Grain News Keeps The Momentum Rolling: The Corn & Ethanol Report

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  • We start off the day with Challenger Job Cuts (Dec.) at 6:00 A.M., Initial Jobless Claims (Jan. 2), Jobless Claims Four-Week Average (Jan. 2), Continuing Jobless Claims (Dec.), Export Sales and Trade Balance at 7:30 A.M., Fed Harker Speech at 8:00 A.M., ISM Non-Manufacturing Business Activity (Dec.), ISM Non-Manufacturing New Orders (Dec.), ISM Non-Manufacturing Employment (Dec.), ISM Non-Manufacturing Prices (Dec.) and ISM Non-Manufacturing PMI (Dec.) at 9:00 A.M., EIA Gas Storage at 9:30 A.M., Four-week & Eight-Week Bill Auction at 10:30 A.M., Fed Bullard Speech at 11:00 A.M., and Fed Evans Speech at 12:00 P.M.

On the corn front, both corn and soybean prices traded higher with funds adding to their record long positions, as China’s 2020 crop is expected to be lower than the USDA had anticipated. The USDA announced 102.6 metric tons of corn sales for destinations unknown, which has traders believing that the destination is China.

This is a sign of more buying by China and other countries, which should further bolster prices. Talk on the street is that of a dry 2021 summer with whispers of a larger drought in the US. This could start more panic demand as we move through South America’s smaller-than-usual crop and carryover. In the overnight electronic session, the March corn is currently trading at 494 ½, which is a ½ of a cent lower. The trading range has been 485 ¾ to 493 ¾.

On the ethanol front, the EIA report showed a modest gain of 1,000 barrels of ethanol production while stocks decreased 220,000 on the week, but there was an increase of last year's numbers with 822,000 barrels. These numbers are a little hard to crunch and figure out, but so was 2020. The next estimate on corn for ethanol use will be on the USDA January 12 crop production report.

With more possible lockdowns and global fuel demand on shaky ground, this leaves ethanol producers in a tangled web of how and what to capitalize on next. There were no trades posted in the overnight electronic session. The April contract settled at 1.566, and is currently showing 1 bid @ 1.310 with 0 offers posted and Open Interest at 45 contracts.

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