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 MBA Mortgage Applications (28/May) and MBA 30-Year Mortgage Rate (28?MAY) at 6:00 A.M., Redbook YoY (29/MAY) at 7:55 A.M., IBD/TIPP Economic Optimism (JUN) at 9:00 A.M., Fed Evans Speech, Fed Bostic Speech and Fed Beige Book at 1:00 P.M., Dairy Product Sales at 2:00 P.M., API Energy Stocks at 3:30 P.M. and Total Vehicle Sales at 6:00 P.M.
Just when we’re reopening from the COVID-19 lockdowns we have two cyber-attacks on the U.S., and many believe some are sandbagging the culprit or culprits in these two attacks that the first one on Colonial Pipeline disrupted the domestic flow of energy and now attacking JBS the World’s largest meat processing company. Now they are going after the food change. This is a matter of National Security, and these attacks should not go unabated, and those responsible should be dealt with swift and effective retribution. These three attacks cannot be swept under the rug any longer.
On the Corn Front the USDA released a strong good-to-excellent rating and said the corn crop is off to a better start than last year. 95% of the corn crop is planted and Brazil’s second corn crop estimate was cut again as yields hit a five-year low. Prices could also be tested as the JBS meat packer plant will undoubtedly slow slaughter and the cattle being held back we will know at the check-out counter at the grocery store or even if you have it delivered. We are already seeing prices go higher as is with the price of corn alone that makes other commodities move higher as the use of corn, corn oil etc. is used in several other commodities one off hand would not think of the residual impact. In the overnight electronic session, the July corn is currently trading at 698 ¾ which is 1 cent higher. The trading range has been 694 ¼ to 679 ¼.
On the Ethanol Front POET acquires Flint Hills’ ethanol business boosting their capacity 40%. It is official the talks have ended, and POET is banking on U.S. ethanol profits in the future. We also have no groundbreaking news with the Supreme Court and the EPA and refiners to date. There were no trades posted in the overnight electronic session. The July contract settled at 2.460 and is currently showing no market with Open Interest at 20 contracts.
On the Crude Oil Front, we have the API data later today. Brent Crude passes $70 a barrel and light sweet crude settled higher after hitting 15-month highs on demand prospects. OPEC+ is going to keep oil production in check for June and July to move the market in balance. With Iran popping up moving illegal cargo concerns mount about cheating on production which was down recently compared to decades in the past. Every country knows that cheating on production would not help the profitable prospects in the future. Russia has scooped up a great portion if not all the Keystone Pipeline XL business free of charge and is in no hurry to raise production in the current price environment. In the overnight electronic session, the July crude oil is currently trading at 6840 which is 68 points higher. The trading range has been 6848 to 6778.
On the Natural Gas Front, we are coming in a little easier this morning. We will have the EIA Gas Storage tomorrow and the dry heat we have in the Plains and east Coast may zero in on the Midwest next. The Great Lakes could give portions of the Midwest a reprieve from the hot temperatures as the mercury rises all around the lakes, and those closest may have a cooling effect. You can expect higher prices this summer with weather premium alone as we watch the Drought index. In the overnight electronic session, the July natural gas is currently trading at 3.073 which is .031 cents lower. The trading range has been 3.095 to 3.072.
Have A Great Trading Day!
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