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, PPI MoM & YoY, Core PPI MoM & YoY, Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average, PPI and PPI Ex Food, Energy, and Trade MoM & YoY at 7:30 A.M., EIA Natural Gas Storage at 9:30 A.M., Total Household Debt at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 30-Year Bond Auction at 12:00 P.M., Fed Balance Sheet at 3:30 P.M.
The Consumer Price Index for January was reported at a record high of 317.7. This was 0.7% higher than in January, marking the highest 1-month increase since January 2023. The annualized inflation rate was higher than expected at 3%, the most since June. The Food & Beverage, Food, Housing, and Medical Care Indexes all set record highs, while the core inflation index (ex-food and energy) set a record high. The Core Inflation rate marked the 49th consecutive month higher. The purchasing power of the US dollar has now lost 19% in 5 years, while food purchasing power is down 23%. Not since the early 1980’s has the consumer seen the currency devalued at such a rate. This looks to support investor demand for real assets in the foreseeable future.
South American Weather Pattern Discussion
South American Forecast Unchanged into Feb26th, Outlook Favorable Nearby; Rain Needed in Mato Grosso do Sul in March:
The Soth American forecast is consistent with prior runs in projecting additional soaking rainfall in N Argentina and Rio Grande do Sulin southern Brazil. Ag Resources (ARC) notes 48-hour precipitation accumulation in Argentina has been recorded in a range of .70-1.80”, which has covered the drier areas of Santa Fe & Entre Rios. Additional rainfall worth .75-2.50” impacts N Argentina Feb 14-17. Argentina dryness is being eased rapidly. There’s also no sign the rainy season ends soon in Mato Grosso and far N Brazil. Assuming the two-week forecast verifies, Feb 1-26 precipitation in Mato Grosso will reach 7.3”. This compares to 8.*” on average but is more than adequate to sustain early safrinha growth. The only potential problem area today is Mato Grosso and Sao Paulo (15% of Brazilian corn production), where net soil moisture loss continues and where improved shower activity is needed in March.
Central US Weather Pattern Discussion
Central US Cold, Wet Next 10 Days:
The Central US forecast has extended a pattern of bitterly cold temps into Feb 22-23with minimum lows in the single digits and teens to be common/widespread to bottom out in the 6-10 day period, when minimums at or below zero blanket the N Plains and Great Lakes Region. Frigid temps were present this morning across the US Plains, where snow cover was minimal. Fortunately, a more active pattern of snow is imminent. Three systems move across the Plains/Midwest into Fen 20th . The EU weather model’s snow accumulation upward of 12-20” is probable across rhe eastern Great Lakes, and totals 4+” are offered to most areas. Soaking rainfall od 1-4” favors the Southeast.
CBOT Corn Recovers Tuesday’s Correction
Market Stuck Until Clarity on Trade Policy; Brazilian Weather Emerges:
Corn futures mixed with Chicago higher and Europe lower. The EU market is being pressured by more aggressive feed wheat offers, due to abundant supply, which provides competition for EU & Black Sea corn disappearance. Rising cash ethanol prices lend support at $4.75-$4.80. Ethanol values rise seasonally in late winter/spring, and weekly EIA data suggest US ethanol disappearance remains strong. Longer tem direction will be a function of US trade policy March onward, the intensity of northern Brazilian rainfall in March & April , and 2025 US seeding intentions, (March 31st). The risk after late winter is higher odds US 25/26 end stocks reach 2.o Bil Bu barring major weather adversity. Note the market has failed to score new highs in late January. Trade range expected to be $4.80-$5.10 basis May, into late March. ARC maintains a strategy catching upon/finishing 2024/25 sales at $5.10, basis May. New bullish fodder is needed on a daily basis given already sizable- long fund length.
Wednesday’s CBOT open interest gained 7,727 contracts in corn, while falling 9,804 contracts in soybeans, 6,542 in soybean oil, and 4,157 contracts in Chicago wheat. Soybean meal open interest was up just 9 contracts. CBOT corn open interest is holding near the record at 2,033,859 contracts.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 888-264-5665 or dflynn@pricegroup.com
Inflation Pushing Declines in US dollar Purchasing Power. The Corn & Ethanol Report 02/13/2025
We kickoff the day with Export Sales, PPI MoM & YoY, Core PPI MoM & YoY, Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average, PPI and PPI Ex Food, Energy, and Trade MoM & YoY at 7:30 A.M., EIA Natural Gas Storage at 9:30 A.M., Total Household Debt at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 30-Year Bond Auction at 12:00 P.M., Fed Balance Sheet at 3:30 P.M.
