"Brick Wall" of Farmer Selling Caps Corn Rally

Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.0:00 Farmer Selling2:35 China is "Prepared" for Trade War6:10 Ethanol Production7:22 Gold/Silver Tariff Implications8:28 Inflation UpdateCorn Futures Encounter Technical ResistanceCorn futures struggled on Wednesday to break through key technical resistance levels. The most heavily traded March 2025 contract stopped just 1 cent short of its October high before reverting lower. Anecdotal reports suggest a substantial amount of farmer selling occurred, which contributed to the price pullback. Despite this, ethanol plants and elevators posted weaker basis bids amid strength in the futures market. Private estimates indicate that fund traders were net buyers of 5,000 contracts on Wednesday after buying 30,000-35,000 contracts on Tuesday. Some estimates suggest large money managers could be net long as much as 150,000 contracts in real time.Potential Second Trump Trade War: A Bigger Risk for US Grain ExportsAnalysts believe that a second trade war with China could be more damaging than the first, especially for US soybean exports. During the first trade war, Chinese soybean purchases from the US dropped 79%, but China still relied on US supplies for certain needs. If a new trade war breaks out, however, China may completely shift to Brazilian soybeans and could bypass US soybeans entirely. Additionally, China is better prepared for another trade war, as it currently holds record soybean stocks. In recent years, China has also sought to reduce its reliance on US corn, approving the import of Brazilian and Argentine corn. US Ethanol Production Shows Modest IncreaseUS ethanol production increased slightly last week, with output reaching 1.08 million barrels per day, showing a small increase both from the previous week and compared to the same week last year. Ethanol stocks were reported at 22.6 million barrels, a 1.5% decrease from the previous week but a 5.6% increase from the same week last year. Implied gasoline demand rose by 1% compared to the previous week and 4.1% year-over-year. Over the last four weeks, implied US gasoline demand is up 1.1% compared to the same period last year.Gold and Silver Premiums Surge Amid Tariff ConcernsGold and silver premiums surged in New York on Wednesday, with gold futures for February delivery trading up to $60 an ounce above spot prices in London. Silver futures were more than $1 an ounce higher during the session. This spike in premiums was driven by short-covering by banks and funds, with concerns about the potential impact of 10% tariffs on precious metals. Consumer Prices Rise in NovemberUS consumer prices rose by 2.7% in November on an annual basis, up from 2.6% in October. For the month, inflation climbed 0.3%, marking the largest monthly increase since April. Both figures were in line with expectations. Despite the uptick in inflation, traders are anticipating a 99% chance that the Fed will cut interest rates by a quarter percentage point at their meeting next week.