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 Unemployment Rate, Average Hourly Earnings MoM & YoY, Participation Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Nonfarm Payrolls Private, and U-6 Unemployment Rate at 7:30 A.M., Fed Bowman Speech at 9:15 A.M., Fed Williams Speech at 9:45 A.M., Fed Kugler Speech at 11:20 A.M., Fed Chair Powell Speech at !1;30 A.M., Baker Hughes Oil & Total Rig Count and Fed Kugler Speech at 12:00 P.M., Consumer Credit Change and Used Car Prices MoM & YoY at 2:00 P.M.
Ag markets rather easily extended Wednesday’s chart-based recovery on a meaningful reversal in US tariffs – goods already listed as part of the existing USMCA will be exempt until at least April 2nd – which allows for short term normality in North American trade. Massive headline risk lingers in the backround , but trade policy aside it’s just premature to be overly bearish at current prices until there’s guidance in North Hemisphere summer climate pattern. Equally important Wed night/Thurs was a big surge in Brazilian cash corn & soybean markets. Spot fob soy basis in Southern Brazil rallied $.40 and is nearing parity with US origin for US origin soy for delivery July onward. Sot corn in Brazil is quoted at $6.45/Bu, and Lula’s administration has approved measures to suspend tariffs on corn, sugar, and coffee imports, Though this must be approved by Congress. Brazil’s corn market stays tight and exports will be near zero until July-Aug.
South American Weather Pattern Discussion
South American Forecast Add Rain to Parana; Uncertainty Lingers Over Extended Brazilian Outlook:
The South American forecast into March 15th is consistent, while uncertainty remains in place with respect to Brazilian precipitation thereafter . On balance forecast have trended drier in central Brazil in the 8-14 day period, but the EU & GFS models offer enough rain to keep safrinha corn healthy. The AI model keeps a pattern of dryness & soil moisture loss into March 20th. All models agree that moderate/heavy showers impact Argentina through Sat/Sun. Totals of 1-3” will be widespread. Reginal overwatering will be present in Buenos Aires, but elsewhere drought relief is a positive. Little/no rain falls in Brazil outside Mato Grosso and Parana. The EU models 7-day forecast is unclear in major crop areas as Brazil’s monsoon has performed oddly since late Feb, and March 15-20 forecast will be monitored.
Central US Weather Pattern Update
US Forecast Dry Next 7 Days; Rain Resumes in E Midwest/Delta in Mid-March:
Lite rain is possible in the TX/OK panhandles in the next 48 hours but otherwise a patten of precipitation stagnation is probable into the second half of March. Mostly dry conditions will blanket the Central Us into March 15th . Thereafter, a series of lite/moderate rain events sweep across the Great Lakes, E Midwest. And Delta/Southeast, with cumulative precipitation worth 1-2”to favor LA, AR, MS, TN, KY, and OH. Yet more rain/snow favors the Great Lakes in the 11-15 day period. A wet east/dry west pattern remain most likely into late month. A normal/above normal temp profile continues. Moisture available for winter wheat becomes important in April. Ag Resources (ARC) also highlights this weeks drought monitor to show the need for ample spring precipitation across NE, SD, IA, MN, and IL. The bet is that dryness east of the Mississippi River eases prior to May 1st but solving drought in the Central Plains will be challenging.
Corn Comments & Analysis
CBOT Corn Rallies as North American Trade Reverts to USMCA Until April 2; Brazilian Market Score New 23-Month High:
Mat CBOT ended higher as normal North American grain flows are expected into the opening days of April – which implies enlarged Mexican demand for US origin corn – and as Brazilian cash and futures on Wednesday rallied sharply after the markets break for Carnival. This was unexpected. Brazil’s cash corn index ended higher again on Thursday and is quoted at $6.45/Bu. It’s clear Brazil has amajor supply issue, with first-crop harvesting not completed until April. The safrinha crop won’t be completed until August. US corn exports will stay strong in spring. US ethanol demand also remains record large. Census ethanol exports in January totaled 198/Mil Gal, vs. 150 a year ago and the 4th highest for any month ever. This adds to ethanol grind until Brazilian production recovers in summer/autumn. Fundamental inputs leans bullish at $4.65, basis May, but outsized trade policy headline risk lingers in the backround. A test of $4.85 may, is forecast.
Have A Great Trading Day!
