Economy Bleak With No End In Sight. The Corn & Ethanol Report 01/20/2022

We kickoff the day with Initial Jobless Claims (15/Jan), Jobless Claims 4-Week Average (15/Jan), Philadelphia Fed Manufacturing Index (Jan), Philly Fed Business Conditions (Jan), Philly Fed Capex Index (Jan), Philly Fed Employment (Jan), Philly Fed New Orders (Jan) Philly Fed prices Paid (Jan) and Continuing Jobless Claims (08/Jan) at 7:30 A.M., Existing Home Sales (Dec) and Existing Home sales MoM  (Dec) at 9:00 A.M. NY Fed Treasury Purchases 10 to 25 yrs. and EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10;30 A.M. and 10-Year TIPS Auction at 12:00 P.M..

On the Corn Front we traded higher in yesterday’s action, with March corn holding support which triggered technical buying. A close above 617 or trades there would encourage more fund and speculative buying. Also, talk about a stronger U.S. export presence with South America’s crop waning, whispers China may be buying 1.5 mmt of U.S. new crop corn as a good faith gesture as Phase 2 negotiations begin and China fell well short of the terms of the phase 1 Agreement. Funs bought 15,000 corn yesterday and if we could trade another 10 cents higher give or take a couple cents, we could see the funds in a more active role in buying as the economy and inflation are spiraling in the wrong direction. In the overnight electronic session the March corn is currently trading at 609 ¼ which is 1 ¼ of a cent lower. The trading range has been 610 ¾ to 607 ¼.

On the Ethanol Front we no real new headlines to report as the country focus is on the economy and high inflation going into President Biden’s speech yesterday. Continue talks should be expected with the ethanol industry and the EPA and the Court of Appeals shortly. There were no trades or open interest in ethanol futures.

On the Crude Oil Front were getting a brief reprieve in prices as we are correcting in an overbought pullback. I do not expect this to last long and still expect us to clear $100 a barrel very shortly. The February contract expires today. In the overnight electronic session the march crude oil is currently trading at 8551 which is 29 points lower. The trading range has been 8607 to 8473. Last night’s API showed builds in crude oil and gasoline. Will we see withdrawals on the EIA at 10:00 A.M.? Should be a driver for future prices.

On the Natural gas Front were coming in weak today but with the Arctic Blast over the lower 48 could change that and go into a full-blown weather market to the chagrin of heating your home and uses of natural gas as a whole. The EIA is out at 9:30 this morning and the Thomson Reuters poll with 16 analyst participating estimate withdrawals ranging from 250 bcf to 153 bcf with the median 196 bcf. This compares to the one-year withdrawal of 137 bcf and the five-year average withdrawal of 161 bcf. In the overnight electronic session the February natural gas is currently trading at 3.931 which is 0.100 lower. The trading range has been 4.037 to 3.887.

Have A Great Trading Day!

Dan Flynn

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