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 Unemployment and U.S. Trade Balance at 7:30 A.M. and Factory Orders at 9:00 A.M. We have President Trump upping the ante on tariffs of $300 billion if a trade deal is not reached by September 1st and China vowed to have countermeasures according to China’s spokesperson for the foreign ministry, Hua Chunying, she added China does not want a trade war with the U.S., but it is not afraid to fight one. This comes at a time China’s Baoshang Bank’s failure and this could be a sign of things to come as the U.S. economy remains vibrant in this dispute and the U.S. will not waver it’s protection of Intellectual Property (IP) and Steel manufacturing. On the Corn front the tariff news sunk the Grain complex as well, and I believe it was overdone creating more bargain basement buyers. Weather will continue to be the focus with tasseling and pollination crucial and there is little room for error with weather conditions in this already stressed crop. Warmer temperatures are forecasted this weekend may help the existing crop but with an early frost all bets are off. In the overnight electronic session the December Corn is currently trading at 406 which is 3 ½ cents higher. The trading range has been 407 ¾ to 403.
On the Ethanol front this market felt the effects of tough negotiations with threats of China importing Corn & Ethanol. This is shaping up to be an economic war we have been enduring and finally fighting back with resolve. In the overnight electronic session the September Ethanol is currently trading at 1.458 which is .015 higher. The trading range has been 1.464 to 1.443. The market is currently showing 1 bid @ 1.455 and 2 offers @ 1.464 with 13 contracts traded and Open Interest at 584 contracts.
On the Crude Oil front we are mounting a tariff comeback after the $300 billion tariff news deep sixed the market and fundamentally it was overdone falling nearly 8% in yesterdays action only to rebounding early and up 2.52% with the September contract currently trading at 5531 which is 136 points higher. The trading range has been 5543 to 5415. It may take a couple more trading sessions to get back to speed and I do not expect many investors to carry short positions over the weekend also if we get a good Jobs and Factory Orders number this market should shake out the shorts.
On the Natural Gas the market continues to drop as production continues to flow. No sustained weather keeping us at peak demand and a bearish EIA Gas Storage number yesterday only emboldened the bears. In the overnight electronic session the September contract is currently trading at 2.152 which is 5 cents lower. The trading range has been 2.202 to 2.149.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374