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 Fed Chair Powell Speech at 6:00 A.M., Export Sales, Unemployment Rate (MAY), Non-Farm Payrolls (MAY), Non-Farm Payrolls Private (MAY), Average Hourly Earnings YoY & MoM (MAY), Average Weekly Hours (MAY), Government Payrolls (MAY), Participation Rate (MAY) and Manufacturing Payrolls (MAY) at 7:30 A.M., Factory Orders MoM (APR) and Factory Orders ex Transportation at 9:00 A.M., N.Y. Fed Treasury Purchases 7 to 10 Years at 9:30 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., and Total Vehicle Sales (MAY) at 5:00 P.M.
On the Corn Front Farmers have expressed concerns over price declines in corn and soybeans. At harvest time 2021 corn futures were above $6.00 per bushel and soybean prices were above $14.00 per bushel. Wisconsin State Farmer’s wrote a story with Gary Schnitkey, Krista Swanson, Nick Paulson, and Carl Zulauf using farm Doc web-based tool, were able to arrive at market-based assessment of potential price declines. This tool indicates a 9% chance that corn prices will decline by more than $2.00 per bushel and 20% chance of soybeans to decline by $2.00 per bushel. Yesterday’s selloff was due to conflicting weather modules that some modules were predicting warm and dry conditions the next two weeks, while another nodule showed rains over parts of the north Plains and upper Midwest. That should be a neat trick because the Plains are dry, and the Drought Index is severe. Today’s export Sales should show exports are going strong and South America’s struggle with their crop continues. The overnight market does not seem to be agreeing with the weather module and are buying into the break with the July corn currently trading at 674 ½ which is 12 ½ cents higher. The trading range has been 676 to 660 ¾.
On the Ethanol Front no more new headlines to report today. Still waiting for the Supreme Court to hand down a decision on the EPA and waivers. There were no trades posted in the overnight electronic session with the July ethanol settling at 2.380 with no current market and open Interest at 20 contracts.
On the Crude Oil Front the market remained somewhat steady after a mixed crude inventory report. An expected hot summer and reopening of business’ still has not been enough for Crude to take out $70 a barrel. I do believe it will come soon enough and gas prices will add pain to the pump. In the overnight electronic session, the July crude oil is currently trading 6890 which is 9 points higher. The trading range has been 6926 to 6833.
On the Natural Gas front natural gas has hardly increased since shale has been attempting another comeback. U.S. cities and states are fighting over banning new natural gas hookups. It seems like yesterday when buses and business trucks proudly displayed this vehicle runs on natural gas. It started in Berkeley, California in 2019. So, let’s take a stroll down memory lane solar and wind power could not generate enough power in southern California during a tumultuous heat wave and they had rolling black outs and in Northern California they could not generate enough power to keep the water flow moving so fire fighters could douse the inferno. People must be delusional on solar and wind power. Well, it is California. In the overnight electronic session, the July natural gas is currently trading at 3.076 which is .035 higher. The trading range has been 3.106 to 3.010.
Have a Great Trading Day!