High Commodity Prices & China. The Corn & Ethanol Report

We started off the day with NFIB Business Optimism Index (MAR) at 5:00 A.M., CPI and Real Earnings at 7:30 A.M., Redbook MoM and YoY (10/APR) at 7:55 A.M., 42-Day Bill Auction at 10:30 A.M., Fed George Speech, Fed Daly Speech and Fed Harker Speech at 11:00 A.M., 30-Year Bond Auction at 12:00 P.M., Fed Bostic Speech at 2:15 P.M. and API Energy Stocks at 3:30 P.M.

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On the Corn front, in yesterday’s action could not hold on to early gains as the weak soybean market brought the corn with it. China has stated that commodity prices are too high and asked lenders to tighten credit growth which spilled into the market and had traders wondering about exports even after a good export inspection number. China’s corn futures retreated as well in the marketplace. South America is moving along, but not at a record clip. Illinois kicked off ahead of average in plantings. With 5% of the crop planted versus 1% the last five years. Sustainability is the question, and it appears that the forecasts expecting rain and cooler than normal temperatures and possible frost conditions will slow plantings and we could see prices climb once again. In the overnight electronic session, the May corn is currently trading at 570 which is 1 cent higher. The trading range has been 572 to 565 ½.

On the Ethanol front, Indiana ethanol groups are calling for the veto of an E15 bill, introduced by State Sen. Mark Messmer that will have warnings on E15 pumps insisting the bill is designed to protect Hoosiers at the pump. The madness is the state issues warnings on E15 and E10. The ethanol groups say it is already a Federal mandate and this bill is sabotaging the state producers which ½ of every bushel in Indiana is processed in an ethanol plant. There were no trades posted in the overnight session. The May ethanol settled at 1.905 and is currently showing no market with bids or offers with Open Interest at 34 contracts.

On the Crude Oil front, the market is higher on Mideast tensions and traders are expecting a draw on tonight’s API Energy Stocks. Yemen’s Iran-aligned Houthi movement said on Monday it had fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Aramco facilities in Jubail and Jeddah. Saudi Aramco told Reuters it would respond to damage reports at the earliest opportunity. Rarely have these attacks caused any disruption and the market sold off from the highs in yesterday’s action. In the overnight electronic session, the May crude oil is currently trading at 6008 which is 38 points higher. The trading range has been 6040 to 5964.

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