We start off the day with NFIB Business Optimism Index (Jun( at 5:00 A.M., Core inflation Rate YoY & MOM (Jun) and Inflation Rate YOY & MOM (Jun) at 7:30 A.M., Redbook YOY (10/Jul) at 7:55 A.M., NY Fed Treasury Purchases 4.5 to 7 yrs. At 9:30 A.M., 52-Week Bill Auction and 42-Day Bill Auction at 10:30 A.M., 30-Year Bond Auction at 12:00 P.M., Monthly Budget Statement (Jun) at 1:00 P.M., and API Energy Stocks at 3:30 P.M.
On the Corn Front WASDE gave varying accounts on corn with expected yields down and with no real change in Soybeans. The Wheat this year has been following the corn’s lead but yesterday it was the latter with wheat leading corn with drought concerns in North Dakota and Canada. With this change up it offered much needed support to keep it higher in the session as soybeans were somewhat weak in the session. We could see a drastic change in the weather in August and September in the Midwest with a possible La Nina forming and that would be horrible to the heat-stricken in the Corn Belt already. Rains that have soaked Illinois have farmers concerned if they are low on nitrogen because the rains are evaporating the proteins in the ground. Let’s face it we are in a weather market and South America’s crop is not getting any better, pile on little to no carryover, certain traders that has been trading on bearish instincts and reverse course may find out the horse already left the barn.
On the Ethanol Front the USDA maintained its forecast in the latest WASDE report of season-average corn price was lowered. Last months WASDE was looking at numbers like larger supplies, greater feed an residual use, increased exports and higher ending stocks. The stocks were lowered 25 million bushels based on greater feed for residual use this year while production forecasted 175 million bushels while 5.2 billion bushels of corn for ethanol use.
On the Crude Oil Front the market is volatile with fears in the economy and the OPEC stalemate between Saudi Arabis and the UAE. Talk of more draws have been supportive to crude prices in the quiet evening session, as the market braces for inventories at 3:30 P.M. and the possibility of a headline before the number. A bullish number could send the market to new high with no OPEC change.
On the natural Gas Front record prices have given power markets a much needed shot in the arm. Throw in Chinese demand, heat in the Pacific Northwest and the Plains, Upper Midwest and drought in Brazil is creating pockets of scarcity for key electric-generating fuel. Got that California? Key electricity-generating fuel versus solar and wind power. Thursday we will have the EIA Gas Storage data.
Have A Great Trading Day!
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