IBM Slumps and More Earnings on Tap. The Corn & Ethanol Report 10/18/18
Daniel Flynn of The PRICE Futures Group - InsideFutures.com - Thu Oct 18, 10:22AM CDT

We kickoff today with Export Sales and Jobless Claims at 7:30 A.M. followed by EIA Gas Storage at 9:30 A.M. After the FED minutes were released with a hawkish stand put more pressure on Stocks and pulled the U.S. dollar and U.S. Treasury yields higher. It seems Fed Chairman Jerome Powell will not get rattled or swayed by President Trump’s tweets. The President does have a good point about raising rates versus inflation that we have not seen in a big way so far. On the Corn front we are trading lower in the overnight electronic session hovering near the 100 day moving average. Exports, weather and yields are the key to the witches brew to determine where we go from here. I also expect harvest to accelerate as long as rains stay away which could impact harvest pressure. In the overnight electronic session the December Corn is currently trading at 370 ½ which is 3 ¾ cents lower. The trading range has been 373 ¼ to 370 ½. The market is looking heavy in the early going and could test the 365 level.

On the Ethanol front sales are slumping after the tweak of restrictions with the Renewable Fuel Standard (RFS) making E-15 more prominent in summer months and making Iowa farmers happy. At the moment the market looks weak but when the shock of Iran sanctions take hold countries will be scrambling for any energy source for combustion engines. In the overnight electronic session the November Ethanol is currently trading at 1.272 which is .008 lower. The trading range has been 1.280 to 1.272. 10 contracts traded and Open Interest has dropped to 930 contracts. The market is currently showing 1 bid @ 1.271 and 2 offers @ 1.277.

On the Crude Oil front do not blink when we are on the brink. The market is under pressure and not bouncing of the Bollinger Band but when investors wake up to the reality of demand at all-time highs with tight supplies it will be hard to keep up with global usage and that should point to higher prices in the future. In the overnight electronic session the November Crude Oil is currently trading at 6865 which is 110 points lower. The trading range has been 7003 to 6858. The November contract expires Monday and the Iran sanctions kick in starting in two weeks.

On the Natural Gas front we have the EIA Gas Storage data today. The Thomson Reuters poll with 23 analysts participating estimating injection builds ranging from 71 bcf to 99 bcf with the median 83 bcf. This build is compared to the one-year build of 55 bcf and the five-year average of 79 bcf. In the overnight electronic session the November contract is currently trading at 3.260 which is 6 cents lower. The trading range has been 3.323 to 3.248.

Have a Great Trading Day!
Dan Flynn