We kicked off the day with NFIB Business Optimism Index at 5:00 A.M., Core Inflation Rate MoM & YoY, Inflation Rate MoM & YoY, CPI, and CPI s.a. at 7:30 A.M., Redbook YoY at 7:55 A.M., 42-Day Bill Auction at 10:30 A.M., 30-Year Bond Auction t 12:00 P.M., Monthly Budget Statement at 1:00 P.M., API Energy Stocks at 3:30 P.M., and Day 1 of FOMC Meeting.

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On the corn Front the market extended the correction in yesterday’s action in weak volume following wheat lower as it failed to trade through the 50-day moving average last week. Volume and open interest is in seasonal retreat. US export potential is expanding rapidly. Forward Brazilian supply risks remain massive as drought in Mato Grosso and Goias is extended another 10-days. But US cash supplies will be more than adequate nearby, with Dec 1^st US stocks likely to be some 1.0-1.2 Bil Bu above last year. US cash & futures markets stay choppy into January. US corn inspections in the week ending Dec7th totaled 28 Mil Bu vs. 46 Mil the previous week. Physical exports will be seasonally sluggish for another 45-60 days. This is common as importers execute trades made previously with South American origin. Yet the pace of weekly/monthly exports will reach 250-300 Mil Bu in Mar-May, which keeps a broad positive seasonal trends intact into April. End user coverage is recommended below $4.80, March. It’s difficult to identify any fundamental catalyst until South American harvest begins in spring. As we expect choppy trade the moment of truth is coming in weather yields, exports, supply/demand, and protection for merchant shipping convoys with the tinder box in the Middle East and Ukraine. In the overnight electronic session the March corn is currently trading at 483 ½ which is 2 cents higher. The trading range has been 484 ¾ to 481 ¾.

On the Ethanol Front the EPA’s final rule for 2023-2025 Renewable Fuel Standard (RFS) requirements for further growth of cellulosic fuels in the coming years. Renewable natural gas (RNG) is the primary fuel produced by treating and purifying biogas that is collected from landfills, wastewater facilities, food waste facilities, and farms. The EIA reports that 99% of Renewable Identification Numbers (RINS) generated in the cellulosic category are from RNG production, and 84% of all-natural gas that is used as a transportation fuel is RNG.

And the Biden administration is expected to announce later this week whether sustainable aviation fuel (SAF) made from ethanol can qualify for billions of dollars of subsidies that are under the Inflation Reduction Act that was passed in 2022. USDA Tom Vilsack indicated in November that he expected that ethanol inclusion of SAF feedstock would be a boon to the ethanol industry. There were no trades or open interest in ethanol futures.

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