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The Corn & Ethanol Report

Daniel Flynn

The Corn & Ethanol Report 02/16/18

Argentina's Moisture Deficit the Talk of the Town

Good Morning!

More news on the Grain front is that more than half of Argentina's Soy and Corn fields are in poor to very poor condition. The correction in the Stock Market has investors realizing it is nothing more than a correction and they will be picking their spots to buy value. The U.S. dollar is trading higher this morning, however, that could be a blip on the screen as we see profit taking in the Euro-currency after its great jump. In the overnight electronic session the March Corn is currently trading at 367 1/4 which is a 1/2 of a cent lower. The trading range has been 368 1/4 to 367 1/4. This morning we have Housing Starts and Permits at 7:30 A.M. going into the Presidents Day holiday long weekend which will delay next week's Export Sales until next Friday coupled with March Grain option expiration which could give a much needed shot in the arm to this market where global fundamentals stand at the moment.

On the Ethanol front there were no trades posted in the overnight electronic session. The March contract settled at 1.486 and is currently showing 1 bid @ 1.481 and 1 offer @ 1.486 with declining Open Interest at 787 contracts open. Expect the April contract Open Interest surge ahead in today's action as well outpacing the March contract in volume.

On the Crude Oil front the market and investors are starting to realize and come to grips that we do not have a lot of storage as we move closer to the summertime driving season and record production is being outsourced by record consumption and this outpacing of shortages in supply only means higher prices. Historically the cycle would show that storage would be high at this time of year but that is not the case this year. In the overnight electronic session the March Crude Oil is currently trading at 6153 which is 19 points higher. The trading range has been 6189 to 6130. The only thing that could slow this market is an economic decline which does not look to be in the picture with this vibrant global economy or a release of the Strategic Petroleum Reserve (SPR).

On the Natural Gas front after a bullish EIA Gas Storage number yesterday and the market still could not get any legs under it shows me it is over for any rally at this time as we move closer to spring and shoulder season. With Crude Oil and Gasoline prices on the surge and plenty of capacity to store with the movement of Crude Oil and Gasoline producers will store more Natural Gas for a rainy day or until the price moves higher to warrant sales and production which is not in the scenario for now. In the overnight electronic session the March Natural Gas is currently trading at 2.550 which is 3 cents lower. The trading range has been 2.589 to 2.542.

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Contact Dan at (888) 264-5665 or dflynn@pricegroup.com.