We started off the day with Consumer Inflation Expectations (MAY) and Export Inspections at 10:00 A.M., 3-Month and 6-Month Bill Auction at 10:30 A.M., Consumer Credit at 2:00 P.M. and Crop Progress at 3:00 P.M.

image source

On the Corn front, the Drought Monitor released the latest U.S. map on Thursday and the map is showing drier conditions moving into the Midwest. The West Coast and the Plains look like a paint by numbers in severity of their drought conditions now and to the 4^th of July when a lot of prognosticators really start more intensely grading the crop. Rains over the weekend were plentiful on Friday and Saturday to the NW Midwest but some farms desperately needing some rains were missed again. But rain in the forecast and better crop grades in the U.S. and South America led to the long liquidation. Another factor where corn exports to China was lower and they are dropping hints they will be purchasing less feed grain and may get more selective in the marketplace if U.S. high prices continue, and the South American market emerges more plentiful. That led to profit-taking and reducing bullish positions or merely heading for the exits panning on buying value at cheaper prices. This week the Midwest is forecasted for hot and dry weather. We will see today’s Export Inspections and Crop Progress and by next week it may have a different story than today. In the overnight electronic session, the July corn is currently trading at 668 which is 16 ½ cents lower. The trading range has been 676 ¼ to 653.

On the Ethanol front, President Biden’s administration is coming under pressure from labor unions, and U.S. senators including his home state Delaware is considering ways to provide relief to biofuel blending mandates. Ethanol production has hit a 15-month high. Arlen Suderman, Chief Commodities Economist for Stone X Group, Inc. said, “levels are indicating the market is breaking the pandemic mindset.” There were no trades posted or market showing in the July contract which settled at 1.910 and the current Open Interest is at 20 contracts.

On the Crude Oil front, the oil markets are baffled by the International Energy Agency (EIA) that is telling OPEC+ to raise production to counter 2022 demand. The oil market remembers May and June of last year and with still coronavirus scares around the globe they will not move to rapidly with oversupply fears that entangled them last year. We must remember the IEA. The Paris-based energy watchdog is always on the wrong side with their ‘dire predictions.” And oil traders are waking up to that credibility the forecast are with what was seen in the past. In the overnight electronic session, the July crude oil is currently trading at 7133 which is 42 points higher. The trading range has been 7170 to 7065.

On the Natural Gas front, the market is easing a little after last week’s big gains. Hot and dry weather are forecasted for the week ahead. And inflationary pressures mount we could see impacts on oil and gas production intensity that could lead to shortages. Also, shortages of supplies needed for drilling and resulting inflation amid coronavirus fallout that could extend a trend and keep production in check going into 2022. Hey, President Joe, we need pipelines! In the overnight electronic session, the July natural gas is currently trading at 3.285 which is .011 lower. The trading range has been 3.325 to 3.280.