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Wednesday, January 22, 2025 12:21:30 PM
The Corn & Ethanol Report
By: Daniel Flynn | January 22, 2025
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Redbook YoY at 7:55 A.M., CB Leading Index MoM at 9:00 A.M., 17_Week Bill Auction at 10:30 A.M., 20-Year Bond Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.\
The USDA’s ERS monthly update of US food expenditures showed that US home expenditures on food for at-home consumption rose 3% in November to an 11-month high of $95.7 billion and was 4% higher than a year ago. Food away from expenditures decline 3% from October but were 7% higher than last year at $144.4 billion. Total food expenditures of $210 billion were down less than 1% from October but were 5% higher than last year. Total expenditures were 46.4 billion less than the record set in December 2023. However, food expenditures tend to spike in December. If the recent 5% growth rate continued in December, total food expenditures will exceed $227 billion. The US food inflation rate has declined after peaking in August 2022. However, food prices continue to reach new record highs. The latest consumer price data showed that the Food Price Index in December reached a record high of 332.9, up 2.4 from a year ago. The pandemic and the accompanying expansion of the money supply considerably altered the long-term trajectory of food prices, which is not expected to slow anytime soon.
South American Weather Update
South Am Forecast Wet in Argentina; Buenos Aires Needs Rain; Drier Brazilian Pattern Aids early Harvest:
The South American forecast into Feb 1at is view as mixed but mostly improved. 4-day precipitation accumulation in Argentina range from .10-1.90”, with much of Cordoba and N Argentina crop areas favored with amounts of .40+’. Additional soaking rainfall is offered to the northern half of Argentina’s Ag Belt Jan 26-31. The Jan 15-31 EU model’s forecast is expecting net moisture loss in Buenos Aires, which is a concern, but the coverage of drought in Argentina will be getting smaller, not larger into early Feb. Rainfall of 1-2” is forecast next week in N Cordoba & Santa Fe in Argentina. A nearly ideal mix of rain & sun occurs in Brazil over the next two weeks. Most important is that the intensity of rainfall declines considerably in Mato Grosso & Goias into Jan 28th . This allows fields to dry and early soybean harvest to expand . Dryness there is welcomed following excessive precipitation since Jan 1st .
US Weather Pattern Discussion
US Snow Cover Retreats Ahead of Arctic Blat in the North; Temps Forecast to Moderate After the Next 24 Hours:
The amount of snow in New Orleans, Florida, Texas. And many other southern cities and states were unprecedented with a foot or more anow recorded in these places that have no snow removal equipment. Very dangerous & very scary. Another concern cis possible flooding with meltdown expected shortly. And the South has more recorded snow than usual bullseye’s in the North. Minimum temps on Mon & Tues were recorded as forecast, with sub-zero lows widespread and Tyes A.M. readings as low as negative 12-18 degrees in NE, SD, IA, and MN. Fortunately, temps should begin to moderate Wednesday and a pattern of normal/above normal temps is projected in the next 6-10 day period . Initial Feb temp guidance is also warmer than normal. The current North American snow cover has additional concerns of wheat winterkill damage but can’t be quantified but a sizable portion of winter wheat crops in TX, OK, KS, NE, SD, MO, and IL were exposed to overnight lows at or below zero. Ag Resources (ARC) also notes that the 60-day rainfall across the principal HRW Belt has been recorded at 10-40% of normal. The combination of frigid temps and developing Plains dryness raises the burden on Mar-May weather. A mild/wet spring is desired.
Corn Comments & Analysis
CBOT Corn Extends Politics-Driven Rally; Funds Long & Market Again Overbought:
President Trump playing possum with Mexico & Canada to further negotiate tariffs. The “Art of the Deal” could bring all sides together at the negotiating table and have a better trade agreement. CBOT futures scored newer highs, with July trading just above $5.00 as fear over blanket US tariffs ease for now. ARC also notes soybean harvesting in Mato Grosso is just 2% complete, vs. 13% a year ago., and little/no safrinha corn will be seeded in January. Additional rain is needed in La Pampa and Buenos Aires in Southern Argentina, and exportable corn supplies hinge upon South American weather for March-September delivery. The correlation between USDA’s January US stocks/use forecast and July CBOT corn. The market is reasonably priced at 44.80-$5.00, but further strength requires additional supply dislocation- or 50-100 Mil Bu of additional export demand. Brazilian weather uncertainty in March/April is noted, but the market is heavily overbought. A correction of 25-35 cents can unfold without fresh demand news. ARC’s work suggests rallies will be labored amid improving soil moisture in central and Northern Argentina. Tariffs on Mexico & Canada are set to be implemented on Feb 1st, unless they ger to the negotiating table, and cash corn basis bids continue to ease. Wheat is being priced into Plains cattle rations from July onward. Corn is overdone to the upside.
