FED Will not Raise Rates
With this active hurricane season and the damaged sustained I believe the Fed would be hard pressed to raise Interest Rates when some people lost their home and still paying a mortgage. However, investors will be listening to the verbiage to try and understand how Dovish or Hawkish the overtones are today and tomorrow. Kicking off the day we have Housing Starts and Permits at 7:30 A.M., Milk Production at 2:00 P.M. and the weekly API Energy Stocks at 3:30 P.M.
The October Crude Oil contract expires tomorrow which could add further drama to this light volume week with yesterday’s Japanese holiday, Thursday is Rosh Hashana and Friday Autumn officially begins. Then we add on the active hurricane season which we our monitoring Hurricane Jose and Maria. Jose is heading up the eastern seaboard while Maria a category 5 still poses a threat to the Gulf of Mexico region with maximum sustained winds at 140 knots moving west-northwest at 8 knots, hopefully she will move out to the Atlantic as well. In the overnight electronic session the November Crude Oil is currently trading at 5068 which is 33 points higher. The trading range has been 5082 to 5018. I anticipate higher prices with
Finally achieving a break out above resistance at $50 a barrel. Volume and expirations will also be critical to price movement.
On the Natural Gas front we saw a breakout yesterday with warmer than normal temperatures that was supportive to prices. We also have weather forecasters predicting a cold and snowy winter and with tighten supplies on the low end of the 5-year average it is a recipe for a long overdue spike in prices. In the overnight electronic session the October contract is currently trading at 3.136 which is 1 cent lower. The trading range has been 3.166 to 3.135. Remember thin markets can be ruthless.
On the Grain front we have a mixed bag of tricks with Corn and Wheat a tad higher and Soybeans a tad lower. We also on this light volume week have October Grain Option Expiration on Friday which could be a game changer in prices. We still look at the fundamentals with the Corn crop bad in some area but flourishing in other areas which will make up for the lost acreage and bushels also coupled with last year Grain Stocks on hand. In the overnight electronic session the December Corn is currently trading at 352 ½ which is 1 cent higher. The trading range has been 353 to 350 ¾.
On the Ethanol front the October contract posted a trade at 1.579 which is .013 of a cent higher. The market traded 2 contracts and is currently showing 1 bid @ 1.566 and 5 offers @ 1.579 with Open Interest at 526 contracts and the November contract Open Interest on the climb and will soon surpass the October Open Interest.