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 MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., ADP Employment Change at 7:15 A.M., S&P Global Composite PMI Final and S&P Global Services PMI Final at 8:45 A.M., ISM Services PMI, Factory Orders MoM, Factory Orders ex Transportation, ISM Services Business Activity, ISM Services Employment, ISM Services New Orders, and ISM Services Prices at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Beige Book and Total vehicle Sales at 1:00 P.M., and Dairy Products dales at 2:00 P.M.
CBOT corn values have plummeted $.75/Bu since February 20th when July corn futures appeared to be aligned with the February WASDE report and a stock/use ratio of 10.2%. July corn above $5.00 appeared justified. Since then, a waterfall price decline has occurred based on hefty long corn speculative positions and growing trade worry about Trump Tariffs on Canada, Mexico, and China. President Trump reminded and assured farmers in his speech that the tariffs will not be completely effective near immediate but will be a success overall and more of a success than the China tariffs in Trumps first term, that was not followed up by the next administration. Tuesday’s close in July corn futures at $4.59 was $.50/Bu lower or 10%. Mexican tariffs on US corn are the big worry with limited US corn trade into China and W Canada. Mexico is the world’s (and US’s) largest corn importer of 24 MMT’s or 945 Mil/Bu. Do to rail logistics, the US has an advantage over other world exporters and it’s far from certain that Mexico would impose tariff on corn and hurt its own domestic feed industry. Mexico has imported 10 MMT’s of US corn or 400 Mil/Bu to date, and has purchased 18 MMT’s or 710 Mil/Bu. Mexico will continue to secure large amounts of US corn. By any fundamental measure, CBOT corn is too cheap. A recovery lies in the offing.
US Weather Pattern Update
Central US Warmth Resumes March 9-14; Precipitation Pattern Remain Stagnant:
The Central US forecast is consistent with previous runs. Additional rain/snow falls the next 48 hours. Moisture equivalents greater than 1” favor IA, WI, IN, and MI. Extended range guidance continues to favor the E Plains/Midwest and meaningful precipitation in the 6-15 day period, and pattern change will be desired soon thereafter. If this pattern fails to change by late March, closer attention will be warranted to the absence of rainfall across the Southern Plains and Dakota/MN. Today’s 16-30 day guidance features stagnation – rainfall in the second half of March favors E Midwest and Great Lakes; below-normal precipitation continues in TX, OK, KS, and NE. It’s early, but whether Central US Plains drought expands or contracts before May 1st is essential to HRW wheat. Subsoil moisture across the US HRW Belt remains in line with longer term averages, but deficits grow by late month. The major forecasting model’s agree that warmth blankets the Central US in the 6-10 days. Max temps are forecast in the upper 60’s & 70’s March 10-12 in TX, OK, KS, and CO. There is no concern about the Corn Belt moisture today,. But close attention must be paid to NE and the Dakotas where drought conditions are growing.
Corn Comments & Analysis
CBOT Corn End Weak but Shows Signs of Bottoming Out; US Gulf Competitive in World Market:
May CBOT corn fell another 4 cents but settled 10 cents off its low, and push back is emerging amid improving ethanol margins and soaring Ukrainian fob premiums. Importers simply have limited options for spring/early summer supply as Argentine harvest won’t begin in full until April and Brazil’s surplus won’t be available until July. US Gulf corn is $.58/Bu discount to Ukrainian origin attracts new demand. Managed funds have sold/liquidated an estimated 92,000 contracts in the last four sessions. Mexican President Sheinbaum and US President Trump are scheduled to talk on Thursday on progress on the border and fentanyl. Mexico’s need for corn and lack of alternatives into summer are important. ARC predicts the recent dramatic break has fully accounted for changes in US trade policy. Seasonal highs were scored last week, but new 25/26 sales will only be made on recoveries. Brazilian weather over the next 60 days is critical. Whether drought in the Plains/IA expands or contracts will be monitored. Corn has closed lower 8 days in a row. ARC sees a rally on Wednesday. Upside price targets rest at $4.70-$4.75 with the USDA to release its WASDE report on Tuesday.
