The Corn & Ethanol ReportDaniel Flynn
The Corn & Ethanol Report 06/15/18
Tariff Battles Begin
Reports on this Friday are Capacity Utilization and Industrial Production at 8:15 A.M. followed by NOPA Crush at 11:00 A.M. Meanwhile the Trump administration is going to impose a 25% tariff on $50 billion in Chinese goods, escalating the trade conflict between the world's two largest economies. Trump noted that the White House could impose additional tariffs if China retaliates with duties of its own on American crops or other goods. I do expect a response from China in wake of the U.S. action, but I do expect cooler heads to prevail but at the end of the day we will come to an understanding.
The futures market tend to overreact in these headlines and the timing of the implementation of the tariffs has investors scrambling. In the overnight electronic session the Grains are making new lows as I write. The July Corn is currently trading at 356 which is 7 cents lower. The trading range has been 365 to 355 1/4.
On the Ethanol front in the overnight electronic session the July Corn posted a trade at 1.406 which is .007 lower. 4 contracts traded and Open Interest is at 828 contracts. This market coupled with Corn is a headline in itself with tariff talk.
On the Crude Oil front the July contract is currently trading at 6666 which is 23 points lower. The trading range has been 6709 to 6656. I still remain bullish but the murky waters may clear after next Friday's OPEC and Non-OPEC nations meeting in Vienna to discuss production output. The markets will be swimming when the reality to investors this will be a long-term affect and not in the short-term.
On the Natural Gas front the market is chugging away with hot temperatures forecasted over the weekend and into Monday. In the overnight electronic session the July Natural Gas is currently trading at 3.000 which is 3 1/2 cents higher. The trading range has been 3.012 to 2.966.
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June 18th, 2018
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