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 Chicago Fed National Activity Index at 7:30 A.M., Dallas Fed Manufacturing Index at 9:30 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., and 2-Year Note Auction at 12:00 P.M.
US existing home sales, as reported by the National Association of Realtors, slipped 5% in January to a 3-month low of 4.08 Mil homes. It was the largest 1-month decline in 7 months. Mortgage rates are down slightly from the 4th quarter high but remained near 7%. Compared to a year ago, home sales were up 2%, marking the 4th consecutive month of annualized gains, which hasn’t happened since July 2021. Home inventories rose by 4% from December and were 17% larger than a year ago at 1.18 Mil homes. The median US home price of 396,900 was up 5% from last year, marking the 10th consecutive month of annualized gains, while inventory in terms months of supply was up 17% year-over-year.
South American Weather Update
South American Forecast Favorable into March 5th:
The near-term South American forecast remains favorable, with the whole of Argentina to benefit from 10-day rainfall of 2-5.00”, and as northern Brazilian soil moisture stays stable amid the return of daily showers. The GFS model’s projected 8-day soil moisture shows drought will be ended completely in parts of Cordoba & Buenos Aires. Focus shifts to N Brazil after the next two weeks. There’s no concern over safrinha yield risk. A pattern of normal/above normal rainfall is forecast in Mato Grosso, Mato Grosso do Sul & Goias into March 10th . A drier pattern follows in N Brazil. This isn’t threatening until April or May. An estimated 67% of the Brazilian winter corn crop seeded as of February 20th, with seeding to surpass 85% by March 1st . There will be no yield drag on Brazilian winter corn due to timely seeding progress.
Central US Weather Update
Net Soil Moisture Loss to Persist Across Plains; Abnormal Dryness to End in Eastern Midwest:
The Central US forecast is consistent with previous runs and keeps in place the pattern of dry west/wet east into the first full week of March. The EU’s two-week precipitation accumulation forecast outlook verifies, current abnormal dryness in IL, IN, and OH will be eliminated. Slow/steady drought expansions occurs in the Southern Plains. The absence of meaningful precipitation across TX, OK, CO, NE, and parts of KS since Dec 1st has been buffered by rainfall there in Nov of 2.50-8.60” . Dryness has been slow to appear in soil moisture and drought monitoring maps. However, as temps rise it’s important that regular rain falls across the HRW belt in March & April. Recall NOAA projects below normal precipitation to continue into late spring across the Southern Plains and Southwest. Note also moisture deficits today are the highest in NE and SD.
Corn Comments & Analysis
Corn Ends Weak on US Economic Concerns Brazilian Market Soars to $6.30/Bu; Mato Grosso to Finish Safrinha Seeding by March 5th:
CBOT corn ended lower on long liquidation – manage funds on Tuesday were long a net 354,000 contracts, vs. 332,000 the previous week – amid a plunging US equity market and concern over future food consumption growth. Ag Resources (ARC) maintains a much choppier market must be expected at/near $5.00. US ethanol margins remained depressed. Argentine corn is offered competitively. Key Sunday/Monday will be whether MAY CBOT holds the 20-day moving average at $5.03. The Brazilian market is clearly buying additional winter corn seedings. Spot corn in Brazil the week rallied $.30/Bu. However, corn at $5.00 has secured new crop has been seeded at a near record pace. Planting in Mato Grosso today is 67% complete and is forecast to reach 85-87% by Feb 25th . The extra acres and normal planting pace is easing concern regarding Brazilian production. Sustained rallies require Brazilian dryness in April. A more bearish price pattern unfolds thereafter if NASS confirms US average of more than 93 Mil. Brazilian weather in April along with the US plantings could produce the next corn bear phase. CBOT preliminary open interest for Friday showed a decline of 88,850 contracts in corn, 24,190 in soybeans, and 15,923 in Chicago wheat. The sharp falls were do to the expiration of March options. However, 174,247 contracts in March corn, 116,403 contracts in March soybeans, and 40,940 contracts of March Chicago wheat are still open. The hefty March futures length suggests that additional liquidation will be forthcoming this week.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or dflynn@pricegroup.com.
