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 Williams Speech at 8:05 A.M., Baker Hughes Oil & Total Rid Count at 12:00 P.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Cattle on Feed and Milk Production at 2:00 P.M.
The Conference Board’s leading Economic Index was down 0.4% for the month of February and was 3.1% less than a year ago. This marked the 32nd consecutive month of annualized declines, and the index at 101.1 was the lowest index reading since December 2016. The index has been signaling a financial recession since July 2022, but an “official” recession has been avoided due to massive government spending. Consumer expectations of future business conditions turned negative during the month and had the largest impact on the index, while manufacturing orders declined in February after increasing in January. The top positive contributors to the index were a boost in average weekly manufacturing hours worked, the S&P 500 Index, and credit spreads.
South American Weather Pattern Discussion
Argentina Trends Wetter; Near Normal South American Climate Projected for the Remainder of March:
The forecast is consistent in projecting regular rainfall across Mato Grosso and an expansion of rainfall into Mato Grosso, Goias, and Minas Gerais in the 6-15 day period. Regular rain will be needed across central and northern Brazil over the next 6-8 weeks, but moisture will be adequate to support safrinha corn growth nearby. Another 72 hours of complete dryness blankets Argentina before widespread/persistent rainfall resumes. The two-week accumulation in Argentina is pegged at 2-4”. Locally heavier totals delay corn and soybean harvest in northern Argentina, but threats will be absent elsewhere. The NOAA’s bias-corrected 7-day anomaly forecast shows a rather normal South American climate at the tail end of March. Brazilian rainfall matters most in April for their winter crop.
Central US Weather Update
Drought Removal Forecast Across Eastern Midwest; Drought Expansion across the Plains:
Short-and long-term US forecast maintain a pattern of normal/above normal rainfall in the E Midwest, Delta, and Mid-South, and a pattern of net drying across the Plains. The EU, GFS, and AI model’s agree that two-week precipitation accumulation for IA, MO, and points eastward will be 1-3.00”. IL, IN, OH, and KY are favored. Precipitation west of IA/MO will be confined to trace amounts, and the heat return in late March accelerates drought expansion/intensification. NOAA’s updated three month drought forecasted updated: Removal is projected in eastern IA and the Great Lakes region. Expansion is forecast in TX, OK, MN, and KS – while the current moderate to severe drought in ND/SD is forecast to remain in place during spring. Large HRW carryover stocks are noted, but a further build becomes less likely if NOAA’s dry Plains forecast is verified. The weather risks across the Plains are rising.
Corn Comments & Analysis
CBOT Corn Jumps on Ongoing Export Demand; Top In Brazilian Corn Due in Next 30 Days:
May/July CBOT corn traded above their respective 100-day moving averages as trade policy uncertainty has failed to slow US export demand, and the EIA data Wednesday confirmed near-record US ethanol grind. US corn disappearance stays strong during spring, and barring surprisingly low feed/residual use, US end stocks are likely to be cut 50-75 Mil Bu in USDA’s April WASDE. US export sales in the week ending March 13th totaled 59 million Bu, a 5-week high and 44 Mil above the pace needed to meet USDA’s annual target. Total commitments now sit at an abnormally high of 84% of USDA’s forecast – which must be raised 25-50 million Bu in April. Upside risk is present, but Ag Resources (ARC) cautions that seasonal trends turn neutral/negative in April/May. Reward a re-test of $4.80-$4.90 in July with catch up sales/hedges. The finding 0f 3-4 Mil additional US acres challenges rallies in late spring/early summer without adverse weather. Note also that spot corn in Brazil dropped $.22/Bu to $6.01. US corn is competitive in world demand, but the Brazilian market has peaked between March 15th and April 19th the last two years. Tightening US old crop stocks should rally the July-December spread. Thursday’s preliminary CBOT open interest featured a 1,982 contract decline in con, but a 14,050 contract gain in soybeans and a 4,254 gain in Chicago wheat. It appears managed money is adding to their net short position in soybeans and Chicago Wheat.