The Consumer Price Index for January was reported at a record high of 317.7. This was 0.7% higher than in January, marking the highest 1-month increase since January 2023. The annualized inflation rate was higher than expected at 3%, the most since June. The Food & Beverage, Food, Housing, and Medical Care Indexes all set record highs, while the core inflation index (ex-food and energy) set a record high. The Core Inflation rate marked the 49th consecutive month higher. The purchasing power of the US dollar has now lost 19% in 5 years, while food purchasing power is down 23%. Not since the early 1980’s has the consumer seen the currency devalued at such a rate. This looks to support investor demand for real assets in the foreseeable future.
South American Weather Pattern Discussion
South American Forecast Unchanged into Feb26th, Outlook Favorable Nearby; Rain Needed in Mato Grosso do Sul in March:
The Soth American forecast is consistent with prior runs in projecting additional soaking rainfall in N Argentina and Rio Grande do Sulin southern Brazil. Ag Resources (ARC) notes 48-hour precipitation accumulation in Argentina has been recorded in a range of .70-1.80”, which has covered the drier areas of Santa Fe & Entre Rios. Additional rainfall worth .75-2.50” impacts N Argentina Feb 14-17. Argentina dryness is being eased rapidly. There’s also no sign the rainy season ends soon in Mato Grosso and far N Brazil. Assuming the two-week forecast verifies, Feb 1-26 precipitation in Mato Grosso will reach 7.3”. This compares to 8.*” on average but is more than adequate to sustain early safrinha growth. The only potential problem area today is Mato Grosso and Sao Paulo (15% of Brazilian corn production), where net soil moisture loss continues and where improved shower activity is needed in March.
Central US Weather Pattern Discussion
Central US Cold, Wet Next 10 Days:
The Central US forecast has extended a pattern of bitterly cold temps into Feb 22-23with minimum lows in the single digits and teens to be common/widespread to bottom out in the 6-10 day period, when minimums at or below zero blanket the N Plains and Great Lakes Region. Frigid temps were present this morning across the US Plains, where snow cover was minimal. Fortunately, a more active pattern of snow is imminent. Three systems move across the Plains/Midwest into Fen 20th . The EU weather model’s snow accumulation upward of 12-20” is probable across rhe eastern Great Lakes, and totals 4+” are offered to most areas. Soaking rainfall od 1-4” favors the Southeast.
CBOT Corn Recovers Tuesday’s Correction
Market Stuck Until Clarity on Trade Policy; Brazilian Weather Emerges:
Corn futures mixed with Chicago higher and Europe lower. The EU market is being pressured by more aggressive feed wheat offers, due to abundant supply, which provides competition for EU & Black Sea corn disappearance. Rising cash ethanol prices lend support at $4.75-$4.80. Ethanol values rise seasonally in late winter/spring, and weekly EIA data suggest US ethanol disappearance remains strong. Longer tem direction will be a function of US trade policy March onward, the intensity of northern Brazilian rainfall in March & April , and 2025 US seeding intentions, (March 31st). The risk after late winter is higher odds US 25/26 end stocks reach 2.o Bil Bu barring major weather adversity. Note the market has failed to score new highs in late January. Trade range expected to be $4.80-$5.10 basis May, into late March. ARC maintains a strategy catching upon/finishing 2024/25 sales at $5.10, basis May. New bullish fodder is needed on a daily basis given already sizable- long fund length.
Wednesday’s CBOT open interest gained 7,727 contracts in corn, while falling 9,804 contracts in soybeans, 6,542 in soybean oil, and 4,157 contracts in Chicago wheat. Soybean meal open interest was up just 9 contracts. CBOT corn open interest is holding near the record at 2,033,859 contracts.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 888-264-5665 or dflynn@pricegroup.com
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn