Weather Calamities Should Rally Commodities
Devastating rains and floods caused havoc this Memorial Day weekend.
My Bonnie did not lie over the ocean for long, and her wrath was felt in North Carolina and now Virginia. Texas is having flooding problems as well in the Houston area, which could disrupt the flow of oil in the Houston Shipping Channel. The Plains had their share of crazy weather, which should be a driving force in the commodity markets.
In the electronic session the July corn is currently trading at 410 ¾, which is 2 cents lower. The trading range has been 413 to 409 ¾ so far. We could see a pop in the complex as the South American soybean squeeze is still on if the U.S. dollar cooperates.
On the ethanol front there were no trades posted in the overnight electronic session. The June contract settled at 1.657 and is currently showing 1 bid at 1.637 and 1 offer at 1.678.
On the crude oil front, the flooding problem in Houston is just going to be another bullish fundamental factor that will drive this market higher. As I wrote in earlier reports, the geo-political events in Libya, Nigeria and Venezuela are disrupting the flow of oil.
With China and India also ready to create demand we have not seen, with global demand increasing and our infrastructure decreasing, this is all just a recipe for an epic bull market.
In the overnight electronic session the July corn is currently trading at 4958, which is 25 points higher. The trading range has been 4977 to 4907.
On the natural gas front, we are using our air-conditioning this early for quite some spell. Wild weather and the coal business evaporating like oil rigs and fracking should give this market legs.
In the overnight electronic session the July contract is currently trading at 2.194, which is 2 ½ cents higher. The trading range has been 2.197 to 2.151.