Good Morning!
As the sanctions were introduced yesterday it showed a bullish sign for Crude Oil after a news story that said that the Saudi’s were not going to cut production as earlier promised. A second story had the Saudi’s saying they would cut whatever it takes to get the market in balance. This is another case to sell rumor and buy fact. Another sign the industry is being pressured at long lengths is that the Pacific Gas & Electric (NYSE:PCG) filed for bankruptcy following the wildfire claims. The trade talks with China resume Wednesday on an awkward note as the U.S. hits Huawei, the Chinese tech giant, with criminal charges. Beijing demanded that Washing ton end this “unreasonable crackdown”, as the U.S. Justice Department unsealed criminal indictments yesterday against Huawei and its CFO, Meng Wenzhou, who was arrested last month in Canada. The company which has denied any wrongdoing, is accused of stealing trade secrets and helping banks evade U.S. sanctions on Iran. Meng is expected to be extradited. Contributing to the story Associated Press (AP), Financial Times (FT) and The Wall Street Journal (WSJ) We also have earnings before and after the bell with Verizon (NYSE:VZ) and Lockheed Martin (NYSE:LMT) leading the way and after the bell with Stryker (NYSE:SYK), Apple (NASDAQ:AAPL) and eBay (NASDAQ:EBAY). We also have Consumer Confidence at 9:00 A.M., API Energy Stocks at 9:30 A.M. and the FOMC meeting today ahead of tomorrow's.
GDP (Q4 ’18) and the FED decision tomorrow. Once again a lot of information to digest.
On the Corn front we are trading quiet in a tight trading range in the overnight electronic session. The March Corn is currently trading at 380, which is a ¼ of a cent higher. The trading range has been 380 ¾ to 378 ½.
On the Ethanol front the February contract Open Interest at 659 contracts is well below the March contract is currently trading at 1.288, which is .004 higher. The trading range has been 1.297 to 1.288. The market is currently showing 1 bid @ 1.282 and 1 offer @ 1.288 with 5 contracts traded and Open Interest at 1,526 contracts.
On the Crude Oil front the March contract is currently trading at 5249, which is 50 points higher. The trading range has been 5260 to 5184. Estimates for the API have Crude up 3 million, Gasoline up 2 million, Distillates down 2 and Runs up 1 and these numbers seem to be changing to draws now as stories abound.
On the Natural Gas front the February contract is expires today and with forecast calling for the coldest day in Chicago history tomorrow of 30 degrees below zero and windchills ^0 below plus before rising to plus 30 degrees above by Saturday. What a turnaround in fortunes. This is why the market sold off. In the overnight electronic session the March Natural Gas is currently trading at 2.823, which is 5 cents lower. The trading range has been 2.913 to 2.802.
Have a Great Trading Day!