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 Fed Williams Speech at 6:30 A.M., Core PCE Prices MoM & YoY, PCE Price Index MoM & YoY, Personal Income MoM, and Personal Spending MoM at 7:30 A.M., Fed Cook & Fed Hammack Speech’s at 8:15 A.M., Michigan Consumer Sentiment Final, Michigan 5 Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions, and Michigan Inflation Expectations Final at 9:00 A.M., and Baker Hughes Oil & Total Rigs Count at 12:00 P.M.
The third revision to the first-quarter US GDP showed that GDP declined by 0.5% from the previous quarter, compared to the second estimate, which had shown a 0.2% decline. The downward revision was due to changes in consumer spending and exports, both of which were slower than previously forecasted. Additionally, imports were lowered from a 42.6% increase over the last quarter to a 37.9% increase. Federal government spending declined by 4.6%, while fixed investment of 7.6% was down slightly from the previous estimate of 7.8%. That chart shows that the negative drag on the final GDP calculation was due to a surge in imports ahead of expected tariffs, which will be a one-time event. The decline of imports in the 2nd quarter will provide a sizable boost to the Q2 GDP figure. The latest estimate from the Atlanta Fed’s GDP-Now model projects Q2 GDP at 3.4%, which would be the largest since Q3 2020, when the economy was rebounding from the pandemic – induced economic shutdown, and the second-largest quarterly GDP growth rate since Q2 1978.
Central US Weather Pattern Update
Abnormal Dryness Set to End in Iowa:
The Central US forecast is consistent in projecting producing additional rainfall of 1-2” across Eastern KS, IA, MN, and WI into the weekend. There will be an expansion of rainfall into the eastern Midwest this weekend and next week. Only the Western Plains will remain arid through the first week of July, while July climate guidance indicates a pattern of warmth and regular rainfall. The routine nature of summer 2025 will persist. Any return of amplified high pressure Ridging stays isolated to the Rocky Mountains into July 10th . This week’s Drought Monitor feature class – 1improvements in Central IA, and pockets of IL & norther IN. Current drought conditions, along with changes recorded over the last four weeks. The adequate soil moisture in KS/NE is noteworthy. Ag Resources (ARC) notes drought today covers only 16% of corn planted area, and the coverage is projected to drop 11-13% in the next two weeks. A Central US drought is lacking.
Corn Comments & Analysis
CBOT Corn Stays Weak; World Demand Shifting to South America; Farmers Predicted a Pop With Better Than Expected Exports:
In yesterday’s action, CBOT corn futures fell another 1-2 cents as central US weather forecast extend non-threatening conditions into the first 10 days of July and US export sales begin to weaken seasonally. June 1st US stocks are expected to be down 300-350 Mil Bu from last year. However, July corn’s delivery period begins just the release of NASS’s report, and it remains a record large world exporter production that will dominate price discovery into early autumn. US export sales in the week vs. a record peak in May of 66 Mil. Like recent years, export sales slide into a range of just 5-20 Mil Bu after early July. USDA must hike its annual US corn export forecast another 50 Mil Bu, but final 24/25 US corn end stocks of 135-140 Bil Bu are far less threatening amid the arrival of record Brazilian production in August and ultimately the arrival of a 16 Bil Bu crop. ARC’s initial target remains $3.90-$3.95 July but fears a deeper correction unfolds in Aug/Sep as the US feed becomes oversupplied and soymeal finds a bigger place in US feed rations. First Notice Day is on Monday along with Grain Stocks and Planted Acreage. Also weekly Export Inspections and Crop Progress.
Have A Great Trading Day!
Contact me directly with any questions or concerns at 1-888-264-5665 or dflynn@pricegroup.com
Lower Fed Spending = Lower GDP. The Corn & Ethanol Report 06/27/2025
We kickoff the day with Fed Williams Speech at 6:30 A.M., Core PCE Prices MoM & YoY, PCE Price Index MoM & YoY, Personal Income MoM, and Personal Spending MoM at 7:30 A.M., Fed Cook & Fed Hammack Speech’s at 8:15 A.M., Michigan Consumer Sentiment Final, Michigan 5 Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions, and Michigan Inflation Expectations Final at 9:00 A.M., and Baker Hughes Oil & Total Rigs Count at 12:00 P.M.
The third revision to the first-quarter US GDP showed that GDP declined by 0.5% from the previous quarter, compared to the second estimate, which had shown a 0.2% decline. The downward revision was due to changes in consumer spending and exports, both of which were slower than previously forecasted. Additionally, imports were lowered from a 42.6% increase over the last quarter to a 37.9% increase. Federal government spending declined by 4.6%, while fixed investment of 7.6% was down slightly from the previous estimate of 7.8%. That chart shows that the negative drag on the final GDP calculation was due to a surge in imports ahead of expected tariffs, which will be a one-time event. The decline of imports in the 2nd quarter will provide a sizable boost to the Q2 GDP figure. The latest estimate from the Atlanta Fed’s GDP-Now model projects Q2 GDP at 3.4%, which would be the largest since Q3 2020, when the economy was rebounding from the pandemic – induced economic shutdown, and the second-largest quarterly GDP growth rate since Q2 1978.
Central US Weather Pattern Update
Abnormal Dryness Set to End in Iowa:
The Central US forecast is consistent in projecting producing additional rainfall of 1-2” across Eastern KS, IA, MN, and WI into the weekend. There will be an expansion of rainfall into the eastern Midwest this weekend and next week. Only the Western Plains will remain arid through the first week of July, while July climate guidance indicates a pattern of warmth and regular rainfall. The routine nature of summer 2025 will persist. Any return of amplified high pressure Ridging stays isolated to the Rocky Mountains into July 10th . This week’s Drought Monitor feature class – 1improvements in Central IA, and pockets of IL & norther IN. Current drought conditions, along with changes recorded over the last four weeks. The adequate soil moisture in KS/NE is noteworthy. Ag Resources (ARC) notes drought today covers only 16% of corn planted area, and the coverage is projected to drop 11-13% in the next two weeks. A Central US drought is lacking.
Corn Comments & Analysis
CBOT Corn Stays Weak; World Demand Shifting to South America; Farmers Predicted a Pop With Better Than Expected Exports:
In yesterday’s action, CBOT corn futures fell another 1-2 cents as central US weather forecast extend non-threatening conditions into the first 10 days of July and US export sales begin to weaken seasonally. June 1st US stocks are expected to be down 300-350 Mil Bu from last year. However, July corn’s delivery period begins just the release of NASS’s report, and it remains a record large world exporter production that will dominate price discovery into early autumn. US export sales in the week vs. a record peak in May of 66 Mil. Like recent years, export sales slide into a range of just 5-20 Mil Bu after early July. USDA must hike its annual US corn export forecast another 50 Mil Bu, but final 24/25 US corn end stocks of 135-140 Bil Bu are far less threatening amid the arrival of record Brazilian production in August and ultimately the arrival of a 16 Bil Bu crop. ARC’s initial target remains $3.90-$3.95 July but fears a deeper correction unfolds in Aug/Sep as the US feed becomes oversupplied and soymeal finds a bigger place in US feed rations. First Notice Day is on Monday along with Grain Stocks and Planted Acreage. Also weekly Export Inspections and Crop Progress.
Have A Great Trading Day!
Contact me directly with any questions or concerns at 1-888-264-5665 or dflynn@pricegroup.com
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374