Good Morning!
Last night’s API data showed a draw of 3.8 million barrels versus an expected build of 2.5 million barrels. If this morning’s EIA data confirms these draws expect a break out to the upside. The market coming back to balance signals me that emerging markets in China and India have increased the insistence of supply to meet the growing demand. The growing global market banking on the abundance of supply may not be a reality in the near future. With OPEC and non-OPEC meeting for production cuts whether successful or non-successful shows me the world supply will be in balance before the consumer opens their eyes. Imports and Exports with a lot of new players with skin in the game may hyper demand and the oil glut will be a distant memory. In the overnight electronic session the November crude oil is currently trading at 5098, which is 69 points higher. The trading range has been 5114 to 5069 so far. The November contract expires tomorrow so lookout for rollovers to the December contract and back months.
On the corn front we continue to base trade on harvest, weather and yields. Is it 80 degree weather or not 80 degree weather? Is it to frost or not to frost this late in October? This El Nino weather that has been as transparent as the USDA numbers tell me we will eventually trade on what on the abundance of the crop God gave us. We must remember “it is not what you plant, but what you grow to reap the benefits of the crop and prosper. In the overnight electronic session the December Corn is currently trading at 351 ¼, which is 2 ½ cents lower. The trading range has been 355 ¾ to 351. Weekly Export Sales tomorrow could potentially spark and ignite an October rally.
On the ethanol front the market continues silence with no trades posted in the overnight electronic session. The November contract settled at 1.586 and is currently showing 5 bids @ 1.574 and 1 offer @ 1.597.
On the natural gas front we seem to have a long liquidation market that may attract buyers seeking value when the weather turns in this shoulder season. In the overnight electronic session, the November contract is currently trading at 3.163, which is 10 cents lower. The trading range has been 3.261 to 3.144. The bulls will have their day sooner rather than later.
Have a Great Trading Day!