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 Retail Sales at 7:30 A.M., Redbook at 7:55 A.M., Capacity Utilization and Industrial Production at 8:15 A.M., Business Inventories, Fed Chair Powell Testimony and NAHB Housing Market Index at 9:00 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., 52-Week Bill Auction at 12:00 P.M., API Energy Stocks at 3:30 P.M. and Fed Clarida Speech at 5:30 P.M.
On the Corn front the USDA Crop Progress showed that that the U.S. corn crop planted, 95% of the crop has emerged by mid-June. Currently 71% of the crop has a good to excellent rating which is a drop from 75% last week. Last year only 59% of the corn crop had this rating. The states in the western Corn Belt showed the largest decline in conditions ratings. Overall the ratings are still favorable and if we stay above 70% good to excellent the market will continue to look bearish. We may have gotten a nudge higher but this could create additional selling pressure. The funds were active sellers in Fridays trading session. In the overnight electronic session the July Corn is currently trading at 331 ¾ which is 2 ½ cents higher. The trading range has been 333 ¼ to 331 ½.
On the Ethanol front top biofuel and farm advocates have called on the Environmental Protection Agency (EPA) to offer answers as ethanol production declines in a new effort to undermine the Renewable Fuel Standard (RFS). The biofuels industry has been hit hard by the sharp decline in fuel demand as residents are following local, state and federal guidelines in social distancing and minimizing travel. Over 100 biofuel plants have fully idled or cut production, with ripple effects on agriculture commodity prices. The EIA said almost all finished motor gasoline sold in the U.S. is blended with 10% ethanol (E10), the drop in gasoline demand has driven similar decreases in fuel ethanol demand and fuel ethanol production. There were no trades posted in the overnight electronic session. The July contract settled at 1.160 and is currently showing 1 bid @ 1.135 and 1 offer @ 1.275 with Open Interest at 72 contracts.
On the Crude Oil front we have Turnaround Tuesday in this market as well heading into the API Energy Stocks. We could test the recent highs of $39 and change. The big stepping stone will be $40 a barrel. In the overnight electronic session the July Crude Oil is currently trading at 3831 which is 119 points higher. The trading range has been 3871 to 3638.
On the Natural Gas front even with hotter weather moving in and hanging around for a spell, there seems nothing is able to stop this market from tank mode. In the overnight electronic session the July Natural Gas is currently trading at 1.609 which is 6 cents lower. The trading range has been 1.685 to 1.608.
Have a Great Trading Day!