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 Market Manufacturing PMI Final (MAY) at 6:45 A.M., Construction Spending MoM (APR), ISM Manufacturing Prices (MAY), ISM Manufacturing New Orders (MAY), ISM Manufacturing Prices (MAY), ISM Manufacturing Employment (MAY) and IBD/Tipp Economic Optimism (JUN) at 9:00 A.M., Dallas Fed Manufacturing Index (MAY) at 9:30 A.M., Export inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Brainard Speech at 1:00 P.M., Cotton System, Fats & Oils and Grain Crushing’s at 2:00 P.M., Crop Progress at 3:00 P.M., Total Vehicle Sales (MAY) and LMI Logistics Managers Index Current (MAY) at 5:00 P.M.
On the Corn Front the market is coming in strong and we will be flirting with $7 corn before you know it. Export Inspections could rekindle whispers of $8 corn. Weather will play a premium as we also get Crop Progress data later today. The farmers were hard at work to get the crop in the ground Friday trying to finalize plantings. South America will be another factor in this market as well as the export market. The navigation down the Mighty Mississippi has loosened with barge traffic no longer stuck dead in the water with fears of furthering damage on the bridge in Memphis. Dry weather concerns and China demand will be the mover and shaker in this market the coming weeks. In the overnight electronic session, the July corn is currently trading at 665 which is 8 ¼ cents higher. The trading range has been 671 ¾ to 660 ¾. The new crop months are trading from 13 ¼ to 16 cents higher.
On the Ethanol Front no news with the U.S. Supreme Court decision regarding the Environmental Protection Agency (EPA) having the power to grant waivers to certain refineries. The argument is the EPA has appointees other than those who have been voted into office and their regulations sometimes turn into a disaster. Case in point, The Gold King Mine where the EPA had a wastewater spill into the Animas River was their baby under the Obama administration in 2015. With the rage of corn and energy prices, Geoff Cooper CEO of the Renewable Fuels Association said, “If oil refineries don’t like buying paper credits to comply with the law, the alternative is simple: blend more low-cost, low-carbon ethanol and they won’t need to obtain any credits at all.” While the Hatfield’s and Mc Coys continue to slug it out, I will keep you posted on any decision the Supreme Court makes. There were no trades posted in the overnight electronic session. The June contract settled at 2.370 and is currently showing no market with Open Interest dropping to 1 contract.
On the Crude Oil Front the big story of the morning is the U.S. seizure of Iranian oil set for China off the coast of the UAE. Iran’s Revolutionary Guard tried to sell the oil to China disguised as “Basra light crude” from neighboring Iraq. The U.S. has identified the Revolutionary Guard as a terrorist organization under U.S. president Trump. On the domestic side of the coin summertime driving season is here and with the weather turning and more municipalities opening we should see a rise in traffic and unfortunately a rise in prices at the pump. In the overnight electronic session, the July crude oil is currently trading at 6814 which is 184 points higher. The trading range has been 6842 to 6641.
On the Natural Gas Front, the heat wave hitting the East Coast and a forecasted heat wave in the Midwest in the coming days has the price of natural gas flying as well. News this morning a new feud is erupting whether to ban or discourage the use of natural gas in new homes. Among the cities is San Francisco leading the pack home of Nancy Pelosi and Gavin Newsom. What needs to be added here is their abysmal record on the environment. Their record is on par with how many socialist countries have thrived during the ages. Not a good batting average and very lopsided in the win/loss column. In the overnight electronic session, the July natural gas is currently trading at 3.086 which is 10 cents higher. The trading range has been 3.098 to 3.015.
Have A Great Trading Day!
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