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 Fed Logan Speech at 3:20 A.M., Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price Index MoM & YoY, House Price Index MoM & YoY, and House Price Index at 8:00 A.M., CB Consumer Confidence, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Servces Index and Dallas Fed Services Revenues Index at 9:30 A.M., Fed Barr Speech at 10:45 A.M., Fed Barkin Speech, 5-Year Note Auction, and Money Supply at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
US cash gold prices are on track for the 2nd consecutive month higher, currently up $148/0z in February, after gaining $177 in January and $5.60 in 2024. The cash market is $9.05/oz higher compared to a year ago. Gold is often referred to as an ‘inflation hedge,” but demand for gold simply reflects the decline in purchasing power of the US dollar (or other currencies). World central banks have been liquidating US Treasury holdings since 2014 and replacing them with gold to avoid the decline in purchasing power of the US dollar. Last weeks CoT report showed that for the week ending Feb 18, funds were sellers of 13,605 contracts against commercial buying of 2,146 contracts on a large 1-day price correction. However, by the end of the week, and futures were $7.40. The smaller commercial net short position continues to suggest that the market has yet to reach levels where commercials see significant downside risk.
South America Weather Update
Needed Rain Forecast Across Argentina (some excessive); No Sign of Premature Dryness in North Brazil:
South America’s climate into the first full week of March is mixed. Drought intensification will be ongoing in Rio Grande do Sul in southern Brazil. Soil moisture stays favorably, robust across Mato Grosso and Goias in N Brazil – which accounts for most of the safrinha corn production. Ongoing heavy rainfall in Argentina begins today. Still, it should model guidance verify that localized flooding could occur in Cordoba, Buenos Aires, and far southern Santa Fe. Certainly, drier conditions will be needed after March 6th . The EU, GFS, and AI models agree that agree that rainfall upwards of 6-12” will impact Argentina’s primary ag belt. The drought will be broken, and the rainfall is favorable initially, as long as heavy rainfall does not begin training and produce lasting flooding. Dry soils can absorb the rain. However, the rain needs to stop afyer March 5th . Pay close attention Play close attention to the 11-15 day forecast.
US Weather Pattern Update
Central US Forecast Abruptly Warmer into March:
The EU, GFS, and AI models have eliminated the return of bitterly cold temps into March 10th . NOAA’s 6-10 day temp probability forecast shows highs this week will reach into the 60’s & 70’s across the S Plains and Delta/Southeast. Freezing overnight lows are possible in the 6-10 day period, but a more springlike temp profile is forecast across the southern and western US ag belt moving forward. Plains moisture will need close monitoring in March. The major forecasting models are also in agreement that any meaningful rain/snow over the next two weeks favors the Delta and E Midwest. AR, southern MO, IL, IN, and OH are targeted with precipitation of 1-3” and March 3-10”. Little/no precipitation is forecast north or west of Missouri. March climate guidance too, is arid across the US Plains.
CBOT corn ended sharply lower as May could not find support at its 20-day moving average. After the close, the President stated the tariffs on Mexico and Canada would be implemented on March 1st . Ag Resource (ARC) has detailed that Mexico will likely remain the US’s largest importer of corn indefinitely and has 307 Mil/Bu of undelivered 24/25 US purchases. Tariffs will be a priority for price discovery in the market. US-China political tensions are rising. The Trump Administration ability to complete a new trade deal is becoming doubtful as new port fees, investment restrictions, and pressure on Mexico to also apply tariffs on Chinese goods are noted. The US Congress wants to remove China’s Most Favored Nation trading status, which will quickly apply new tariffs. The market has also been forced to reconcile heavily overbought technical conditions. As such, few have benn willing to step in front the recent correction. With its well-known managed fund length, last night’s range was a still-sizable 335-354,000 contracts.
