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 Tuesday with Chicago Fed Activity Index at 7:30 A.M., Redbook MoM and YoY at 7:55 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., 273-Day Bill Auction at at 12:00 P.M., Milk Production at 2:00 P.M. and API Energy Stocks at 3:30 P.M.
On the Corn front the USDA Crop Progress estimates on good-to-excellent corn rating remain the same at 69%. Corn silking progress in Iowa and Indiana are above the five-year average at 9% and 10% respectively. Total silking was estimated at 50% total U.S. with the five year average of 54%. That number comes in quite different from last weeks estimates, while the dough making stage is at 9% compared to 7% on average. Today’s weather is expected to have scattered strong to severe thunderstorms capable of large hail and damaging winds expected over portions of the Plains, Midwest, Mississippi Valley and the Ohio Valley. If there is no severe damage accompanied with the storms we should see prices pressured further. In the overnight electronic session the December corn is currently trading at 332 ½ which is 3 ¼ cents lower. The trading range has been 335 ¼ to 332.
On the ethanol front the EPA has released updated renewable identification number (RIN) data showing that more than 1.51 billion RIN’s were generated under the Renewable Fuel Standard in June, bringing the total RIN generation for the first half of 2020 to 8.52 billion. During the same period of 2019 total RIN generation reached 9.64 billion. Another big news story is some hand sanitizers are dangerous which contain methanol as opposed to ethanol which contaminates the sanitizer. It will cause breathing problems which is a symptom of the corona virus. Also will cause dryness of skin, headaches, nausea, vomiting, seizures and in some cases death.
Methanol is a wood based alcohol that is used for anti-freeze and rocket fuel. The FDA warns it does not approve hand sanitizers and any product sanitizer said it is FDA Approved, the FDA said it would be best to not use it at all. If it is ethanol based which uses grains and sugar as opposed to the deadly concoctions that methanol is derived from, it would be safe to use. There were no trades posted in the overnight electronic session. The August contract settled at 1.107 and is currently showing 1 bid @ 1.048 and 2 offers @ 1.220 with Open Interest dropping to 50 contracts.
On the Crude Oil front today is the LAST TRADING DAY on the August contract. Crude oil prices have had a turnaround as positive hopes have edged out the rise of infection as we traded in narrow trading ranges with fears that new lock downs could derail a recovery demand. Also Haley Zaremba with OILPRICE.com reports that the Dakota Access Pipeline currently mired in a legal battle with no definite end in sight, with widespread protests and sociopolitical conflict from its inception, was ordered by a district court to shut down operations and dry out by August 5. Now the oil industry is grappling how to ship Bakken crude to market. Transporting oil and gas by rail has been criticized by environmentalists and other concerned parties, even earning the alarmist moniker of “bomb trains.” These are indeed far from unfounded views if you can look at history and count the rail disasters carrying that cargo. One instance in 2013 a runaway oil train in Quebec killed nearly 50 people when it derailed. These headlines seem to have brought back a bullish spin to the market and we will see the API data later today. In the September crude oil is currently trading at 4200 which is 108 points higher. The trading range has been 4229 to 4074.
On the Natural Gas the market is easing a little bit higher following the strength in the energy complex with the positive news on vaccines making good steps forward. In the overnight electronic session the August Natural Gas is currently trading at 1.654 which is .013 higher. The trading range has been 1.666 to 1.622.
Have A Great Trading Day!