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The Corn & Ethanol Report

Daniel Flynn
http://www.pricegroup.com/
dflynn@pricegroup.com


Hold On! Tariff Deals Are on the Way! The Corn & Ethanol Report 04/29/2025

We kickoff the day with Goods Trade Balance Adv, Retail Inventories Ex Autos MoM Adv, and Wholesale Inventories MoM Adv at 7:30 A.M., Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY, House Price Index, and House Price Index MoM & YoY at 8:00 A.M., JOLT’s Job Openings, CB Consumer Confidence, and JOLT’s Job Quits at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Revenues Index at 9:30 A.M., and API Energy Stocks at 3:30 P.M.

Central US Weather Update

Additional Rain Offered to US Southern Plains; Lasting Midwest Planting Disruptions Absent:

The Central US forecast is consistent with prior runs, and maintains an active patterns of showers across the US S Plains and near-normal rainfall across the Midwest & Delta into May 12th. Periodic warmth aids seeding/germination. Max temps in the &0’s & 80’s blanket the Midwest Monday/Tuesday and again May 4-9. NOAA’s 6-10 day precipitation probability prognosis shows active showers impact TX/OH and much of the central and eastern Midwest over the next 72 hours. Totals of 1+” favor TX, OK, AR, MO, IL, & IN. Meaningful rainfall May 2-10 will be isolated to TX/OK panhandles, CO, and far Western Kansas – where it’s needed. The shift in rainfall from the east to west is timely. The duration of Midwest warmth/dryness will of course be monitored, but early season crop health is above average.

Black Sea Weather Pattern Discussion

Southern Russia Benefits from Wetter April; Europe, Ukraine Arid:

Drought in the Black Sea has retreated from southern Russia following rainfall so far in April of 1.3-2.90” or some 140-350% of normal/. Major winter crop areas have wheat yield potential has stabilized in key Russiaq wheat producing oblasts Krasnodar & Stavropol. Yet, not all areas have benefitted. Moisture deficits persist in Romania and especially across the eastern Ukraine and neighboring sections of western Russia, but little/no precipitation is forecast in E Europe, Ukraine, and Central Russia. Ag Resources (ARC’s) work continues to suggest N Hemisphere wheat crop as a whole will be average at best and could be substantially lower depending on May and early June weather conditions. Monitor Black Sea weather conditions.

2025 Black Sea Corn Supply & Demand

The Ukrainian corn market continues to reel from last summer’s droughts. It’s clear cash corn prices are now working to ration what’s left of the 2024 production, with fob premiums for May-June quoted $1.37-$1.40 over CBOT futures. This compares to spot Gulf basis $.73 over and Ukrainian premiums a year ago in April of just $.20-$.30/Bu. ARC estimates Ukrainian corn exports through the end of April at 16.1 MMT’s, or 73% of the USDA’s annual forecast with 5 full months remaining in the international marketing year. This also leaves Ukraine to export only 5.( MMT’s between May-Sep. Ukrainian corn exports a year ago were 9.3 MMT’s. ARC also suspects a majority of Ukraine’s remaining surplus has been spoken for by neighboring importers in the Mideast and traditional buyers in SE Asia. Ukraine will not provide much competition for importer demand late summer onward defines the corn market outlook over the next six months. Ukraine’s old crop supply issue is solely a function of yield loss in summer 2024. Assuming normal Black Sea weather May-Aug 2025, and despite historically low carry-in stocks, Ukrainian production and exports rebound meaningfully in 2025/26. A balance sheet shows assuming trend yield, Ukrainian corn output in 2025 will be 32.0 MMT’s, up 5.2 MMT’s year-over-year. Exports will expand by 4 MMT’s, or 120 Mil Bu. This will be added year-over-year increase in Brazilian exports of 6-8 MMT’s, and so the message is that the US market is unlikely to match 2024/25’s export program – which was massive but mostly due to smaller-than-expected crops in the Black Sea and Brazil in 2024.

Assuming normal summer weather in Russia, production & exports there will rebound 2.4-2.6 MMT’s, vs. 25 MMT’s in 24/25. The primary risk beyond early summer is that South American, Black Sea, and US corn production expand simultaneously. Note Ukrainian corn exports typically begin in earnest in mid to late November. Ukrainian weather will be monitored closely given the current dryness and forecast that offer only limited relief prior to May 8th. But corn will be planted rapidly and consecutive years of major corn yield loss in Ukraine have only occurred only once in 25 years.(2006-2007). The point is that Brazilian and Ukraine supply competition returns in 2025/26. Without a lasting drought, US 2025/26 corn exports will struggle to reach 2,300 Mil Bu. The lackluster export program mandates US corn sales above $4.60 December futures. The corn risk price is lower without a dire Midwest drought.

CBOT Corn Comments & Analysis

Corn Corrects on Favorable US Planting Weather, Macro Market Weakness:

The global corn market ended weaker due to the absence of bullish fuel and plunging wheat valuations. Cash HRW in Western Kansas last night was quoted at $.46/Bu below cash corn. Reduced spring/summer feed disappearance will partally offset larger projected exports, with USDA’s 24/25 export forecast 100+ Mil Bu too low. Bulls must be fad daily, and rapid planting/shrinking Central US drought hinders new buying in the short term. The US corn crop is 24% planted, vs. 25% last year in late April, and vs. the 10-year average of 22%. Progress for regionally slowed in the E Midwest this week but is forecast to reach 50-55% by May 10th as warmth/dryness will be widespread in the 6-15 day period. Seeding dates won’t be an issue for yield. Rallies into mid/late May will be used to advance 2025 cash sales. A large US crops is needed , but the likelihood that drought spreads in the next 30 days is low. Strong Midwest cash basis and old crop strength must rally new crop December corn futures. The risk vs. the reward is to the downside until June when the summer Midwest weather pattern can be better determined. Use 10-15 cent rallies for sales.

Monday’s CBOT open interest fell sharply with corn off 34,144 contracts, soybeans down 24,512 contracts, Chicago wheat off 790 contracts, Soybean meal of 15,155 and soybean oil up 763. First notice day looms tomorrow for May CBOT futures, but only May corn is still showing open interest of 55,689 contracts. The other May futures appear close to being liquidated.

Have A Great Trading Day!



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Contact Dan at (888) 264-5665 or dflynn@pricegroup.com.