Good Morning!
Even after yesterday’s slight bounce following Tuesday’s bloodbath in the Grain Complex, Intl FC Stone projection of Corn and Soybean yields and bushel per acre that was a far cry from the USDA July estimate was not enough to stop the bleeding. The news put a temporary hold on selling pressure, but the finger was not big enough to plug the dike. Weather will still be considered a factor but many traders contend that carryover will trump any rally. In this stage in the game we may see a market that changes the cycle. In the overnight electronic session the September Corn is currently trading at 362, which is 3 cents lower. The trading range has been 365 to 361 ¼. Weather trends we have grown accustomed to may have changed in 2017 and I am not talking Global Warming or Climate Change, I am talking about the 2017 January, February and even March, April and May weather in the Mid-West that has given investors headaches trying to figure out the fundamentals.
On the Ethanol front there were no trades posted in the overnight electronic session. The September contract settled at 1.559 and is currently showing 2 bids @ 1.541 and 1 offer @ 1.554 with growing Open Interest at 1,011 contracts.
On the Crude Oil front the market is attempting to get back in balance even with fake headlines that get the algorithm traders step on the accelerator pedal and take out tight stops. The basic fundamentals will come into play and the market is always right. And when ready we will wake up and say why are we paying so much at the pump as gasoline prices will rise. In the overnight electronic session the September Crude Oil is currently trading at 4979, which is 20 points higher. The trading range has been 4989 to 4912.
On the Natural Gas front the market looks gravely oversold with very few buyers looking to invest and production caps are lurking and will show their ugly face soon if price levels do not change. Today we have the weekly EIA Gas Storage data and Thomson Reuters, Scott Divasino’s weekly poll that 24 analyst participated showed expectations of builds anywhere from 13 bcf to 37 bcf with the median of 21 bcf. This compares to last week build of 17 bcf, a DRAW last year of 3 bcf and the five-year average of builds of 44 bcf. Do not forget we are a major exporter of Natural Gas and the countries we are moving product to have an appetite. In the overnight electronic session the September Natural Gas is currently trading at 2.826 which is 1 ½ of a cent higher. The trading range has been 2.843 to 2.808.
Today’s reports are Export Sales and Initial Jobless Claims at 7:30 A.M., Factory Orders and ISM Non-Manufacturing Index at 9:00 A.M. EIA Gas Storage at 9:30 A.M. and Dairy Products at 2:00 P.M.
Have a Great Trading Day