API Builds Do You Believe
Good Morning!
We started the day with Fed Brainard Speech at 4:15 A.M., MBA Mortgage Applications came in at -5% versus the previous 3.8% and the 30-Year Mortgage Rate came in at 3.98% matching the previous number. Bullish Housing Starts, which continue to point signs of a growing U.S. and global economy. We have EIA Energy Stocks at 9:30 A.M. and I am wondering if the EIA will match the API assertion of builds, and we also have Dairy Product Sales at 2:00 P.M. On the Corn front the recent strength has been bottled up as we digest the gains of the U.S.-China “Phase 1” trade deal. Investors are weighing South Americas growing conditions which would shed light on U.S. exports as we wrap up this crazy 2019 rough year that started in plantings and carryover into harvest. Will 2020 be any better? Ask Mother Nature if we can count on her or the trade deals that we are banking on to come into fruition. In the overnight electronic session the March Corn is currently trading at 388 ½, which is 1 ½ of a cent lower. The trading range has been 389 ¾ to 387 ½.
On the Ethanol front there were no trades posted in the overnight as we close to the end of 2019. The trade deal with China and other fundamental news should create optimism for producers next year. The January contract settled at 1.369 and the market is currently showing a wide range with 1 bid @ 1.335 and 1 offer @ 1.385 with Open Interest at 309 contracts.
On the Crude Oil front last nights API Energy Stocks showed surprising builds in inventories with exports surging and imports down, I cannot figure where these builds are coming from. With builds in the job sector and global economies lightening up regulations that only equals Energy use to satisfy the growth in infrastructure. Let’s see if the EIA Energy Stocks data is close to the API’s bearish builds while the market seems to be holding its own in light volume holiday markets. The January contract expires tomorrow so we will roll to the February contract which is currently trading at 6048, which is 39 points lower. The trading range has been 6063 to 6024.
On the Natural Gas front the market is selling and noy buying on the weekend weather forecast calling for higher temperatures to the chagrin of producers this far in December. In the overnight electronic session the January Natural Gas is currently trading at 2.279, which is 4 cents lower. The trading range has been 2.327 to 2.266.
Have a Great Trading Day!