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The day's events include Export Sales, Initial Jobless Claims (May 8), Jobless Claims Four-Week Average (May 8), and Core PPI MoM and YoY (April) at 7:30 A.M., EIA Gas Storage at 9:30 A.M., Four-Week & Eight-Week Bill Auction at 10:30 A.M., Fed Bullard Speech, and ISM New York Index at 3:00 P.M.

On the corn front, the USDA showed that old crop supplies tightened and the WASDE numbers on South America’s crop did not have any surprises. At the close, who would have imagined that the July contract would have settled 7 ½ cents lower, the September settled 13 ½ cents lower, and the December settled 18 ¾ cents lower? 

I think the USDA numbers did not consider that China was buying new crops and cancelling old crop orders. Unlike the soybeans, the corn numbers set the tone for bears to jump on and start short covering, which spilled into the overnight session. The July corn has recently trading at around 702 ¼, which is 12 ½ cents lower. The trading range has been 714 to 698 ½.

I believe the market is overdone on the slightly bearish news and I expect a rebound soon. Tomorrow is the last trading day on all May Grain contracts.

On the ethanol front, the pipeline shutdown sparked fuel concerns. Renewable fuels groups are advocating a solution that could ease supply pressures. This comes at a time when Colonial Pipeline has restarted and has yet to get back to full steam. There were no trades posted in the overnight electronic session. The June contract settled at 2.340, with open interest remaining at 20 contracts.

On the crude oil front, the market traded higher on the U.S. stock draw and upbeat global demand. However, the India COVID-19 crisis slammed the brakes on the rally and it continues to pressure the market as we speak. Another bearish equation to the picture is that the Colonial Pipeline is back online following the cyberattack.

The restart will take several days for the product delivery chain to return to normal capacity, but the futures market is selling off that risk premium now. In the overnight electronic session, the June crude oil has been trading at around 6418, which is 190 points lower. The trading range has been 6581 to 6409.

On the natural gas front, the market is waiting for temperatures to rise and this can't come soon enough for producers, even with a stronger export market. Today we have the EIA Gas storage and the Thomson Reuters poll with 16 analysts participating, whose estimates range from 68 billion cubic feet (bcf) to 82bcf, with the median build of 77bcf and 76bcf. In the overnight electronic session, the June natural gas has been trading at around 2.945, which is .015 lower. The trading range has been 2.984 to 2.941.