The National Hurricane Center issued yet another advisory about a Disturbance moving towards the Gulf Coast direction when we are still counting and assessing the casualties after Hurricane Zeta. This Disturbance has a 40% chance to form hurricane status in the next 48 hours and 80% in the next five days. The disturbed weather over the Lesser Antilles and eastern Caribbean Sea has become more concentrated as the NHC update at 1;00 A.M. CDT this morning. We will have more ideas on the impact and danger this storm could bring early next week
On the corn front we witnessed the biggest loss in 7 months as COVID-19 fears gripped the market and spooked it before Halloween pushing fears ahead of the unknown. Which can be scary in futures trading. With this drop in prices expect China and other countries to take advantage of the lower price swing and import more U.S. ag products. Even with the election on Tuesday, it is clear that U.S. demand is increasing, and other buyers know they have to buy our goods and may take advantage of the dip in prices. I expect when the wind blows in this latest pandemic scare, it will go away, and the market will have a positive perspective, which should drive prices higher. In the overnight electronic session, the December corn is currently trading at 397 which 1 ½ of a cent lower. The trading range has been 398 ¼ to 394 ¼.
On the ethanol front this market is also looking ahead to the final outcome of Tuesday election with a lot of skin in the game. All the roadblocks, disruptions and the industry put on the brink of extinction the industry came back. We will have an idea if all the trade deals are in place on an even playing field or do we become the world’s breadbasket at unaffordable prices to the U.S. farmer and producers. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.530 and is currently showing 1 bid at 1.310 and 0 offers with Open Interest down to 5 contracts. We will rollover and cover the December ethanol next week.
On the crude oil front, it seems words out of OPEC they are not in a hurry to extend production cuts as demand fears, multiplied with the latest surge in the pandemic. With local governments here in the U.S. going back to shut business’ down AGAIN, instead of keeping business open with an agreement of social distancing and regulate to keep the business open and not shut it down. Also, if Saudi Arabia and Russia forgot their little price war with the pandemic raging at the time and put prices in the negative, their memory has failed them. If they decide to boost production, all I can say, I saw this movie before and know how it ends. When they drive people to not agree and demand and production numbers change like the U.S. foreign debt, we will find demand creep up back in the picture as it has so many times before. In the overnight electronic session, the December crude oil is currently trading at 3627 which is 10 points higher. The trading range has been 3660 to 3535.
On the natural gas front the market is showing resilience as the energy along with other commodity complexes went south for the winter with the recent pandemic news. We also have to realize we have boots on the ground assessing damages and further repairs after Zeta, and we have another Disturbance moving to an area to the Gulf Coast. Traders will be watching. In the overnight electronic session the December natural gas is currently trading at 3.301 which is unchanged. The trading range has been 3.344 to 3.285.