Funds Doubling Down On Shorts. The Corn & Ethanol Report

We kicked off the day with Export Sales, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, Philly Fed Prices Paid, Jobless Claims 4-Week Average, and Continuing Jobless Claims at 7:30 A.M., Fed Jefferson Speech at 8:05 A.M., Fed Barr testimony at 8:30 A.M., Existing Home Sales, Existing Home Sales MoM, Fed Logan Speech, and CB Leading Indicators at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., and 10-Year TIPS Auction at 12:00 P.M.

corn field

Photo by Jesse Gardner on Unsplash

On the Corn Front, we were down again with fund selling. Brazilian corn fob premiums are up $.50/bushel from lows made in early May. Exports remain lackluster, and corn and soybeans demand stays mostly confined to South America throughout the summer months, but Ukrainian corn is not quoted beyond July as the export corridor since winter has been extended in only 60-day increments and ARC bets Chinese demand quickly back to the US in Sept/Oct timeframe and onward. In the overnight electronic session the July corn is currently trading at 550 ¼ which is 11 ¼ cents lower. The trading range has been 561 ¾ to 550.

On the Ethanol Front, an ethanol plant in north-central Iowa failed to maintain its equipment to limit air pollution and repeatedly emitted harmful chemicals over the course of more than a year, according to the Iowa Department of natural Resources. The department recently fined POET Bioprocessing in Iowa Falls, the maximum administrative penalty of $10,000. POET, based in South Dakota, has 33 facilities in eight states. The company acquired the Iowa Falls site on the Southwest edge of town from Flint Hills Resources in June 2021, according to a recent DNR administrative order. Since then, the company has reported at least 10 instances of excess of emissions to the DNR that were a result of its fermentation process. The process involves yeast converting sugar in corn into ethanol. It emits carbon dioxide and other harmful pollutants. There were no trades or open interest in ethanol futures.

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