Corn And Ethanol: Corn Tumbles On Midwest Weather

in #money10 days ago

Corn sank due to the weather in the US Midwest, while funds added to their record short positions in last week's trade. The market is coming in higher, but I would be hard pressed to believe we will be in the green, with Export Inspections and Crop Progress, which should show plenty of supplies in grain and a modest shift in US planting from corn to soybeans. Traders are also keeping tabs on China, as tensions rise and our relations soured with the pandemic. China is flexing its muscles in Hong Kong, Taiwan and other areas in the Pacific Rim and wants Washington to stay out of its affairs. They are also threatening this could end the trade deal signed in January. In the overnight electronic session the December Corn is currently trading at 328 ¼ which is 3 cents higher. The trading range has been 328 ¼ to 323 ½.

On the ethanol front, it's pretty quiet. We are just continuing to see production rise and stockpiles fall. There were no trades posted in the overnight electronic session. The August contract settled at 1.110 and is currently showing 1 bid @ 1.091 and 1 offer @ 1.150 with Open Interest at 77 contracts. We could see strength in this market today, with a trend developing in sugar and with corn and energy prices higher in the early going.

Crude oil started out lower this morning, with traders fearing states may go back on lock-down again. We are starting to see demand materialize and traders are expecting travel this long weekend as we celebrate Independence Day. In the overnight electronic session the August Crude Oil is currently trading at 3890 which is 41 points higher. The trading range has been 3912 to 3750.

Natural gas is trading sharply higher after last weeks nosedive after the EIA Gas Storage data, while prices have not fully recovered we are still inching upwards. With weather related demand perking up, we could see additional short covering and higher volatility. In the overnight electronic session the August contract is currently trading at 1.619 which is 7 ½ cents higher. The trading range has been 1.623 to 1.558.

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