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 this shortened Thanksgiving week with Chicago Fed National Activity Index at 7:30A.M., Dallas Fed Manufacturing Index at 9:30 A.M., Export Inspections at 10:00 A.M., 3-mont & 6-month Bill Auction at 10:30 A.M., 2-Year Note Auction at 12:00 P.M., Crop Progress at 3:00 P.M. and Fed Chair Powell Speech at 6:00 P.M. Busy weekend and busy week ahead of us. Charles Schwabe made it official of buying TD Ameritrade while Louis Vuitton has agreed to buy Tiffany for $16.2 billion U.S. in its biggest acquisition yet. Elections in Hong Kong swung the Pro-Democracy movement to a landslide of 90%, cruising at the ballot box, something the liberals should fear come 2020 and 2024. While China signaled it may be softening and will reform their Intellectual Property Laws. If this is true, this is a big one folks. U.S. forces had combat in Syria fighting ISIS and Iranians trying to get a stronghold on the Turkish border. Iran also wants to escalate tensions planning to attack Israel which we take seriously after attacks on Saudi Arabia. Once again Iran is writing checks it cannot cash. Game On!
On the Corn front, delayed harvest has resulted in chaos for trade routes. Corn usually harvested in the Mid-West before it is sent south to be exported. But because farmers in the east, hurt by the spring-time deluge, are holding back on supplies in a hope of seeing higher prices. The cash price has been pushed higher than the futures markets in the east and lower than the futures markets in the west. Which is known as “basis arbitrage”. The result? Corn is going to be shipped “over Chicago” from the west, to supply Corn processors, Ethanol plants or animal-feed makers in the east. The spread on the arbitrage is not that large yet but the market is the market and it is something to keep an eye on. We also have had more storms impacting harvest with more expected to come and further disrupt even further. In the overnight electronic session the December Corn is currently trading at 370 ¼ which 1 ½ of a cent higher. The treading range has been 371 ¼ to 368 ¼.
On the Ethanol front, it is Ethanol versus Fossil Fuels. The Great Dilemma! What is better, cost conscious and safer for the environment? The question is who do you believe? Now I understand those indoctrinated at the Harvard-Yale football game had a sit-in at halftime to exploit their fossil fuel concerns, but do they know more than Hunter Biden? I am just asking? The answer is those who believe what will make their constituents happy to peddle their product. We did have an upswing in activity in the overnight electronic session in the first 3 option months of Ethanol posting trades. The January Ethanol is currently trading at 1.400 which is .010 lower. The trading range has been 1.416 to 1.400. The market is currently showing 1 bid @ 1.401 and 1 offer @ 1.415 with 2 contracts traded and Open Interest at 455 contracts.
On the Crude Oil front, we are easing off in the early going, which I expect to be creating a good buying opportunity. There is once again compelling fundamental evidence that this market is way overdue for another ride to the upside. In the overnight electronic session the January Crude Oil is currently trading at 5736 which is 41 points lower. The trading range has been 5808 to 5721.
On the Natural Gas front, the weather reports keep changing like the wind. Very choppy trade. In the overnight electronic session the January Natural Gas is currently trading at 2.585 which is 12 ½ cents lower. The trading range has been 2.743 to 2.564.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374