House Passes Border-Security Bill. The Corn & Ethanol Report 02/15/19
Daniel Flynn of The PRICE Futures Group - - Fri Feb 15, 12:43PM CST

The Border-Security Bill should be on the President’s desk to sign to avert another partial government shutdown until they play games in September. With the President anything but thrilled with the Bill it looks like he will sign and seek alternative ways to get the full funding to get the job done right even if it means calling for a National Emergency or have El Chapo fund the wall. Today we start the morning trading session with Business Inventories, Import Price Index and Empire State Index at 7:30 A.M., Capacity Utilization and Industrial Production at 8:15 A.M., Consumer Sentiment Index at 9:00 A.M. and NOPA Crush at 11:00 A.M.

In closed-door sessions the Chinese and U.S. failed to narrow the gap on structural reforms to China’s economy that the U.S. requested to avoid and increase in tariffs after March 1st. U.S. stocks sold off the highs with lack of progress Thursday. This is just the first two days of high-level meetings and there is talk the March 1st deadline may be pushed back as the two sides kick the can down the road and both parties want to reach a formal agreement. President Xi may even participate next week. The market is seeing positive tones as long as the two sides continue to talk in mutual best interests.

On the Corn front the futures followed the break in the Soybeans and Wheat in yesterday’s trading session. The Soybeans got cracked on news China canceled some unshipped Soybean sales. Two reasons investors were pondering as to why, is the African Swine Fever spreading more rapidly than first thought or is China’s economy slowing be a factor in reducing food demand. The second reason does not hold a lot of water with me. You most definitely want to keep your people fed in rougher times which I do not believe it is big of an issue as the markets are reacting. While talks of increases in Corn Production in the Black Sea and South America and Argentine Corn is now cheaper than U.S. Corn which Corn tenders could be switched to Argentina. In the overnight electronic session the March Corn is currently trading at 375 ¼ which is a ½ of a cent higher. The trading range has been 376 ¼ to 373 ¾.

On the Ethanol front there were no trades posted in the overnight electronic session. This market is cognizant of the U.S.-China trade talks as well. The March contract settled at 1.326 in yesterday’s action.

Open Interest is still sliding down to 1,215 contracts. The market is currently 1 bid @ 1.322 and 1 offer @ 1.331.

On the Crude Oil front more bullish news that Saudi Aramco halted Oil output this week at Safaniyah, the worlds largest offshore Oil field, Energy Intelligence reported. Concerns are on how long the Oil field will be out of operation with the shortage of heavy Crude Oil in the market already and the Saudi’s are not known to give updates with press releases, some prognosticators expect the Oil field to down going into March. In the overnight electronic session the March Corn is currently trading at 5487 which is 46 points higher. The trading range has been 5510 to 5424.

On the Natural Gas front the market is bouncing back on cold weather forecast after a bearish EIA Gas Storage data yesterday. In the overnight electronic session the March contract is currently trading at 2.593 which is 2 cents higher. The trading range has been 2.603 to 2.543.

Have a Great Trading Day!
Dan Flynn