The GFS model has been updated, and it’s in better agreement with its EU counterpart. However, the GFS is still much wetter in IA in the next 10 days, but trade seems to be inching its bias toward the EU based on performance to date. How much rain falls across the W Corn Belt in the next 72 hours will be critical, and Thursday’s drought monitor will expand abnormal dryness there.
This AM’s weekly energy report is viewed as bearish ethanol, but supportive crude & gasoline. Ethanol stocks as of July 14th totaled 930 Mil Gal, up 40 Mil on the week and up 4.6% on last year. US export demand is in retreat.
US crude and gas stocks continue to drop, and notice that gasoline stocks are now down substantially from the same week a year ago. Longer term, tightening energy supplies will support biofuel production margins into yearend.
It’s all about Central US weather! As discussed on Tuesday, we view the starting point for US corn yield as being 165-166 Bu/Acre, and the trade is just now realizing the extent of recent acreage expansion across the Dakotas and elsewhere in the Plains. No new sales are advised until US corn yield can be better assessed in August.
