Personal Income and API Energy Stocks Today
More earnings and more reports in this first week of August. Yesterday’s Crop Progress really once again had no major surprises, and the fund's massive liquidation buried Soybeans and corn followed suit. We may get a bounce today with the U.S. dollar retreating after yesterday’s gains and weather still playing a role in the outcome of this market.
In the overnight electronic session the September corn is currently trading at 325, which is ¾ of a cent lower. The trading range has been 325 ¾ to 324 ¼. If the latest weather forecast is correct and yields are as favorable as some deem, we could see one more pop to the upside before harvest pressure kicks in. Or if there is a surprise in weather and yields, it could be a wild trading August.
On the ethanol front the August contract is heading into expiration and there were no trades in all the contract months in the overnight electronic session. The September contract settled at 1.395 and is currently showing 1 bid at 1.343 and 2 offers at 1.395.
On the crude oil front the market is bouncing back from yesterday’s selloff that violated the $40 level. This evening we have the API Energy Stocks which could have a surprisingly bullish spin. The September contract is currently trading at 4044, which is 38 points higher in the overnight electronic session. The trading range has been 4067 to 3985.
The funds may have lost their bearish edge as they showed they were in liquidation frenzy in the Grain complex yesterday. We could see another good run to the upside especially after tonight’s API data.
On the natural gas front I still believe this market is way undervalued. And as long as the heat is on and more pressure is being applied to this market to supply electricity and other forms of energy, we have to look to the future: this La Nina summer will more than likely be followed by a cold winter. With coal plants becoming history we will rely even more on natural gas to warm our homes and business’ during the cold winter months.
Rig counts, weather and Thursday’s EIA Gas Storage will make the case in this market. In the overnight electronic session the September contract is currently trading at 2.781, which is 1 cent higher. The trading range has been 2.794 to 2.756. It could be a dynamic week in the Energy complex.