Another Historic Record High For Dow Jones, Nasdaq; Corn & Ethanol Report

We started off the day with MBA Mortgage Applications (27/NOV) and MBA 30-Year Mortgage Rate (27/Nov) at 6:00 A.M., ADP Employment Change at 7:15 A.M., Fed Quarles and Fed Williams Speech at 8:00 A.M., ISM New York Index (NOV) at 8;45 A.M., Fed Chair Powell Testimony and Fed Harker Speech at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., Fed Williams Speech at 12:00 P.M., Fed Beige Book at 1:00 P.M. and Dairy Product Sales at 2:00 P.M.

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On the Corn front, the futures traded lower in Tuesday’s action with rain estimates changing in the weather modules for South America. Expectations of heavy rains, not quite but should be adequate. Joe Vaclavik, president of Standard Grain brokerage, said, “Brazil is going to catch some rain. It’s not going to be what they normally see this time of year, but it is not a flown-blown drought either. Commodity funds still hold sizable net-long positions in CBOT corn and soybean futures. Both markets will be prone to bouts of long-liquidation as the calendar year winds down. We will be watching moves by China purchasing U.S. agriculture crops and products, South American weather, Export Sales tomorrow, and sales as we move closer to the USDA Crop Production and Supply/Demand December 10th. In the overnight electronic session, the March corn is currently trading at 419 ½ which is 1 ¼ of a cent lower. The trading range has been 420 ¾ to 416 ¾.

On the Ethanol front, we had big news on an otherwise dull trading day for this market as it tallied the woes of the corn and crude oil prices. The Renewable Fuels Association revealed that all 2021 automobiles are explicitly approved by the manufacturer to use E15 gasoline. Far fewer models are being offered as flex-fuel vehicles (FFV’s) capable of operating on fuel blends containing up to 85% ethanol. Only two automakers – Ford and General Motors- are offering FFV’s. In model year 2021 with 11 only models available for FFT’s in 2021, and with five of those models available to only fleet purchasers. This is a positive sign we may be turning the Covid corner. In the overnight electronic session, the January ethanol posted a trade at 1.350 which is unchanged. The market is currently showing 1 bid @ 1.305 and 3 offers @ 1.350 with Open Interest at 42 contracts.

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