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
The Presidents Day holiday has banks closed, and state and federal offices recognize the holiday along with certain commodity sectors. However, equities, interest rates, and brent crude will halt trading at 12:00 P.M. And FX at 4:00 P.M. There will be no reports but we will hear from the Fed governors starting with Fed Harker Speech at 8:30 A.M., Fed Bowman Speech at 9:20 A.M., and Fed Waller Speech at 5:00 P.M.
In Friday’s action the CBOT May corn settled to 2 ½ cents higher on the heels of wheat rallying settling 21 ½ cents higher and sharp break in the US dollar.
US industrial production in January beat expectations and increased by 0.5% from December, following an upward-revised December increase 1%. Compared to a year ago, The Federal Reserves Industrial Production Index was 2% higher, marking the largest annualized increase since September 2022, when the economy was still rebounding from the pandemic shutdowns. January also marked the first month of annualized growth of more than 1% since January 20233. Production of aircraft and parts and 7% jump in electric and natural gas utilities manufacturing output accounts for 78% of industrial production and was down 0.1% due to a slowdown in motor vehicles and parts but was 1% higher than a year ago., marking the largest annualized increase since December 2023. Capacity Utilization rose to a 5-month high of 77.8% and was 1.6% higher than a year ago.
Central US Weather Pattern Discussion
Frigid Temps Persist into Feb 23rd; Peak Cold Occurs Mid Next Week:
The Central US forecast is consistent in maintaining a pattern of bitterly cold temps throughout the next 10 days. Model guidance places the coldest of coming temps Tues-Wed, with minimum lows projected 3-20 degrees below zero across the whole of the US Plains. Heavy snow is forecast in E KS, MO, and across the E Midwest, but pockets of US HRW Belt will stay barren of snow cover. Winterkill concern stays elevated across southeastern CO, W KS, and the TX/OK panhandles. Logistical interruptions are also anticipated. The forecast is also consistent in forecast a moderate in temps after Feb 23rd . Precipitation in late winter broadly favors the eastern half of the US Ag Belt.
South American Weather Forecast Update
South American Weather Forecast Favorable; Normal/Near Normal Precipitation Forecast Next Two Weeks:
The South American pattern into late February is nearly ideal. Another 8-9 days of warmth/dryness in central & northern Brazil will sustain soybean harvesting at a near-record pace, while regular raine resumes into Mato Grosso, Goias, and far northern Brazil thereafter. Subsoil moisture will be more than adequate for early safrinha corn growth. Soaking 1-3” rainfall is advertised in the next 7 days across Argentina and Rio Grande do Sul in southern Brazil. The EU model’s two-week percent of normal precipitation in major crop areas. Rain adds to seed weights in Argentina. Worst-case safrinha corn planting date in Brazil will be avoided. Beyond late February, the focus of South American weather will be on the intensity of seasonal rainfall in North Brazil. March and April will be most important in determining safrinha yield potential.
Further Corn Analysis
Corn Ends Firm, March CBOT Falters at $5.00; Safrinha Corn Seeding Races Ahead:
World corn markets ended firm for a third time as funds add to existing length amid hope that trade wars can be avoided in spring. As mentioned at midday, it’s impossible to confidently forecast global grain flows beyond April 1st, and in the near term Ag Resources (ARC’s) chief concern is centered on potential speculative liquidation amid favorable South American Weather. A more bearish trend is forecast after March seeding intentions published March 31st . Safrinha corn planting in Mato Grosso last week reached 45% complete, vs. 53% on average. A near record 21% of the crop was planted in the last seven days, and along with wetter extended range forecast in N Brazil there is no undue concern about safrinha yield loss. It’s the duration of rainfall beyond mid May is now key. Managed funds on Tuesday were long about 332,000contracts and ARC estimates net fund length currently 350-353,000. Adverse Brazilian weather and confirmed absence of tariffs are needed to sustain above $5.10.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 888-264-5665 or dflynn@pricegroup.com.
