We start off the day with U.S. Current Account (Q3) at 7:30 A.M., CB Leading Index at 9:00 A.M., Fed Evans Speech at 10:00 A.M., Fed Brainard Speech at 10:10 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Fed Bank Stress Test Results 2nd Round at 3:30 P.M.
On the Corn Front many traders are still talking about strong U.S. domestic corn demand and strong CIF basis, good weekly corn sales and talk of South American crops which have been the guiding light in this late in the year rise in prices that have lacked real harvest pressure usually seen in this quarter seasons usual cycle, and the rise in U.S. export demands as traders have hoped for. Funds remain heavily long and will need additional headlines to trade even higher to trade even higher while commercials are remaining on the short signs of trade. Talk on the street is that added U.S. exports and lower U.S. carryout have many are betting that lower carryout could push March corn to the 450-460 price levels with big resistance at 450. So, the market is digesting several factors with South American weather, acreage guesses and actual realized exports. Traders still believe China will import 20-22 mmt corn versus the USDA target of 16.5 mmt. Informa estimate U.S. corn acreage to be at 91.1.vs. 91.3 last year. With funds and commercials battling out the price range forecasts, “Let the games begin!” In the overnight electronic session, the March corn is currently trading at 434 ¼ which is 1 ¾ of a cent higher. The trading range has been 434 ½ to 432.
On the Ethanol Front the industry needs Federal relief. What is holding up the stimulus….? These are the Americans all over that earned their right to the package that need the help because they truly had skin in the game and are either furloughed, unemployed and you have not given needed relief for months, to feed their families with little to zero and negative income. We want these people to have a green light to what they earned and deserve not people on the border that did not play any part in getting us through this crisis and thanks for your so-called generosity in this vote harvest time. The Ethanol industry rolled with the changes during this pandemic and zeroed in on pluses that ethanol can be used for other than ethanol for gasoline use that makes the U.S. a great country and adjusted to the tough times and using the private sector to achieve and produce the most favorable outcome with no help from the government and not be smothered with Big Government agendas. There were no trades posted in the overnight electronic session. The January ethanol settled at 1.320 and is currently showing 1 bid @ 1.250 and 2 offers @ 1.400 with Open Interest at 32 contracts.
On the Crude Oil Front the Saudi’s crude exports have inched up and for the short-term prices are heading higher on strong Asian demand, stimulus hopes and the vaccine we hope will get demand back to pre-corona virus movement and lack of government’s Big Brother attitude of how a formula can work using the private sector versus the governments achievements in battling this terrible pandemic head-on and bring a sense of calmness and people ready to meet the challenge to reach the most positive outcome after human suffering and losses mount globally. We do have crude oil prices flirting with $50 a barrel, after going negative in the early spring months. We see a silver lining globally to get back on pace where people can recover and start the free trade and cargoes operating again and supply the demand we seek and get the global economies as close to business as usual to reshape and move forward as OPEC+ is realizing what they can do in the big picture. In the overnight electronic session, the January crude oil is currently trading at 4815 which is 21 points lower. The trading range has been 4844 to 4813.
On the Natural Gas Front inventories showed a larger than expected draw. While the recovery of a nasty Nor’easter has begun before winter has started and prospects of colder and snowy weather hitting the Plains and Midwest next week that could keep the bears in this market on edge. Forget the two-week forecasts next week on Christmas Eve we will see temperatures drop and the shorts will window dress as they will try to be as quiet as a mouse to unravel shorts which could spike another rally. We could also see volatility as normal volumes may be down due to the holiday season and year-end surprises. In the overnight electronic session, the January natural gas is currently trading at 2.652 which is .016 higher. The trading range has been 2.677 to 2.644.
Have A Great Trading Day!