Good Morning!
We start off the day with ISM Non-Manufacturing Index at 9:00 A.M., EIA Energy Stocks at 9:30 A.M. and Dairy Product Sales at 2:00 P.M. Mexico seems to want to talk turkey but the with the Trump Administration will listen they are not yet impressed and the tariffs will go on as scheduled. China on the other hand thought they were dealing with a pat-a-cake administration like they have in the past. We will not cave into a bad deal just to get a deal done. They are intent in garnering Intellectual Property, especially 5 G technology so they can unlock the secrets of so many countries. Well I have an uneasy feeling about that. We have been at a trade war for a long time already with China whether we know it or not. The time is now to change all of that. Meanwhile China’s Corn acreage is expected to fall to 41.63 million hectares this year and next. Also Archer-Daniels-Midland Company (NYSE:ADM) delivered Brazil Corn to Smithfield Foods in the U.S. amid heavy rains. Could that have been the game-changer that sold the Corn off in the overnight? The July Corn is currently trading at 417 ¼, which is 8 cents lower. The trading range has been 424 ¾ to 414 ½. With all the flooding’s and rains we did have a Tropical Depression that dissipated in the Atlantic. One more weather concern we have to contend with at one hell of a time.
On the Ethanol front the EPA finalizes the rule allowing year-round E15 sales and stepping back Renewable Identification Numbers (RIN’s) under the Renewable Fuel Standard Program. The June contract expires today and in the overnight electronic session the July Ethanol posted a trade at 1.509, which is .012 lower. The market is currently showing 1 bid @ 1.505 and 1 offer @ 1.515 with 1 contract traded and Open Interest at 720 positions.
On the Crude Oil front last night’s API data was freakishly bearish and quite unbelievable. I can’t imagine where all these barrels came from. It was not from Russia or Saudi Arabia you can count on that with these price levels and that’s for sure. The Crude Oil stocks showed builds of 3.545 million barrels with street expecting draws of 800 thousand, Distillates had builds of 6.314 million with expectations of builds of 400 thousand barrels, Gasoline had builds 2.696 million barrels with expectations of a 700 thousand barrel build and Cushing came in at builds of 1,408 million barrels. As I write the ADP jobs number really missed the beat we is taking the steam out of the Stock Market and may pressure the Energy sector as well. We were expecting job growth of 185 thousand jobs and the growth only grew 27 thousand jobs. Hopefully the EIA Energy Stocks will have a bullish biased and will be a game-changer in today’s trading session. In the overnight electronic session the July Crude Oil is currently trading at 5275 which is 73 points lower. The trading range has been 5341 to 5259.
On the Natural Gas front the market is treading water after last weeks bearish EIA Gas Storage data we will have this weeks data tomorrow. In the overnight electronic session the July contract is currently trading at 2.411, which is a ½ of a cent lower. The trading range has been 2.426 to 2.401.
Have a Great Trading Day!