Technical or Fundamental the grain complex is flying. Weather fears and scares in South America or here at home has caught the attention of the most season traders scratching their heads and as surprised as they are the one thing they agree on this grain market is ready for a summer rally that will blindfold the summer doldrums. In the overnight electronic session the July corn is currently trading at 408 ¼ which is 3 ½ cents higher. The trading range has been 408 ¾ to 403 ¾. Rains forecasted will not help corn tassel and with farmers replacing plantings with soybeans in favor of corn should keep this train rolling.
On the Ethanol front there were no trades posted in the overnight electronic session the June contract settled at 1.642 and is currently showing 1 bid at 1.645 and 1 offer at 1.642.
On the crude oil front how much more bullish news can you sprinkle on this market. A bull market needs to be fed continuously with bullish news and this bull is feasting at the table. We have oil strikes in France, political distress in oil producing nations (Libya, Nigeria and Venezuela-just to name a few) the Canadian Sands wild fires disruptions while demand is peaking and the U.S. oil companies giving up on 5 year old multi-million dollar projects which will prove the infrastructure to meet that demand is dwindling or spiraling down at a record pace. Can I raise the question? What more do you need to see a bullish market when it is right on the nose of your face? In the overnight electronic session the July crude oil just punched through $50 a barrel and is currently trading at 5006 which is 50 points higher. The trading range has been 5009 to 4953 and is now looking to test the 5073 level.
On the Natural Gas front the market is easing off gains once again. But again this is market weather will factor heavily and if we have a hotter June and July that forecasters are calling for it will be.
“Katy bar the door”! If consumption goes up like we have not seen in years and we do not have coal plants to back up seasonable demand this market should roll. In the overnight electronic session the July contract is currently trading at 2.164 which is down .017 of a cent. The trading range has been 2.182 to 2.154 so far. Today’s weekly EIA Gas Storage could change the picture as well. The Thomson Reuters poll of 20 Energy analyst show they believe an injection number ranging anywhere from 60 to 76 bcf. This compares to an injection of 126 a year ago and the five year average of 98 bcf. If this does not paint a bullish picture of production being down, let’s see what tomorrows rig counts say.