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 Employment Cost Index and 1st Quarter GDP at 7:30 A.M. On the Corn front the International Grain Council (IGC) made a slight increase to its forecast for 2018-2019 global Corn (Maize) production, although called for a drawdown in stocks for the second successive season. As the weather gets better in the U.S. Mid-West this tells me a growth in the percentage of plantings as we move from winter to summer with no spring. The significance and urgency of global demand for feed and human consumption will be realized just as investors thought or think we are in a Crude Oil glut. We will get our education very shortly. In the overnight electronic session the May Corn is currently trading at 387 which is 1 cent higher. The trading range has been 387 ¼ to 385 ¼. Today’s trading session will be banking on plantings and when that is said and done it will be all about Mother Nature.
On the Ethanol front we had activity in the May and June contracts as we move closer to May’s expiration and move the risk to the June contract. In the overnight electronic session the June contract is currently trading at 1.458 matching the price of the May contract. The trading range on the June contract has been 1.461 to 1.458. The market is currently showing 1 bid @ 1.459 and 1 offer @ 1.462. 14 contracts changed hands in the June however Open Interest dropped to 771 contracts.
On the Crude Oil front the market was rolling up until Genscape released their findings that there was more storage in Cushing, Oklahoma than the American Petroleum Institute (API) and the Energy Information Administration (EIA) reported in their weekly reports. This had the bulls running for the exits. In reality this was just a non-bullish headline and the fundamentals have not changed. Or as I would say “The Song Remains the Same”. In the overnight electronic session the June Crude Oil is currently trading at 6794 which is 25 points lower. The trading range has been 6821 to 6777. In today’s trading session I expect a short-covering rally with geo-political factors investors should not want to risk a heavy short position going into the weekend.
On the Natural Gas front the Futures to Cash are still deviated and eventually the Cash and Future prices will meet head on. I still remain bearish even after a bullish EIA Gas Storage number yesterday. In the overnight electronic session the June contract is currently trading at 2.809 which is 3 cents lower. The trading range has been 2.834 to 2.792.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374