More Global Market Volatility. The Corn & Ethanol Report

We kicked off the day with Durable Goods at 7:30 A.M., Michigan Consumer Expectations at 9:00 A.M., Baker Hughes Rig Count at 12:00 P.M., and Cattle on Feed at 2:00 P.M.

On the Corn front, more rains and cooler temperatures should slow plantings, and even with warmer temperatures on the way it will come with more rains next week. This could slow farmers to get a good jump on plantings. However, Farmers really surprised me last year of the yields produced with all the weather calamities faced with flooding, rains, and abnormal temperatures to name a few. China’s whispers of buying 20 mmt of U.S. Corn for its reserves rallied the market and could induce farmer selling at these levels. But talking to some of my farmers, they are torn to do so. But with Ethanol demand down, yesterdays Export Sales and expectations of lower cattle placements should squash any true rally. In the overnight electronic session the May Corn is currently trading at 317 ½ which is down 1 ¾ of a cent. The trading range has been 320 ¾ to 316.

On the Ethanol front big producer ADM said it will idle production at its corn ethanol plants in Cedar Rapids, Iowa, and Columbus, Nebraska, furloughing 90 employees in each facility for at least four months. Each plant annually produce 300 million gallons of the corn-based fuel additive, are among the largest in the nation. Rolling over to the June contract it posted a trade at 0.956, which is 0.002 higher. The market is currently showing 2 bids @ 0.938 and 3 offers @ 0.970 with 2 contracts traded and Open Interest at 236 contracts.

On the Crude Oil front after trading lower in the overnight electronic session with the Asian markets sharply lower and the European markets mixed, the market rallied back on the strength of the U.S. markets. June Crude Oil is currently trading at 1723 which is 73 points higher. The trading range has been 1795 to 1564.

On the Natural Gas front, the June market is trading with good volume this morning and is currently trading at 1.943 which is .001 higher. The trading range has been 1.988 to 1.923. With the energy complex a boom or bust industry, expect this market to be a sleeper in the future.

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