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 Michigan 5-Year Inflation Expectations Prel, Michigan Consumer Expectations Prel, Michigan Consumer Sentiment Prel, Michigan Current Conditions Prel, and Michigan Inflation Expectations at 9:00 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.
Following a lower consumer price inflation (CPI) release on Wednesday, the producer price inflation rate in February was also down slightly from January, at 3.2%. However, the producer price index was down fractionally from January, but at a record high for February. The PPI inflation rate was the lowest in 3 months, buy it also marked the 6th straight month tha producer price inflation exceeded consumer price inflation. Price trends for both inflation indicators tend to follow raw material price trends. Th CRB Index in January was 10% higher than in 2024 but is currently just 4.4% higher than March last year. US energy prices will continue to slide while the US economic outlookis darkening on the diminished investment US inflationary price trends appear to be stable with stagnation a future risk.
South American Weather Pattern Discussion
South American Forecast Favorable in Mato Grosso; Trends Drier in Mato Grosso do Sul & Parana:
The forecast is nonthreatening but actual Brazilian rainfall in the next 10 days needs close monitoring. Model guidance has trended drier this week, with any meaningful Brazilian rainfall into March 20th confined to pockets og Goias and NW Mato Grosso. Better rain chance are projected thereafter, but the arrival of an outright pattern shift keeps getting delayed. In Brazil’s safrinha corn belt, water demands are low currently, but the concern is that normal seasonal precipitation rates begin to drop in Aoril. Average precipitation in Mato Grosso do Sul in March is 5.8”, average precipitation there in April is 2.9”. Missing March rain is noteworthy. There’s time for soil moisture to recharge across the southern part of the safrinha belt, but a wet April is needed. The forecast hints at a stronger monsoon flow of rainfall during April 1-10”.
Central US Weather Pattern Update
Abundant Precipitation in Midwest/Delta; Plains Drought to Deepen Next Two Weeks:
An active pattern of rain/snows lies ahead for the Upper and eastern Midwest. Moisture equivalent totals over the next 7 days are forecast at .75-1.50” in MN, IA, WI, and IL. Higher totals are projected in TN, KY, and the eastern Midwest. Additional rain is forecast east of the Mississippi River March 20-27. Ag Resources (ARC) is concerned about current abnormal dryness/drought in the principal Corn Belt, but it’s the Southern & Central Plains where drought worry is real. Dryness in S Plains, NE, and SD would be most concerning should a stagnant precipitation pattern linger into April. A warmer-than-normal temperature pattern is forecast into March 28th. Max temperatures in upper 60’s and 70’s will be common in TX, OK, KS, and NE.
Corn Comments & Analysis
Corn Rally Fades into Close; Strong US Export Demand Intact:
Global corn markets recovered on Thursday without enthusiasm. A sinking US financial market (DOW) lingers in the back round. The fear of a US recession is growing. The uncertainty of global grain flows from April 2nd onward (reciprocal tariffs) limits new CBOT buying with managed funds net long 250,000 contracts. However, US export demand remain strong through March 6th, New Sales last week totaled 38 Mil Bu, vs. 36 Mil the previous week and 22 Mil above the pace needed to hit the USDA’s target. Total US export commitments of 1,990 Mil Bu account for abnormal high of 81% of USDA’s annual forecast. Sustained weekly sales of 30 Mil through April triggers a 50 mil upward revision to export forecasts. Fundamental input leans supportive below $4.50 basis May CBOT, but it’s struggling macro environment that keeps resistance at $4.80-$4.85. A new supply threat is needed to sustain a rally. Closely monitor Brazilian weather in early April for the timing on the withdrawal of the monsoon. China was rumored to be securing Brazilian corn for July/August. No US corn buying from China is expected on 20% import tariffs. CBOT corn open interest rose 5,216 contracts while soybeans falling 3,289 contracts. Large Capital Flows are no longer entering the grain arena with uncertainty of tariffs impact on exports and late February declines has speculators looking at other investments.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or dflynn@pricegroup.com
Watchlist: South American Weather & Tariffs. The Corn & Ethanol Report 03/14/2025
We kickoff the day with Michigan 5-Year Inflation Expectations Prel, Michigan Consumer Expectations Prel, Michigan Consumer Sentiment Prel, Michigan Current Conditions Prel, and Michigan Inflation Expectations at 9:00 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.
