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 Fed Williams speech at 6:00 A.M., Export Sales, Fed Bullard Speech, PPI MoM & YoY, Core PPI YoY & MoM at 7:30 A.M., Michigan Current Conditions Prel (NOV), Michigan Inflation Expectations Prel (NOV), Michigan 5-Year Inflation Expectations Prel (NOV), Michigan Consumer sentiment Prel (NOV), Michigan Consumer Expectations Prel (NOV) and Fed Harker Speech at 9:00 A.M., EIA Has Storage at 9:30 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.
On the Hurricane Front now Hurricane eta made her way through Florida and now is moving north in the Atlantic is expected to kiss the Carolina’s Coastline and set a straight northeast pattern in the Atlantic. Tropical Storm Theta which is off the coast of Africa with maximum sustained winds at 50 knots. Depression 1 should have traders’ attention, having a 90% chance of Hurricane in 48 hours. It is located over the central Caribbean Sea and has become better organized. The is moving slowly westward with additional development of this system over the weekend. Honduras and Nicaragua should monitor this Disturbance, and we will keep an eye on it also.
On the Corn Front the December contract settled 8 ¾ cents lower in yesterday’s action with no Export Sales either yesterday and the market has been all the buzz about U.S. Ag products moving at an amazing clip. With lack of more timely encouraging bullish news which a bull market needs and can’t miss a meal, the corn sold off and the funds obliged by lightening their net-long positions by 5,000 corn positions. In the overnight electronic session, the December corn is currently trading at 407 ½ which is ¾ of a cent lower. The trading range has been 409 to 403 ¾. Let’s hope the Export Sales data have $4 corn hold.
On the ethanol Front the U.S. ethanol production and stocks hit multi-month highs last week. The EIA said production averaged 977,000 barrels per day (bpd), up 16,000 on the week and highest average since the lockdowns were beginning and limiting blending demand, but blending’s were down 37,000 for the year. Stocks were gained 484,000barrels from the previous week to 20.2 million, the biggest reserve since August but again down on the year. The RFA said blender imports and amount of gasoline supplied to the market was up on the week. Ethanol imports to the West Coast averaged 68,000 (bpd) the highest average since mid-September. The USDA expects 5 billion bushels of corn to be used for ethanol production this year, with the next estimate out December 10th. There were no trades posted in the overnight electronic session. The December ethanol settled at 1.45 and is currently showing 1 bid @ 1.360 and 2 offers @ 1.430 and Open Interest at 46 contracts.
On the Crude Oil Front the market is struggling with the Covid-19 upswell with lockdowns and U.S. fiscal deadlock on relief checks. Optimism with the vaccine has been welcomed but the renewed lockdowns stopped the celebration in its tracks. All traders will be watching Disturbance 1 as inches ever so closer to the Gulf of Mexico. In the overnight electronic session, the December crude oil is currently trading at 4039 which is 73 points lower. The trading range has been 4094 to 4016.
On the Natural Gas Front the news San Francisco bans natural gas in new buildings leaves some questions. Will electricity companies follow the move and end up getting sued by the state because of lack of power generated and a weaker power grid? Will politicians take the blame when air-conditioners do not work? That’s an easy one. We have the EIA Gas Storage data and Thomson Reuters polled 14 analysts with estimations ranging from a withdrawal of 12bcf to an injection of 5bcf with the median decrease of 3bcf. This compares to the one-year decrease of 66bcf and the five-year average withdrawal of 24 bcf. In the overnight electronic session, the December natural gas is currently trading at 3.024 which is .048 higher. The trading range has been 3.031 to 2.949. This market will be watching Disturbance 1 over the weekend and it could be very well a Tropical Storm or Hurricane over the weekend.
Have A Great Trading Day!