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., Export Sales, US Trade Balance, Initial Jobless Claims, Continuing Jobless Claims, Job Claims 4-Week Average, Nonfarm Productivity QoQ Final, and Unit Labor Cost QoQ Final at 7:30 A.M., 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 and Fed Kugler Speech at 11:00 A.M., Fed Harker Speech at 12:30 P.M., Dairy Products Sales at 2:00 P.M., abd Fed Balance Sheet at 3:30 P.M.
The ADP private payrolls data showed that private businesses added 37,000 jobs in May. It was the smallest monthly increase since March 2025. The figure fell far short of the 60,000 jobs added in April and well below trade expectations of 115,000. The services sector added 36,000 jobs, led by leisure/hospitality, financial services, and information. The goods-producing sector lost 2,000 jobs, primarily in natural resources/mining and manufacturing, which collectively offset the gains in construction. Last week, the Personal Consumption Expenditures Index, the Fed’s preferred inflation indicator, showed that the US inflation rate in April fell to a 7-month low of 2.1%, marking the 18th month below 3%. The low inflation rate, combined with the low jobs number greatly increases the odds the Fed will begin cutting interest rates by late summer. Which sounds too late to the dance again.
The US Weather Pattern Update
Central US Lacks Extreme Heat Next Two Weeks; Mix of Rain/Sun Continues:
The Central US forecast remains consistent in projected widespread soaking rainfall across the Southern Plains, E Midwest and TN/KY over the next 72 hours. Totals upward of 2-3” will favor OK, MO, IL, and IN. Dryness follows next week, but the major forecasting models that moderate rainfall returns to E Plains and W Midwest, including IA, June 14-16. More rain is needed in the next two weeks in NE/IA, but otherwise water availability won’t be a major issue. Ag Resources (ARC) also highlights the mild nature of US temp forecast into the 2nd half of June. EU’s model’s max temp forecast shows highs will be capped in the mid/upper 70’s in the Midwest and in the 80’s further South.
US Energy Update
US Gasoline Consumption Falters; Recessionary Concerns Return:
Us motor gasoline use has struggled to match year-ago levels since mid-winter, and in the week ending May 30th gasoline disappearance was down 8& from the previous year at 8.# Mil Gal per day. The recent faltering of energy consumption is counter-seasonal in nature. This has allowed concern over poor future US & economic growth to creep back into the financial market price discovery. Spot WTI crude prices tend to peak seasonally in the second half of June as the N Hemisphere summer driving season is fully digested by the marketplace. Weakness so far in spring/summer is rather counter seasonal in nature, and US crude stocks end their period of contraction beginning in September. However, that does bode positively fuel expenses. ARC doubts crude can trade above $65/barrel for any length of time. Await corrections in diesel prices to extend forward coverage. However, Fox Contributor and Sr. Market Analyst for the Price Group Phil Flynn, believes in the short-term $65?barrel sounds right for the moment, but Flynn expects crude oil to be pushing $70/barrel by the 4th of July.
Cor Comments & Analysis
Corn Ends Steady/Higher for Second Day; Shorts Being Covered Amid Trade Deal Optimism/Weather Uncertainty:
CBOT corn futures have found support near the late autumn lows. US weather uncertainty after mid-June is heightened, while it is certain that improved precipitation is needed in the Black Sea and China. ARC also notes that Tuesday AM funds were net short and estimated 102-104000contracts in Chicago. Modest covering has occurred since. Fresh input for both bulls and bears has been lacking. Otherwise, ARC’s strategy of selling weather-based rallies remain intact. World fob prices have turned lower as Argentina’s harvest surpasses 40% complete and as safrinha harvest in N Brazil accelerated after mid-June. New lows are not expected until it’s known late June/July weather issues have been avoided; however, a US-China trade deal is needed to prevent US end stocks from reaching or exceeding 2.0 billion bushels. Keep in mind this correlates with market at/below $4.00 at harvest. Target $4.50+, Dec CBOT, to add 10-20% to forward hedges. Bull trends are based on supply exclusively. July’s newfound discount to Dec suggests limited concern over old crop supply availability.
More Headaches from China
I must admit I am not holding my breath for a US-Sino trade deal even after President Trump talks with his counterpart Xi. The Chinese tend to be tough negotiators and string along necessary concessions to make the deal real. Recent headlines that Yungin Jian a University of Michigan lab researcher is accused of being a loyalist to the Chinese Communist Party, with allegations of smuggling in crop killing fungus harmful to the US population.
Key Details: Jian, a Chinese nationalist of the Chinese Communist Party (CCP), Case: She and her boyfriend Zunyong Liu, are accused of plotting to smuggle a potentially dangerous crop-killing fungus (Fusarium graminearum) into the US: Government Funding: Jian allegedly received funding from the Chines government for her research work. Charges : Both Jian and Lui are charged with conspiracy, smuggling goods into the US, false statements, and VISA fraud.
