Grains Correct On Export Inspections But Overall Demand Had The Complex Rally Back. The Corn & Ethanol Report

We start off the day with Redbook MoM & YoY (02/Jan) at 7:55 A.M., ISM New York Index (Dec) at 8:45 A.N., ISM Manufacturing New Orders (Dec). ISM Manufacturing Prices (Dec), ISM Manufacturing Employment (Dec) and ISM Manufacturing PMI (Dec) at 9:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Fed William Speech and Fed Evans Speech at 2:45 P.M., API Energy Stocks at 3:30 P.M. and Total Vehicle Sales at 6:00 P.M.

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On the Corn front, the market was off to a solid start Sunday night with talk on the street of lower South American crops due to La Nina which would increase U.S. demand and lower U.S. carryout. The Export Inspections did not come out as bullish as expected and were lower than last week but still higher than last year. That started a selloff, and a combination of less bullish news gave the market a reason to correct after a nice bullish run. The market did recover from the lows with Chinese demand remaining strong and traders felt optimistic of future purchases. With bull spreads firming in corn and soybeans overall, traders set their sights on higher price targets. With the weather in South America not helping the crop, investors are thinking the potential yield potential will continue to drop. The Dalian corn futures made new highs with talk of a lower 2020 China crop while most of the rain in Brazil was in areas that were not so much growing areas and was less than expected and Argentina remains dry. That did set up the recovery on the close. In the overnight electronic session, the March corn is currently trading at 486 which is 2 ¼ cents higher. The trading range has been 486 ½ to 482.

On the Ethanol front, Pacific Ethanol Inc. (PEIX) the golden child of the ethanol rebound in the rough 2020 year started the New Year on a good note as shares jumped 4.97% in yesterday’s action to close at $5.70. Based out of Sacramento, California the producer and marketer operates facilities in the western and Midwestern states. The company’s revenue comes from their production and sale of ethanol. Its production includes sale of ethanol and co-products, such as corn oil, distillers’ grains, and corn gluten meal, which is a smaller portion of the companywide revenue while their customers are mainly integrated oil companies and marketers that blend ethanol into their gasoline. There were no trades posted in the overnight electronic session. The April contract settled at 1.566 and is currently showing 1 bid @ 1.310 with no offers posted and Open Interest at 45 contracts.

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