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The Corn & Ethanol Report

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


Brazilian Monsoon Boost Soil Moisture & Yield Potential. The Corn & Ethanol Report 04/15/2025

We kickoff the day with Export Prices MoM & YoY, Import Prices MoM & YoY, and NY Empire State Manufacturing Index at 7:30 A.M., Redbook YoY at 7:55 A.M., 52-Week Bill Auction 10:30 A.M., Fed Barkin Speech at 10:35 A.M., NOPA Crush at 11:00 A.M., API Energy Stocks at 3:30 P.M., and Fed Cook Speech at 6:10 P.M.

The Kansas City Fed quarterly survey of energy business offered mixed results for the first quarter of 2025. Compared to a year ago, energy drilling and business activity were down 2 points from the previous quarter at -18. However, compared to the previous quarter, the index rose 19 points to +6. It was the first time that the quarterly index was positive since the 4th quarter of 2022. Survey respondents were more positive about the outlook, and the 6 Month Outlook Index rose 8 points to +21, matching Q2 ’24 as the highest since Q3’22. Survey respondents indicated that the average break even WTI crude price was $65/barrel, with crude oil prices expected to average $67/barrel over the next 6 months and $69 over the next year. It’s worth noting that the Fed’s survey was conducted March 17-31st – before large Trump tariffs.

Central US Weather Pattern Discussion

Central US Forecast Improves; Corn/Soybean Seeding Expands into the Midwest this Week; Rain to Reach Eastern Plains:

The Central US forecast has trended warmer beginning April 17th earlier than previous forecast – and a pattern normal/above normal temps is forecast thereafter April 28th . Lows in the 40’s linger across the Great Lakes/E Midwest into Thursday, but the recent pattern of cold ends beyond the next three days. The EU models max temp forecast on April 18th is showing readings in the 70’s will be widespread across the E Midwest April 21-28. Regional planting delays MO & IL, but moisture will be welcomed across the S Plains. Brazilian

Brazilian Weather & Safrinha Corn Yield

The Brazilian monsoon has found a second life as heavy showers are funneled to Mato Grosso, Mato Grosso do Sul, & Goias. Ag Resources (ARC) notes 10-day forecast are outright wet, and the 11-15 day guidance favors Mato Grosso with yet more rainfall of .50-1.50”. The Brazilian monsoon will not exit earlier than normal in 2025, and safrinha yield potential is improving in most aeas despite late seeing in Mato Grosso, which itself accounts for roughly 48-54% of total safrinha corn production. March rainfall in Mato Grosso was mediocre, but assuming current two-week forecast verifies, April rainfall will be 6.20”. This compares to 3.8” on average and if realized will be the highest rainfall total since 2019. Brazilian corn yield performance in Mato Grosso is determined by late April and May rainfall. we will get a further education of safrinha corn yield performance in Mato Grosso in late April. Yield is explained by more than just April rainfall, but whether the monsoon withdrawals early is a big deal. April rainfall across Mato Grosso of 4” or better generally locks a trend at or above yield. CONAB in its April estimate projected Mato Grosso’s safrinha corn yield at 6% the linear 15-year trend at 6.578 MT/Hectare vs. 691 MT/Hectare last year when April rain similar. ARC’s bet is that Mato Grosso’s safrinha corn yield in 2025 will be at 2-4% above trend, which adds 2-300 MMT’s to Brazilian corn production. Enlarged yield potential in Mato Grossso also completely offsets issues in Parana due to Feb-March dryness. A large Brazilian safrinha crop is anticipated. The corn harvest will begin in mid-June. The Brazilian corn market is not yet competitive with US Gulf, and in fact fob offers remains absent completely in May & June. US corn export disappearance stays elevated nearby. But abnormally heavy rainfall in Northern Brazil adds to forward downside marker risk profile – which ARC views as already sizable of 95+ Mil Acres. The spot cash corn market in Brazil very likely scored its annual peak in early March and in recent weeks has followed normal seasonal trends lower. Expanding Brazilian ethanol production is noted, but amid recent/upcoming rainfall ARC projects Brazil’s exportable corn surplus in calendar year 2025 at 42-45 MMT’s, vs. 38.3 MMT’s in crop tear 23/24. A majority of this surplus will be shipped between July November. The US market will be allowed to maintain end stocks of 1.4 Bil Bu more easily once Brazilian corn becomes available in early July. CBOT corn must contend with the return of export competition and larger world corn production mid-summer onward which will harm US 2025/26 corn export estimates.

Corn Comments & Analysis

CBOT Corn Corrects Amid Improved US Brazilian Weather; US Farmers Sell Cash:

Global corn futures ended weaker as market risk was shed. Sustained Midwest warmth keeps national averages into late April. More important is the resurgence of rainfall in central and northern Brazil, which is set to occur just prior to safrinha pollination. Major Brazilian weather issues will have been avoided in 2025 and record yields cannot be ruled out if the wet pattern holds into mid-May. The US crop on Sunday was 4% planted, vs. 6% a year ago and a bit below expectations. Regional delays return to the E Midwest after April 20th , but ARC project progress this Sunday. To reach 12-13%, vs. 10% on average. Producers west of the Mississippi River will be active. The tightness of of old crop US/world corn stocks keeps July supported below 44.70, but a meaningful N Hemisphere weather issue is needed to prevent a normal seasonal correction during summer. Strength in the next 30 days will be used to advance 2025 cash sales- and begin 2026 hedges. Near normal Brazilian and US weather could produce a substantial increase in new crop supplies.

Open interest in corn grew 9,972 contracts, Chicago wheat 3,136 contracts while soybeans dropped 8,197 contracts and soymeal fell 2,411and soybean oil fell 4,755.

Have A Great Trading Day!



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