Hot Weather Could Rule The Roost On Several Commodities. The Corn & Ethanol Report

We started off the day with NY Empire State Manufacturing Index (MAY) at 7:30 A.M., NAHB Housing Market Index (MAY) at 9:00 A.M., Fed Clarida Speech at 9:05 A.M., Fed Bostic Speech 9:25 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Export Inspections at 10;00 A.M., NOPA Crush at 11:00 A.M., Overall Net Capital Flows (MAR), Foreign Bond Investment (MAR),  Net Long-Term Tic Flows (MAR) and Crop Progress at 3:00 P.M.

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On the Corn front, we are near a 3-week low on selling pressure with easing concerns of supplies. The market did reach 8-Year highs on tight world supplies. But now the market is in long liquidation mode now that the market is seeing higher expected supply. The main focus to this year is exports & weather. South America’s crop has not changed what was expected, and weather in the U.S. keying on the Drought Monitor and plantings.

The old adage is, it is not what you plant but what you grow. In the overnight electronic session, the July corn is currently trading at 646 ¼ which is 2 ½ cents higher. The trading range has been 647 ¼ to 633. The market is overdone to the downside in my opinion, and we could see short covering.

On the Ethanol front, in 2020 we saw U.S. exports decline for the 2nd straight year. Brazil is attempting to establish a bigger market share with corn and sugar-based ethanol. Last year’s weather issues and a thriving export market with high pieces may have many producers of ethanol conserve what product is on the shelf. Retailers in Brazil asked to reduce the ethanol required to blend into gasoline, saying smaller production in the current season has reduced biofuel supplies and increased prices. There were no trades posted in the overnight electronic session. The June contract settled at 2.340 and is currently showing no market with Open Interest at 21 contracts.

On the Crude Oil front, is another market that is weighing in on supply and demand. Just like the fears are positioned on certain fundamental aspects around the globe that are influencing prices while exporters try and keep the market in balance. We have OPEC+ member countries establishing their market share with Iran back in the picture. Russia and other countries made public their plans to boost their production capacity, to make the most of their oil resources while they can. In the overnight electronic session, the June crude oil is currently trading at 6508 which is 29 points lower. The trading range has been 6574 to 6506.

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