06/05/2025 My Surprise

On the Grains
Good morning. Let’s get right to it. Yesterday, we observed the weekly EIA numbers, which were supportive of corn, as the ethanol grind jumped to 1.105 million barrels per day (MBPD). This figure was well ahead of expectations, the highest in 11 weeks, and 3.1% above last year’s same week. With the crushing report behind us, showing that more Milo has made its way into the grind and ethanol yields are increasing, we now need to average +2.0% above last year’s levels to meet the USDA estimates. While it would be preferable not to need to see an increase in the balance of the year, 2.0% certainly isn’t beyond the realm of possibilities. Even if we lose slightly, say 1%, that will amount to 55 million bushels of corn, which we have already easily sold in the export market. Ethanol stocks rose last week to 24.44 million barrels, which is up 6% from last year. Gasoline demand fell 7.6% vs the previous year’s same week, while the demand over the last 4 weeks has been down 3.1%. Ethanol exports were excellent this week at 150,000 barrels, up from 66,000 barrels last week and 91,000 on the 3-week average. Bottom line, while we do need to see an increase in domestic usage, we are close enough not to be too concerned that we won’t make the USDA’s projected 5.5-billion-bushel estimate. Notably, gasoline demand has declined after the Memorial Day weekend, potentially indicating that consumers are slowing down their spending. This issue could persist, particularly in the protein sector.