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 Challenger Job Cuts at 6:30 A.M., Export Sales, Initial Jobless Claims, Continuing Jobless Claims, and Jobless Claims 4-Week Average at 7:30 A.M., S&P Global Manufacturing PMI Final at 8:45 A.M., ISM Manufacturing PMI, ISM Manufacturing Employment, Construction Spending MoM, ISM Manufacturing New Orders, and ISM Manufacturing Prices at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., Cotton System, Fats & Oils, and Grain Crushings at 2:00 P.M., and Fed Balance Sheet at 3:30 P.M.
The first release for estimates of 1st quarter US GDP showed a 0.3%decline in the first quarter of 2025. The nominal GDP figure rose by 0.9% to a record high of $29,998 million, but the negative print was a result of the inflation adjustment via the GDP Deflator. The GDP Deflator showed a quarterly inflation rate of 3.7, the highest print since July 2022, versus the quarterly CPI inflation rate of 2.95%. Spending and Investment contributed significantly to GDP, but all those gains were washed out by record large US imports. Also, a key note, decline in government spending slightly affected GDP. However, another positive the federal debt during Q1 declined by $4.3 billion, only 2nd decline since Q2 of 2017. A recession is defined by 2 quarters of negative growth and the US appears to be heading to an important slowdown in the labor market hiring. Capital investment was reported slowing on tariff uncertainty. The US has $5 trillion of new investment coming to roost in the US with manufacturing and we are already seeing the energy sector moving to take the chains off and war on energy (Regulations) solidifying exports of natural gas to Poland for one country. Private business will get us out of the hole, we can’t spend our way out of it with, out control government spending we realized the last 4 years.
US Planting & Weather Update
US Forecast Consistent; Planting Speeds Ahead in C Plains/W Midwest; T-Storms Need Monitoring in TX, OK, & KS:
The Central US forecast maintains a pattern of flooding rainfall/heavy t-storms across the Southern Plains over the next 5-6 days, a mix of rain/sun in E Midwest and the return of warmth & dryness to the central and northern Plains. Threats nearby are isolated to TX, OK, and parts of KS, where flooding is feared. Wind speeds will also be monitored. Spring crops will be rated highly in mid/May following the rejuvenation of dryness in NE, the Dakotas, and MN will be watched – moderate/severe drought remains in place there – but there’s time for a pattern change before crop water demand expands in June. The EU’s model’s10- day forecast has accumulation upward of 5-7” are anticipated in the TX/OK Panhandles and Southwest KS. Localized flooding is likely.
US Ethanol Market Discussion
US Ethanol Market Unaffected by Weakness in Crude Oil:
Spot Midwest cash ethanol continues to follow seasonal trends and, since early spring, has not been negatively impacted by multi-year lows in crude oil values. Spot ethanol this week quoted at at $177/Gal, unchanged from last week and up $.12/Gal from early March’s low. 2025’s rally will be hindered by sluggish /negative US economic growth, but Ag Resources (ARC) doubts a lasting bear trend develops until late summer – when gasoline use begins to wane and Brazilian ethanol production/exports ramp up. Relative strength in ethanol is important as it’s salvaged production margins. Note US ethanol production last week was up 5% year-over-year at 306 Mil Gal. Ethanol inventories are unchanged from last year. Expanded ethanol grind May-Jul is seasonally typical, adding to late spring corn export disappearance – which will be sizable.
Corn Comments & Analysis
Corn Recovers; US Export Demand Intact; Brazilian Market Slow to Shed Premium on Pipeline Refilling:
Corn ended higher with Jul-Dec spread widening on strong export/ethanol disappearance. A US ethanol production in the week ending April 25th totaled 306 Mil Gal, up 5% on the previous year and the largest on record for the week. Exporters sold another 5 Mil Bu to unknown destinations and weekly sales this morning are expected to range from 28-40 Mil Bu. Recall US corn sales of just 13 Mil/week are needed to meet USDA’s annual 2024/2025 forecast. ARC maintains downside price risk is limited below $4.60/July and $4.30 December prior to pollination. Nearby Midwest weather threats are absent, but the break in Brazil’s cash market has slowed. Brazil’s cash index sits at $6.04?Bu vs. $4.75 a year ago on May 1st. Ukraine fob premiums continue to rise. Importers have little alternative but to source US corn between now and July. Tightening old crop supplies allow for rallies into early summer, but these rallies should be used to extend forward hedges amid high odds global stocks swell in the second half of 2025. Target $4.85+ July and $4.60+ December for sales.
