Good Morning!
After yesterday’s Crop Production USDA Supply/Demand report that surprised even the most veteran investors we are still back at it again like our countrymen in Texas and Florida. Let’s not forget our First Responders and our Men and Woman of the Armed Forces. Our prayers go out to every individual affected by the current events, and again, we Americans showed our fortitude in times of crisis for our neighbors. So let’s be unified and roll up our sleeves and get our country back on track as we start the market day. We kick off this morning with Producer Price Index (PPI) at 7:30 A.M., EIA Energy Stocks at 9:30 A.M. and Dairy Product Sales at 2:00 P.M. In the aftermath of the Hurricanes last night’s API Energy Stocks showed the thirst we have for refined product. The Crude stocks showed builds of 6.181 million barrels and not surprisingly huge draws on Gasoline of 7.896 million barrels and draws in Distillates of 1.805 million barrels. Refineries are working amazingly after this one-two punch and we need to refine as much Energy to get power back to the affected regions so they can get back on their feet again. We are still monitoring Hurricane Jose a Category 1 with Sustained Winds at 65 knots moving southeast at 7 knots and hopefully back out to sea. In the overnight electronic session the October Crude Oil is currently trading at 4865 which is 42 points higher. The trading range has been 4877 to 4812.
On the Corn front yesterday’s Crop Production USDA Supply/Demand raised some eyebrows. As a typical report what you think or expect and does not equate in the reality of the markets. And the reality is the market is never wrong. The Corn and Soybeans bounced off the lows while the Wheat futures continued the climb. Tomorrow all September Grain Futures expire and investors prepare for the next sleight of hand whether it is weather fundamentals or any technical factor this oversold market still looks heavy. In the overnight electronic session the December Corn is currently trading at 353 ¾, which is 2 ¼ cents higher. The trading range has been 354 ¾ to 350 ¼. We should see some interesting market moves in the trading sessions to finish off this week.
On the Ethanol front we had quite a bit of activity as this market is aware we have shortages and need refined product in volume and this market took notice. We saw activity in the October, November and December contracts. The October contract posted a trade at 1.558, which is .008 of a cent higher. ( contracts traded at that price and fading Open Interest at 798 contracts and expect the November and December contracts to be busy attempting to spread Energy volume as reconstruction begins.
On the Natural Gas front the market is continuing to slowly climb in this early shoulder season. In the overnight electronic session the October contract is currently trading at 3.046, which is 4 ½ cents higher. The trading range has been 3.053 to 2.995. We should see some extraordinary movement in the Energy sector with current and recent events.
Have a Great Trading Day!