Photo by Waldemar on Unsplash

We kicked off the day with Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Year Note Auction & 6-Month Bill Auction at 10:30 A.M., 10-Year Note Auction & 3-Month Billl Auction at 12:00 P.M.

As we kick off the week, scuttlebutt among traders is concern with South American weather. We are both in the weather throws of El Nino which is causing a drought market and danger to yields. Traders are also betting China has finished its US SRW wheat purchases with the US fob SRW wheat values now above French/Australian offers. That is why the wheat is in retreat.Soybean futures are rallying as the Northern Brazilian drought is forecast to worsen. Declining soil moisture and high temperatures in the 90’s and lower 100’s is hitting soy yield potential in Mato Grosso, Goias, and Bakia. And Eastern Central Brazilian crops also endure drought amid lack of future rain. The first half of December has been disappointing!, according to ARC. Waiting for corn to jump as China announced it harvested a record corn crop at 288.8 MMT’s. China’s farmers estimated they raised seeded area by 2.7% to 109 Mil acres, the largest since 2015. China seems to continually estimated record corn crops which has many suggesting that either demand is stronger or the crops are too large based on import demand and rising domestic prices. We will be watching how the funds will jockey for position. And folks the market may be showing the tolerance of prices as the Hama/Israeli war will affect maritime insurance for commercial trade, which will send prices higher and possibly lead to food shortages with inferior yields expected. In the overnight electronic session the March corn is currently trading at 485 ½ which is unchanged. The trading range has been 487 ½ to 483 ½.

On the Ethanol Front low stocks of sugar and uncertainties over production this year forced India’s Modi government to go slow on its successful ethanol blending program. Centre has taken the next towards augmenting domestic availability-restricting diversion of the sweetener for ethanol production. On December 7^th the Ministry of Consumer Affairs, Food and Public Distribution directed all mills and distilleries not to use sugarcane juice/syrup for making any ethanol “with immediate effect.” Ethanol is 99.9% alcohol that can be blended with petrol. The ethanol blended petrol (EBP) program has a significant accomplishment of the Narendra Modi government. The all-India average blending of ethanol with petrol has risen from 1.6% in 2013-14 to 11.8% in 2022-23. There were no trades or open interest in ethanol futures.

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