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 at 7:30 A.M., Chicago PMI and Consumer Confidence at 9:00 A.M. followed by the API Energy Stocks at 3:30 P.M. not to mention the start of the two-day FED meeting. On the Corn front we meet with the Chinese again hoping to reach an agreement on a trade deal that looks good on paper, but farmers and investors want it to be a reality. But patience is the “Art of the Deal”, let’s not settle anything less than a good deal for all involved. The deadline is three weeks away or it will be more tariffs that will try to balance out unbalanced trade. Optimism is coming not only from the China side but the U.S. sides believes we could reach an agreement in two weeks ahead of the deadline. We are facing another hurdle with Mother Nature who is casting fears with inclement weather that is keeping farmers from the fields to plant and acreage and yields are a question mark. Funds continue to be record short, even with slight short-covering their net is largely short. If we do have a deal with China expect the funds to change their posture. In the overnight electronic session the May Corn is currently trading at 353 ¼ which is 1 ¼ of a cent higher. The trading range has been 354 to 351.
On the Ethanol front tomorrows Grain Crushing report should show weakness in Corn amounts in ethanol production. The EIA weekly production through March shows this marketing year is ahead of last year. This again, shows that the market was anticipating a U.S.-China trade deal and most expected it would be a done deal by now. So the market is in dry-dock for the moment. There were no trades posted in the overnight electronic session with the June contract settlement price at 1.340.Open Interest is at 1,043 contracts and the market is currently showing 2 bids @ 1.338 and 2 offers @ 1.341.
On the Crude Oil front, “you say you want a revolution, well el you know”, Venezuela’s Juan Guiado is calling for a military uprising to take back their country from the clutches of socialism that destroyed one of the most vibrant economies in South America under FREE ENTERPRISE> This is causing further risk-on factors in Crude Oil prices and the market is reflecting as much this morning. OPEC and the Saudi’s not to mention non-OPEC Russia are expected to keep production as is. They will wait and see if the U.S. is serious about Iranian sanctions without waivers. We have API Energy Stocks today which could print an even more bullish scenario and we could se 466 a barrel in a heartbeat. In the overnight electronic session the June Crude Oil is currently trading at 6441 which is 91 points higher. The trading range has been 6475 to 6330.
On the Natural Gas front the market remains in purgatory as the oversold market in the basement is making it harder for investors selling it in the hole. But buyers are not in the futures market for now and the cash market is just going with the flow to move product. In the overnight electronic session the June Natural Gas is currently trading at 2.588 which is a ½ of a cent lower. The trading range has been 2.614 to 2.581.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374