Yields and Weather Are the Name of the Game Now

10/23/2014 7:00 am EST

Focus: COMMODITIES

Dan Flynn, of The PRICE Futures Group, shares the Corn and Ethanol Report for Wednesday, highlights how the market’s trying to follow the corn and energy prices’ lead, what traders should plan for next, and how a change in the weather could cause a change in the market.

The grains continue to rally as farmers are having a tough time to be ahead of harvesting this season. Better weather is forecasted for the upcoming days and the farmers will be ramping up to play catch up and should put a dent in the shortcomings, which should squelch the current upswing and induce harvest pressure on this market. In the overnight electronic session on Tuesday, the December corn is currently trading at 359 ¾, which is 3 ¾ cents higher. The trading range has been 361 to 353 ½ so far. The continuing drive to the upside hinges on weather at this point.

On the ethanol front, the market is trying to follow the corn and energy prices lead. This market is influenced by the Environmental Protection Agency—with the go green policy—while taking product from the food chain. Yes, this is another government driven market which trades in light volume and any trader worth his or her salt can see why. In the overnight electronic session on Tuesday, there were no trades posted. The November contract settled at 1.770 and is currently showing two bids @ 1.787 and six offers @ 1.823. Once again, a wide spread.

On the crude oil front, the weekly API data showed a whopping build of over ten million barrels and the market is tugging on support currently trading at 8288, which is 39 points higher. The trading range has been 8297 to 8227, so far. The market seems determined to hold support but the economic factors from China, the EuroZone, and Russia shows me demand is going to go down and so should prices at the pump.

On the natural gas front, the market still seems to be pressured at this time. However, I remain wildly bullish, even under the current circumstances that are taking bulls away from the market. In the overnight electronic session on Tuesday, the November contract is currently trading at 3.686, which is .025 cents lower. The trading range has been 3.718 to 3.681, so far. A change in the weather—meaning another Polar Vortex—could change this market’s psyche.

By Dan Flynn, Contributor, The PRICE Futures Group

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