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 Business Inventories, Export Sales, Jobless Claims, Retail Sales, New York Empire State Manufacturing Index and Philadelphia Fed Manufacturing Index at 7:30 A.M., Capacity Utilization and Industrial Production at 8:15 A.M., EIA Gas Storage, Fed Bostic Speech, 4-Week & 8-Week Bill Auction at 9:30 A.M., NOPA Crush at 11:00 A.M., Overall Net Capital Flows (Feb), Foreign Bond Investment (Feb), Fed Mester Speech and Net Long-Term Tic Flows (Feb) at 3;00 P.M.
On the Corn Front we finally have new headlines that match concerns of this market with little to none in carryover and the market realized it yesterday. Even with the cold weather and frost scares the market was grudgingly moving higher, especially when China said prices were too high and they may slow imports. But the frost scares along with Fund and user end buying quickly had this market on a tear. We could even see more fund buying if this April cold front is prolonged that will slow plantings and boost prices even higher. These prices may encourage more acreage to be planted than previously thought and drought concerns in the Plains is another hot topic in this market. In the overnight electronic session, the May corn is currently trading at 598 ½ which is 4 ½ cents higher. The trading range has been 601 ½ to 594 ¼.
On the Ethanol Front corn-based ethanol jumps 58% in Brazil with more growth expected while U.S. production and supply are down on the week. We could see some eye-popping moves in the export market as Brazil wants to compete with the U.S., especially in a fragile corn market with carryover concerns. There were no trades posted in the overnight electronic session. The May contract settled at 2.000 and is currently showing no market with Open interest at 34 contacts.
On the Crude Oil Front the market soared on bullish news and even the IEA comments were bullish, and a very bullish EIA number and away the market flew. Increased tensions in the Middle East are also a concern with the risk factor building and the closing of the Keystone Pipeline XL leaves the U.S. less energy independent and now we must rely on other sources to fill the void we have in our own back yard. We should see price move higher as we get a good education in yesterday’s market action. Today is Last Trading Day in the May contract so we rollover to the June contract which is currently trading at 6309 which is 13 points lower. The trading range has been 6355 to 6261.
On the Natural Gas Front the market is waking up to global demand as well with Russia clamping its paws on the EU market which they need more options than one supplier. Today we have the EIA Gas Storage and the Thomson Reuters poll with 16 analysts participating have estimates of builds ranging from 50bcf to 79bcf with the median 66bcf. This compares to the one-year injection of 47bcf and the five-year average of 37bcf. In the overnight electronic session, the May natural gas is currently trading at 2.588 which is 3 cents lower. The trading range has been 2.628 to 2.583.
Have A Great Trading Day!
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