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 first Friday of the month with Unemployment and U.S. Trade Balance at 7:30 A.M. On the Corn front, the market seems to be in climate denial. Heavy rains and floods early in the year led to replanting in June. The Mighty Mississippi turned farmland into swampland. Look at the facts, Acreage is down, and maturity of the crop will show, yields will be down and not to mention carryover stocks are down. With the rains that slowed down harvest even further, if we have an early frost, I can hear, Dandy Don Meredith sing, Say goodnight the party’s over. In the overnight electronic the December Corn is currently trading at 386 ¾ which is 2 cents lower. The trading range has been 388 ½ to 386 ¼.
On the Ethanol front, the Trump administration is expected to announce the details of a U.S. biofuel policy to help angry farmers over waivers granted to refiners exempting them from using Corn-based Ethanol. The White House has held weeks of discussions with Farm and oil state senators and executives at oil refiners and officials at biofuels producers. The plan is expected to be announced at 10:00 A.M. This story reported by Stephanie Kelly and Hameyra Pamuk with Thomson Reuters. There were no trades posted in the overnight electronic session. The November contract settled at 1.421 and is currently showing 7 bids @ 1.403 and 1 offer @ 1.411 with Open Interest at 443 contracts.
On the Crude Oil front, were hoping for a good jobs number. Otherwise we will be thinking rate cuts at the next FED meeting towards the end of the month. We have bullish fundamentals with the mishap at the BP refinery in Whiting, Indiana. We also will watch to see if Saudi Arabia will be able to keep up with demand using their supplies as their processing plants are not up to speed yet. And no matter what they produce the key is to process the Crude Oil to make it lighter and valuable to their customers. We also have bloodshed in Iraq and Libya raising the ante on geo-political risk. Also the EIA failed to count the U.S. exports on Thursday’s reports. These factors will show up eventually even with the fears that the U.S. economy which has rolled like a juggernaut has slowed, I look at this as a bump in the road and far from a dead horse. In the overnight electronic session the November Crude Oil is currently trading at 5274 which is 29 points higher. The trading range has been 5296 to 5226.
On the Natural Gas front, a cold front moving across the Western U.S. into the Plains and will lead to thunderstorms and locally heavy rainfall into Saturday. Ahead of the front gust winds will produce critical fire conditions across the Great Basin and central Rockies today. Meanwhile, record warmth continues across portions of the South today, before cooler temperatures arrive this weekend according to the National Weather Service. The forecast has put a halt to the short squeeze in Natural Gas and in the overnight electronic session the November contract is currently trading at 2.289 which is 4 cents lower. The trading range has been 2.353 to 2.283.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374