Read Full Story »»»
DiscoverGold
By: Daniel Flynn | January 22, 2025
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Redbook YoY at 7:55 A.M., CB Leading Index MoM at 9:00 A.M., 17_Week Bill Auction at 10:30 A.M., 20-Year Bond Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.\
The USDA’s ERS monthly update of US food expenditures showed that US home expenditures on food for at-home consumption rose 3% in November to an 11-month high of $95.7 billion and was 4% higher than a year ago. Food away from expenditures decline 3% from October but were 7% higher than last year at $144.4 billion. Total food expenditures of $210 billion were down less than 1% from October but were 5% higher than last year. Total expenditures were 46.4 billion less than the record set in December 2023. However, food expenditures tend to spike in December. If the recent 5% growth rate continued in December, total food expenditures will exceed $227 billion. The US food inflation rate has declined after peaking in August 2022. However, food prices continue to reach new record highs. The latest consumer price data showed that the Food Price Index in December reached a record high of 332.9, up 2.4 from a year ago. The pandemic and the accompanying expansion of the money supply considerably altered the long-term trajectory of food prices, which is not expected to slow anytime soon.
South American Weather Update
South Am Forecast Wet in Argentina; Buenos Aires Needs Rain; Drier Brazilian Pattern Aids early Harvest:
The South American forecast into Feb 1at is view as mixed but mostly improved. 4-day precipitation accumulation in Argentina range from .10-1.90”, with much of Cordoba and N Argentina crop areas favored with amounts of .40+’. Additional soaking rainfall is offered to the northern half of Argentina’s Ag Belt Jan 26-31. The Jan 15-31 EU model’s forecast is expecting net moisture loss in Buenos Aires, which is a concern, but the coverage of drought in Argentina will be getting smaller, not larger into early Feb. Rainfall of 1-2” is forecast next week in N Cordoba & Santa Fe in Argentina. A nearly ideal mix of rain & sun occurs in Brazil over the next two weeks. Most important is that the intensity of rainfall declines considerably in Mato Grosso & Goias into Jan 28th . This allows fields to dry and early soybean harvest to expand . Dryness there is welcomed following excessive precipitation since Jan 1st .
US Weather Pattern Discussion
US Snow Cover Retreats Ahead of Arctic Blat in the North; Temps Forecast to Moderate After the Next 24 Hours:
The amount of snow in New Orleans, Florida, Texas. And many other southern cities and states were unprecedented with a foot or more anow recorded in these places that have no snow removal equipment. Very dangerous & very scary. Another concern cis possible flooding with meltdown expected shortly. And the South has more recorded snow than usual bullseye’s in the North. Minimum temps on Mon & Tues were recorded as forecast, with sub-zero lows widespread and Tyes A.M. readings as low as negative 12-18 degrees in NE, SD, IA, and MN. Fortunately, temps should begin to moderate Wednesday and a pattern of normal/above normal temps is projected in the next 6-10 day period . Initial Feb temp guidance is also warmer than normal. The current North American snow cover has additional concerns of wheat winterkill damage but can’t be quantified but a sizable portion of winter wheat crops in TX, OK, KS, NE, SD, MO, and IL were exposed to overnight lows at or below zero. Ag Resources (ARC) also notes that the 60-day rainfall across the principal HRW Belt has been recorded at 10-40% of normal. The combination of frigid temps and developing Plains dryness raises the burden on Mar-May weather. A mild/wet spring is desired.
Corn Comments & Analysis
CBOT Corn Extends Politics-Driven Rally; Funds Long & Market Again Overbought:
President Trump playing possum with Mexico & Canada to further negotiate tariffs. The “Art of the Deal” could bring all sides together at the negotiating table and have a better trade agreement. CBOT futures scored newer highs, with July trading just above $5.00 as fear over blanket US tariffs ease for now. ARC also notes soybean harvesting in Mato Grosso is just 2% complete, vs. 13% a year ago., and little/no safrinha corn will be seeded in January. Additional rain is needed in La Pampa and Buenos Aires in Southern Argentina, and exportable corn supplies hinge upon South American weather for March-September delivery. The correlation between USDA’s January US stocks/use forecast and July CBOT corn. The market is reasonably priced at 44.80-$5.00, but further strength requires additional supply dislocation- or 50-100 Mil Bu of additional export demand. Brazilian weather uncertainty in March/April is noted, but the market is heavily overbought. A correction of 25-35 cents can unfold without fresh demand news. ARC’s work suggests rallies will be labored amid improving soil moisture in central and Northern Argentina. Tariffs on Mexico & Canada are set to be implemented on Feb 1st, unless they ger to the negotiating table, and cash corn basis bids continue to ease. Wheat is being priced into Plains cattle rations from July onward. Corn is overdone to the upside.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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