Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
The way the futures traded yesterday investors are just not buying into the negative news on the Corn crop. Crop conditions came in the low side of the average and may spark a summer rally despite the healthy South American crop. Now a key question traders are pondering is soil moisture and enough rain. This could come into play with tomorrow being called to be hot and dry. After tomorrow forecasts call for cooler temperatures and rains until Monday. Could this could be too little too late? In the overnight electronic session the July Corn is currently trading at 375 ¾ which is a ½ of a cent lower. The trading range has been 377 ½ to 375 ½. We could see a Turnaround Tuesday in today’s action.
On the Ethanol front we are seeing rollovers taking place with the July contract last at 1.515 which is 3 ½ cents lower. The trading range has been 1.543 to 1.515. The market traded 13 contracts and is currently showing 2 bids @ 1.538 and 4 offers @ 1.563 with Open Interest at 688 contracts. The August contract is currently last at 1.514 which is .041 cents lower. The trading range has been 1.550 to 1.514 and the market is currently showing 5 bids @ 1.545 and 3 offers @ 1.563 with 15 contracts traded and growing Open Interest at 972 contracts.
On the Crude Oil front the July contract expires today. We also have the weekly API Energy Stocks released at 3:30 P.M. which I am expecting surprising draws to show up even in Cushing, Oklahoma. This could be the last leg down but it is hard to catch a falling knife. If OPEC continues their solidarity on production cuts this market will get back in balance or more producers will be out of business. In the overnight electronic session the August Crude Oil is currently trading at 4353 which is 90 points lower. The trading range has been 4469 to 4338 so far. Businesses will not be able to afford to put more rigs into play at these price levels and sooner or later something will have to give.
On the Natural Gas front the July contract is currently trading at 2.889 which is a ½ of a cent lower. The trading range has been 2.912 to 2.882. With an active hurricane season forecasted we have two disturbances this early in the season that threaten the Gulf of Mexico. Tropical Storm 3 could impact Brownsville, Texas to the Louisiana coast with refinery row right smack in the middle. And we are tracking Tropical Storm Bret which the current cone has it on track to hit Honduras, Nicaragua and Costa Rica. With warmer temperatures forecasted next week and the threat in the Gulf we could bring back the running of the bulls.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374
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Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses.
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