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 Wholesale Trade at 7:30 A.M., Wholesale Inventories MoM at 9:00 A.M., Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., and Crop Progress at 3:00 P.M.
Following a sharp drop in ADP payrolls data, the market was braced for a similar decline in the monthly nonfarm payroll data. However, the report leaned slightly favorable with nonfarm growth of 139,000 jobs versus expectations of 130,000. The Household Survey revealed that that the unemployment rate remained unchanged at 4.2% from April, while the U-6 employment rate remained unchanged at 7.8%. Average hourly earnings rose 0.4% from April and were 3.9% higher than a year ago, beating the inflation rate and reflecting an increase in real wages. Overall, unemployment and inflation rates remain at historical low levels, suggesting that the Fed should SOON consider cutting interest rates.
Central US Weather Pattern Update
Central US Forecast Shows Rain to Return to N Plains/Midwest in 8-14 Day Period:
The Central US forecast maintains a lack of heat and sustained dryness into the last week of June, and leans favorable if realized. Soaking rainfall of 1-3” favors the US Southern Plains, Delta, and mid-south early this week. Ag Resources (ARC) notes corn begins to pollinate in the far south in the second half of June and moisture there is abundant. Dryness will be widespread next week, but the principal forecasting models have been consistent in forecasting the return of regular rain in all but the W Plains after June 15th . NOAA’s projected two-week change in soil moisture remains positive with no major threats on the radar, and importantly maximum temperatures into June 21st will be capped in the 70’s & low 80’s. Crop condition improvement is anticipated.
Ethanol Update
Brazilian Ethanol Price Drift Lower:
Cash ethanol in Southern Brazil this week is quoted at $2.04/Gal vs. $2.08 last week and vs. late spring’s peak of $2.10. Seasonally, Brazilian ethanol prices enter a bearish phase in the second half of the calendar year as safrinha corn and newly harvested sugar cane crops become available. Similar TO US corn exports, the US market faces elevated competition for product demand beginning in August. Already, the pace of ethanol exports have slowed. Official US ethanol reports in April totaled 172 Mil Gal vs. 196 Mil in March and vs. 214 Mil Gal in April 2024. US ethanol exports in summer are typically the lowest of the year as more supply is used in domestic gasoline blending. ARC’s message is that US corn demand contraction lies ahead amid larger South American production in 2025.
Corn Comments & Analysis
CBOT Corn Extends Recovery; US Forecast favorably wet in 8-14 Day Period:
CBOT corn ended higher as December traded through its 50-day moving average and the Jul-Dec recovered on tight old crop US stocks. Managed funds on Tuesday were net short 154,000 contracts, which is historically large for early June, and both the bulls and bears await clarity over late-June climate patterns in the US, European, and the Black Sea. Short covering is featured. ARC notes heat & dryness is being pushed into late June/early July. The EU, GFS, and AI models agree that welcomed rain blankets the N Plains, IA, and Great Lakes from June 13-20. And that dominate/expansive high-pressure Ridging is absent from the forecast. US crop ratings today should improve for the 2nd week. Cash markets will be forced to sort out abundant US and South American supplies in the 2nd half of 2025. Long-term outlook stay bearish without a shift to extreme heat and complete Central US dryness after June 23rd. Resistance remain in place at $4.50-$4.55 Dec CBOT. The US/China will stay in a dance of trying to achieve a trade deal. However, China’s demand that the US swell high end semiconductor chips makes a final pact difficult. Dec corn futures are overpriced.
Corn Seeding 96-97% Complete. The Corn & Ethanol Report 06/09/2025
We kickoff the day with Wholesale Trade at 7:30 A.M., Wholesale Inventories MoM at 9:00 A.M., Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., and Crop Progress at 3:00 P.M.
Following a sharp drop in ADP payrolls data, the market was braced for a similar decline in the monthly nonfarm payroll data. However, the report leaned slightly favorable with nonfarm growth of 139,000 jobs versus expectations of 130,000. The Household Survey revealed that that the unemployment rate remained unchanged at 4.2% from April, while the U-6 employment rate remained unchanged at 7.8%. Average hourly earnings rose 0.4% from April and were 3.9% higher than a year ago, beating the inflation rate and reflecting an increase in real wages. Overall, unemployment and inflation rates remain at historical low levels, suggesting that the Fed should SOON consider cutting interest rates.
Central US Weather Pattern Update
Central US Forecast Shows Rain to Return to N Plains/Midwest in 8-14 Day Period:
The Central US forecast maintains a lack of heat and sustained dryness into the last week of June, and leans favorable if realized. Soaking rainfall of 1-3” favors the US Southern Plains, Delta, and mid-south early this week. Ag Resources (ARC) notes corn begins to pollinate in the far south in the second half of June and moisture there is abundant. Dryness will be widespread next week, but the principal forecasting models have been consistent in forecasting the return of regular rain in all but the W Plains after June 15th . NOAA’s projected two-week change in soil moisture remains positive with no major threats on the radar, and importantly maximum temperatures into June 21st will be capped in the 70’s & low 80’s. Crop condition improvement is anticipated.
Ethanol Update
Brazilian Ethanol Price Drift Lower:
Cash ethanol in Southern Brazil this week is quoted at $2.04/Gal vs. $2.08 last week and vs. late spring’s peak of $2.10. Seasonally, Brazilian ethanol prices enter a bearish phase in the second half of the calendar year as safrinha corn and newly harvested sugar cane crops become available. Similar TO US corn exports, the US market faces elevated competition for product demand beginning in August. Already, the pace of ethanol exports have slowed. Official US ethanol reports in April totaled 172 Mil Gal vs. 196 Mil in March and vs. 214 Mil Gal in April 2024. US ethanol exports in summer are typically the lowest of the year as more supply is used in domestic gasoline blending. ARC’s message is that US corn demand contraction lies ahead amid larger South American production in 2025.
Corn Comments & Analysis
CBOT Corn Extends Recovery; US Forecast favorably wet in 8-14 Day Period:
CBOT corn ended higher as December traded through its 50-day moving average and the Jul-Dec recovered on tight old crop US stocks. Managed funds on Tuesday were net short 154,000 contracts, which is historically large for early June, and both the bulls and bears await clarity over late-June climate patterns in the US, European, and the Black Sea. Short covering is featured. ARC notes heat & dryness is being pushed into late June/early July. The EU, GFS, and AI models agree that welcomed rain blankets the N Plains, IA, and Great Lakes from June 13-20. And that dominate/expansive high-pressure Ridging is absent from the forecast. US crop ratings today should improve for the 2nd week. Cash markets will be forced to sort out abundant US and South American supplies in the 2nd half of 2025. Long-term outlook stay bearish without a shift to extreme heat and complete Central US dryness after June 23rd. Resistance remain in place at $4.50-$4.55 Dec CBOT. The US/China will stay in a dance of trying to achieve a trade deal. However, China’s demand that the US swell high end semiconductor chips makes a final pact difficult. Dec corn futures are overpriced.
Have A Great Trading Day!
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374