Hurricane Florence’s Effect on Commodities
$CORN, $WEAT, $SOY, $USO,$UNG
Thursday’s US economic data included: CPI, Export Sales, Jobless Claims and followed by EIA Gas Storage.
But the the Main headline is Hurricane Florence bearing down on the east coast, and a major tropical disturbance in the Gulf of Mexico, it is 1 that has a 50% chance of forming into a hurricane and is expected to make landfall across portions of northeast Mexico, Texas and Louisiana with heavy rain, gusty winds and supply side disruption.
Then there is Tropical Storm Isaac lurking southeast of Puerto Rico which could threaten the Gulf region too.
Plus, we have Hurricane Helene a Category 1 and at the moment the cone shows it is not a threat to the US coast and finally we have Subtropical Storm Joyce, which the cone looks as well it will have a boomerang effect and turn northeast and as well not threaten the US coast.
On the Corn front yesterday’s Crop Production USDA Supply/Demand report left traders wondering. Investors believe we will have plenty of Corn, but talk to the farmers and they are not so sure with all the rain and a risk of an early frost and a mature crop we have not seen in years.
September Grains expire Friday.
Ethanol’s front the October contract is currently trading at 1.270, which is .005 higher. The trading range has been 1.270 to 1.265. 11 contracts traded and the market is currently showing 1 bid @ 1.265 and 1 offer @ 1.270 with Open Interest at 1,210 contracts.
On Crude Oil
The front the market rallied after Bullish inventories and fear of disruptions in the flow of Crude Oil with the active Hurricane season with storms churning in the Atlantic.
Plus the fact Iranian and Venezuelan Crude Oil is virtually halted
Genscape will be releasing date early Friday, and whisper numbers are that we may see further draws, which could put WTI Crude Oil above 70 bbl again.
On Nat Gas
The Reuters poll with 22 analyst participating expect injection builds anywhere from 60 bcf to 76 bcf with the median number 68 bcf. That compares to the 1-year injection build of 96 bcf and the five-year average injection build of 76 bcf. The October Natural Gas is currently trading at 2.854 which is 2.5c higher.
Stay tuned…
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Paul Ebeling
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