We started off the day with Fed Kaplan at 8:15 A.M., U.S. Markit Composite PMI Flash (MAY) and Markit Services PMI Flash (MAY) at 8:45 A.M., Existing Home Sales MoM (APR) and Existing Home Sales (APR) at 9:00 A.M., Baker Hughes Oil & Total Rig Count at 12:00 P.M., Fed Daly Speech at 12:30 P.M., Cattle on Feed at 2:00 P.M., and Fed Kaplan Speech at 3:55 P.M.

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On the Corn front, the market is unable to ignore China’s purchases. China bought another 48.0 million bushels of corn yesterday. After an early selloff and pressure on the soybeans and wheat market the July corn settled 6 ¼ cents higher, September 12 cents higher, and the December contract 13 cents higher. Talking with my farmer customers and colleagues in certain areas in the Midwest are concerned that the drought could overcome acreage planted. One farmer told me it was too wet early and now it is too dry. Still not completed with plantings, he said, I must get this in the ground before the moisture has evaporated. He continued, do I plant a smaller crop so I can realize yields, or do I plant as much as I can. He further explained the alfalfa and wheat were almost dying on the vine so to speak with lack of moisture. This could be the story for 2021 as exports are up and carryover is slim and with Brazil’s crop not close to a bumper crop their carryover is the same if not worse. I expect to see more choppy trade, but at the end of the day or the bottom line we will see higher prices regardless of the peaks and valleys the market will show. In the overnight electronic session, the July corn is currently trading at 657 ¼ which is 7 ¼ cents lower. The trading range has been 666 ¾ to 654 ¼.

On the Ethanol front, the EU market is transitioning to post-lockdown normality. While European undenatured ethanol prices have risen 51% since the beginning of the year, there are signs that the market is starting to normalize down the curve. This should be a boon to ethanol exporting countries such as Brazil and the U.S. This fundamentally could even further rallies in the corn market. There were no trades posted in the overnight electronic session. The June contract settled at 2.355 and is currently showing no market with Open Interest at 21 contracts.

On the Crude Oil front, the U.S. shale is becoming more attractive once again and U.S. shale producers have promised to reign in production growth and return more cash to investors, unlike 2015-2016 and the demise of 2020. Cleaner gas standards are required by the federal government and until we have perfected the battery-operated cars there is not much to accept but ignition with fuels. There is no reliable energy source period…. Then the combustible engine. We also have another issue with Iran back in the export market and the closure of the Keystone Pipeline giving U.S. business to Russia. What are they thinking?We have to expect higher prices and imports which makes shale way more attractive as prices we will see will become evident. As we move into next week’s Memorial Day Weekend $70 a barrel is very reachable. In the overnight electronic session, the July crude oil is currently trading at 6274 which is 80 points higher. The trading range has been 6302 to 6156.

On the Natural Gas front, the industry has been urging to focus on the narrative addressing the energy transition. They must accept the new initiatives to capture and store greenhouse emissions. We still do not have a reliable energy source to keep the lights on, only coal and LNG. Solar and wind power just cannot cut it when demand goes through the roof. These issues must be addressed as well as pipelines to be able to reach the customer at a moment’s notice. Until a reliable alternative is discovered or found I am sticking with this market. In the overnight electronic session, the June natural gas is currently trading at 2.967 which is .042 higher. The trading range has been 2.983 to 2.946.