More Market Volatility In A Bullish Fundamental Marketplace. The Corn & Ethanol Report

We started off the day with Fed Kaplan at 8:15 A.M., U.S. Markit Composite PMI Flash (MAY) and Markit Services PMI Flash (MAY) at 8:45 A.M., Existing Home Sales MoM (APR) and Existing Home Sales (APR) at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Fed Daly Speech at 12:30 P.M., Cattle on Feed at 2:00 P.M., and Fed Kaplan Speech at 3:55 P.M.

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On the Corn front, the market is unable to ignore China’s purchases. China bought another 48.0 million bushels of corn yesterday. After an early selloff and pressure on the soybeans and wheat market the July corn settled 6 ¼ cents higher, September 12 cents higher, and the December contract 13 cents higher. Talking with my farmer customers and colleagues in certain areas in the Midwest are concerned that the drought could overcome acreage planted. One farmer told me it was too wet early and now it is too dry. Still not completed with plantings, he said, I must get this in the ground before the moisture has evaporated. He continued, do I plant a smaller crop so I can realize yields, or do I plant as much as I can. He further explained the alfalfa and wheat were almost dying on the vine so to speak with lack of moisture. This could be the story for 2021 as exports are up and carryover is slim and with Brazil’s crop not close to a bumper crop their carryover is the same if not worse. I expect to see more choppy trade, but at the end of the day or the bottom line we will see higher prices regardless of the peaks and valleys the market will show. In the overnight electronic session, the July corn is currently trading at 657 ¼ which is 7 ¼ cents lower. The trading range has been 666 ¾ to 654 ¼.

On the Ethanol front, the EU market is transitioning to post-lockdown normality. While European undenatured ethanol prices have risen 51% since the beginning of the year, there are signs that the market is starting to normalize down the curve. This should be a boon to ethanol exporting countries such as Brazil and the U.S. This fundamentally could even further rallies in the corn market. There were no trades posted in the overnight electronic session. The June contract settled at 2.355 and is currently showing no market with Open Interest at 21 contracts.

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