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, Jobless Claims, PPI and Wholesale Trade at 7:30 A.M. followed by EIA Gas Storage at 9:30 A.M. More of the same with soggy weather in the Plains and Mid-West. Another cold front is expected tomorrow and going into the weekend. Not good news as ground temperatures should have thawed by now and that is not the case. China underestimated U.S. resolve as it backtracked on almost all aspects of commitments to the China-U.S. trade deal They are familiar to deal like this and expect a weak U.S. to look the other way. Evidence of this goes back to the late 1990’s when China was negotiating to join the World Trade Organization (WTO), China’s premier visited Washington mistakenly expecting then-President Clinton to approve the deal. At the end of negotiations in Beijing , then U.S. Trade Representative Charlene Barshefsky walked out of the talks, convinced Beijing was jerking her around , only to come back and finish the deal. This is nothing new for China to push back on specific commitments during negotiations. It is their Modus Operandi (MO) to play the masters of deception. With a new sheriff in town they have misread their tea leaves. Once again we hold the cards and I would have an uneasy feeling if we cave into their demands at this stage of the game. Remember the Art of the Deal is the best option is to walk away or as the song goes, “You Got to Know When to Hold’em and Know when to Fold’em. Contributing to this story is Lingling Wei in Beijing and Bob Davis in New York with the Wall Street Journal. Chinese press has been quoted there will be no deal. In the overnight electronic session the July Corn is currently trading at 358 ¾ which is 5 ½ cents lower. The trading range has been 363 to 358 ¼.
On the Ethanol front the June contract is currently trading at 1.308 which is .016 lower with 2 contracts traded and Open Interest at 1,035 positions. The market is currently showing 2 bids @ 1.308 and 1 offer @ 1.315.
On the Crude Oil front the market is currently holding it’s own considering the Stock Market is taking another shellacking. More geo-political risk in the air, no pun intended, as Rocket Man wants attention and they are still around even if their not the main headline. They launched two short-range missiles mostly to get our attention. In the overnight electronic session the June Crude Oil is currently trading at 6163 which is 49 points lower. The trading range has been 6221 to 6134.
On the Natural Gas front has stalled on two days of modest gains We have the weekly EIA Gas Storage data at 9:30 A.M. The Thomson Reuters poll with 20 analysts expecting injections ranging from 76 bcf to 112 bcf with the median build of 88 bcf. This compares to the one-year build of 104 bcf and the five-year average build of 89 bcf. In the overnight electronic session the June Natural Gas is currently trading at 2.590 which is 2 cents lower. The trading range has been 2.607 to 2.587.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374