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 Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings MoM & YoY, Participation Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Nonfarm Payrolls Private, and U-6 Employment Rate at 7:30 A.M., Fed Chair Powell Speech at 10:25 A.M., Fed Barr Speech at 11:00 A.M., Fed Waller Speech at 11:45 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Dairy Products at 2:00 P.M.
The US trade deficit improved slightly in February but remained the second – largest monthly deficit on record. The deficit in January plunged to a historic $131 Bil and improved to $127.7 Bil in February. The goods deficit fell by $8.8 Bil to $145 Bil, and services deficit fell 0.8 Bil to $24.3 Bil. Exports rose by 2.9% to $278.5 Bil, mainly due to monetary gold, passenger cars, computer accessories, trucks, buses, and civilian aircraft. Exports declined for fuel oil, transport, and government goods and services. Imports held near record levels of $401 Bil, nearly unchanged from January’s $401.2 Bil. Consumer goods imports rose $2.4 Bil, including cell phones, household items, pharmaceuticals, and capital goods. The largest decline was industrial supplies and materials. The US trade gap narrowed with China, Switzerland, and Canada but widened with the EU, Mexico, and Vietnam.
Central US Weather Pattern Discussion
Dangerous System Sweeps Delta/S Midwest next 72 Hours; Dry Pattern Established Thereafter; Plains Drought to Deepen Next Two Weeks:
The Central US forecast is consistent. Heavy showers/t-storms will impact the Delta/Southeast & E Midwest throughout the next three days. Cumulative rainfall of 7+” will target AR, TN, and KY. Totals of 2-5” is forecast in MO, southern IL, IN, OH, and PA. This along with lingering cold keeps fieldwork absent east of the Mississippi River into mid-month. Note overnight lows in the 30’s & 40’s will persist in IL, IN, OH, WI, and MI into April 13th. This weeks drought monitor shows drought/abnormal dryness will be eliminated completely from MO, IL, IN, and MI. Modest improvement is anticipated in eastern OK. However, drought will be intensifying in KS, NE, and the Dakotas if current two-week forecast are verified. The EU ensemble model’s two week precipitation accumulation forecast has localized rainfall upward 8-10” is possible in pockets of far southern Midwest. Also notice that a lengthy period of dryness lies ahead for areas that are experiencing moderate to sever drought. Warming temps in the Southern Plains and NE accelerate moisture loss after April 10th. It’s far too early to worry about Central US drought, and planting is set to begin west of the Mississippi River in late April – if not sooner. However, Ag resources (ARC) does note NOAA calculates rainfall of 5-10” is needed to end drought across the Central Plains prior to June 1st. This implies normal/slightly above normal precipitation is needed rather quickly. An eye will be kept on whether rain expands into the Plains during spring.
Corn Export Update
Census US corn exports in Feb totaled 238 Mil Bu, down 5 Mil from Jan but up 26 Mil year-over-year and the third largest for the month on record. Using FGIS shipment data, ARC projects of fiscal US corn exports in March at an incredible 316 Mil Bu, up 29% from the previous year. Recall USDA projects final 24/25 US corn exports to rise only 7%, and the entire pace analysis suggests USDA’s forecast is 100-200 Mil Bu too low. US corn is still cheap in the global feed marketplace. Brazilian fob premiums for Jul-Aug delivery as of last night sit at $.08-$.17/Bu above US Gulf basis. Physical US corn export disappearance doesn’t peak until April. US corn exports stay abnormally large into late 2025 unless it’s confirmed Brazilian production expands 5+ MMT’s this summer. US corn demand is still strong.
CBOT corn ended near unchanged and was 6-12 cents above the overnight lows until the Doe shed another 600 points due to China’s retaliation tariff of 34% and not importing chicken and US grains to make a statement, they already are in decline importing US ag products. It looks like more to come but in the end game this won’t be healthy for China as domestic consumption is down and expect the tariff to be matched by the US. The July-Dec spread fell briefly to 14 cents, which is undervalued and which is projected to strengthen once index fund rolls end next week. Next Thursday WASDE report is expected to be bullish of old crop corn as 2024/25 US corn export estimate is raised by 100-200 Mil Bu. Tightening US old crop corn stocks underpin July corn futures below $4.60. The persistent rainfall in late April should be a waning of Brazilian rainfall in late April should be monitored. The Midwest corn seeding pace will get underway next week amid lengthy period of dry weather. US corn export sales in the week ending March 27th totaled 46 Mil Bu, vs. 41 Mil a week ago, and a full 33 Mil above the pace needed to hit the USDA annual target. Ukrainian origin won’t compete until autumn. Feed wheat prices are rising. ARC notes that trimming US corn end stocks to 1.4 Bil drops the world exporter stocks/use ratio to just 7.1% – a record low.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account 1-888-264-5665 or dflynn@pricegroup.com.
