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 started the day off with NFIB Business Optimism Index (Jun) at 5:00 A.M. coming in at 1.006 versus the previous 94.4 and a forecast of 92, CPI and Real Earnings at 7:30 A.M Redbook YoY & MoM at 7;55 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., 52-Week Bill Auction at 10:30 A.M., 52-Week Bill Auction at 12:00 P.M., Fed Brainard Speech at 1:00 P.M., Fed Bullard Speech at 1:30 P.M. and API Energy Stocks at 3:30 P.M.
On the Corn front the USDA lowered the good to excellent rating again putting that number at 69% down 2% from last week. The USDA reported that the silking process in large producing states like Illinois and Nebraska are still well behind the five-year average. Nebraska is at 19% silked versus a 29% five-year average and Illinois’ rate is 36% versus a 53% five-year average. The U.S. has 3% of the corn crop entering dough stage, equaling the five-year average. Data confirmed with Mike McGinnis with Successful Farming. Now we will get back to weather and temperatures are supposed to ease back to the mid to lower 80’s in the Chicago area tomorrow. But the National Weather Service is forecasting storms in the Central U.S., Dangerous Heat in the South and Critical Fire Weather in the West. This cold is expected to bring strong severe storms from the South-Central Plains to the Upper Mid-west that may produce damaging winds, large hail and a couple of tornadoes. Dangerous heat continues in the south, especially Texas. Temperatures will slightly moderate in the Southwest. Critical fire conditions persist in the Great Basin and into Northeastern California. In the overnight electronic session the December Corn is currently trading at 336 ¾ which is a ¼ of a cent higher. The trading range has been 338 ¼ to 335.
On the Ethanol front Ethanol Producer Magazine posted a story that Growth Energy Senior Vice President offered testimony during a virtual public hearing on the U.S. EPA’s test protocols for U.S. fuels. The agency is currently updating Tier 3 Motor Vehicle Emissions and Fuel Standards to reflect the modern transition to higher blends of low-carbon ethanol. “Ethanol is a low-carbon biofuel which reduces greenhouse gas emissions on average of 39%compared to gasoline,” Bliley told reporters. “Today 98% of our nations gasoline is blended with 10% ethanol becoming the de facto fuel for American consumers, and with year round approval of E15 and the potential of high octane, mid-level blends, were poised to do much, much more>. So it was very appropriate that the Tier 3 fuel regulation change the certification fuel from E0 to E10. There were no trades posted in the overnight electronic session. The August ethanol settled at 1.330 and is currently showing 2 bids @ 1.200 and 2 offers @ 1.350 with Open Interest dropping to 67 contracts.
On the Crude Oil front the fear of lock-downs continues to refute this market from pushing through and closing above $41 a barrel. Today’s API could show some surprises with disruptions in production from Tropical Storm Fay both offshore and inland. Early whisper numbers see draws in Crude at 4(MB) and products draw at 3(MB) In the overnight electronic session the August crude oil is currently trading at 3960 which is 50 points lower. The trading range has been 3988 to 3907.
On the Natural Gas front we are looking quiet in the early going. Brentan Alexander with Forbes reports that Dominion’s Natural Gas Dump shows that a renewable future is on the horizon. I could not agree with him more. Anytime an industry is hurting and you start to see buyouts, Mergers and Acquisitions it is usually a sign that the bottom is in or very close. In the overnight electronic session the August natural gas is currently trading at 1.723 which is .016 lower. The trading range has been 1.739 to 1.708.
Have a Great Trading Day!