We kicked off the day with Export Sales, GDP (Q2), Initial Jobless Claims (22/AUG), Jobless Claims 4-Week Average (22/AUG), Corporate Profits QoQ Prel (Q2), GDP Price Index QoQ 2^nd (Q2), Continuing Jobless Claims (15/AYG) at 7:30 A.M., Fed Chair Powell Speech at 8:10 A.M., Pending Home Sales (JUL) YoY & MoM at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas City Fed Manufacturing Index (AUG) at 10:00 A.M. 4-Week and 8-Week Bill Auction at 10:30 A.M. 7-Year Note Auction and  Jackson Hole Economic Symposium at 12:00 P.M.

With refineries shut down power outages and other weather-related impacts that complicate the shutdown procedure we will produce 4 million pounds of pollution in a no win situation. Zoya Teirstein with Grist reports that 9 oil refineries in Texas alone could produce that magnitude of pollution. A lot of different chemicals and gases, including volatile organic compounds, carbon dioxide, carbon monoxide, butene, and propane, get released via gas combustion devices (flares) by refineries during shutdowns. Motiva refinery in Port Arthur, Texas, the largest refinery in North America is in the eye of the storm and 20 feet water surges mostly caused by high winds could be a problem, even though their shutdown was ahead of schedule. The crude oil market has traded risk on, but has yet to price in all the consequences we won’t realize until the storms aftermath. In the overnight electronic session the October crude oil is currently trading at 4311 which is 28 points lower. The trading range has been 4350 to 4296.

On the Natural Gas front the September contract expires today and the market is not waiting out damage assessments in refineries and pipelines stretching from Louisiana to Texas with this monster storm. We also have The EIA Gas Storage that may take a back seat this week because of Laura. The Weekly Reuters poll with 17 analysts participating estimate increases of 39bcf to 58bcf. This compares to the one-year injection of 77bcf and the five-year average of 66bcf. In the overnight electronic session the October natural gas is currently trading at 2.613 which is .039 higher. The trading range has been 2.627 to 2.491.

On the corn front low rainfall in the Midwest has driven prices up almost 4%  since the start of the week as sweltering heat hit crop conditions. We punched through a six-week high and gained 9% the last two weeks. The boost also could be attributed to the august 10^th derecho, but as many scouts on the Pro-Farmer crop tour mentioned drought conditions in Iowa would be the big story with lower bushels per acre. Cooler temperatures are expected this weekend, but lack of rain should lead to further declines in crop conditions. And no likely precipitation from Laura is expected in areas in Iowa thirsting for rain. In the overnight electronic session the December corn is currently trading at 357 which is 2 ¾ cents higher. The trading range has been 358 to 352 ¾.

On the Ethanol Front the EIA reported ethanol production last week average 931,000 barrels a day, up 4,000 from last week, but still down 107,000 from last year because of uncertainties about blending demand caused by the pandemic. The Renewable Fuels Association says blending demand declined modestly for the second week in a row, even with the amount of gasoline supplied to the market shot 6.2% higher. Both measures of demand are well below last year. The domestic supply of 20.409 million barrels was 139,00 higher than last week but 2.573 million lower than a year ago because of reductions in production. The USDA’s next corn for ethanol use will be September 11^th with the Crop Production USDA Supply/Demand. There were no trades posted in the overnight electronic session. The September contract settled at 1.285 and is currently showing 1 bid @ 1.250 and 3 offers @ 1.320 with Open Interest at 40 contracts.