Russia To Sharply Cut Military Operations Near Kyiv and Chernigov. The Corn & Ethanol Report 03/29/2022

We start off the day with Redbook YoY (26/Mar) at 7:55 A.M., Fed Williams Speech, S&P/Case-Shiller Home Price MoM & YoY (Jan), House Price Index (Jan) and House Price Index MoM & YoY (Jan) at 8:00 A.m., Jolts Job Openings (Feb), CB Consumer Confidence (Mar) and Jolts Jon Quits (Feb) at 9:00 A.M., Dallas Fed Services Index (Mar) and Dallas Fed Services Revenue Index (Mar) at 9:30 A.M., 7-Year Note Auction at 12:00 P.M. and API Energy Stocks at 3:30 P.M.

On the Corn Front wheat and corn futures fall ahead of the Ukraine peace talks. We do have concerns over China’s surging Covid-19 cases which is also weighing in on commodity markets further. Traders  squared off positions and took some profits, while we have had a broad sell-off stoked on China demand. Remember we have Prospective Plantings on Thursday. In the overnight electronic session the May corn is currently trading at 729 ¼ which is 19 ¼ cents lower. The trading range has been 747 ½ to 729.

On the Ethanol Front Midwestern lawmakers are trying to replace Russian oil with ethanol. The argument remains that increased ethanol sales would lower fuel prices and help the climate. Both counts are hotly contested. There were no trades or open interest in ethanol futures.

On the Crude Oil Front we were sharply lower in yesterday’s action and early this morning the market was a buck and change lower, when the announcement broke on the Ukraine talks that Russia will sharply cut military operations near Kyiv and Chernigov. The markets are trading risk off but the U.S. Treasuries are telling me inflation will march on. We have had quite the volatility this week. I do not see gas prices to fall sharply as we do not have the infrastructure that has been dismantled or capped. We have the API Energy Stocks later in the day but the main headlines are the Ukraine and the China Covid-19 rise in cases. In the overnight electronic session the may crude oil is currently trading at 10020 which is 576 points lower. The trading range has been 10784 to 9844.

On the Natural Gas Front it is Last Trading Day in the April contract. The G-7 rejects Russia’s demand to pay natural gas in rubles. Germany energy minister Robert Habeck told reporters that, “all G-7 ministers  agreed completely that this would be a one-sided clear breach of existing contracts,” for natural gas., which is used to heat homes, generate electricity and power industry.  Payment in ruble is not acceptable, we have urged companies affected not follow Putin’s demand,” Habeck said. In the overnight electronic session the mat natural gas is currently trading 5.448 which is 0.090 lower. The trading range has been 5.527 to 5.238.

Have A Great Trading Day!

Dan Flynn

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