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 Hump day with CPI and Real Earnings at 7:30 A.M., EIA Energy Stocks at 9:30 A.M. and Dairy Product Sales. On the Corn front the Crop Production USDA Supply/Demand data lower Corn yield more than expected. This restarted a rally that has been overdue and was stalled last week with drier weather conditions that had the funds pulling in the reigns on buying after liquidating a record short position. I was hoping this rally would push and test the May 29th high of 438 but came up short. Now we have more wet forecast and below normal temperatures, this increases the thinking of, “what yields will we see”? We could have another weather phenomenon that could set the stage for a double-whammy if we move to extreme blistering hot temperatures or even (don’t laugh) an early frost. This fickle weather has been so hard to gauge this planting season which normally farmers would have been done or close to done with lollygaggers finishing up due to different weather patterns than the norm In the overnight electronic session the July Corn is currently trading at 428 ¾ which is 1 cent lower. The trading range has been 429 to 424.
On the Ethanol front the July contract is currently trading at 1.521 which is .006 higher. The trading range has been 1.521 to 1.516. The market is currently showing 1 bid @ 1.518 and 1 offer @ 1.526. 8 contracts traded and Open Interest is at 550 positions.
On the Crude Oil front the API had another bearish spin. With Crude Oil builds of 4.852 million barrels with Cushing adding 2.365 million barrels, Gasoline stocks were only up 829 thousand barrels telling me demand is increasing with cheap prices at the pump as we edge closer to the 4th of July holiday. While Distillates showed draws of 3.461 million barrels. Eventually these declines will show up as demand will increase and higher prices will rear it’s ugly head in the future. As far as the Crude Oil builds my only guess is we are importing from Canada to North Dakota and railing it to Cushing. And let’s not forget the State North Dakota produces over a million barrels a day. In the overnight electronic session the July Crude Oil is trading at 5180 which is 147 points lower. The trading range has been 5305 to 5146.
On the Natural Gas front the market continues to ease with plenty of product to go around. After a brief pop the July contract is currently trading at 2.389 which is 1 cent lower. The trading range has been 2.406 to 2.384. With these prices and product virtually coming out of the ground and several other fundamental reasons this will be the Energy of the future.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374