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 NFIB Business Optimism Index (OCT) at 5:00 A.M., Redbook MoM and YoY (07/Nov), IBD/TIPP Economic Optimism (NOV), and JOLTS Job Openings (SEP) at 9:00 A.M., Crop Production USDA Supply/Demand and WASDE reports at 11:00 A.M., 10-Year Note Auction at 12:00 P.M., Fed Quarles Testimony at 1:00 P.M., API Energy Stocks at 3;30 P.M., and Fed Brainard Speech at 4:00 P.M.
On the Hurricane Front Tropical Storm Eta heavy rainfall will continue across portions of Cuba, the Bahamas, and southern Florida and spread north to central Florida. Eta’s current cone updated at 3:00 P.M. CDT Monday has the storm on a direct path with the Florida Panhandle and could regain hurricane strength in the Gulf of Mexico. This storm will be closely monitored in the next several days with possible Tropical Storm impacts moving west to Louisiana and Texas. Other models have the storm moving east once landfall is made in the panhandle region. We also have Disturbance 1 to contend with located several hundred miles southwest of the Azores and has an 80% chance to form a hurricane in 48 hours. The storm is moving east-northeast over the northeastern Atlantic Ocean.
On the Corn Front there are whispers that the USDA could drop the World corn crop today, increase U.S. exports, increase China corn imports, and lower U.S/World end stocks that supported a close above $4 in yesterday’s trading action. The vaccine news was also a shot in the arm for corn and other food products along with fuel demand expecting to see a rise in 2021 which added further support. Funds stepped in and bought 1,000 more corn adding to their estimated net-long position roughly at 302,000 contracts. We also have a cold front in the Plains moving east and bringing back November like temperatures as early as tonight in the Midwest. The corn harvest has been pegged at 91% done. In the overnight electronic session, the December corn is currently trading at 410 ½ which is 3 cents higher. The trading range has been 411 ½ to 406 ¼.
On the Ethanol Front we will see corn for ethanol use in today’s USDA report. Pacific Ethanol is in the news again announcing it has entered into an agreement with Liberty Basin LLC to sell 134 acres, rail loop and grain handling at its Magic Valley plant in Burley, Idaho for $10 million in cash. Pacific Ethanol will retain the ethanol production facility and terminal on the 25 remaining acres and will enter into certain agreements with Liberty Basin LLC for delivery of grain to the plant. The sale is expected to close on or before November 30, 2020, subject to customary closing conditions. There were no trades posted in the overnight electronic session. The December contract settled at 1.400 and is currently showing 0 bids and 3 offers @ 1.449 with Open Interest at 39 contracts.
On the Crude Oil Front the keys to the market today are… will the vaccine rally continue or run out of steam? Is the Gulf of Mexico way behind on repairs for energy traffic with another disruption heading their way? And how will the API count the shortages of barrels? I just hope they can count barrels better than several states can count votes. Other news India has invited foreign oil firms to invest in its Strategic Petroleum Reserve and this could be another game seizing moment for the U.S. crude and natural gas exports depending how we can meet eye to eye. In the overnight electronic session, the December crude oil is currently trading at 4062 which is 33 points higher. The trading range has been 4102 to 3941.
On the Natural Gas front yesterday’s action has started a little bump to the upside this morning. With Tropical Storm Eta, November like temperatures heading our way and more investment India is pursuing must be supportive to this market in the early going. In the overnight electronic session, the December Natural gas is currently trading at 2.890 which is .031 higher. The trading range has been 2.912 to 2.860.
Have A Great Trading Day!