What a Difference a Day Makes. The Corn & Ethanol Report 10/26/17

The Bank of Canada kept Interest Rates unchanged after hikes in July and last month. This strategy is showing a more cautious approach as their economy is heating up and they do not want to throw a curveball this early in the economic recovery. Here in the U.S. investors are pondering who will be the next FED Chief. Whispers are circulating who the favorite is to replace Janet Yellen, or does she stay which is not very likely. Inquiring investors are all ears. This morning we have Export Sales and Initial Jobless Claims at 7:30 A.M., EIA Gas Storage at 9:30 A.M. and more Earnings ahead of tomorrow’s 3rd Quarter GDP.

On the Corn front the market is gearing up for higher demand with tenders be sought with Exports rising and demand should be a spark plug with emerging markets in Asia setting the pace for bio-fuels and in South America Brazil’s election to replace the incumbents shell game driving the Real to make U.S. exports more inevitable we may have a reason to put a glut in supply to change to shortages to the consumer at the slight of the hand. In the overnight electronic session the December Corn is currently trading at 351 which is unchanged. The tight trading range has been 352 to 350 ¼.

On the Ethanol front there were no trades posted in the overnight electronic session. Open Interest in the November contract is down to 210 contracts while the December Open Interest is at 1088 contracts. So we rollover Beethoven and focus on more liquidity. The December contract settled at 1.400 and is currently showing 5 bids @ 1.391 and 1 offer @ 1.400.

On the Crude Oil front the seems to be coming to the realization that the downside talk and headlines were fake news and fracking will not be a quick fix answer no matter what. Production and lack thereof will get this market back in balance. In the overnight electronic session the December Crude Oil is currently trading at 5215 which is 3 tics lower. The trading range has been 5230 to 5195.

On the Natural Gas front we have the weekly EIA Gas Storage data with the Thomson Reuters poll by Scott Disavino talking with 24 analyst which expect injection builds anywhere from 60 bcf to 70 bcf with the median at 65 bcf. With tighter supplies at a 10 year low and a cold November forecasted we could correct finding a bottom and see a significant rally with so many coal plants retired in a short period of time. The November contract expires on Monday so it would be wise to rollover or liquidate today and for sure tomorrow. In the overnight electronic session the December contract is currently trading at 3.047 which is 3 ½ cents lower. The trading range has been 3.103 to 3.036.

Have a Great Trading Day!
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374

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