Good Morning!
If you can’t be good be consistent. That was the weather module that said the Arctic front would be short-lived and lift which started a massive sell-off in Natural Gas after a long holiday weekend which caught certain investors by surprise and so far the forecast has proven to be inaccurate. I guess we should stick with the more modern European module. With the current weather temperatures and reports leaning to tighter supplies we should see another bull run. This morning’s reports start with Initial Jobless Claims at 7:30 A.M., ISM Non-Manufacturing Index at 9:00A.M., EIA Energy Stocks also EIA Gas Storage at 9:30 A.M. and at 2:00 P.M Dairy Products & Dairy Product Sales.
In the overnight electronic session the February Natural Gas is currently trading at 3.297 which is 3 cents higher. The trading range has been 3.305 to 3.232 so far. Ahead of this morning’s EIA Gas Storage, the Thomson Reuters poll of 17 analysts forecast draws of 61 bcf to 135 bcf with the medium roughly 82 bcf. These draws compare to last week’s draw of 237 bcf which was 3 bcf short of the record, 98 bcf last year and the five-year average of 107 bcf.
On the crude oil front, the API showed a massive draw of 7.43 million barrels with Cushing, Oklahoma showed builds of 482 thousand barrels. This compares to whopping builds of 4.25 million barrels in Gasoline Stocks and Distillates up 5.24 million barrels. The question we must ask ourselves do we believe the huge draw in oil and massive build in Products? The EIA Energy Stocks that will be released at 9:30 A.M just may be the determining factor. In the overnight electronic session the February Crude Oil is currently trading 5366 which is 40 cents higher. The trading range has been 5385 to 5304. The Libyan news has come and gone and the market is reflecting a show me attitude to see if that country will boost production with pressure from every other Oil producing country applying pressure not to do so after the market sold off from a six-month high in Tuesday’s trading session when the news broke. Another thing investors are eyeballing that China may tighten monetary conditions, curb risky investments and keep the yuan from depreciating too far.
On the Ethanol front the February contract posted a trade at 1.507 which is unchanged. Estimated Volume is 21 contracts with Open Interest at 3,852 contracts. The market is currently showing 3 active bids @ 1.506 and 3 offers @ 1.511.
On the Grain front it is a tale of two cities versus yesterday’s activity in the overnight electronic session, which much quieter trade and most of the complex in the red with the exception of Soybean Oil, which is trading a little higher. The March Corn is currently trading at 359 ½, which is ¼ of a cent lower. The range has been 360 to 358 ½. Once again we will monitor exports with this bumper crop has plenty to move.
Have a Great Trading Day!