We started off the day with Export Sales and Jobless Claims at 7:30 A.M., EIA Gas Storage at 9:30 A.M., 4-Week, and 8-Week Bill Auction at 10:30 A.M., and then 30-Year Bond Auction at 12:00 P.M.

On the Corn front, the USDA reported that it is expecting yield increases in the top 12 corn-producing states compared to 2019. However, the estimates did not include damages reported from Monday’s Derecho storm across parts of the Corn Belt. This is a big Wild Card with yields going up and the USDA also raised its demand production. The big question is… Have these numbers actually come into fruition with the damage we saw in Iowa? Or do we wait for the next report which will have lesser of the farmers input and more input based on the USDA. And will exports already penciled in see many cancellations? Iowa is the number-one producer of corn in the U.S., with 2.58 billion bushels harvested in 2019, accounting for roughly one-sixth of nationwide yields. The state has been the top corn producer for the past 26 years. It will take time for agronomists to assess the health of the corn plants affected by the derecho. Harvest will begin shortly and one-third of Iowa’s crop are flattened. It’s a hard call to fathom whether the corn will recover and the impact of potential yield. 2020 has hit the U.S. farmer with trade disputes, low demand, and the arguments with the Renewable Fuel Standard and throw in the global pandemic and lowest corn prices in a decade. In the overnight electronic session, the  December corn is currently trading at 331 ¾ which is 4 ½ cents higher. The trading range has been 333 ½ to 327 ½.

On the ethanol front, this market could as well be affected by the storm. We are still trying to get back to normal, with lock-downs at a minimum and driving picking up. John Perkins with Brownfield AGNEWSFor America reports as ethanol production and stocks were down on the week with the EIA reporting that production averaged 918,000 barrels a day, down 13,000 barrels from a week ago and 127,000 under a year ago, and the second week in a row because of margins and concerns about blending demand because of COVID-19. Blending demand did increase on the week but well below last year's levels. The supply was 19.75 million barrels was down 596,000 barrels on the week and more than 4.133 million on the year, the tightest domestic stock since 2016. The USDA expects 4.85 billion bushels of corn to be used for ethanol production this year, rising to 5.2 billion next marketing year, which starts September 1^st. By then we should have a better take on the damage Monday’s storms caused. There were no trades posted in the overnight electronic session. The September ethanol settled at 1.230 and is currently showing 1 bid @ 1.100 and 1 offer @ 1.300 with Open Interest at 66 contracts.

On the Crude Oil front, the market moved higher again with bigger than anticipated draws. CBS MarketWatch reports that Phillips 66 will stop making fuels from crude oil at it’s San Francisco area refinery and will shift to renewable fuels. The fuels will consist of cooking oil, fats, greases, and soybean oils. The company expects to produce 680 million gallons a year of renewable diesel, renewable gasoline, and sustainable jet fuel. In the overnight electronic session, the September crude oil is currently trading at 4258 which is 9 points lower. The trading range has been 4284 to 4240.

On the natural gas front we have the EIA Gas Storage report today and a WSJ poll with 12 analysts, brokers and traders polled expect increases ranging from 50bcf to 65bcf. This compares to the one-year of 51bcf and the five-year average of 44bcf. OILPRICE.com’s Chris Kennedy reports the true motives of Chevron acquiring Noble energy and Leviathan partner Delek Drilling which will give more clout to Delek Drilling and be in line with Israel’s plans, but it may take time with current oversupply in the market.“We don’t have in our group LNG capabilities”, said Yossi Abu, “Chevron brings significant LNG to the Leviathan project.” In the overnight electronic session, the September natural gas is currently trading at 2.167 which is .015 higher. The trading range has been 2.205 to 2.145.