Good Morning,
It has been a while since we have spoken about Strategic Petroleum Reserves (SPR). But not even 24 hours has passed since OPEC paved the way to a sincere compromise to get the oil market back in balance proposing cuts of 32.5 million barrels a day with the execution to start in November speculators immediately brought up China’s secret SPR stockpile that they could either stop importing or flood the market with exports to keep oil prices low. I believe as long as we do not have demand destruction China will keep their cards close to the vest. In the overnight electronic session the November crude oil is currently trading at 4700, which is 5 tics lower. The trading range has been 4747 to 4660.
On the natural gas front investors are eyeing Tropical Storm Matthew, which is bearing down on the Caribbean with maximum sustained winds at 60 knots and could pose a threat to the Gulf of Mexico region, although weather forecasters are predicting Matthew’s course should head up the eastern U.S. seaboard. We also have the weekly EIA Gas Storage today with expectations on the street of injection builds anywhere from 50 bcf to 65 bcf. These numbers compare to last year at this time of 96 bcf and the five-year average of 95 bcf. In the overnight electronic session, the November natural gas is currently trading at 2.997, which is a ½ of a cent lower. The trading range has been 3.032 to 2.989.
On the corn front the market is paring recent losses heading into tomorrow’s USDA Grain Stocks and Small Grain Summary. Rains in the Mid-west continue to delay harvesting while the other growing areas are ahead of schedule. In the overnight electronic session the December contract is currently trading at 332, which is 2 ¾ of a cent higher. The trading range has been 333 ½ to 329 ½.
On the ethanol front there were no trades posted in the overnight electronic session. The market did have some activity after the EIA Ethanol production and supply data. The October contract settled at 1.556 and is currently showing 1 bid @ 1.541 anf 5 offers @ 1.598.