The grains are giving back gains achieved in yesterday’s trading session. We also have Wholesale Trade at 7:30 A.M. and tomorrow we have the monthly Crop Production USDA Supply/Demand at 11:00 A.M. which could shed light of yields in drought stricken growing areas in the Plains and Mid-West. In the overnight electronic session the September corn is currently trading at 396 ½ which is 5 ½ cents lower. The trading range has been 404 ¾ to 394 ½. The question we will see in today’s trading session is whether we see further short covering or outright sales by commercials.
On the Ethanol front there were no trades posted in the overnight electronic session. The August contract settled at 1.553 and is currently showing 7 bids at 1.530 and 2 offers at 1.590 with Open Interest at 1,084 contracts. This market is still dancing to the tune of the new proposal from Administrator of the Environmental Protection Agency (EPA) Scott Pruitt of lower volume in biofuels in Gasoline and Diesel in 2018 unless market indicators dictate otherwise.
On the Crude Oil front we have the weekly API Energy Stocks at 3:30 P.M. in which I am anticipating further draws unless we have a surprise build. If we do get reported draws it will be hard to keep this dog down. In the overnight electronic session the August contract is currently trading at 4393 which is 47 points lower. The trading range has been 4491 to 4385. It just seems the algorithm traders are testing the reality of the market with production expectations out of sync with what fracking and other wells can produce after being capped.
On the Natural Gas front the weather is trumping the bears and changing weather forecasts. We could see a spike in prices as we see a lot of production go to the wayside at these price levels. If we have sustain hot temperatures it could be the beginning of a game changer. In the overnight electronic session the August Natural Gas is currently trading at 2.974 which is 4 ½ cents higher. The trading range has been 2.988 to 2.921.