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 Core PCE Price Index MoM & YoY, Export Sales, Personal Income MoM, Personal Spending MoM, Goods Trade Balance Adv., PCE Price Index MoM & YoY, Retail Inventories Ex Autos MoM Adv., and Wholesale Inventories MoM Adv, at 7:30 A.M., Chicago PMI at 8:45 A.M., Michigan Consumer Sentiment Final, Michigan 5 Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions Final, and Michigan Inflation Expectations at 9:00 A.M., Fed Bostic Speech at 11:20 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Fed Goolsbee Speech at 6:30 P.M.
The 2nd estimate of US 1st GDP showed a slight improvement from the initial estimate, with a decline of 0.2% compared to the estimate of 0.3%. The drag on the Q1 GDP formula remained a surge in imports, (tariff Scares), and the 2nd estimate showed a negative contribution from imports worsened from the initial estimate. Consumer spending remained a positive contributor but was down slightly from the initial estimate. This was offset by an upward revision in investments in fixed assets, which was the largest contributor to the GDP formula. The drag on GDP from imports is likely to be a single-quarter event. At the same time, investment growth is expected to remain strong as the build-out of the US manufacturing industry accelerates in the year ahead.
Central US Weather Pattern Update
Drought Eases Further in Central Plains; Heavy Rains Returns to E Plains, Midwest & Delta in 6-10 Day Period:
The Central US forecast remains broadly favorable. Adynamic/active pattern of precipitation persists into the middle part of June, which raises concern over wheat disease pressure in OK, KS, AR, and KY, but concern over water availability to newly planted corn & soybeans will be diminished further. Importantly, forecasts are consistent in calling for normal/above normal temps beginning June 1. Highs in the 70’s-80’s will be widespread. Current drought coverage in the last week and looking ahead shows meaningful dryness remains in place in NE and across far IL, but improvement occurred in OK, KS, and NE. Ag Resources (ARC) notes that severe drought now covers 5% of corn planted area, 3% of soybeans, and 10% of spring wheat. Additional boosts in soil moisture lie ahead for the Dakotas, MN, and IA.
Corn Comments & Analysis
CBOT Corn Stays Weak as Brazil Begins Looking for Export Demand; US to Be Well Watered:
CBOT corn futures continue to extract risk premium as Central US drought coverage eases further into the middle part of June and as South American cash priced drift lower seasonally. Brazil’s cash corn index has fallen to $5.16/Bu, down $.17 from last week. Brazilian corn for Aug-Sep is quoted $.07-.08/ Bu below US origin on a fob basis. Weather premium won’t fully shed until July weather is better understood, but the market is in the process of transitioning from
Old crop tightness to a probable swelling of new crop supplies. Note that assuming normal weather, combined Argentine, Brazilian, Ukrainian, and US production increases 1.5-1.8 Bil Bu in calendar year 2025. Additionally, corn’s ethanal demand draw has lagged year-ago levels in May. This is part due to slower grind, but also due to larger sorghum inclusion and enlarged ethanol yields. ARC estimates corn used for ethanol production in May at 445 Mil Bu, vs. 455 a year ago. Weather scares can’t be ruled out, but it’s imperative to use volatility to add to forward hedges. $4.50+, Dec CBOT is targeted.
GDP Not as Easy as Easy as 1-2-3. The Corn & Ethanol Report 05/30/2025
We kickoff the day with Core PCE Price Index MoM & YoY, Export Sales, Personal Income MoM, Personal Spending MoM, Goods Trade Balance Adv., PCE Price Index MoM & YoY, Retail Inventories Ex Autos MoM Adv., and Wholesale Inventories MoM Adv, at 7:30 A.M., Chicago PMI at 8:45 A.M., Michigan Consumer Sentiment Final, Michigan 5 Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions Final, and Michigan Inflation Expectations at 9:00 A.M., Fed Bostic Speech at 11:20 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Fed Goolsbee Speech at 6:30 P.M.
The 2nd estimate of US 1st GDP showed a slight improvement from the initial estimate, with a decline of 0.2% compared to the estimate of 0.3%. The drag on the Q1 GDP formula remained a surge in imports, (tariff Scares), and the 2nd estimate showed a negative contribution from imports worsened from the initial estimate. Consumer spending remained a positive contributor but was down slightly from the initial estimate. This was offset by an upward revision in investments in fixed assets, which was the largest contributor to the GDP formula. The drag on GDP from imports is likely to be a single-quarter event. At the same time, investment growth is expected to remain strong as the build-out of the US manufacturing industry accelerates in the year ahead.
Central US Weather Pattern Update
Drought Eases Further in Central Plains; Heavy Rains Returns to E Plains, Midwest & Delta in 6-10 Day Period:
The Central US forecast remains broadly favorable. Adynamic/active pattern of precipitation persists into the middle part of June, which raises concern over wheat disease pressure in OK, KS, AR, and KY, but concern over water availability to newly planted corn & soybeans will be diminished further. Importantly, forecasts are consistent in calling for normal/above normal temps beginning June 1. Highs in the 70’s-80’s will be widespread. Current drought coverage in the last week and looking ahead shows meaningful dryness remains in place in NE and across far IL, but improvement occurred in OK, KS, and NE. Ag Resources (ARC) notes that severe drought now covers 5% of corn planted area, 3% of soybeans, and 10% of spring wheat. Additional boosts in soil moisture lie ahead for the Dakotas, MN, and IA.
Corn Comments & Analysis
CBOT Corn Stays Weak as Brazil Begins Looking for Export Demand; US to Be Well Watered:
CBOT corn futures continue to extract risk premium as Central US drought coverage eases further into the middle part of June and as South American cash priced drift lower seasonally. Brazil’s cash corn index has fallen to $5.16/Bu, down $.17 from last week. Brazilian corn for Aug-Sep is quoted $.07-.08/ Bu below US origin on a fob basis. Weather premium won’t fully shed until July weather is better understood, but the market is in the process of transitioning from
Old crop tightness to a probable swelling of new crop supplies. Note that assuming normal weather, combined Argentine, Brazilian, Ukrainian, and US production increases 1.5-1.8 Bil Bu in calendar year 2025. Additionally, corn’s ethanal demand draw has lagged year-ago levels in May. This is part due to slower grind, but also due to larger sorghum inclusion and enlarged ethanol yields. ARC estimates corn used for ethanol production in May at 445 Mil Bu, vs. 455 a year ago. Weather scares can’t be ruled out, but it’s imperative to use volatility to add to forward hedges. $4.50+, Dec CBOT is targeted.
Have A Great Trading Day!
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374