Seems The Correction In The Grains Took It Too Far. The Corn & Ethanol Report

We start off the day with Export Sales, Initial Jobless Claims (06/FEB), Jobless Claims 4-Week Average (06/FEB), and Continuing Jobless Claims (30/JAN) at 7:30 A.M., EIA Gas Storage at 9:30 A.M., Fed Monetary Policy Report at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 30-Year Bond Auction at 12:00 P.M., and U.S. Budget Plan FY 2022 at 1:00 P.M.

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On the Corn front, Wow! The soybeans were even slammed hard in yesterday’s trading session. The correction seems well overdone; however, headlines continue to spook traders with South American weather getting better. But the old adage is, “it is not what you plant, but what you grow.” Argentina and Brazil would need a huge reversal of fortunes in weather in their La Nina year to spike expected yields, which is a longshot but notimpossible. China buying is not going to simply dry up and they will participate in the U.S. market while the bulls are worried about market shares going down with the news out of South America. The funds remained long 345,000 contracts of corn selling 30,000 contracts in Tuesday’s action with whispers of more to come. I hope to get a more accurate and recent number soon and hope the export sales rock today. In the overnight electronic session, the March corn is currently trading at 531 which is 3 ½ cents lower. The trading range has been 532 ¾ to 524 ¾.

On the Ethanol front, as production improves, we are still behind last year and have many hurdles ahead this year. Hopefully, the countries who regularly purchase U.S. ethanol continue and China will jump at the chance to buy the value this commodity pricewise has to offer. The market is watching energy prices as China could add an influx of demand and we do not want corn and crude prices to get out of hand for profit margins to producers. There were no trades posted in the overnight electronic session. The April contract settled at 1.729 and is currently showing 1 bid @ 1.550 and 0 offers posted with Open Interest at 43 contracts.

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