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 Index (19/Aug), MBA Mortgage Refinance Index (19/Aug), MBA Purchase Index (19/Aug), MBA Purchase Index (19/Aug), MBA Mortgage Applications (19/Aug), and MBA 30-Year Mortgage Rate (19/Aug) at 6:00 A.M., Durable Goods Orders MoM (Jul), Durable Goods Ex Transportation MoM (Jul), Non Defense Ex Air (Jul), and Durable Goods Orders ex Defense MoM (Jul) at 7:30 A.M., Pending Home sales MoM & YoY (Jul) at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 2-Year FRN Auction at 10:30 A.M., and 5-Year Note Auction at 12:00 P.M., and Dairy Products Sales at 2:00 P.M.
On the Corn Front the early birds at the Pro Farmer Tour gave the market more legs in the green. This is the point when traders seriously try and evaluate yields farmers will have. They thought yields in South Dakota and Ohio to be less than expected. Now the tour will focus on Indiana and Nebraska yields. Looking ahead expectations of much higher yields in Iowa and Illinois, The US forecast for fall is calling for normal harvest weather. In the overnight electronic session the December corn is currently trading at 669 ¼ which is 9 ¼ cents higher. The trading range has been 671 ¼ to 659 ¾.
On the Ethanol Front the industry is applauding the new round of USDA HBIIP funding many projects that are underway. The University of Nebraska with researchers studying a project that aims to reduce water and energy in ethanol production. As of January 1, 2022 biofuel plant production capacity in the US reached 21 billion gallons per year v(gal/y) from 275 facilities. More than four-fifths of US biofuel production was for fuel ethanol. Heavy activity in this commodity that are effecting other commodities as we push forward, while the ethanol futures couldn’t catch a cold.
On the Crude Oil Front last night’s API data showed draws in crude oil -5.632M, with builds in Cushing of +0.679M, products showed slight builds as well with gasoline +O.268 and distillates at +1.051M. More gamechangers as we beg for energy that is under our feet and now we are at the whims of OPEC+. Saudi Arabia was adamant that if the US-Iran nuke talks get a deal together than the Saudi’s could cut US imports. We have to remind you that there has been a proxy war between those two states. The two countries severed diplomatic ties in 2016. Tehran insists that its nuclear programs are for peaceful purposes. Yeah, and I am the Easter Bunny. Expect more shake and bake with volatility reigns in even further. In the overnight electronic session the October crude oil is currently trading at 9407 which is 33 points higher. The trading range has been 9540 to 9334.
On the Natural Gas Front with an early winter could be coming to Europe and Germany wants to shift from Russian to Canadian natural gas supplies at “warp speed.” However developing LNG export capacity could take years. What is the US waiting for? All of our politicians that are at war with the energy sector keep writing checks that they can’t cash, and this could be a boon to their checkbooks. Endless demand spurs US natural gas prices to the shale-era highs, while Europe’s energy crisis is playing a helping hand in US natural gas prices. In the overnight electronic session the September natural gas is currently trading at 9.249 which is 0.056 higher. The trading range has been 9.426 to 9.209.
Have A Great Trading Day!
Dan FlynnQuestions? Ask Dan Flynn today at 312-264-4374