We start off the day with Corporate Profits QoQ Prel (Q2), Export Sales, GDP Price Index QoQ 2ndEst. (Q2), GDP Growth Rate QoQ 2ndEst. (Q2), Initial Jobless Claims (21/Aug), Jobless Claims 4-Week Average (8/21), PCE Prices QoQ 2ndEst. (Q2), Core PCE Prices QoQ 2ndEst. (Q2), and Continuing Jobless Claims (14/Aug) at 7:30 A.M., EIA Gas Storage and NY Fed Treasury Purchases 0 to 2.25 yrs. at 9:30 A.M., Kansas Fed Manufacturing Index (Aug) at 10:00 A.M., 4-Week & 8-Week Bill Auction and 7-Year Note Auction at 10:30 A.M. and the Jackson Hole Economic Symposium.
On the Hurricane Front Disturbance #1 has a 90% chance of hurricane formation in the next 48 hrs.. It is currently located over the west-central Caribbean Sea about 150 miles south-southwest of Jamaica moving northwest and is a threat to the U.S. coastline in the Gulf of Mexico. We will keep you updated on this storm. Disturbance #2 has a 40% chance of hurricane formation in the next 48 hrs.., it is currently located over the central Atlantic about 600 miles east of Bermuda moving slowly at 10 to 15 mph. Disturbance #3 has a 40% chance of hurricane formation in the next 48 hrs. It is currently located in the central tropical Atlantic about 1,000 miles west-southwest of the Cabo Verde Islands moving west-northwest at 10 to 15 mph.
On the Corn Front the market is taking a breather from the gains we have seen the past couple of trading sessions. Lack of farmer selling may have ignited a spark that this market is too cheap for fair value. We continue to look at carryover which is very low in the U.S., Argentina and Brazil. If exports pick up and when we digest yields we may take off and have a harvest rally (unheard of) for the second straight year. In the overnight electronic session the December corn is currently trading at 548 ½ which is 3 ¼ cents lower. The trading range has been 551 to 547 ½.
On the Ethanol Front Brazilian transport company Loguna Logistica carried out its first ethanol export deal to California using pipelines to move the biofuel. My question is… Why is California importing from Brazil and not using the U.S. market? While the U.S. producers are investing and toiling to make carbon free pipelines. Well that’s California. There were no trades or activity in the ethanol futures again with the September contract settling at 2.220.
On the Crude Oil Front the market is lower this morning having gained a lot of real estate this week. Another thing to look at is the Disturbance heading into the Gulf of Mexico which could threaten Houston Tx. To Louisiana right smack dab in the U.S. energy hub. In the overnight electronic session the October crude oil is currently trading at 6746 which is 90 points lower. The trading range has been 6815 to 6734.
On the Natural Gas Front tomorrow is Last Trading Day on the September contract. It is time to roll or liquidate. The market is strong with a bright future and summer heat intensifying the rally. In the overnight electronic session the October natural gas is currently trading at 4.019 which is .094 higher. The trading range has been 4.036 to 3.931. We have the EIA Gas Storage number today and the Thomson Reuters poll with 17 analysts participating estimate builds ranging from 35 bcf to 56 bcf with the median injection of 39 bcf. This compares to the one-year build of 36 bcf and the five-year average of 53 bcf.
Have A Great Trading Day!
Dan Flynn -