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 Prices and Import Prices YoY and MoM (NOV), N.Y. Empire State Manufacturing Index at 7:30 A.M., Redbook YoY & MoM (12/DEC) at 7:55 A.M., Industrial Production YoY & MoM (NOV),
Manufacturing Production YoY & MoM (NOV), and Capacity Utilization (NOV) at 8:15 A.M., IBD/TIPP Economic Optimism (DEC), 119-Day and 42-Day Bill Auction at 10:30 A.M., NOPA Crush at 11:00 A.M., Overall Net Capital Flows (OCT), Foreign Bond Investment (OCT), and Net Long-Term Tic Flows (OCT) at 3:00 P.M., API Energy Stocks at 3:30 P.M. and Day 1 of the FOMC Meeting.
On the Corn Front corn export intentions rebound as China volumes grow. We did see some weakness on the December corn as it expired to the cash market. It will be interesting to see how we roll as we head into winter next Monday and China will be buying feed grains to supplement their record herd of hogs that they are breeding with intentions of the long-term and will see the effect to the U.S. pork industry vs. other countries. Archer-Daniel-Midland Co. has reopened a key U.S. grain export terminal after construction delays, which should help boost their profits. Greg Morris, president of Ag Services and oil seed unit, said last month the U.S. was in a great position to have its largest export program ever in the fourth quarter.. He continued margins were “great” and the pace was set to continue. “And even despite having five named storms hit New Orleans, the industry continues to run very well down there.” In the overnight electronic session, the March corn is currently trading at 421 ½ which is 2 ½ cents lower. The trading rang has been 424 to 420 ½.
On the Ethanol Front with COVID-19 cases on the rise, as the vaccine starts to get distributed, state, and local governments are taking additional actions to limit travel and promote social distancing. In turn, consumption of ethanol-blended gasoline is rapidly falling again, threatening to derail an already tenuous economic recovery in the ethanol industry. There were no trades posted in the overnight electronic session. The January contract settled at 1.310 and is currently showing 1 bid @ 1.250 and 2 offers @ 1.400 with Open Interest remaining at 32 contracts.
On the Crude Oil Front prices in Asia were down in midmorning trade on coronavirus concerns and a downward revision of OPEC’s 2021 demand forecast. Another complication is Iran is expecting the U.S. to lift sanctions next year and they could flood the market with oil if their infrastructure was maintained well and does not need heavy work, they could start rolling out the barrels in the market again. We have the API today and the U.S. market is holding up in the early going. In the overnight electronic session, the January crude oil is currently trading at 4740 which is 41 points higher. The trading range has been 4752 to 4653.
On the Natural Gas Front an article written by James Hyerczik with FX-EMPIRE, shorts are defending 2.685 ahead of the east coast winter storm that is forecasted to be a large one and the biggest seen in several years. Natural gas futures are trading lower after the shift in weather forecast to colder temperatures yesterday that triggered a short-covering rally which was stopped by a key technical area, setting up a possible retracement into a key support level. In the overnight electronic session, the January natural gas is currently trading at 2.606 which is .076 lower. The trading range has been 2.694 to 2.596.
Have A Great Trading Day!