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 Business Inventories, Export Sales, Jobless Claims and Retail Sales at 7:30 A.M., Business Inventories MoM (May), NAHB Housing Market Index (July) at 9:00 A.M., EIA Gas Storage at 9:30 A.M., Fed Williams Speech at 10:10 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Fed Williams Speech at 12;30 P.M., Overall Net Capital Flows, Foreign Bond Investment and Net Long-Term Tic Flows at 3:00 P.M.
On the Corn front after China books a record U.S. corn purchase, the market and traders want to see if the export market is moving and products are going elsewhere. Weather will be a key factor, with the summer wind starting to be a tad cooler at sunset and temperatures high during the day and cold fronts hitting warm fronts produce rains and storms. If there is no wind or hail damage this will be ideal growing conditions for this crop as move closer to harvest. Farmers, Investors and Traders will be keying on the USDA Crop Progress estimates on Monday to see what is rated good to excellent and where we stand in the silking stage. In the overnight electronic session the December Corn is currently trading at 337 which is 3 cents higher. The trading range has been 337 ¼ to 333 ½.
On the ethanol front production climbed for the 12th week in a row. The EIA reported that production average of 931,000 barrels a day, which was up 17,000 barrels from last week, but still 135,000 barrels below last year. Blending demand and the volume of gasoline supplied to the market were both down from a week ago, which has a lot to do with the 4th of July holiday. The domestic supply tightened slightly, down 12,00 barrels from a week ago at 20.608 million barrels and 2.757 million barrels from a year ago following production cuts for all the obvious reasons. The USDA next corn for ethanol use data will be on the August 12th Crop Production USDA Supply/Demand data. There were no trades posted in the overnight electronic session. The august ethanol settled at 1.205 and is currently showing 1 bid @ 1.170 and 1 offer @ 1.298 with Open Interest at 64 contracts.
On the Crude Oil front we have Option Expiration for the August contract which could make for an interesting 1:30 P.M. close. The bullish numbers we saw in the EIA data drove the market higher and did close above $41 a barrel. The OPEC+ meeting said they would ease record oil curbs from August 1st citing recovery in demand as global lock-downs are loosening up. They are also aware that lock-downs could go back into effect so they do not want to upset the apple-cart as they move to get this market back in balance. In the overnight electronic session the August Crude Oil is currently trading at 4083 which is 37 points lower. The trading range has been 4118 to 4060.
On the Natural Gas Front the market is seeing and weighing the prospects of new investments into the new way of energy for the future. Today we have the EIA Gas Storage data and the Thomson Reuters weekly poll with 18 analysts participating, estimate increases ranging from 34 bcf to 52 bcf with the median 48 bcf and actual number of 47 bcf. This compares to the one-year injection of 44 bcf and the five-year average build of 37 bcf. In the overnight electronic session the August natural gas is currently trading at 1.788 which is 1 cent higher. The trading range has been 1.807 to 1.776.
Have a Great Trading Day!