Good Morning!
With weak and sluggish Grain markets farmers are not in the market to buy new farm equipment, which is forcing John Deere (N:DE) to lay off thousands. This is just another sign of a struggling economy. The administration seems more set on applying social programs than rather get to the crux of the issue which is creating jobs. And with these new programs that infuse tax dollars and all the layoffs will not pay the piper.
In the overnight electronic session the March corn is currently trading at 369 ¾, which is ½ of a cent lower. The trading range has been 371 to 369 so far. Ideally I would like to see at least a 10 cent rally in the corn to attract activity in the cash market.
On the ethanol front there were no trades posted in the overnight session. The February contract settled at 1.393 and is currently showing 1 bid @ 1.383 and 2 offers @ 1.398.
On the crude oil front the market could not sustain last week’s late rally due to comments from Mario Draghi that more stimulus is possible. This woke the market up from a record short position and funds showed that they were on notice. Trilby Lundberg of the Lundberg survey mentioned that we should enjoy gas prices at these levels for now because they are not here to stay forever. I cannot further agree that once this glut dematerializes with rig counts spiraling down and the infrastructure that was put on mothballs will have to go through an extensive and rigorous maintenance operation to get back online. And banks will not be so quick to loan money in this boom or bust industry. In the overnight electronic session the March crude oil is currently trading at 3124 which is 95 points lower. The trading range has been 3274 to 3086. I do not expect to see oil price below $30 a barrel for any sustainable time in the future.
On the natural gas front the February contract sold off the highs in the overnight session as the Blizzard of 2016 has come and gone and supposedly more moderate temperatures are on the horizon. In the overnight electronic session the February contract is currently trading at 2.1114, which is 2 ½ cents lower. The trading range has been 2.165 to 2.102 so far.
Have a Great Trading Day!