If it Rains in The Plains, Please Be in Spain
Good Morning!
We kickoff the day with Export Sales, (Q’4) GDP and Jobless Claims at 7:30 A.M. followed by EIA Gas Storage at 9:30 A.M. and Hogs and Pigs at 2:00 P.M. As we look ahead to the Grain reports today and tomorrow with the ongoing U.S.-China trade talks Mother Nature has convincingly taken center stage. We did see some sun and temperatures rise but it will not last as we move into the weekend. And next week forecast of cold temperatures and a storm that might mimic last weeks blast across the Rockies, Plains and Mid-West. It just has to have you thinking, can Mother Nature give the farmers a break. This early in the season and we have rivers at flood stages and all of the snow if it ever melts will surely pressure any levees and put further doubt on getting the fields in order just for planting purposes. We will see a lot more switchovers in crop plantings as farmers adjust their game plan or just give up the ship with the conditions of the fields. Keep in mind the funds are heavily short and we could see a short covering rally shortly. In the overnight electronic session the May Corn is currently trading at 373 ¼, which is a ½ of a cent lower. The trading range has been 374 to 372 ½.
On the Ethanol front the May contract is currently trading at 1.381, which is .003 lower. The trading range has been 1.389 to 1.381. 5 contracts traded and Open Interest is at 792 contracts. The market is currently showing 2 bids @ 1.381 and 2 offers @ 1.384. Talks with China are moving and the U.S. Ethanol market wants to be the exporter that other exporting countries like Brazil would want to forge a partnership as we see further developments and trade agreements.
On the Crude Oil front the market is taking some heat early with a higher U.S. dollar and weak Stock Market and more Trump tweets to OPEC. Again I believe this break is nothing more than smoke and mirrors and I do expect the market to rally and be higher on the day by the 1:30 close. In the overnight electronic session the May Crude Oil is currently trading at 5846, which is 95 points lower. The trading range has been 5943 to 5820.
On the Natural Gas front we are seeing some life with the May contract currently trading at 2.734, which is 1 ½ of a cent higher. The trading range has been 2.752 to 2.720. The EIA Gas Storage is today and the Thomson Reuters poll with 19 analysts participating expect withdrawals ranging from 54 bcf to 29 bcf with the median 39 bcf. This compares to the one-year decline of 34 bcf and the five-year average decrease of 23 bcf.
Have a Great Trading Day!