Technical Bounce? The Corn & Ethanol Report

We kicked off the month with Jobless Claims at 7:30 A.M., Construction Spending MoM, ISM Manufacturing PMI, ISM Manufacturing Employment, ISM Manufacturing New Orders, and ISM Manufacturing Prices at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30_year Mortgage Rate at 11:00 A.M., Fed Harker Speech at 12:00 P.M., Cotton System, Dairy Products Sales, Fats & Oils, and Grain Crushings at 2:00 P.M.

corn field

Photo by Jesse Gardner on Unsplash

On the Corn Front the bearish forces continued as weak demand, increased production estimates from Brazil, Russia is flooding the global markets with cheap wheat and US plantings near completion. Also, a weaker Chinese PMI only added to traders confusion. Dryness is expected going into mid-June with scattered summer showers tilting the markets follow through. However, moisture is the key as we had the driest May in sometime in the Great Lakes region. We came in higher in the overnight as the grain complex is starting to focus on weather and other basic fundamentals instead of macroeconomic worries, as the House passed the US Debt Ceiling and it is on its way to the Senate. Even though, we have to concentrate on basic fundamentals, The Labor Department’s monthly Job Openings and Labor Turnover showed that the number of job openings in March declined 4% from February to 9.59 Million jobs. Compared to a year ago, the figure was down 20%. Excluding a 3-month period during the covid pandemic, this was the largest year-over-year decline since November 2009. The March job openings was also the lowest since April 2021. There were fewer job openings in transportation, warehousing, and utility sectors, which more than offset an increase in educational services. Tomorrow the Labor Department will release the Employment report, which is expected to show 190,000 jobs added in May, which will be a stunning 48% decline from last year. Changing gears today is the official start of the Hurricane Season with water temperatures in the Atlantic and Pacific oceans could even create a bigger weather scare as right now is a critical time for crop maturity and yields. In the overnight electronic session the July corn is currently trading at 601 ½ which is 7 ½ cents higher. The trading range has been 692 to 592 ¼.

On the Ethanol Front US biofuels capacity and feedstock consumption was up in March with operational biofuels capacity expanded by 381 MMgy in March, with gains for renewable diesel, ethanol, and biodiesel. Total feedstock consumption was at 27.087 billion pounds in March vs. 24.537 the previous month. Operational biofuels capacity reached 23.099 billion gallons per year compared to 22.718 the previous month. Fuel ethanol capacity was at 17.734 up 339 MMgy from the previous. Biofuel capacity expanded to 2.087 billion gallons up 24 MMgy the previous month but down 144 MMgy from a year ago. There were no trades or open interest in ethanol futures.

More By This Author:

3-Day Weekend Tuesday Surprise. The Corn & Ethanol Report
Grains Bouncing Back. The Corn & Ethanol Report
It’s All About Weather. The Corn & Ethanol Report

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