Also hearing whispers that further talks with Mexico and Canada on easing tariffs due to cooperation on all parties.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or email dflynn@pricegroup.com
Oversold Grains Bounce After Powerful Speech to Congress. The Corn & Ethanol Report 03/05/2025
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., ADP Employment Change at 7:15 A.M., S&P Global Composite PMI Final and S&P Global Services PMI Final at 8:45 A.M., ISM Services PMI, Factory Orders MoM, Factory Orders ex Transportation, ISM Services Business Activity, ISM Services Employment, ISM Services New Orders, and ISM Services Prices at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Beige Book and Total vehicle Sales at 1:00 P.M., and Dairy Products dales at 2:00 P.M.
CBOT corn values have plummeted $.75/Bu since February 20th when July corn futures appeared to be aligned with the February WASDE report and a stock/use ratio of 10.2%. July corn above $5.00 appeared justified. Since then, a waterfall price decline has occurred based on hefty long corn speculative positions and growing trade worry about Trump Tariffs on Canada, Mexico, and China. President Trump reminded and assured farmers in his speech that the tariffs will not be completely effective near immediate but will be a success overall and more of a success than the China tariffs in Trumps first term, that was not followed up by the next administration. Tuesday’s close in July corn futures at $4.59 was $.50/Bu lower or 10%. Mexican tariffs on US corn are the big worry with limited US corn trade into China and W Canada. Mexico is the world’s (and US’s) largest corn importer of 24 MMT’s or 945 Mil/Bu. Do to rail logistics, the US has an advantage over other world exporters and it’s far from certain that Mexico would impose tariff on corn and hurt its own domestic feed industry. Mexico has imported 10 MMT’s of US corn or 400 Mil/Bu to date, and has purchased 18 MMT’s or 710 Mil/Bu. Mexico will continue to secure large amounts of US corn. By any fundamental measure, CBOT corn is too cheap. A recovery lies in the offing.
US Weather Pattern Update
Central US Warmth Resumes March 9-14; Precipitation Pattern Remain Stagnant:
The Central US forecast is consistent with previous runs. Additional rain/snow falls the next 48 hours. Moisture equivalents greater than 1” favor IA, WI, IN, and MI. Extended range guidance continues to favor the E Plains/Midwest and meaningful precipitation in the 6-15 day period, and pattern change will be desired soon thereafter. If this pattern fails to change by late March, closer attention will be warranted to the absence of rainfall across the Southern Plains and Dakota/MN. Today’s 16-30 day guidance features stagnation – rainfall in the second half of March favors E Midwest and Great Lakes; below-normal precipitation continues in TX, OK, KS, and NE. It’s early, but whether Central US Plains drought expands or contracts before May 1st is essential to HRW wheat. Subsoil moisture across the US HRW Belt remains in line with longer term averages, but deficits grow by late month. The major forecasting model’s agree that warmth blankets the Central US in the 6-10 days. Max temps are forecast in the upper 60’s & 70’s March 10-12 in TX, OK, KS, and CO. There is no concern about the Corn Belt moisture today,. But close attention must be paid to NE and the Dakotas where drought conditions are growing.
Corn Comments & Analysis
CBOT Corn End Weak but Shows Signs of Bottoming Out; US Gulf Competitive in World Market:
May CBOT corn fell another 4 cents but settled 10 cents off its low, and push back is emerging amid improving ethanol margins and soaring Ukrainian fob premiums. Importers simply have limited options for spring/early summer supply as Argentine harvest won’t begin in full until April and Brazil’s surplus won’t be available until July. US Gulf corn is $.58/Bu discount to Ukrainian origin attracts new demand. Managed funds have sold/liquidated an estimated 92,000 contracts in the last four sessions. Mexican President Sheinbaum and US President Trump are scheduled to talk on Thursday on progress on the border and fentanyl. Mexico’s need for corn and lack of alternatives into summer are important. ARC predicts the recent dramatic break has fully accounted for changes in US trade policy. Seasonal highs were scored last week, but new 25/26 sales will only be made on recoveries. Brazilian weather over the next 60 days is critical. Whether drought in the Plains/IA expands or contracts will be monitored. Corn has closed lower 8 days in a row. ARC sees a rally on Wednesday. Upside price targets rest at $4.70-$4.75 with the USDA to release its WASDE report on Tuesday.
Also hearing whispers that further talks with Mexico and Canada on easing tariffs due to cooperation on all parties.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or email dflynn@pricegroup.com
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn