Good Morning!
We kick off the Day with Housing Starts & Permits at 7:30 A.M. EIA Energy Stocks at 9:30 A.M and Dairy Product Sales at 2:00 P.M. In the commodity world the Grains are trading weather and Energies are trading supply and weather. The API data showed builds of weekly supplies while Distillates and Gasoline showed draws which is a telltale sign this market has bottomed. In the overnight electronic session the Grains are again trading hot weather and rains in this critical juncture of the 2017 crop. Looking at the Wheat futures whether (no pun intended) if you talk Minneapolis, Kansas City or Chicago Wheat the basis between Winter Wheat and Spring Wheat is showing a spread that could be taken advantage from investors. The grain rally is lagging but Mother Nature will keep volatility at the forefront. In the overnight electronic session the September Corn is currently trading at 381 ¼, which is 4 ¼ cents lower. The trading range has been 383 ¾ to 374 ¼. Rains and hot temperatures should fuel this market in the next weeks.
On the Ethanol front rollovers are the focus and the August contract posted trades at 1.554 which is .009 of a cent higher with Estimated Volume of 25 contracts traded while the September contract showed a trade at 1.550 with Estimated Volume of 15 contracts. Open Interest in the August contract is down to 683 contracts while the September contracts Open Interest is growing to 611 contracts which is a curtain call for the August contract to be in the rear view mirror shortly.
On the Crude Oil front as the August contract closes in on expiration and the squeeze on the short side wears out, investors are asking if this market will breakout. My money is on the upside. In the overnight electronic session the September Crude Oil is currently trading at 4670, which is 11 points higher. The trading range has been 4684 to 4632. Even with the build on Crude Oil inventories of 1.6 million barrels Gasoline draws of 5.4 million barrels and Distillates draw of 2.9 million barrels shows me we are close to the bottom.
On the Natural Gas front investors focusing on activity of Disturbances in the Atlantic that could disrupt movement of supply in the Gulf of Mexico. Tropical Storm Don dissipated but another Tropical Storm Emily located at Cabo Verde and the Lesser Antilles has a 30% chance of forming a hurricane in the next 48 hours. It is still early in the season but hurricane activity can become a weather factor for investors climb aboard to expect disruptions and a climb in prices. In the overnight electronic session the August Natural Gas is currently trading at 3.088, which is unchanged. The trading range has been 3.103 to 3.070.
Have a Great Trading Day