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 kickoff the day with Fed Williams Speech at 6:00 A.M., Redbook MoM & YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY at 8:00 A.M., Chicago PMI and Consumer Confidence at 9:00 A.M., Fed Williams Speech at 10:00 A.M., Fed Brainard Speech at 10:05 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., Grains stocks and Planted Acreage at 11:00 A.M., Fed Chair Powell Testimony at 11:30 A.m., Fed Bostic and Fed Kashkari Speech at 1:00 P.m. and API Energy Stocks at 3:30 P.M.
On the Corn front yesterday the USDA reported the corn, sorghum and wheat export inspections were above projections in the current marketing years. Crop Progress showed corn silkings were at 4% vs. 2% last week but below the 7% five-year average. Corn also came in at 73% good to excellent which was 1% better than last week. The rally in yesterdays action and continued in the overnight is the U.S. Midwest 6-10 day weather forecast of warm and dry weather. Although we did see some rain coverage across the Midwest with fears of violent storms and flash flooding. If corn is not parched in the next week and a half, expect all those who covered shorts to pile on again. In the overnight electronic session the December corn is currently trading at 338 which is 3 ¼ cents higher. The trading range has been 338 ¼ to 332 ¼. Remember today is FIRST NOTICE DAY in JULY GRAINS.
On the ethanol front U.S. Se. Joni Ernst kicked off a video news conference by saying this, “really big week” for Iowa as the most recent version of the North American trade agreement will take effect tomorrow. The Iowa republican was further quoted , “This is a big boon for our Iowa industry because Mexico and Canada are Iowa’s two largest trading partners.” She went on to say yesterday, “ So this, folks, is a really, really big deal, and despite a year of obstruction from Democrats, we did deliver a big win for Iowa.” Ernst and agricultural group officials spent 30 minutes talking about defense from threats posed by the Environmental Protection Agency (EPA) and Big Oil. This should be a continued story to read in the coming months and I will keep you in the loop. There were no trades posted in the overnight electronic session. The August ethanol settled at 1.155 and is currently showing 2 bids @ 1.070 and 2 offers @ 1.190 with Open Interest declining to 66 contracts.
On the Crude Oil front we have the API Energy Stocks later today and expecting draws of 2 million barrels across the board with refinery runs up 0.5. In the overnight we sold off on demand fears both domestic and globally. Domestic fears are that states may be slow to reopen with fears of a resurgence of COVID-19 and globally there is no question that there is ramped up demand and with the 4th of July weekend upon us I see more drivers on the road. I do expect to see demand accelerated in the coming weeks. In the overnight electronic session the August crude oil is currently trading at 3895 which is 75 points lower. The trading range has been 3980 to 3890.
On the Natural Gas front we saw quite the spike and recovery from last weeks tail spin. The market is moving to the 6-10 day warm weather module and dancing to that tune. Producers must be having some sigh of relief, little as it is, it is refreshing not to see this market get continually pummeled. We are hoping Thursdays EIA Gas Storage numbers could help as well because if the numbers are bearish buyers will be skittish. In the overnight electronic session the August ethanol is currently trading at 1.779 which is 7 cents higher. The trading range has been 1.782 to 1.668.
Have a Great Trading Day!