The Good: There were some green shoots in the U.S. ethanol market today as production moved up to 598,000 barrels. This is the first increase of ethanol production in nine weeks. The other good news was that ethanol stocks declined for the second week in a row to 25,600 barrels. Production remains half of normal in the U.S., but the increase an indication that the U.S. is beginning to increase gasoline consumption. Although consumption will not be back to normal for a number of months, the personal vehicle consumption will the first sector to recover. Early data from Asia and Europe indicates that post COVID-19 transportation trends favour personal vehicle transportation over the alternatives. This trend will be exacerbated by the reduction in gasoline prices. Corn markets did not react to the news today and pushed lower in futures trading today.
The Bad: The number of cases of COVID-19 cases today in the U.S. surpassed the second largest outbreak by over one million. The number of cases hit 1.288 million people, while Spain is reporting “only” 220,325 cases. Despite the fact that the U.S. is opening in more than 35 states this week, the number of cases continues to rise. This increases the chances that outbreaks will result in another “lockdown” in a number of states, which will slow the recovery.
The Ugly: Frost is forecast for a large portion of the Corn Belt and central and northern Plains states (Nebraska to Montana). The concern is for the wheat crop, especially in parts of Illinois and Missouri. Heading is not widespread in Nebraska, so there should be minimal damage unless temperatures move lower than currently forecast. The map below shows the forecast low temperatures for Friday.