Headlines Were the Tale of the Tape. The Corn & Ethanol Report 11/21/19

We kickoff the day with Export Sales, Jobless Claims, Philadelphia FED Manufacturing Index and FED Mester Speech at 7:30 A.M., Existing Home Sales and CB Leading Index MoM at 9:00 A.M., FED Kashkari Speech at 9:10 A.M., EIA Gas Storage at 9:30 A.M. 4 and 8-Week Bill Auction at 10:30 A.M. and 10-Year TIPS Auction at High Noon. On the Corn front we traded lower in yesterdays action due to better weather in South America and concerns about lower export demand. We also had a headline that “phase one” of the trade deal will not be completed before the end of the year. We also have a huge rain storms crossing the Plains and Mid-West that will move to the East coast which will further impact harvest. A breaking headline that might be supportive that the U.S. may delay the implementation of further tariffs. We are trading higher in the overnight electronic session with December Corn currently trading at 368 which is 1 ¼ of a cent higher. The trading range has been 368 ¼ to 366 ¼.

On the Ethanol front , Ethanol producer POET says it will “pause production” of cellulosic Ethanol at its Project LIBERTY plant in Emmetsburg, Iowa. In a news release, POET says the action is the result of the EPA challenges with the implementation of the Renewable Fuel Standard (RFS). The company says it will focus on improving operational efficiency at the plant with the goal of improving mechanical reliability, and licensing technologies in country’s which favorably support the use of low-carbon fuels from crop residue and other biomass. It will use biomass stored on site or already under contract and will not purchase additional biomass at this time, POET said, Brownfield Ag News reported and story forwarded by Jerry Gidel. We have Ethanol production up from last week but down from last year with lower margins. There were no trades posted in the overnight electronic session. The December contract settled at 1.405 with the market currently showing 1 bid @ 1.387 and 1 offer @ 1.417 with Open Interest at 293 contracts.

On the Crude Oil front the market is gaining steam after Tuesdays bearish API data, but found some life after a less than bearish EIA counting Wednesday morning and was construed as bullish. We also have Iran and the Houthi thugs stirring up trouble in the Middle-East and the U.S. deployed the U.S.S. Abraham Lincoln carrier strike force in the region for rapid deployment. It seems Tehran is getting nervous about an uprising at home with the U.S. sanctions crippling their economy. In the overnight electronic session the January Crude Oil is currently trading at 5732 which is 31 points higher. The trading range has been 5747 to 5660.

On the Natural Gas front we have the EIA Gas Storage data at 9:30 A.M. The Thomson Reuters poll with 16 analyst participating are estimating withdrawals ranging from 99 bcf to 82 bcf with the median draw of 89 bcf. This compares to the one-year withdrawal of 70 bcf and the five-year average draw 57 bcf. Reported by Harshith Aranya, Scott DiSavino and Marguerita Choy with Thomson Reuters. In the overnight electronic session the December Natural Gas is currently trading at 2.534 which is 2 ½ cents lower. The trading range has been 2.584 to 2.528.

Have a Great Trading Day!
Dan Flynn