Corona Fear Headlines Created A Stir To Start The Christmas Week. The Corn & Ethanol Report

We started off the day with Corporate Profits QoQ Final (Q3), GDP Price Index QoQ Final (Q3), GDP Growth Rate QoQ Final (Q3), PCE Price QoQ Final (Q3), Core prices (Q3) at 7:30 A.M., Redbook MoM (19/Dec) and Redbook YoY (19/Dec) at 7:55 A.M., CB Consumer Confidence (DEC), Existing Home Sales MoM (DEC), and Richmond Fed Manufacturing Index (DEC) at 9:00 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., 5-Year TIPS Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.

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Sunday night was a cruel start to the week and the market followed through making new lows on Monday. When the initial shock of traders, trading on fear the outside markets poised a comeback except for copper being very weak throughout the trading session. Much needed rains in South America did move in but did not have the coverage or as plentiful in the real needed acres or regions farmers were hoping for. Almost all of the markets in the grain complex mounted a comeback with soybeans leading the way.  With pollination beginning in South America, January and February will be crucial to their 2021 crops, while U.S. exports remain strong and especially big numbers already for 2021 exports, with U.S. exports the cheapest game in town currently. After we get through February for Brazil and Argentina’s crop estimates we will be talking and looking towards U.S. plantings with the usual switchovers between corn and soybeans, but farmers and traders watch the Drought Monitor Index. In the overnight electronic session, the March corn is currently trading at 439 ½ which is a ½ of a cent lower. The trading range has been 441 ½ to 437 ¼.

On the Ethanol front, we are having ethanol stocks pile up as plants are producing ethanol as a byproduct now. Peter Meyer of S&P Global Platts said,” Ethanol plants are selling a lot of their byproducts given the rise in soybean oil prices which were somewhat based on Palm oil prices going up, so you have corn oil in demand, and there’s a need for carbon dioxide for all the dry ice needed to move vaccines.” Meyer also said, there are only about 30 ethanol plants with a capability to capture carbon dioxide for resale. But the other product in demand: DDGs, “Then you have DDGs, which there is really a high demand for right now,” added Meyer. “Your cattle numbers have been flat the last four or five years, but the hog numbers keep going up. So, there is a demand for feed.” This why we saw ethanol companies stock prices rise in yesterday’s action and the January ethanol futures settle .005 higher amid all the chaos in the market yesterday. There were no trades posted in the overnight electronic session. The January contract settled at 1.325 and is currently showing 1 bid @ 1.100 and 1 offer @ 1.500 with Open interest at 32 contracts.

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