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 Export Inspections and Consumer Inflation Expectations at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Barkin Speech at 11:00 A.M., Fed Waller Speech at 12:00 P.M., Crop Progress at 3:00 P.M., Fed Harker Speech at 5:00 P.M., and Fed Harker Speech at 6:40 P.M.
Following a cooler-than- expected CPI inflation figure on Thursday, the Producer Price Index for March also came in below expectations. The PPI was reported at a 3-month low of 147.5, down 0.4% from February. This marked the first monthly decline in the PPI since October 2023. The annualized inflation rate was 2.7% the lowest since last September. Falling energy prices were the most significant contributor to lower inflation rates and have been the largest frag on the CRB Index. The CRB is 2.2% lower than a year ago and on track for the first year-over-year decline since October, suggesting a further decline in inflation rates during April.
Central US Weather Pattern Discussion
Midwest Planting to Begin After April 20th; Drought Deepens in Plains:
The Central US forecast is consistent with all major forecasting models calling for the arrival of warmth to the Great Lakes & E Midwest after the next 10 days. Potentially heavy precipitation keeps fieldwork slow on a regional basis in IA, WI, and northern IL, but otherwise the coming pattern shift allows for the timely planting/emergence of corn, soybean, and spring wheat. Even producers in TN & KY will re-enter fields by late April following last week’s devastating floods. NOAA’s 8-14 temp probability guidance reflects negatively on HRW yield potential. Theres not much rain offered to TX, OK, W KS, & CO into the final days of the month. Max temps in the 80’s & low 90’s will be commo0n in TX/OK Panhandle & W KS in the second half of April. It’s heat, more dryness, that’s a concern in the S Plains & HRW wheat yields.
South American Weather Update
Brazilian Forecast Wet into April 20th; Moisture Deficits Eased/Erased in Mato Grosso do Sul:
The Brazilian forecast has improved as the monsoon is projected to outperform over the next 10 days. Cumulative rainfall in Mato Grosso, Mato Grosso do Sul, and Goias 60% of Brazils safrinha corn area – is projected in a range of 2-5.00”. The coming jump in soil moisture cools temps there. Safrinha corn yield potential will stabilize if nearby forecasts are verified. Deficits will remain in parts of Goias & Minas Ferais, but the area of concern is getting smaller, not larger. Mato Grosso, Mato Grosso do Sul in Brazil is unlikely prior to April 25th. Brazilian corn FOB premiums will be watched closely as weather improves. Declines in fob offers are expected.
Mexican Corn Supply & Demand
Mexico will be the world’s largest corn importer in crop year24/25-beating second place Europe by 5MMT’s – and Ag Resources (ARC’s) work suggests Mexico’s corn import needs will stay above 20 MMT’s even assuming larger production. Mexican imports of US corn began rising in 2021 following expanded feed use and as stocks were drawn down to newly untenable levels in 2019-2020. Mexico in the past has been able to source 12-15% of its import needs from South America- but only in years in which Brazil’s surplus was burdensomely large. Mostly, the US provides 96-99% of Mexico corn needs. Through March 27th US exporters have sold/shipped a combined 19.1 MMT’s to Mexico, vs. 18.5 MMT’s a year ago. Mexico is an incredible market. Its proximity to the US, and rapidly expanding domestic corn use in Brazil, keeps US export potential bright in 2025. ARC’s bet is that Mexico still must purchase 4.5-%.% MMT’s of US corn, and between now and September must ultimately ship 11-12 MMT’s (430-470 Mil Bu). Assuming severe drought persists in N Mexico through summer, Mexican corn imports rise to 25 MMT’s, a new record and which implies US corn shipments to Mexico of 930-950 Mil Bu. Do not forget carryover supplies aren’t overly robust at just 4.3 MMT’s. Imports must be, at a minimum , 23 MMT’s just to keep inventories stable. Today, US Gulf corn on a fob basis sits at $.20/Bu below Argentine origin for June delivery and sits %.12?bu below Brazilian corn for July. Mexico’s corn needs will be filled with US origin indefinitely due to proximity.
CBOT corn ended sharply higher amid a further collapse in the US dollar and the lack of retaliation from importers. Even Europe has paused its planned tariffs on US goods, and soon non-Chinese markets will remain open through early summer. Additional US export demand is anticipated. Note also spot ethanol values have shrugged off weakness in crude and rallied to seasonal highs. ARC’s bet is that seasonal trends are followed to mid-summer. Modest upside risk is present amid recent momentum and lack of US/Ukrainian carryover supplies. However, its imperative to use additional strength to manage downside risk.
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
FED Up? Walk the Walk Jerome & Governors. The Corn & Ethanol Report 04/14/2025
We kickoff the day with Export Inspections and Consumer Inflation Expectations at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Barkin Speech at 11:00 A.M., Fed Waller Speech at 12:00 P.M., Crop Progress at 3:00 P.M., Fed Harker Speech at 5:00 P.M., and Fed Harker Speech at 6:40 P.M.
Following a cooler-than- expected CPI inflation figure on Thursday, the Producer Price Index for March also came in below expectations. The PPI was reported at a 3-month low of 147.5, down 0.4% from February. This marked the first monthly decline in the PPI since October 2023. The annualized inflation rate was 2.7% the lowest since last September. Falling energy prices were the most significant contributor to lower inflation rates and have been the largest frag on the CRB Index. The CRB is 2.2% lower than a year ago and on track for the first year-over-year decline since October, suggesting a further decline in inflation rates during April.
Central US Weather Pattern Discussion
Midwest Planting to Begin After April 20th; Drought Deepens in Plains:
The Central US forecast is consistent with all major forecasting models calling for the arrival of warmth to the Great Lakes & E Midwest after the next 10 days. Potentially heavy precipitation keeps fieldwork slow on a regional basis in IA, WI, and northern IL, but otherwise the coming pattern shift allows for the timely planting/emergence of corn, soybean, and spring wheat. Even producers in TN & KY will re-enter fields by late April following last week’s devastating floods. NOAA’s 8-14 temp probability guidance reflects negatively on HRW yield potential. Theres not much rain offered to TX, OK, W KS, & CO into the final days of the month. Max temps in the 80’s & low 90’s will be commo0n in TX/OK Panhandle & W KS in the second half of April. It’s heat, more dryness, that’s a concern in the S Plains & HRW wheat yields.
South American Weather Update
Brazilian Forecast Wet into April 20th; Moisture Deficits Eased/Erased in Mato Grosso do Sul:
The Brazilian forecast has improved as the monsoon is projected to outperform over the next 10 days. Cumulative rainfall in Mato Grosso, Mato Grosso do Sul, and Goias 60% of Brazils safrinha corn area – is projected in a range of 2-5.00”. The coming jump in soil moisture cools temps there. Safrinha corn yield potential will stabilize if nearby forecasts are verified. Deficits will remain in parts of Goias & Minas Ferais, but the area of concern is getting smaller, not larger. Mato Grosso, Mato Grosso do Sul in Brazil is unlikely prior to April 25th. Brazilian corn FOB premiums will be watched closely as weather improves. Declines in fob offers are expected.
Mexican Corn Supply & Demand
Mexico will be the world’s largest corn importer in crop year24/25-beating second place Europe by 5MMT’s – and Ag Resources (ARC’s) work suggests Mexico’s corn import needs will stay above 20 MMT’s even assuming larger production. Mexican imports of US corn began rising in 2021 following expanded feed use and as stocks were drawn down to newly untenable levels in 2019-2020. Mexico in the past has been able to source 12-15% of its import needs from South America- but only in years in which Brazil’s surplus was burdensomely large. Mostly, the US provides 96-99% of Mexico corn needs. Through March 27th US exporters have sold/shipped a combined 19.1 MMT’s to Mexico, vs. 18.5 MMT’s a year ago. Mexico is an incredible market. Its proximity to the US, and rapidly expanding domestic corn use in Brazil, keeps US export potential bright in 2025. ARC’s bet is that Mexico still must purchase 4.5-%.% MMT’s of US corn, and between now and September must ultimately ship 11-12 MMT’s (430-470 Mil Bu). Assuming severe drought persists in N Mexico through summer, Mexican corn imports rise to 25 MMT’s, a new record and which implies US corn shipments to Mexico of 930-950 Mil Bu. Do not forget carryover supplies aren’t overly robust at just 4.3 MMT’s. Imports must be, at a minimum , 23 MMT’s just to keep inventories stable. Today, US Gulf corn on a fob basis sits at $.20/Bu below Argentine origin for June delivery and sits %.12?bu below Brazilian corn for July. Mexico’s corn needs will be filled with US origin indefinitely due to proximity.
CBOT Corn Comments & Analysis
Corn Rallies to 6-Week High; Geopolitical Risk Remains; Brazilian Weather Improves:
CBOT corn ended sharply higher amid a further collapse in the US dollar and the lack of retaliation from importers. Even Europe has paused its planned tariffs on US goods, and soon non-Chinese markets will remain open through early summer. Additional US export demand is anticipated. Note also spot ethanol values have shrugged off weakness in crude and rallied to seasonal highs. ARC’s bet is that seasonal trends are followed to mid-summer. Modest upside risk is present amid recent momentum and lack of US/Ukrainian carryover supplies. However, its imperative to use additional strength to manage downside risk.
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,
Daniel Flynn
Questions? Ask Dan Flynn today at 312-264-4374