Corn Heading For Choppy Waters. The Corn & Ethanol Report 02/24/2025
We kickoff the day with Chicago Fed National Activity Index at 7:30 A.M., Dallas Fed Manufacturing Index at 9:30 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., and 2-Year Note Auction at 12:00 P.M.
US existing home sales, as reported by the National Association of Realtors, slipped 5% in January to a 3-month low of 4.08 Mil homes. It was the largest 1-month decline in 7 months. Mortgage rates are down slightly from the 4th quarter high but remained near 7%. Compared to a year ago, home sales were up 2%, marking the 4th consecutive month of annualized gains, which hasn’t happened since July 2021. Home inventories rose by 4% from December and were 17% larger than a year ago at 1.18 Mil homes. The median US home price of 396,900 was up 5% from last year, marking the 10th consecutive month of annualized gains, while inventory in terms months of supply was up 17% year-over-year.
South American Weather Update
South American Forecast Favorable into March 5th:
The near-term South American forecast remains favorable, with the whole of Argentina to benefit from 10-day rainfall of 2-5.00”, and as northern Brazilian soil moisture stays stable amid the return of daily showers. The GFS model’s projected 8-day soil moisture shows drought will be ended completely in parts of Cordoba & Buenos Aires. Focus shifts to N Brazil after the next two weeks. There’s no concern over safrinha yield risk. A pattern of normal/above normal rainfall is forecast in Mato Grosso, Mato Grosso do Sul & Goias into March 10th . A drier pattern follows in N Brazil. This isn’t threatening until April or May. An estimated 67% of the Brazilian winter corn crop seeded as of February 20th, with seeding to surpass 85% by March 1st . There will be no yield drag on Brazilian winter corn due to timely seeding progress.
Central US Weather Update
Net Soil Moisture Loss to Persist Across Plains; Abnormal Dryness to End in Eastern Midwest:
The Central US forecast is consistent with previous runs and keeps in place the pattern of dry west/wet east into the first full week of March. The EU’s two-week precipitation accumulation forecast outlook verifies, current abnormal dryness in IL, IN, and OH will be eliminated. Slow/steady drought expansions occurs in the Southern Plains. The absence of meaningful precipitation across TX, OK, CO, NE, and parts of KS since Dec 1st has been buffered by rainfall there in Nov of 2.50-8.60” . Dryness has been slow to appear in soil moisture and drought monitoring maps. However, as temps rise it’s important that regular rain falls across the HRW belt in March & April. Recall NOAA projects below normal precipitation to continue into late spring across the Southern Plains and Southwest. Note also moisture deficits today are the highest in NE and SD.
Corn Comments & Analysis
Corn Ends Weak on US Economic Concerns Brazilian Market Soars to $6.30/Bu; Mato Grosso to Finish Safrinha Seeding by March 5th:
CBOT corn ended lower on long liquidation – manage funds on Tuesday were long a net 354,000 contracts, vs. 332,000 the previous week – amid a plunging US equity market and concern over future food consumption growth. Ag Resources (ARC) maintains a much choppier market must be expected at/near $5.00. US ethanol margins remained depressed. Argentine corn is offered competitively. Key Sunday/Monday will be whether MAY CBOT holds the 20-day moving average at $5.03. The Brazilian market is clearly buying additional winter corn seedings. Spot corn in Brazil the week rallied $.30/Bu. However, corn at $5.00 has secured new crop has been seeded at a near record pace. Planting in Mato Grosso today is 67% complete and is forecast to reach 85-87% by Feb 25th . The extra acres and normal planting pace is easing concern regarding Brazilian production. Sustained rallies require Brazilian dryness in April. A more bearish price pattern unfolds thereafter if NASS confirms US average of more than 93 Mil. Brazilian weather in April along with the US plantings could produce the next corn bear phase. CBOT preliminary open interest for Friday showed a decline of 88,850 contracts in corn, 24,190 in soybeans, and 15,923 in Chicago wheat. The sharp falls were do to the expiration of March options. However, 174,247 contracts in March corn, 116,403 contracts in March soybeans, and 40,940 contracts of March Chicago wheat are still open. The hefty March futures length suggests that additional liquidation will be forthcoming this week.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or dflynn@pricegroup.com.
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn