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 N.Y. Fed Treasury Purchases 10 to 22.5 Years at 7:00 A.M., Export Inspections at 10:00 A.M., 3-month and 6_Month Bill Auction at 10:30 A.M., Consumer Credit Change (APR) at 2:00 P.M. and Crop Progress at 3:00 P.M.
On the Corn Front it looks like Tuesday is make or break for solid rain coverage, depending on what portion you live in, that will be targeted by the rain with precipitation moving with the heat front or even drying up in the atmosphere. The rains are expected Monday through Thursday with only Tuesday forecasted to be heavy saturating rains and farmers and traders will be watching the Drought Index. China and Mexico continue buy corn at a record clip. The question is will they keep up the pace to outrun their 2021 U.S. corn imports. The name of the game is exports dryness and heat in the coming weeks. The CFTC commitments of traders showed non-commercial traders, a category that includes hedge funds trimmed their short positions on wheat and raised their net-long positions on soybeans. This again goes well for the corn market. Tobin Grey director of agriculture strategy at Commonwealth Bank of Australia said, “The market will remain hypersensitive to these weather issues because feed grain supply is tight.” Global supply estimates are already shrinking due to sustained dryness in Brazil and strong purchases by China. In the overnight electronic session, the July corn is currently trading at 698 ¾ which is 16 cents higher. The trading range has been 706 ¼ to 691 ½.
On the Ethanol front there are no new headlines other than the Indian Ethanol-petrol deadline advancement which we covered last week. There has not been a whisper on the Supreme Court judicating on the ethanol waivers and the part the Environmental Protection Agency (EPA) plays. There were no trades posted in the overnight electronic session. The July ethanol settled at 2.460 and is currently showing no marker with Open Interest at 20 contracts.
On the Crude Oil Front a story be David French with Reuters reports U.S. oil acreage is booming along with crude oil price recovery. The price of oil is more than two-years highs and is offering a long-awaited opening to companies and private equity firms to reload weak assets back into the U.S. oil patch. Sales of land parcels worth $6.9 billion have been announced in the first five months of 2021, almost eclipsing the $7 billion in 2020. More deals are on the way worth more than $12 billion is either up for sale or being prepared to come to market in the United States, according to a over a dozen investment bankers and industry sources interviewed bt Reuters. In the overnight electronic session, the July crude oil is currently trading at 6946 which is 16 points lower. The trading range has been the long awaited 7000 to 6893.
On the Natural Gas Front, the futures finished sharply higher last week mostly on gains in last Tuesday’s session on a weather-related price spike. The market then drifted into a sideways pattern the rest of the week but holding on to gains. Last week started with several weather models showing the possible development of an intense heat wave, however gains were capped and retreated as the heat forecast weakened and cash prices fell. The EIA Energy Stocks were also a disappointment to bulls last Thursday. If we do end up coming out hot and dry this market will be rocking & rolling once again. In the overnight electronic session, the July natural gas is currently trading at 3.063 which is .034 lower and dropping. The trading range has been 3.115 to 3.062.
Have A Great Trading Day!
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