We kickoff the day with MBA Mortgage Market Index (08/Jul), MBA Mortgage Refinance Index (08/Jul), MBA Purchase Index (08/Jul) MBA Mortgage Applications (08/Jul) and MBA 30-Year Mortgage Rate at 6:00 A.M., Core Inflation Rate MoM & YoY (Jun), Inflation Rate MoM & YoY (Jun) and CPI at 7:30 A.M., EIA Energy Stocks at 9:30 A.M., 30-Year Bond Auction at 12:00 P.M., Monthly Budget Statement (Jun) and Beige Book at 1:00 P.M., and Dairy Products Sales at 2:00 P.M.
On the Corn Front the futures were down sharply on recession fears and this morning’s CPI should show more inflation, that could force the Fed to increase rates to increase rates until we are at the R-word and worse of all the D-word will follow. The Crop Production USDA Supply/Demand and WASDE data did not help matters. The USDA said the US corn crop is 64% good-to-excellent. The USDA pegged the world’s corn ending stocks at 1.510 billion bushels and above the June estimate vs. trade expectations of 1.491 and the June estimate of 1.485 billion bushels. Let’s not kid ourselves, the crop is not made yet and we are trading weather with forecasters see some rain and cooler temperatures in the Midwest Great Lakes region. Other parts of the country will not be so lucky with severe heat that will have any precipitation evaporating in the dry hot summer sun. Tomorrow is Last Trading Day on July grains. In the overnight electronic session the September corn is currently trading at 597 ½ which is 3 ½ cents higher. The trading range has been 604 ¼ to 684 ¾.
On the Ethanol Front the USDA maintained its forecast for 2022-23 corn use in ethanol in its latest World Agriculture Supply and Demand Estimates. Early estimates released yesterday expect the 2022-23 corn outlook for increased supplies and higher ending stocks. The USDA beginning stocks are raised 25 million bushels to 1.51 billion bushels and production rose 45 million bushels at 14.505 billion bushels.
There were no trades or open interest in ethanol futures.
On the Crude Oil Front the market is trading in fear. Recession fears with higher interest rates, China in lockdown mode. With another slap in the face to American taxpayers was the Strategic petroleum Reserves (SPR) were sold to a China oil firm that has ties to Hunter Biden. While there is no capacity to hold the oil, this is just another blow to the American People. This is Joe Biden’s debacle and I am confident nothing will come out of Biden’s trip to Saudi Arabia. Last night’s API showed builds across the board with crude +4.762M, gasoline +2.972M, distillates +3.262M and Cushing +o.298M. In the overnight electronic session the August crude oil is currently trading at 9641 which is 57 points higher. The trading range has been 9737 to 9367.
On the Natural gas Front although we pulled back from the highs in yesterday we are back up sharply. This is based on weather and concerns of Putin’s Russia are going to hold the EU hostage to their energy with the Nord Stream pipeline and their whim that the past administration called and set parameters so this would not happen. While the Biden administration put a halt on all safeguards and welcome to reality. In the overnight electronic session the August natural gas is currently trading at 6.216 which is 0.153 higher. The trading range has been 6.555 to 6.201.
Have A Great Trading Day!
Dan Flynn