Another self-inflicted crisis in the Euro-zone leading to the latest news of one super state with counties giving up their armies, criminal laws, taxation system and central bank, transferring those powers to Brussels. I do not see the wonder or achievement in this move whatsoever. It sounds like the United Nations. Well, “God help them’. Our market rebounded as the smoke is somewhat clearing away on the horizon and investors have come to the realization that this is a European problem and must be dealt or fixed by the Europeans if they desire free trade and not surrender to the control of the big countries such as France and Germany who started this failed experiment back in the 1950’s/ Free Market for Free Men will ring and this will not ring hollow as a couple of elite will want to show their power. History has a way of repeating itself and this case is no different and the power brokers should know all glory is fleeting.
On the corn front the weekly Crop Progress report did not give as much detail as I expected. Weather is obviously playing a big role in the La Nina summer and Thursdays Grain Stocks and Planted Acreage should give farmers and traders a further education of what is in store the rest of the summer. The Grain complex is on a charge with soybeans, soybean meal and soybean oil leading the cavalry. In the overnight electronic session the July corn is currently trading at 391 ¾ which is 6 ½ cents higher. The trading range has been 393 ½ to 382 ½. The weather forecast about heat in the Plains and Mid-West keep changing to cooler temperatures but lack of rain in growing areas has the farmers and investors’ attention as we move to the 4th of July weekend where we should normally see six to seven feet corn stalks at least and this is also a critical time for tasseling.
On the ethanol front there were no trades posted in the overnight electronic session in the July contract which settled at 1.620 and is currently showing 1 bid at 1.623 and 1 offer at 1.637. Meanwhile the August contract is currently trading at 1.620 which is .014 of a cent higher. The trading range has been 1.620 to 1.611.
On the crude oil front the market shot back like a boomerang with the bounce in the Stock Market and the U.S. dollar selloff. The market could be susceptible for another selloff with the events in the Euro-zone not close to an acceptable close for member nations. In the overnight electronic session the August crude oil is currently trading at 4736 which is 103 points higher. The trading range has been 4770 to 4654. Let’s ride this horse and see how far it will take us today.
On the natural gas the July futures expire today while the market rallied into the 1:30 P.M. close yesterday with July option expiration. The same old fundamentals are in play with Storage well below the five-year average, very hot summer like we have not seen in at least eight years, the retirement of coal plants and rig-counts down to U.S. Civil War lows is just a recipe for a historical rally. If you are not out of a position in the July contract it is advisable to do so immediately. In the overnight electronic session the August contract is currently trading at 2.816 which is 7 ½ cents higher. The trading range has been 2.821 to 2.743. I remain wildly bullish on this market.