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 tractors today with Export Sales, Initial Jobless Claims (09/JAN), Jobless Claims 4-Week Average (09/JAN), and Continuing Jobless Claims (02/JAN) at 7:30 A.M., EIA Gas Storage at 9:30 A.M., Fed Bostic Speech at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Fed Chairman Powell Speech at 11:30 A.M., and Fed Kaplan Speech at 12:00 P.M.
On the Corn Front we have a little changeup as the “Tale of Two Cities,” started getting into the minds of traders. With yesterday starting the thoughts of the possibilities of changing weather forecast that were for the most part pretty bullish for grains globally. Traders also looked at the trade agreements in place, whether they will stay in place as we look at global surpluses at a low, and thoughts of changing the guard will soften the market as we saw spot corn prices trade higher as deferred months traders just kept their hands in their trading pockets for the moment. They will obviously observe the markets follow through as we move closer to plantings. In the overnight electronic session, the March corn is currently trading at 525 ¾ which is 1 ¾ of a cent higher. The trading range has been 527 ¾ to 519.
On the Ethanol Front production increased from last week and stocks increased to the highest levels since early May. We remember those times and where we came back from. Managed funds bought 5,000 more corn which tells me, they have a reason to be buying that aggressively. There were no trades posted in the overnight electronic session. The April contract settled at 1.738 and is currently showing 0 bids posted and 1 offer @ 1.770 with Open Interest at 45 contracts.
On the crude Oil Front the market is still rising with the stimulus package talks, vaccines and Saudi Arabia oil production cuts are navigating waters that are tough to sail. If the market continues to brace for shocks that are expected not to happen and most likely did occur. Then the market is getting poised to expect the unexpected in this boom or bust industry. Crude oil really floated after Tuesday’s party which saw a nice rally. Majors like Exxon Mobil showed shares were up 1.113% in pre-market trading, U.K. majors BP and Shell were up 0.93% and 0.47% respectively. In the overnight electronic session, the February crude oil is currently trading at 5302 which is 11 points higher. The trading range has been 5329 to 5250.
On the Natural Gas Front the erratic swings of the day kept the bulls and bears seating to see who goes down first. The weather picture paints a wild picture of large demand as a surge in cold weather is expected in late January. We are going to see a lot of, “kicking the can down the road,” as what relationship will the new administration and EPA have, as natural gas exports are on the rise and that is good news for the American consumer and producers. Traders will be watching the EIA Gas Storage number and Scott DiSavino with Thomson Reuters weekly poll with 17 analysts participating estimate withdrawals ranging from 137-bcf to 117-bcf with the median decrease of 128-bcf. That compares to the one-year withdrawal of 97-bcf and the five-year average decline of 167-bcf. In the overnight electronic session, the February natural gas is currently trading at 2.767 which is 4 cents higher. The trading range has been 2.784 to 2.736.
Have A Great Trading Day!