Old Man Winter Pack’n a Punch
Good Morning!
The east coast girls are bundled and the west coast girls are bundled, Sorry I meant bundled up and fumbled the Beach Boys hit but weather like this you think of Summer Breeze and A Summer Wind. The east coast is taking it on the chin again as after Old Man Winter punched them in the nose he is now hitting them with hurricane-force winds creating loads of snow and ice after the initial arctic blast. And this should effect the markets today and beyond. This morning we kickoff the day with Initial Jobless Claims at 7:30 A.M., EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., Dairy Products and Dairy Product Sales at 2:00 P.M.
On the Corn front news reported by Tom Polansek of Thomson Reuters that four years of a bumper grain and oil seed harvest has squeezed profits for Cargills (CM:CARG) and main rivals Archer-Daniels-Midland Company (NYSE:ADM), Bunge Ltd (OTC:BGEPF) and Louis Dreyfus Corp. Traders expect more of the same next year, prompting cost cuts. I anticipate challenges in this year’s crop but at the moment I am unique. In the overnight electronic session the March Corn is currently trading at 352 ½, which is a ½ of a cent lower. The trading range has been 353 ½ to 352 ¼.
On the Ethanol front the January contract expires today and the February contract is currently trading at 1.349, which is .003 higher. The trading range has been 1.393 to 1.345. 59 contracts traded and Open Interest is at 1,606 contracts. The market is currently showing. The market is hearing whispers that the cold weather is going to put refineries at a further disadvantage to produce corn and sugar based Ethanol in the mix.
On the Crude Oil front last night’s API data showed draws in Crude Oil at 4.992 million barrels, Cushing down 2.11 million while Gasoline and Distillates showed builds of 1.87 million barrels and 4.272 million barrels respectively. The east coast should welcome a big build in Distillates for Home Heating Oil and hopefully we pray there will not be any further disruptions in deliveries. In the overnight electronic session the February Crude Oil is currently trading at 6180, which is 17 points higher. The trading range has been 6221 to 6169. The EIA report will be released at 10:00 A.M.
On the Natural Gas front the weekly EIA Gas Storage will be released at 9:30 A.M. And the weekly Thomson Reuters poll with 24 analysts participating expect huge draws anywhere from 205 bcf to 243 bcf with the median at 221 bcf. This compares to last week’s draw of 112 bcf, the one year of 76 bcf and the five-year average of 99 bcf. This will be the biggest withdrawal for the week on record, according to the federal agency data going back to 1994, sue to increased heating demand during the brutally cold week. Reported by Karen Rodrigues, editing by Scott DiSavino and Tom Brown. In the overnight electronic session the February Natural Gas is currently trading at 3.028 which is 2 cents higher. The trading range has been 3.078 to 2.981. Coal Plants in West Virginia will be slowed down as well in the inclement weather.
Have a Great Trading Day!