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
Sparks are flying and it seems this trade war with China will not have the happiest of endings between the two largest global economies. Both sides are taking their licks, however, the U.S. stand is not to be taken advantage of like it has been in the past. You will see investors putting their cash in Gold and U.S. Interest Rates seeking a safe haven in all this madness. Beijing is a warning of financial chaos as the U.S. designated China as a currency manipulator and will be brought to the attention to the G20 and IMF for rules broken and cheating on financial stability. We also have Iran and North Korea back in the headlines with their new threats they just may be the little kid seeking attention. Today we have the API Energy Stocks where we think we will see draws of 3mln barrels across the board. On the Corn front the USDA Crop Progress showed a median 57% good-to-excellent on the crop which is down 1% point from last week. We do have drought conditions creeping in and most definitely need to watch the weather. In yesterday’s action we saw the December Corn hold support at 400 and rallied and settled higher on the day. I expect the disconnect in this market to sink in when countries looking to make purchases for product and not used to seeing the cupboard barren. In the overnight electronic session the December Corn is currently trading at 412 ¼ which is 2 ½ cents lower. The trading range has been 416 ¼ to 411 ½.
On the Ethanol front the September contract posted a trade at 1.440 which is .008 lower with 1 contract traded and the market is currently showing 3 bids @ 1.434 and 1 offer @ 1.445 with Open Interest at 517 contracts.
On the Crude Oil front there are two things that would make me take a bearish stand and the first one would be a global economic slowdown which headline would over play. Secondly would be President Trump granting waivers on Iranian Oil. With Iranian President Rouhani AKA knucklehead warning the “mother of all wars”, if the U.S. attacks. Seems to me I heard that verbiage before with their neighbor Iraq, how did that work out? The U.S. has been patient and showed restraint only to keep the free flow of commerce moving as Iran’s piracy preying on international commercial shipping. I am also expecting draws on tonight’s API Energy Stocks. In the overnight electronic session the September Crude Oil is currently trading at 5501 which is 32 points higher. The trading range has been 5542 to 5372.
On the Natural Gas front we had a small pop in this over supplied bearish market as we close in on shoulder season. In the overnight electronic session the September contract is currently trading at 2.100 which is 3 cents higher. The trading range has been 2.131 to 2.073.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374