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 Sales, Initial Jobless Claims (03/OCT), Jobless Claims 4-Week Average (03/OCT), and Continuing Jobless Claims (26/SEP) at 7:30 A.M., EIA Gas Storage at 9:30 A.M., 4-Weekk and 8-Week Bill Auction at 10:30 A.M., 30-Year Bond Auction at 12:00 P.M., Fed Barkin Speech at 1:30 P.M., and Fed Kaplan Speech at 5:00 P.M.
On the Hurricane Front, Advisory #13 was delivered at 4:00 P.M. C.D.T. from the National Hurricane Center, winds, and water levels along the northern coast of the Yucatan Peninsula will gradually subside this evening. Heavy rainfall, which could lead to significant flash flooding will affect the Yucatan Peninsula through early Thursday. Hurricane Delta is expected to grow as it approaches the northern Gulf Coast, where life-threatening storm surge and dangerous hurricane-forced winds are likely to begin tomorrow, particularly for portions of the Louisiana Coast. Storm and Hurricane watches are in effect, and residents should follow advice given by local officials. Flash urban, small stream and moderate river flooding is likely Friday and Saturday from portions of the central Gulf Coast into portions of the Lower Mississippi Valley. As Delta moves inland, additional heavy rainfall is expected in the Ohio Valley and Mid Atlantic this weekend.
On the Corn Front the market continues to roll heading into today’s Export Sales and tomorrows USDA Crop Production Supply/Demand data. The current weather should be conducive for harvesting, but barge traffic and navigation on the Illinois River and the Mighty Mississippi may hinder product getting to their destination. More dry temperatures are expected in the Corn Belt; however, Hurricane Delta could slow the eastern portions with heavy rains. In the overnight electronic session, the December corn is currently trading at 391 which is 2 ¼ cents higher, the trading range has been 391 ½ to 388 ¼.
On the Ethanol Front we are seeing the pandemic make ethanol facilities more aware and shifting focus from fuel ethanol to high-grade alcohol for hand sanitizers. In recent months we have seen Pacific Ethanol, Green Plains and Highwater Ethanol move to meet that demand with the crunch of demand for fuel due to COVID-19. These companies restructuring has kept them afloat and, in some cases, profitable, through these rough times of the pandemic. They realized ethanol to the gas tanks only, was not an easy proposition to stay alive. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.376 and is currently showing 1 bid @ 1.100 and 1 offer @ 1.395 with Open Interest at 76 contracts.
On the Crude Oil Front, the market is trading in a full risk category as repairs not even close to being done from the previous tropical storm activity. Offshore Oil Rigs never had a chance to get back to half-speed, and now Hurricane Delta is exposing the worst fears in producers and suppliers. In the overnight electronic session, the November crude oil is currently trading 4050 which is 55 points higher. The trading range has been 4062 to 3976.
On the Natural Gas Front, the market is easing off the highs made in yesterday’s action. Traders started taking profits later in the session and we have followed through in the overnight session. Traders were thinking ahead of this morning’s EIA Gas Storage data at 9:30 A.M. The weekly Thomson Reuters poll supplied by Scott DiSavino and company who polled 15 analysts, who estimate increases of 67bcf to 85bcf with the medium injection of 73bcf. This compares to the one-year injection of 102bcf and the five-year average of 87bcf. Regardless of the actual number, all eyes will be focused on Hurricane Delta and we may see short sellers and/or profit takers start to buy again. In the overnight electronic session, the November natural gas is currently trading at 2.540 which is .066 lower. The trading range has been 2.620 to 2.530.
Have a Great Trading Day!