We kicked off the day afternoon with Baker Hughes Oil & Total Rig Count at 12:00 P.M., Cattle& Cattle On Feed at 2:00 P.M.

Photo by Waldemar on Unsplash

On the Corn Front CBOT corn consolidates following an 80 cent rally. Rain is in the forecast today and over the weekend. Corn market risk is to the upside. Few traders will risk being short corn and wheat heading into the weekend with Russia attacking Ukraine port infrastructure. Corn futures remain cheap in the world of agriculture. We could run into supply fears again with new end users purchases on breaks below 525 as Chinese feed imports increase and a rapid decline in crop health is probable across the Central Plains and Western Midwest in the coming weeks. China purchased 12 million bushels of US sorghum for old crop delivery and 16 million bushels for new crop. Chinese purchases of sorghum are by private buyers and foreshadow a robust corn import campaign. Whispers that China is checking offers for early 2024 arrival. World feed markets are finding demand. A sub—170 corn yield pulls end stocks down to 145-165 billion bushels. This could propel rallies to 570 and 630. Above 600 would be closer to fair value. I expect a short-covering rally and the market to close higher on the day. In the overnight electronic session the December corn is currently trading at 532 ¼ which is 14 cents lower. The trading range has been 546 to 531 ¼.

On the Ethanol Front Sen. Cynthia Lummis (R-Wy) on July 19^th introduced a bill that aims to alter Renewable Fuel Standard by changing the way renewable identification number (RIN) compliance credits generated and slashing the renewable volume obligations (RVO’s) of small refineries. A statement released by Lummis’ office indicates that legislation, titled the Small Refinery Relief Act, was introduced in response to the EPA’s July 14^th denial of 26 small refinery exemption (SRE) petitions. More of this story can be found in Ethanol Producer Magazine written by Erin Voegele. There were no trades or open interest in ethanol futures.

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