3/3/2021

Corn choppy and beans lower overnight and both settling lower on the day as we remain rangebound and trade continues to look for fresh news to give the market some direction. Weekly ethanol production recovered 29% from the previous week where winter storms resulted in huge cuts in ethanol production but, at 849k barrels/day, it was still the second lowest week of production since June. Ethanol stocks are down nearly 8% in the past 2 weeks to 22.4 million barrels. Most likely a lagging effect from the weather shutdown as ethanol use remains 12% below average. Soybean harvest in Brazil remains slow and roughly 2 weeks behind schedule but their combines continue to roll and they are estimated to be close to 25% harvested. We will get a fresh set of fundamentals to trade next week Tuesday with the release of the March WASDE report. This will most likely be a report that mirrors the February report and will not have much for changes. I would venture to guess an increased export number in corn partially offset by some lowered usage in ethanol or feed/residual. Most importantly, the carryout will need another cut to maintain the long term trend higher.