The Corn And Ethanol Report: February 05, 2020

NADQ Record Highs And Weather Forecast Change

Good Morning!

We started this morning with MBA Mortgage Applications coming in at 5% versus the previous 7.2%, MBA 30-Year Mortgage Rate coming in at 3.71% vs. 3.81% at 6:00 A.M., ADP Employment Change at 7:15 A.M., U.S. Trade Balance, Treasury Refunding Announcement and Exports & Imports at 7:30 A.M., Markit Composite & Markit Services PMI Final for January at 8:45 A.M., ISM Non-Manufacturing Index at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., Dairy Product sales at 2:00 P.M., and Fed Brainard Speech at 3:10 P.M.

OPEC emergency meeting with more production cuts expected and we have come across the crossroads learning to defeat the coronavirus. Learning it could be a batch of flu and common cold mutating bugs, and China announced it has a vaccine that may have been realized to stop this epidemic in its tracks, and the markets are rolling on the news. The weather forecasts are now showing we may in fact see a polar vortex before were done as opposed to the forecast two weeks ago that had the vortex on the other side of the globe. Let’s hope the little rodent Groundhog was right and spring is right around the corner. Pitchers and Catchers report for the Chicago White Sox next week. We are not far away from sunshine and we wait with grueling anticipation.

On The Corn front we are trading higher but are not leaping like the Soybeans and Wheat, which ate 7 & 6 cents higher respectively. Corn production in 2020 is expected to rise. A story from Drew Powell with ABC News reported from Carson County Texas that Corn producers in the Texas Panhandle are banking on an increase in international exports to offset prices remaining flat. One farmer Dustin Babcock said, “We hope for good yields and good yields will turn to a good profit,” he further went on to say, I think the biggest struggle with Corn in 2019 was wet conditions at harvest. We had a wet fall and struggled to get the crop out.” Mr. Babcock was right but geographically his neighbors to the north struggled with wet conditions and flooding rivers in planting season, and with flooded fields the horse already lest the barn before they could even consider harvest. Hopefully this will be a great year for farmers in 2020. In the overnight electronic session the March Corn is currently trading at 382 ½, which is ¼ of a cent higher. The trading range has been 383 ¼ to 381.

On the Ethanol front today is the Last Trading Day on the February contract. There were no trades in the complex in the overnight electronic session. The March contract settled at 1.367 and is currently showing 1 bid @ 1.362 and 2 offers @ 1.373 with Open Interest at 463 contracts.

On the Crude Oil front we had a bearish Crude Oil number in last nights API Energy Stocks with builds of 4.182 million barrels, While Cushing, Oklahoma had slight builds of 957 thousand barrels, Gasoline stocks rose 1.963 million barrels and Distillates had a bullish draw of 1.783 million barrels. With more bullish news with the coronavirus and the OPEC production cuts the market roared back to follow the roaring Stock Market with high expectations in the ROARING 20’s. In the overnight electronic session the March crude oil is currently trading at 5075 which is 114 points higher. The trading range has been 5119 to 4947.

On the natural gas front the change in the weather with a potential polar vortex headed are way cannot even get the Natural Gas bulls awake from their slumber or hibernation. In the overnight electronic session the March natural gas is currently trading at 1.832, which is 4 cents lower. The trading range has been 1.884 to 1.825.

Have a Great Trading Day!