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 Exports & Ethanol Grind Keep Rolling. The Corn & Ethanol Report 03/21/2025
We kickoff the day with Fed Williams Speech at 8:05 A.M., Baker Hughes Oil & Total Rid Count at 12:00 P.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Cattle on Feed and Milk Production at 2:00 P.M.
The Conference Board’s leading Economic Index was down 0.4% for the month of February and was 3.1% less than a year ago. This marked the 32nd consecutive month of annualized declines, and the index at 101.1 was the lowest index reading since December 2016. The index has been signaling a financial recession since July 2022, but an “official” recession has been avoided due to massive government spending. Consumer expectations of future business conditions turned negative during the month and had the largest impact on the index, while manufacturing orders declined in February after increasing in January. The top positive contributors to the index were a boost in average weekly manufacturing hours worked, the S&P 500 Index, and credit spreads.
South American Weather Pattern Discussion
Argentina Trends Wetter; Near Normal South American Climate Projected for the Remainder of March:
The forecast is consistent in projecting regular rainfall across Mato Grosso and an expansion of rainfall into Mato Grosso, Goias, and Minas Gerais in the 6-15 day period. Regular rain will be needed across central and northern Brazil over the next 6-8 weeks, but moisture will be adequate to support safrinha corn growth nearby. Another 72 hours of complete dryness blankets Argentina before widespread/persistent rainfall resumes. The two-week accumulation in Argentina is pegged at 2-4”. Locally heavier totals delay corn and soybean harvest in northern Argentina, but threats will be absent elsewhere. The NOAA’s bias-corrected 7-day anomaly forecast shows a rather normal South American climate at the tail end of March. Brazilian rainfall matters most in April for their winter crop.
Central US Weather Update
Drought Removal Forecast Across Eastern Midwest; Drought Expansion across the Plains:
Short-and long-term US forecast maintain a pattern of normal/above normal rainfall in the E Midwest, Delta, and Mid-South, and a pattern of net drying across the Plains. The EU, GFS, and AI model’s agree that two-week precipitation accumulation for IA, MO, and points eastward will be 1-3.00”. IL, IN, OH, and KY are favored. Precipitation west of IA/MO will be confined to trace amounts, and the heat return in late March accelerates drought expansion/intensification. NOAA’s updated three month drought forecasted updated: Removal is projected in eastern IA and the Great Lakes region. Expansion is forecast in TX, OK, MN, and KS – while the current moderate to severe drought in ND/SD is forecast to remain in place during spring. Large HRW carryover stocks are noted, but a further build becomes less likely if NOAA’s dry Plains forecast is verified. The weather risks across the Plains are rising.
Corn Comments & Analysis
CBOT Corn Jumps on Ongoing Export Demand; Top In Brazilian Corn Due in Next 30 Days:
May/July CBOT corn traded above their respective 100-day moving averages as trade policy uncertainty has failed to slow US export demand, and the EIA data Wednesday confirmed near-record US ethanol grind. US corn disappearance stays strong during spring, and barring surprisingly low feed/residual use, US end stocks are likely to be cut 50-75 Mil Bu in USDA’s April WASDE. US export sales in the week ending March 13th totaled 59 million Bu, a 5-week high and 44 Mil above the pace needed to meet USDA’s annual target. Total commitments now sit at an abnormally high of 84% of USDA’s forecast – which must be raised 25-50 million Bu in April. Upside risk is present, but Ag Resources (ARC) cautions that seasonal trends turn neutral/negative in April/May. Reward a re-test of $4.80-$4.90 in July with catch up sales/hedges. The finding 0f 3-4 Mil additional US acres challenges rallies in late spring/early summer without adverse weather. Note also that spot corn in Brazil dropped $.22/Bu to $6.01. US corn is competitive in world demand, but the Brazilian market has peaked between March 15th and April 19th the last two years. Tightening US old crop stocks should rally the July-December spread. Thursday’s preliminary CBOT open interest featured a 1,982 contract decline in con, but a 14,050 contract gain in soybeans and a 4,254 gain in Chicago wheat. It appears managed money is adding to their net short position in soybeans and Chicago Wheat.
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