Let’s Roll In The New Year! The Corn & Ethanol Report

We started the first trading session of 2021 with Market Manufacturing PMI Final (DEC) at 8:45 A.M., Construction Spending MoM (NOV) and ISM Manufacturing Index at 9:00 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Cotton System, Fats & Oils, and Grain Crushing’s at 2:00 P.M. and Total Vehicle Sales at 6:00 P.M.

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On the Corn front, the U.S. market is riding the wave on exports at the close of business on Thursday of last year. Talk after the close were pointed at tight supplies and Argentina suspending corn exports for the rest of their market year, which is wildly bullish news. La Nina weather is keeping Argentina and south Brazil drier than normal adding more support to this rally. Demand is not on any slowdown pace and expectations are for the Grain Complex to continue to rise this new year and corn prices are expected to remain firm on global demand and shrinking supplies. Let’s not forget about U.S. corn acreage to face competition from U.S. soybean acreage with the successful vaccines will also bolster U.S. ethanol demand. According to the USDA China imports of U.S. corn was estimated in 2019/20 at 7.6 million metric tons and expectations in 2020/21 are estimated at 16.5 million (mt). Though the Chinese purchase of U.S. corn slowed in 2020 amid their domestic harvest, there is a signal demand will resume in 2021. With factors weighing in, China’s hog herd that was hit hard by the Asian Swine Fever which is another fundamental bullish reason that bullish exports for feed will grow rapidly to re-stock the herd and get it growing to domestic demand. We will see corn and soybean products grow on all the demand factors that point to the upside. In the overnight electronic session, the Grain Complex started higher and continue to rally. The march corn is currently trading at 496 ¼ which is 12 ¼ cents higher. The trading range has been 497 ¾ to 486 ½.The 2014 highs of the 519 area are very close and not out of mind or sight. Prices of corn on the Dalian Commodity Exchange in China continues to seek new highs, which starts the year with bullish predictions in the future.

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