Happy Groundhog Day!
Good Morning!
Grains rallied in yesterday’s trading session, which caught some traders leaning and they were picked off with the surprise move. The explanation why the Corn market rallied was fund buying, continued record U.S. Ethanol production, which we are exporting and Cattle numbers higher than expected, which keyed the flight to quality that woke up a market that had fallen asleep in the bear doldrums with Mexico’s continued ban on GMO Corn and Argentine weather and crops doing much better than what was expected. Exports will be essential as traders will look at this morning’s Export Sales and the possibility of growing exports and furthering new relationships in this changing geo-political world. In the overnight electronic session the March Corn is currently trading at 366 ¾, which is 1 ½ of a cent lower. The trading range has been 368 to 366 ½.
On the Ethanol front the February contract is closing in on expiration and there were no trades posted in the complex in the overnight electronic session. The March contract settled at 1.511 and is currently showing 1 bid @ 1.499 and 1 offer @ 1.510 with Open Interest at 3261 contracts.
On the Crude Oil front the market did not achieve a 1:30 close above $54 a barrel. Regardless we are still looking bullish and the numbers bear out that OPEC production cuts outweigh U.S. growth in production and news Saudi Aramco is going to raise prices on product is only another bullish sign in this market and good news to the industry as a whole. In the overnight electronic session the March Crude Oil is currently trading at 5415, which is 27 points higher. The trading range has been 5434 to 5349.
On the Natural Gas front Punxsutawney Phil predicts 6 more weeks of winter. The movie Groundhog Day, which was filmed in Woodstock Illinois which is a beautiful hamlet northwest of Chicago where this morning the town celebrates the movie and this the 24th year after the movie their version of Punxsutawney Phil is Woodstock Willie. If Willie confirms what Phil said about 6 more weeks of winter it may be a boon to the Natural Gas market and may create a spike in the market as we eagerly await to hear pitchers and catchers are reporting for spring training. In the overnight electronic session the March Natural Gas is currently trading at 3.318 which is 3 cents lower. The trading range has been 3.194 to 3.118. The EIA Gas Storage will be released at 9:30 A.M. and the Thomson Reuters poll of 20 analyst predict draws anywhere from 70 bcf to 115 bcf with the medium of 86 bcf. The draws compare to last weeks draw of 119 bcf, the 1-year of 169 bcf and the five-year average of roughly 166 bcf.
Have a Great Trading Day