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., US Trade Balance, Exports, Imports, Export Sales, Initial Jobless Claims, Jobless Claims 4-Week Average, Nonfarm Productivity QoQ Final, Unit Labor Costs, and Wholesale Trade at 7:30 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., Fed Waller Speech at 2:30 P.M., Fed Balance Sheet at 3:30 P.M., Fed Bostic Speech and Total Vehicle Sales at 6:00 P.M.
Crosscurrents remain numerous. Trade wars, should they continue, lean bearish longer term as higher imported prices weigh on broad demand growth. But in the median term, favorable weather and large crops are still demand to build global grain and oilseed inventories. Mother Nature will be the ultimate arbiter of fair value over the next 4-5 months. Ag Resources (ARC) also notes currency dynamics are changing rapidly. What was heavy weight laid upon the markets – soaring US dollar and weaker currencies elsewhere, which added to South American producer profitability and trimmed importer purchasing power – is being reversed. The US dollar index since mid-January has fallen 5%. Potential weakness only adds to CBOT volatility.
South American weather Pattern Discussion
South American Forecast Stays Uncertain in Brazil; Rain in Argentina to Slow/Pause Corn Harvesting:
South American weathers impact on production hinges upon which model is correct in central and northern Brazil after March 14th . The EU & GFS maintain a pattern of near normal rainfall across most of Brazil’s safrinha corn belt in the 11-15 day period. The AI model keeps a pattern of warmth/dryness intact. Pay close attention to whether better rain chances in Mato Grosso do Sul and Parana are pulled forward into the 7-day period, and ARC notes its common for operational model guidance in the 11-15 day period to assure normal climatology – which of course ius wet in Brazil in March. In the near term, there’s agreement that dryness impacts all but for NW Mato Grosso. This is not an issue yet and dryness will allow safrinha corn seeding to speed along. It’s mid-March onward when rain is needed. Soaking showers continue for another 3-4 days in Argentina, with the heaviest amounts (2-3”) favor Buenos Aires. This slows corn harvesting in Argentina, but otherwise is viewed as helpful as drought eases further
Central US Weather Pattern
Upper Midwest Soil Moisture Replenishment Ahead; Limited Precipitation in HRW Belt Next Two Weeks:
The Central US forecast remains consistent in projecting a broadly stagnant pattern of precipitation and variable temps into March 20th . Climate guidance extends a pattern of dryness in the Plains and above normal precipitation in the central and eastern Midwest into the opening week of April, but confidence beyond 10-12 days is low. Rain/snow in the last 24 hours spread from the E Plains into the Delta region & Midwest. Moisture equivalent totals of 1” or more recorded in E KS, LA, MO, IA, and IL. Midwest soil moisture is being recharged, and additional precipitation is forecast in the N Plains and Midwest throughout the 6-15 day period. NOAA’s two-week data projects a boost in soil moisture. Rain/snow will be most welcomed in SD, MN, IA, and WI.
Corn Comments & Analysis
CBOT Corn Bounces; Ethanol Growth Intact; All Eyes on Brazilian Rainfall Next Two Weeks:
May CBOT corn recovered from deeply oversold technical levels. Trump offered concessions to tariffs by exempting US automakers for 30-days, and there’s hope Mexico will leave off US corn from its list of retaliation. Negotiations will be occurring. Anything that keeps Mexico as the US’s largest customer is positive. Otherwise there’s so far been no erosion in US corn demand. Ethanol production in the week ending Feb 28 totaled 321 Mil Gal, up 3% from last year and a record for late winter. Margins have bounced from breakeven following the correction in cash corn values, and string ethanol disappearance between now and mid-summer keeps grind grind strength in spring. Model disagreement in Brazil loom large, whether rainfall of 1-2” occurs in Mato Grosso do Sul and Parana March 15-20 is paramount. ARC maintains a strategy of waiting on recoveries to extend sales. Downside risk is limited at $4.50 May, and $4.35 Dec. Its important that demand potential has brightened on the break . US corn is cheap in the world market as Argentine fob premiums rise.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or email deflynn@pricegroup.com
Weather & Tariffs Key to Marketplace. The Corn & Ethanol Report 03/06/2025
We kickoff the day with Challenger Job Cuts at 6:30 A.M., US Trade Balance, Exports, Imports, Export Sales, Initial Jobless Claims, Jobless Claims 4-Week Average, Nonfarm Productivity QoQ Final, Unit Labor Costs, and Wholesale Trade at 7:30 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., Fed Waller Speech at 2:30 P.M., Fed Balance Sheet at 3:30 P.M., Fed Bostic Speech and Total Vehicle Sales at 6:00 P.M.
