We kicked off the day with S&P Global Manufacturing PMI Final at 8:45 A.M., ISM Manufacturing PMI, ISM Manufacturing Employment, ISM Manufacturing New Orders, ISM Manufacturing Prices, and Construction Spending MoM at 9:00 A.M., Export inspections, Fed Chair Powell Speech, and Fed Harker Speech at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Barr Speech at 12:00 P.M., Fed Williams Speech at 12:30 P.M., Cotton System, Fats & Oils, and Grain Crushings at 2:00 P.M., Crop Progress at 3:00 P.M., and Fed Mester Speech at 6:30 P.M.

Photo by Waldemar on Unsplash

On the Corn Front corn stocks data was down 1% and was neutral/supportive fundamental but collapsing wheat prices and weakness in macro markets weighed on futures. Final 22/23 US corn stocks were 1,361 Mil Bu, 91 Mil below the USDA’s estimate in early September. Jun-Aug feed/residual use was 696 Mil Bu, some 70 Mil above trade expectations. The US corn balance sheet will be tightening as new crop carryover is trimmed. ARC maintains a national yield estimate of 171 BPA. The recent recovery in global corn trade is important, and while demand has been concentrated in Brazil, deflated prices are uncovering some consumption. Yet, any sizable post-harvest recovery depends on South American weather and Ukraine offering fob corn cheaply to shed supply. US corn new crop end stocks of 2.0-2.2 Bil Bu is no longer news, producers will be tight-fisted with newly gathered supply. The global feed market as a whole lacks the supply fear present a year ago, but it’s normal for corn to add premium into winter and spring as physical supply availability erodes. The exact timing of annual lows is unknown but it’s no longer the time of the year to be bearish. September grain stocks data will be digested by Monday. Thereafter focus returns to disappearance rates as well as what remains abnormal in South America. Ongoing dryness in Argentina is unusual given the arrival of El Nino. Recall first-crop planting has begun and typically peaks by mid-October. Cash must lead futures higher. Choppiness persist near term. Upside targets are unchanged at $5.20 to $5.40 by late year. In the overnight electronic session the December corn is currently trading at 480 ¾ which is 4 cents higher. The trading range has been 481 ½ to 476.

On the Ethanol Front the margins are up again this week. Midwest cash ethanol prices rallied $.01-1.0/Gal and is slightly above the levels of late September 2022. The National Corn Growers Association this week launched a grassroots advocacy campaign to encourage the National Highway Traffic Safety Administration to provide a level playing field for biofuels such as ethanol. The organizing is calling on corn growers and advocates to make their voices heard by submitting comments to the agency. The campaign comes after the NHTSA proposed hiking the Corporate Average Fuel Economy Standard, referred to as the CAFÉ Standard, which regulates how much fuel a vehicle consumes per mile. The agency’s current proposal would move fleet average for small cars and light trucks 44 to 58 miles per gallon by 2032. Full story can be found in Ethanol Producer Magazine. Next they will want to take our lightbulbs, gas, and wood stoves. There were no trades or open interest in ethanol futures.

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