Thursday Freefall. The Corn & Ethanol Report

We started off the day with Personal Income MoM & YoY (JAN), Wholesale Inventories MoM Adv (JAN), Goods Trade Balance Adv (JAN), PCE Price Index MoM & YoY (JAN), Core PCE Price Index YoY & MoM (JAN) at 7:30 A.M., Chicago PMI (FEB) at 8:45 A.M., Michigan Consumer Sentiment Final (FEB), Michigan Consumer Expectations Final (FEB), Michigan Current Conditions Final (FEB), and Michigan Inflation Expectations Final (FEB) at 9:00 A.M., followed with Baker Hughes Oil & Total Rig Count at 12:00 P.M.

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Just after Fed Chair Jerome Powell’s testimony on Tuesday & Wednesday, the brutal sell-off in the stock and the bond market was ignited by fears that the economy could overheat later this year and generate a high level of inflation that would force the Fed to hike rates earlier than expected. We should hear plenty from the Fed Board of Governors in the coming weeks and months.

On the Corn front, weak export sales with sales of corn coming in at 599,200 million metric tons (mmt) vs. trade expectations of 500,000 – 1.3 (mmt) and soybeans 238,700 (mmt) vs. the street expectations of 200,000 to 800,000 (mmt). This started a round of profit-taking as in many different commodity sectors was caught off guard as well, with the stocks and bonds coming off so quick after Fed Chair Powell’s testimony. In the overnight electronic session. The March corn is currently trading at 550 ½ which is 4 ¼ cents lower. The trading range has been 554 ½ to 548 ½.

On the Ethanol Front no new headlines. The EPA must account for lost gallons of ethanol as production plummeted 27.8% in one week. Plenty of energy companies taxed at the moment as they work on getting the lights back on, so unless a resounding headline the energy companies are playing catch up. There were no trades posted in the overnight electronic session. The April contract settled at 1.729 and there are no bids or offers making a market with Open Interest holding at 43 contracts.

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