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 Redbook MoM and YoY at 7:55 A.M., Market Manufacturing PMI Final (AUG) at 8:45 A.M., ISM Manufacturing New Orders (AUG), ISM Manufacturing Prices (AUG), ISM Manufacturing Employment (AUG), ISM Manufacturing PMI (AUG) and Construction Spending at 9:00 A.M., 119-Day & 42-Day Bill Auction at 10:30 A.M., Fed Brainard Speech at 12:00 P.M., Cotton System, Fats & Oils, and Grain Crushings at 2:00 P.M., API Energy Stocks at 3:30 P.M. and Total Vehicle Sales at 7:00 P.M.
We are tracking Disturbance 1 which is the sixteenth tropical storm this active hurricane season. Rains are expected in Jamaica today and interest there, as well as northern Nicaragua, Honduras, Belize, Guatemala and the Yucatan Peninsula. It has an 80% chance to be a tropical cyclone and last known direction it was headed was westward. An Air Force Reserve reconnaissance aircraft is currently en route to fyrtehr investigate the Disturbance.
On the Corn Front the corn dropped to a 1 week low due to a better than expected crop rating from the USDA, easing concerns of yield losses. The good-to-excellent rating dropped to 2% points from last week and pegged at 62%, but above average expectations of a Reuters survey with 11 analysts participating. Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney said, “the rally in corn was largely fund driven,” he continued, “ the world has plenty of corn, there are no shortages.” That’s a lot to digest heading into the Labor Day weekend that we have to take into consideration. More Chinese buying? More fund selling and harvest beginning in some states. In the overnight electronic session the December corn is currently trading at 353 ¾ which is 4 cents lower. The trading range has been 357 to 351.
On the Ethanol Front the September contract is now very thin with Open Interest at 11 contracts, so it is time to roll to the October contract which posted no trades and settled at 1.320 and is currently showing 1 bid @ 1.090 and 2 offers @ 1.330 with Open Interest at 42 contracts. The University of Chicago has said it found a new catalyst that can make ethanol out of carbon dioxide and I will be researching this project further, while ePure members said they produced 5.6 billion litres of ethanol in 2019.
On the Crude Oil front we have the API Energy Stocks today, and I am expecting the unexpected with forecast numbers to be all over the place, given the storms disruptions the past weeks. We are also following Disturbance 1 to se what path it charts after reaching the Yucatan Peninsula In the overnight electronic session the October crude oil is currently trading at 4307 which is 46 points higher. The trading range has been 4323 to 4277.
On the Natural Gas front prices have turned lower with cooler temperatures pushing futures down 1& following the rapid climb starting two months ago with hot temperatures having air conditioners working overtime and mergers and acquisitions of several companies, which historically means there are better times ahead for this industry. Although, the low prices are forcing producers to strip out cost and squeeze cash from each well. In the overnight electronic session the October natural gas is currently trading at 2.580 which is 8 cents lower. The trading range has been 2.675 to 2.568.
Have A Great Trading Day!