Corn futures saw the biggest drop in 2 months in yesterday's trading session, with hot temperatures and more rains forecast for today and tomorrow. The weather change for more precipitation should bring in humidity which will be ideal for the corn crop. Traders are also looking ahead to Tuesday's USDA Grains Stocks and Planted Acreage data. Analysts polled by Reuters expect a slight shift in plantings from corn to soybeans and the second-largest June 1st soybean supply on record. Another factor in yesterday's drop was the International Grains Council raising its forecast for global corn and wheat production. Tuesday is First Notice Day on all July Grain contracts. In the overnight electronic session the July Corn is currently trading at 318 ¼ which is 1 cent higher. The trading range has been 319 ½ to 316 ¼.
On the ethanol front, the EIA forecast that production will be 15% lower than last year, it also expects margins to gradually increase, but is skeptical on US motor gasoline demand in 2020, due to coronavirus. There were no trades posted in the overnight electronic session. The August contract settled at 1.105 and is currently showing 1 bid @ 1.066 and 1 offer @1.162 with Open Interest at 975 contracts.
The crude market had quite the turnaround yesterday with of America lifting its oil price forecast for this year and next year. Their reasoning is OPEC+ cut deals to curtail supply and producers slashed capital expenditure. We also are coming into the 4th of July weekend, where we should see more cars and SUV’s on the road. The naysayers to this optimism are skeptical that demand will recover to pre-coronavirus levels anytime soon. In the overnight electronic session the August Crude Oil is currently trading at 3865 which is 7 points lower backing of the high of 3935 with the low currently at 3861.
In natural gas, it is LAST TRADING DAY on JULY NATURAL GAS. In yesterday's trading action prices hit a seasonal 25-year low, after the EIA Gas Storage data and concerns about a storage tank top build. Weather needs to help this market in July and hot temperatures have been a flip of the coin so far. We would like the product to move, as producers prepare for shoulder season, when they hope a pick-up in exports in September to November will ease the supply burden. In the overnight electronic session the August natural gas is currently trading at 1.541 which is a ½ of a cent lower. The trading range has been 1.555 to 1.526.