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 Redbook MoM & YoY (21/NOV) at 7:55 A.M., S&P/Case-Shiller House Price Index YoY and MoM (SEP) at 8:00 A.M., CB Consumer Confidence and Richmond Fed Manufacturing Index at 9:00 A.M., Fed Bullard Speech at 10:00 A.M., 118-Day and 41-Day Bill Auction at 10:30 A.M., Fed Williams Speech at 11:00 A.M., Fed Clarida Speech at 11:45 A.M., 7-Year Note Auction and 2-Year FRN Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
On the Hurricane Front Disturbance 1 a few hundred miles northeast of the central Bahamas have a very low chance of being any threat as it moves over the central Atlantic.
On the Corn Front the USDA said the U.S. corn and soybean harvest are officially over. Weather was generally good to for harvest activity last week in many key growing areas. While in parts of the country might still have corn and soybean to harvest, statistically, the season is over. Corn and soybeans hit a 4-year high as forecast rainfall missed parts of Brazil and forecasts for scattered precipitation in parts of Argentina and Brazil will not be enough to break through the drought. There are whispers of mor corn sales to the unknown, while commercials and funds rollout of December to March contracts, with the funds net-long and the commercials net-short. I have already witnessed a variety of speculation longs for 2021 in corn and soybeans to date. In the overnight electronic session, the December corn is currently trading at 417 ½ which is 9 cents lower. The trading range has been 426 to 416 ½.
On the Ethanol Front the industry is bracing for more restrictions. Ethanol has been a big source of demand for domestic corn, even though sharply curbed by global fuel consumption. In recent weeks Reuters says output has chipped away at its deficit in prior years. However, the resurgence of Covid and increasing restrictions, especially before the holiday season, threaten to halt a comeback in fuel demand before it can ramp up. When compared to previous year’s production levels, it shows output is rising out of the Covid slump though the pace is still slow. There were no trades posted in the overnight electronic session. The December contract settled at 1.410 and is currently showing 1 bid @ 1.370 and 0 offers posted with Open Interest at 25 contracts.
On the Crude Oil Front Canada is seeing record job losses in the oil and gas sector. 37% of oil and gas companies have resorted to permanent layoffs due to the pandemic driven oil price and oil demand slump. As Venezuela’s regime has recently arrested oil workers or retired oil workers who have dared to expose the corruption and mismanagement at its state oil firm PDVSA and its dire financial, operational, and working conditions. In a country holding the world’s biggest oil reserves, and they cannot keep a refinery running? Sounds like that country in Seattle, Chaz. Nicolas MADuro is clinging to power in this once rich and vast land of opportunity. The socialist moved in and now a country with enterprising dreams is now called a socialist regime and I pray to God it will never the word regime will never be applied to the United States of America. Venezuelans are stealing crude oil to process at home. This is a sad state of affairs. But once again proves socialism is a bad thing and not a good thing which invites more corruption and seizure of the peoples Liberty.
It is consistent in stealing the God-given wealth of a nation and now Venezuela is referred to as a regime. In the overnight electronic session, the January crude oil is currently trading at 4347 which is 41 points higher. The trading range has been 4374 to 4282.
O the Natural Gas Front colder weather expected in the south and demand rose the last week is supporting prices. Medium-Term Momentum is negative to neutral as the fast stochastic is printing red pointing to consolidation. We will see demand rise to heat buildings in the residential and commercial sector. We will have the EIA Gas Storage tomorrow at 11:00 A.M. a day early with the Thanksgiving holiday on Thursday. Also, worth noting the December contract expires tomorrow, if your margin clerk has not made you rollover already there is no more perfect time than the present. In the overnight electronic session the January natural gas is currently trading at 2.852n which is .029 higher. The trading range has been 2.855 to 2.800.
Have a Great Trading Day!