Iran Feeling The Heat
Good Morning!
We started the day with Mortgage Applications coming in down 2.2% with the previous number was up 9.6% while the 30-year mortgage rate came in at 3.99% versus the previous 4.03%, at 9:30 A.M. We also have the EIA Energy Stocks and lastly Dairy Product sales and FED Minutes at 2:00 P.M. Last nights API data came in with builds on Crude Oil stocks at 6 mln barrels, Cushing had draws of 1.4 mln, Distillates were down 2.2 mln barrels and Gasoline stocks were up 3.4 mln barrels. It seems like these numbers were out early and the market was overdone to the downside. This morning we are coming in higher with whisper numbers that the EIA energy Stocks should paint a completely different picture with large draws. Other news driving the markets is the changing of the weather forecast to much colder weather over the weekend after a brief warmup. Also critical, which investors and traders thought was a thing of the past, we now have Middle east risk-on in the picture with the U.S.S. Abraham Lincoln aircraft carrier strike group transited the Straight of Hormuz on Tuesday, after it was ordered by the White House to rapidly deploy to the Mideast to meet heightened threats from Iran. A Saudi Arabian flagged tugboat, “was hijacked and subjected to armed robbery by terrorist elements of the Houthi militia,” Saudi Spokesman Turki al-Malki was quoted. The Houthi’s are backed by Iran. Also in the Middle east two American service members were killed this morning when their helicopter crashed in eastern Afghanistan, while supporting combat operations, according to the U.S. military. The Taliban claimed responsibility after one of their spokesman said Afghan and U.S. forces were preparing to launch an attack in the area. We also have the December contract expiring today and risk back on in the Middle east. Also, if the EIA data is drastically different than the API showing draws this market should rally. In the overnight electronic session the January Crude Oil is currently trading at 5572, which is 37 points higher. The trading range has been 5580 to 5485.
On the Corn front, we settled higher on the day in yesterdays action, but closing at mid-range did not light a fire to get the bulls overly excited. The market is trading on harvest and weather and lack of acres and yields in the U.S. but Brazil has been able to pick up the supply needs for now. In the overnight electronic session the December Corn is currently trading at 368 ¾, which is 1 ¼ of a cent lower. The trading range has been 370 ½ to 368.
On the Ethanol front, there were no trades posted in the overnight electronic session. The December Ethanol settled at 1.404 and is currently showing 2 bids @ 1.387 and 1 offer @ 1.429 with Open Interest at 318 contracts.
On the Natural Gas front, the market is trading a change in the weather where the forecast are for cold weather following the brief warmup. In the overnight electronic session the December Natural Gas is currently trading at 2.560 which is 5 cents higher. The trading range has been 2.570 to 2.505.
Have a Great Trading Day!