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 the day with Export and Import Prices YoY & MoM (May) at 7:30 A.M., Michigan numbers Prel for June- Consumer Expectations, Current Sentiment, Current Conditions, Inflation Expectations, 5-Year Inflation Expectations and Fed Barkin Speech at 9:00 A.M., Baker Hughes Oil Rig Count & Total Rig Count with another Fed Barkin Speech at 12:00 P.M.
On the Corn front the market traded higher on whispers of U.S. corn bought at export basis. It is believed to be China as the buyer but we will be trying to find out if another country was on the dance floor as well. In yesterdays data U.S. Ending Stocks were pegged at 3.323 billions of bushels with estimates expecting 3.36 billion bushels, World Ending Stocks were 3.378 million metric tones vs. estimates at 3.397 (mmt). Corn for ethanol use dropped by 50 million bushels but is expected to climb with states slowly re-opening and favorable weather to get people out and about stricken with cabin fever. The December Corn had a tight trading range of 3 ¼ cents and settled 2 ¼ cents higher. The USDA set the 2020 corn crop at 15.595 million bushels and farmers are expecting a larger number. Weather factors will be critical from here on out. We will also be keeping an eye on fund activity and farmer selling. In the overnight electronic session the December corn has another tight inside day trading range so far currently trading at 343 ¼ which is a ½ of a cent lower. The trading range has been 343 ¾ to 342 ¾.
On the Ethanol front with inventories shrinking to the lowest point in 2020 the WASDE report maintained its projection for corn use for ethanol in the 2020-21 crop year. While the outlook for in corn use for ethanol was mostly unchanged when compared to the May WASDE, there were fractional increases to beginning and ending stocks. There were no trades posted in the overnight electronic session. The July contract settled at 1.192 and is currently showing 1 bid @ 1.117 and 1 offer @ 1.235 with Open Interest at 75 contracts.
On the Crude Oil front the coronavirus second wave fears had investors scrambling in a long liquidation with spillover from the Stock Market as investors were wondering if the states may double-down on the gulag system. The market is now trading higher in the overnight electronic session with many investors believing the panic sell was way overdone. The July crude oil is currently trading at 3669 which is 35 points higher. The trading range has been 3675 to 3448.
On the Natural Gas front the market stalled again even with hot weather in the southeast and a pattern moving north-northeast at the moment. Also forecasts are calling for a hot and dry July which should help move some of the glut in the U.S. and we have to remember we have a global glut currently. That may change, but the producers I am speaking to are not betting the farm on it. In the overnight electronic session the July natural gas is currently trading at 1.797 which is .016 lower. The trading range has been 1.882 to 1.780.
Have a Great Trading Day!