Commodities Are The Name Of The Game. The Corn & Ethanol Report

We started off the day with Business Inventories, Retail Sales, NY Empire State Manufacturing Index, and Producer Price Index (PPI) at 7:30 A.M., Industrial Production & Manufacturing  MoM and YoY (DEC) at 8:15 A.M and Capacity Utilization at 8:15 A.M., Michigan Current Conditions Prel (JAN), Michigan Consumer Sentiment Prel (JAN), Michigan Inflation Expectations Prel (JAN), Michigan Consumer Expectations Prel at 9:00 A.M., NOPA Crush at 11:00 A.M., and Baker Hughes Oil & Total Rig Count at 12:00 P.M.

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On the Corn front, we have the highest prices in corn and soybeans after a large harvest last fall that seem to want to continue the surge. The market is expected to climb even further with tightening of supplies and large purchases from China, the first country to rebound after the pandemic. The charts are showing that corn and soybeans can reach highs not seen in a while even surpassing 2014. With the USDA estimate of a 325-million-bushel, smaller production estimate than what was pegged for last year and farmers are looking to expand plantings of eight major U.S. crops – corn, sorghum, barley, oats, wheat, rice, and soybeans by 6 million acres this spring versus 2020 and shows me why Funds are happy to be long. In the overnight electronic session, the March corn is currently trading at 534 which is a ¼ of a cent lower. The trading range has been 536 ¼ to 527 ¾.

On the Ethanol front, dozens of ethanol plants remain idle with the main factor of $5 corn and the full impact of the spike will not be felt for weeks as corn and soybean prices climb. We should see exports picking up and I would not paint a doom and gloom picture just yet, this early in the game. There were no trades posted in the overnight electronic session. The April contract settled at 1.783 and is currently showing 0 bids posted and 2 contracts offered @ 1.749 with Open Interest at 45 contracts.

On the Crude Oil front, traders are expecting a minor trend change as the markets catch some breath while OPEC saying the market is still clouded by pandemic fears. Technicians believe we can test $5230 to $5063 a barrel with the pivot number at $5312 a barrel. Even as more oil is trying to hit the market that we are unaware of how we are seeing Asian countries buying product. The market could also be reacting to the new administration’s hands on or hands-off approach as de-regulation does not seek in the plans and the market will have to adjust to the curbs and if they play their hand right, we will have more jobs and other benefits we have seen the last few years. In the overnight electronic session, the February crude oil is currently trading at 5277 which is 80 points lower. The trading range has been 5383 to 5258.

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