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
Ukraine/US Ink Rare Earth Deal-Tariff Deals & Tax Cuts on Deck. The Corn & Ethanol Report 05/01/2025
We kickoff the day with Challenger Job Cuts at 6:30 A.M., Export Sales, Initial Jobless Claims, Continuing Jobless Claims, and Jobless Claims 4-Week Average at 7:30 A.M., S&P Global Manufacturing PMI Final at 8:45 A.M., ISM Manufacturing PMI, ISM Manufacturing Employment, Construction Spending MoM, ISM Manufacturing New Orders, and ISM Manufacturing Prices at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., Cotton System, Fats & Oils, and Grain Crushings at 2:00 P.M., and Fed Balance Sheet at 3:30 P.M.
The first release for estimates of 1st quarter US GDP showed a 0.3%decline in the first quarter of 2025. The nominal GDP figure rose by 0.9% to a record high of $29,998 million, but the negative print was a result of the inflation adjustment via the GDP Deflator. The GDP Deflator showed a quarterly inflation rate of 3.7, the highest print since July 2022, versus the quarterly CPI inflation rate of 2.95%. Spending and Investment contributed significantly to GDP, but all those gains were washed out by record large US imports. Also, a key note, decline in government spending slightly affected GDP. However, another positive the federal debt during Q1 declined by $4.3 billion, only 2nd decline since Q2 of 2017. A recession is defined by 2 quarters of negative growth and the US appears to be heading to an important slowdown in the labor market hiring. Capital investment was reported slowing on tariff uncertainty. The US has $5 trillion of new investment coming to roost in the US with manufacturing and we are already seeing the energy sector moving to take the chains off and war on energy (Regulations) solidifying exports of natural gas to Poland for one country. Private business will get us out of the hole, we can’t spend our way out of it with, out control government spending we realized the last 4 years.
US Planting & Weather Update
US Forecast Consistent; Planting Speeds Ahead in C Plains/W Midwest; T-Storms Need Monitoring in TX, OK, & KS:
The Central US forecast maintains a pattern of flooding rainfall/heavy t-storms across the Southern Plains over the next 5-6 days, a mix of rain/sun in E Midwest and the return of warmth & dryness to the central and northern Plains. Threats nearby are isolated to TX, OK, and parts of KS, where flooding is feared. Wind speeds will also be monitored. Spring crops will be rated highly in mid/May following the rejuvenation of dryness in NE, the Dakotas, and MN will be watched – moderate/severe drought remains in place there – but there’s time for a pattern change before crop water demand expands in June. The EU’s model’s10- day forecast has accumulation upward of 5-7” are anticipated in the TX/OK Panhandles and Southwest KS. Localized flooding is likely.
US Ethanol Market Discussion
US Ethanol Market Unaffected by Weakness in Crude Oil:
Spot Midwest cash ethanol continues to follow seasonal trends and, since early spring, has not been negatively impacted by multi-year lows in crude oil values. Spot ethanol this week quoted at at $177/Gal, unchanged from last week and up $.12/Gal from early March’s low. 2025’s rally will be hindered by sluggish /negative US economic growth, but Ag Resources (ARC) doubts a lasting bear trend develops until late summer – when gasoline use begins to wane and Brazilian ethanol production/exports ramp up. Relative strength in ethanol is important as it’s salvaged production margins. Note US ethanol production last week was up 5% year-over-year at 306 Mil Gal. Ethanol inventories are unchanged from last year. Expanded ethanol grind May-Jul is seasonally typical, adding to late spring corn export disappearance – which will be sizable.
Corn Comments & Analysis
Corn Recovers; US Export Demand Intact; Brazilian Market Slow to Shed Premium on Pipeline Refilling:
Corn ended higher with Jul-Dec spread widening on strong export/ethanol disappearance. A US ethanol production in the week ending April 25th totaled 306 Mil Gal, up 5% on the previous year and the largest on record for the week. Exporters sold another 5 Mil Bu to unknown destinations and weekly sales this morning are expected to range from 28-40 Mil Bu. Recall US corn sales of just 13 Mil/week are needed to meet USDA’s annual 2024/2025 forecast. ARC maintains downside price risk is limited below $4.60/July and $4.30 December prior to pollination. Nearby Midwest weather threats are absent, but the break in Brazil’s cash market has slowed. Brazil’s cash index sits at $6.04?Bu vs. $4.75 a year ago on May 1st. Ukraine fob premiums continue to rise. Importers have little alternative but to source US corn between now and July. Tightening old crop supplies allow for rallies into early summer, but these rallies should be used to extend forward hedges amid high odds global stocks swell in the second half of 2025. Target $4.85+ July and $4.60+ December for sales.
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,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374