest prices from the Illinois Production Cost Report showed an average price of $753 vs. $785 last year. This offers some financial relief for producers. New crop corn prices pencil out near break even or a slight profit for many producers, and new crop corn futures this week and now trading above a year ago, helping to aid the financial outlook.
South American Weather Pattern Discussion
Argentina to get Soaked; Below Normal Rainfall Aids Brazilian Harvest Progress:
The South American forecast into late February is consistent and keeps in place a pattern into late Feb is consistent and keeps in place a pattern of heavy rainfall across Argentina and a mix of rain/sun in Northern Brazil. This is viewed as favorable as later planted crops in Argentina will benefit from improving soil moisture via seed sizes, while the rush to harvest Brazilian soybeans will be ongoing for another 12-14 days. A recent pattern shift in Argentina and the opening of the Brazilian harvest window. Organized precipitation returns to most of Argentina’s ag belt Feb 15-18. Accumulation of 1-4” will blanket Cordoba, Santa Fe & Enter Rios. In Brazil heavy rainfall in excess of 2” will be confined to northern Mato Grosso and fringe soy producing areas in the far north. Another 9-11MMT’s of Brazilian soybeans will be gathered this week.
On the Corn Front
CBOT Corn Stays Ahead of Feb WASDE:
Global corn markets ended firm on Monday amid high odds USDA in its Feb WASDE trims Argentine production 1-2 MMT’s and hikes US ethanol grind a modest 25 Mil Bu. Both will serve to tighten what is an already tight balance sheet, though Ag Resources (ARC) maintains $5.10, basis May CBOT which represents hard resistance without an early end to Brazil’s rainy season in April. Whether tariffs on Mexico and Canada are implemented is a big deal. The absence of tariffs leaves the market to focus acutely on Brazilian weather and the seasonal expansion of physical US export disappearance. The establishment of tariffs accelerates the seasonal transition from the US to South America during late spring and summer. Tariffs, US planting intentions, and South American weather drive price discovery. ARC strongly recommends managing forward risk by rewarding rallies. Keep in mind that seasonal price trends, which are positive today and turn negative in April. ARC and other analysts look to extend 2025 sales by 10-15% prior to release of NASS seeding intentions data by March 31st . Winter corn is being rapidly seeded in Brazil which is helping to germinate/establish the crop.
On the Ethanol Front
Ethanol’s corn demand draw continues to expand amid record US ethanol exports and as Brazilian cash prices are expected to rise into the spring and summer driving months. Ethanol demand growth has been welcomed in 24/25, and the collision of this and lower-than-expected final yield is noteworthy. ARC’s longer-term fundamental research on ethanol’s demand expansion stays bright but only to a point amid the lack gain in US ethanol production capacity since 2020. US corn used for ethanol Sep-January is estimated at 2.33 Bil Bu, up 2.8% year-over-year and the largest since 2017/18 – when annual ethanol grind was a record 5.61 Bil Bu. This also compares to the USDA’s projected 24/25 increase in corn grind of only 22 Mil Bu (0.4%). We are expecting the USDA to raise industrial corn use 25 Bil Bu in today’s WASDE or March WASDE provided US export demand for ethanol stays strong.If deals are not cut US tariffs and retaliation can quickly change the positive outlook for US ethanol.
WASDE South American Yield Forecast Surprise? The Corn & Ethanol Report 02/11/2025
We kickoff the day with NFIB Business Optimism Index at 5:00 A.M., Fed Chair Powell Testimony at 9:00 A.M., 42-Day Bill Auction at 10:30 A.M., Crop Production, USDA Supply/Demand, WASDE, and EIA Short Term Energy Outlook at 11:00 A.M., 3-Year Note Auction at 12:00 P.M., Fed Bowman & Fed Williams Speech at 2:30 P.M., and API Energy Stocks at 3:30 P.M.
Early Midwest field work is still several weeks away, at least according to the latest weather forecasts that call for another blast of cold air and snow across much of the Midwest tomorrow. However, soil conditions across much of the Midwest are dry, and producers are hoping for a fast snow melt and a quick spring thaw to begin fertilizer application in March. Nitrogen prices followed grain prices lower last fall, and producers saw anhydrous ammonia prices around 4685/ton vs. $800 the previous year. However, the market crept higher through the winter, and the latest prices from the Illinois Production Cost Report showed an average price of $753 vs. $785 last year. This offers some financial relief for producers. New crop corn prices pencil out near break even or a slight profit for many producers, and new crop corn futures this week and now trading above a year ago, helping to aid the financial outlook.
South American Weather Pattern Discussion
Argentina to get Soaked; Below Normal Rainfall Aids Brazilian Harvest Progress:
The South American forecast into late February is consistent and keeps in place a pattern into late Feb is consistent and keeps in place a pattern of heavy rainfall across Argentina and a mix of rain/sun in Northern Brazil. This is viewed as favorable as later planted crops in Argentina will benefit from improving soil moisture via seed sizes, while the rush to harvest Brazilian soybeans will be ongoing for another 12-14 days. A recent pattern shift in Argentina and the opening of the Brazilian harvest window. Organized precipitation returns to most of Argentina’s ag belt Feb 15-18. Accumulation of 1-4” will blanket Cordoba, Santa Fe & Enter Rios. In Brazil heavy rainfall in excess of 2” will be confined to northern Mato Grosso and fringe soy producing areas in the far north. Another 9-11MMT’s of Brazilian soybeans will be gathered this week.
On the Corn Front
CBOT Corn Stays Ahead of Feb WASDE:
Global corn markets ended firm on Monday amid high odds USDA in its Feb WASDE trims Argentine production 1-2 MMT’s and hikes US ethanol grind a modest 25 Mil Bu. Both will serve to tighten what is an already tight balance sheet, though Ag Resources (ARC) maintains $5.10, basis May CBOT which represents hard resistance without an early end to Brazil’s rainy season in April. Whether tariffs on Mexico and Canada are implemented is a big deal. The absence of tariffs leaves the market to focus acutely on Brazilian weather and the seasonal expansion of physical US export disappearance. The establishment of tariffs accelerates the seasonal transition from the US to South America during late spring and summer. Tariffs, US planting intentions, and South American weather drive price discovery. ARC strongly recommends managing forward risk by rewarding rallies. Keep in mind that seasonal price trends, which are positive today and turn negative in April. ARC and other analysts look to extend 2025 sales by 10-15% prior to release of NASS seeding intentions data by March 31st . Winter corn is being rapidly seeded in Brazil which is helping to germinate/establish the crop.
On the Ethanol Front
Ethanol’s corn demand draw continues to expand amid record US ethanol exports and as Brazilian cash prices are expected to rise into the spring and summer driving months. Ethanol demand growth has been welcomed in 24/25, and the collision of this and lower-than-expected final yield is noteworthy. ARC’s longer-term fundamental research on ethanol’s demand expansion stays bright but only to a point amid the lack gain in US ethanol production capacity since 2020. US corn used for ethanol Sep-January is estimated at 2.33 Bil Bu, up 2.8% year-over-year and the largest since 2017/18 – when annual ethanol grind was a record 5.61 Bil Bu. This also compares to the USDA’s projected 24/25 increase in corn grind of only 22 Mil Bu (0.4%). We are expecting the USDA to raise industrial corn use 25 Bil Bu in today’s WASDE or March WASDE provided US export demand for ethanol stays strong.If deals are not cut US tariffs and retaliation can quickly change the positive outlook for US ethanol.
Have A Great Trading Day!
Contact me directly with any questions at 1-888-264-5665 or dflynn@pricegroup.com
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn