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 Export Prices MoM & YoY, Import Prices MoM & YoY, Retail Sales MoM & YoY, Retail Sales Control Group MoM, Retail Sales Ex Autos MoM, and Retail Sales Ex Gas/Autos MoM at 7:30 A.M., Industrial Production MoM & YoY, Manufacturing Production MoM & YoY, and Capacity Utilization at 8:15 A.M., Business Inventories MoM and Retail Inventories Ex Autos MoM at 9:00 A.M., and Baker Hughes Oil & Total Rig Counts at 12:00 P.M.
Following a slightly higher-than-expected Consumer Price Inflation rate on Wednesday, Producer Price Inflation was also slightly above expectations. The Bureau of Labor Statistics reported that the Producer Price Index for final demand rose 0.4% in January to a record high of 147.7. The annualized inflation rate of 3.5% was unchanged from December but also the highest since February 2023. This also marked the 4th consecutive month that the PPI inflation exceeded CPI inflation, indicating narrowing margins between producers cost and retail sales prices. The PPI inflation rate ticked lower at the end of summer, and raw material prices have led the recent turn higher. The CRB Index in January was up 12% year-over-year and is currently 13.3% higher than last year, suggesting a further increase in PPI and CPI inflation rates.
Central US Weather Pattern Discussion
Snow Blankets Most of Central US; Winterkill Damage Uncertain:
The Central US forecast keeps in place frigid temps into Feb 21-22 with moderation due thereafter. Overnight lows in the single digits have been recorded this week across the OK Panhandle, KS, CO, and NE. Snow cover was absent Wednesday. Snow cover is present but spotty/lite across the Southern Plains currently some measure of damage was done to winter wheat, but details won’t be available until spring. Fortunately, additional heavy snow is forecast across the Plains, Midwest, and mid-South next Tues-Thurs. Accumulation of 2-8” is offered to TX, OK, KS, and NE. Accumulation of 4-12” is forecast in TN, KY, and eastern Midwest. Recent/upcoming snow will work to improve soil moisture across the E Midwest, where abnormal dryness lingers in IL, IN, and MI. Severe extreme drought will remain intact in ND, SD, and IA. Improved rain/snow is needed across the W Corn Belt in March.
South American Weather Update
South American Pattern Stays Wet in Argentina Dry in Brazil Next 10 Days; Regular Showers Resume in N Brazil Late Feb:
South American forecast stays favorable into late February. Additional drought erosion lies ahead for northern and eastern Argentina – where rain is most welcomed. Rainfall of .75-3.00” is projected in northern Cordoba, Santa Fe, and Entre Rios into Sun/Mon. In northern Brazil, dryness persists in all pockets of Mato grosso into Feb 24th . This allows soybean harvesting there to continue at a record pace. Safrinha corn seeding will be active. Notably, the major forecasting model’s agree that near-daily showers return to Mato Grosso & Goias thereafter, which keeps moisture stable. Extended range guidance mist verify, but today there’s no concern about early-season safrinha corn crop health.
Current soil moisture in Brazil is adequate to be abundant across 75% of safrinha corn-growing areas.
Corn Comments & Analysis
May CBOT Corn Maintains Support at 20-Day Moving Average; Strong US Export Demand Persists:
Global corn markets on Thursday ended slightly higher amid larger-than-expected US weekly export sales in the week ending Feb 6th totaled 65 Mil Bu, a three-week high and 40 Mil above the pace needed to meet the USDA’s target. Total 24/25 export commitments sit at 1,827 Mil Bu, up 28% year-over-year. USDA forecast 24/25 US exports up only 7%. Final US exports will be all about summer export sales/shipments & thus the size of South American production. However, Ag Resources (ARC) doubts an outright collapse in US export demand will appear in the 30 days. Brazil’s daily cash corn price index has in the last three weeks has rallied 12% to &5.81 , and has not followed its normal neutral seasonal trend in late winter. A range of $4.60-$5.10 persists until the Brazilian corn crop is planted on a timely basis and the market can confirm that US farmers have planted 93 Mil plus acres. A longer-term bearish trend resumes when the market focuses on growing US new crop stocks and 2025/26 US corn stocks above 2.0 Bil Bu.
