On the corn Front the market continued Monday’s rally as China is back and active recently purchasing 136 mmt. of U.S. corn. The market will be focusing on upcoming acreage weather along with yields and continued demand. Crop yields in Brazil and Argentina are expected to be coming in lower than the USDA estimate. In the overnight electronic session, the March corn is currently trading at 537 ¼ which is 5 cents higher. The trading range has been 539 ½ to 532.
On the ethanol front rumors of active China buying in the ethanol market still has this market muzzled with doubts of increasing production as profit margins remain tight forcing some plants to remain idle. The question is when will producers feel confident to get these plants back online. We will get the weekly stocks and production numbers this morning. There were no trades posted in the overnight electronic session. The April ethanol settled at 1.658 and is currently showing 2 bids at 1.600 and 2 offers at 1.749 with Open Interest at 44 contracts.
On the crude oil front last night’s API showed draws in crude -5.272 million Barrels, Cushing draws of -3.475 M, with builds in gasoline +3.058 M and distillates builds of +1.398M. The street was looking for slight builds in crude and surprised by the large draw which boosted the market. Traders will be watching for the EIA data at 9:30 a.m. as we move closer to the OPEC meeting with rumors of millions of barrels of sanctioned Venezuelan oil is moving to China. In the overnight electronic session, the march crude oil is currently trading at 5269 which is 8 points higher. The trading range has been 5312 to 5249.
On the natural gas Front today is Last Trading Day for the February contract. Cooler temperatures have had the market rally over 8% this week. Prices have run into resistance at the 5-day moving average at 2.670 and support at the 10-day moving average at 2.620. Short-term momentum has turned positive as the fast stochastic generated a crossover buy. In the overnight electronic session, the March natural gas is currently trading at 2.686 which is 5 cents higher. The trading range has been 2.700 to 2.618.
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