Busy Markets. The Corn & Ethanol Report

We start off the day with MBA Mortgage Applications (22/Jan) and MBA 30-Year Mortgage Rate (22/Jan) at 6:00 A.M., Durable Goods Orders MoM (DEC), Durable Goods Ex Transportation MoM (DEC) and Durable Goods Ex Defense MoM (DEC) at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., 105-Day and 154-Day Bill Auction at 10:30 A.M. 2-Year FRN Auction at 12:00 P.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.

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On the Corn Front the market continued Monday’s rally as China is back and active recently purchasing 136 mmt. of U.S. corn. The market will be focusing on upcoming acreage weather along with yields and continued demand. Crop yields in Brazil and Argentina are expected to be coming in lower than the USDA estimate. In the overnight electronic session, the March corn is currently trading at 537 ¼ which is 5 cents higher. The trading range has been 539 ½ to 532.

On the Ethanol front, rumors of active China buying in the ethanol market still has this market muzzled with doubts of increasing production as profit margins remain tight forcing some plants to remain idle. The question is when will producers feel confident to get these plants back online. We will get the weekly stocks and production numbers this morning. There were no trades posted in the overnight electronic session. The April ethanol settled at 1.658 and is currently showing 2 bids @ 1.600 and 2 offers @ 1.749 with Open Interest at 44 contracts.

On the Crude Oil front, last night’s API showed draws in crude -5.272 million Barrels, Cushing draws of -3.475 M, with builds in gasoline +3.058 M and distillates builds of +1.398M. The street was looking for slight builds in crude and surprised by the large draw which boosted the market. Traders will be watching for the EIA data at 9:30 a.m. as we move closer to the OPEC meeting with rumors of millions of barrels of sanctioned Venezuelan oil is moving to China. In the overnight electronic session, the march crude oil is currently trading at 5269 which is 8 points higher. The trading range has been 5312 to 5249.

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