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 Challenger Job Cuts at 6:00 A.M., Export Sales, Initial Jobless Claims (28/NOV), Jobless Claims 4-Week Average (28/NOV), and Continuing Jobless Claims (21/NOV) at 7:30 A.M. Markit Composite PMI Final (NOV) and Markit Services PI Final (NOV) at 8:45 A.M., ISM Non-Manufacturing Index at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M. and Dairy Products at 2:00 P.M.
On the Corn Front Successful Farming’s Chuck Abbott reports a University of Illinois Economist, Joe Janzen said on Tuesday that China is buying huge amounts of U.S. corn as it rebuilds its hog herd and recovers from their self-inflicted pandemic. Their appetite may not last through 2021 and their imports could weaken by next fall. He went on to say that U.S farmers are expected to harvest their second-largest crop ever. China’s imports of 13 million tons could taper to a still large 10.5 million tons. Janzen also said, “China will import grain when it needs grain and when the market dictates.” I believe we have seen some sort of this posture recently and they still need grain and I expect more buying from China. In the overnight electronic session, the March corn is currently trading at 424 ¼ which is a ½ of a cent lower. The trading range has been 425 ¾ to 422.
On the Ethanol Front we have Last Trading Day on the December contract. Ethanol production dipped last week, continuing to show the impact of COVID-19 on blending demand. The EIA showed production averaged 974,000 barrels per day (bpd), down 16,000 from last week mainly due or at least part to Thanksgiving, and we were 86,000 below a year ago because of demand uncertainties. The Renewable Fuels Association said blender inputs were the lowest since Mid-June and volume of gasoline supplied to the market also declined. Stocks of 21.240 million barrels the largest inventory since Mid-June, up 374,000 barrels from last week and 601,000 barrels on the one year. The RFA says ethanol imports to the West Coast averaged 9,000 barrels per day. The next USDA corn to ethanol use estimate is out next Thursday December 10th. There were no trades posted in the overnight electronic session. The January ethanol settled at 1.340 and is currently showing 3 bids @ 1.289 and 3 offers @ 1.370 with Open Interest at 36 contracts.
On the Natural Gas Front prices have been dropping ahead of the inventory report. U.S. natural gas consumption is expected to decline year over year in 2020 according to the EIA. The weather is expected to be warmer than normal throughout the U.S. for the next two weeks according to the NOAA. Natural Gas prices broke down again on Wednesday falling nearly 4% and poised to test target support of 268 which is currently right on the money and the test begins Round 1. The EIA Gas Storage is today and the weekly Thomson Reuters poll with 16 analysts participating, have estimates ranging from withdrawals of 28bcf to an injection of 3bcf with the median decrease of 12bcf. This compares to the one-week decrease of 57bcf and the five-year average withdrawal of 61bcf. In the overnight electronic session, the January natural gas is currently trading at 2.669 which is 0.111 lower. The trading range has been 2.768 to 2.663.
On the Crude Oil Front that experiment in socialism reared its ugly head once again, and after experimenting for over a century the study has proven to bat 1,000 as it has proven 100% of the time it is the wrong thing to do and will kill your countries wealth. If you can’t be good, be consistent and socialism numbers speak volumes of the atrocities it has caused. Venezuela’s gas shortage is worsening. After years of mismanagement from a corrupt government in regime 1 and 2, U.S. sanctions Venezuela’s imports have nosedived. Oil workers are ready to accept bribes as their meager salaries quickly evaporate with the hyperinflation. And more drama in the OPEC+ negotiating world. In the overnight electronic session, the January crude oil is currently trading at 4486 which is 42 points lower. The trading range has been 4548 to 4466.
Have A Great Trading Day!