Good Morning,
Talking Heads Talk, but no agreement reached? Not so fast. Khalid al-Falih Saudi Arabia’s oil minister was quoted that a deal may not be reached until the November 30 OPEC meeting. He offered hope that a reduction was in the plans as his Russian counterpart Alex Novak looked on. The good news is his is a step in the right direction versus the embarrassment at the nonevent OPEC meeting in Doha, Qatar last April, which had the Russians leaving saying why did you have us come in the first place if you were just going to grandstand put no genuine offer on the table. If the Saudi’s words are legitimate and the Iranians keep their heads, a deal could be orchestrated as they should be aware they all have mutual interests in freezing or cutting production. The market was a buzz after the news and a bullish API number increased the favorable feeling. In the overnight electronic session, the November Crude Oil is currently trading at 4516, which is 49 points higher. The trading range has been 4550 to 4453. The market focus today is the weekly EIA Energy Stocks and any new headline out of Algiers. Other factors that could create demand destruction is Brexit trade and Deutsch Bundesbank fears.
On the Natural Gas front a strong Tropical Wave near Barbados is producing winds of 40-45 mph, which could be a major threat to the Gulf the next three days. The market is shrugging off the weather news early as investors were waiting for a shoulder season break from the rallies we have been realizing lately. However a selloff of 15 to 20 cents or more may have the bulls pounce. In the overnight electronic session he November Natural Gas is currently trading at 2.970 which is 8 cents lower. The trading range has been 3.043 to 2.956. Investors are looking ahead to any significant surprise in tomorrow’s EIA Gas Storage and active hurricane season to motivate large buy orders.
On the Corn front the market is still trading in a malaise with recent USDA data reporting record yields while harvest is ahead of schedule in most growing areas. Floods and wet weather are hampering harvest in Iowa, parts of Illinois, Minnesota and Wisconsin. Yields will be the key to Fridays latest USDA report because the old adage is “it is not what you plant but what you grow”. And Friday’s data may shed light on what is good to excellent, good or poor output. In the overnight electronic session, the December Corn is currently trading at 329 ½, which is 2 ¼ cents lower. The trading range has been 332 ½ to 329 ½ so far.
On the Ethanol front, we have the weekly EIA Ethanol production and supply data today. The market showed some activity in the overnight electronic session in the futures that looks mainly to be rollovers to the November contract. The October contract posted a trade at 1.583, which is 9/10 of a cent higher. The November contract is currently trading at 1.535 which is 2 and 8/10 of a cents higher. The trading range has been 1.535 to 1.509.