Severe Storms and Flash Flooding
The weather outlook is not very good to our friends in the South, where damaging storms are impeding the efficient use of community resources to meet Mother Nature’s brutal blow head on. Our friends in the Plains and West Northwest are fighting fires and parts of the Midwest are having rains that will travel downstream and affect flooding areas on the Mississippi.
This should be bullish to a corn market where nobody believes the USDA’s forecast on yields. Then again, who believes in any government agency these days? In the overnight electronic session the September corn is currently trading at 327 ½, which is 1 cent higher. The trading range has been 328 ¾ to 326 ½. I still believe this market is undervalued at this point.
On the ethanol front there were no trades posted in the overnight electronic session. The September contract settled at 1.431 and is currently posting 1 bid at 1.428 and 1 offer at 1.441. The market will attempt to break through and achieve the triple top of 1.470 made on July 26th.
On the crude oil front analysts are talking about global demand again, and a shaky global growth environment added with stubborn oversupply. First of all we will not have a stubborn oversupply forever. And if these government regulations continue with taxation without representation while the politicians tell us they know more about business than we do, I think it is time for a divorce.
If they think following the path of a socialist Venezuela’s policy is a good thing, then why did their policy lead to a dooming collapse in their main industry that was owned and run by their government? In the overnight electronic session the September crude oil is currently trading at 4596, which is 22 points higher. The trading range has been 4616 to 4534.
On the natural gas front the September contract is currently trading at 2.615, which is 2 ½ cents higher in the overnight electronic session. The trading range has been 2.618 to 2.580. Shoulder season be damned, wildfires, severe storms, floods and an active hurricane season forecasted in the Atlantic are all a part of the witches brew which fundamentally will lead to higher prices.