Wind Chill Factor
Good Morning!
Corn prices are creeping up ever so slowly attempting to test the 360 ½ high that was made earlier this month on December 4. With cold weather hitting and snow coverage in a lot of key planting areas it looks like a good sign as we start talking about plantings for 2018. Investors will also be monitoring weather in South America, which is rainy and humidity high at the moment, and growing demand in Ethanol in emerging markets could be a game changer in the carryover market, which is full to capacity. In the overnight electronic session the March Corn is currently trading at 352 ¼, which is a ½ of a cent lower. The trading range has been 352 ¼ to 351 ¾. We have had tight trading ranges with holiday markets or not and if the weather and fundamentals really kick in we should see a broader spectrum of price volatility.
On the ethanol front locally we will start to see more E 15 show up as Mid-West based Hy-Vee Inc. is selling e 15 in five locations across their eight-state region. The blend is 15% Ethanol and 85% Petroleum and if the emerging markets are serious about pollution standards and stick to their plan to implement more Ethanol usage this could be a boon to the Corn and Sugar markets that are based on Ethanol usage. And of course, demand will force more exports and prices should rise. In the overnight electronic session the February contract is currently trading at 1.310, which is .013 higher. The trading range has been 1.311 to 1.310 with estimated volume at 12 contracts traded as the January contract matched which tells me rollover time is moving and the February Open Interest is at 1,678 contracts.
On the Crude Oil front the market is slipping away from yesterday’s gains in the early going. Tonight’s API data could push the market to close over $60 a barrel and gain further momentum. Saudi Arabia continues to signal their intent to privatize Saudi Aramco, and the Libyan pipeline blast sent the market back in the bull’s hands. The Iraqi Oil minister Jabar al-Luaibi is optimistic the market will be in balance the 1st quarter of 2018 and do not forget the powder keg with Yemen firing missiles at Riyadh, Saudi Arabia which could further hike prices with the fear factor coming into play with dwindling supplies. And we will not be talking oil glut fracking or no fracking. In the overnight electronic session the February contract is currently trading at 5949 which is 48 points lower. The trading range has been 5993 to 5933.
On the Natural Gas front the January contract expires today so the focus will be on the February contact. And it does feel like February with the bone chilling cold and weather forecasts predict it will be around for a while and the market mat take notice, In the overnight electronic session the February contract is currently trading at 2.684 which is 3 cents higher. The trading range has been 2.707 to 2.612. If you really do believe the weather forecasts we could see a much anticipated spike in prices.
Have a Great Trading Day!