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 early busy morning with Export Sales, GDP (Q’2), Initial Jobless Claims (25-Jul), Jobless Claims 4-Week Average, PCE Prices QoQ Adv (Q-2), Core PCE Price QoQ Adv (Q-2) and Continuing Jobless Claims (18/Jul) at 7:30 A.M., EIA Gas storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M.
On the Corn Front the futures fell for a fourth straight session Wednesday as mild weather accompanied with rain is favoring prospects for a large harvest, Julie Ingwersen wrote on her daily update on the trading session. The weather is playing a key factor with prospects of better yields and the export market picking up with a shrinking U.S. dollar. Many analysts believe the next two weeks of near-normal temperatures with rains will be beneficial to the crops development. Funds remain short and we may see more selling pressure, unless we have a better than expected Export Sales data which analysts are already expecting signs of a solid number. In the overnight electronic session the December corn is currently trading at 326 ¼ which is unchanged. The trading range has been 328 to 326 ¼.
On the Ethanol front the energy Information Administration (EIA) reported that production averaged 958,000 barrels a day which was up 50,000 on the week, but 73,000 barrels below last year because of lower demand caused by the pandemic and poor margins for producers. Blending demand was modestly higher, but also considerably lower than a year ago. Stocks were up 471,000 barrels more than last week three and a half year low of 20.272 million barrels, but that is still 4.196 million barrels less than last year because of the slowdown in production. The next USDA corn for ethanol use is Wednesday August 12, with Crop Production USDA Supply/Demand, WASDE and EIA Energy Stocks data all out on the same day. There were no trades posted in the overnight electronic session. The September contract settled at 1.111 and is currently showing 3 bids @ 1.030 and 1 offer @ 1.180 with Open Interest at 69 contracts.
On the Crude Oil front we had a bullish EIA number for crude oil and not so much for products. We are trading lower at the moment with Tropical Storm Isaias cone changing in the latest forecast, which has its path moving right through the state of Florida and moving up the Eastern Coast with minimal if any chance to enter the Gulf of Mexico. As we have seen in the past these storms are very unpredictable and could change course in an eyelash blink in a moment. But that is the prediction for now, until we got the latest update from the National Hurricane Center’s tracking of the storm. And now we are seeing risk off come into play, we are still not out of the woods in this active hurricane season with a new Disturbance located about 300 miles south-southeast of the Cabo Verde Islands which has become more concentrated this morning, and could develop further in the next day or two and at the current time has a 20% chance of Cyclone Formation. In the overnight electronic session the September crude oil is currently trading at 4043 which is 84 points lower. The trading range has been 4139 to 4034.
On the Natural Gas Front we have the EIA Gas Storage this morning. I also had a chance to speak with some of my producers or boots on the ground regarding the Seeking Alpha story written by Mr. Balan regarding the cycle change to the upside until at least February. They countered that that may be true by February but prices in this commodity could go in the negative by September, with declines in orders still rampant and the fears of not if but how many cancellation of existing orders there will be. As my guys said anything is possible but they are still in fear of their margins. In the overnight electronic session the September natural gas is currently trading at 1.907 which is .023 lower. The trading range has been 1.928 to 1.908.
Have A Great Trading Day!