Good China Manufacturing Data an Early Boost. The Corn & Ethanol Report 12/02/19

We kickoff the first Monday of December with Market Manufacturing PMI Final (Nov) at 8:45 A.M., ISM Manufacturing Index and Construction Spending at 9:00 A.M., Export Inspections at 10:00 A.M. followed with Cotton System, Fats & Oils and Grain Cushing’s at 2:00 P.M. On the Corn front President Trump announced the U.S. will reinstate Metal Tariffs on Argentina and Brazil accusing the countries of weakening their currencies and hurting the U.S. farmer. Corn futures had a nice rally in Friday’s action. Futures are rallying as some investors see the futures oversold and expect a rise as Cash Sales are slow. The funds seem to be piling on with the markets weak export demand. In the overnight electronic session the March Corn is currently trading at 380 ¾ which is a ½ of a cent lower. The trading range has been 383 ¼ to 379 ¼.

On the Ethanol front the EU’s demand for low-carbon fuels could be a potential shot in the arm for U.S. exports. In October, the Netherlands began using E-10 petrol. Other countries onboard for E-10 are Slovakia, Hungary and Lithuania. Other countries such as Brazil, use higher blends to reduce emissions. There were no trades posted in the overnight electronic session. The January contract settled at 1.412. The market is currently showing 5 bids @ 1.396 and 1 offer @ 1.414 with Open Interest at 488 contracts.

On the Crude Oil front Friday had light volume holiday markets and fake news once again from the International Energy Agency that had Algorithm and High Frequency Traders having a field day selling off the market. Russia is playing possum on production cuts as usual and I bet will be onboard with OPEC at the end of the day. This Is consistent just as the IEA will be wrong again about the Oil glut news. Whispers are that OPEC and its allies plan to deepen production cuts and have a deal in place to run until June 2020. The OPEC cuts would have countries adding 400,000 barrels per day to existing cuts of 1.2 million barrels per Day (bpd) and 1.2% of global supply. In the overnight electronic session the January Crude Oil is currently trading at 5648 which is 131 points higher. The trading range has been 5667 to 5542.

On the Natural Gas front we are trading higher with winter weather spreading across the lower 48. In the overnight electronic session the January Natural Gas is currently trading at 2.321 which is 4 cents higher. The trading range has been 2.369 to 2.303.

Have a Great Trading Day!
Dan Flynn