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 Building Permits Prel, Housing Starts, Building Permits MoM & YoY, Housing Starts MoM, Export Prices MoM & YoY, and Import Prices MoM & YoY ay 7:30 A.M., Michigan Consumer Sentiment Prel, Michigan 5-Year Inflation Expectations Prel, Michigan Consumer Expectations Prel, Michigan Current Conditions Prel, and Michigan Inflation Expectations Prel at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Net Long-term TIC Flows, Foreign Bond Investment, and Overall Net Capital Flows at 3:00 P.M.
Following a lower CPI inflation print earlier in the week, the Bureau of Labor Statistics followed the cool Producer Price Inflation rate. The PPI for April came in at 2.4% down from 3.4% in March, below expectations of 2.5-2.6%, and the lowest since September 2024. The Producer Price Index was reported at 147.7 for April, down 0.7 points from March, the largest 1-month decline since April 2020 and the 2nd since January 2015. There is a close relationship between US inflation rates and raw materials prices, which is about 3% higher at mid-month than a year-ago.
Central US Weather Pattern Update
Dryness Eliminated from N Plains, Midwest; NOAA Long Term Forecast Maintains Dryness in Plains During Summer:
Complicated weather is anticipated over the next 2-3 months, but the short-term outlook is viewed as rather favorable. A period of widespread rain occurs next Mon-Thurs, and on balance, forecasts have trended wetter in IL & IN. Too much rain falls in some areas, but Ag Resources (ARC)projects corn seeding as of May 18th to be 77-80% planted – and nearly finished in all but ND, WI, and OH. National soybean planting this weekend should reach 62-65% complete. Current drought conditions and updated NOAA’s 7-day forecast shows a complete elimination in drought concerned states, dryness lies ahead in SD & MN. Substantial moisture improvement occurs in eastern NE. Drought currently covers 22% of corn-planted area but is projected to drop to 15-17% by late next week. Longer term risks linger in the backround, but first a lasting trend of soil moisture loss must occur before risk premium is added into the marketplace. Updated Jun-Aug climate outlook showed neither the NOAA nor the EU models can’t shake higher odds of heat and dryness across the Western Ag Belt & Canada during the summer months. Heat is forecast in all regions after June 1st – and especially across the far W Plains – while below normal rainfall is forecast west of the Mississippi River. NOAA’s associated three-month drought forecast shows expansion & intensification are projected in NE, SD, and MT. The Canadian Prairies are also at risk of drought development and wildfires. Long range guidance will be kept in mind, but short-term drought concerns have eased. Note there’s general agreement that yet more rain impacts the E Plains and SW Corn Belt May 25-30.
Corn Comments & Analysis
CBOT corn futures ended mixed, with July finding life on the continued incredible pace of export demand. ARC’s work suggests strong US export demand stays in place into at least mid-summer amid resiliently firm South American fob premiums as the Black Sea market rations what remains of the 2024 crop. Abundant US rain pressures December futures above $4.50. US export sales in the week ending May 8th totaled 66 Mil Bu. Cumulative 24/25 export commitments of 2,444 Mil Bu account for an abnormally large 94% of USDA’s new annual forecast, and sales of just 8 Mil/week are needed to hit 2,600 Mil Bu annual target. Pace analysis suggest final 24/25 final US corn exports upward of 2,700 Mil Bu, and key is whether lower feed/residual use in summer works to keep end stocks above 1.4 Bil bushels. Cash corn will tighten into late July. The US/China continue to have trade discussions which is encouraging that a deal could be struck by mid-July. If China imports more than 12 MMT’s of corn in 2025/26 it will be a big deal. China’s interior corn price continues to rally on tightening stocks. July looks to pace corn rallies.
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
Wheeling & Dealing Continuation. The Corn & Ethanol Report 05/16/2025
We kickoff the day with Building Permits Prel, Housing Starts, Building Permits MoM & YoY, Housing Starts MoM, Export Prices MoM & YoY, and Import Prices MoM & YoY ay 7:30 A.M., Michigan Consumer Sentiment Prel, Michigan 5-Year Inflation Expectations Prel, Michigan Consumer Expectations Prel, Michigan Current Conditions Prel, and Michigan Inflation Expectations Prel at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Net Long-term TIC Flows, Foreign Bond Investment, and Overall Net Capital Flows at 3:00 P.M.
Following a lower CPI inflation print earlier in the week, the Bureau of Labor Statistics followed the cool Producer Price Inflation rate. The PPI for April came in at 2.4% down from 3.4% in March, below expectations of 2.5-2.6%, and the lowest since September 2024. The Producer Price Index was reported at 147.7 for April, down 0.7 points from March, the largest 1-month decline since April 2020 and the 2nd since January 2015. There is a close relationship between US inflation rates and raw materials prices, which is about 3% higher at mid-month than a year-ago.
Central US Weather Pattern Update
Dryness Eliminated from N Plains, Midwest; NOAA Long Term Forecast Maintains Dryness in Plains During Summer:
Complicated weather is anticipated over the next 2-3 months, but the short-term outlook is viewed as rather favorable. A period of widespread rain occurs next Mon-Thurs, and on balance, forecasts have trended wetter in IL & IN. Too much rain falls in some areas, but Ag Resources (ARC)projects corn seeding as of May 18th to be 77-80% planted – and nearly finished in all but ND, WI, and OH. National soybean planting this weekend should reach 62-65% complete. Current drought conditions and updated NOAA’s 7-day forecast shows a complete elimination in drought concerned states, dryness lies ahead in SD & MN. Substantial moisture improvement occurs in eastern NE. Drought currently covers 22% of corn-planted area but is projected to drop to 15-17% by late next week. Longer term risks linger in the backround, but first a lasting trend of soil moisture loss must occur before risk premium is added into the marketplace. Updated Jun-Aug climate outlook showed neither the NOAA nor the EU models can’t shake higher odds of heat and dryness across the Western Ag Belt & Canada during the summer months. Heat is forecast in all regions after June 1st – and especially across the far W Plains – while below normal rainfall is forecast west of the Mississippi River. NOAA’s associated three-month drought forecast shows expansion & intensification are projected in NE, SD, and MT. The Canadian Prairies are also at risk of drought development and wildfires. Long range guidance will be kept in mind, but short-term drought concerns have eased. Note there’s general agreement that yet more rain impacts the E Plains and SW Corn Belt May 25-30.
Corn Comments & Analysis
CBOT corn futures ended mixed, with July finding life on the continued incredible pace of export demand. ARC’s work suggests strong US export demand stays in place into at least mid-summer amid resiliently firm South American fob premiums as the Black Sea market rations what remains of the 2024 crop. Abundant US rain pressures December futures above $4.50. US export sales in the week ending May 8th totaled 66 Mil Bu. Cumulative 24/25 export commitments of 2,444 Mil Bu account for an abnormally large 94% of USDA’s new annual forecast, and sales of just 8 Mil/week are needed to hit 2,600 Mil Bu annual target. Pace analysis suggest final 24/25 final US corn exports upward of 2,700 Mil Bu, and key is whether lower feed/residual use in summer works to keep end stocks above 1.4 Bil bushels. Cash corn will tighten into late July. The US/China continue to have trade discussions which is encouraging that a deal could be struck by mid-July. If China imports more than 12 MMT’s of corn in 2025/26 it will be a big deal. China’s interior corn price continues to rally on tightening stocks. July looks to pace corn rallies.
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,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374