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• We start off the day with Challenger Job Cuts (Dec.) at 6:00 A.M., Initial Jobless Claims (Jan. 2), Jobless Claims Four-Week Average (Jan. 2), Continuing Jobless Claims (Dec.), Export Sales and Trade Balance at 7:30 A.M., Fed Harker Speech at 8:00 A.M., ISM Non-Manufacturing Business Activity (Dec.), ISM Non-Manufacturing New Orders (Dec.), ISM Non-Manufacturing Employment (Dec.), ISM Non-Manufacturing Prices (Dec.) and ISM Non-Manufacturing PMI (Dec.) at 9:00 A.M., EIA Gas Storage at 9:30 A.M., Four-week & Eight-Week Bill Auction at 10:30 A.M., Fed Bullard Speech at 11:00 A.M., and Fed Evans Speech at 12:00 P.M.

On the corn front, both corn and soybean prices traded higher with funds adding to their record long positions, as China’s 2020 crop is expected to be lower than the USDA had anticipated. The USDA announced 102.6 metric tons of corn sales for destinations unknown, which has traders believing that the destination is China.

This is a sign of more buying by China and other countries, which should further bolster prices. Talk on the street is that of a dry 2021 summer with whispers of a larger drought in the US. This could start more panic demand as we move through South America’s smaller-than-usual crop and carryover. In the overnight electronic session, the March corn is currently trading at 494 ½, which is a ½ of a cent lower. The trading range has been 485 ¾ to 493 ¾.

On the ethanol front, the EIA report showed a modest gain of 1,000 barrels of ethanol production while stocks decreased 220,000 on the week, but there was an increase of last year's numbers with 822,000 barrels. These numbers are a little hard to crunch and figure out, but so was 2020. The next estimate on corn for ethanol use will be on the USDA January 12 crop production report.

With more possible lockdowns and global fuel demand on shaky ground, this leaves ethanol producers in a tangled web of how and what to capitalize on next. There were no trades posted in the overnight electronic session. The April contract settled at 1.566, and is currently showing 1 bid @ 1.310 with 0 offers posted and Open Interest at 45 contracts.

On the crude oil front, the EIA had a turnaround on the rainy day that the API stocks gave traders. The U.S. did not import Saudi oil for the first time in 35 years. With the pandemic fears and Saudi Arabia realizing it is better suited to negotiate with honey rather than vinegar, this attitude was reflected in what we saw in the OPEC+ meetings.

With the unknown about future demand along with the pandemic, this is great news for the short-term. Goldman Sachs (GS) is on board with my thinking, which could be the kiss of death. In the overnight electronic session, the February crude oil was trading at 5093, which is 30 points higher. The trading range has been 5104 to 5039.

On the natural gas front, the market is playing with the cold weather as some areas in the U.S. may see milder winter temperatures for the next five to ten days. The EIA Gas Storage this morning and the Thomson Reuters weekly poll, with 17 analysts participating, have estimates of withdrawals ranging from 158 bcf to 118 bcf, with a median decrease of 135 bcf.

If this is correct, the industry is definitely looking at the next administration and if they will be more friendly to fossil fuels than advertised. Tracking weather modules and everything else starting the year has some traders in doubt. And with talk of a hot, dry summer, this could be a wild ride in 2021. In the overnight electronic session, the February natural gas was trading at 2.712, which is .004 lower. The trading range has been 2.723 to 2.690.