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
Tariffs Tagged for March 1st. The Corn & Ethanol Report 02/25/2025
We kickoff the day with Fed Logan Speech at 3:20 A.M., Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price Index MoM & YoY, House Price Index MoM & YoY, and House Price Index at 8:00 A.M., CB Consumer Confidence, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Servces Index and Dallas Fed Services Revenues Index at 9:30 A.M., Fed Barr Speech at 10:45 A.M., Fed Barkin Speech, 5-Year Note Auction, and Money Supply at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
US cash gold prices are on track for the 2nd consecutive month higher, currently up $148/0z in February, after gaining $177 in January and $5.60 in 2024. The cash market is $9.05/oz higher compared to a year ago. Gold is often referred to as an ‘inflation hedge,” but demand for gold simply reflects the decline in purchasing power of the US dollar (or other currencies). World central banks have been liquidating US Treasury holdings since 2014 and replacing them with gold to avoid the decline in purchasing power of the US dollar. Last weeks CoT report showed that for the week ending Feb 18, funds were sellers of 13,605 contracts against commercial buying of 2,146 contracts on a large 1-day price correction. However, by the end of the week, and futures were $7.40. The smaller commercial net short position continues to suggest that the market has yet to reach levels where commercials see significant downside risk.
South America Weather Update
Needed Rain Forecast Across Argentina (some excessive); No Sign of Premature Dryness in North Brazil:
South America’s climate into the first full week of March is mixed. Drought intensification will be ongoing in Rio Grande do Sul in southern Brazil. Soil moisture stays favorably, robust across Mato Grosso and Goias in N Brazil – which accounts for most of the safrinha corn production. Ongoing heavy rainfall in Argentina begins today. Still, it should model guidance verify that localized flooding could occur in Cordoba, Buenos Aires, and far southern Santa Fe. Certainly, drier conditions will be needed after March 6th . The EU, GFS, and AI models agree that agree that rainfall upwards of 6-12” will impact Argentina’s primary ag belt. The drought will be broken, and the rainfall is favorable initially, as long as heavy rainfall does not begin training and produce lasting flooding. Dry soils can absorb the rain. However, the rain needs to stop afyer March 5th . Pay close attention Play close attention to the 11-15 day forecast.
US Weather Pattern Update
Central US Forecast Abruptly Warmer into March:
The EU, GFS, and AI models have eliminated the return of bitterly cold temps into March 10th . NOAA’s 6-10 day temp probability forecast shows highs this week will reach into the 60’s & 70’s across the S Plains and Delta/Southeast. Freezing overnight lows are possible in the 6-10 day period, but a more springlike temp profile is forecast across the southern and western US ag belt moving forward. Plains moisture will need close monitoring in March. The major forecasting models are also in agreement that any meaningful rain/snow over the next two weeks favors the Delta and E Midwest. AR, southern MO, IL, IN, and OH are targeted with precipitation of 1-3” and March 3-10”. Little/no precipitation is forecast north or west of Missouri. March climate guidance too, is arid across the US Plains.
Corn Comments & Analysis
Corn Extends Correction on Trade Policy Concern; Argentine Rainfall Favors Crops:
CBOT corn ended sharply lower as May could not find support at its 20-day moving average. After the close, the President stated the tariffs on Mexico and Canada would be implemented on March 1st . Ag Resource (ARC) has detailed that Mexico will likely remain the US’s largest importer of corn indefinitely and has 307 Mil/Bu of undelivered 24/25 US purchases. Tariffs will be a priority for price discovery in the market. US-China political tensions are rising. The Trump Administration ability to complete a new trade deal is becoming doubtful as new port fees, investment restrictions, and pressure on Mexico to also apply tariffs on Chinese goods are noted. The US Congress wants to remove China’s Most Favored Nation trading status, which will quickly apply new tariffs. The market has also been forced to reconcile heavily overbought technical conditions. As such, few have benn willing to step in front the recent correction. With its well-known managed fund length, last night’s range was a still-sizable 335-354,000 contracts.
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