Hurricane Season Is Upon Us. The Corn & Ethanol Report 06/02/2022

We kickoff the day with Challenger Job Cuts at 6:30 A.M., ADP Employment Change (Mat) at 7:15 A.M., Initial Jobless Claims (28/May) and Continuing Jobless Claims (21/May) at 7:30 A.M., Factory Orders MoM (Apr) and Factory Orders ex Transportation at 9:00 A.M., EIA Natural 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., Fed Logan Speech at 11:00 A.M. and Fed Mester Speech at 12:00 P.M.

On the Corn Front the futures ended up sharply lower for the second straight day. Most feel the losses were due to talks between the EU and Russia to open a corridor for Ukraine corn exports. A lot of things to think about as I believe this break was way overdone. First thing is the Black Sea is loaded with mines due to fears of a Russian amphibious attack What does the war torn country have to export as Russia has done everything to wipeout Ukraine infrastructure and planting fields are now battle zones. This is one void to fill with another hot spot with Brazil as their crops are dying due to a heavy drought and they are concerned . And with the start of hurricane season as of yesterday we already have a reminder of a forecasted busy hurricane season. A Disturbance near the Yucatan Peninsula in the Southeastern Gulf of Mexico has an 80% chance of hurricane formation in the next 48 hours and could hit Florida this weekend. With La Nina’s forecasted,  dry area’s and wetter than norm area’s we have many challenges this growing season. In the overnight electronic session the July corn is currently trading at 737 ¾ which is 6 ½ cents higher. The trading range has been 738 ½ to 727 ¼.

On the Ethanol Front ethanol production capacity fell to 17.323 billion gallons in March, although feedstock was up. There is definitely an active cash market while there is zero activity in ethanol futures.

On the Crude Oil Front were down with the Saudi’s and OPEC+ output decision. We have the EIA data at 10:00 A.M., and last nights API’s showed draws in crude at 1.181M, slight builds at Cushing at + 0.177M, draws in gasoline at -0.256 and draws in distillates at -0.858M. In the overnight electronic session the July crude oil is currently trading at 11439 which is 87 points lower. The trading range has been 11498 to 11120.

On the Natural Gas Front the market is rolling like a juggernaut as weather and exports are keying this rally. The EIA Gas Storage is at 9:00 A.M. and the Thomson Reuters poll with 14 analyst participating estimates range from 82bcf to 93 bcf with the actual 96 bcf. This compares to the one-year injection of 98 bcf and the five-year average injection of 100 bcf. In the overnight  electronic session the July natural gas is currently trading at 8.952 which is 0.256 higher. The trading range has been 9.057 to 8.629.

Have A Great Trading Day!

Dan Flynn

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