Texas Big Freeze Becoming Oil Market Crisis. The Corn & Ethanol Report

We started off the day with Fed Brainard Speech, Housing Starts & Permits at 7:30 A.M., Philadelphia Fed Manufacturing Index, Fed Bostic Speech and EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4_Week & 8-Week Bill Auction at 10:30 A.M., and 30-Year TIPS Auction at 12:00 P.M.

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On the Corn front, we closed slightly higher in yesterday’s action. Export Sales will be tomorrow due to the Presidents Day holiday. Illinois river freezes and slow rail is reducing needed grain flow to export ports. Most traders believe demand on U.S. corn will improve. In the overnight electronic session, the March corn is currently trading at 549 ¾ which is 3 ¼ cents lower. The trading range has been 554 ½ to 549.

On the Ethanol front, cold weather cut ethanol production by half as conditions strained the power grids and boosted the price of natural gas, said Geoff Cooper Chief Executive of ethanol trade group Renewable Fuels Association, “ We have got a substantial share of industries capacity that is idle right now, or will be, because of this storm”. There were no trades posted in the overnight electronic session. The April contract settled at 1.729 and is currently showing no market with Open Interest at 43 contracts.

On the Crude Oil front, Brent Crude surpassed 465 a barrel shortly in London. As the record cold in Texas has crude down 4 million barrels a day, or 40% of crude production is now off-line. We will just have to work through these disturbances. Both short-term and long-term I am friendly to the market. In the overnight electronic session, the March crude oil is currently trading at 6158 which is 44 points lower. The trading range has been 6226 to 6097.

On the Natural Gas front, the market is trying to keep up with demand and parts of the grid that id off-line. This should make trading interesting in the next couple of sessions. In the overnight electronic session, the March natural gas is currently trading at 3.181 which is .038 lower. The trading range has been 3.298 to 3.172.

Disclaimer: A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA Past results are not necessarily indicative of future results. Investing in ...

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