Crosscurrents remain numerous. Trade wars, should they continue, lean bearish longer term as higher imported prices weigh on broad demand growth. But in the median term, favorable weather and large crops are still demand to build global grain and oilseed inventories. Mother Nature will be the ultimate arbiter of fair value over the next 4-5 months. Ag Resources (ARC) also notes currency dynamics are changing rapidly. What was heavy weight laid upon the markets – soaring US dollar and weaker currencies elsewhere, which added to South American producer profitability and trimmed importer purchasing power – is being reversed. The US dollar index since mid-January has fallen 5%. Potential weakness only adds to CBOT volatility.
South American weather Pattern Discussion
South American Forecast Stays Uncertain in Brazil; Rain in Argentina to Slow/Pause Corn Harvesting:
South American weathers impact on production hinges upon which model is correct in central and northern Brazil after March 14th . The EU & GFS maintain a pattern of near normal rainfall across most of Brazil’s safrinha corn belt in the 11-15 day period. The AI model keeps a pattern of warmth/dryness intact. Pay close attention to whether better rain chances in Mato Grosso do Sul and Parana are pulled forward into the 7-day period, and ARC notes its common for operational model guidance in the 11-15 day period to assure normal climatology – which of course ius wet in Brazil in March. In the near term, there’s agreement that dryness impacts all but for NW Mato Grosso. This is not an issue yet and dryness will allow safrinha corn seeding to speed along. It’s mid-March onward when rain is needed. Soaking showers continue for another 3-4 days in Argentina, with the heaviest amounts (2-3”) favor Buenos Aires. This slows corn harvesting in Argentina, but otherwise is viewed as helpful as drought eases further
Central US Weather Pattern
Upper Midwest Soil Moisture Replenishment Ahead; Limited Precipitation in HRW Belt Next Two Weeks:
The Central US forecast remains consistent in projecting a broadly stagnant pattern of precipitation and variable temps into March 20th . Climate guidance extends a pattern of dryness in the Plains and above normal precipitation in the central and eastern Midwest into the opening week of April, but confidence beyond 10-12 days is low. Rain/snow in the last 24 hours spread from the E Plains into the Delta region & Midwest. Moisture equivalent totals of 1” or more recorded in E KS, LA, MO, IA, and IL. Midwest soil moisture is being recharged, and additional precipitation is forecast in the N Plains and Midwest throughout the 6-15 day period. NOAA’s two-week data projects a boost in soil moisture. Rain/snow will be most welcomed in SD, MN, IA, and WI.
Corn Comments & Analysis
CBOT Corn Bounces; Ethanol Growth Intact; All Eyes on Brazilian Rainfall Next Two Weeks:
May CBOT corn recovered from deeply oversold technical levels. Trump offered concessions to tariffs by exempting US automakers for 30-days, and there’s hope Mexico will leave off US corn from its list of retaliation. Negotiations will be occurring. Anything that keeps Mexico as the US’s largest customer is positive. Otherwise there’s so far been no erosion in US corn demand. Ethanol production in the week ending Feb 28 totaled 321 Mil Gal, up 3% from last year and a record for late winter. Margins have bounced from breakeven following the correction in cash corn values, and string ethanol disappearance between now and mid-summer keeps grind grind strength in spring. Model disagreement in Brazil loom large, whether rainfall of 1-2” occurs in Mato Grosso do Sul and Parana March 15-20 is paramount. ARC maintains a strategy of waiting on recoveries to extend sales. Downside risk is limited at $4.50 May, and $4.35 Dec. Its important that demand potential has brightened on the break . US corn is cheap in the world market as Argentine fob premiums rise.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or email deflynn@pricegroup.com
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn