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
Today marks the 75th anniversary of the formal acceptance by the Allies of World War II accepting Nazi Germany’s unconditional surrender of it’s Armed Forces May 8, 1945, marking the end of World War II in Europe. How ironic we have the Unemployment number at 7:30 A.M. which analysts expect a bad number that could be as bad as the beginning of that war. We also have Wholesale Trade at 9:00 A.M. and Baker Hughes Rig Count at 12:00 P.M. Asian stock markets were higher and we had a mixture in Europe, however the U.S. markets are riding the strength. On the Corn front and the grain complex as a whole traded in the green in yesterdays action with the USDA announcing new China old crop and new crop sales and the U.S. and China may resume trade talks in this delicate time as the world looks at mounting evidence that China knew the severity of this coronavirus and allegedly covered up necessary information which spread this pandemic. While we had promising Export Sales we are still down 347 million bushels vs. last year. More bullish weather news with a widespread freeze that should not help vulnerable crops including Hay, Soybeans & Wheat. Also the weather forecasts have Kentucky dropping to a record low in May of 24 degrees on Saturday which could be damning to those crops planted as well. In the overnight electronic session the July Corn is currently trading at 319 which is 1 cent higher. The trading range has been 320 to 317 ¼. Technicians are wondering if there is enough bullish fundamental news to test 330.
On the Ethanol front there is finally some good news reported by Mark Dorenkamp with Brownfield AG NEWS FOR AMERICA wrote that Ethanol demand maybe turning the corner. Global Commodity Analytics president Mike Zuzolo says for the first time in two months, ethanol production moved higher as some states began lifting stay-at-home orders. “Because we are opening up, the demand for energy, ethanol (and) biodiesel included, that demand is not an absolute zero number.” He also said that should not be taken lightly considering Crude Oil prices sunk into negative territory last month before rallying $60 a barrel. “ So when you think about that in terms of percentage lost and percentage gained, and the demand destruction that we’ve probably done in the ethanol world, it could have been extremely bad had we not had that price recovery.” Zuzolo says it’s critical for the ethanol market and commodity prices in general, that the U.S. experiences a strong summer driving and grilling season. Could that be a cue to the livestock industry as we move to get back as close to normal as we can be? There were no trades in the overnight electronic session. The June contract settled at 1.081 and is currently showing 1 bid @ 1.081 and 1 offer @ 1.090 with weak Open Interest at 150 contracts.
On the Crude Oil front there is a lot of movin’ and a shake’n globally as we retreat off the highs made early this morning even though we are still trading higher. This could be a day traders paradise. An anonymous source told associated Press (AP) that the U.S. will be withdrawing Patriot missiles and the 300 troops staffing those batteries out of Saudi Arabia. When asked about the move by the press, President Trump did not want to talk about the move. But added, his administration was, “doing some things,” and making a lot of moves in the Middle East and elsewhere. Were doing a lot of things all over the world with our military. “We’ve been taken advantage of all over the world, our military.” This move punishing Saudi Arabia comes at a time when tensions are high between the Kingdom and Iran. The questions are will position traders square up their investments going into the weekend? Will they not want to be short going into the weekend? We will see how this trading session unfolds. In the overnight electronic session the July Crude Oil is currently trading at 2520 which is 37 points higher. The trading range 2629 to 2473.
On the Natural Gas front this ungodly cold weather for May has not captured the attention of the bullish investors in this market The bearish investors seem convinced this market has not bottomed yet. In the overnight electronic session the June Natural Gas is currently trading at 1.854 which is 4 cents lower. The trading range has been 1.927 to 1.846.
Have a Great Trading Day!
And God Bless All the Mothers in the World!Questions? Ask Dan Flynn today at 312-264-4374