Good Morning!
Russia and Saudi Arabia agreed that they will set up a working group to monitor the oil market and come up with recommendations to promote more stability in price swings ahead of the informal OPEC meeting later toward the end of the month. The initial news on the Labor Day holiday had markets in London buzzing with prices flying in heavy volume. The spot October WTI traded over $2 higher in the overnight electronic session but the wind seems to have been taken out of the sails with the October contract currently trading at 4431, which is 13 points lower. The trading range has been 4653 to 4406. Overall this is still a bullish sign as the Saudi’s embarrassed themselves with the childish move of not coming to have a dialogue to cut or freeze production in the last meeting in Doha, Qatar, which caused a furor from represenitives from Moscow wondering what was the point of their trip.
On the Ethanol front the September contract expires today and there were no trades posted in the overnight electronic session across the board. The October contract settled at 1.446 and is currently showing 1 bid @ 1.436 and 1 offer @ 1.467.
On the Natural Gas front there is a Disturbance that has disorganized cloudiness and thunderstorms over the central Caribbean Sea and adjacent areas are associated with a Tropical Wave. The threat level of this becoming a monster storm is low at the moment. There is another Tropical Wave near the west coast of Africa several hundred miles west-southwest of the Cabo Verde Islands. Also the hot temperatures we are realizing at the moment are forecasted to drop to cooler temperatures next week and with no major hurricane threat on the radar for the Gulf of Mexico and being in shoulder season the market lacks any bullish passion. In the overnight electronic session the October contract is currently trading at 2.752, which is 4 cents lower. The trading range has been 2.770 to 2.728.
On the Corn front FC Stone raise crop production forecast on Corn and Soybeans dramatically, which is bearish news in those commodities. The new Corn forecast is 175.6 billion Bu/Acre versus 15.195 billion bushels earlier forecasted. In the overnight electronic session, the December Corn is currently trading at 325 ¼, which is 3 ¼ cents lower. The trading range has been 328 ¼ to 325. Hot rainy weather forecasted this week should be supportive and keep the floor from collapsing in the Grain complex.