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 (18/Jun) and MBA 30-Year Mortgage Rate (18/Jun) at 6:00 A.M., Current Account Q1 at 7:30 A.M., Fed Bowman Speech at 8:10 A.M., Market Composite PMI Flash (Jun),Market Manufacturing PMI Flash (Jun) and Market Services PMI Flash (Jun) at 8:45 A.M., New Home Sales MoM (May) and New Home Sales at (May) at 9:00 A.M. EIA Energy Stocks and NY Fed Purchases 4.5 to 7 yrs. at 9:30 A.M., Fed Bostic Speech at 10:00 A.M., 2-Year FRN Auction at 10:30 A.M., 5-Year Note Auction at 12:00 P.M. and Dairy Product Sales at 2:00 P.M.
On the Corn Front the July contract settled a ½ of a cent higher while the September and December settled 18 ½ cents lower. The outside markets were no help with crude oil settling -0.79% lower and the Dow Jones only +0.23higher. The market is trading a very volatile weather market with the weather models all over the place. It is like Ernie Meanie Miny Moe to pick which model is correct. The current weather pattern has the north Midwest Corn Belt hot and dry while the eastern Corn Belt looks like they will have ideal weather conditions heading into pollination. The market is also hypersensitive to machine trading and active funds. The acreage is also a concern as traders are wary of large increases of acreage that could impact carryover projections on the new crop. Next Wednesday we have the USDA Grain Stocks and Planted Acreage data that could change traders’ minds as well with the inconsistent weather models. In the overnight electronic session, the July corn is currently trading at 664 ¼ which is 3 ½ cents higher. The trading range has been 664 ½ to 659 ¼.
On the Ethanol Front a large Brazilian maker of sugar and ethanol said it plans to use more of the cane-based biofuel and less sugar in its 2021/22 crop. SAO Martinho SA said late Monday it intends to use 58% cane versus 53% last year. The move will have sugar traders wondering how bullish a sugar move they can expect. There were no trades posted in the overnight electronic session. The July contract settled at 2.480 and is currently showing no market with Open Interest at 20 contracts.
On the Crude Oil Front the market rallied in the overnight with crude stocks down 7.199M, Cushing -2.550, gasoline +0.959M and distillates +0.992M. This is a very bullish number overall and traders who bought value going down yesterday are licking their chops going into the EIA Energy Stocks later this morning. In the overnight electronic session, the August crude oil is currently trading at 7343 which is 58 points higher. The trading range has been 7358 to 7282.
On the Natural Gas Front the market is on a roll with product expected to move regardless of the administrations dead end policies on pipelines. Export demand is picking up and is expected to continue and extreme weather most definitely will push demand even higher here at home. Tomorrows EIA Gas Storage number could either put the brakes on the steady upstream in prices or have a bigger rally after the number. In the overnight electronic session, the July natural gas is currently trading at 3.292 which is .034 cents higher. The trading range has been 3.294 to 3.250.
Have A Great Trading Day!
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