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 star off the day with Export Sales, Initial Jobless Claims, Jobless Claims 4-Year Average and Continuing Jobless Claims at 7:30 A.M., CB Leading Index MoM June at 9:00 A.M., EIA Gas Storage at 9:30 A.M., Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week and 8-Week Bill Auction at 10:30 A.M., and 10-Year TIPS Auction at 12:00 P.M.
On the Corn front the market rallied while taking bears by surprise with whispers of more China purchases in the future other whispers made the rounds was reports in southern Iowa did receive much needed rain, the western part of the state continues to be dry with parts considered to be in a D2 or severe drought. Besides weather concerns in parts of Iowa another concern crept into the market with the fields across Iowa had an insect pest problem including low levels soybean aphids, Japanese beetles, potato leaf-hoppers, and corn rootworm as gray leaf spot is becoming more prevalent in corn fields an isolated reports of tar spot in corn. This led to short covering and the market settled in the green after the latest tumble in prices. In the overnight electronic session the December corn is currently trading at 333 ¾ which is 1 cent lower. The trading range has been 335 ¼ to 333 ½.
On the ethanol front production was down for the first time since April. The EIA said production averaged 908,000 barrels a day, down 23,000 barrels from a week ago and down 131,000 barrels from a year ago. The amount of gasoline supplied to the market was down for the second week in a row, while blending demand did improve , but is still way below a year ago. The next USDA corn for ethanol use estimate will be August 12. John Perkins with Brownfield Ag News For America supplied the data. In the overnight electronic session the August and September contracts each posted a trade at identical prices as rollovers are moving into the market. The August contract is last at 1.163 which is .027 lower with 1 contract traded. The market is currently showing 1 bid @ 1.145 and 2 offers @ 1.230 with Open Interest at 49 contracts.
On the Crude Oil front the market is plagued by the up and down of demand destruction with cities and states ponder a rollback on phases while trying to have business’ operational. This weeks inventory data was not enough to support Tuesday’s rally. If OPEC+ sticks to its guns on production cuts we will see this market pretty close to balanced after what happened in May. In the overnight electronic session the September Crude Oil is currently trading at 4164 which is 26 points lower. The trading range has been 4236 to 4162.
On the Natural Gas front the market needs a bullish EIA Gas Storage report. In yesterdays action we saw short covering take place as traders prefer to look at today’s report and not the fifteen-day weather forecast. The Thomson Reuters poll with 17 analysts participating estimate increases ranging from 26 bcf to 46 bcf with the median injection of 36 bcf. This compares to the one-year injection and the five-year average build of 33 bcf. In the overnight electronic session the August natural gas is currently trading at 1.696 which is 1 ½ of a cent higher. The trading range has been 1.713 to 1.685.
Have A Great Trading Day!