Tale of the Tape. The Corn & Ethanol Report 10/26/2020

We start off the day with Chicago Fed National Activity Index (SEP) at 7:30 A.M., New Home Sales MoM (SEP), New Home Sales (SEP) at 9:00 A.M., Dallas Fed Manufacturing Index at 9:30 A.M., Export Inspections at 10:00 A.M.,  3-Month and 6-Month Bill Auction at 10:00 A.M., and Crop Progress at 3:00 P.M.

On the Hurricane Front activity has begun again with Tropical Storm Zeta graduated and could become the next hurricane. The storm is expected to be in the Yucatan Peninsula of Mexico tonight or tomorrow morning. Through Wednesday heavy rainfall is expected from central and western Cuba, the Cayman Islands, Jamaica, southern Florida, and the Keyes which could lead to flash flooding in urban areas.

On the Corn Front we are starting of the week in grains being a little weaker with needed rains in Argentina brining relief to their crops. This really should not impact U.S. prices as we move forward. The die has been cast and if you are behind the eight-ball like China is to purchase grains to supplement your winter stocks, they have no choice other than to come to the U.S. market. And let’s be clear, they are not use to dancing to our tune but rather having us dance to theirs. This will not happen this tear for a string of events that happened in 2020. The facts are clear cut they will have more orders to restock their state-run stockpiles sold at auction earlier, and they do not want a population that is hungry. And that is pretty much the tale of the tape. In the overnight electronic session, the December corn is currently trading at 416 ½ which is 2 ¾ cents lower. The trading range has been 419 ¾ to 415.

On the Ethanol front Advanced Biofuels Canada announced on October 19th that biofuels in Canada’s gasoline pool accounted for 6.5% and 2.5% in the nation’s diesel. The pandemic does drive consumption numbers up and down and the media attention of shutdowns which shake and bake the market. However, the country is moving to really gear up on ethanol product in the nations gas tanks which is a win/win for U.S. farmers and U.S. ethanol producers as exports may come close to doubling to our neighbors to the north. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.520 and is currently showing 1 bid @ 1.390 with 0 offers and Open Interest at 45 contracts.

On the Crude Oil Front prices are down heading into the week with low demand fears coming back into play. I didn’t believe it and neither should you. The Multi Commodity Exchange in New Delhi saw prices fall 3.03 per cent to the Rs 2,850 per barrel as participants reduced their positions. I may remind you they have been a buying spree the last few weeks and we will see more buying so don’t short your book to quick. Sometimes waiting for more bullish news gets old and taking kids of the street  (profits) are not bad measures. In the overnight electronic session, the December crude oil is currently trading at 3887 which is 98 points lower. The trading range has been 3974 to 3842.

On the Natural Gas Front this market is poised to be a mover and a shaker. It will also depend on next Tuesday’s election results as one campaign wants to shelf the benefits of what this product offers. And if that mistake is made the prices of all any many others will destroy the U.S. consumer. This market has been underpriced and traders are starting to see exports to Asia and Europe increasing and domestically we are expecting a cold winter. These reasons should really boost prices. In the overnight electronic session, the November natural gas is currently trading at 3.038 which is .067 higher. The trading range has been 3.047 to 2.907.

Have A Great Trading Day!
Dan Flynn