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 Evans Speech at 7:00 A.M., Unit Labour Cost and Non-Farm Productivity at 7:30 A.M., FED Williams Speech at 8:30 A.M., EIA Energy Stocks at 9:30 A.M., 10-Year Note Auction at 12:00 P.M., FED Harker Speech at 2:00 P.M., Total Vehicle Sales at 5:00 P.M. and FED Williams Speech at 5:30 P.M. On the Corn front, the market is trading below 385 and the funds seem to be quiet. A lot of investors and traders expected the funds to go on a selling spree at these numbers. Their lack of aggressiveness fundamentally tells me that the lows cannot get much lower. U.S.-China Trade Talks will mutually benefit both sides of the table and the Chinese cannot blink with their problems in Hong Kong to name a few issues they have and keep their economy rolling like a juggernaut. Therefore, I believe the lows are in. In the overnight electronic session, the December Corn is currently trading at 383 ¼ which is 1 ½ of a cent higher. The trading range has been 384 to 382. A very tight trading range. And speaking for farmers that had dry land to harvest, they were moving at full throttle. This is just proof in the pudding that when the American Farmer is faced with adversity, they will say is that all you got?. This harvest is far from over and this has been a terrible year. Whether it is weather or demand this market has been completely underestimated.
On the Ethanol front, “ All is quiet on the Western Front”, There were no trades posted in the overnight electronic session. The December contract settled at 1.394 and the market is currently showing 1 bid @ 1.390 and 1 offer @ 1.404 with Open Interest at 540 contracts.
On the Crude Oil front, the API Energy Stocks showed the “ Same Old Song” with Crude Oil builds of 4.2 mln barrels while Gasoline stocks had draws of 4.0 mln barrels and Distillates showed draws of 1.6 mln barrels. Well folks, eventually these numbers tell me that we will have to pay the piper. Distorted or not there is not enough product to cover as we attempt to refine Diesel, Gasoline and other Products. Even though these numbers do not make sense, it still paints a roadmap of higher prices in the future. Breaking whisper news has China committing major Dinero, Greenbacks or Yuan to the Saudi Aramco IPO. This again shows me demand is not crumbling whatever Morning Joe or and other fake news affiliates will want you to believe. In the overnight electronic session the December Crude Oil is currently trading at 5704 which is 19 points lower. The trading range has been 5731 to 5675.
On the Natural Gas front, the market has run into resistance and the bulls are not piling on and not exiting either at this point. Frigid weather forecasted with way below normal temperatures for this time of year has investors and traders contemplating, what we are in store for this winter. There is plenty of product as producers will tell you and if this bumper supply last at these prices and ready to be shipped and pipelined at these prices, this market will not be undervalued for long with the percentage of revenue only goes to the Deep Pockets or Wisdom of the Capitalist Entrepreneur which had the intestinal fortitude to win the day. In the overnight electronic session the December Natural Gas is currently trading at 2.872 which is 1 cent higher. The trading range has been 2.891 to 2.826.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374