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 month of November with Unemployment at 7:30 A.M., Market Manufacturing PMI Final (Oct) at 8:45 A.M., ISM Manufacturing Index at 9:00 A.M., FED Williams Speech at 11:00 A.M., Fed Chairman Clarida Speech and Fed Quarles Speech at 12:00 P.M., also at High Noon we have the Baker Hughes Oil Rig Count, Followed by Fed Williams again at 1:30 P.M., Cotton System, Fats & Oils and Grain crushing at 2:00 P.M. I am anticipating a good Jobs number this morning while Manufacturing should show weakness with the GM strike that hung over our heads. We did get data overnight that China’s Manufacturing activity expanded which should be a welcome sign to the markets today. On the Corn front wet, cold and snow has given some Iowa farmers no choice but to leave unharvested Corn in the ground. One farmer told me that the cost of drying his Corn fields outweighs any profit potential. The Corn futures are not showing that in prices this morning even with more acres unaccountable for. In the overnight electronic session the December Corn is currently trading at 388 ½ which is 1 ½ of a cent lower. The trading range has been 390 to 388 ½. I am hoping we are holding 387 or the key technical number this morning to hold support would be the 384-385 level.
On the Ethanol front the EPA, Farmers and Ethanol producers remain at odds over the Renewable Fuel Standard (RFS) and there seems to be no “quick pro quo”, in the cards. This is what liberals should really be concerned about. In the overnight electronic session the December Ethanol is currently trading at 1.475 which is .044 higher. The trading range has been 1.477 to 1.475. The market is currently showing 1 bid @ 1.401 and 1 offer @ 1.479. It looks like somebody is going on a fishing expedition on the bid. Two contracts traded and Open Interest is at 475 contracts.
On the Crude Oil front the China Manufacturing data should be bullish along with further Saudi production cuts in the future. Refinery runs data showed a lot of refineries were put back into service and will be forced to work overtime to catch up on the shortages of Gasoline blends and Diesel that are lagging big time. Other concerns are Ethanol blends that have been put into the mandate. In the overnight electronic session the December Crude Oil is currently trading at 5438 which is 20 points higher. The trading range has been 5453 to 5407.
On the Natural Gas front yesterdays slightly bearish EIA Gas Storage data had the bulls heading for the exits taking profits. There were expectations of a larger than normal Gas storage was in the cards, and it was. If there is an extended weather forecast of below normal temperatures you may see investors coming back buying value on this break to the downside. In the overnight electronic session the December Natural Gas at 2.593 which is 4 cents lower. The trading range has been 2.644 to 2.575.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374