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The Corn & Ethanol Report

Daniel Flynn

The Corn & Ethanol Report 07/21/17

Corn Production Forecast Lowered

Good Morning!

Today at 2:00 P.M. we have Cattle and Cattle On Feed reports. News from Informa Economics IEG has adjusted production forecasts for Corn, Barley and Spring Wheat due to dry conditions and above-normal temperatures in the Northern Plains and Western Corn Belt. Informa Economics IEG will issue their next product survey for all crops in the first week of August. Informa Economics IEG adjusted Corn production down 287 million bushels to 13.9 billion bushels, which would be roughly 1.3 billion bushels below last year's record. The Corn yield is forecast to average 166.2 bushels per acres, which is 3.5 bushels below the previous forecast, and, if realized, would be 9.1 bushels below last year. Even with that bullish news said there are still a lot of bearish traders ready to step on any rally sell heavily due to last year's carryover and it was showed in last night's action with September Corn currently trading at 385 1/4 which is 5 3/4 cents lower. The trading range has been 391 to 384 3/4.

On the Ethanol front there were no trades posted in the overnight electronic session. The August contract settled at 1.538 and is currently showing 4 bids @ 1.514 and 4 offers @ 1.535 with declining Open Interest at 491 contracts.

On the Crude Oil front we have the OPEC meeting on Tuesday and the weekly API Energy Stocks on the same. The outcome of the two events could bring investors to the realization that this market is still out of balance. And it looks like the algorithm boys were at it again tanking the market from being higher at 6:35 A.M. as you can see on the chart. In the overnight electronic session the September Crude Oil is currently trading at 4655 which is 37 points lower. The trading range has been 4721 to 4635. I would think investors would not want to be overly short going into the weekend and especially on Tuesday when we get word out of OPEC and the API Energy Stocks.

On the Natural Gas front the market is trading lower in the overnight electronic session with the August contract currently last at 3.008 which is 3 ½ cents lower. The trading range has been 3.042 to 3.003. Weather, rig-counts and exports will play key roles for this market to trade higher.

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