China In Lockdown
Good Morning!
We Kickoff the Spring Festive Eve for China today and the Chinese New Year with festivities canceled due to this killer virus. In our U.S. markets we start off the day with Exports Sales at 7:30 A.M., Markit Composite, manufacturing & Markit Services PMI Flash for January at 8:45 A.M. Baker Hughes Rig-Counts at High Noon and Cattle on Feed at 2:00 P.M. Th Wuhan coronavirus has infected 800 plus and killed 26 around the world so far. China has gone into lockdown and in a drastic turn of events, part of the Great Wall and Disneyland in Shanghai have been closed amid fears that as many as 10,000 are already infected with the deadly virus. Fourteen cities, home to around 40 million people, are reported to have gone into some form of lockdown and public transportation has been halted and roads closed, reported by the Daily Mail. This should drag heavily on the Energy complex. On the Corn front the market closed higher yesterday but is lower in the overnight electronic session with the rest of the Grain complex watching events unfold in China as we normally would be watching weather in South America and gauging the size of their crop while watching U.S. weather for plantings. In the overnight electronic session the March Corn is currently trading at 390 ¼ which is 3 ½ cents lower. The trading range has been 393 ¼ to 390.
On the Ethanol front we are starting to see Feb-Mch rollovers starting to kick in with February’s Open Interest declining and March Open Interest rising. In the overnight electronic session the March contract is currently trading at 1.362, which is .008 higher. The trading range has been 1.362 to 1.342. The market is currently showing 1 bid @ 1.343 and 1 offer @ 1.360 with 2 contracts traded and Open Interest at 373 contracts.
On the Crude Oil front with the grounding of Boeing (NYSE:BA) 737 MAX which is leading to major air carriers canceling flights and now the transport restrictions in China could create a black swan event with demand destruction that was not seen in the cards and could create a global economic slowdown due to demand dropping for various wild card reasons and not a recession that some have been predicting for 3 years. In the overnight electronic session the Crude Oil is bouncing of the lows at the moment following the stock market. The March contract is currently trading at 5537, which is 22 points lower. The trading range has been 5595 to 5525.
On the Natural Gas front the market is not able to sustain any sort of short-covering rally especially with February temperature forecast are all pointing higher temps. In the overnight electronic the February Natural Gas is currently trading at 1.886, which is 4 cents lower. The trading range has been 1.945 to 1.872.
Have a Great Trading Day!