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 and Wholesale Trade at 7:30 A.M. followed by EIA Gas Storage at 9:30 A.M. On the Corn front we are seeing prices rise after technically 400 held basis December when gloom & doom was the focus of the world economic stage. We still have weather issues driving this market for potential yields of whatever acreage there is to cultivate for next year. Acreage of this crop will not be the norm of percentage of the crop buyers and producers are used to. As we see tasseling and silking and pollination come into play will we see hot weather that a crop is already stressed being pushed more to the extreme as we can assured to be bracing for an early frost in this years weather environment which will make the best out of harvest for whatever we can reap. In the overnight electronic session the December Corn is currently trading at 416 ½ which is 2 ½ cents higher. The trading range has been 417 ¼ to 413.
On the Ethanol front the market posted 1 trade at 1.419 which is unchanged. The market is currently showing 3 bids @ 1.421 and 3 offers @ 1.428 with Open Interest at 550 contracts. This market is following the headlines and weather of the Corn crop and Crude Oil news bracing for negatives and positives as the trade war continues and the U.S. political football of the Renewable Fuel Standard (RFS).
On the Crude Oil front the Saudi’s did a little stimulating themselves promising to ramp up production cuts or keep them in place as countries devalue their currency to keep their economy rolling and the Saudi’s want fair value. We will see demand is still strong and should get stronger with the stimulus as the global countries want to keep their economies rolling like a juggernaut and remember we still have tight supplies. In the overnight electronic session the September Crude Oil is currently trading at 5240 which is 131 points higher. The trading range has been 5284 to 5194. We must remember that this growth we have realized in a sprint is not the end of the world when we come to a jog.
On the Natural Gas front we are still seeing a short covering rally if you can call it that. In the big picture there is plenty of product heading into shoulder season and with U.S. prices a bargain will we be able to export at a bargain with tariffs. Today we have the EIA Gas Storage data and the weekly Thomson Reuters poll with 19 analysts participating expect injection builds ranging from 55 bcf to 63 bcf with the median build of 60 bcf. This compares to the one-year build of 35 bcf and the five-year average injection of 49 bcf. In the overnight electronic session the September Natural Gas is currently trading at 2.103 which is 2 cents higher. The trading range has been 2.135 to 2.086.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374