The USDA dropped their ratings on corn and soybeans. The good to excellent rating for corn dropped to 71, down 2% from last week. Another reason the corn gained strength was silkings in the major US corn producing states of Iowa, Illinois, Indiana, and Nebraska are below the five-year average. And of course weather will play a critical role in prices, as the hot weather is supposed to hang around for a while, with rains forecasted on Friday. The drought index is not at critical levels, but this news was enough to have the shorts exit the market. There was a role-reversal in the overnight session with December corn currently trading at 351 ½ which is 4 ¾ cents lower. The trading range has been 357 ½ to 350 ½.
In the ethanol market, Chicago Argo ethanol prices hit their highest level in seven months, due to low inventories. A source quoted by S&P Global Platts said: “If someone has ethanol, they need it”. The source continued: “If you want to buy some ethanol, you are going to have to buy the offer.” August ethanol posted a trade at 1.350 which was 0.031 higher. The market is currently showing 1 bid @ 1.281 and 1 offer @ 1.395 with 1 contract traded and Open Interest at 75 contracts.
Crude oil is focussing on the API energy inventory later today. Expectations are for draws of about 3 million barrels on crude and builds of about 1 million on distillates and gasoline. The market is in an area where it gets sluggish and backs off, before buying the same real estate. August crude oil is currently trading at 4038 which is 25 tics lower. The trading range has been 4079 to 3990.
The natural gas market saw more profit taking in yesterday's action. The heat dome is expected to be here for a while and we just saw investors banking profits and re-entering and that also brought in fresh buying. August Natural Gas is currently trading at 1.912 which is .082 cents higher. The trading range has been 1.919 to 1.8219.