Another China Trade Snag. The Corn & Ethanol Report 11/14/19

At 6:30 A.M. we had the FED Quarles Speech and we have Jobless Claims and PPI at 7:30 A.M., FED Clarida and FED Evans Speech at 8:10 A.M., FED Chair Powell Testimony at 9:00 A.M., EIA Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4 & 8-Week Bill Auction at 10:30 A.M., FED Williams Speech at 11:00 A.M. and Dairy Products Sale at 2:00 P.M. China is still calling for the U.S. to rollback tariffs as part of any “phase one” agreement, as trade negotiations between the two largest economies drag on. China’s Ministry of Commerce spokesperson Gao Feng was quoted, “If both sides reach phase one agreement, the level of tariff rollback will fully reflect the importance of the phase one agreement.” Gao did not specifically address the comment President Trump said last Friday that he had not agreed to remove tariffs on Chinese products. This coincides with what the President Trump said earlier in the week that if the deal breaks down there will be a great number of new tariffs to be imposed. On the Grain front we have Last Trading Day on November Soybeans. On the Corn front the market is getting a little relief from harvest pressure that the market has been experiencing in recent market trends. Farmers are still behind the Eightball while trying to put this harvest and 2019 year in the rearview mirror. In the overnight electronic session the December Corn is currently trading at 376 which is ¾ of a cent higher. The trading range has been 377 ¼ to 374 ½.

On the Ethanol front, we saw some late action in the overnight that looked like a spread was applied with the December contract posting a trade at 1.393 which is .019 lower and the January contract posting a trade at 1.375 which is .012 lower. We could see rollovers picking up in this light volume market and Open Interest is at 358 contracts basis December and 164 in January.

On the Crude Oil front, last night’s API showed draws in Crude Oil at 541 thousand barrels, Cushing down 1.2 million barrels and Products showed builds with Gasoline leading the way with builds of 2.3 million barrels and Distillates showed builds of 887 thousand barrels. In the overnight electronic session the December Crude Oil is currently trading at 5760 which is 48 points higher. The trading range has been 5779 to 5729.

On the Natural Gas front, the market is looking ahead to the future as another weather forecast is calling for frigid temperatures to follow this brief rise in the mercury. And the cold may not lift as quickly that it did in the 1st round. This morning we have the EIA Gas Storage data at 9:30 A.M. The Thomson Reuters poll with 18 analysts participating have forecasts ranging from a draw of 6bcf to an injection of 9 bcf with the median withdrawal of 1 bcf. This compares to the one-year withdrawal of 109bcf and the five-year average withdrawal of 32 bcf. In the overnight electronic session the December Natural Gas is currently trading at 2.660 which is 6 cents higher. The trading range has been 2.696 to 2.637.

Have a Great Trading Day!
Dan Flynn