Contact me directly with any questions at 1-888-264-5665 or email dflynn@pricegroup.com
Slowing Brazilian Harvest Benefits US Exports. The Corn & Ethanol Report 03/07/2025
We kickoff the day with Unemployment Rate, Average Hourly Earnings MoM & YoY, Participation Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Nonfarm Payrolls Private, and U-6 Unemployment Rate at 7:30 A.M., Fed Bowman Speech at 9:15 A.M., Fed Williams Speech at 9:45 A.M., Fed Kugler Speech at 11:20 A.M., Fed Chair Powell Speech at !1;30 A.M., Baker Hughes Oil & Total Rig Count and Fed Kugler Speech at 12:00 P.M., Consumer Credit Change and Used Car Prices MoM & YoY at 2:00 P.M.
Ag markets rather easily extended Wednesday’s chart-based recovery on a meaningful reversal in US tariffs – goods already listed as part of the existing USMCA will be exempt until at least April 2nd – which allows for short term normality in North American trade. Massive headline risk lingers in the backround , but trade policy aside it’s just premature to be overly bearish at current prices until there’s guidance in North Hemisphere summer climate pattern. Equally important Wed night/Thurs was a big surge in Brazilian cash corn & soybean markets. Spot fob soy basis in Southern Brazil rallied $.40 and is nearing parity with US origin for US origin soy for delivery July onward. Sot corn in Brazil is quoted at $6.45/Bu, and Lula’s administration has approved measures to suspend tariffs on corn, sugar, and coffee imports, Though this must be approved by Congress. Brazil’s corn market stays tight and exports will be near zero until July-Aug.
South American Weather Pattern Discussion
South American Forecast Add Rain to Parana; Uncertainty Lingers Over Extended Brazilian Outlook:
The South American forecast into March 15th is consistent, while uncertainty remains in place with respect to Brazilian precipitation thereafter . On balance forecast have trended drier in central Brazil in the 8-14 day period, but the EU & GFS models offer enough rain to keep safrinha corn healthy. The AI model keeps a pattern of dryness & soil moisture loss into March 20th. All models agree that moderate/heavy showers impact Argentina through Sat/Sun. Totals of 1-3” will be widespread. Reginal overwatering will be present in Buenos Aires, but elsewhere drought relief is a positive. Little/no rain falls in Brazil outside Mato Grosso and Parana. The EU models 7-day forecast is unclear in major crop areas as Brazil’s monsoon has performed oddly since late Feb, and March 15-20 forecast will be monitored.
Central US Weather Pattern Update
US Forecast Dry Next 7 Days; Rain Resumes in E Midwest/Delta in Mid-March:
Lite rain is possible in the TX/OK panhandles in the next 48 hours but otherwise a patten of precipitation stagnation is probable into the second half of March. Mostly dry conditions will blanket the Central Us into March 15th . Thereafter, a series of lite/moderate rain events sweep across the Great Lakes, E Midwest. And Delta/Southeast, with cumulative precipitation worth 1-2”to favor LA, AR, MS, TN, KY, and OH. Yet more rain/snow favors the Great Lakes in the 11-15 day period. A wet east/dry west pattern remain most likely into late month. A normal/above normal temp profile continues. Moisture available for winter wheat becomes important in April. Ag Resources (ARC) also highlights this weeks drought monitor to show the need for ample spring precipitation across NE, SD, IA, MN, and IL. The bet is that dryness east of the Mississippi River eases prior to May 1st but solving drought in the Central Plains will be challenging.
Corn Comments & Analysis
CBOT Corn Rallies as North American Trade Reverts to USMCA Until April 2; Brazilian Market Score New 23-Month High:
Mat CBOT ended higher as normal North American grain flows are expected into the opening days of April – which implies enlarged Mexican demand for US origin corn – and as Brazilian cash and futures on Wednesday rallied sharply after the markets break for Carnival. This was unexpected. Brazil’s cash corn index ended higher again on Thursday and is quoted at $6.45/Bu. It’s clear Brazil has amajor supply issue, with first-crop harvesting not completed until April. The safrinha crop won’t be completed until August. US corn exports will stay strong in spring. US ethanol demand also remains record large. Census ethanol exports in January totaled 198/Mil Gal, vs. 150 a year ago and the 4th highest for any month ever. This adds to ethanol grind until Brazilian production recovers in summer/autumn. Fundamental inputs leans bullish at $4.65, basis May, but outsized trade policy headline risk lingers in the backround. A test of $4.85 may, is forecast.
Have A Great Trading Day!
Contact me directly with any questions at 1-888-264-5665 or email dflynn@pricegroup.com
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn