We start off the day with NIFB Business Optimism (August) at 5:00 A.M.,U.S., IBD/TIPP Economic Optimism (September), Three-Month & Six-Month Bill Auction at 9:00 A.M., Export Inspections at 10:00 A.M., 119-Day and 42-Day Bill Auction at 10:30 A.M., Three-Year Note Auction and 52-Week Bill Auction at 12:00 P.M., Consumer Credit at 2:00 P.M., and Crop Progress at 3:00 P.M.

On the corn front, Bloomberg reports what was on traders’ minds: that crop damage from heavy rains are destroying many acres of ripe corn in China while the government auctioned off their stockpiles, leaving what they have on hand as nil or next to none. This should be a bullish sign, as we know they will be forced to import more product from producing destinations all over the globe and will have a hard time manipulating price.

The futures markets were higher and stronger last night on the news, but have pulled back from the highs. In the overnight electronic session, the December corn is trading at 359 ¼, which is 1 ¼ of a cent higher. The trading range has been 363 ½ to 357 ¼.

On the ethanol front, the battle lines between Brazil lawmakers and U.S. lawmakers may have reached a new high, with Brazilian lawmakers urging for an increase of tariffs on U.S. ethanol. Tariff wars always have consequences and this is not going away quietly, with Brazil importing 332 million gallons of U.S. ethanol worth about $493 million in 2019.

U.S. lawmakers are asking U.S. Trade Representative Robert Lighthizer to pressure Brazil to restore zero-tariff on ethanol trade between the two countries. We will see how the coming actions come into play, and we will keep you posted on the latest headline. There were no trades posted in the overnight electronic session. The October contract settled at 1.306 and is showing 1 bid at 1.100 and 2 offers at 1.380 with Open Interest at 43 contracts.

On the crude oil front, the market was spooked with headlines of Saudi’s cutting prices and lower demand concerns due to the pandemic. I believe the market already has priced in lower demand and has recovered from the market going negative a few months back. If we see states continue to reopen, we should see businesses and demand increase to levels that were expected before this nightmare.

On September 9 we have the API inventories, which could put a stop to this panic sell off. In the overnight electronic session, the October crude oil is currently trading at 3708, which is 269 points lower. The trading range has been 3959 to 3696.

On the natural gas front, we saw a pullback on lighter than expected volume. Also, many analysts are concerned with Russia’s natural gas pipeline that could shake up geopolitics for decades. The pipeline would double the capacity of existing undersea routes from Russian fields to Europe.

Russia’s Gazprom PJSC (OGZPY) owns the joint Russian-European venture with Royal Dutch Shell Plc (RDS-A) and four other investors, contributing 9.5 billion euro to the project. This could give the Kremlin new leverage to Germany and other NATO allies. In the overnight electronic session, the October natural gas is trading at 2.553, which is 3 ½ cents lower. The trading range has been 2.586 to 2.493.