The Corn & Ethanol ReportDaniel Flynnhttp://www.pricegroup.com/ dflynn@pricegroup.com Tariff Monday & Inflation Concerns. The Corn & Ethanol Report 02/10/2025 We kickoff the day with Consumer Inflation Expectations and Export Inspections at 10:00 A.M., and 3-Month & 6-Month Bill Auction at 10:30 A.M. The February jobs report offered little excitement for January. The US economy added 143,000 jobs in January, well below an upward revised December figure of 307,000 jobs but below the average trade estimate of 170,000. November jobs figure was up by 51,000. The unemployment rate dipped to a 7-month low of 4%, but largely due to a recent population revision raised the civilian labor force by 2.2 million people to 170.74 million. The U6 unemployment rate which includes marginally attached workers and workers forced into part-time for economic reasons, was unchanged in December at 7.5%. Government payrolls increased by 32,000 in January, while private businesses added 111,000 jobs, which was well below expectations of 141,000. Manufacturing payrolls increased by just 3,000 jobs in January. South American Weather Pattern Discussion South American Weather Favorable into Late Feb; Near-Term Brazilian Dryness Accelerates Harvest; No Sign Yet Rainy Season Ends Early: The South American climate is improving. Soaking rainfall of 1-4” has been recorded this week across key areas of Argentina as well as Parana in Southern Brazil. Long term forecasts are trending wetter in Argentina through early March, and a normal pattern of rain is most probable in Brazil. EU ensemble model’s (the best performing weather model) 1-5 day & 6-10 day South American forecast shows the absence of rain in C and N Brazil which sets the stage for rapid soybean harvesting in mid-and late February. Regular rain resumes in N Brazil in the 6-15 day period, and this too is viewed as favorable. Note the biggest risk to Brazilian safrinha corn production is not seeding seeding dates, but rather the duration of the wet season. Soil moisture in Mato Grosso & Goias stays abundant through the remainder of February. On the Corn Front US Tariff Concern Sparks Long Liquidation; Mato Grosso Safrinha Seeding Accelerates: Corn markets ended weak amid reports Trump planned to enact blanket tariffs on trading partners. This occurred while safrinha corn seeding in N Brazil accelerates and the US dollar ended sharply higher. The old adage, bull markets need to be fed bullish news daily, and it wasn’t in the cards at the end of last week and continuing to start this week. And while it remains that 15-20% Mato Grosso’s corn crop will be planted after March 1st, fund length is viewed as excessive relative to highly uncertain N American grain flows. Recall Mexico in 23/24 secured an incredible 964 Mil Bu of US corn, and to date sales to Mexico are up 23 Mil Bu (4%) year-over-year. Its imperative that Mexican demand continues freely. Managed funds on Tuesday were long a net 352,000 contracts. Ag Resources (ARC) estimates that only 12,000 contracts have been liquidated since. A new defined trend awaits policy certainty and new crop seeding intentions, but a 20-30 cent break occurs if the flow of bullish news pauses. $5.10, basis May, is hard resistance. CBOT open interest as of Friday’s close showed corn open interest dropped 12,108 contracts, Soybeans gained 2,956 contracts, and wheat was down 15,011 contracts. Have A Great Trading Day! A Subsidiary of Price Holdings, Inc. - an Employee Owned Diversified Financial Services Firm. Orders must be entered via direct verbal communication with a representative of our firm. We cannot be held responsible for orders left in any other manner. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading data-on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. Member NIBA, NFA. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The PRICE Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Contact Dan at (888) 264-5665 or dflynn@pricegroup.com. |
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