More Rains This Week. The Corn & Ethanol Report

We start off the day MBA Mortgage Applications (14/AUG), MBA 30-Year Mortgage Rate (14/AUG) at 7:30 A.M., AIA Energy Stocks at 9:30 A.M. 20-Year Bond Auction at 12:00 P.M., FOMC Minutes at 1:00 P.M. Dairy Products and Milk Production at 2:00 P.M.

On the Corn front, the storm last week could impact corn and soybean prices for some time. Farmers in Indiana have told us that they have hundreds of thousands of dollars in damages including equipment, buildings, and crops. The storm was not as bad as Iowa taking the brunt of the monster. The USDA dropped the good/excellent rating on corn to 69% versus 71% last week when the storm hit. Iowa’s crop rating dipped to 59% good/excellent and Illinois to 76%. Meanwhile, 76% of the nations corn dough vs. 69% five-year average and the USDA pegged the U.S. corn 23% dented vs. 24% five-year average. In the overnight electronic session, the December corn is currently at 340 ¾ which is 1 cent lower. The trading range has been 341 to 338.

On the Ethanol front, Pacific Ethanol stock is rising and gained over 48% in two days. Rich Smith (TMF Daily) reports the stock has been the coronavirus stock because it adjusted to a producer of in-demand alcohol for disinfectants and hand sanitizers in recent months which increased the company’s revenue and post its first quarterly profit in 3 ½ years. There were no trades posted in the overnight electronic session. The September contract settled at 1.290 and is currently showing 1 bid @ 1.290 and 1 offer @ 1.320 with Open Interest at 63 contracts.

On the Crude Oil front, the API showed draws of 6.264M barrels versus a forecast of @ 2900 draw. Prices seem to be waiting for the EIA Gas Storage and the September contract expiring tomorrow. In the overnight electronic session, the October crude oil is currently trading at 4269 which is 43 lower. The trading range has been 3297 to 4261.

On the Natural Gas front fundamentals are turning bullish as it appears European stocks are shrinking and U.S. LNG exports rising. The short-term weather outlook has hot conditions across the western and southern U.S.with highs in the ’90s and 100’s with the hottest in Southern California and the Southwest. Weather systems with showers and comfortable highs in the ’70s and ’80s will bring light demand in the Midwest, Mid-Atlantic, and Northeast. Meanwhile, the National Hurricane Center shows a Disturbance in the Atlantic that could take hurricane formation with a current path that threatens the Gulf of Mexico There is another threat in the Atlantic that could form into a Disturbance and a third threat over Guinea and Sierra-Leone Africa. In the overnight electronic session, the September natural gas is currently trading at 2.394 which is .023 lower. The trading range has been 2.455 to 2.375.

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