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 last day of August with Fed Clarida Speech at 8:00 A.M., Dallas Fed Manufacturing Index and Fed Bostic Speech at 9:30 A.M., Export Inspections at 10:00 A.M., 3-Month and 6-Month Bill Auction at 10:30 A.M., and Crop Progress at 3:00 P.M.
We are still evaluating Laura’s damage with early news that most refinery damage was minimal, however, Lake Charles, Louisiana, it is still to early and dangerous to get a real hands on assessment with flooding and power outages still a major problem. Lake Charles has three refineries, Calcasieu Refining Co., Pelican Refining Company and Citgo Lake Charles, as more depressions and further danger is churning in the Atlantic. Too early to say if some of these storms will in fact threaten the Gulf but the thought is in the back of every person’s mind.
On the Corn Front we have Export Inspections and Crop Progress, I am not expecting the USDA to paint a better picture than the scouts in last weeks crop tours told us. What the market will be trying to guess what areas soaked up the minimal rains and we are aware of the drier areas there is less disease but a lot of unfinished ears because of a hot June and July. In the overnight electronic session the December corn is currently trading at 364 which is 4 ¾ cents lower. The trading range has been 364 ¼ to 359 ¼.
On the Ethanol front as mentioned on Friday Rep. Adrian Smith and Rep. Darin LaHood of Illinois, along with 20 other colleagues, wrote a letter to United States Trade Representative Robert Lighthizer, requesting he work to terminate Brazil’s use of a trade rate quota on U.S. ethanol. Smith a senior member of the Ways and Means Committee, which has jurisdiction over trade, and is a member of the Biofuels Caucus. They are just asking for an even playing field. Last year Brazil set an import quota of 198 million gallons and implemented a 20% tariff on each gallon above that, while they are tariff free. One way or another you see a game-changer here. Either Brazil lifts those tariffs or the U.S. will apply tariffs, to the chagrin of the Brazilian sugar cane farmer. There were no trades posted in the overnight electronic session. The September contract settled at 1.289 and is currently showing 1 bid @ 1.299 and 0 offers with Open Interest dropping to 32 contracts.
On the Crude Oil front there are three Tropical Disturbances in the Atlantic with a 4th moving off the coast of Africa. These storms are destined to make a splash later this week, and the only question right now is… Where? We are still working on the havoc Laura left in her path in Louisiana and Texas. The people are hoping not to have a repeat so soon in this predicted active hurricane season The market is still trying to gather the impact of all of the disruptions last week’s storms caused and may be forced back into defensive posture this week. In the overnight electronic session the October crude oil is currently trading at 4342 which is 45 points higher. The trading range has been 4357 to 4290.
On the natural Gas front we saw some profit taking early but as the reality of the next round of storms heading this way could send prices gravitating higher again. In the overnight electronic session the October natural gas is currently trading at 2.627 which is .030 cents lower. The trading range has been 2.650 to 2.599.
Have A Great Trading Day!