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Corn And Ethanol: Agriculture And Energy Day Today

By Dan FlynnCommoditiesDec 03, 2020 09:24AM ET
Corn And Ethanol: Agriculture And Energy Day Today
By Dan Flynn   |  Dec 03, 2020 09:24AM ET
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On the Corn front as we head into the big report day we learned that 43% of Iowa corn and soybean crop was hit hard with Monday's storms. Radio Iowa’s O. Kay Henderson reports that Governor Kay Reynolds said initial estimates indicate 10 million acres of Iowa cropland “was impacted by Monday's storm”. The governor went on to say a farmer reached out to her and said this was the worst wind damage I have ever seen. According to the USDA 23.4 million acres were seeded with corn and soybeans this spring.

So the early estimate indicates that 43% of the corn and soybean crop has been damaged or destroyed. “When I say 10 million acres, that’s an early estimate,” Reynolds said, “some of the photos have just been devastating. She is planning an aerial view of the damage. I spoke with one farmer in Iowa and he said the crop was flattened as far as the eye could see as he was driving in his truck to assess damage in his part of the state.

We can expect more damage in other states. And this could be a game-changer in the agricultural complex. In the overnight electronic session, the December corn is currently trading at 323 ¼ which is a ¼ of a cent lower. The trading range has been 324 ¼ to 322 ¾. All eyes will be on the reports at 11:00 A.M. with more damage assessments coming in the next days which could change the overall market tone.

On the ethanol front Alcohol drives profits for Pacific Ethanol (NASDAQ:PEIX) as it just has been reinstated and listed back on the NASDAQ Exchange. The corn news is just another blind-side hit to this industry as production was on a steady uptick but well below of last year because of the pandemic and other profit and blending issues. In the overnight electronic session the September ethanol posted a trade at 1.217 which was unchanged. The market is currently showing 1 bid at 1.110 and 1 offer at 1.220 with 1 contract traded and Open Interest at 67 contracts.

On the Crude oil Front the market seems to be gathering its legs again with OPEC+ still acting firm on production cuts cooperation even with some countries not fulfilling their obligations. We also had a bullish API inventory number yesterday with draws in crude oil at 4.401M while Cushing showed builds of +1.073M and products had draws with distillates -2.349M and gasoline -1.310M. This should be an interesting EIA Energy Stocks at 9:30. In the overnight electronic session the September crude oil is currently trading at 4227 which is 66 points higher. The trading range has been 4235 to 4153.

On the Natural Gas Front FX Empire reports some technicians think natural gas top is in but with a falling U.S. dollar we think we would see commodities rise, which could represent another buying opportunity. Another report from Reuters has Chevron (NYSE:CVX) Corp’s $5 billion offer to acquire Noble Energy (NASDAQ:NBL) after the U.S. oil major first proposed a 50% stake in Nobles Eastern Mediterranean natural-gas fields, in a proxy filing on Tuesday showed. If consummated, the all-stock merger will boost Chevron’s U.S. shale oil holdings and give it vast natural gas assets off the coast of Israel. Noble’s Leviathan, one of the biggest offshore gas discoveries of the last decade, already supplying natural gas to Egypt, Israel and Jordan. This may be another sign that the bottom is in, or very close. In the overnight electronic session the September natural gas is currently trading at 2.136 which is .035 lower. The trading range has been 2.161 to 2.121.

Corn And Ethanol: Agriculture And Energy Day Today

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Corn And Ethanol: Agriculture And Energy Day Today

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