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 FED decision on Interest Rates is today investors are wondering will the FED cut ¼ or ½ percent. We also had a bullish API inventory number on Energies yesterday. And any rate cut should stimulate the economy and send the commodity markets soaring. As the FED meeting ends today we also have economic reports starting with Employment Cost Index at 7:30 A.M., Chicago PMI at 9:00 A.M., EIA Energy Stocks at 9:30 A.M. and Dairy Product Sales at 2:00 P.M. On the Corn front the market is trading weather with crop conditions getting rave revues versus what reality is in the big picture. Adding pressure the trade talks with China did not take long to fold up the tents and go nowhere and China military forces are gathering at the border with Hong Kong as democracy protest continue. Could this be timing that the talks dramatically stalled? Once again these factors have pressured the Grain Complex and unless the FED comes to the rescue with a stimulating rate cut the market could face more downward pressure. In the overnight electronic session the December Corn is currently trading at 420 which is 1 cent lower. The trading range has been 423 ½ to 419 ¾.
On the Ethanol front the Renewable Fuel Standard (RFS) mandate continues to be a hot iron politically with Big Corn and Refineries duking it out to have their voice heard over disagreements in the mandate. There were no trades posted in the overnight electronic session. The September contract settled at 1.482 and is currently showing 1 bid @ 1.474 and 2 offers @ 1.487 with Open Interest at 604 contracts.
On the Crude Oil front we had a bullish API number with Crude Stocks down 6mln barrels we also had draws in Cushing, Distillates and Gasoline. Also news that Iran and Russia intend on conducting naval maneuvers in the Indian Ocean, Gulf of Oman and the Strait of Hormuz. Now throw in a FED rate cut with all of this bullish fundamental news you can just light the fuse to see a big rally. In the overnight electronic session the September Crude Oil is currently trading at 5861 which is 56 points higher. The trading range has been 5864 to 5797.
On the Natural Gas front the market is trading higher with most of the nation blanketed with a heat dome that we will endure in the coming days. In the overnight electronic session the September Natural Gas is currently trading at 2.182 which is 4 ½ cents higher. The trading range has been 2.186 to 2.127.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374