We started off the day with MBA Mortgage Applications (06/Aug) and MBA 30-Year Mortgage Rate (06/Aug) at 6:00 A.M., Core Inflation Rate YoY and MoM (Jul) and Inflation Rate YoY and MoM (Jul) at 7:30 A.M., EIA Energy Stocks , Fed Bostic Speech and NY Fed Treasury Purchases 22.5 to 30 yrs. at 9:30 A.M., Fed George Speech at 11:00 A.M., 10-Year Note Auction at 12:00 P.M., Monthly Budget Statement (Jul) at 1:00 P.M. and Dairy Product Sales at 2:00 P.M.

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Severe storms in the Midwest that included heavy rains, hale, lightning, high winds and tornadoes. There will be another batch tonight and we are trying to get accurate numbers to assess the damage in farmland areas. Even though this year has been forecasted to be a milder hurricane season we have Tropical Storm Fred which is 50 miles east-southeast of Santo Domingo, Dominican Republic. The storm’s current cone shows it to enter the Gulf of Mexico and current trajectory has it riding up the western Florida Coast. There is also a disturbance in the eastern tropical Atlantic several hundred miles west-southwest of the Cabo Verde Islands. We will keep you posted on further developments.

On the Corn front, last night’s storms as of 8:00 P.M. showed 175,000 customers were having power outages. The storms hitting Iowa, Northern Illinois, Southern Wisconsin and Indiana. The corn market seemed to be trading a little more risk-on in last night’s trade and the market seems way undervalued. This just adds to the drama heading into tomorrow’s report. Don’t be surprised to see a fresh wave of Chinese buying regardless that they have pulled back on purchases of crude oil, iron-ore. Copper and grains. In the overnight electronic session the December corn is currently trading at 560 which is 6 ¾ cents higher. The trading range has been 560 ¼ to 552.

On the Ethanol front, the EIA increased forecast for 2021 ethanol production and 2022 ethanol blending maintained. The EIA predicts fuel ethanol production will average 970,000 barrels per day which is up 60,000 (bpd) from a year ago and 2022 expectations are expected to average 1.01 million (bpd). We will have corn for ethanol use in tomorrow’s USDA report. There were no trades posted in the overnight electronic session. The September contract settled at 2.220 and sadly no traction in the ethanol futures market.

On the Crude Oil front, the market is still trading on Covid delta fears. There have been whispers that OPEC+ may have to reconsider production hikes if they want to keep the market in balance and not have a repeat performance of 2020. We should see risk premium pick up depending on the path of Tropical Storm Fred. Last nights API Energy Stocks showed draws in crude oil -0.816M, Cushing -0.413M, gasoline 1.114M and distillates showed builds of +0.673M. In the overnight electronic session the September crude oil is currently trading at 6766 which is 63 points lower. The trading range has been 6879 to 6667.

On the Natural Gas front, we saw a little long liquidation in the overnight but the hot weather should buoy prices in the daytime session. This market is also following the path of Tropical Storm Fred and tomorrow we have the EIA Gas Storage and I will have analysts estimates in tomorrows report. In the overnight electronic session the September natural gas is currently trading at 4.048 which is .041 lower. The trading range has been 4.129 to 4.019.