On the Hurricane Front Disturbance 1 a trough of low pressure has formed over the western Caribbean Sea and extends northward across western Cuba. As of Mondays, update at !;00 P.M. CST the storm has a 10% chance of Cyclone Formation in the next 48 hours. While a new Tropical Storm Epsilon is expected to be at or near hurricane strength as it approaches Bermuda late this week. The current cone poses a risk to the U.S. upper-eastern coast and Canada. We will keep you posted as events unfold.
On the corn front harvest is moving along and ahead of schedule and yields are looking pretty good. We should be wrapping up harvest in the not so distant future with certain states already done harvesting soybeans. We also want to keep an eye on exports, I do expect another round of Chinese buying and Mexico to follow through with steady buying. In the overnight electronic session, the December corn is currently trading at 405 ½ which is ¼ of a cent higher. The trading range has been 407 ½ to 403 ½.
On the ethanol front a report predicted growth in Brazilian corn ethanol production. This is coming at a time when they are slapping a duty on U.S. ethanol imports. This could lead to another round of exchanges of tariffs between the two countries. Brazil is expected to reach 25 billion liters (660.43 million gallons) during the 2020-21 marketing year.
There have been plentiful and cheap corn supplies in the west-central region of Brazil that attracted investment in the corn ethanol sector over the past few years. There are currently 16 ethanol plants in the country with four of the facilities corn only plants and the remaining facilities are flex plants that produce ethanol from corn and sugarcane. There were no trades posted in the overnight electronic session. The November contract settled at 1.469 and is currently showing 1 bid at 1.300 and 0 offers with Open Interest at 63 contracts.
On the crude oil front, the November contract expires today. The market is in chop mode and we have the API Energy Stocks later in the day. The Disturbance 1 in the Gulf of Mexico could cause more disruptions to oilrigs and shipping the next few days. In the overnight electronic session, the December crude oil is currently trading at 4090 which is 16 points lower. The trading range has been 4133 to 4065.
On the natural gas front spot prices are leading the pack with cooler temperatures. The market may be also factoring risk in the Gulf Coast Region. In the overnight electronic session, the November natural gas is currently trading at 2.907 which is 0.112 higher. The trading range has been 2.926 to 2.824.
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