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 Personal Income, Personal PCE Price Index and Core PCE Price Index at 7:30 A.M., Michigan Consumer Expectations, Michigan 5-Year Inflation Expectations, Michigan Current Conditions, Inflation Expectations and Michigan Consumer Sentiment at 9:00 A.M. and Baker Hughes Oil & Total Rig Count at 12:00 P.M.
On the Corn front we did see the biggest drop in 2 months in yesterdays trading session with hot temperatures and more rains forecasted for today and tomorrow. The weather change for more precipitation should bring in humidity which will be ideal for the corn crop. Traders are also looking ahead to Tuesdays USDA Grains Stocks and Planted Acreage data. Analysts polled by Reuters expect a slight shift in plantings from corn to soybeans and the second-largest June 1st soybean supply on record. Another factor in yesterdays drop was the International Grains Council raised its forecast for global corn and wheat production. Tuesday is First Notice Day on all July Grain contracts. In the overnight electronic session the July Corn is currently trading at 318 ¼ which is 1 cent higher. The trading range has been 319 ½ to 316 ¼.
On the ethanol front the EIA forecasted that ethanol production will be 15% lower than last year, it also expects ethanol margins to gradually increase but is skeptical on U.S. motor gasoline demand in 2020 due to the coronavirus. There were no trades posted in the overnight electronic session. The August contract settled at 1.105 and is currently showing 1 bid @ 1.066 and 1 offer @1.162 with Open Interest at 975 contracts.
On the Crude Oil front the market had quite the turnaround yesterday with global Research team at Bank of America lifting its oil price forecast for this year and next year. Their reasoning is OPEC+ cut deals to curtail supply and producers slashed capital expenditure. We also are coming into the 4th of July week where we should see more cars and SUV’s on the road. The naysayers to this optimism is they are skeptical that demand will recover to pre-coronavirus levels anytime soon. In the overnight electronic session the August Crude Oil is currently trading at 3865 which is 7 points lower backing of the high of 3935 with the low currently at 3861.
On the Natural Gas Front it is LAST TRADING DAY on the JULY NATURAL GAS. In yesterdays trading action prices hit a 25-year low for this time of the year. After the EIA Gas Storage data and concerns about a storage tank top build. Weather needs to help this market in July which hot temperatures have been a flip of the coin so far, and we would like tee product move as producers prepare for shoulder season they hope exports in September to November will ease the burden on this market. In the overnight electronic session the August natural gas is currently trading at 1.541 which is a ½ of a cent lower. The trading range has been 1.555 to 1.526.
Have a Great Trading Day!