Hurricane Irma Barrels Down Towards the Caribbean
Irma at the moment a Category 4 Hurricane with sustained winds at 130 knots and movement west at 12 knots. Is expected to make landfall later this week on the U.S. Coast from Miami to Ft. Lauderdale at the current track. There is also Disturbance 2 in the southwestern Gulf of Mexico which has a 50% chance of a Cyclone Formation in the next 48 hours and is expected to make landfall over portions of eastern Mexico.
We also have Disturbance 1 lurking in the Atlantic that has a 60% chance of Cyclone Formation in 48 hours as well, with a brand area of low pressure located 1000 miles west-southwest of the Cabo Verde Islands and gradually getting more organized. We have the Energy Products trading sharply lower with concerns of Demand Destruction and the Crude Oil trading higher. The API data will be delayed due to the Labor Day holiday.
Today’s reports are Factory Orders at 9:00 A.M., Export Sales at 10:00 A.M., Dairy Products at 2:00 P.M. and Crop Progress at 3:00 P.M.
BREAKING NEW HURRICANE IRMA IS NOW A CATEGORY 5 HURRICANE!
In the overnight electronic session the October contract is currently trading at 4792 which is 63 points higher. The trading range has been 4801 to 4715. We should see some wild movement in this active Hurricane Season and how it will affect Inventories and movement of Products.
On the Ethanol front a story by Michael Hirtzer and Chris Prentice of Reuters report that hundreds of gas stations in 38 states could sell a blend with higher Ethanol content, known as E-15, after the EPA said they could switch to winter blends two weeks earlier than normal. With the current crazy weather conditions we are experiencing in the lower 48 and better suited to deal with the likes of a storm like Harvey, after Katrina we learned a lesson, but we did not have the likes of Irma right behind it and other Disturbances as well.
A top Ethanol Producer with Archer Daniels Midland Co. was quoted we will be forced to “manage through these conditions. In the overnight electronic session the October Ethanol posted a trade at 1.500 which is .006 of a cent higher. 1 contract traded and the market is currently showing 1 bid at 1.486 and 1 offer at 1.510 with Open Interest at 985 contracts.
On the Natural Gas front the market is joining in with the Products in the FREE for Fall ( no pun intended). We are in shoulder season and temperatures are cooler than the norms at this time of the season. In the overnight electronic session the October Natural Gas is currently trading at 3.025 which is 4 ½ cents lower. The trading range has been 3.059 to 3.013.
On the corn front we had First Notice Day on all September Grains on Thursday August 31st so we will switch our focus to the December Corn contract. The Grain complex is trading mostly higher across the board with the exception of Rice that is which is down a ½ of a cent. We also have Export Inspections and Crop Progress today.
The current weather is below normal temps and we could be talking early frosts that could spark a short covering rally. In the overnight electronic session the December Corn is currently trading at 358 ¼ which is 3 cents lower. The trading range has been 359 to 354 ¾.