Corn futures rallied, taking bears by surprise, with whispers of more China purchases in the future. Other whispers making the rounds were reports that southern Iowa did receive much-needed rain. The western part of the state continues to be dry, with parts considered to be in a D2, or severe drought. Besides weather concerns in parts of Iowa, there was chatter of concern that fields across the state had an insect problem including low levels soybean aphids, Japanese beetles, potato leaf-hoppers, and corn rootworm as gray leaf spot is becoming more prevalent. This led to short covering and the market settled in the green after the latest tumble in prices. December corn is currently trading at 333 ¾ which is 1 cent lower. The trading range has been 335 ¼ to 333 ½.
On the ethanol front, production was down for the first time since April. The EIA said production averaged 908,000 barrels a day, down 23,000 barrels from a week ago and down 131,000 barrels from a year ago. The amount of gasoline supplied to the market was down for the second week in a row, while blending demand did improve, but is still way below a year ago. The next USDA corn for ethanol use estimate will be August 12. John Perkins with Brownfield Ag News For America supplied the data. August and September contracts each posted a trade at identical prices as rollovers are moving into the market. The August contract is last at 1.163 which is .027 lower with 1 contract traded. The market is currently showing 1 bid @ 1.145 and 2 offers @ 1.230 with Open Interest at 49 contracts.
On the crude oil front, the market is plagued by the up-and-down of demand destruction, with cities and states ponder possible restrictions on activity, while trying to keep businesses operational. This week's inventory data was not enough to support Tuesday’s rally. If OPEC+ sticks to its guns on production cuts, we will see this market pretty close to balanced after what happened in May. September crude futures are currently trading at 4164 which is 26 points lower. The trading range has been 4236 to 4162.
The natural gas market needs a bullish EIA Gas Storage report. In yesterday's action, we saw short covering take place, as traders prefer to look at today’s report and not the fifteen-day weather forecast. The Thomson Reuters poll with 17 analysts participating estimate increases ranging from 26 bcf to 46 bcf with the median injection of 36 bcf. This compares to the one-year injection and the five-year average build of 33 bcf. In the overnight electronic session the August natural gas is currently trading at 1.696 which is 1 ½ of a cent higher. The trading range has been 1.713 to 1.685.