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 Market Composite PMI Flash, Market Manufacturing PMI Flash and Market Services PMI Flash at 8:45 A.M., New Home Sales MoM and New Home Sales (Jun) at 9:00 A.M., Baker Hughes Oil and Total Rig Count at 12:00 P.M., Cattle and Cattle on Feed at 2:00 P.M.
On the corn front there was a pullback on the U.S. dollar that made U.S. products more attractive to foreign purchasers. And whispers are abound that China is not yet done buying U.S. Ag products. Meanwhile crop conditions in 18 major states held steady from a week earlier, which was better than trade expected. Temperatures are expected to heat up this weekend with scattered showers across the Plains and Upper Midwest, with more rains forecasted next week in a wider range of the Corn Belt. This should be very conducive to the corn crop at this stage in the game. In the overnight electronic session the December Corn is currently trading at 335 ¾ which is a ¼ of a cent lower. The trading range has been 337 ½ to 335 ¼.
On the Ethanol front Eric Pfeiffer with Hoosier Ag Today reported that Indiana ethanol plants were running at 60%-65% production. Helena Jette, director of biofuels for Indiana Marketing Council said, I think a lot of plants are making sure they are going to ease back into production and as those profit margins and as the traffic picks up.” Needless to say the producers are playing their hand cautiously. Ethanol demand is improving, and at the height of shutdowns in April, gasoline demand was down 55% year over year. Jette also said it is a bit better now. In the overnight electronic session we saw more rollover activity albeit 1 contract with the August and September contracts trading at even money. The August contract is last at 1.114 which is .030 lower. The market is currently showing 1 bid @ 1.030 and 1 offer @ 1.230 with Open Interest at 47 contracts.
On the Crude Oil front the market is inching up ever so slowly, while traders want to see a move to the upside but this week’s inventory numbers changed that tune. There are still prospects of demand increasing are good, but traders are looking over their shoulders for possibly more city and state lock down phases. In the early going it looks like traders do not wish to carry a heavy short position over the weekend. In the overnight electronic session the September crude oil is currently trading at 4131 which is 24 points higher. The trading range has been 4167 to 4072.
On the Natural Gas front we had a nice rally in the market after the EIA Gas Storage number. Other news is that EU officials have warned Turkey not to pursue a survey mission for gas reserves near the Greek islands in the eastern Mediterranean. Greece and Cyprus have accused Turkey of undermining their sovereignty by continuing to pursue energy resources in their territorial waters. This comes at a time when Turkey’s, U.S. natural gas imports are growing. In the overnight electronic session the August natural gas is currently trading at 1.768 which is .017 lower. The trading range has been 1.791 to 1.746.
Have a Great Trading Day!