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 started the day with Challenger Job Cuts coming in at 50.275K and John Challenger had a forecast of 80K so this is pretty good news as the Stock Market after reaching all-time highs relented to the on again off again good news with the China Trade Deal. At 7:30 A.M. we have Export Sales, Jobless claims and Personal Income. Followed by Chicago PMI at 8:45 A.M, EIA Gas Storage at 9:30 A.M. and 4 & 8 Week Bill Auction at 10:30 A.M. The market seems skittish on the Chinese news of no long-term trade agreement in the mix. I expect the long-term negotiations to carry on into the election while investors just want Phase One of the deal sign, sealed and delivered. Another domino dropped as internal problems in Chile delayed the signing and talk the deal may be sign in an alternative place like Mar-a-Lago while the Chinese are playing hard to get to sign these agreements. This has the markets early thoughts of, “back to the old drawing Board”. In the overnight electronic session the December Corn is currently trading at 388 ½ which is 2 ¼ cents lower. The trading range has been 391 to 387 ¼.
On the Ethanol front, there were hearings in Michigan yesterday with Iowa Farmers, Ethanol Producers and State Officials pleading their case against the proposal by the Environmental Protection Agency (EPA) volume requirements for the Renewable Fuel Standard (RFS). The big bugaboo was the waiver granted to 31 small refineries exempting them from the requirement that they blend Ethanol, and other Biofuels into their Gasoline. At the beginning of the month the Trump administration announced a move to boost Ethanol demand by blending more Ethanol into Gasoline. But Mid-October the EPA said it would use the Department of Energy statistics to calculate the losses from Farmers and Ethanol Producers. There were no trades in the overnight electronic session. The December contract settled at 1.410. The market is currently showing 5 bids @ 1.405 and 1 offer @ 1.418 with Open Interest at 464 contracts.
On the Crude Oil front, investors and producers alike do not have a clue where all these available barrels have come from. If you do the math, it makes no sense. Even if there were releases from the Strategic Petroleum Reserves (SPR) the numbers still do not add up unless there was Halloween black magic. With products low in volume, these numbers are giving consumers a false sense of security. In the overnight electronic session the December Crude Oil is currently trading at 5447 which is 59 points lower. The trading range has been 5559 to 5421.
On the Natural Gas front, we have the EIA Gas Storage today. The Thomson Reuters weekly poll with 18 analysts participating expect injection builds ranging from 66bcf to 94 bcf with the median injection of 85bcf and the actual 86bcf with a slight larger than usual of Gas in storage. This compares to the one-year build of 49bcf and the five-year average of 65bcf. In the overnight electronic session the December Natural Gas is currently trading at 2.706 which is 1 ½ of a cent higher. The trading range has been 2.738 to 2.685.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374