This Is Not A Drill – All Hands On Deck - The Corn & Ethanol Report

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We kickoff the day with Export Sales, GDP Growth Rate QoQ Final (Q4’23), Corporate Profits QoQ, GDP Price Index QoQ Final, Initial Jobless Claims, Continuing Jobless Claims, Core PCE Prices QoQ Final, GDP Sales QoQ Final,  Jobless Claims 4-Week Average, PCE Prices QoQ Final, and Real Consumer Spending QoQ Final at 7:30 A.M., Chicago PMI at 8:45 A.M., Michigan Consumer Sentiment Final, Pending Home Sales MoM & YoY, Michigan 5-Year Inflation Expectations Final, Michigan Consumer Expectations Final, Michigan Current Conditions Final, and Michigan Inflation Expectations Final at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Prospective Plantings, Quarterly Grain Stocks, 15-Year & 30-Year Mortgage rate at 11:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Hogs & Pigs at 2:00 P.M.

As we digest all the quarterly reports, and added reports we the long weekend in observance of Good Friday & Easter. We are here at the awaited Quarterly Grain Stocks and Prospective Plantings will finalize farmers early intentions with incoming revenue the most highest priority in these markets. New activity with funds leading to further speculation that the new index fund money is not just being bottom feeders but is shorting or adding to shorts in this heavy volatile bear stand. Bullish fundamentals and bearish technicals are leading further indecision in the grain complex.

The latest update on South American weather has a drier forecast across Southern Brazil while weather in Mato Grosso and Argentina remain favorable. The EU & GFS remain in agreement that Brazil’s monsoon continues to perform normally into the middle part of April across key areas of northern Brazil. Warmth/dryness pushes maturity and speeds harvest along in Argentina. The only area of concern at present is that of deepening drought across the southern third of Brazil’s safrinha Corn Belt. 10-day cumulative rainfall of 2-4” impacts Mato Grosso do Sul and Goias in Brazil. Moderate rain sneaks into northern Mato Grosso do Sul but does not reach major crop areas there – and a pattern of complete dryness is offered to Parana – which accounts for 15% of Brazilian safrinha production. Projected subsoil anomalies remain in place. Surplus moisture will be present in Mato Grosso do Sul and Parana. It remains the story of the haves and have nots. USDA will be forced to trim it’s Brazilian corn production estimate if rain fails to appear in the south by mid-April. This will add to volatility and price swings. Yesterday’s open interest reflect the doubt in the passion of bulls & bears minds as we seem to be oversold.

In yesterday’s trading session corn open interest fell 828 contracts and soybeans dropped 1,355 contracts, while wheat rose 2,175 contracts. Soybean meal lost 2,161 contracts while soybean oil dropped 1,635 contracts.

 


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