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 of the day with IMF/World Bank Virtual Annual Meeting with First Notice and Last Trading Day on October Gasoil. Reports will be quiet today as Canada celebrates their Thanksgiving and the U.S. celebrates Columbus Day a Federal holiday.
On the Hurricane Delta aftermath, the hurricane shut power and topples equipment at U.S Gulf refineries and closed oil-export ports as its destructive winds and storm surge reached far from its center. 700,000 homes and businesses in three Gulf Coast states were without power on Saturday after Delta made landfall as a Category 2 hurricane with winds of 100 mph near Creole, Louisiana. Total S.A., Valero, and Motiva Enterprises has operations problems from lost power, to losing cooling towers and other shutdowns. Total quickly launched efforts to restart their oil processing plants and the three companies did not reply to request for comment. Which means they have boots on the ground assessing damage and moving to get operational again. Royal Dutch Shell, Convent, Geismar, and Norco, Louisiana were operating normally. The other Louisiana refineries were close to the storm track were shut down for maintenance work after Hurricane Laura six weeks ago. Those plants are operated by Citgo Petroleum and Phillips 66. Oil and petrol chemical ports from Beaumont, Texas to Lake Charles, Louisiana, were shut to commercial vessels and remained closed on Saturday. Houston and Galveston were operating normally, according to the U.S. Coast Guard. We will be passing on information as we receive it.
On the Corn Front Friday’s USDA Supply/Demand report showed U.S. corn ending stocks were ar 2.167 which was slightly higher than estimates but well below September’s number. Same story for world ending stocks which was a tad higher than estimates but well below September. U.S. production (on billions of bushels) came in at 14.72 with expectations of 14.81 and September coming in at 14.9 while U.S. yields came in at 1.78.4 bushel per acre with estimates at 177.7 (bpa) and September coming in at 178.5 (bpa). With this balance sheet, with bullish numbers for soybeans as well, and no change in South American corn or soybean production or exports while China to buy, this is going to be an interesting 2020/21 year in grains. In the overnight electronic session, the December corn is currently trading at 398 ¾ which is 3 ¾ cents higher. The trading range has been 399 ¼ to 394.
On the Ethanol Front the WASDE lowers forecasts for 2020/21 use for ethanol. Forecasts for corn production, feed and residual use, and ending stocks were also lowered. Corn used for ethanol is down 50 million bushels, based on weekly ethanol production date as reported by the EIA. There should be more headlines we can sink our teeth into after the November 19th USDA report, which is one week after the U.S. Presidential election. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.400 and is currently showing 1 bid @ 1.375 and 1 offer @ 1.450 with Open Interest at 71 contracts.
On the Crude Oil Front, the market is feeling the pressure this morning on three fronts. With the Norwegian Oil and Gas Association announcing the end of a strike that derailed 8% of Norways product and threatened to shutter its largest oil field. Success in mediation talks ended the dispute at the heart of the disruption. Also pressuring the market is news Libya will reopen Sharara, its largest oil field while U.S. operations in the Gulf of Mexico also started to return online having been shut thanks to Hurricane Delta. In the overnight electronic session, the November crude oil is currently trading at 3898 which is 62 points lower. The trading range has been 4045 to 3980.
On the Natural Gas Front this market is still doing damage control as Hurricane Delta really hit refineries in Louisiana. As I wrote before not many companies are answering inquiries as the boots on the ground face hazardous conditions and are still very much in harm’s way. We will keep you updated as we receive new and current information. In the overnight electronic session, the November natural gas is currently trading at 2.894 which is 0.153 higher. The trading range has been 2.955 to 2.881.
Have A Great Trading Day!