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 kickoff the day with MBA Mortgage Market Index (17/Jun), MBA Mortgage Refinance Index (17/Jun), MBA Purchase Index (17/Jun), MBA Mortgage Applications (17/Jun) and MBA Mortgage Applications (17/Jun) at 6:00 A.M., Redbook YoY (18/Jun) at 7;55 A.M., Fed Chair Powell Testimony and 2-Year FRN Auction at 8:30 A.M., Fed Evans Speech at 11;%0 A.M., 20-Year Bond Auction at 12:00 P.M., Fed Harker and Fed Barkin Speech at 12:30 P.M., and API Energy Stocks at 3:30 P.M.
On the Corn Front the funds bailed in the wake of weather reports forecasting moderating temperatures and the state of the global economy. If this heat remains for a longer period of time we can expect the crop to have more damage and the funds will come back and pile on driving prices higher faster than inflation. The Ukraine/Black Sea exports down to nil and drought in Brazil and South America’s total export market will play a crucial factor as we had a wet planting season causing delays. And now we have concerns the crop may be scorched by extreme hot and dry weather. In the overnight electronic session the July corn is currently trading at 765 which is 4 ¼ cents higher. The trading range has been 767 ¾ to 754 ½.
On the Ethanol Front we continue to talk back and forth about corn-based ethanol actually being worse for the environment than gasoline. There will be studies both pro & con to have the opposing sides refineries and corn lobby try and gain more leverage. Whatever the case if the global economy does not sink US corn exports will wake up and drive more inflation to your local grocery store. Ouch…With an active cash market ethanol futures remain in dry dock.
On the Crude Oil Front the market is trading sharply lower, and not for positive reasons. The Biden energy policy is to purchase crude oil from sworn enemies instead of pumping here in North America which would drive down cost at the pump easily to $2 and change. Not to mention diesel prices which is causing farmers and trucking to pay higher prices and we feel the impact with groceries as this runaway inflation continues. Russia is selling oil to India and now the US is allegedly asking to purchase Russian oil at $120 a barrel. Not a good thing asking the evil empire to export a less environment friendly energy source to the US, even after sanctions. It kind of defeats Joe Bidens green energy plan. The Federal tax cuts are nothing but a band-aid on a big wound. China is having a run on banks as their economy is feeling the heat and pressure too. In the overnight electronic session the August crude oil is currently trading at 10385 which is 567 points lower. The trading range has been 10976 to 10320.
On the Natural Gas Front the market is trading on the economy and weather. How long will the heat last? We’re coming in higher this morning but this market like the rest of the energy sector is vulnerable for breaks to the downside. In the overnight electronic session the July natural gas is currently trading at 6.756 which is 0.052 higher. The trading range has been 6.852 to 6.618>
Have A Great Trading Day!
Dan FlynnQuestions? Ask Dan Flynn today at 312-264-4374