Grains in Pause Today. The Corn & Ethanol Report 02/17/2025
The Presidents Day holiday has banks closed, and state and federal offices recognize the holiday along with certain commodity sectors. However, equities, interest rates, and brent crude will halt trading at 12:00 P.M. And FX at 4:00 P.M. There will be no reports but we will hear from the Fed governors starting with Fed Harker Speech at 8:30 A.M., Fed Bowman Speech at 9:20 A.M., and Fed Waller Speech at 5:00 P.M.
In Friday’s action the CBOT May corn settled to 2 ½ cents higher on the heels of wheat rallying settling 21 ½ cents higher and sharp break in the US dollar.
US industrial production in January beat expectations and increased by 0.5% from December, following an upward-revised December increase 1%. Compared to a year ago, The Federal Reserves Industrial Production Index was 2% higher, marking the largest annualized increase since September 2022, when the economy was still rebounding from the pandemic shutdowns. January also marked the first month of annualized growth of more than 1% since January 20233. Production of aircraft and parts and 7% jump in electric and natural gas utilities manufacturing output accounts for 78% of industrial production and was down 0.1% due to a slowdown in motor vehicles and parts but was 1% higher than a year ago., marking the largest annualized increase since December 2023. Capacity Utilization rose to a 5-month high of 77.8% and was 1.6% higher than a year ago.
Central US Weather Pattern Discussion
Frigid Temps Persist into Feb 23rd; Peak Cold Occurs Mid Next Week:
The Central US forecast is consistent in maintaining a pattern of bitterly cold temps throughout the next 10 days. Model guidance places the coldest of coming temps Tues-Wed, with minimum lows projected 3-20 degrees below zero across the whole of the US Plains. Heavy snow is forecast in E KS, MO, and across the E Midwest, but pockets of US HRW Belt will stay barren of snow cover. Winterkill concern stays elevated across southeastern CO, W KS, and the TX/OK panhandles. Logistical interruptions are also anticipated. The forecast is also consistent in forecast a moderate in temps after Feb 23rd . Precipitation in late winter broadly favors the eastern half of the US Ag Belt.
South American Weather Forecast Update
South American Weather Forecast Favorable; Normal/Near Normal Precipitation Forecast Next Two Weeks:
The South American pattern into late February is nearly ideal. Another 8-9 days of warmth/dryness in central & northern Brazil will sustain soybean harvesting at a near-record pace, while regular raine resumes into Mato Grosso, Goias, and far northern Brazil thereafter. Subsoil moisture will be more than adequate for early safrinha corn growth. Soaking 1-3” rainfall is advertised in the next 7 days across Argentina and Rio Grande do Sul in southern Brazil. The EU model’s two-week percent of normal precipitation in major crop areas. Rain adds to seed weights in Argentina. Worst-case safrinha corn planting date in Brazil will be avoided. Beyond late February, the focus of South American weather will be on the intensity of seasonal rainfall in North Brazil. March and April will be most important in determining safrinha yield potential.
Further Corn Analysis
Corn Ends Firm, March CBOT Falters at $5.00; Safrinha Corn Seeding Races Ahead:
World corn markets ended firm for a third time as funds add to existing length amid hope that trade wars can be avoided in spring. As mentioned at midday, it’s impossible to confidently forecast global grain flows beyond April 1st, and in the near term Ag Resources (ARC’s) chief concern is centered on potential speculative liquidation amid favorable South American Weather. A more bearish trend is forecast after March seeding intentions published March 31st . Safrinha corn planting in Mato Grosso last week reached 45% complete, vs. 53% on average. A near record 21% of the crop was planted in the last seven days, and along with wetter extended range forecast in N Brazil there is no undue concern about safrinha yield loss. It’s the duration of rainfall beyond mid May is now key. Managed funds on Tuesday were long about 332,000contracts and ARC estimates net fund length currently 350-353,000. Adverse Brazilian weather and confirmed absence of tariffs are needed to sustain above $5.10.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 888-264-5665 or dflynn@pricegroup.com.
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn