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 Export Sales, Initial Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average at 7:30 A.M., Fed Bostic Speech and NY Fed Treasury Purchases 0-2.5 yrs. at 8:30 A.M., EIA Natural Gas Storage at 9:30 A.M., Fed Barkin Speech at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate, Crop Production USDA Supply/Demand & WASDE data at 11:00 A.M., 30-Year Bond Auction at 12:00 P.M., Fed Chair Powell Speech and IBD/TIPP Economic Optimism at 1:00 P.M.
Trends in CBOT grain market open interest have been mixed in recent weeks and open interest on corn has increased in 9 of the last 10 weeks and is now the highest since November of last year. Wheat open interest found a low in late June and has been steadily rising since. Wheat open interest is presently 28% higher than a year ago and the highest prices since October 2020. In soybeans, open interest peaked in mid-October and has declined 14% from the high. But the latest report shows that it was 17% higher than a year ago. The lack of speculative interest has been the largest bearish fundamental and technical pricing in CBOT futures prices. However, fund interest has steadily been returning with corn and wheat prices at multi-year lows. Soybeans has the best bullish story if South America weather problems persist with strong export interest for US Soybean meal and domestic demand for soybean oil. Remember the many flash sales destined for China as we see how the weather in South America will determine yields. Expectations are mixed as the market prepares for the crop report. And as much as traders want to digest, the market is weighing many factors. The street and ARC expect corn yielding 173.2 bushel per acre (bpa) and soybean yield 49.6 bpa. Also whispers that WASDE is expected to adjust world wheat production slightly lower and trim 2023/24 soybean oil stocks. In the overnight electronic session the December corn is currently trading at 472 ½ which is 3 ½ cents lower. The trading range has been 576 to 472.
On the Ethanol Front the private sector and government bureaucracies remain at odds with a scientific study of using a plan that would either state that the use of carbon capture at ethanol plants will actually result in more net CO2 emissions. The global ethanol market is moving, and we better be onboard! My money is on the private sector. There were no trades or open interest in ethanol futures.
Have A Great Trading Day!