I am guessing that the FED will hold back on a rate cut at 1:00 P.M. and I expect Fed Chair Powell to talk dovish. Last weeks jobs number makes this direction most likely. We will get started today with MBA Mortgage Applications and MBA 30-Year Mortgage Rate at 6:00 A.M., CPI, and Real Earnings at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., Fed Interest Rate Decision at 1:00 P.M., Fed Press Conference at 1:30 P.M. and Dairy Product Sales at 2:00 P.M.
On the Corn front, we traded lower in yesterday's trading session with profit-taking and technical selling along with fund activity shorting. U.S. corn planting is pretty much wrapped up, and the emergence is faster than normal with 75% of the crop rated good-to-excellent. We did receive rains from Cristobal with central Illinois needing a good dowsing as they have been dry as a bone. More heavy rains are forecasted over extreme East Central and Southeast Illinois. In the overnight electronic session the July corn is currently trading at 326 which is 1 and ½ of a cent lower. The trading range has been 328 to 325 ¾.
On the Ethanol front, we will see if production will increase for the sixth straight week. The EIA doubts it, with slightly reduced its forecast for ethanol production in 2020 and 2021 in the latest short-term Energy Outlook, and ethanol consumption was revised lower as well. There were no trades posted in the overnight electronic session. The July contract settled at 1.240 with the market currently showing 2 bids @ 1.150 and 1 offer @ 1.260 with Open Interest at 92 contracts.
On the Crude Oil front, last nights surprise build in the API data snatched the upward momentum this market was moving in. Crude stocks were +8.420, Cushing -2.285, Gasoline -2.913, and Distillates +4.271. I anticipate draws next week because of shutdowns in and around the Gulf of Mexico due to Cristobal. In the overnight electronic session the July Crude Oil is currently trading at 3809 which is 85 points lower. The trading range has been 3861 to 3773.
On the Natural Gas front, global demand is expected to have a record fall with weak LNG exports a major concern. Natural Gas Intelligence (NGI) blames the weak price action on, “demand concerns tied to mixed weather forecasts and diminished gas exports.” NGI also reported that “Intense summer heat across swaths of Texas and Southwest, along with forecasts for higher temperatures elsewhere later in June, have fueled optimism for increased demand to run air-conditioning. However, projections for weaker weather systems next week and strong rains over much of the country, along with cooler temperatures in the East chilled enthusiasm in Tuesday's trade according to James Hyerczyk with FX Empire. In the overnight electronic session the contract bounced pretty remarkably from the lows with the July contract currently trading at 1.753 which is .014 lower. The trading range has been 1.768 to 1.674.
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