Floods Continue to Ravage the South
Flooding late last week intensified and caused extremely dangerous conditions, leaving investors to speculate: was Friday’s late session Grain rally due to the flooding, or did farmers and investors alike just not believe the USDA’s yield numbers?
The Mighty Mississippi has floods in large sections that could create a big problem with movement of crops. Also, more rains are expected in the Louisiana, Texas, Alabama and Mississippi areas already under water.
We will also have rains across parts of the Mid-West. We will be hearing about the river cresting, spillways and whether the levees will hold the next couple of weeks. The Grains are flying in the overnight electronic session. The September corn is currently trading at 326 ¼ which is 4 cents higher. The trading range has been 327 ¼ to 321. We should see a spike and test 345.
On the ethanol front there were no trades posted in the overnight electronic session. The September contract settled at 1.409 and is currently showing 2 bids at 1.382 and 1 offer at 1.429. The market is grossly underbid.
On the crude oil front floods and more rains expected could affect traffic in the Houston Shipping Channel, which could drive crude oil prices higher. In the overnight electronic session the September crude oil is currently trading at 4463, which is 14 points higher. The trading range has been 4515 to 4450.
On the natural gas front the floods could affect the Henry Hub, which is a distribution hub on the Natural Gas Pipeline in Erath, Louisiana. Even Mother Nature’s grim hand has not pushed this market to rally much higher.
There are still a lot of disbelievers out there. Even with the heat dome causing deaths in Philadelphia and the Eastern seaboard the market looks tame for the moment. In the overnight electronic session the September contract is currently trading at 2.571 which is 1 ½ of a cent lower. The trading range has been 2.583 to 2.561.