Following a lower consumer price inflation (CPI) release on Wednesday, the producer price inflation rate in February was also down slightly from January, at 3.2%. However, the producer price index was down fractionally from January, but at a record high for February. The PPI inflation rate was the lowest in 3 months, buy it also marked the 6th straight month tha producer price inflation exceeded consumer price inflation. Price trends for both inflation indicators tend to follow raw material price trends. Th CRB Index in January was 10% higher than in 2024 but is currently just 4.4% higher than March last year. US energy prices will continue to slide while the US economic outlookis darkening on the diminished investment US inflationary price trends appear to be stable with stagnation a future risk.
South American Weather Pattern Discussion
South American Forecast Favorable in Mato Grosso; Trends Drier in Mato Grosso do Sul & Parana:
The forecast is nonthreatening but actual Brazilian rainfall in the next 10 days needs close monitoring. Model guidance has trended drier this week, with any meaningful Brazilian rainfall into March 20th confined to pockets og Goias and NW Mato Grosso. Better rain chance are projected thereafter, but the arrival of an outright pattern shift keeps getting delayed. In Brazil’s safrinha corn belt, water demands are low currently, but the concern is that normal seasonal precipitation rates begin to drop in Aoril. Average precipitation in Mato Grosso do Sul in March is 5.8”, average precipitation there in April is 2.9”. Missing March rain is noteworthy. There’s time for soil moisture to recharge across the southern part of the safrinha belt, but a wet April is needed. The forecast hints at a stronger monsoon flow of rainfall during April 1-10”.
Central US Weather Pattern Update
Abundant Precipitation in Midwest/Delta; Plains Drought to Deepen Next Two Weeks:
An active pattern of rain/snows lies ahead for the Upper and eastern Midwest. Moisture equivalent totals over the next 7 days are forecast at .75-1.50” in MN, IA, WI, and IL. Higher totals are projected in TN, KY, and the eastern Midwest. Additional rain is forecast east of the Mississippi River March 20-27. Ag Resources (ARC) is concerned about current abnormal dryness/drought in the principal Corn Belt, but it’s the Southern & Central Plains where drought worry is real. Dryness in S Plains, NE, and SD would be most concerning should a stagnant precipitation pattern linger into April. A warmer-than-normal temperature pattern is forecast into March 28th. Max temperatures in upper 60’s and 70’s will be common in TX, OK, KS, and NE.
Corn Comments & Analysis
Corn Rally Fades into Close; Strong US Export Demand Intact:
Global corn markets recovered on Thursday without enthusiasm. A sinking US financial market (DOW) lingers in the back round. The fear of a US recession is growing. The uncertainty of global grain flows from April 2nd onward (reciprocal tariffs) limits new CBOT buying with managed funds net long 250,000 contracts. However, US export demand remain strong through March 6th, New Sales last week totaled 38 Mil Bu, vs. 36 Mil the previous week and 22 Mil above the pace needed to hit the USDA’s target. Total US export commitments of 1,990 Mil Bu account for abnormal high of 81% of USDA’s annual forecast. Sustained weekly sales of 30 Mil through April triggers a 50 mil upward revision to export forecasts. Fundamental input leans supportive below $4.50 basis May CBOT, but it’s struggling macro environment that keeps resistance at $4.80-$4.85. A new supply threat is needed to sustain a rally. Closely monitor Brazilian weather in early April for the timing on the withdrawal of the monsoon. China was rumored to be securing Brazilian corn for July/August. No US corn buying from China is expected on 20% import tariffs. CBOT corn open interest rose 5,216 contracts while soybeans falling 3,289 contracts. Large Capital Flows are no longer entering the grain arena with uncertainty of tariffs impact on exports and late February declines has speculators looking at other investments.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or dflynn@pricegroup.com
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn