More Volatility In The Mix. The Corn & Ethanol Report

We start off the day with Redbook YoY & MoM (30/JAN) at 7:55 A.M., ISM New York Index (JAN) at 8:45 A.M., IBD/TIPP Economic Optimism (FEB) at 9:00 A.M., 119-Day Bill Auction and 42-Day Bill Auction at 10:30 A.M., Fed Williams and Fed Mester Speech at 1:00 P.M. and API Energy Stocks at 3:30 P.M.

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On the Corn front, the market started off with momentum carried from last week and Export Inspections showed 110 metric tons of U.S. corn was sold to Japan and 125.7 mt sold to Mexico. The exports came in at 43 million bushels versus 55 MT last week and 22 MT last year. There was not a lot of chatter of China stepping back in so quick after very large orders last week and better weather in South America contributed to the selloff from the highs on Monday but did manage to settle in the green. Traders still agree that China demand and future purchases are not a thing of the past. Next Tuesday we will have Crop production USDA Supply/Demand data. In the overnight electronic session, the March corn is currently trading at 547 ½ which is 1 ¾ of a cent lower. The trading range has been 552 ½ to 545 ¾.

On the Ethanol front, there is talk China will step back in buying DDG and ethanol which is a telling sign they are still in the market for grain-based energy and feed as well as crude oil and products. The Wisconsin Farmers Union Delegates have been talking the future of ethanol as they reached a resolution highly critical of the EPA for granting Small Refinery Waivers to oil refineries. While Brazil’s total ethanol sales for 2020 were down 11.9% from 2019. There were no trades posted in the overnight electronic session. The April contract settled at 1.749 and is currently showing 1 bid @ 1.501 and 2 offers @ 1.749 with Open interest at 41 contracts.

On the Crude Oil front, employees of the Dakota Access Pipeline are expected to get their pink slips shortly just like the Keystone XL employees. It is a shame because these are six-figure salaried jobs heading overseas. And the benefits will be more solar panels, weaker power grid which will lead to rolling blackouts when the grid is stressed for acts of God. Heatwaves that will have air-conditioning use will skyrocket when comfort is a must.

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