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
The NFIB Business Optimism Index came out at 5:00 A.M. at 101.8 vs. the previous 103.1 the forecast was for 103.6 and consensus 104.1. We also have PPI at 7:30 A.M., Redbook at 7:55 A.M., IBD/TIPP Economic Optimism at 9:00 A.M., 52 week Bill Auction at 10:30 A.M., 3 year Note Auction at 12:00 P.M., FED Evans Speech at 12:35 P.M., FED Powell Speech at 1:30 P.M. API Energy Stocks at 3:30 P.M. and Fed Kashkari Speech at 4:00 P.M. A lot of news came out after yesterdays Stock Market close. Starting with President Trump signing the U.S.-Japan trade deal which will provide a staged reduction on Japanese tariffs of more than $2 billion worth of U.S. beef and pork. This matching access now granted to the 11 Trans-Pacific trade pact countries. This par makes the goal posts even. At least part of our elected officials are doing their jobs to make America a better place to live and not wasting taxpayer (VOTER) money on a Kangaroo court that has no basis, Laws or precedent to move forward. Just what you might think about the Swamp people. Now the bad news… We had very weak Factory Orders out of Germany which did not rattle the market as the U.S.-China trade talks hit yet another snag with China Threatening a retaliatory strike on Intellectual Property as the U.S. blacklisted 8 Chinese tech companies do to their treatment of their Muslim population. The Chinese delegation may be headed back home again with no end in sight. This again puts us back to square one and I do not believe it was the Chinese intention to ever negotiate in the first place.
On the Corn front, we expect weather to drastically change Friday night and into the weekend. This might be the knockout punch, as the crop is already in bad shape and I cannot fathom why prices are where they are at. In the overnight electronic session the December Corn is currently trading at 386 which is 1 cent lower. The trading range has been 388 ½ to 386.
On the Ethanol front, the Trump policy shift gave Farmers, “Exactly what we wanted.” President Trump said the boost to the Corn-based Ethanol mix into the nation’s fuel to about 16 billion gallons or 60.6 billion liters. There were no trades posted in the overnight electronic session. The November contract settled at 1.396. The market is currently showing 1 bid @ 1.392 and 2 offers @ 1.409 with Open Interest at 426 contracts.
On the Crude Oil front, the market broke after the China and German news. We still will have tight supplies moving forward. The geo-political risk should be higher as the U.S. is pulling out of Syria after being there for way longer than advertised by the last administration and no contributions from our European counterparts. We may now find out with the Iranians, ISIS, Russia, Turkey and terrorist pointing guns at each other. Who will blink first? As President Trump’s campaign promise we will not risk American lives in a useless war that we have no aim, chance or game plan to be victorious. In the overnight electronic session the November Crude Oil is currently trading at 5219 which is 56 points lower. The trading range has been 5327 to 5181.
On the Natural Gas front, the market is not yet reacting to the forecast of a winter wonderland head in our direction which snows in the Dakota’s and bearing down on Minnesota. In the overnight electronic session the November Natural Gas is currently trading at 2.283 which is 2 cents lower. The trading range has been 2.328 to 2.277.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374