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 Export Sales, Jobless Claims and Wholesale Trade at 7:30 A.M., EIA Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Fed Bostic Speech at 11:00 A.M. and 30-Year Bond Auction at 12:00 P.M.
On the Corn front China has bought more corn and other Ag products but even with the boost in sales they are setting the tone to buy about $27 billion in Grains which is far short of the pledge to buy $36.5 billion in are January Trade Deal agreement. Weather remains a factor in the Corn Belt with scattered precipitation and in some areas receiving up to two inches of rain inside the heat dome. Which means what a difference a few miles makes or county to county. We will be tuned in on weather in the coming weeks and also looking ahead to tomorrows Crop Progress USDA Supply/Demand and WASDE data. And after that release we will be looking at the USDA Crop Progress ratings and corn silkings on Monday. In the overnight electronic session the December Corn is currently trading at 359 ¼ which is 5 cents higher. The trading range has been 359 ¾ to 353 ¼.
On the Ethanol front according to the EIA ethanol production averaged 914,000 barrels a day, which is up 14,000 barrels last week, but still below a year ago as blending is still a factor. Ethanol stocks were up for the first time in eleven weeks but supplies remain very tight. Tomorrows USDA report posting corn for ethanol use will be looked at as well. There were no trades posted in the overnight electronic session with the August contract settling at 1.360 and currently showing 1 bid @ 1.360 and 1 offer @ 1.388 with Open Interest at 74 contracts.
On the Crude Oil front the EIA showed a larger build in crude stocks than the API, showing a 5.6 (MB) versus the API’s 2 (MB) builds. China is also falling short on U.S. energy purchases to fulfill the agreement of the phase-one Trade Deal signed with the U.S. in January. And it is no secret they have been stacking their stockpiles in recent months with prices at these levels. Many analysts concur that China will fall short of the agreed target. The market is still trying to scratch its way and close above $41 a barrel. In the overnight electronic session the August crude oil is currently trading at 4082 which is down 8 points. The trading range has been 4099 to 4061.
On the Natural Gas front the Buffett news of buying assets of Dominion Energy and the weather has galvanized this market from the abyss. We also have the EIA Gas Storage data this morning and the Thomson Reuters poll with 16 analysts participating who estimates range from increases of 51 bcf to 65 bcf with the median 57 bcf. This compares to the one-year injection of 67 bcf and the five-year average build of 63 bcf. In the overnight electronic session the August natural gas is currently trading at 1.877 which is .053 cents higher and the trading range has been 1.891 to 1.812.
Have A Great Trading Day!