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 weather is what the headline of this mornings report continue to dominate this disappointing 2019 plantings. USDA Crop Progress showed the staggering deficiencies this versus last year and the five-year average. This should come to know surprise if you been watching the Weather Channel or feeling the weather outside while watching all of the flooded rivers crest this early in the season. Cold weather is also a culprit for farmers not being able to get out of the gate. And now fears in the global trade discussions are in murky waters as the Chinese pulled back and reneged previous agreements and President Trump waisted no time in dropping the hammer on Sunday night. We are not in this deal for the short-term and China is used to seeing negotiators look the other way in negotiations just to get the deal done. I agree the farmers need a deal but I believe it is more important for the U.S. not to back down when we hold the cards in these negotiations. There will be a time we may not hold the upper hand so the time is now to reach a fair trade agreement with intellectual property and military software not being hijacked.
Let’s see if the U.S. Trade Balance at 7:30 A.M. does anything to move the markets. We also have Consumer Credit at 2:00 P.M. and API Energy Stocks at 3:30 PM.
In the overnight electronic session the May Corn is currently trading at 355 ¾ which is unchanged. The trading range has been 357 ¾ to 355 ¾. The July contract is currently trading at 365 ¼ which is 1 cent higher. We will start tracking July tomorrow as the May contract expires next Tuesday.
On the Ethanol front there were no trades posted in the overnight electronic session in the June contract. The July contract posted 1 trade at 1.337 which is unchanged. The market is in wait and see mode with future Corn Stocks in question and whether the EPA will grant waivers to small refineries on significant blends of E15 year round. Other Energy news is the board of directors at Anadarko Petroleum favors Occidental Petroleum’s takeover bid versus Chevron Corporation’s. Normally when you see buy-outs and merger it is a sign of the beginning of a bull market.
On the Crude Oil front the market is also following the moves in the global stock markets. Another concern is OPEC and Russia keeping the lid on production as they wonder will the Trump administration grant anymore waivers on Iranian Oil. With the geo-political front as we see possible civil wars in Libya and Venezuela you can scrap any Oil coming from those countries. While U.S. intelligence has overheard significant chatter that Iran is primed to attack U.S. Interest and Military assets in the Middle-East. U.S. Security Advisor John Bolton said about deploying the USS Abraham Lincoln Carrier Strike Group and a Bomber Task Force to the region was to send a clear and unmistakable message that the U.S. is ready to respond to ant attack, whether by proxy, Revolutionary Guard Corps, or Iranian forces. It just proves a point with the administration protecting U.S. interest that America never got into a war when it was strong, it was when we were weak and tempted tyrants. We also have the API Energy Stocks at 3:30 P.M which I expect draws after two weeks of surprising builds in the Gulf Coast. In the overnight electronic session the June Crude Oil is currently trading at 6160 which is 65 points lower. The trading range has been 6249 to 6150.
On the Natural Gas front the market is bouncing a little from the past trading sessions. The trend remains lower but we see a little sideways for the moment. In the overnight electronic session the June contract is currently trading at 2.544 which is 2 cents higher. The trading range has been 2.550 to 2.514.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374