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 Initial Jobless Claims, Initial Jobless Claims (10/OCT), Jobless Claims 4-Week Average (10/OCT), NY Empire State Manufacturing Index (OCT), Philadelphia Fed Manufacturing Index (OCT), Continuing Jobless Claims (03/OCT) at 7:30 A.M., EIA Natural Gas Storage at 9:30 A.M., EIA Energy Stocks and Fed Quarles Speech at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Dairy Product Sales at 2:00 P.M., FedKashkari Speech at 4:00 P.M., and IMF/World Bank Virtual Annual Meeting.
On the Hurricane Storm Tracking Front, the National Hurricane Center has Disturbance 1 with the same west-northwestward movement but has lowered it to a 10% chance of Cyclone Formation in the next 48 hours. This update is as of Wednesday October 14th at 1:00 P.M. CST. We will keep you posted.
On the Corn Front nice gains more corn and soybean purchases from China. Their Dalian Commodity Exchange made a new record in prices in yesterday’s action, while managed funds were net-buyers and scooped up 7,000 contracts of corn with their estimated position net-long 171,000 contracts of corn contracts. We will have a better education of Chinese and Mexican buying in tomorrow’s Export Sales report, delayed a day because of the Columbus Day holiday on Monday. In the overnight electronic session, the December corn is currently trading at 396 ½ which is unchanged. The trading range has been 400 to 395 ¼.
On the Ethanol Front more good news for ethanol producers as they struggle, scratch and claw ways to find alternative solutions that can be used for ethanol, whether high-grade alcohol for disinfectants and hand sanitizers but other bio-fuels to maximize other uses the industry can capitalize on, other than fuel for gas. But the news is global market for ethanol is projected to reach $105.2 billion U.S. by 2025. This is great news for the ethanol industry and the U.S. which is already set it’s sights on Canada which is pushing for even lower greenhouse gas emissions. This may spread globally and that would create a golden opportunity for corn and ethanol export market. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.430. The market is currently showing 1 bid @ 1.401 and 0 offers with Open Interest at 69 contracts.
On the Crude Oil Front big draws on the API’s were the name of the game in yesterday’s action, while the market was clamoring to see how soon the forecasted disruptions would show up in the numbers. With the Disruptions of Hurricane Laura six weeks ago and Delta still fresh in our minds. The crude draw was -5.422M, Gasoline -1.513M, Distillates -3.930M, and Cushing, Oklahoma had builds of +2.199M. This morning we will have the EIA Energy Stocks at 10:00 to back these numbers up. The market is down this morning and the culprit is the International Energy Agency (IEA) and OPEC suggesting that oil demand growth could be weaker than anticipated. This comes at a time when China’s refineries are geared up for another buying spree. I can understand OPEC wanting to keep the unity with production cuts, especially with Libya’s largest oil field back online. But the (IEA) paints a different picture and their usually way off wrong, it’s the old adage, “if you can’t be good be consistent.” And the IEA is consistently inconsistent. In the overnight electronic session, the November crude oil is currently trading at 3975 which is 129 points lower. The trading range has been 4129 to 3970.
On the Natural Gas Front after yesterday’s selloff we are higher today with cooler temperatures and frost warnings tonight forecasted that may stick around for a while. We have the EIA Natural Gas Storage at 9:30 A.M., and the Thomson Reuters weekly poll supplied by Scott DiSavino who expects the numbers to vary with pre-Hurricane Delta landfall that had energy firms in shut-in mode about 62% of their offshore Gulf of Mexico production. The poll with 14 analysts participating estimate increases ranging from 46bcf to 74bcf with the median injection 55bcf. This compares to the one-year injection of 92bcf and the five-year average of build of 75bcf. In the overnight electronic session, the November natural gas is currently trading at 2.752 which is 0.116 higher. The trading range has been 2.780 to 2.639.
Have A Great Trading Day!