Grain Notes 4/8/2020 PM Comments 

Good afternoon. Todays markets saw corn falling slightly and soybeans steady. May corn was down 1 1/2 to 3.30 and December corn down 1 3/4 to 3.4925. May soybeans were down 1/4 to 8.5450 and November soybeans were up 1 1/4 to 8.68. Corn traded firm to start the session but gave up the gains and then some as the weekly ethanol report reminded the market that ethanol is in surplus and gasoline demand continues to fall.
  • Weekly ethanol production fell a sharp 168 tb today to 672, down over 33% from two weeks ago. Stocks are exploding higher with records set again. With 1.37 mln barrels added this week, the 27.09 mln barrels on hand are the highest ever but only 65% of the US’s holding capacity. 
  • The EIA released their Short Term Energy Outlook (STEO) and its not looking good for gasoline nor ethanol demand. Annualized gas prices are expected to be 75 cents/gallon below 2019 and 2021 expected to be 44 cents/gal below 2019 too. Diesel values are expected to be similarly lower (70 cents/gal and 55 cents). WTI crude oil is expected to average $29.34/barrel in 2020 and 41.12 in 2021 vs 57 dollars/barrel in 2019.
  • Gasoline production is expected to fall a total of 9% annualized in 2020 and recover to just 4% below 2019 in 2021. Ethanol production is expected to fall 21% in 2020 and recover to 3% below 2019 in 2021. This final forecast projects a long hard road for ethanol as not only 2020 going to work against existing ethanol production but also dissuade any new capacity about to come online. 
  • Weatherwise, the Brazilian safrinha crop continues to find itself under a dry and stressful weather pattern for the next two weeks. Weather models that go out to 90 days show a chronic dry pattern persisting through the period. Locally the 10 day slows a good chance for rain tonight and this weekend while cooling off and staying cool. 
  • China announced it will be releasing .5 mmt of soy reserves to backfill the demand not met by delayed shipments from Brazil. Brazil’s currency has reversed direction and is back to gaining against the USD today. US offers to China are 10 to 13 dollars/mt above Brazil landed China today.
  • The river continues to rise which will close a majority of river terminals next week. Nestle continues to be the strongest corn did in the area at +17 the May futures. Anhydrous season is going smoothly and we feel we are close to 65-70% done. 
  • April WASDE report is tomorrow at 11:00 am CT.  There are no markets this Friday, April 10th in observance of Good Friday.  Once the markets close on Thursday, they don’t reopen until Sunday night. 
Have a great evening.