We kickoff the day with Trade Balance at 7:30 A.M., Redbook YoY & MoM at 7:55 A.M., Market Composite & Market Services PMI Final (APR) at 8:45 A.M., IBD/TIPP Economic Optimism (MAY), Fed Evans Speech and ISM Non-Manufacturing Index at 9:00 A.M., 119-Day & 42-Day Bill Auction at 10;30 A.M., Fed Bullard & Fed Bostic Speech at 1:00 P.M., Dairy Product Sales at 2:00 P.M. and API Energy Stocks at 3:30 P.M.
On the Corn front the USDA showed U.S. farmers have 51% of the crop in the ground, ahead of the five-year average of 39%. Individual states like Iowa have 78% planted vs. a five-year average of 46%. Illinois farmers are 56% done vs. a 54% five-year average, and Indiana farmers have completed 33% of their corn plantings vs. a 26% five-year average. Meanwhile, 8% of the nations corn has emerged vs. a 10% five-year average. The corn traded lower again in yesterday’s action. The culprits were the fundamentals that a drop in demand for U.S. domestic corn and favorable U.S. Midwest weather forecasts, while we mentioned a drop in demand for domestic corn usage we also hit another milestone with hog slaughter at a 29-year low. There is definitely a change in the weather that was not seen by traders and investors with yesterdays forecast. We could see temps fall below freezing in the coming days with another front with freeze warnings hitting next week. We could have a weather market early and we could see a short-covering rally as funds remain short. In the overnight electronic session the July Corn is currently trading at 316 which is a ½ of a cent higher. The trading range has been 317 to 314.
On the Ethanol front U.S. Secretary of Agriculture Sonny Perdue announced Monday that the USDA intends to make available up to $100 million in competitive grants for activities that will expand the availability and sales of renewable fuels. “America’s energy independence is critical to our economic security, and President Trump fully recognizes the importance of our ethanol and bio fuels industries and the positive impacts they deliver to consumers and farmers with an affordable, abundant and clean burning fuel,” Perdue said in a news release. “American ethanol and bio fuels producers have been affected by decreased energy demands due to the coronavirus, these grants to expand their availability will help increase their use during our economic resurgence. The Higher Blends Infrastructure Incentive Program will fund up to $100 million for competitive grants or sales incentives for ethanol and bio diesel fuel producers. The funds will assist transportation, fueling and bio diesel distribution facilities with converting to higher ethanol blends. The funds also will offer cost-sharing and/or
Sales incentives for installation of fuel pumps, equipment and infrastructure. “While the proposal does not give immediate relief to the Kansas bio fuel plants, it is good news in very uncertain times,” said Ron Seeber, president and CEO of Renew Kansas. “ This program will help support low-carbon bio fuels and propel higher blends in the future.” Reported by Alice Mannette with the Leavenworth Times. Today is the Last Trading Day on May ethanol while the June contract posted a trade at 1.033 which is 0.023 higher. The market is currently showing 1 bid @ 0.959 and 1 offer @ 1.033 with 1 contract traded and with light Open Interest at 181 contracts.
On the Crude Oil we are seeing more strength after a close above $20 a barrel. We have API Energy Stocks later at 3:30 P.M., but not everyone is sipping champagne yet. Royal Dutch Shell plc belongs in that doom and gloom category with CFO Jessica Uhl warned investors of, “major demand destruction that we don’t know will come back.” The Anglo-Dutch supermajor, a deep water operator and leading natural gas trader, stunned investors after announcing the first dividend cut since the 1940’s said it deemed it necessary to preserve liquidity given the uncertainty regarding when the pandemic will finally be contained. Crude futures gained 11% in yesterday’s action while Brent Crude is flirting with $30 a barrel. Asian stock markets were higher and spilled over to the U.S. markets and the Crude and rest of the energy complex are flying! In the overnight electronic session the July Crude Oil is currently trading at 2477 which is 199 points higher. The trading range has been 2500 to 2338.
On the Natural Gas front cooler than normal temperatures prompted a rally as the June futures did dip below 4@ in the overnight session. More good news Clean Energy is building, rehauling and maintaining natural gas fueling stations. Even at an unprecedented challenging time we are experiencing with COVID-19, Clen Energy is showing the wave of the future. In the overnight electronic session the June Natural Gas is currently trading at 2.093 which is 10 cents higher. The trading range has been 2.150 to 1.981.
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