Good Morning!
Saudi Energy Minister Khalid al-Falih spoke in an upbeat mode that OPEC will reach a production cut agreement in Vienna November 30th. These comments came after the Crude Oil market was on the threshold of $40 a barrel. The actual low was 4220. Any coincidence? The cartel knows that oil prices at $40 a barrel or cheaper will not spiritually, morally or economically cut it. And a new U.S. administration with a friendly Energy policy will open up doors and usher in more competition which is not good news to any cartel. In the overnight electronic session the December Crude Oil is currently trading at 4631 which is 74 points higher. The trading range has been 4638 to 4528. The optimism has the market technically shooting for $50 a barrel a very short time.
On the Natural Gas front we have the weekly EIA Gas Storage data this morning. And with winter weather approaching the Mid-West after snowing in the Northern Plains we could see this market continue its advance after the unseasonably warm weather that has pressured the market as we are at record surpluses. A Reuter’s poll of 19 analyst guesstimate injection numbers anywhere from 24 bcf to 43 bcf which compares to 10 bcf last year and the five-year average of 27 bcf. Depending on what weather forecast you believe if we get a good dose of winter weather and not have coal mines pick up the slack to the power grid we will go through supplies at a startling pace and wonder what happened to our full capacity of supply. In the overnight electronic session the December contract is currently trading at 2.754 which is 1 cent lower. The trading range has been 2.798 to 2.737.
On the Corn front the market is trading higher in the overnight electronic session after settling 3 cents lower in yesterday’s action. With harvesting duties near complete we will now look at frost and winter weather in the coming months. We will also monitor exports that could fuel any rally with the higher U.S. dollar pressuring higher commodity prices. The December Corn is currently trading at 340, which is 1 ½ of a cent higher. The trading range has been 340 ¾ to 338 ¾.
On the Ethanol front there were no trades posted in the overnight electronic session. The December contract settled at 1.520 and is currently showing 1 bid @ 1.526 and 1 offer @ 1.534. The EPA will be pushing the Ethanol mandate to apply a more inferential substitute in our gas tanks as just regular gasoline. This measure expiration date coincides with the OPEC November 30th meeting.
Have a Great Trading Day!