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 New York State Empire Manufacturing Index (NOV) at 7:30 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., NOPA Crush and Fed Clarida Speech at 11:00 A.M., Fed Daly Speech at 12:45 P.M., and Crip Progress at 3:00 P.M.
On the Hurricane Front Post Tropical Storm Theta is off the coast of Africa and moving north at 2 knots which is no longer any threat to the North American Continent. While hurricane IOTA with maximum sustained winds at 80 knots and is moving west at 8 knots. It is expected to rapidly intensify to Category 4hurricane as it approaches Central America and remnants of the storm surge could find its way in the Gulf of Mexico and possibly start another threat. We should know a little more later in the day.
On the Corn Front the December contract settled at 410 ½ in Friday’s action. U.S. farmer selling was the culprit of last week’s selloff. There are expectations of 2021 corn acreage. An Informa estimate for 2021 acreage is pegged at 91.7 million versus 91.0 million this year. Although their estimate was 230,000 acres below their October estimate. The 2021 yield is expected to be near 181.0 versus this year’s 175.8. This could produce a crop near 15,270 million bushels, the USDA was 14.890 (mb). Analyst suggest South America, Ukraine and the U.S. will have to have good 2021 crops/weather or the futures will trade higher next year. U.S. exports sales were near 978 (mt) Friday. U.S. corn commit is near 34.1 (mmt) vs. 12.4 (mmt) last year. Commitment was 673 vs. 451 last year. The usual suspects were the best buyers with Mexico leading the way, followed by China and destinations unknown. Most of the foreign importers are already trying to get a feel for U.S. corn prices in 2021. In the overnight electronic session, the December corn is currently trading at 412 ½ which is 2 cents higher. The trading range has been 412 ¾ to 409.
On the ethanol Front Ron Seeber, president, and CEO of Renew Kansas Biofuels Association, summed up biofuels and results for the races on both the state and federal level, “Kansas is still very much a red state,” noting a win for republican Roger Marshall to take the place of Sen. Pat Roberts, “the state went from red to redder.” Seeber also was asked what his perspective was on biofuels under a Biden administration, his answer was, what their overall policy is going to be, and whether there’s a place for biofuels in that policy and who is appointed head of the EPA. Seeber also noted that a move to more electric cars rather than biofuels would be problematic. In the overnight electronic session, the December ethanol posted a trade at 1.440 which is .040 lower. The market is currently showing 1 bid @ 1.330 and 1 offer @ 1.440 with 4 contracts traded and Open Interest at 40 contracts.
On the Crude Oil Front Felicity Bradstock a freelance writer in Energy & Finance believes the oil industry is set to thrive for decades to come and the reasons are, cutting cost, better data analytics to improve existing systems, new technologies, such as “digital twins”, which provides a 3D simulation so engineers can use and maneuver oil platforms and rigs remotely when they cannot get out of the rig. Oil funds should see record gains in December, they learned a lot about project delays and going over budget due to poor data analytics systems. Also, Moderna early testing on a vaccine show it is 94.5% effective. In the overnight electronic session, the December crude oil is currently trading at 4183 which is 170 points higher. The trading range has been 4202 to4015.
On the Natural Gas Front the market is getting T-Boned like it did in last night’s open. The reasons are Europe’s Green Deal which is bad news for U.S. LNG and November storage builds with mostly mild temperatures had the bulls ducking for cover. Friday’s EIA Gas Storage showed builds of 8bcf. We will be playing weather and temperatures for the next move. In the overnight electronic session the December natural gas is currently trading at 2.790 which is 20 ½ cents lower. The trading range has been 2.887 to 2.784.
Have A Great Trading Day!