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 busy morning with Advanced durable Goods, Export Sales, GDP (Q1-20) and Jobless Claims at 7:30 A.M., Fed Kaplan Speech at 8:30 A.M., EIA Has Storage at 9:30 A.M., Fed Kaplan Speech and Kansas Fed Manufacturing Index at 10 A.M., 4-Week and 8-Week Bill Auction at 10:30 A.M. Fed Mester Speech at 11:00 A.M., 7-Year Note Auction at 12:00 P.M., Milk Production at 2:00 P.M., and Fed Stress Test Results For Big Banks at 3:30 P.M.
On the Corn front the market traded higher in the early going but failed in the trading session and had a weak close. The December Corn peaked in yesterday’s action at 339 ¾ which was 3 cents higher only to close at 3333 ¾ which was 3 cents lower. Funds remain heavily short and weather played a big factor with rains across the Mid-West with decent temperatures. There were other fundamental reasons that pressured the market with weak exports concerns of a 2nd wave of coronavirus cases and China requesting that shipments of U.S. Ag products have documentation that guarantees it is virus free. In the overnight electronic session the December corn is currently trading at 331 ¾ which is 2 cents lower. The trading range has been 333 ¾ to 331 ¾.
On the Ethanol front the ethanol stocks drop for the ninth straight week to a 6 ½ month low. Improved driving demand continues to spur blending activity with production up 6.2% from last week but down 16.7% from last year. There were no trades posted in the overnight electronic session. The august contract settled at 1.164 and is currently showing 1 bid @ 1.050 and 2 offers @ 1.210 with Open Interest at 74 contracts.
On the Crude Oil front we dropped hard on the COVID-19 resurgence news and builds in crude inventories. Tsvetana Parascova with OILPRICE.com reported that there are at least 16 oil tankers idling off the coasts of Africa and Southeast Asia because the few potential buyers would risk U.S. sanctions for dealing with the regime of Nicolas Maduro. The tankers are carrying 18.1 million barrels of unsold Venezuelan Crude Oil and it is equal to two months of the countries production at its current rate, according to Reuters. In the overnight electronic session the August Crude Oil is currently trading at 3731 which is 70 points lower. The trading range has been 3846 to 3713.
On the Natural Gas front we have the weekly EIA Gas storage report. The Thomson Reuters poll with 17 analysts participating expect injection builds ranging from 90 bcf to 115 bcf with the median 106 bcf. This compares to the one-year injection of 92 bcf and the five-year average build of 65 bcf. In the overnight electronic session the August Natural Gas is currently trading at 1.616 which is 4 ½ cents lower. The trading range has been 1.661 to 1.612. Tomorrow is Last Trading Day in the July Natural Gas contract so it would be wise to roll or liquidate today.
Have A Great Trading Day!