The National Hurricane Center update as of Wednesday at 1:00 P.M. CDT has Disturbance 1 chance to form a hurricane are almost 0% in the next 48 hours and possibly 20% in five-days. It is expected to move slow the next several days as the system passes western or central Cuba, the Florida Straits, and the Bahamas. Regardless of the development heavy rainfall is possible in those areas and southern Florida. Upgraded to Hurricane status Epsilon with sustained winds at 100 knots moving northwest at 9 knots. Epsilon could be a tricky one but is still projected to miss the Northeast Coast of North America, but dangerous surf and rip currents are likely occurring along the coast of Bermuda, Bahamas, The Greater Antilles, Leeward Islands, and portions of the east coast of the U.S. and Atlantic Canada the next few days.
On the corn front, the tale of the tape is pretty much the same old song, South American old crop supplies are tight, lack of U.S. and Argentina farmer selling, and lower Ukraine supply. In the futures markets the funds pitched in and bought 3,000 more corn and are estimated to be net-long 231,000 total contracts, down 273,000 contracts from August and this is Oct. 22 and they are still long and at the moment, I don’t believe shorting the market is the closest thing to their mind.
In yesterday’s action technicians were hoping to print a new high at 416 or 416 ½ but it never happened. The market did stay near or at 415 during most of the trading session and did finally make a new high of 415 ½ and settled at 413 ¾ which was 5 cents higher. In the overnight electronic session, the December corn is currently trading at 412 which is 1 ¾ of a cent lower. The trading range has been 414 ¼ to 410 ¾.
On the ethanol front, yesterday’s report had stocks come in 1% lower than last week and 7% on the year, while production was down 2% from last week and 8% on the year. The USDA next corn for ethanol use will be released on November 10th. There were no trades posted in the overnight electronic session. The November ethanol settled at 1.520 and is currently showing 1 bid at 1.100 and 0 offers with Open Interest dropping to 45 contracts.
On the crude oil front, the market was gaining support after the EIA reported a draw on crude oil stocks at 1 million barrels which offset what the API reported on Tuesday afternoon of a build just over a half a million barrels, although the API was not drastic, analyst were looking for draws and that was enough to deep-six the market. The market is coming back.
Meanwhile the Venezuelan vessel carrying 1.3 million barrels of crude oil continues to dangerously tilt and could cause a catastrophic oil spill. This could be an ecological disaster, just to give you an idea the vessel named Nabarima cargo is about 5 times of the cargo the famed Exxon Valdez spilled in 1989. Another concern is aquatic life in the Caribbean, and this could be a bigger blow after this active hurricane season that is showing no signs of quit so far. The vessel is part of a joint venture between Petroles de Venezuela (PDVSA) and Italy’s Eni Spa. The vessel has been stranded since January 2019 while an Eni spokesperson said they were waiting from a green light from the U.S. government to prevent any sanction “risks”, trying to offload crude oil from the vessel. In the overnight electronic session, the December crude oil is currently trading at 4021 which is 18 points higher. The trading range has been 4041 to 3971.
On the natural gas front, we are seeing a short-lived weather forecast that could bring temperatures back close to 80 degrees. I can hear and see the thunder and lightning this morning which hopefully has the warm temps following. This gave natural gas a reason to pull in the reigns from the rally we have been seeing, and the EIA Gas Storage number gave another reason for profit taking.
The Thomson Reuters poll supplied by Scott DiSavino with 14 analysts participating, estimate increases of 42bcf to 62bcf with the median 52bcf. This compares to the one-year injection of 89bcf and the five-year average build of 67bcf. In the overnight electronic session, the November natural gas is currently trading at 3.007 which is .016 lower. The trading range has been 3.056 to 2.997.