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 Retail Sales MoM & YoY, NY Empire State Manufacturing Index, Retail Sales Control Group MoM, Retail Sales Ex Autos MoM, and Retail Sales Ex Gas/Autos MoM at 7:30 A.M., Business Inventories MoM, NAHB Housing Market Index and Retail Inventories Ex Autos MoM at 9:00 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., NOPA Crush Report at 11:00 A.M.
The Commitment of Traders report showed another week of fund liquidation. The previous week saw record large liquidation of 305,000 contracts across the 10 major ag markets. Liquidation continued but at a lesser rate in the week ending March 11th. Funds sold 73,000 in corn, 24,000 contracts in soybean oil, 13,000 across all wheat exchanges, and 1,900 in the hog market. Funds bought 20,000 contracts in soybeans, 13,000 in soybean meal, 2,400 live cattle, and 1,300 in feeder cattle. Across all 10 markets , funds sold nearly 75,000 contracts. Funds were net long in corn, hogs, cattle, and feeder cattle, and net short in soybeans, soybean meal, soybean oil, and all 3 US wheat markets.
South American Weather Pattern Discussion
Argentine Corn Harvest to Speed Along; Calls for Wetter Pattern in Brazil Lack Confidence:
The South American is broadly consistent with prior runs. Mild/dry weather in Argentina into March 23rd allows corn harvesting there to move quickly – the crop nationally this week is 8% complete vs. 4% a year ago – while uncertainty continues in Brazil. Model agreement is again poor beyond the next 5 days, and whether rain expands into Mato Grosso do Sul and Parana is key in the second half of March. The GFS model maintains needed rainfall there after March 18th. The EU model is drier. The AI model is near completely dry outside Mato Grosso into March 28th. The evolution of rainfall in Mato Grosso do Sul, which produces 12-15%.of Brazil’s total safrinha crop. Assuming the 10-day forecast verifies, rainfall will total 2-6″, vs. an average in March of 5.89″. Heavy rain in April has occurred in the past, but seasonally precipitation begins to fade rapidly beyond early April. Close attention must be paid to daily rainfall accumulation across the southern half of Brazil’s safrinha belt beginning next week.
Central US Weather Pattern Update
Central US Forecast Keeps Warm Pattern in Place; Favorable for Midwest Field Work but Accelerates Plains Drying:
The Central US forecast is viewed as favorable across the principal Corn Belt but less so in the southern & central Plains. Abnormally high winds are present in TX, OK, and KS today. High wind speeds will again impact the Plains next Wed-Thurs. Meaningful precipitation with 1-2″ will be spread across IA, MN, WI, and areas east of the Mississippi River Sat-Wed, but little/no precipitation is forecast across the US HRW Belt into the latter days of March. A mostly warmer than normal temp pattern will stay in place through the balance of the month. This allows for rapid fieldwork and timely corn seeding in TX, OK, KS, and much of NE & SD. The burden being placed upon April-May rainfall in HRW Belt is increasing.
Corn Comments & Analysis
Corn Rally Extends Correction on Chart Pattern; Brazilian Market Continues to Rally; Fund Liquidation Larger Than Expected:
CBOT corn ended weak amid May’s inability to stay above the 100-day moving average last week. Other breaking news is absent, and the next 30 days will be driven by US planting intentions, (March 31st), US trade policy details and the coverage of Brazilian rain in the second half of March. Volatility assured. It’s difficult to be bullish above $4.85, May, and difficult to be bearish below $4.55. Ag Resources (ARC) notes the Brazilian market rallied again, with May corn there at $5.90/Bu, vs. $5.82 on Thursday. Managed funds in the week ending March 11th liquidated a net 73,000 contracts. Fund length on Tuesday was 147,000 contracts, which is not excessively large. ARC estimates net fund length on Friday at 132-134,000 contracts. New sales will only be made on recoveries. Large Brazilian, US, and Ukrainian crops are needed to build inventories and bearish at $4.55 May, and $4.35 basis December. Volatility expands further in spring.
Have A Great Trading Day & Happy St. Patrick’s Day!
Contact me directly at 1-888-264-5665 or dflynn@pricegroup.com
Tariffs & Tax Cuts – Good Days Ahead. The Corn & Ethanol Report 03/17/2025
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn