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., Fed Beth & Fed Goolsbee Speech at 8:00 A.M., Fed Waller Speech at 8:35 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing Index Flash, and S&P Global Services PMI Flash at 8:45 A.M., New Home Sales and New Home Sales MoM at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction and 2-Year FRN Auction at 10:30 A.M., 5-Year Note Auction at 12:00 P.M., Fed Beige Book, Building Permits Final and Building Permits MoM at 1:00 P.M.,
The Federal Reserve reported that the US M2 Money Supply rose in March to $21,764, up 0.42% from February and a new record high. This marked the 17th consecutive month that the US money supply increased. Compared to a year ago, M2 was 4.1% larger than most significant annualized increase since July 2022 and the 13th consecutive month of year-over-year increases. Compared to February 2020, just before the pandemic, the 2025 money supply was $6.3 trillion, or 41% larger. The expanding supply continues to dilute the US currency, which is the root of US price inflation. However, the current growth rate falls short of the 2020-2022 rate, when the money supply expanded by an average of 18%. The M2 increase will support US economic growth nearby.
US Weather Pattern Update
Moisture Deficits to be Confined to NW Corn Velt; Dry Pattern Needed for the Southern Midwest:
The Central US forecast is consistent with prior runs. Widespread moisture boosts lie ahead for nearly the entire Plains and Iowa, with EU, GFS, and NOAA agreeing that rainfall of 2-4” favors this region over the next 14 days. NOAA’s predicted soil anomalies on May 6th shows dryness concerns have retreated and are centered on NE and SD. Otherwise, the outlook is broadly favorable, with 5-6 days of open planting weather occurring east of the Mississippi River. Warmth will be widespread throughout the next 10 days, accelerating early seeding across the Dakota’s and Minnesota. Ag Resources (ARC’s) work suggests that the 2025 corn and soybean planting pace will be normal, national planting progress. Plains rainfall will be especially welcomed. Odds of Midwest drought in May-June is declining due to improving soil moisture and the lack of extreme heat.
South American Weather Update
Additional Rain Forecast for Central Brazil Next 7 Days; Safrinha Issues Confined to Parana:
The Brazilian monsoon will continue to perform with near to above rainfall for the balance of April. A later than normal withdrawal of seasonal rainfall is probable by mid-May. Heavy showers into May 6th favors Mato Grosso do Sul and Parana. Corn yield potential has recovered in MGDS and stabilized in Parana following early season dryness. Corn yields are determined from late March into late May. Brazil’s primary safrinha corn belt is wet. There was some early season damage done in Parana and the minor producing states of Goias/Minas Gerais. Since planting, rainfall has been well above normal. Most of the winter corn crop was planted in the last 2 weeks of February and the opening week of March. Record corn yields are possible. Brazil’s safrina corn harvest won’t be early like it was a year ago, but ARC anticipates progress in Mato Grosso be close to average and harvest typically reaches 50% complete by July 15th . The Brazilian market will also be flooded with new safrinha supply in the second half of July/early August as most of safrinha planting occurred in Mato Grosso & Goias during the second half of February. ARC’s message is that normal seasonal trends in price and demand will be followed in 2025. Corn market breaks from mid-May onward if the Central US avoids meaningful planting delays and worst-case weather scenarios during the summer. It’s also routine for importer demand to shift away from the US to South America from late June onward. The absence of Brazilian corn yield loss keeps ARC’s strategy of selling rallies in place with December futures overvalued above $4.75. CBOT corn values are shifting back to bearish following a strong post-harvest export demand.
Corn Comments & Analysis
CBOT Corn Ends Weak on US Planting Progress amid Dry Midwest Windows:
The CBOT corn futures fell 6-7 cents amid building chart resistance at $4.90-$4.95, basis July, and as US seeding dates are set to stay aligned with longer term averages into the opening week of May. Premium will be extracted slowly/steadily if N Hemisphere weather threats are absent. The arrival of Brazil’s safrinha harvest in June-July provides meaningful competition for export demand for the first time in 8 months. Argentina will be more aggressive in exports as its tax break ends on June 30th . Corn shifting from an export demand driven bull to a supply driven bear market. ARC’s strategy is to use recoveries to add hedges. Tarket $4.85+ May to catchup on/finish 2024 sales. The interior US cash market isn’t overly concerned about record total disappearance. The cash market feels that supplies are larger than implied by NASS. Weather-based volatility is ahead, but ARC’s principal concern is Dec CBOT falling to $3.80-$4.00 at harvest. US planted area will likely expand to +96.0 Mil acres on a normal planting pace. A drought is needed to sustain a lasting CBOT rally effort.
Tuesday’s preliminary open interest showed liquidation. Chicago wheat open interest was down 3,408 contracts, corn was down 600 contracts, and soybeans off 2,303 contracts. Soybean oil lost 5,o24 contracts, while soybean meals was down 5,623. The ongoing drop in open interest does not reflect a push of new speculative funds into CBOT grains.
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
Framing Trade Deals & Powell Will Stay. The Corn & Ethanol Report 04/23/2025
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., Fed Beth & Fed Goolsbee Speech at 8:00 A.M., Fed Waller Speech at 8:35 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing Index Flash, and S&P Global Services PMI Flash at 8:45 A.M., New Home Sales and New Home Sales MoM at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction and 2-Year FRN Auction at 10:30 A.M., 5-Year Note Auction at 12:00 P.M., Fed Beige Book, Building Permits Final and Building Permits MoM at 1:00 P.M.,
The Federal Reserve reported that the US M2 Money Supply rose in March to $21,764, up 0.42% from February and a new record high. This marked the 17th consecutive month that the US money supply increased. Compared to a year ago, M2 was 4.1% larger than most significant annualized increase since July 2022 and the 13th consecutive month of year-over-year increases. Compared to February 2020, just before the pandemic, the 2025 money supply was $6.3 trillion, or 41% larger. The expanding supply continues to dilute the US currency, which is the root of US price inflation. However, the current growth rate falls short of the 2020-2022 rate, when the money supply expanded by an average of 18%. The M2 increase will support US economic growth nearby.
US Weather Pattern Update
Moisture Deficits to be Confined to NW Corn Velt; Dry Pattern Needed for the Southern Midwest:
The Central US forecast is consistent with prior runs. Widespread moisture boosts lie ahead for nearly the entire Plains and Iowa, with EU, GFS, and NOAA agreeing that rainfall of 2-4” favors this region over the next 14 days. NOAA’s predicted soil anomalies on May 6th shows dryness concerns have retreated and are centered on NE and SD. Otherwise, the outlook is broadly favorable, with 5-6 days of open planting weather occurring east of the Mississippi River. Warmth will be widespread throughout the next 10 days, accelerating early seeding across the Dakota’s and Minnesota. Ag Resources (ARC’s) work suggests that the 2025 corn and soybean planting pace will be normal, national planting progress. Plains rainfall will be especially welcomed. Odds of Midwest drought in May-June is declining due to improving soil moisture and the lack of extreme heat.
South American Weather Update
Additional Rain Forecast for Central Brazil Next 7 Days; Safrinha Issues Confined to Parana:
The Brazilian monsoon will continue to perform with near to above rainfall for the balance of April. A later than normal withdrawal of seasonal rainfall is probable by mid-May. Heavy showers into May 6th favors Mato Grosso do Sul and Parana. Corn yield potential has recovered in MGDS and stabilized in Parana following early season dryness. Corn yields are determined from late March into late May. Brazil’s primary safrinha corn belt is wet. There was some early season damage done in Parana and the minor producing states of Goias/Minas Gerais. Since planting, rainfall has been well above normal. Most of the winter corn crop was planted in the last 2 weeks of February and the opening week of March. Record corn yields are possible. Brazil’s safrina corn harvest won’t be early like it was a year ago, but ARC anticipates progress in Mato Grosso be close to average and harvest typically reaches 50% complete by July 15th . The Brazilian market will also be flooded with new safrinha supply in the second half of July/early August as most of safrinha planting occurred in Mato Grosso & Goias during the second half of February. ARC’s message is that normal seasonal trends in price and demand will be followed in 2025. Corn market breaks from mid-May onward if the Central US avoids meaningful planting delays and worst-case weather scenarios during the summer. It’s also routine for importer demand to shift away from the US to South America from late June onward. The absence of Brazilian corn yield loss keeps ARC’s strategy of selling rallies in place with December futures overvalued above $4.75. CBOT corn values are shifting back to bearish following a strong post-harvest export demand.
Corn Comments & Analysis
CBOT Corn Ends Weak on US Planting Progress amid Dry Midwest Windows:
The CBOT corn futures fell 6-7 cents amid building chart resistance at $4.90-$4.95, basis July, and as US seeding dates are set to stay aligned with longer term averages into the opening week of May. Premium will be extracted slowly/steadily if N Hemisphere weather threats are absent. The arrival of Brazil’s safrinha harvest in June-July provides meaningful competition for export demand for the first time in 8 months. Argentina will be more aggressive in exports as its tax break ends on June 30th . Corn shifting from an export demand driven bull to a supply driven bear market. ARC’s strategy is to use recoveries to add hedges. Tarket $4.85+ May to catchup on/finish 2024 sales. The interior US cash market isn’t overly concerned about record total disappearance. The cash market feels that supplies are larger than implied by NASS. Weather-based volatility is ahead, but ARC’s principal concern is Dec CBOT falling to $3.80-$4.00 at harvest. US planted area will likely expand to +96.0 Mil acres on a normal planting pace. A drought is needed to sustain a lasting CBOT rally effort.
Tuesday’s preliminary open interest showed liquidation. Chicago wheat open interest was down 3,408 contracts, corn was down 600 contracts, and soybeans off 2,303 contracts. Soybean oil lost 5,o24 contracts, while soybean meals was down 5,623. The ongoing drop in open interest does not reflect a push of new speculative funds into CBOT grains.
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