We start off the day with Export Sales, Initial Jobless Claims, Jobless Claims Week Average, PPI MoM & YoY (AUG), Continuing Jobless Claims (29/AUG), Core PPI YoY & MoM (AUG) at 7:30 A.M., Wholesale Inventories MoM (JUL) at 9:00 A.M., EIA Natural Gas storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4-Week and 8-Week Bill Auction at 10:30 A.M., 30-Year Bond Auction at 12:00 P.M., and dairy Products at 2:00 P.M.

On the Tropical Storm front, we have Disturbance 1 moving northwestward at 10 to 15 mph and is expected to move inland over eastern North Carolina this afternoon. Disturbance 2 which is centered a couple mile northeast of the Central Bahamas. This system is forecast to drift westward and likely into the Florida peninsula on Friday. Afterward, upper-level conditions could become conducive for some development this weekend while the system drifts northwestward over the eastern Gulf of Mexico. Tropical Storm Paulette is moving west-northwest at 9 knots and the current movement does not look to pose a threat to the Gulf Region, while the same could be said about Tropical storm Rene moving in the same direction at 9 knots as well. Disturbance 3 is forecast to move off the west coast of Africa today and move westward and has a 60% chance of Cyclone Formation in 48 hours. This is a threat that will be monitored closely.

On the Corn front, the market was lower yesterday on light technical selling. Some wet weather is forecast to return to the central Corn Belt, with drier-than-normal conditions for the Central Plains. On Tuesday it was reported that Funds were a net buyer of +10,500 contracts of corn. The quality of the crop fell to 61% good-to-excellent down another 1%, while the Fair rated 25% up 1% from last week and the 14% poor to very-poor no change. 97% is now at dough stage just up above the five-year average of 94% 79% is dented with the five-year average 71%. In the overnight electronic session, the December corn is currently trading at 360 ¼ which is unchanged. The trading range has been 361 ¾ to 359 ½.

On the Ethanol front, the U.S. Grains Council reported that they are discussing how to take advantage of the hand sanitizer boom in South Korea and other Asian countries since the outbreak of COVID-19. This uptick in demand is opening the door to build new partnerships to expand demand potential across Asia- both for industrial uses and fuel. Haksoo Kim, USGC director in South Korea , was quoted, The demand for U.S. ethanol for industrial use has increased significantly due to demand for hand sanitizing products in South Korea and throughout the region.” Domestic demand for hand sanitizer in South Korea is now at 2.6 million gallons a month- more than 12 times pre-pandemic levels. There were no trades posted in the overnight electronic session. The October contract settled at 1.306 and is currently showing 1 bid @ 1.100 and 2 offers @ 1.320 with Open Interest at 42 contracts.

On the Crude Oil front, the market recovered from Tuesday overdone and oversold market due to the Saudi news, and later the API showed builds in crude oil at 2.970M, Cushing +2.608M, gasoline had draws of -6.492M,

And distillates had builds of +2.293M. No real surprise on the gasoline number after Labor Day. The draws we have seen the past few weeks were disruptions with Tropical Storms and Hurricane activity. And we have more activity in the Atlantic to keep are eyes on, that may cause more disruptions. In the overnight electronic session, the October crude oil is currently trading at 3750 which is 55 points lower. The trading range has been 3818 to 3730.

On the Natural Gas front, the big global demand versus heavy stockpiles will have traders looking at this morning’s EIA Gas Storage . The huge offshore finds discovered recently have been put on hold from the majors to invest any man hours and money due to political or terrorism reasons. We are in shoulder season which usually sells off the market. The weekly Reuters poll with 18 analysts participating estimate increases of 62bcf to 73bcf with the median build of 68bcf. This compares to the one-year injection of 82bcf and the five-year average of 77bcf. In the overnight electronic session, the October natural gas is currently trading at 2.374 which is .032 lower. The trading range has been 2.407 to 2.366.

Have A Great Trading Day!
Dan Flynn