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 Retail Sales and N.Y. Empire State Manufacturing Index at 7:30 A.M., Capacity Utilization, Industrial Production and Manufacturing Production at 8:15 A.M., Business Inventories, Michigan Consumer Expectations, Mich. Current Conditions, Mich. Inflation Index, Mich. 5-Year Inflation Index, Mich. 5-Year Inflation Expectations and Mich. Consumer Sentiment (MAY), also JOLTS Job Openings (MAR) at 9:00 A.M., NOPA Crush at 11:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., followed by Overall Net Capital Flows, Foreign Bond Investment and Net Long-Term Tic Flows for March at 3:00 P.M.
On the Corn front the July contract settled at 317 ½ which is 4 ¾ cents lower. The markets lower bias was based on ample supplies and speedy plantings. We did have rains yesterday accumulating over 4 inches in some areas in that short period of time. We have forecast of dryer warmer weather today but another cool front and rains to follow. But this is after flash floods and rivers at flood stage already in parts of the Corn Belt we will see if this bounce from yesterdays selloff, will continue going into the weekend. The stock Market had a reversal of fortunes as the U.S. moves to block U.S. chip makers to supply Chinese telecom giant Huawei with any product. As China is slowly stepping up to the plate and buying U.S. agriculture as agreed to in January in the Phase 1 of the U.S.-Sino trade agreement. Intellectual Property (IP) was not agreeable with both parties so we started with this agreement and IP was going to be a part of Phase 2 yet to be negotiated. China is threatening retaliation and this could lead to more tariffs and freezing of China assets and freezing the U.S. debt Treasuries China bought on maturity, and will China continue to honor Phase 1 of the trade agreement? A lot of question marks to be sure. In the overnight electronic session the July Corn is currently trading at 318 ¾ which is 1 ¼ of a cent higher. The trading range has been 319 ½ to 316 ¾.
On the Ethanol front we do see more drivers, “ On the Road Again!” Sorry could not pass up a good Willie Nelson song. I mentioned yesterday that Andersons Inc. is moving to restart operations while producer Green Plains Inc. will keep “quiet” on plant restarts, but will monitor if it is a economical reality to do so that positive revenue can be realized. There were no trades in the overnight electronic session. The July contract settled at 1.065 and is currently showing 2 bids @ 1.050 and 5 offers @ 1.110 with Open Interest at 243 contracts.
On the Crude Oil front we are seeing more drivers on the road, whether it is errands for basic necessities, keep the motor working not leaving it idle which could lead to more problems later and/or just to get out from suffering from a bad case of Cabin Fever. We are rolling again this morning with the July Crude Oil is currently trading at 2846 which is 58 points higher. The trading range has been 2901 to 2753. Could we see a test of $30 a barrel after the rig-count at high noon? We will see how the market holds up with the Huawei news which shook the stock market with after China hinting of retaliation.
On the Natural Gas front the market continues the dead-cat bounce after being in the throws of a bear market in which the bears pounced. Keep in mind we are still in shoulder season and the bears may be waiting to jump back in on a technical resistance number. In the overnight electronic session the June Natural Gas is currently trading at 1.713 which is 0.032 cents higher. The trading range has been 1.732 to 1.658.
Have a Great Trading Day!