The shortest day of the year is today as tomorrow days will get longer and hopefully less cold unless you’re long natural gas. The Energy complex ought to show interesting trade this winter with the weather and a new administration at the helm. On the Corn front the strong U.S. dollar has pressured the market and exports will key this market.
With the Environmental Protection Agency (EPA), enforcement of the Renewable Fuel Standard (RFS) that should be supportive to Corn and Sugar prices as they are the key component to Ethanol. But at the end of the day we also look at the Brazil Corn crop which is higher than the USDA estimates and exports become larger and the currency swap of Brazilian real to the U.S. dollar become significant of what exporting countries goods are more attractive to buy. In the overnight electronic session the March Corn is currently trading at 349-¼ which is 1 cent lower. The trading range has been 351-¼ to 349-¼.
On the Ethanol front the January contract posted a trade at 1.567, which is unchanged. 1 contract traded at that price and Open Interest is dwindling at 1517 contracts and the market is currently showing 1 bid @ 1.552 and 2 offers @ 1.572.
On the crude oil front last night’s weekly API data showed draws in crude supplies at 4.1 million barrels while Cushing, Okla., showed modest gains. Products were down with gasoline stocks down 2 million barrels and Distillates down 1.5 million barrels. Also with Russia leading the way with the other 10 non-OPEC nations agreeing to enforce their pledge to production cuts is only more bullish news to this market. Trump that with these gains will be seen like never before with emerging markets such as China and India and China’s imports rose 18% versus last year. If that is not a roadmap to success and prosperity are ahead as the Free Markets move. In the overnight electronic session the February crude oil is currently trading at $53.45 per barrel, which is 15 points higher. The trading range has been 5379 to 5338.
On the natural gas front the current warm front did not sway investors on reality of supplies to get us through winter and February made me shiver. Exports and the retirement of coal and nuclear plants will definitely put pressure on the power grid if this is a long winter and what will save us from the cold. It won’t be solar or wind energy as reality of the votes have been counted. In the overnight electronic session the January natural gas is currently trading at 3.443 which is 17 cents higher. The trading range has been 3.464 to 3.307.