Winter Wonderland. The Corn & Ethanol Report

We start off the day with Market Manufacturing PMI Final (JAN) at 8:45 A.M., Construction Spending (DEC) and ISM Manufacturing Index PMI (JAN) at 9:00 A.M., Export Inspections at 10:00 A.M., 3-Month and 6-Month Bill Auction 10:30 A.M., Cotton System, Fats & Oils and Grain Crushing’s at 2:00 P.M. and Total Vehicle Sales (JAN) at 6:00 P.M.

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On the Corn front, we rose to 7 ½ year highs in Friday’s trading session with massive U.S. corn sales to China. The market is also fixated on unfavorable weather conditions in South America which may jeopardize the hope for yields. The USDA reported Friday that that sales of 2.108 million tons to China. It was the second-biggest daily U.S. sale on record, eclipsing only by a deal for 3.72 million tons to the U.S.S.R. in 1991. Friday’s deal followed other U.S. sales to China totaling 3.74 million tons, creating the largest corn export sales on record. In the overnight electronic session, the march corn is currently trading at 555 which is 8 cents higher. The trading range has been 555 ¾ to 548 ½.

On the ethanol front, China was a player in this market as well as last week with large purchases. In Brazil, low liquidity in the spot market and Petrobras gasoline price increases have sent hydrous ethanol to a record high price. Ethanol trading in the spot market is expected to remain below typical trading volumes until the end of March, or the end of Brazil’s intercrop period. There were no trades posted in the overnight electronic session. The April contract settled at 1.749 and is currently showing 1 bid @ 1.501 and 2 offers @ 1.749 with Open Interest at 44 contracts.

On the Crude Oil front, Reddit was quoted that volatility in the stock market may spillover to crude oil prices. They also forecasted a short squeeze on silver, but at the moment that prediction is right. Crude oil prices did rise on vaccine optimism and crude oil tankers are on hold as supply last year not only exceeded demand but storage capacity as well. OPEC and OPEC+ members are continuing various cuts month-to-month production through April 30th, 2022 with the next meeting scheduled March 4th 2021 in Vienna. Friday’s Baker Hughes rig-counts were up for the 10th consecutive week. In the overnight electronic session, the March crude oil is currently trading at 5259 which is 39 points higher. The trading range has been 5281 to 5164.

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