We start off the day with Personal Income MoM (JUL), Personal Spending MoM (Jul), Wholesale Inventories MoM Adv (Jul), Goods Trade Balance Adv (Jul), PCE Price Index MoM & YoY (Jul), Core PCE Price Index Y0Y & MoM at 7:30 A.M., Michigan Inflation Expectations Final (Aug), Michigan Consumer Sentiment Final (Aug), Michigan 5-Year Inflation Expectations Final (Aug), Michigan Consumer Conditions Final (Aug) and Fed Chair Powell Speech at 9:00 A.M., NY Fed Treasury Purchases 22.5 to 30 yrs. at 9:30 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.
On the Hurricane Front Tropical Storm Ida is threatening to make landfall on the U.S. Coast and the current target looks like Louisiana where the Henry Hub is located. Forecast have said once in the Gulf of Mexico Ida could become a category 4 hurricane and could hit Sunday night. Disturbance #2 is a tropical wave located between the Cabo Verde Islands and the Lesser Antilles. This storm has a 70% chance of formation in the next 48 hrs. moving west northward and hit cooler waters and move northward. Disturbance #3 is located 600 miles east of Bermuda. It is expected to accelerate this weekend and move northeastern and miss the U.S. East coast.
On the Corn Front the market had weaker export Sales than anticipated. Talk of better acreage out of Brazil and Argentina slowed any rally. Analysts continue to surmise U.S. acreage and yield numbers as we move closer to harvest. This market could be waiting for the September 13thUSDA Crop Production Supply/Demand data or another headline. In the overnight electronic session, the December corn is currently trading at 548 ¾ which is 2 cents lower. The trading range has been 551 ½ to 544 ½.
On the Ethanol Front the market multi monthly production lows and lost a synthetic plant in the U.S. which will close. The Lyondell Bassel plant nearly 70 yrs. old could not compete with ethanol distillers. There were no trades in the overnight electronic session and no market. The September contract settled at 2.220 with zero Open Interest.
On the Crude Oil Front oil prices are getting ready for a major rally. And if you do the math it does add up. The closing of the Keystone Pipeline XL and turmoil could cause major disruptions from getting product to the consumer. Throw in hurricane season the market is very sensitive to any risk factors while OPEVC and OPEC+ will not tolerate prices in the $50 a barrel range. In the overnight electronic session, the October crude oil is currently trading at 6897 which is 155 points higher. The trading range has been 6904 to 6752.
On the Natural Gas Front the EIA Gas Storage was 29bcf well below injection expectations. Russia is pumping less natural gas and may open the market for more exports to the EU. This market is on a roll being undervalued for some time. When there is a need for product especially heading into winter and producers like Russia cut back it only opens the door. In the overnight electronic session, the October natural gas is currently trading at 4.357 which is 15 cents higher. The trading range has been 4.410 to 4.221. The September contract expires today.
God Bless All of Our Troops and Civilians that put their lives on the line for our freedom and do not forget their families.
Have A Great Trading day!
Dan Flynn -