Tropical Storm Alberto Makes Landfall. The Corn & Ethanol Report

We kicked off the day with Building Permits Prel, Building Permits MoM Prel, Current Account, Housing Starts, Housing Starts MoM, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Continuing Jobless Claims 4-Week Average, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, and Philly Fed Prices paid at 7:30 A.M., EIA Energy Stocks at 10:00 A.M., 17-Week Bill Auction, 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 5-Year TIPS Auction at 12:00 P.M., Dairy Products Sales at 2:00 P.M. and Fed Barkin Speech at 3:00 P.M.

corn field

Photo by Jesse Gardner on Unsplash

Tropical Storm Albero became the first named storm of the 20254 Atlantic hurricane season Wednesday, and as the system churned over the open waters in the Gulf of Mexico, it blasted parts of Texas, Louisiana, and Mexico with heavy rainfall, storm surge flooding and gusty winds. At last report from the National Hurricane Center (NHC), Albero was a minimal tropical storm with winds mainly around of miles. Despite the center of circulation being 200 miles south of the Rio Grande, widespread coastal flooding was reported along the barrier islands and coastal communities from Brownsville, Texas, to Grand Isle, Louisiana. The FOX Forecast Center said due to the system’s lack of organization and a steep pressure gradient, coastal flooding was more significant that what is normally experienced during a low-end tropical storm. As many analysts and traders, including myself, forecast, predicted, and warned this is not a time or anytime to tap into an already depleted Strategic Petrolem Reserves (SPR’s) which is at over 40 year lows. With wildfires, flooding, other Act’s of God, and weakening foreign policy with wars across the globe and National Security at risks we have not seen since WW II. CBOT corn ended firm in Tuesday’s trading session, amid strength in Brazilian fob premiums and the EU and Canadian weather models abruptly drier in very late June. Volatility is the theme, but there is a scenario in which the Central and Eastern Midwest are subject to complete dryness and temps at or above 90 degrees for the next two weeks. Subsoil moisture exists today, but rapid depletion is probable. US weather – and a weather pattern shift occurs in July – dominates price discovery. The markets perception of US yiel potential has outsized impact on price Action amid profitable ethanol margins and abnormally strong US export demand. Brazilian corn for July arrival is offered $.11/Bu above US origin, basis fob, which compares to steep discounts a year ago. Competition from South America does not arrive until mid-summer, but unlike a year ago the US share in meeting importer needs. Fund short-covering occurs if the East Midwest/Mid-South heat and dryness is prolonged into July. CBOT resumed trading last night after the Juneteenth holiday pause, and with precipitation in the forecast which keeps the bulls eating hand to mouth and not buying with both hands. Its all about weather now sports fans.

Enjoy the Longest Day of the Year – Summer Solstice & Great Trading Day!

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