File Photo

Jan 07, 2021

Markets Pause After Recent Run-up

Brazil rains improve, but still erratic

Weekly Ethanol Production Steady

  • Production for the week ended January 1 was up slightly to 274.9 million gallons from 274.6 million in the previous week.
  • Weekly production was 12% lower than last year, and had been averaging 11% below year-ago levels in December.
  • Ethanol production will need to average nearly 281 million gallons per week through August to reach USDA's annual corn for ethanol usage forecast.
  • Ethanol stocks declined to 978 million gallons last week from 987 million gallons the week prior.
  • The stocks decline was the first since mid-October, but they remain at record high levels for this time of year.
  • Weekly gasoline demand was 8.5% below last year, compared to the 4-week average of 11.7% lower.

FBN’s Take On What It Means: With corn prices over 6-year highs and weak gasoline demand, ethanol margins remain under pressure, and the near term production outlook remains stagnant. It is probably too early in the season for the USDA to trim its forecast corn usage for ethanol in next week's report, but current trends are pointing in that direction.


Brazil Rains Improve, But Still Erratic

  • Brazil’s weather has improved in recent weeks with well-timed rainfall and normal temperatures.
  • The spotty rainfall pattern has resulted in some pockets of ongoing dryness not far from areas that experienced improved crop conditions.
  • Rainfall was less than half of normal in portions of interior western Mato Grosso, while near to slightly above average rain occurred in other areas.
  • Another area of ongoing concern about dryness is in Rio Grande do Sul where rainfall has been 50-80% of normal in the past 30 days.
  • Topsoil and subsoil moisture levels are rated as mostly adequate.
  • The forecast for the next two weeks is expected to be similar to the past month with some variability in rainfall and temperate conditions.

FBN’s Take On What It Means: Because of the erratic nature of the rainfall, it is going to be very difficult to forecast potential yields and production from many of Brazil’s crop regions, especially after a significant delay in the arrival of rains early in the growing season. The continued risk of missing rains, especially in the south will be supportive of prices.

Iowa Corn Yield Refresher
On Tuesday, USDA will release its revised US corn production estimate. Iowa could be a focal point given the wind storm that passed through the state and potential revisions to the corn yield. In the November report, USDA estimated the yield at 184 bushels/acre but we lean towards a slightly lower yield - perhaps closer to the 180-mark. But, the bottom line for the US is that we do not anticipate a sharp reduction in yields. We do look for a minor trim, which leans supportive, but at this point may not be market moving without other supportive elements.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)
The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.

Kevin McNew

Recently Added to Buyer's Guide

VersaMix Triple Shaft Mixers

  • For mixing applications requiring efficient powder dispersion and critical homogenization of medium to high viscosity slurries, pastes, gels, creams and suspensions
  • High-shear mixer with solids/liquid injection manifold (SLIM) technology rotor/stator

GUC-F Controller

  • Multichannel feeding and dosing controller
  • Control solution for feeding and weighing applications in powder handling applications
  • Flexible and modular design with analog and digital load cells


  • Offers accurate and reliable continuous mass flow measurement of bulk solids with an accuracy of +/- 0.5% full scale
  • Measures mass of flowable solids with densities of 10 to 100 pounds/cubic foot and flow rates from 700 to 7,000 cubic feet/hour


  • 10.1” touchscreen
  • Easy to install in new or existing systems

Sanderson Farms Feed Mill Expansion - Kinston, NC

  • Construction of a whole grain silo expansion (76’ diameter x 145’ tall) to hold 500,000 bushels
  • Expansion also includes a 12’x17’x22’ deep boot pit extension at the end of the existing receiving tunnel

Horizon Feed Ordering Automation Platform

  • Automates many processes within supply chain for efficient, sustainable and profitable production
  • Manage all bins and orders on a single software platform


Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014