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The Corn & Ethanol Report

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


Fed Governors Lean Dovish for Dec Rate Cut. The Corn & Ethanol Report 11/26/2025

We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Durable Goods Orders MoM, Durable Goods Orders Ex Transportation MoM, Initial Jobless Claims, Durable Goods Orders ex Defense MoM, Jobless Claims 4-Week Average, and Non Defense Goods Ex Air at 7:30 A.M., Chicago PMI at 8:45 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction 4-Week & 8-Week Bill Auction, and 7-Year Note Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate, and EIA Natural Gas Storage at 11:00 A.M., Baker Hughes Oil & Total Rigs Count at 12:00 P.M., Fed Beige Book, Building Permits Final, Building Permits MoM Final, Building Permits Prel, Building Permits MoM Prel, Durable Goods Orders MoM Adv, Durable Goods Orders Ex Transportation MoM, Goods Trade Balance Adv, Retail Inventories Ex Autos MoM, Wholesale Inventories MoM Adv, Wholesale Inventories MoM Adv, Durable Goods Orders ex Defense MoM, Non Defense Goods Orders Ex Air, New Home Sales, New Home Sales MoM, Retail Inventories Ex Autos MoM at 1:00 P.M. or times adjusted, and Dairy Products Sales at 2:00 P.M.

The Federal Reserve reported that the seasonally adjusted M2 money supply in October rose to a record high of $22,298 billion. This was a 0.39% increase from September and a 43.65% increase over last year. October marked the 5th consecutive month that money supply had increased by more than 4% over the previous year, and the 6th month in 2025. This hasn’t happened since late 2022, when currency inflation from the pandemic was winding now. October marked the 24th consecutive month that the money supply increased. Inflation remains a real risk going forward as liquidity expands and the supply of dollars is at a record level. The Fed will continue to walk a fine line, balancing full employment and price stability. Fed governors are leaning dovish for the December 10th interest rate decision. Christopher Waller is in favor of a cut over concerns of a weaker labor market, Stephen Miran is an advocate for an aggressive cut of 50 basis points. Michele Bowman also is very dovish as she and Waller dissented in favor for cuts in July, and Nary Daly’s dovish stance is due to concerns of a vulnerable labor market.

South American Weather Pattern Update

Normal/Above Normal Rainfall Blankets South America Next 10 Days; Equatorial Pacific Warming Lies Ahead:

The principal forecasting models are consistent in projecting normal shower activity across Northern Brazil after today and the return of widespread heavy rainfall to Argentina & Southern Brazil Nov 30-Dec 4. 10-day accumulation of 1.0-1.5” will spread across Argentina , Paraguay & Southern Brazil. Accumulation of 2-5” will be spread across central and northern Brazil. Such totals are typical for late Nov/ early Dec. A solid base of soil moisture has been established just ahead of early corn pollination in December, and abnormal dryness in Cordoba will be eased next week. Given current moisture levels, rainfall of just 2.5-3.0” is needed in Dec to lock in above trend first crop corn yields in Argentina.

Corn Comments & Analysis

CBOT Corn Ends Steady/Higher; Sorghum Unmoved Despite Token Chinese Purchases:

Corn markets globally remain choppy. Leaving doubts either the bulls or bears will find leverage through the balance of 2025, but ARC maintains that South American supply disruption is needed to sustain rallies to $4.50, basis March, and $4.75, basis Dec’26. Of note is that Argentina’s two-week forecast is trending wetter, and the looming end of La Nina argues for climate normalcy there in the medium term. Argentine drought concerns are now being pushed into late Dec/early Jan. Recall rainfall of 3.5+” in Argentina in Dec lock in trend yield potential. 1.0-2.0 is forecast Dec 1-10. The market becomes more imbalanced in winter/spring amid record Argentine production, and the strategy remains to leverage near-term market strength. Spot sorghum basis in Central Kansas for the 11th week is quoted $1.00+ under CBOT corn. The cash sorghum market is unimpressed by record inclusion at ethanol pants and China buying a few token cargoes of US origin. Domestic demand growth challenges keep Dec 1st US corn stocks above 13.0 Bil Bu vs. 12.1 Bil last year. Corn lacks a bull story above $4.45 basis March.

Have A Great Trading Day!



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