Good Morning!
At 6:00A.M. we had MBA Mortgage Applications coming at -11.9% versus the previous + 0.%% and the MBA 30-year Mortgage Rate came in at 4.02% versus the previous 3.92%., at 8:00 A.M. we have House Price Index MoM, EIA Energy Stocks at 9:30 A.M., 5-year Note Auction at 12:00 P.M., Monthly Budget Statement at 1:00 P.M. and Dairy Product Sales at 2:00 P.M. On the Corn front we cannot seem to ride any good news for long and sell off the market. Even with better news in trade talks and even cold and bad weather for harvest cannot add premium to the market. Tomorrow we have Export Sales that hopefully will put a positive spin on the market. In the overnight electronic session the December Corn is currently trading at 386 ¼, which is 1 ¾ of a cent lower. The trading range has been 389 to 386.
On the Ethanol front, we have seen Ethanol margins see significant improvement since August 1, U.S. plants have been cutting production cost and Ethanol prices have been on the rise. A number of Ethanol plants have scaled back production during the past year in response to tough profit conditions. There were no trades posted in the overnight electronic session. The November contract settled at 1.421 and is currently showing 1 bid @ 1.389 and 5 offers @ 1.435 with Open Interest dropping to 214 contracts.
On the Crude Oil front, last night’s API Energy Stocks showed builds in Crude Oil at 4.451 mln barrels, Cushing had builds at 1.988 while Gasoline showed draws of 702 thousand barrels and Distillates had draws of 3.491 mln barrels. The Saudi’s announced they are pursuing further production cuts in a theatre near you. The timetable may be December. This is bullish and after the bombing of their Oil fields the market may have priced shortages in already but has not really moved and seems to be rangebound. My main concern is the consistent draws we have seen in Distillates and Gasoline, which will catch up to us in the pump, and especially Diesel.
On the Natural Gas front, President Trump is going to Pennsylvania to push deregulation in the Oil Industry. Colder weather and consistent changes in weather modules lead to traders cover longs. In the overnight electronic session the November Natural Gas is currently trading at 2.292 which is 2 cents higher. The trading range has been 2.299 to 2.251.
Have a Great Trading Day!