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, 2nd Quarter GDP and Jobless Claims at 7:30 A.M., followed by EIA Gas Storage at 9:30 A.M. On the Corn front, a lot of investors and traders are guessing what sparked the spike in Corn in yesterday’s trading session. Several ideas like a short-covering rally as we move to month and quarter end. Cargill was canceling Corn registrations as we head to delivery, and Ethanol showed demand had increased and production outpaced analyst predictions. There was also late news that China said it would not retaliate to the latest round of U.S. tariffs and wants to get back to the negotiating table sooner rather than later. In the overnight electronic session the December Corn is currently trading at 373 which is 2 cents higher. The trading range has been 374 to 371 ½.
On the Ethanol front, the market settled higher in yesterday’s action on bullish news with the weekly EIA data and news the Trump administration relating announcement relating to the exemptions granted to 31 small refineries but there has not been a time-table to when the announcement will come out. There were no trades posted in the overnight electronic session. The October contract settled at 1.345 and is currently showing 1 bid @ 1.324 and 1 offer @ 1.359 with Open Interest growing to 444 contracts.
On the Crude Oil front, the only bearish news on the so-called production increase. And if you do the math, why were down 10 mln barrels plus? Also, if Iran caves into U.S. demand (which I highly doubt) the imposed sanctions lifted would flood the market with oil. And thirdly, investors are looking ahead to demand destruction after Hurricane Dorian hits. Any storm path is unpredictable and investors are worried about flooding refineries if the storm goes into the Gulf of Mexico and regurgitates hitting refinery row which could cause damage with major flooding while disrupting shipping. In the overnight electronic session the October Crude Oil is currently trading at 5626 which is 48 points higher. The trading range has been 5643 to 5543.
On the Natural Gas front, we have the EIA Gas Storage data today and the market does not seem to be moving much and pushing hurricane premium as of yet. On the EIA, we are expecting injection builds of 55 bcf. Investors are seeing record demand in most Energy markets and I do not see a Recesses ion for some time to come. In the overnight electronic session the October Natural Gas is currently trading at 2.242 which is 2 cents higher. The trading range has been 2.248 to 2.221.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374