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 U.S. Challenger Job Cuts at 6:30 A.M., ADP Employment Change (MAY) at 7:15 A.M., Initial Jobless Claims (29/MAY), Jobless Claims 4-Week Average (29/May), Unit Labour Costs QoQ Final Q1 and Continuing Jobless Claims (22/MAY) at 7:30 A.M., Market Composite PMI Final (MAY) and Market Services PMI Final at 8:55 A.M., ISM Non-Manufacturing PMI (MAY), ISM Non-Manufacturing Business Activity (MAY), ISM Non-Manufacturing Prices (MAY), ISM Non-Manufacturing New Orders (MAY) and ISM Non-Manufacturing Employment at (MAY) at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M.,N.Y. Fed Treasury Purchases 22.5 to 30 Years at 10:20 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., Fed Bostic Speech at 11:30 A.M., Fed Harker speech at 12:50 P.M. and Fed Quarles Speech at 2:05 P.M.
On the Corn Front prices eased on the glowing USDA report. I believe the selloff will be short-lived with the heat-dome over the Northern Plains will move in and cover the Midwest in the next couple of days. That will change the bearish focus. Also, the JBS meat plants are getting back online and hopefully the disruption has been minimal. JBS has not said if it paid the ransom, but we know these Russian hackers are the best in the world and have to think it may be at the directive of the Putin government and should be treated as so, until this gang of thieves are put out a business. This terrorism plot could cause a disruption that could slowdown slaughter and have Cattle being held back from marketing. In the short-term it looks bullish, but the lingering effects could bring prices down once the initial panic is over in barbecue season and high prices already. The corn sold off as traders wonder what psychological effect this will have on corn, while the soybeans traded higher. We see this volatility as we head into tomorrow’s Export Sales number and the hot and dry forecasts should push the market higher. In the overnight electronic session, the July corn is currently trading at 682 ½ which is 7 ½ cents higher. The trading range has been 685 to 675.
On the Ethanol Front it is last Trading Day in the June contract India has set their sights on blending 10% ethanol with diesel by 2022 and 20% in the blend by 2030. The target was moved up by the Central Government to 2025 and now has advanced to April 2023. 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 EIA data today at 10:00A.M. Last night’s API Energy Stocks showed crude stocks -5.36M, Cushing +0.741M, gasoline +2.51M and distillates +1.585. Those numbers seem to be inline and reasonable for this time of year. We will see if we have any surprises on the EIA Energy Stocks today. Analysts predict a hot summer and with the economy reopening we could see $80 a barrel as demand comes roaring back. The reopening of the economy has already sent crude prices up around 40%. A surge in driving, goods transportation and air-travel could further push prices higher. In the overnight electronic session, the July crude oil is currently trading at 6856 which is 27 points lower. The trading range has been 6940 to 6854.
On the Natural Gas Front this market is gearing up for a hot summer as well. Today we have the EIA Gas Storage at 9:30 A.M. The poll conducted by Thomson Reuters with 17 analysts participating estimates range from a build of 86bcf to 107bcf with the median injection of 95bcf. This compares to the one-year injection of 95bcf and the five-tear average of 92bcf. In the overnight electronic session, the July natural gas is currently trading at 3.052 which is .023 lower. The trading range has been 3.090 to 3.051.
Have A Great Trading Day!
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