Energy Independence? The Corn & Ethanol Report 02/08/2022

We kickoff the day with NFIB Business Optimism Index (Jan) at 5:00 A.M., U.S. Trade Balance (Dec), Exports (Dec) and Imports (Dec) at 7:30 A.M., Redbook YoY (o5/Feb) at 7:55 A.M., IBD/TIPP Economic Optimism  (Feb) at 9:00 A.M., NY Fed Treasury Purchases 22.5 to 30 yrs. at 9:30 A.M., Quarterly Report on Household Debt and Credit (Q4) at 10:00 A.M., 3-Year Note Auction at 12:00 P.M. and API Energy Stocks at 3:30 P.M.

On the Corn Front futures opened higher in yesterday’s action and the funds piled on singing, “let’s get this party started!” Talks continue of lower and lower South American supply and U.S. demand is knocking at the door. The Follow through was short lived as in the overnight electronic session the March corn is currently trading at 631 ¾ which is 3 ½ cents lower. The trading range has been 636 ¾ to 629 ½

We may see a chop in today’s trade as we have certain traders squaring up or adding to their positions before tomorrow’s USDA and WASDE data.

On the Ethanol Front biofuel groups urge the EPA to follow through with its proposal to deny more than 60 pending small refinery exemptions (SRE)petitions in comments filed with the agency before the close of the Feb 7 public comment deadline. There seems to be some fight after the deadline. We will keep you posted on this major headline. There were no trades in ethanol futures.

On the Crude Oil Front we pulled below $90 a barrel. This market is being pushed and pulled and the talk in the oil patch with my contacts, they are talking about draws in crude and large draws in Cushing, Oklahoma. However, there is also whispers of releasing strategic petroleum reserves (SPR)’s which will only sugarcoat the short-term but in actual hard reality when and where the market seek its own level?

Ask any former governor from California how price caps worked out for him and his state overall. We should be rethinking Anwar and the Keystone Pipeline XL and get back to energy independence. This is a national Security issue that would change how are enemies and OPEC+ will play their hand. In the overnight electronic session the March crude oil is currently trading at 8957 which is 175 points lower. The trading range has been 9168 to 8901.

On the Natural gas Front the Texas grid hasn’t fixed natural gas yet and consumers are facing much higher energy bills. Germany is at Russia’s beck and call now that the U.S. energy policy pushed the German’s in signing a deal with the devil. We have turnaround Tuesday with the market in the green in the early going. In the overnight electronic session the March natural gas is currently trading at 4.288 which is 0.056 higher. The trading range has been 4.343 to 4.173.

Have A Great Trading Day!

Dan Flynn

Questions? Ask Dan Flynn today at 312-264-4374