Light at The End of the Tunnel? The Corn & Ethanol Report 10/17/19

We kickoff the day with Philadelphia Manufacturing Index, Housing Starts & Permits and Initial Jobless Claims at 7:30 A.M. Next up will be Capacity Utilization and Industrial Production at 8:15 A.M., EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4 & 8 Week Bill Auction at 10:30 A.M., 5-Year TIPS Auction at 12:00 P.M. and followed with U.S. Monthly Budget Statement and the FED’s Bowman & Evans Speech at 1:00 P.M. And if they can’t speak out of both of their mouths we will have the FED Williams Speech at 3:20 P.M. On the Grain front, it looks like Phase 1 is taking shape as Chins confirms it will honor their purchase commitments. And while Argentina weather is dry and forecasted to be drier and U.S. Stocks shrinking, this is a perfect recipe for higher prices. In the overnight electronic session the December Corn is currently trading 395 which is 3 ¼ cents higher. The trading range has been 3963/4 to 391 ½.

On the Ethanol front, the market’s reaction to the farm news has been slow with no activity in the November contract but the December contract posted 1 trade. The market is looking and pricing the cause and effect of future prices in the Energy, Grain and Softs prices to determine what is fair value. Let’s get together with the Renewable Fuel Standard (RFS). Whether you are Big Oil or Big Farmers, We are all Americans wanting to achieve the same goal. The November Ethanol settled at 1.422 and the market is currently showing 1 bid @ 1.417 and 8 offers @ 1.434 with Open Interest at 314 contracts.

On the Crude Oil front, there were no major surprises in the whopping build in Crude Stocks that came in at 10.451 mln barrels, Cushing builds of 1.648 mln barrels, while Gasoline had draws of 934 thousand barrels and Distillates down 2.862 mln barrels. These numbers reflect what is in store for Diesel and Jet Fuel stockpiles in the future. You will see imports limited and supplies tightening in the near future. In the overnight electronic session November Crude Oil is currently trading at 5276 which is 60 points lower. The trading range has been 5331 to 5262.

On the Natural Gas front, the market has gotten some legs with unseasonable cold weather and forecasts it will continue. Today we have the EIA Gas Storage and the Thomson Reuters pol with 20 analysts participating expect build anywhere from 89 bcf to 111 bcf with the medium build of 73 bcf. This compares to the one-year build of 62 bcf and the five-year average of 73 bcf. In the overnight electronic session the November Natural Gas is currently trading at 2.343 which is 4 cents higher. The trading range has been 2.352 to 2.284.

Have A Great Trading Day!
Dan Flynn