We start off the morning with Wholesale Trade at 7:30 A.M. Crop Production USDA Supply/Demand at 11:00 A.M. and API Energy Stocks at 3:30 P.M. The Energy markets seems to trade defiantly with weather forecast changing. Tuesday’s forecast is calling for severe weather as the cold front stalls from southern Wisconsin and northern Illinois into parts of southern Iowa, northern Missouri and east Kansas. The severe threats are damaging winds, large hail and heavy rainfall. In the overnight electronic the September corn is currently trading at 346 ½, which is 1 ¾ of a cent lower. The trading range has been 351 ½ to 346. With severe weather forecasted tonight and tomorrow any bullish surprise on today’s reports will be big.
On the Ethanol front the September contract posted a trade at 1.552, which is ½ of a cent lower while the October contract posted a trade at 1.507 which is .012 cent lower. The spot August had no trade and settled at 1.579 and is currently posting 2 bids @ 1.574 and 6 offers @ 1.580. This market seems to be trading lower than fair value considering the spread between Corn, Crude Oil and Products.
On the Crude Oil front we already have had quite the turnaround Tuesday as prices are following a strong Stock Market and weaker U.S. dollar. We also have API Energy Stocks today. Yesterday’s selloff still has a lot of investors scratching their heads with demand and product worries on and then off. When does the product magically appear and disappear and demand destruction calls come out of nowhere. Regardless the market is always right. In the overnight electronic session the August Crude Oil is currently trading at 4595, which is 119 points higher. The trading range has been 4617 to 4451. I believe this market is poised to test the 4677 level and make an attempt to punch through $47 a barrel in today’s action.
The Natural Gas market that had investors wondering what changed in the fundamentals to sell off the market, which was nothing more than a slight change in the weather forecast. The investors that were carrying positions took profits and bought value with the continued break to the downside. In the overnight electronic session the August Natural Gas is currently trading at 2.737, which is 3 ½ cents higher. The trading range has been 2.751 to 2.707.