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 Redbook YoY & MoM (27/FEB) at 7:55 A.M., ISM New York Index (FEB) at 8:45 A.M., IBS/TIPP Economic Optimism (MAR) at 9:00 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., Fed Brainard Speech at 12:00 P.M., Fed Daly Speech at 1:00 P.M., API Energy Stocks at 3:30 P.M., and Total Vehicle Sales (FEB) at 6:00 P.M.,
On the Corn Front the market continues to play the setback mode after coming out of the blocks early and shaking the bearish cobwebs in their heads after the bulls ran the market on tight supplies. The market should and the “keyword” should resist sharp setbacks with China demand and a need for a large global harvest to even put these numbers into place. Speculative bullishness remains high on corn and the funds were pitching more longs to lighten their load for the moment. Traders do believe cooler heads will prevail and they are expecting activity in the marketplace pick up and remain on high. Another reflection in the bullishness of the market is
U.S. crop insurance that guarantees prices of the 2021 season are the highest in seven years of corn. I believe as we move forward the market will explain for itself, who will satisfy global demand and if so, how many players may have to be shut out of exports with weak domestic supplies that comes first. In the overnight electronic session, the May corn is currently trading at 532 ½ which is 5 ¾ cents lower. The trading range has been 539 to 532 ¼.
On the Ethanol Front to say were not off to a rolling start is an understatement. The USDA said corn for ethanol use was 477.6 billion bushels which is down 10% from last year. The next USDA report on corn for ethanol use will be next Tuesday March 9th. Another point that will be different is the EPA guidelines issued with the new regime at the EPA. This market is not alone weighing in on all the possible scenarios could unfold. There were no trades posted in the overnight electronic session. The April ethanol settled at 1.729 and at the moment there are no market makers making a market with Open Interest standing at 43 contracts.
On the Crude Oil Front choppy days of recent had us no different in yesterday’s action with this market coming out like gangbusters as well only to succumb to the lifeless selloff and buyers acting beware. We have the API Energy Stocks and we are expecting draws with the Texas freeze and the South freeze that forced operations in shutdown mode if Mother Nature did not take care of that herself. And we have the OPEC+ meeting tomorrow and Thursday which should give an indication the countries that want to add production but also know the importance of keeping the market in balance. In the overnight electronic session, the April crude oil is currently trading at 5980 which is 84 points lower. The trading range has been 6039 to 5945.
On the Natural Gas Front the mid-March forecast continues to weigh in on futures prices. However, the strong April support which was brought on by strong cash prices has traders wondering about temperature in the lower 48 this year. As stated, many, many, moons, or months before if it is hot people will seek air-conditioning. And in some places, this could become a norm. The market has put a feeling in me prices will seek new higher levels if the Mother Nature and the weather people are accurate that it is very possible to see another boon. Unfortunately, right now it feels like shoulder season or if your boos on the ground you are still getting the important things done now. In the overnight electronic session, the April natural gas is currently trading at 2.777 which is unchanged. The trading range has been 2.786 to 2.775.
Have A Great Trading Day!