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 start off this busiest day of the week report wise Adv Durable Goods, GDP (Q1) and Jobless Claims at 7:30 A.M., Pending Home Sale YoY & MoM at 9:00 A.M., EIA Gas Storage at 9:30 A.M., EIA Energy Stocks, Fed Williams Speech and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week and *-Week Bill Auction at 10;30 A.M., 7-Year Note Auction and 154-Bill Auction at 12:00 P.M., followed by Dairy Product Sales at 2:00 P.M.
On the Corn front the July contract settled at 320 ½ which was 1 ½ of a cent higher in yesterday’s action with tight trading ranges in the whole complex. Funds remain near or above record shorts as many concerns hound this market whether China will honor their trade commitments, overall exports, and global supplies this early in the game. We should start to see partly cloudy to clearer weather tomorrow but will see temperatures moderate to even below normal temps for May but throughout today stay warm and muggy as we expect rains all day in the Corn Belt. In the overnight electronic session the July Corn is currently trading at 321 ½ which is 1 cent higher. The trading range has been 322 to 320 ¼.
On the Ethanol front the USDA reported that Corn use for Ethanol falls 434 million in March. Corn for alcohol use and other consumer use dropped 3% lower than in February and 6% lower than March 2019. The market is seeing some improving positive since March and with the summer driving season upon us and the easing on lockdowns which will help demand further, we do see some brighter spots than the USDA reminded us what we were thinking and going back then with all of the demand destruction. Iowa senators are still challenging and waiting for the Food and Drug Administration’s (FDA) response their letter regarding sanitizers and ethanol plants. As soon as I have any news I will let you know. There were no trades posted in the overnight electronic session. The July contract settled at 1.114 and is currently showing 5 bids @ 1.092 and 2 offers @ 1.145 with Open Interest at 118 contracts.
On the Crude Oil front the API data came out with some surprising builds with Crude inventories +8.731M, Gasoline +1.120M, Distillates +6.907M and Cushing showed draws of -3.307M. The market did not sell off hard on these numbers mainly the market was already down hard in profit taking mode and these numbers are hard to absorb to be correct, and the market gain some very little but some ground before the 4:00 p.m. stoppage of trade. At 10:00 A.M. we have the EIA Energy Stocks which could paint a different picture. In the overnight electronic session the July crude is currently trading at 3261 which is 20 points lower. The trading range has been 3273 to 3114.
On the Natural gas front the market sunk like a rock in yesterday’s trading session following the crude and products after consecutive sessions of being in the green. We have the EIA Gas Storage at 9:30 A.M. And the Thomson Reuters weekly poll with 16 analysts participating estimate increases of 99 bcf to 126 bcf with the median 106 bcf- 107 bcf. This compares to the one-year injection of 188 bcf and the five year average build of 103 bcf. In the overnight electronic session the July contract is currently trading at 1.886 which is unchanged. The trading range has been 1.896 to 1.852.
Have a Great Trading Day!