Busy Two Days Ahead. The Corn & Ethanol Report

We start of the day with Redbook MoM & YoY (21/NOV) at 7:55 A.M., S&P/Case-Shiller House Price Index YoY and MoM (SEP) at 8:00 A.M., CB Consumer Confidence and Richmond Fed Manufacturing Index at 9:00 A.M., Fed Bullard Speech at 10:00 A.M., 118-Day and 41-Day Bill Auction at 10:30 A.M., Fed Williams Speech at 11:00 A.M., Fed Clarida Speech at 11:45 A.M., 7-Year Note Auction and 2-Year FRN Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.

On the Hurricane Front Disturbance 1 a few hundred miles northeast of the central Bahamas have a very low chance of being any threat as it moves over the central Atlantic.

On the Corn front, the USDA said the U.S. corn and soybean harvest are officially over. The weather was generally good to for harvest activity last week in many key growing areas. While in parts of the country might still have corn and soybean to harvest, statistically, the season is over. Corn and soybeans hit a 4-year high as forecast rainfall missed parts of Brazil and forecasts for scattered precipitation in parts of Argentina and Brazil will not be enough to break through the drought. There are whispers of more corn sales to the unknown, while commercials and funds rollout of December to March contracts, with the funds net-long and the commercials net-short. I have already witnessed a variety of speculation longs for 2021 in corn and soybeans to date. In the overnight electronic session, the December corn is currently trading at 417 ½ which is 9 cents lower. The trading range has been 426 to 416 ½.

On the Ethanol front, the industry is bracing for more restrictions. Ethanol has been a big source of demand for domestic corn, even though sharply curbed by global fuel consumption. In recent weeks Reuters says output has chipped away at its deficit in prior years. However, the resurgence of Covid and increasing restrictions, especially before the holiday season, threaten to halt a comeback in fuel demand before it can ramp up. When compared to previous year’s production levels, it shows output is rising out of the Covid slump though the pace is still slow. There were no trades posted in the overnight electronic session. The December contract settled at 1.410 and is currently showing 1 bid @ 1.370 and 0 offers posted with Open Interest at 25 contracts.

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