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
We kickoff the day with Export Sales at 7:30 A.M. and later in the afternoon we have the Cattle on Feed at 2:00 P.M. It is planting season and talks of demand and plantings are stirring the pot for a bull market. Weather, Exports, Cycles and Carryover are part of the recipe in this witches brew. Julie Ingwersen with Thompson Reuters reported that U.S. Farmers will plant 90.0 million acres of Soybeans this spring, down from 90.1 last year, while reducing Corn acres 90.0 million acres versus 90.2 last year. Reuters further polled analyst and those participating expect Soybean plantings would rise to 90.6 million acres and Corn Seedings would drop to 89.9 million acres. But I stress once again, “It is not what you plant but what you grow!” Current weather has put some competitors at a disadvantage but with NAFTA politics pushing Mexico to a new trading partner demand and global weather could just be the game changer that could create more demand on U.S. product which we should see more volatility and wild price swings and I am betting in the end prices will be higher. In the overnight electronic session the March Corn is currently trading at 367 ½ which is ¾ of a cent higher. The trading range has been 367 ¾ to 366 ¼.
On the Ethanol front the March contract continues liquidation mod, the Open contracts are estimated to be 488 and volume of 4 contracts traded. In the overnight electronic session the March contract is current at 1.499 which is up .012, the trading range has been 1.499 to 1.498 and the market is currently showing 1 bid @ 1.495 and 1 offer @ 1.503.
On the Crude Oil front the market is digesting the fundamentals of tight supply even heading into shoulder season. Refineries will go into maintenance to gear up for the volume expected in the summer driving season. OPEC is firm on output and U.S. is struggling to keep up capacity to meet demand which is increasing further. With U.S. and global demand, expect a bull run.
On the Natural Gas front the market cannot sustain any rally, weather, demand and cheap prices are keys to this game. With product expected to flood the market at these prices you can expect what is cheap can get cheaper. It may be setting or creating a golden buying opportunity but the basic fundamentals have the cards stacked against the deck for now and no real rally is in sight. In the overnight electronic session the March Natural Gas is currently trading at 2.577 which is 5 ½ cents lower. The trading range has 2.620 to 2.555.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374
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