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 MBA Mortgage Applications (02/OCT), and MBA 30-Year Mortgage Rate (02/)CT) at 6:00 A.M., Fed Barkin Speech at 9:00 A.M.,EIA Energy Stocks at 9:30 A.M., 105-Day and 154-Day Bill Auction at 10:30 A.M., 10-Year Note Auction at 12:00 P.M., FOMC Minutes and Fed Williams Speech at 1:00 P.M., Fed Kashkari Speech at 1:15 P.M., Fed Williams Speech and Consumer Credit Change (AUG) at 2:00 P.M., Fed Evans speech at 3:30 P.M., and the Vice Presidential Debate at 8:00 P.M.
On the Hurricane Front, Hurricane Delta will affect portions of the Cayman Islands, western Cuba, and the northern Yucatan Peninsula through midweek. Texas will feel the path in their eastern coastline which could disrupt the Houston Shipping Channel. While life threatening storm surge and dangerous hurricane-forced winds, especially along the coasts of Louisiana and Mississippi beginning Friday. Further storm surge and hurricane watches will be issued today for portions of the northern Gulf Coast.
On the Corn Front the market rallied on talk of lower U.S. supply and higher export demand. Dry weather in Argentina, Brazil and the Black Sea were supportive. Also, the funds remain net-long and China’s holiday, Golden Week that started last Friday October 1st, still had rumors persist that China was buying U.S. corn and soybeans yesterday. Hot and dry weather in the Corn Belt the rest of the week should ramp up harvest to even better numbers. There is also a story that there may be delays in opening the Illinois River’s, Peoria Lock and Dam to navigation, which could disrupt grain flows according to Allen a. Marshall, a spokesman for the U.S. Army Corps of Engineers. In the overnight electronic session, the December corn is currently trading at 388 ½ which is 3 ½ cents higher. The trading range has been 389 to 384.
On the Ethanol Front not a whole lot of new headlines as the market prepares for this morning’s EIA Energy Stocks and brace for Friday’s USDA data for corn to ethanol use. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.381 and is currently showing 4 bids @ 1.380 and 1 offer @ 1.395 with Open Interest at 68 contracts.
On the Crude Oil Front, a surprise build of 951,000 barrels on the API Energy Stocks with expectations of only a 400,000 build and Cushing stocks rose 749,000 barrels just sunk crude oil prices. Two game changers are in place and that is this morning’s EIA Energy Stocks data and following Hurricane Delta. If we see a more bullish report, we will see short-covering and if the National Hurricane Center updates get worse as at the moment Hurricane Delta is projected to be a Category 3 when it makes landfall. In the overnight electronic session, the November crude oil is currently trading at 3980 which is 87 points lower. The trading range has been 4035 to 3942.
On the Natural Gas Front global markets are racing to fossil fuels to replace coal and more countries are transitioning their electric grids from coal to gas. They will need mote capabilities to liquify the gas for exports abroad to make it safer which will cost huge in investments, but well worth the outcome. The world’s most accessible natural gas deposits are in a handful of countries, the U.S., Russia, Iran, and Qatar. Qatar seems to be winning the race at the moment. A recent Woods Mackenzie analysis expects demand to double from now and 2040. Tim McDonnell, Climate reporter with Quartz supplied the information. The market is currently feeling the fears of the hurricane and the prices show it with the November natural gas currently trading at 2.573 which is .074 higher. The trading range has been 2.599 to 2.466.
Have a Great Trading Day!