The Corn & Ethanol Report: Active Start to Hurricane Season


On the front, the big headline stays the headline, namely weather. And enter the hurricane season and the weather madness does not stop there. In the Atlantic, we have Tropical Storm Bret that could set a course to the Gulf of Mexico and there is another disturbance following Bret. We started off trade in corn and soybeans higher on weather, which is a topic farmers and traders can’t shy away from. Profit taking took hold overnight with a technical sign of overbought market conditions, and weak Brazilian corn and soybeans freight-on-board (FOB) offer values lower. We also have to gear up for Friday, June 30th Frain Stocks/Seeding Reports. It will not take much volume to move this market sharply. Open interest on corn shows that we gained ground by 12,201 contracts. And as I stressed heavily, we are in a weather market but also glued to economic pluses or minuses. Every trader still keeps China’s imports in focus. The People’s Republic Bank of China cut its 1-5 year loan rate by 10%. Post-COVID China’s economic recovery has sputtered. An additional economic stimulus is expected as China’s recovery gains get some legs. Keep in mind we are one headline away from the market to discount the positive news. China is importing record tonnage of soybeans from Brazil, corn imports are down 10.6% while is 62.5% with massive imports from Australia for feed purposes. In the overnight electronic session, the July corn is currently trading at 642 ¼ which is 2 cents higher. 

On the front, big news is the Iowa Utilities Board (IUB) on June 16th issued an order announcing the public evidentiary hearing for Summit Carbon Solutions’ proposed carbon dioxide pipeline that will begin on August 22nd and is expected to extend until October.  This will be an interesting outcome as debates will thrive on Farmland (NYSE:) growing crops for feed and human consumption vs. Biodiesel and ethanol carbon capture pipelines for liquified carbon dioxide within the state. There were no trades or open interest in ethanol futures.

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