German Manufacturing Misses the Beat. The Corn & Ethanol Report 03/22/19

The German manufacturing data had the markets do an about-face as we have another report or headline that “chicken little the sky is falling”!  Once again the prognosticators are calling for a global economic slowdown with trade disputes with China and the EU leading the way on headlines. However the trade talks go we will be playing on an equal playing field that the Eu is not used to and the socialist don’t like it. In the short-term I expect the market to be resilient and bounce back to a thriving economy as we still have excellent manufacturing data in the U.S. Later today we have the Cattle on Feed and Cold Storage reports at 2:00 P.M. And I expect both Beef and Pork to roll with skyrocketing demand and the floods diminishing weights and herds. And in the aftermath of the Bomb Cyclone , catastrophic flooding could last for months causing the worst flood disaster in history. On the Corn front we are hearing whispers that China is buying U.S. Corn for April and May shipment. With the floods and trade talks demand is growing and may outpace what we can produce if you look at the big picture of the start to this years crop. The old saying is, “it is not what you plant but what you grow,” and the

Early stages of this years crop plantings and yields may suffer. In the overnight electronic session the May Corn is currently trading at 379 which is 2 ¾ of a cent higher. The trading range has been 380 ¾ to 375 ½.

On the Ethanol front we are seeing exports on the rise and the market may have taken notice and is trading closer to fair value. The floods have taken it’s toll on production with Ethanol plants forced to shut down in Nebraska, Iowa, and South Dakota. In the overnight electronic session the April contract is currently trading at 1.427 which is .009 higher. The trading range has been 1.430 to 1.417. The market is currently showing 1 bid @ 1.424 and 5 offers @ 1.430 with 14 contracts traded and Open Interest down to 386 contracts. The May contract is now outpacing the April in Open Positions so we will rollover on Monday.

On the Crude Oil front we shot above $60 this week and once again received bad news on global growth and the markets sunk again. In the overnight electronic session the May crude Oil is currently trading at 5920 which is 78 points lower. The trading range has been 6007 to 5904.

On the Natural Gas front the German data was not supportive to this part of the Energy sector as well. In the overnight electronic session the April contract is currently trading at 2.766 which is 5 ½ cents lower. The trading range has been 2.824 to 2.721.

Have a Great Trading Day!
Dan Flynn