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 Export Sales, Fed Mester Speech, Initial Jobless Claims (14/NOV), Jobless Claims 4-Week Average (14/Nov), Philadelphia Fed Manufacturing Index (NOV), Existing Home Sales MoM (OCT) at 7:30 A.M., Existing Home Sales MoM (OCT) at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas Fed Manufacturing Index (NOV) at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Fed Mester Speech at 11:35 A.M., and Fed 10-Year TIPS Suction at 12:00 P.M.
On the Hurricane Front as Iota has moved through Central America another Disturbance in the west-southwestward Caribbean Sea. Currently does not pose a threat to the Gulf of Mexico. But we will keep it on our radar.
On the Corn Front the market traded higher yesterday on whispers of new U.S. corn sales to unknown destinations and some traders believe that unknown may be China. They were actively following prices but did not tender any bids. They seem to be in wait and see mode to get a pullback in prices, but with new highs in the Chinese corn futures they may want to look at their currency and wonder if they are being penny wise and dollar foolish. Also, Russia and the Ukraine domestic corn is at new highs. Funds joined the party and added 7,000 new positions of corn with an estimated net-long position of 261,000 contracts. In the overnight electronic session, the December corn is currently trading at 420 ¾ which is 5 cents lower. The trading range has been 425 to 419 ¼.
On the Ethanol Front the EIA data was pretty close to the forecast. The vaccine talk has some analysts raising next year corn demand for ethanol use as hopes are raised, we will get back to normal next year. As fears grow on the pandemics next round, we see that ethanol companies that reinvented themselves and when the vaccine is released at warp speed unlike some states still counting ballots from two weeks ago, this industry should make a comeback in2021. Weekly ethanol production was down 6% and stocks were down 1% with improved margins. There were no trades posted in the overnight electronic session. The December ethanol settled at 1.420 and the market is currently showing 2 bids @ 1.330 with 0 offers and Open Interest at 36 contracts.
On the Crude Oil Front the December crude oil is set to expire tomorrow so we will rollover to January, which we should be trading this late anyway. The oil crash continues to claim victims with a wave of bankruptcies in the 32d quarter. Oil producers and oil field services companies in the U.S. shale patch continued to file protection from creditors at the start of the 4th quarter. In the oil field sector services, 27 North American companies filed for bankruptcy. Between the beginning of 2015 and the end of October 2020, 250 North American oil field services providers filed for bankruptcy. More bankruptcies are expected by the end of October, said Rystad Energy. And Rystad left us with a sobering prediction, If WTI Crude averages $40 per barrel and Henry Hub price of $3 per MMcf persists in 2021, they expect 54 new bankruptcies. Thanks to Charles Kennedy with Oilprice.com for the statistics and story. In the overnight electronic session, the January crude oil is currently trading at 4169 which is 32 points lower. The trading range has been 4208 to 4126.
On the Natural Gas Front, it is that time of the week for the EIA Gas Storage data. Scott DiSavino with Thomson Reuters weekly poll with 17 analysts participating have estimates ranging from a withdrawal of 22bcf to and injection of 27bcf. This compares to the one-year decrease of 47bcf and a withdrawal of 37bcf on the five-year average. The street seems to be pricing in a negative number with the two-week weather forecast and positive headlines going to negative. The traders in the market is throwing too much in the mix crating the volatile shakes. In the overnight electronic session, the December natural gas is currently trading 2.563 which is .149 lower. The trading range has been 2.744 to 2.546. Let’s wait out the number and hope for better headlines in the future.
Have A Great Trading Day!