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 Current Account (Q2) at 7:30 A.M., Michigan Current Conditions Prel (SEP), Michigan Inflation Expectations Prel (SEP), Michigan 5-Year Inflation Expectations Prel (SEP), Michigan Consumer Sentiment Prel (SEP), Michigan Consumer Expectations Prel (SEP), CB Leading Index MoM (AUG), and Baker Hughes Oil & Total Rig Count at 12:00 P.M.
On the Hurricane Front Tropical Depression 22 moving slowly over the Gulf of Mexico and is expected to strengthen to a Tropical Storm, and possibly a hurricane. It is moving north-northwest at 5 knots and is a threat to the Mexico, Texas, and Louisiana coastline. Hurricane Teddy is moving northwest at 10 knots. Teddy is expected to produce large sells to affect portions of the Leeward Islands, the Greater Antilles, the Bahamas, Bermuda, and southeastern United States during the next few days. The current track has it making landfall on the northeastern coastline. And then there is Disturbance 1 which is a few hundred miles southwest of the Cabo Verde Islands which has a 60% chance of Cyclone Formation in the next 48 hours. Disturbance 2 is moving east in the Atlantic and soon move inland over Portugal. Disturbance 3 is post-tropical cyclone Paulette and is located several hundred miles north-northwest of the Azores. It is expected to move south-southwest and redevelop late this weekend or early next week. And another storm is brewing in Africa getting ready to move into the Atlantic.
On the Corn front the U.S. Department of Agriculture has estimated 550,000 acres of Iowa corn will not be harvested this fall due to the damage caused by the Derecho. The estimate released September 11th places the value of the lost corn crop based on yields and price before the storm around $344 million. Corn prices have gone up due to crop losses and farmers will get more money for the corn they do harvest. Most farmers have crop insurance to cover some of the loss and other federal programs may help. In the overnight electronic session, the December corn is currently trading at 377 which is 1 ¾ of a cent higher. The trading range has been 379 ¼ to 373 ¼.
On the Ethanol Front U.S. ethanol stocks are at a multi-week low according to John Perkins with Brownfield Ag News For America. The EIA said production averaged 926,000 barrels a day, down 14,000 on the week and 77,000 on the year as the industry continues to struggle with slower blending demand due to the pandemic. The U.S. Grains Council added, it does not expect ethanol production to return to pre-COVID levels until 2022. The Renewable Fuels Association said the amount of gasoline supplied to the market and blending demand both up on the week, but below last year’s levels. The USDA next corn for ethanol use estimate is October 9th. There were no trades posted in the overnight electronic session. The October contract settled at 1.345 and is currently showing 2 bids @ 1.340 and 2 offers @ 1.360 with Open Interest at 40 contracts.
On the Crude Oil Front the market is trading a little risk off this morning following Hurricane Sally, but there is still a lot of activity in the Gulf of Mexico and the Atlantic to entice buyers back into play, and we could see another crunch in inventory data next week. In the overnight electronic session, the October crude oil is currently trading at 4042 which is 55 points lower. The trading range has been 4149 to 4040.
On the Natural Gas front prices tumbled after a larger than expected build in stockpiles in yesterday’s Gas Storage report. The market is rebounding from the overnight lows and may be trading risk on again with all the storm activity in the refiner’s neighborhood. In the overnight electronic session, the October natural gas is currently trading at 1.968 which is .074 lower. The trading range has been 2.028 to 1.926.
Have A Great Trading Day!