We start off the day with Redbook YoY & MoM (30/JAN) at 7:55 A.M., ISM New York Index (JAN) at 8:45 A.M., IBD/TIPP Economic Optimism (FEB) at 9:00 A.M., 119-Day Bill Auction and 42-Day Bill Auction at 10:30 A.M., Fed Williams and Fed Mester Speech at 1:00 P.M. and API Energy Stocks at 3:30 P.M.

image source

On the Corn front, the market started off with momentum carried from last week and Export Inspections showed 110 metric tons of U.S. corn was sold to Japan and 125.7 mt sold to Mexico. The exports came in at 43 million bushels versus 55 MT last week and 22 MT last year. There was not a lot of chatter of China stepping back in so quick after very large orders last week and better weather in South America contributed to the selloff from the highs on Monday but did manage to settle in the green. Traders still agree that China demand and future purchases are not a thing of the past. Next Tuesday we will have Crop production USDA Supply/Demand data. In the overnight electronic session, the March corn is currently trading at 547 ½ which is 1 ¾ of a cent lower. The trading range has been 552 ½ to 545 ¾.

On the Ethanol front, there is talk China will step back in buying DDG and ethanol which is a telling sign they are still in the market for grain-based energy and feed as well as crude oil and products. The Wisconsin Farmers Union Delegates have been talking the future of ethanol as they reached a resolution highly critical of the EPA for granting Small Refinery Waivers to oil refineries. While Brazil’s total ethanol sales for 2020 were down 11.9% from 2019. There were no trades posted in the overnight electronic session. The April contract settled at 1.749 and is currently showing 1 bid @ 1.501 and 2 offers @ 1.749 with Open interest at 41 contracts.

On the Crude Oil front, employees of the Dakota Access Pipeline are expected to get their pink slips shortly just like the Keystone XL employees. It is a shame because these are six-figure salaried jobs heading overseas. And the benefits will be more solar panels, weaker power grid which will lead to rolling blackouts when the grid is stressed for acts of God. Heatwaves that will have air-conditioning use will skyrocket when comfort is a must.

Just look at last summer in California with wildfires in the north and heatwaves in L.A. that lead to those blackouts as residents can testify to. Higher energy prices, higher regulation, higher taxation, higher unemployment with lower productivity, and the availability of employment. That is exactly what historically will happen. The API Energy Stocks come out later this morning and I am expecting draws on crude with slight builds in products. In the overnight electronic session, the March crude oil is currently trading at 5476 which is 121 points higher. The trading range has been 5491 to 5345.

On the Natural Gas front, the winter weather and expected cold snap over the weekend will jumpstart product moving, and the March contract did get through 3.000 last night. These prices may find continued support heading into the spring and summer months unless by the stroke of a pen we will see more whimsical regulation and that will lead to deal killers. In the overnight electronic session, the March natural gas is currently trading at 2.983 which is 0.133 higher. The trading range has been 3.005 to 2.811.