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 this busy Thursday with Export Sales and Jobless Claims at 7:30 A.M., EIA Gas Storage at 9:30 A.M., Crop Production USDA Supply/Demand at 11:00 A.M. and the FED decision on Interest Rates today which investors are expecting the FED to keep to keep rates in check. However, they will be listening to the verbiage of whether they have a dovish or hawkish overtone for the December 18th and 19th FOMC meeting. On the Corn front Dominique Patton with Thomson Reuters reported that China, the worlds #2 Corn producer, has revised its Corn output data for the past 10 years, an official think-tank has said in a report. China’s national statistics bureau had said Corn output in 2017 was 215.9 million tonnes but the new data showed last year’s crop was 20% larger at 259 million tonnes, the China Grain and Oils Information Center (CBGOIC) said. The report said that the new data sharply increases planted acreage from 35.5 million hectares to 42.4 million hectares. It is not clear why the data was adjusted. But this is shocking news that could affect world trade and Ethanol exports. In the overnight electronic session the December Corn is currently trading at 373 ¾ which is 1 ½ of a cent higher. The trading range has been 374 to 371 ¼. The market seems to be squaring up on positions ahead of the data later today.
On the Ethanol front the Brazil and China news has not rattled the market as of yet. In the overnight electronic session the December Ethanol is currently trading at 1.281 which is .005 higher. The trading range has been 1.285 to 1.275. 25 contracts traded and with the volume picking up Open Interest continues to decline to 1,743 contracts. The market is currently showing 2 bids @ 1.280 and 1 offer @ 1.284.
On the Crude Oil front OPEC is going to announce a production cut next week if not earlier with the front end of the market taking a beating the past four weeks. Sooner or later funds, high frequency traders and institutions will realize that tight supplies and growing demand is reality and the price of the Energies will move accordingly. In the overnight electronic session the December Crude Oil is currently trading at 6164 which is 3 tics lower. The trading range has been 6242 to 6151. This market is in a wild chop at the moment.
On the Natural Gas front we have the weekly EIA Gas Storage data. The Thomson Reuters poll with 18 analysts participating expect injection builds anywhere from 53 bcf to 65 bcf with median injection 58 bcf. This compares to the one-year injection build of 22 bcf and the five-year average injection build of 48 bcf. This shows me we have an abundance of Natural Gas and producers are rolling it along hoping to fill some void with a global shortage of Distillate fuel we will see further in very tight supply if we have a rough and tumble winter. In the overnight electronic session the December Natural Gas is currently trading at 3.550 which is a ½ of a cent lower. He trading range has been 3.556 to 3.493.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374