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 of the day with MBA Mortgage Applications and MBA 30-Year Mortgage Rate at 6:00 A.M., Housing Starts & Permits at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., Fed Chair Powell Testimony at 11:00 A.M., 20-Year Bond Auction at 12:00 P.M., Dairy Product Sales at 2:00 P.M. and Fed Mester Speech at 3:00 P.M.
On the Corn front the market spiked higher in Mondays overnight electronic session with a 4% drop in the USDA Crop Progress rating of corn deemed to be good to excellent. The spike was short lived as it brought sellers back to the table and the selloff began in yesterdays trading session. With good growing weather with an expected robust crop, fears of a bumper crop crept back in the marketplace. These fears are based on good solid fundamentals and the funds are short, which these factors in place the selling pressure could be daunting. In the overnight electronic session we are seeing tight ranges again with the July corn currently trading at 326 ½ which is 2 ½ cents lower. The trading range has been 328 ¼ to 326 ¼.
On the Ethanol front bio fuels international reports renewable ethanol is a win for the E.U.’s Farm to Fork strategy, which aims to build a more sustainable European agriculture and food system. Importantly, it highlights the potential for a truly circular bio-based economy in which advanced bio refineries produce bio energy, protein feed for animals, sustainable fertilizers and bio-chemicals. In “transition to a climate-neutral European economy and the creation of new jobs in primary production. They are starting to realize the contribution this strategy works and could open further competition to the U.S. export market. There were no trades posted in the overnight electronic session. The July contract settled at 1.200 and is currently showing 1 bid @ 1.160 and 1 offer @ 1.260 with Open Interest at 72 contracts.
On the Crude Oil front yesterdays API data left traders scratching their heads whether you believe or a nonbeliever with the data a mixed bag of tricks. The crude stocks rose 3.857M, while Cushing, Oklahoma declined 3.289M, Gasoline stocks rose 4.267M and Distillates only rose 919 thousand. We will get a refresher course a little later this morning with the EIA Energy Stocks. With volatility the new norm heading into expiration our risk department wants us to roll to August today with July option expiration. In the overnight electronic session the August contract is currently trading at 3824 which is 41 points lower. The trading range has been 3901 to 3748.
On the Natural Gas front the market is trying to gather some legs with hot weather forecasted the next two weeks. Still very indecisive trade as bulls looking to buy value are tired of getting run over. In the overnight electronic session the July natural gas is currently trading at 1.619 which is a half of a cent higher. The trading range has been 1.639 to 1.602.
Have a Great Trading Day!