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The Corn & Ethanol Report

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


Ethanol Margins Sour Ahead of Peak US Production. The Corn & Ethanol Report 11/19/2025

We kickoff the day with MBA 330-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Trade Balance, Building Permits Prel, Building Permits MoM Prel, Housing Starts, and Housing Starts MoM at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., 20-Year Note Auction at 12:00 P.M., FOMC Minutes and Fed Williams Speech at 1:00 P.M., and Dairy Products Sales at 2:00 P.M.

The National Association of Homebuilders’ Housing Market Index turned sharply higher in October and extended gains through November to reach a 7 month high of 38. For the month the Index was up 3% and was 19% higher in the last two months. Builder confidence has improved as mortgage interest rates has relaxed, and builders reported that current sales were up 5% for the month, while traffic of prospective buyers had increased 4%. However, builders remain cautious and their outlook for sales in the next 6 months was down 6% from October. 41% of builders reported cutting prices in November, a record high in the post-pandemic era and the first time this metric had been over 40%. The average price cut in November was 6%, while 65% of builders reported using sales incentives unchanged from the previous 2 months. US housing prices are correcting from a multi-year bull market on lack of affordability.

South American Weather Pattern Update

Pattern Shift Ahead: Normal/Above Normal Rain to Impact Tropical Latitudes of Brazil;

The South American forecast is consistent. Soaking rainfall shifts from Argentina/S Brazil into the northern half of Brazil’s soy belt the next 3-4 days, and near daily showers are offered to Mato Grosso, Goias, Minas Gerais, and fringe area of north/northeast thereafter into Dec 2nd. The duration of dryness in Argentina will be monitored amid stubborn but weak La Nina, but this shift leans positive of yield potential following Nov 8-18 rainfall accumulations of 1.10-3.40’. Mild temperatures are expected to blanket Argentina over the next two weeks, preventing any undue crop stress. Assuming the current EU models 12-day forecast verifies, Nov rainfall in Mato Grosso will total 6.4”, vs. 6.9” on average. The wettest 60 days of the year lie ahead, and regional dryness in N Brazil will be eliminated by November 30th. December rainfall is forecast to be normal.

Corn Comments & Analysis

CBOT Corn Ends Firm; Ethanol Margins Erode on Post-Harvest Rally:

CBOT futures ended higher but remain unwilling to breach key chart resistance. Corn lacks the political spark fueling soybeans rally, and there’s limited room for additional rallies given the need to find a record 16.0-16.3 Bil Bu of consumption to balance US supply & demand. The return of supply-driven bear trends await clarity on South Am weather in Dec, but continue to reward test of $4.40, Dec, and $4.50, March. Ethanol margins have soured amid stagnant ethanol prices and Midwest cash corn’s ascent to $4.10-$4.30/Bu. The margins have eroded just ahead of peak production in late-Nov-Dec is noteworthy. There’s limited room for cash corn above $4.30 without much higher ethanol prices, and todays EIA report will be monitored for an early than normal peak in output. Recall ethanol production in the week ending Nov 7th was down 14 Mil Gal from the previous week. Fair value is seen at $4.25-$4.55, March, into year’s end. Downside potential to $4.00-$4.10 returns thereafter with normal rain Argentina. Leverage nearby market strength.

Have A Great Trading Day!



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