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
CBOT Corn Testing Resistance in Overnight Session. The Corn & Ethanol Report 02/14/2025
We kickoff the day Export Prices MoM & YoY, Import Prices MoM & YoY, Retail Sales MoM & YoY, Retail Sales Control Group MoM, Retail Sales Ex Autos MoM, and Retail Sales Ex Gas/Autos MoM at 7:30 A.M., Industrial Production MoM & YoY, Manufacturing Production MoM & YoY, and Capacity Utilization at 8:15 A.M., Business Inventories MoM and Retail Inventories Ex Autos MoM at 9:00 A.M., and Baker Hughes Oil & Total Rig Counts at 12:00 P.M.
Following a slightly higher-than-expected Consumer Price Inflation rate on Wednesday, Producer Price Inflation was also slightly above expectations. The Bureau of Labor Statistics reported that the Producer Price Index for final demand rose 0.4% in January to a record high of 147.7. The annualized inflation rate of 3.5% was unchanged from December but also the highest since February 2023. This also marked the 4th consecutive month that the PPI inflation exceeded CPI inflation, indicating narrowing margins between producers cost and retail sales prices. The PPI inflation rate ticked lower at the end of summer, and raw material prices have led the recent turn higher. The CRB Index in January was up 12% year-over-year and is currently 13.3% higher than last year, suggesting a further increase in PPI and CPI inflation rates.
Central US Weather Pattern Discussion
Snow Blankets Most of Central US; Winterkill Damage Uncertain:
The Central US forecast keeps in place frigid temps into Feb 21-22 with moderation due thereafter. Overnight lows in the single digits have been recorded this week across the OK Panhandle, KS, CO, and NE. Snow cover was absent Wednesday. Snow cover is present but spotty/lite across the Southern Plains currently some measure of damage was done to winter wheat, but details won’t be available until spring. Fortunately, additional heavy snow is forecast across the Plains, Midwest, and mid-South next Tues-Thurs. Accumulation of 2-8” is offered to TX, OK, KS, and NE. Accumulation of 4-12” is forecast in TN, KY, and eastern Midwest. Recent/upcoming snow will work to improve soil moisture across the E Midwest, where abnormal dryness lingers in IL, IN, and MI. Severe extreme drought will remain intact in ND, SD, and IA. Improved rain/snow is needed across the W Corn Belt in March.
South American Weather Update
South American Pattern Stays Wet in Argentina Dry in Brazil Next 10 Days; Regular Showers Resume in N Brazil Late Feb:
South American forecast stays favorable into late February. Additional drought erosion lies ahead for northern and eastern Argentina – where rain is most welcomed. Rainfall of .75-3.00” is projected in northern Cordoba, Santa Fe, and Entre Rios into Sun/Mon. In northern Brazil, dryness persists in all pockets of Mato grosso into Feb 24th . This allows soybean harvesting there to continue at a record pace. Safrinha corn seeding will be active. Notably, the major forecasting model’s agree that near-daily showers return to Mato Grosso & Goias thereafter, which keeps moisture stable. Extended range guidance mist verify, but today there’s no concern about early-season safrinha corn crop health.
Current soil moisture in Brazil is adequate to be abundant across 75% of safrinha corn-growing areas.
Corn Comments & Analysis
May CBOT Corn Maintains Support at 20-Day Moving Average; Strong US Export Demand Persists:
Global corn markets on Thursday ended slightly higher amid larger-than-expected US weekly export sales in the week ending Feb 6th totaled 65 Mil Bu, a three-week high and 40 Mil above the pace needed to meet the USDA’s target. Total 24/25 export commitments sit at 1,827 Mil Bu, up 28% year-over-year. USDA forecast 24/25 US exports up only 7%. Final US exports will be all about summer export sales/shipments & thus the size of South American production. However, Ag Resources (ARC) doubts an outright collapse in US export demand will appear in the 30 days. Brazil’s daily cash corn price index has in the last three weeks has rallied 12% to &5.81 , and has not followed its normal neutral seasonal trend in late winter. A range of $4.60-$5.10 persists until the Brazilian corn crop is planted on a timely basis and the market can confirm that US farmers have planted 93 Mil plus acres. A longer-term bearish trend resumes when the market focuses on growing US new crop stocks and 2025/26 US corn stocks above 2.0 Bil Bu.
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