Good Morning!
This morning we kickoff the day with reports starting at 7:30 A.M. with Exports Sales, Initial Jobless Claims and U.S. Trade Balance followed by Factory Orders at 9:00 A.M. and Dairy Products at 2:00 P.M.
On the Natural Gas front the weekly EIA Gas Storage data is today and the Thomson Reuters poll Scott Disavino gathered from 21 analyst showed expectations of injection builds anywhere from %0 billion cubic feet (BCF) to 70 bcf with the average guesstimate build of 61 bcf. This compares to last week’s build of 74 bcf, the one year of 68 bcf and the five-year average of 63 bcf. In the overnight electronic session the June Natural Gas is currently trading at 3.228, which is sharply unchanged. The trading range has been 3.254 to 3.211. The market is still mulling over damage control and demand destruction after the crazy weather Mother Nature cast on us last weekend.
On the Crude Oil front the same picture is pretty much painted as the Natural Gas in this shoulder season with volatile weather patterns across the lower 48 states. This latest sell-off in this market after a less-than-bullish EIA report versus API the night before really does not tell the whole story of what is to be expected. Under the Obama administration a deal was cut with lawmakers to put a budget through and with this deal for the Go Green policy one part was to release Crude Oil from the Strategic Petroleum Reserves (SPR). One million barrels were released last week and they have been reclassified or retagged but in reality not new product and should already have been priced in the market. When this market comes to grips, shortages will become reality and investors will become oversold. In the overnight electronic session the June Crude Oil is currently trading at 4688, which is 94 points lower. The trading range has been 4775 to 4673.
On the Ethanol front the June contract is currently trading at 1.509, which is 1 cent lower. The trading range has been 1.520 to 1.509. The fickleness in this market has a lot to do with instability in Energy and Grain prices.
Speaking of Grains, on the corn front the market is currently trading 3 ½ cents lower in the May contract at 362 ¾. The trading range has been 367 ½ to 362 ½. South America’s harvest, Weather and plantings in the U.S. grip this market and any rallies seem to be sold by farmers to lessen their expected losses come harvest time at these price levels.