We start off the day with Fed Chair Powell Speech at 7:00 A.M., Fed Williams Speech at 8:00 A.M., NAHB Housing Market Index (OCT) at 9:00 A.M., Export Inspections at 10:00 A.M., 3- Month & 6-Month Bill Auction at 10:30 A.M., Fed Clarida Speech at 8:45 A.M., Fed Bostic Speech at 1:20 P.M., Fed Harker Speech at 2:00 P.M., and Crop Progress at 3:00 P.M.
On the Hurricane front, a new Disturbance 1 located 700 miles southeast of Bermuda remains poorly organized and displaced mainly to the east low-level center. This storm has an 80% chance of Cyclone Formation in the next 48 hours and is currently meandering well to the southeast of Bermuda.
On the Corn front, the facts are just the facts, and 1.1 million tons of U.S. corn purchased has been shipped to China. Usually, our top importer is Mexico who has still been a steady customer, but China’s number this year has been climbing. They do tend to buy when the price is right for them. Although the Chinese are still short of the ”Sino-U.S. Phase 1 Trade Agreement”. Chinese importers are practical but is getting close to the finish line. With supplies tight in South America the U.S will be the only game in town moving into winter and China must replenish their state stocks sold at auction. It will get to the point where they can’t be penny-wise and dollar foolish. In the overnight electronic session, the December corn is currently trading at 405 ¼ which is 3 ½ cents higher. The trading range has been 406 ¾ to 400 ¾.
On the Ethanol front, the EIA saw ethanol production hit its highest level since the end of August. Ethanol output a week before October 9th averaged 937,000 barrels per day up from 923,000 (bpd) a week before. This was the biggest jump in production since September 4th. The Midwest, which produces the most ethanol in the country, reached an output of 900,000 (bpd), up from an average of 881,000 (bpd) and the highest output since late July. East Coast production jumped to 10,000 (bpd) up 6,000 (bpd) from the previous week. Rocky Mountain output was unchanged, and the Gulf Coast took a dive coming in at 9.000 (bpd) after averaging 17,000 (bpd) mainly due to Hurricane Delta. All in all these are signs that good old American ingenuity has risen to the occasion utilizing all options for ethanol use other than gas at the pump. There were no trades posted in the overnight electronic session. The November contract settled at 1.440 and is currently showing 1 bid @ 1.100 and o offers with Open Interest at 65 contracts.
On the Crude Oil front, tomorrow is Last Trading Day on the November contract so we will rollover to the December contract which is currently trading at 4112 which is unchanged. The trading range has been 4144 to 4080. Crude oil prices have moved higher on spot demand and the question traders are asking is how long China will prop up prices. And with their stockpiles being used and their ports cleared of oil tankers ready to discharge the crude oil product, They may be off on another buying spree and we know they have deep pockets, and the question is how deep will they dig into those pockets.
On the Natural Gas Front, the market traded overall higher in last week’s trade but in very choppy trade. The reason was a reaction to damages on platforms due to Hurricane Delta and conflicting weather reports of changes in temperatures. Traders will be monitoring U.S. and European weather models to see if there will be an increase in heat demand. In the overnight electronic session, the November natural gas is currently trading at 2.707 which is .066 higher. The trading range has been 2.757 to 2.638.
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