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 Fed Kashkari speech at 9:20 A.M., Export Inspections at 10:00 A.M., 3 & 6-month Bill auction at 10:30 A.M., Fed Chair Powell speech at high noon, Consumer Credit at 2:00 P.M. and Crop Progress at 3:00 P.M. We are experiencing a bad drought in the Southeast which in some cycles could be a sign of things to come in the Mid-West next year or 2021. This drought is stressing Cattle Ranchers in the South and Southeastern states as the attempt to bring water to their herds. On the Corn front, the Mid-West is seeing local rivers still at flood stage and raises many concerns in harvest. The weather forecast is calling for drier weather and high temps in the 60’s which will all but change on Thursday which more rains are forecasted and another dip in the mercury. This will further test farmers as we had a very wet last week and kept harvest to a slowed pace. Today we will get a report of what percentage of harvest is complete. In the overnight electronic session, the December Corn is currently trading at 386 ½ which is 1 ¾ of a cent higher. The trading range has been 387 ¾ to 385.
On the Ethanol front, the Environmental Protection Agency and the Department of Agriculture jointly proposed new rules on Friday that would increase Ethanol consumption at the expense of Oil refineries to help Corn & Soybean Farmers buffeted by President Trump’s trade wars. The plan would overhaul the system of quotas for Ethanol, a fuel that is made from Corn and other crops, as they blend their fuels. Its overall goal is to increase the sale of the biofuels beyond the current mandate of 15 billion gallons annually. This story contributed by Lisa Friedman NYT Climate. In the overnight electronic session the November contract finally posted a trade at 7:24 A.M. at 1.395 which is .007 higher. The market is currently showing 1 bid @ 1.389 and 1 offer @ 1.498 with 2 contracts traded and Open Interest at 445 contracts.
On the Crude Oil front, the market is trading higher after being overdone to the downside last week. $51 a barrel held as the low last week was 5099. With inconsistent inventory data due to the storms in the Atlantic traders started to realize the geo-political risk in the Middle-East is far from over. U.S. troops pulling out of Syria which totally surprised the Pentagon, some look at this as betrayal to the Kurds whom the U.S. supported against ISIS for years. President Trump told Turkey President Recep Tayyip Erdogan that he is now responsible for ISIS prisoners that the U.S. captured. President Trump further went on to say the U.S. troops were only supposed to stay for 30 days, that was many years ago. We stayed and got deeper and deeper in battle with no aim in sight. Sounds like the last administrations foreign policy. We also have more problems with Iraq and Libya starting to rear their ugly heads tensions are mounting creating further geo-political risk. In the overnight electronic session the November Crude Oil is currently trading at 5352 which is 71 points higher. The trading range has been 5371 to 5259.
On the Natural Gas front the market is not buying into the cold front forecasted for later this week. In the overnight electronic session the November Natural Gas is currently trading at 2.302 which is 5 cents lower. The trading range has been 2.341 to 2.291.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374