On the corn front, a quick recap on Wednesday’s trade. The corn was lower due to declining open interest in the December contract, First Notice Day, and month end that had help the profit takers move. Funds shaved of 5,000 corn and expectations of a slowdown in demand as buyers do not seem to be willing to pay these price levels for 2021. The wait and see game or playing possum game could begin. Traders are also watching to see how much actual precipitation and rain will fall on dry areas in Argentina and Brazil as concerns for a healthy crop is worrisome as the battle with La Nina continues. There was no overnight electronic session last night so we will start fresh this morning!
On the ethanol front no real new headlines as the market’s recovery is threatened by new Covid-19 restrictions. There was no overnight session in this market either. The December ethanol Open Interest declined to 4 contracts so we will rollover and make January top step on Monday.
On the Crude Oil front, we are trading lower in the overnight after Wednesday’s gains with more vaccine news. Also, the API and EIA were two different tales from two different cities with the API posting builds of 3.8 M and the EIA showing draws of 0.8 M. The Baker Hughes rig count showed no signs of U.S. drilling activity has slowed down. Also, OPEC and OPEC+ meet Monday and Tuesday to discuss the path on production quotas for each member. In the overnight electronic session, the January crude oil is currently trading at 4504 which is 67 points lower. The trading range has been 4609 to 4455.
On the natural gas front supermajors Exxon Mobil (NYSE:XOM) and Total (NYSE:TOT) are renegotiating natural gas resource sharing deal for their respective LNG projects offshore Mozambique. Both majors want to cut project cost and use the cheapest gas first. I am sure we will see a lot more shared revenue in the infrastructure in projects in the future as all companies are concerned of project costs and this may be the beginning of companies working together to cut costs as we are still not sure what this new administration (allegedly) will commit to the industry moving into the future. In the overnight electronic session, the January natural gas is currently trading at 2.927 which is .034 lower. The trading range has been 2.963 to 2.905.
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