The Corn And Ethanol Report: February 11, 2020

Coronavirus Epidemic is yet to be Contained

Good Morning!

Japan’s markets were closed to the National Foundation Day holiday while all other Asian markets were in the green as well as the U.S. markets this morning. Beware there will be Fed Testimony and Speeches today. The U.S. economic reports began with NFIB Business Optimism Index (Jan) coming out at 104.3 beating expectations and the previous 102.7, Redbook YoY and MoM at 7:55 A.M., Fed Chair Powell Testimony and JOLTs Job Openings (Dec) at 9:00 A.M., Crop Production USDA Supply/Demand and WASDE reports at 11:00 A.M., Fed Quarles Speech at 11:15 A.M., 3-Year Note at 12:00 P.M., Fed Bullard speechat 12:30 P.M., Fed Kashkari speech at 1:15 P.M. and API Energy Stocks at 3:30 P.M. There is talk the coronavirus peaked but that uneasy feeling most have and would want to see more evidence of this claim. Burger King joined other chains like Dunkin (NASDAQ:DNKN) and Starbucks (NASDAQ:SBUX) in shutting down operations in China until further notice. This could have some repercussions in the future to the U.S. economy even though we are hitting on all cylinders at the moment.

On the Corn front we are waiting to see what the Crop Production USDA Suppl/Demand and WASDE reports have to offer. Sales to China seem to be up in the air and have farmers and investors wondering about exports but the silver lining that we do not have all of our eggs in one basket regarding trade. Even sick people need to eat and hopefully the China market will reenergize shortly. In the overnight electronic session the March Corn is currently trading at 380 ¼, which is 1 ½ of a cent lower. The trading range has been 382 to 3380.

On the Ethanol front Eco-Energy a Biofuel, supply chain, is on track to complete construction of an Ethanol distribution terminal in Phoenix, Az. and commence operations in (Q-3) 2020. Chad Conn vice-president of distribution at Eco-Energy was quoted, “combining location and state-of-the-art design, this Ethanol terminal will deliver the most efficient and attractive solutions for suppliers and blenders in the Phoenix market.” Union Pacific (NYSE:UNP) Railroad will provide rail service to the Ethanol terminal, with plans to handle over 250 million gallons annually, according to Biofuels International. In the overnight electronic session the March contract posted a trade at 1.337, which is .001 lower. The market is currently showing 1 bid @ 1.335 and 2 offers at 1.339 with 3 trades passing hands and Open Interest at 307 contracts.

On the Crude Oil front we have turn-around Tuesday with the market having legs in the early going even with the disappointing news that the OPEC+ meeting has been delayed until March. We have the API Gas Storage at 3:30 P.M. with expectations of Cushing, Oklahoma supplies to drop 603K+ barrels. In the overnight electronic session the March Crude Oil is currently trading at 5842, which is 85 points higher. The trading range has been 5062 to 4958.

On the Natural gas front the market is trying to level out after yesterdays 9 cents plus break. Yes the bears are still in control at this time. In the overnight electronic session the March contract is currently trading at 1.771, which is a ½ of a cent higher while the deferred months are still in the red which shows me the pedal is still to the metal. The March trading range has been 1.782 to 1.753.

Have a Great Trading Day!