Happy Australia Day & Chinese New Year
Good Morning!
We kickoff the day with New Home Sales at 9:00 A.M., Dallas Fed Manufacturing Index at 9:30 A.M., 2-Year Note Auction and 6-Month Bill Auction at 10:30 A.M. 3-Month Bill Auction and 5-Year Note Auction at 12:00 P.M. We have the Pacific Rim markets closed due to the holidays and the U.S. markets are getting whipped in the early going with fears that the coronavirus death toll is rising with more than 56 dead. More cities in China are on lockdown and investors are selling the board like a run on the banks. We also had a rocket attack on the U.S. embassy in Baghdad with 3 rockets with a direct hit after months of close calls. One rocket hit the embassy cafeteria at dinner time while the two others landed nearby. And we will have impeachment testimony today. On the Corn front the market closed lower on Friday on concerns of Asian demand. After the weekend we are seeing a lot more fear. One thing is for sure regardless of the calamity people will still have to eat. We should also keep a keen eye on weather developments as we move closer to planting season. In the overnight electronic session the March Corn is currently trading at 380 ¼, which is 7 cents lower. The trading range has been 384 ¾ to 379 ½.
On the Ethanol front there were no trades posted in the overnight electronic session. The March contract settled at 1.335 and is currently showing 2 bids @ 1.315 and 1 offer @ 1.334 with Open Interest at 394 contracts.
On the Crude Oil front the Stock Market is down big-time and demand destruction is up big-time with flights canceled going to China leaves a lot of product that was expected to evaporate. We will have a lot more unexpected product in the pipeline. Rumors are swirling the Saudi’s make cut production even further. How long will the risk of speculator selling continue and when will the market recover is on traders’ minds. We do have geo-political risk on as we hunt down the varmints that shot rockets at our embassy in Iraq. In the overnight electronic session the March Crude Oil is currently trading at 5254, which is 165 points lower. The trading range has been 5371 to 5265.
On the Natural Gas front the market is trading higher this morning, but I believe this rally will be short-lived with the rise in the mercury and reports of warmer than normal temperatures in February. In the overnight electronic session the February Natural Gas is currently trading at 1.943, which is 5 cents higher. The trading range has been 1.976 to 1.922.
Have a Great Trading Day!