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 kickoff this morning with Redbook YoY & MoM (Jul) at 7:55 A.M., S&P/Case-Shiller Home Price Index YoY & MoM at 8:00 A.M., Consumer Confidence (Jul) and Richmond Fed Manufacturing Index (Jul) at 9:00 A.M., 120-Day and 42-Day bill Auction at 10:30 A.M., 7-Year Note and 2-Year FRN Auction at 12:00 P.M., API Energy Stocks at 3:30 P.M. and the start of the FOMC Meeting today.
On the Corn Front the USDA Crop Production gave corn a boost of 3% to 72% good to excellent from last weeks 69%. And 82% of the nation’s corn silking versus a 75% five-year average. Hoosier Ag Today reported the recent rains brought needed relief to corn and soybeans, with increasing topsoil and subsoil moisture significantly from last week. Ohio’s Country Journal-Ohio Ag Net reports that rains haves and have-nots showing up in their state. This brought an easing of prices in the overnight electronic session. We are now currently trading at 331 which is 3 ½ cents lower. The trading range has been 332 ½ to 330 ½.
On the ethanol front many members of Congress from both sides of the aisles are pushing for inclusion of emergency relief aid for ethanol producers in the COVID-19 stimulus bill which is currently working through the Senate. Lawmakers are aware that they already provided and the USDA distributed billions of financial aid to other segments in the agriculture sector. Producers from the pork and beef industries, to cotton, wheat, asparagus, cilantro and rhubarb have received help but the ethanol producers have been left out. This damage has come after the feud with the oil industry regarding blending requirements. Lets hope the lawmakers can brush aside politics and pork barreling and get relief to those who need it. There were no trades posted in the overnight electronic session. The September ethanol settled at 1.115 and the market is currently showing 3 bids @ 1.030 and 1 offer @ 1.160 with Open Interest at 65 contracts.
On the Crude Oil front the market has been trading from the positive to the negative in the overnight electronic session. Today’s API Energy Stocks may or may-not include disruptions in production from Hurricane Hanna but traders are aware there could be a shock number. We are also watching Disturbance 1 in the Atlantic that is now about 500 miles east of the Winward Islands, producing a wide area of showers and thunderstorms. Recent satellite imagery suggest the system does not yet have a well defined center, but data from NOAA buoy 41040 indicate the system is producing winds near tropical-storm-force. An Air Force Reserve Hurricane Hunter aircraft is scheduled to investigate later this afternoon. If the storm becomes a Tropical Wave the name will be Isaias with the current track has it headed towards the East Coast or possibly the Gulf of Mexico. This has been the ninth Disturbance in the Atlantic so early in hurricane season. In the overnight electronic session the September Crude Oil is currently trading at 4143 which is 17 points lower. The trading range has been 4193 to 4126.
On the Natural Gas front Robert P. Balan, Managing Director and CEO of Predictive Analytic Models, wrote in Seeking Alpha that Natural Gas is set to rally until February, citing severe cuts in production due to the COVID-19 pandemic. The sharp decline in supplies is swamping the delta of falling demand. He continued that Natural Gas, the “widow maker,” may begin a new cycle where the upside has begun. In the overnight electronic session the September natural gas is currently trading at 1.844 which is .058 higher and seeking new highs as I write. The trading range has been 1.844 to 1.777.
Have A Great Trading Day!