Rollback on Tariffs. The Corn & Ethanol Report 11/07/19

We kickoff the day with Export Sales and Jobless Claims at 7:30 A.M., EIA Gas Storage at 9:30 A.M., 4 & 8- Week Bill Auction at 10:30 A.M., 30-Year Bond Auction at 12:00 P.M., FED Kaplan Speech at 12:05 P.M., Consumer Credit at 2:00 P.M. and FED Bostic Speech at 6:10 P.M. Grains are coming in mostly higher with China talking rollback on tariffs before the scheduled signing of Phase One of the deal in December. We have Export Sales and Crop Production USDA Supply/Demand tomorrow at 11:00 A.M. Whispers are abound that yields are better than previously expected. But the early driver is the China news. In the overnight electronic session the December Corn is currently trading at 378 ¾ which is unchanged. The trade has been 380 to 377 ½.

On the Ethanol front,  Bloomberg has reported that Valero Energy Corp. has temporally shut two of three Ethanol plants bought from Green Plains Inc. just a year after the purchase. The second-biggest U.S. Oil processor by capacity stopped operations at its Corn Biofuel facility In Riga, Michigan, a biorefinery in Bluffton, Indiana, is down for a “turnaround”, and will resume production “as soon as favorable economic conditions exists”, according to Valero. They also bought another facility in Lakota, Iowa from Green Plains Inc. for $300 million in October of last year. There were no trades posted in the overnight electronic session. The December contract settled at 1.373 and is currently showing 1 bid @ 1.375 and 1 offer @ 1.388 with Open Interest at 429 contracts.

On the Crude Oil front, the market is seeing more demand kicking in with China rollback on tariffs story. The Stock Market loves it and with tight supplies you can expect even tighter supplies with economies moving and starting to “kick it” again and it will take Energy to expand the infrastructure to expand global economies. In the overnight electronic session the December Crude Oil is currently trading at 5734 which is 99 points higher. The trading range has been 5738 to 5627.

On the Natural Gas front, we have the EIA Gas Storage report. The Thomson Reuters poll with 18 analyst participating, estimate injections ranging from 31bcf to 84bcf with the median build of 45bcf. This compares to the one-year build of 42bcf and the five-year average injection of 30bcf. In the overnight electronic session the December Natural Gas is currently trading at 2.793 which is 3 ½ cents lower. The trading range has been 2.839 to 2.763.

Have a Great Trading Day!
Dan Flynn