EPA to Disclose New Renewable Fuel Plan. The Corn & Ethanol Report 06/16/17

Rain makes Grain and the markets thirst for a rally and crops thirst for rain actually happened at the same time. Who Thunk? With investors start worrying about yields and inspire a rally which will be met with Farmer and Fund selling. Also Planalytics cut Corn yields from 167.4 bushel/acre to 166.9 bu/acre. This is quite a slide from the June 9th USDA forecast of 170.7 bu/acre. Rains and warmer temperatures in the mix this weekend will leave investors thinking if it is too late to be conducive. In the overnight electronic session the July Corn is currently trading at 379 ¼ which is ¼ of a cent lower. The trading range has been 380 to 377.

On the Ethanol front the U.S. Environmental Protection Agency (EPA) is expected to propose renewable fuel use requirements for 2018 anytime now. The chatter on the street is there will be no major changes and a modest increase to biofuels according to Jarrett Renshaw and Chris Prentice with Reuters. There were no trades posted in the overnight electronic session. The July contract settled at 1.573 and is currently trading at 1.573 and is currently showing 1 bid @ 1.571 and 1 offer @ 1.596 with Open Interest at 765 contracts and is now below the August contract Open Interest at 855 contracts. Rollovers will be the talk of this market until the EPA’s proposal is locked in.

On the Crude Oil front the question is… Have we hit rock bottom? July option expiration yesterday kept any further break to the downside or any rally in check. The market is still vulnerable for another break but even though we are not out of the woods yet it increasingly looks like we could trade higher from here, both technically and fundamentally the market looks to be a buy. In the overnight electronic session the July contract is currently trading at 4485 which is 39 points higher. The trading range has been 4494 to 4424. Next Tuesday is the Last Trading Day for the July contract so Monday we will rollover to the August contract.

On the Natural Gas front yesterday’s EIA Gas Storage had a bullish spin and the market reacted with warmer temperatures on the horizon. Weather forecasts continue to change or be updated while investors are banking on a dry heat spell which should propel prices this summer. In the overnight electronic session the July contract is currently trading at 3.055 which is 1 tic lower. The trading range has been 3.082 to 3.038.

Have a Great Trading Day!
Dan Flynn

 

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