It was a mixed day in the grains, with corn and wheat closing lower, and soybeans closing higher. Soybeans closed up 4 to 5 cents, after being up almost a dime midday. Corn was pulled down by lower wheat prices, with corn losing 1 to 2 cents per bushel, and wheat dropping 14 cent in KC and 12 cents in Chicago. The outside markets saw a RISK OFF type of day, with crude oil dropping $2.55, gold losing $27, and the Dow Jones down 45 points with the NASDAQ down 181 points. The dollar index was off 0.305 points today.
Crude oil broke on a bearish Dept of Energy report showing a build of crude oil stocks to 10 month highs. This was the 4th week in a row of a build in stocks, and the market seemed to ignore the continued issues in the Middle East. Gasoline demand was strong and more than expected on the week.
Ethanol production was down 73,000 barrels per day to 983,000. This was a drop of 6.9% from the previous week, and the lowest weekly production since 1/19/24. Ethanol stocks were at 26,080 mln barrels, or 1.095 bln gallons. Ethanol stocks are still at the 2nd highest level for this April time frame, only behind the infamous Covid mess in 2020. Historically ethanol stocks decline as summer driving and summer vacations increase. As the chart below shows, 2024 ethanol stocks are near all time record highs, and haven’t varied much this calendar year thanks to the strong ethanol grind.
Last week the USDA raised 2023/24 ethanol usage by 25 mln bushel to 5.400 bln bushels. This would be the 3rd highest yearly total behind 2017/18 (5.605 bln bushel), and 2016/17 (5.432 bln bushel). The current marketing year is on pace for 14.8 mln bushel of corn per day, while last year was at a 14.18 mln bushels per day. To hit the 5.600 bln level, corn use per day would need to be 15.3 mln bushels. That’s only 500 more truck loads per day to raise corn demand by 200 mln bushels! For comparison, the one week record corn grind was in the Fall of 2021 at 15.7 mln bushels per day, or a 5.700 bln max grind. That would put current year ethanol grind at around 95% of maximum week capacity.
Good rains were seen yesterday across portions of Minnesota, Iowa, and Wisconsin. Rainfall totals were in the ½ inch to 3 inch range. These April Showers will bring more than just May flowers, as subsoil reserves are getting refilled right before the growing season. The market doesn’t seem concerned about planting delays on April 17th, but the outlook for trendline or higher yields remain with an average growing season. The latest NWS 8-14 day forecast has more rains coming, as well as above normal temps. Some would view that as pushing planting back in parts of the Eastern Corn Belt. The big winner yesterday was Minnesota, with multiple 2 to 3 inch rain totals reported. To see the past 24 hour rainfall data and to find more rainfall data for this growing season from CoCoRahs, click here.
Market action was again on the disappointing side today, as the outside markets, lack of fed interest rate cuts, geopolitical concerns, and weather weigh on the markets. Farmer selling has increased in Brazil thanks to their currency moving to the lowest levels since March 2023. We have seen reports of basis improving on corn in some areas, so we will be watching for opportunities to keep pushing corn sales along. The market is watching the forecasts and planting pace.
That’s all for today. See you here tomorrow
Good night.
