Good Morning!
Do we forget or just not remember the past five reports that showed builds in Crude Oil and Products? Did we forget the Saudi flooding of the market to put the U.S. Shale Producer out of business? Did we forget the Saudi’s overplayed their hand and want to put the market and global economies and competition back in balance?
Last night’s API data showed a whopping build of 9.94 million barrels of Crude stocks while Cushing, Oklahoma showed draws of 1.27 million barrels. Gasoline showed builds of only 717 thousand barrels while Distillates increased 1.5 million barrels. Overall the numbers look bullish to me if you believe in the 9.94 million barrel build. The benchmark seems to be $50 a barrel and that could be the bottom of this market barring any global financial disaster; otherwise this number seems increasingly priced into the market.
This morning at 9:30 A.M. we will have the EIA data that will avow or disavow last night’s data. In the overnight electronic session the March Crude Oil is currently trading at 5287, which is 33 points lower. The trading range has been 5310 to 5273. Other reports we are looking at today are Business Inventories, CPI, Real Earnings and Retail Sales at 7:30 A.M. Capacity Utilization and Industrial Production at 8:15 A.M. followed by NOPA Crush at 11:00 A.M. and Dairy Product Sales at 2:00 P.M.
On the corn front the market continues to weigh the export market and record crops both in the U.S. and South American growing regions and marketplace. The demand for product with Ethanol, feed and human consumption continues to keep the market flowing. This time of year weather and crop conditions the next 4 to 6 weeks will be monitored by investors and U.S. plantings and acreage will be the opening salvo in this market. In the overnight electronic session the March Corn is currently trading at 372 ½, which is 1 ¾ of a cent lower. The trading range has been 374 ¾ to 372 ¼.
On the Ethanol market there were no trades posted and all is quiet on the Western Front ahead of weekly inventories. The March contract settled at 1.542 and is currently showing 1 bid @ 1.526 and 1 offer @ 1.544 with Open Interest at 2,211 contracts.
On the Natural Gas front the market broke $3 and is dithering where to go next with the offbeat weather across the Plains and Mid-West versus the rough weather in the Pacific Northwest and Atlantic Northeast states. In the overnight electronic session the March Natural Gas is currently trading at 2.965, which is 6 cents higher. The trading range has been 2.980 to 2.928. So close to shoulder season the market may be gearing up for a hot summer that will bring prices back up.
Have a Great Trading Day