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 Sales, Initial Jobless Claims, Nonfarm Productivity QoQ Prel, Unit Labor Cost QoQ Prel, Continuing Jobless Claims, Jobless Claims 4-Week Average, and Wholesale Trade at 7:30 A.M., Wholesale Inventories MoM at 9:00 A.M., EIA Natural Gas Stocks at 9:30 A.M., Consumer Inflation Expectations at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.m., 30-Year Bond Auction at 12:00 P.M., and Fed Balance Sheet at 3:30 P.M.
After the Fed kept interest rates in check, the Manheim Used Vehicle Index showed that the average wholesale used-vehicle price at dealer auctions jumped sharply in April. The index was 4.9 higher than a year ago, the largest year-over-year advance since August 2022. Used vehicle prices typically increase through the spring, and often top by mid-April. Dealers reported stronger-than normal used retail sales, with April sales down 1.7% from March, but 13% higher than a year ago, which tightened dealer inventories. Used inventories were estimated at 41 days of supply, down from 46 days last year.
US Weather Pattern Update
The major forecasting models are in broad agreement that needed rain impacts the Canadian Prairies in the 6-10 day period and widespread rain returns to the E Plains and Midwest May 17-21. Confidence in extended range details is low, but for neither excessive rain nor lasting dryness is indicated outside of NE & the Dakota’s. The EU 6-10 and 11-15 precipitation forecast with the heaviest rain in May favors AR, MO, and the southern Midwest. The forecast is favorable heading into Memorial Day. Planting un the Plains & Midwest will go nearly unobstructed for another 9-10 days. Recently planted crops will have access to adequate moisture. Widespread warmth next week spreads corn, soybean, and spring wheat emergence.
US Gasoline Stock Decline Pauses; Demand Growth Stays intact with the Summertime Driving Season Closing In:
Energy market recoveries have lacked follow-through amid deepening concern over future US and global economic performance. That the energy markets have been weak in late spring is noteworthy-seasonally, spring trends are typically rather positive- and fundamentally, US motor stocks were up slightly from the previous week in early May. US motor gas stocks on May 2nd totaled 225.7 million barrels, vs. 225.5 Mil the previous week. Notice that, seasonally, inventories typically stabilize from May to July, and so a new spark is needed to boost RBOB gasoline above $2.00 and spot WTI crude oil above $60. Rallies will be challenged by larger OPEC production through the summer. Diesel prices will be attractive, but the energy market’s signal is one of stagnant global GDP growth. ARC analysis looks for WTI crude oil to bottom in the lower $50’s.
Corn Comments & Analysis
July Corn Posts 4-Month Low; Midwest Forecast Improves:
Liquidation persists in CBOT corn futures. Rapid Midwest planting will be followed by welcome rainfall in late May, and details surrounding next week’s meeting (pushed ahead this weekend) between the US & China in Switzerland. President Trump spoke yesterday afternoon and indicated Tariffs to China will not be eased. Flooding the US with Fentanyl is a priority as much as trade agreements, and the US has the edge, holding the cards in this round. Weather will pressure the market with US forecasts. Highs in the Brazilian corn cash market were scored in late March. Seasonal trends there are negative into August, when safrinha harvesting nears completion. The relaxation of Brazil’s market has been slow amid ethanol production, but ARC maintains enlarged competition for world market share returns in July. A weather problem is needed to sustain a CBOT rally. However, ARC advises against turning bearish at current prices until summer climate patterns are better understood. Managed fund length has been trimmed to just 45-50,000 contracts, vs. 364,000 in February. The chance for new trade deals that add to US export demand are good. At some oint, the US and China should be able to reach a new trade deal. December downside price targets pre-pollination rests at $4.30-$4.40. Await weather inspired rallies to add to 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@peicegroup.com
UK Tariff Trade Deal-Better Get Onboard EU. The Corn & Ethanol Report 05/08/2025
We kickoff the day with Export Sales, Initial Jobless Claims, Nonfarm Productivity QoQ Prel, Unit Labor Cost QoQ Prel, Continuing Jobless Claims, Jobless Claims 4-Week Average, and Wholesale Trade at 7:30 A.M., Wholesale Inventories MoM at 9:00 A.M., EIA Natural Gas Stocks at 9:30 A.M., Consumer Inflation Expectations at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.m., 30-Year Bond Auction at 12:00 P.M., and Fed Balance Sheet at 3:30 P.M.
After the Fed kept interest rates in check, the Manheim Used Vehicle Index showed that the average wholesale used-vehicle price at dealer auctions jumped sharply in April. The index was 4.9 higher than a year ago, the largest year-over-year advance since August 2022. Used vehicle prices typically increase through the spring, and often top by mid-April. Dealers reported stronger-than normal used retail sales, with April sales down 1.7% from March, but 13% higher than a year ago, which tightened dealer inventories. Used inventories were estimated at 41 days of supply, down from 46 days last year.
US Weather Pattern Update
The major forecasting models are in broad agreement that needed rain impacts the Canadian Prairies in the 6-10 day period and widespread rain returns to the E Plains and Midwest May 17-21. Confidence in extended range details is low, but for neither excessive rain nor lasting dryness is indicated outside of NE & the Dakota’s. The EU 6-10 and 11-15 precipitation forecast with the heaviest rain in May favors AR, MO, and the southern Midwest. The forecast is favorable heading into Memorial Day. Planting un the Plains & Midwest will go nearly unobstructed for another 9-10 days. Recently planted crops will have access to adequate moisture. Widespread warmth next week spreads corn, soybean, and spring wheat emergence.
US Gasoline Stock Decline Pauses; Demand Growth Stays intact with the Summertime Driving Season Closing In:
Energy market recoveries have lacked follow-through amid deepening concern over future US and global economic performance. That the energy markets have been weak in late spring is noteworthy-seasonally, spring trends are typically rather positive- and fundamentally, US motor stocks were up slightly from the previous week in early May. US motor gas stocks on May 2nd totaled 225.7 million barrels, vs. 225.5 Mil the previous week. Notice that, seasonally, inventories typically stabilize from May to July, and so a new spark is needed to boost RBOB gasoline above $2.00 and spot WTI crude oil above $60. Rallies will be challenged by larger OPEC production through the summer. Diesel prices will be attractive, but the energy market’s signal is one of stagnant global GDP growth. ARC analysis looks for WTI crude oil to bottom in the lower $50’s.
Corn Comments & Analysis
July Corn Posts 4-Month Low; Midwest Forecast Improves:
Liquidation persists in CBOT corn futures. Rapid Midwest planting will be followed by welcome rainfall in late May, and details surrounding next week’s meeting (pushed ahead this weekend) between the US & China in Switzerland. President Trump spoke yesterday afternoon and indicated Tariffs to China will not be eased. Flooding the US with Fentanyl is a priority as much as trade agreements, and the US has the edge, holding the cards in this round. Weather will pressure the market with US forecasts. Highs in the Brazilian corn cash market were scored in late March. Seasonal trends there are negative into August, when safrinha harvesting nears completion. The relaxation of Brazil’s market has been slow amid ethanol production, but ARC maintains enlarged competition for world market share returns in July. A weather problem is needed to sustain a CBOT rally. However, ARC advises against turning bearish at current prices until summer climate patterns are better understood. Managed fund length has been trimmed to just 45-50,000 contracts, vs. 364,000 in February. The chance for new trade deals that add to US export demand are good. At some oint, the US and China should be able to reach a new trade deal. December downside price targets pre-pollination rests at $4.30-$4.40. Await weather inspired rallies to add to 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@peicegroup.com
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374