Floods & Severe Weather Very Concerning. The Corn & Ethanol Report 04/04/2025
We kickoff the day with Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings MoM & YoY, Participation Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Nonfarm Payrolls Private, and U-6 Employment Rate at 7:30 A.M., Fed Chair Powell Speech at 10:25 A.M., Fed Barr Speech at 11:00 A.M., Fed Waller Speech at 11:45 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Dairy Products at 2:00 P.M.
The US trade deficit improved slightly in February but remained the second – largest monthly deficit on record. The deficit in January plunged to a historic $131 Bil and improved to $127.7 Bil in February. The goods deficit fell by $8.8 Bil to $145 Bil, and services deficit fell 0.8 Bil to $24.3 Bil. Exports rose by 2.9% to $278.5 Bil, mainly due to monetary gold, passenger cars, computer accessories, trucks, buses, and civilian aircraft. Exports declined for fuel oil, transport, and government goods and services. Imports held near record levels of $401 Bil, nearly unchanged from January’s $401.2 Bil. Consumer goods imports rose $2.4 Bil, including cell phones, household items, pharmaceuticals, and capital goods. The largest decline was industrial supplies and materials. The US trade gap narrowed with China, Switzerland, and Canada but widened with the EU, Mexico, and Vietnam.
Central US Weather Pattern Discussion
Dangerous System Sweeps Delta/S Midwest next 72 Hours; Dry Pattern Established Thereafter; Plains Drought to Deepen Next Two Weeks:
The Central US forecast is consistent. Heavy showers/t-storms will impact the Delta/Southeast & E Midwest throughout the next three days. Cumulative rainfall of 7+” will target AR, TN, and KY. Totals of 2-5” is forecast in MO, southern IL, IN, OH, and PA. This along with lingering cold keeps fieldwork absent east of the Mississippi River into mid-month. Note overnight lows in the 30’s & 40’s will persist in IL, IN, OH, WI, and MI into April 13th. This weeks drought monitor shows drought/abnormal dryness will be eliminated completely from MO, IL, IN, and MI. Modest improvement is anticipated in eastern OK. However, drought will be intensifying in KS, NE, and the Dakotas if current two-week forecast are verified. The EU ensemble model’s two week precipitation accumulation forecast has localized rainfall upward 8-10” is possible in pockets of far southern Midwest. Also notice that a lengthy period of dryness lies ahead for areas that are experiencing moderate to sever drought. Warming temps in the Southern Plains and NE accelerate moisture loss after April 10th. It’s far too early to worry about Central US drought, and planting is set to begin west of the Mississippi River in late April – if not sooner. However, Ag resources (ARC) does note NOAA calculates rainfall of 5-10” is needed to end drought across the Central Plains prior to June 1st. This implies normal/slightly above normal precipitation is needed rather quickly. An eye will be kept on whether rain expands into the Plains during spring.
Corn Export Update
Census US corn exports in Feb totaled 238 Mil Bu, down 5 Mil from Jan but up 26 Mil year-over-year and the third largest for the month on record. Using FGIS shipment data, ARC projects of fiscal US corn exports in March at an incredible 316 Mil Bu, up 29% from the previous year. Recall USDA projects final 24/25 US corn exports to rise only 7%, and the entire pace analysis suggests USDA’s forecast is 100-200 Mil Bu too low. US corn is still cheap in the global feed marketplace. Brazilian fob premiums for Jul-Aug delivery as of last night sit at $.08-$.17/Bu above US Gulf basis. Physical US corn export disappearance doesn’t peak until April. US corn exports stay abnormally large into late 2025 unless it’s confirmed Brazilian production expands 5+ MMT’s this summer. US corn demand is still strong.
Corn Comments & Analysis
Corn Ends Flat; Shrugs Off Trump Tariffs & Equity Market Losses:
CBOT corn ended near unchanged and was 6-12 cents above the overnight lows until the Doe shed another 600 points due to China’s retaliation tariff of 34% and not importing chicken and US grains to make a statement, they already are in decline importing US ag products. It looks like more to come but in the end game this won’t be healthy for China as domestic consumption is down and expect the tariff to be matched by the US. The July-Dec spread fell briefly to 14 cents, which is undervalued and which is projected to strengthen once index fund rolls end next week. Next Thursday WASDE report is expected to be bullish of old crop corn as 2024/25 US corn export estimate is raised by 100-200 Mil Bu. Tightening US old crop corn stocks underpin July corn futures below $4.60. The persistent rainfall in late April should be a waning of Brazilian rainfall in late April should be monitored. The Midwest corn seeding pace will get underway next week amid lengthy period of dry weather. US corn export sales in the week ending March 27th totaled 46 Mil Bu, vs. 41 Mil a week ago, and a full 33 Mil above the pace needed to hit the USDA annual target. Ukrainian origin won’t compete until autumn. Feed wheat prices are rising. ARC notes that trimming US corn end stocks to 1.4 Bil drops the world exporter stocks/use ratio to just 7.1% – a record low.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account 1-888-264-5665 or dflynn@pricegroup.com.
Thanks,
Daniel Flynn
Questions? Ask Dan Flynn today at 312-264-4374