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 Export and Import Prices YoY & MoM (AUG) NY Empire State Manufacturing Index (SEP) at 7:30 A.M., Industrial Production YoY & MoM (AUG), Manufacturing Production YoY & MoM (AUG), and Capacity Utilization (AUG) at 8:15 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., NOPA Crush at 11:00 A.M., 20-Year Bond Auction at 12:00 P.M., API Energy Stocks at 3:30 P.M., and the start of the FOMC Meeting.
National Hurricane Center Advisory 16 for Hurricane Sally updated at 4:00 A.M. this morning. Dangerous Storm Surge Warning is in effect from the Mouth of the Mississippi to the Okaloosa/Western County Line in Florida. Mississippi to Florida and up in the Carolina’s are bracing for historic flooding with the arrival time within the next two to three days. Disturbance 1 is expected to meander over the Southern Gulf of Mexico for the next several days and at the moment is a low threat to materialize into a big storm. Hurricane Paulette is moving northeast at 17 knots and the cone has it missing the North American Coastline and heading back out to the Atlantic. Post Tropical Storm Rene has dissipated overnight, while Tropical Storm Teddy current cone has in moving west-northwest towards Bermuda, Tropical Storm Vicky off the coast of Africa is moving northwest at 8 knots, the current cone has it posing a threat to Puerto Rico and the Dominican Republic next week. Disturbance 2 off the coast of Africa has a 50% chance of Cyclone Formation in 48 hours and is a few hundred miles south-southeast of the Cabo Verde Islands. And Disturbance 3 located over the northeast Atlantic Ocean several hundred miles northeast of the Azores. The forecast has it moving south-southeastward the next few days and encounter warmer oceanic temperatures and could gain more strength.
On the Corn front, the UADA reports that it dropped the corn good-to-excellent rating to 60% down from 61% last week. Iowa’s good-to-excellent rating dropped 1 percentage point as well to 42% in contrast to Minnesota’s good-to-excellent rated 76%. Meanwhile, 89% of the nation’s corn is in the dent stage vs. 82% five-year average. The USDA pegged the U.S. corn as 41% mature vs. the five-year average of 32%. As of Sunday, 5% of the U.S. corn crop has been harvested equal to the five-year average. Mike McGinnis with Successful Farming supplied the numbers. In the overnight electronic session, the December corn is currently trading at 368 which is 1 ½ cents lower. The trading range has been 369 ½ to 367 ½. The market is trying to punch through season highs while China continues to buy, cooler weather and Funds remain long.
On the Ethanol front, Rebecca Beitsch with The Hill reports the EPA delivers a win to the ethanol industry angered by waivers given to refiners. The EPA chose not to challenge a 10th Circuit Court of Appeals decision that found its economic hardship waiver shortcut national goals for ethanol use. This was a win for the industry hard hit with the trade war with China and the COVID-19 pandemic. There were no trades posted in the overnight electronic session. The October ethanol settled at 1.306 and is currently showing 1 bid @ 1.220 and 1 offer @ 1.340 with Open Interest at 42 contracts.
On the Crude Oil front, the International Energy Agency changed their supply and demand numbers putting a more bullish spin on things which is adding strength to the crude oil market. We also have the API numbers at 3:30 P.M. today and the numbers should be interesting as we look ahead to the damage and disruptions Sally will cause just after recovering from Hurricane Laura. In the overnight electronic session the October crude oil is currently trading at 3775 which is 49 points higher. The trading range has been 3802 to 3706.
On the Natural Gas front, the market is in a wild chop as traders contemplate, will this slow moving storm cause demand destruction wiping out electricity and other uses for natural gas, or will Sally cause major disruptions to pipelines and refineries. In the overnight electronic session, the October natural gas is currently trading at 2.321 which is .011 higher. The trading range has been 2.347 to 2.275.
Have A Great Trading Day!