Fed Expected To Keep Rates Unchanged. The Corn & Ethanol Report

We kicked off the day with MBA Mortgage Applications (23/Jul) and MBA 30-Year Mortgage Rate (23/Jul) at 6:00 A.M., Goods Trade Balance Advanced (Jun), and Wholesale Inventories MoM Adv. At 7:30 A.M., EIA Energy Stocks at 9:30 A.M., 2-Year FRN Auction at 10:30 A.M., Fed Interest Rate Decision at 1:00 P.M., Fed Press Conference at 1:30 P.M. and Dairy Product Sales at 2:00 P.M.

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On the Corn front, I still remain bullish and a day of reckoning for the bears in this market. Changing weather forecasts with more rain and cooler temperatures are in certain models in the Midwest the next 10-days. Some traders like the funds believe were at in the pollination stage there is little damage the hot weather will have at this point. I beg to differ, and there is little margin of error with carryover and yields we will experience and if the funds had longs on the way down and if they decide to carry a heavy short position they will be wrong on the way up. If that is the case I anticipate a short-covering rally like the horse busting out of the barn, especially with lighter volume at the moment in the summer doldrums. Be prepared if funds throw large numbers to be short and I also expect U.S. exports to rise rivaling whatever crop South America can export. In the overnight electronic session the December corn is currently trading at 547 which is ¾ of a vent higher. The trading range has been 551 to 542 ¾.

On the ethanol front, Coamo a large Brazilian company is moving and plotting a course to strategy more corn for ethanol use. While the Renewable Fuels Association sent a letter yesterday to Joe Biden to reinforce in his thinking their commitment ensuring ethanol achieves a net-zero carbon footprint, on average by 2050 or sooner. There were no trades posted in the overnight electronic session. The August contract settled at 2.320 and is currently showing no market with Open Interest at 2 contracts.

On the Crude Oil front, last nights API Energy Stocks showed draws across the board with Crude oil down -4.728M. Cushing -0.126M, gasoline down a whopping 6-226M, and distillates -1.882M. If today's EIA Energy Stocks resemble these numbers the market should trek higher. The September crude oil is currently trading at 7201 which is 36 points higher. The trading range has been 7260 to 7170.

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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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