Good Morning!
As we hunker down and wait to see what weather risk is next, Mother Nature is far from done in showing who the boss is. On the Grain front whispers of China tendering a large offer to buy soybeans brought the bulls back to the table. Again we are talking global demand versus global supply which has put a groove back in the marketplace. Weather will continue to be a factor in this La Nina summer that may prove to be a game changer.
On the corn front in the overnight electronic session the September crude oil is currently trading at 337, which is 1 ¼ of a cent higher. The trading range has been 338 ½ to 335 ½ so far. This late in the season we have the bulls back and a surprise around every corner in this election year as Central banks trying to change gears with currency intervention, which effects trade and at the end of the day, people need to eat and if yields are a far cry from expectations, expect a bull run.
On the ethanol front once again there were no trades posted in the overnight electronic session. The August contract settled at 1.445 and is showing 1 bid @ 1.404 and no offers in this light volume market. The September contract settled at 1.437 and is showing 1 bid @ 1.413 and 1 offer @ 1.436. Make no mistake about it, this market is following trade in corn and what is in store for the markets in the coming weeks.
On the crude oil front the market broke the $44 support and the new support number is 4150, which traders wanting to pick a bottom that will be close unless a global depression will put a whammy on demand. Brexit or no Brexit the markets will not sleep and reality will be the big shocker if we have a huge short-covering rally. In the overnight electronic session September crude oil is currently trading at 4207 which is 15 points higher. The trading range has been 4218 to 4166. Geo-political concerns causing fears and unrest will dominate investors’ minds of demand or demand destruction.
On the natural gas front we have the weekly EIA Gas Storage data today. The Thomson Reuters poll of 18 analyst forecast injection ranging from 22 bcf to 33 bcf. At this time of year this has been the lowest addition since 2010, breaking the 5-year average. Hmm… This week's 26 bcf average compares to 34 bcf last week and the 52 bcf of a year ago and the 5-year average. In the overnight electronic session the September contract is currently trading at 2.665, which is ½ of a cent higher. The trading range has been 2.676 to 2.651. Light volume or summer doldrums be damned as this market will wake everybody up shortly.
Have a Great Trading Day!