Good Morning!
We kickoff the day with CPI, Jobless Claims and Real Earnings at 7:30 A.M., EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., Crop Production USDA Supply/Demand at 11:00 A.m. and Dairy Product Sales at 2:00 P.M. After Hurricane Michael made landfall it was a tremendous jolt to the people in his path and the global markets traded like they were in harm’s way. After yesterday’s action I believe the only thing we need to fear is fear itself. Granted the markets went into panic mode and there was some technical damage but I believe whatever reason and there were many that investors claimed to be the culprit that brought the market down some investors are missing the big picture. There may be a continuation with margin calls being met and we see an influx of new buyers to the table and this could be a great buying opportunity.
On the Corn front rains has slowed harvest and with weak cash basis farmers are holding back from selling at these levels and storage concerns are in investors’ minds. We have the monthly Crop Production USDA Supply/Demand data today. Will this report shed any light on where we go from here? I am guessing with the change in weather temperatures, I am concerned about frosts that could hurt the late plantings after it was 80 degrees two days ago. We also have the Mighty Mississippi at flood stage which is closing some locks to traffic while Iowa recorded its 3rd wettest September on record. In the overnight electronic session the December Corn is currently trading at 361 ½, which is 1 ¼ of a cent lower. The trading range has been 362 ¼ to 360 ¾.
On the Ethanol front now the reality of lifting the ban on gasoline blended with 15% Ethanol also known as E-15 the White House tried to appease rivaling parties in the Corn and Oil industries. The map is simple while trying to boost Ethanol demand and cutting compliance cost for refiners, or we can use that dirty word regulations. In the overnight electronic session the November Ethanol is currently trading at 1.301, which is .019 lower. The trading range has been 1.317 to 1.301 with 16 contracts traded. The market is currently showing 1 bid @ 1,305 and 1 offer @ 1.309 with Open Interest at 1,524 contracts.
On the Crude Oil front the market looks to be in a buy zone after Hurricane Michael is churning up the East Coast and North Carolina is still reconstructing from Hurricane Florence. So we can see several states in the path of this monster will need Energy to pave the way back to normality. Last night’s API showed jaw-dropping builds in Oil of 9.75 million barrels of Oil that made me blush. I never saw it coming and today at 10:00 A.M we have the EIA Energy Stocks and my question is, “will the EIA data come close to matching the API data”? In the overnight electronic session the November Crude Oil is currently trading at 7215, which is 102 points lower. The trading range has been 7276 to 7163.
On the Natural Gas front the market broke the streak of trading sharply higher after the selloff in yesterday’s trading session. We have the EIA Gas Storage at 9:30 A.M and the Thomson Reuters weekly poll with 20 analysts participating expect injection builds anywhere from 86 bcf to 96 bcf with the median build of 91 bcf. This compares to the one-year injection build of 55 bcf and the five-year average Injection build of 79 bcf. In the overnight electronic session the November Natural Gas is currently trading at 3.214, which is 7 cents lower. The trading range has been 3.287 to 3.195.
Have a Great Trading Day