We kickoff the day with Export Sales, Initial Jobless Claims (14/Aug), Jobless Claims 4-Week Average (14/Aug), Philadelphia Fed Manufacturing Index (Aug) and Continuing Jobless Claims (07/Aug) at 7;30 A.M. CB Leading Index MoM (Jul) at 9:00 A.M., EIA Gas storage and NY Fed Treasury Purchases 4.5 to 7 yrs. at 9:30 A.M., $-Week and 8-Week Bill Auction at 10:30 A.M., and 30-Year TIPS Auction at 12:00 P.M.
On the Hurricane Front Grace is now a full fledge hurricane with hurricane conditions and a dangerous storm surge are expected in the Yucatan Peninsula of Mexico in the next few hours. The storm is expected to hit the eastern mainland of Mexico beginning late Friday. Post Tropical Storm Fred is moving up the eastern inland coast causing tornados in New Jersey. They may get a double whammy with Tropical Storm Henri may have an impact on the eastern seaboard but is not expected to have a direct hit on the U.S. and move out in the Atlantic.
On the Corn Front we ended up higher in yesterday’s action in a narrow trading range. The fact that the USDA lowered yields and the PRO FARMER tour so far concurs with their findings so far, the corn did support the overall grain complex from a complete washout to the downside. As we know about yields and a slow export market this market may also experience harvest pressure early. The covid scare and Fed tapering may as well bring this market down with the outside markets getting crushed and the spillover to the grain complex. In the overnight electronic session the December corn is currently trading at 5581/2 which is 6 ½ cents lower. The trading range has been 563 ½ to 557 ¼.
On the Ethanol Front production and supplies are at multi-monthly lows. The EIA said production averaged 973,000 barrels a day. The lowest weekly average since April, and down 13,000 on the week, but up 47,000 on the year. The supply of 21.588 million barrels was a five-week low, a decrease of 718,000 barrels last week but an increase of 1.288 million last year. The USDA said the Midwest ethanol prices were mostly firm last week. They also expect 5.075 billion bushels of corn to be used this marketing year, rising 5.2 billion next marketing year. There will be an update on these numbers on the September 10th USDA report. There were no trades posted in the overnight electronic session. The September contract settled at 2.220 and is currently showing no market with zero Open Interest.
On the Crude Oil Front Covid fears and Fed tapering concerns out trumped by the Biden administrations ill-advised and unconceivable pull out of Afghanistan which brought up risk premium ten-fold with the country now becoming a safe haven for terrorists. In the overnight electronic session the October crude oil is currently trading at 6334 which is 187 points lower. The trading range has been 6457 to 6266.
On the Natural Gas Front this market is the energy source of the future but is no different than other commodities selling off with Fed tapering and Covid fears. Today we have the EIA Gas storage and a poll conducted by the Wall Street Journal with 14 analysts participating estimate injection numbers ranging from 19bcf to 33bcf. This compares to a 45bcf build last week and the five-year average of 42bcf. In the overnight electronic session the September natural gas is currently trading at 3.781 which is .071 cents lower. The trading range has been 3.829 to 3.766.
Have A Great trading Day!
Dan Flynn -