Corn & Ethanol Report, Market Commentaries, The Corn & Ethanol Report, Trading-Futures

Trade Winds Are Changing. The Corn & Ethanol Report 01/22/2021

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We start off the day with Export Sales at 7:30 A.M., Market Composite PMI Flash (JAN), Market Manufacturing PMI Flash (JAN), Market Services PMI Flash (JAN) at 8:45 A.M>, Existing Home Sales MoM and Existing Home Sales for December at 9:00 A.M., EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M. and Cattle on Feed at 2:00 P.M.

On the Corn Front we gained back portions of this week’s losses in yesterday’s trading session. This market is no different to commodities cause and effect in one commodity is stronger by using parts of its breakdown to add to another commodity that can be scrutinized and used, with the new trade winds being advertised and some of those commodities listed are going to be shelved. The Grain complex is waiting to hear the POTUS next move that could change trade as we saw it in this grain run-up. In yesterday’s action the market was in chop mode early but consolidated to the recent losses. This morning’s export sales may put back some faith in buyers. But remember that the breadbasket to America is the farmer and they are concerned about high energy prices and rightfully so. Let’s hope we bring in the new and not bring in the old of zero revenue and outdated and unwise regulations. In the overnight electronic session, the March corn is currently trading at 519 ¾ which is 4 ½ cents lower. The trading range has been 522 ¾ to 518.

On the Ethanol Front this is another industry that is begging for attention. Weekly ethanol production is expected to be down with builds in stocks, I am not thinking builds in stocks at the moment, but anything is possible. We still want to see idle ethanol plants getting back online and producing. With the beginning of 2021 we have a lot of work to do. There were no trades posted in the overnight session. The April contract settled at 1.663 and is currently showing 1 bid @ 1.531 and 2 offers @ 1.749 with Open Interest at 45 contracts.

On the Crude Oil Front the EIA expects prices to hover around $50 a barrel. This coming at a time when trade patterns may change with China importing oil and allegedly sending cargoes to Venezuela and India made no secret of their thirst for Iranian oil. What will OPEC+ next move be? They have a meeting coming up. And with tankers on the seas that could be reflagged and headed to another port that is not on the current list. We should have a broader scope picture aa we move closer to the February OPEC+ meeting. In the overnight electronic session, the March crude oil is currently trading at 5238 which is 75 points lower. The trading range has been 5316 to 5233.

On the natural Gas Front, we have another industry in the energy sector that is attempting to be profitable for decades to come even with the sudden change in the trade winds. Alex Kimani with OilPrice.com reported that producers are betting big on hydrogen that will be a leading fuel in the greenhouse world and this sector is not about to go out with a whimper. With what we have witnessed with all the byproducts we learned ethanol has contributed good uses for during the pandemic. We are seeing and most know the positives Natural Gas has in the field. Scott DiSavino with Thomson Reuters has supplied us with a poll with 17 analysts participating for the EIA Gas Storage have withdrawal estimates ranging from 191-bcf to 133-bcf with the median at 178-bcf. This compares to the one-year withdrawal of 170-bcf and the five-year average of declines of 174-bcf. Traders seem to be keying on the five-year number in early scuttlebutt. In the overnight electronic session, the February natural gas is currently trading at 2.488 which is .003 lower. The trading range has been 2.504 to 2.480.

Have A Great Trading Day!
Dan Flynn

Questions? Ask Dan Flynn today at 312-264-4374  
 
 
 

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