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Corn And Ethanol: Export Sales And Hot Weather

By Dan FlynnCommoditiesJul 16, 2020 10:51AM ET
Corn And Ethanol: Export Sales And Hot Weather
By Dan Flynn   |  Jul 16, 2020 10:51AM ET
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After China's record US corn purchase, the market and traders want to see if the export market is moving and products are going elsewhere. Weather will be a key factor, with the summer wind starting to be a tad cooler at sunset and temperatures high during the day and cold fronts hitting warm fronts produce rains and storms. If there is no wind or hail damage, this will be ideal growing conditions for this crop as we move closer to harvest. Farmers, investors and traders will be keying on the USDA Crop Progress estimates on Monday to see what is rated good-to-excellent and where we stand in the silking stage.  December Corn is currently trading at 337 which is 3 cents higher. The trading range has been 337 ¼ to 333 ½.

Ethanol production climbed for the 12th week in a row. The EIA reported average production of 931,000 barrels a day, up 17,000 barrels from last week, but still 135,000 barrels below last year. Blending demand and the volume of gasoline supplied to the market were both down from a week ago, which has a lot to do with the 4th of July holiday. Domestic supply tightened slightly, down 12,000 barrels from a week ago at 20.608 million barrels and 2.757 million barrels from a year ago following production cuts for all the obvious reasons. The USDA next corn for ethanol use data will be on the August 12th Crop Production USDA Supply/Demand data. There were no trades posted in the overnight electronic session. August ethanol settled at 1.205 and is currently showing 1 bid @ 1.170 and 1 offer @ 1.298 with Open Interest at 64 contracts.

On the crude oil market, we have August options expiry, which could make for an interesting 1:30 P.M. close. The bullish numbers we saw in the EIA data drove the market higher to close above $41 a barrel. The OPEC+ group said they would ease record oil curbs from August 1st citing recovery in demand as global lock-downs are loosening up. They are also aware that lock-downs could go back into effect, so they do not want to upset the apple-cart as they move to get this market back in balance. August crude is currently trading at 4083 which is 37 points lower. The trading range has been 4118 to 4060.

The natural gas market is seeing and weighing up the prospects of new investments into the new way of energy for the future. Today we have the EIA Gas Storage data and the Thomson Reuters (NYSE:TRI) weekly poll with 18 analysts participating, estimate increases ranging from 34 bcf to 52 bcf with the median 48 bcf and actual number of 47 bcf. This compares to the one-year injection of 44 bcf and the five-year average build of 37 bcf. In the overnight electronic session the August natural gas is currently trading at 1.788 which is 1 cent higher. The trading range has been 1.807 to 1.776.

Corn And Ethanol: Export Sales And Hot Weather

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Corn And Ethanol: Export Sales And Hot Weather

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