The Corn & Ethanol ReportDaniel Flynn
The Corn & Ethanol Report 12/11/19
Will the FED Spark a Santa Claus Rally?
The day started with MBA U.S. Mortgage Applications coming in at 3.8% vs. the previous -9.2% and the MBA 30-Year Mortgage Rate at 3.98% vs. the previous 3.97%. These numbers bode well with an excellent Jobs market. We have CPI and Real Earnings at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., FED Interest Rate Decision at 1:00 P.M. along with FOMC Economic Projections and FOMC Monthly Budget Statement. And finally, Dairy Product Sales at 2:00 P.M. On the Corn front we continue trading in a slim trading range. Yesterday's reports were mildly bearish but news out of South America offered a little support with Brazil's Conab estimate that the Corn production will be at 98.4 million tonnes which is down 1.6% from last year. While Argentina is showed dry forecasts in Corn growing areas. We should see further support in months to come with the historic signing of the USMCA trade deal. Richard Trumka President of the AFL-CIO had to educate Pelosi and her people this is a great deal, that totally blows NAFTA out of the water. Relief to U.S. farmers is on the way despite the democrats delay. Another telling thing to me on yesterday's historic history day was the photo-op with House of Representatives announcing the Articles of Impeachment of President Donald Trump. In the overnight electronic session the March Corn is currently trading at 376 1/4 which is 3/4 of a cent lower. The trading range has been 377 to 375 1/4.
On the Ethanol front the January contract posted a trade at 1.340 which is .002 higher. The market is currently showing 1 bid @ 1.310 and 1 offer @ 1.345 with 1 contract traded and Open Interest at 456. The signing of the trade agreement is a bonus but the trade war with China could escalate with more tariffs still on the table for Sunday.
On the Crude Oil front we had an unexpected bearish spin on the API Energy Stocks data with Crude Oil +1.41M, Cushing -3.53M, Gasoline +4.92M and Distillates +3.24M. These numbers are weighing a little on the market in the early going and the EIA Energy Stocks could paint a different picture and if the FED is proactive ahead of the holiday's we could see another spike in prices. In the overnight electronic session the January Crude Oil is currently trading at 5898 which is 26 points lower. The trading range has been 5917 to 5881.
On the Natural Gas front the market is trading a little higher with the cold weather. With plenty of product and nowhere to go fast producers are concerned about sub-$2 prices. In the overnight electronic session the January Natural Gas is currently trading at 2.284 which is 2 cents higher. The trading range has been 2.297 to 2.261.
Have a Great Trading Day!
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December 16th, 2019
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