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 Durable Goods Orders MoM, Durable Goods EX Transportation MoM, Durable Goods Ex Air, Durable Goods Orders ex Defense MoM, at 7:30 A.M., Redbook YoY at 7;55 A.M., S&P/Case-Shiller Home Price MoM & YoY, House Price Index MoM & YoY, and House Price Index at 8:00 A.M., CB Consumer Confidence, New Home Sales, New Home Sales MoM, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Index at 9:00 A.M., NY Fed Treasury Purchases TIPS 7.5 to 30 years, Dallas Fed Services Index and Dallas Fed Services Revenue Index at 9:30 A.M., 5-Year Note Auction at 12;00 P.M., API Energy Stocks, Building Permits Final, and Building Permits MoM Final at 3:30 P.M.
On the Corn Front crop conditions fell to the second lowest rating in 38 years. If we do the math that was 1985 which was a hot summer in the Midwest. However, drought conditions in 1988 is the threat we are battling now. The market is coming in lower today with forecasts of wetter and better rains expected. The real question is if the crops can endure more dryness with slim to nil soil moisture as corn moves ever so closely to the pollination stage. The global market is mobilizing expecting shortages due to drought regions across the globe, and with little carryover it will be hard to soften the blow. The next two weeks will be critical for rainfall to provide soil moisture. In the overnight electronic session the July corn is currently trading at 624 ¼ which is 13 cents lower. The trading range has been 644 ½ to 624.
On the Ethanol Front There were no further breaking news headlines to change the psychology of this market with threats of biofuels and ethanol reliant on corn and soybeans. The US could excel and is on exports but lacks the infrastructure and crops which is most important to these blends. The market is realizing to keep your eyes on the prize and that is domestic use and exports. The market is taking a breather for today as the main blend (crops) will dominate prices from where we go from here. There were no trades or open interest in ethanol futures.
Have An Excellent Trading Day!