China Syndrome. The Corn & Ethanol Report 06/05/2025
We kickoff the day with Challenger Job Cuts at 6:30 A.M., Export Sales, US Trade Balance, Initial Jobless Claims, Continuing Jobless Claims, Job Claims 4-Week Average, Nonfarm Productivity QoQ Final, and Unit Labor Cost QoQ Final at 7:30 A.M., 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 and Fed Kugler Speech at 11:00 A.M., Fed Harker Speech at 12:30 P.M., Dairy Products Sales at 2:00 P.M., abd Fed Balance Sheet at 3:30 P.M.
The ADP private payrolls data showed that private businesses added 37,000 jobs in May. It was the smallest monthly increase since March 2025. The figure fell far short of the 60,000 jobs added in April and well below trade expectations of 115,000. The services sector added 36,000 jobs, led by leisure/hospitality, financial services, and information. The goods-producing sector lost 2,000 jobs, primarily in natural resources/mining and manufacturing, which collectively offset the gains in construction. Last week, the Personal Consumption Expenditures Index, the Fed’s preferred inflation indicator, showed that the US inflation rate in April fell to a 7-month low of 2.1%, marking the 18th month below 3%. The low inflation rate, combined with the low jobs number greatly increases the odds the Fed will begin cutting interest rates by late summer. Which sounds too late to the dance again.
The US Weather Pattern Update
Central US Lacks Extreme Heat Next Two Weeks; Mix of Rain/Sun Continues:
The Central US forecast remains consistent in projected widespread soaking rainfall across the Southern Plains, E Midwest and TN/KY over the next 72 hours. Totals upward of 2-3” will favor OK, MO, IL, and IN. Dryness follows next week, but the major forecasting models that moderate rainfall returns to E Plains and W Midwest, including IA, June 14-16. More rain is needed in the next two weeks in NE/IA, but otherwise water availability won’t be a major issue. Ag Resources (ARC) also highlights the mild nature of US temp forecast into the 2nd half of June. EU’s model’s max temp forecast shows highs will be capped in the mid/upper 70’s in the Midwest and in the 80’s further South.
US Energy Update
US Gasoline Consumption Falters; Recessionary Concerns Return:
Us motor gasoline use has struggled to match year-ago levels since mid-winter, and in the week ending May 30th gasoline disappearance was down 8& from the previous year at 8.# Mil Gal per day. The recent faltering of energy consumption is counter-seasonal in nature. This has allowed concern over poor future US & economic growth to creep back into the financial market price discovery. Spot WTI crude prices tend to peak seasonally in the second half of June as the N Hemisphere summer driving season is fully digested by the marketplace. Weakness so far in spring/summer is rather counter seasonal in nature, and US crude stocks end their period of contraction beginning in September. However, that does bode positively fuel expenses. ARC doubts crude can trade above $65/barrel for any length of time. Await corrections in diesel prices to extend forward coverage. However, Fox Contributor and Sr. Market Analyst for the Price Group Phil Flynn, believes in the short-term $65?barrel sounds right for the moment, but Flynn expects crude oil to be pushing $70/barrel by the 4th of July.
Cor Comments & Analysis
Corn Ends Steady/Higher for Second Day; Shorts Being Covered Amid Trade Deal Optimism/Weather Uncertainty:
CBOT corn futures have found support near the late autumn lows. US weather uncertainty after mid-June is heightened, while it is certain that improved precipitation is needed in the Black Sea and China. ARC also notes that Tuesday AM funds were net short and estimated 102-104000contracts in Chicago. Modest covering has occurred since. Fresh input for both bulls and bears has been lacking. Otherwise, ARC’s strategy of selling weather-based rallies remain intact. World fob prices have turned lower as Argentina’s harvest surpasses 40% complete and as safrinha harvest in N Brazil accelerated after mid-June. New lows are not expected until it’s known late June/July weather issues have been avoided; however, a US-China trade deal is needed to prevent US end stocks from reaching or exceeding 2.0 billion bushels. Keep in mind this correlates with market at/below $4.00 at harvest. Target $4.50+, Dec CBOT, to add 10-20% to forward hedges. Bull trends are based on supply exclusively. July’s newfound discount to Dec suggests limited concern over old crop supply availability.
More Headaches from China
I must admit I am not holding my breath for a US-Sino trade deal even after President Trump talks with his counterpart Xi. The Chinese tend to be tough negotiators and string along necessary concessions to make the deal real. Recent headlines that Yungin Jian a University of Michigan lab researcher is accused of being a loyalist to the Chinese Communist Party, with allegations of smuggling in crop killing fungus harmful to the US population.
Key Details: Jian, a Chinese nationalist of the Chinese Communist Party (CCP), Case: She and her boyfriend Zunyong Liu, are accused of plotting to smuggle a potentially dangerous crop-killing fungus (Fusarium graminearum) into the US: Government Funding: Jian allegedly received funding from the Chines government for her research work. Charges : Both Jian and Lui are charged with conspiracy, smuggling goods into the US, false statements, and VISA fraud.
Question is: Is this the deal breaker?
Have A Great Trading Day!
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374