Thursday, February 18, 2010

Thursday February 18th, 2010

Good evening blog readers. Thursday is here and that means it is time for the much anticipated Energy Report to begin. I bring news of energy gains. Crude oil settled higher at close today, leaning closer to the $80 mark at $79.06. The large bounce in today's market was driven by what appeared to be technical buying. This week has provided a large jump in the diesel market, with prices up almost .15 cents on the cash market, expect the pumps to jump. The majority of the gains were futures driven, but basis has seen a .06 cent jump over the week in the Chicago market . The DOE report was interpreted as bullish, even with builds in crude oil of 3.085 million bpd and builds in gas of 1.6 million bpd. But it was draws in diesel of 2.9 million bpd which seemed to be enough to prop the market up for the day. Just in itself the report is kind of neutral, but in context of early week expectation everything but crude is an improvement in demand numbers. The numbers are explained under import reports showing larger than expected crude imports and much lower than anticipated heating oil imports. Demand is still down, with diesel leading the way at 7.9% weaker than this time last year, and gas lagging at about 1.3%. Never less products saw gains every day this week including today's .06 cents on gas, .045 cents on diesel, and $1.73 on crude. Most gains are being attributed to the weak early day dollar, leading buyers back into energy. Looking forward it doesn't seem like a break in gains is in our future, the market really seems focused on getting crude to the $80 mark, if it holds look to spend more on diesel this spring. But... a big but is if the bulls are unable to push it above $80 look for $2.00 plus retracement to provide a temporary break on diesel and gas gains.
Good evening all.
thanks for reading
Zach Winter

Wednesday, February 17, 2010

Wednesday, February 17, 2010

Good afternoon bloggers! Corn and soybeans saw pressure today after yesterday's gains. Both commodities were on the defensive for most of the day. Corn fell 7 cents and beans declined 14 cents. Corn finished at $3.60 and soybeans finished at $9.51. It appears that profit taking and the strengthening US dollar kept the commodity market under pressure. Natural gas and crude oil are up on the day. Ethanol margins dropped 7 cents per gallon since last week. On a positive note, corn and soybean basis remains strong on the river. River values for beans peaked last week at +14 CH0 and has backed off since then. Barge freight is remaining steady as well as CIF basis. CIF corn has firmed 2% from last week. US corn export demand is weaker than recent expectations. Demand is weakening due to increased South America competition. Reports are saying that Argentina's crop is 19+mmt. Also there is a possibility of more shipments coming out of Brazil.

Currently, old crop soybean demand remains very strong. With South America's crop looking good, look for US exports to decline in April. US soybean export shipments show a total of 41 mbu has been shipped this week. The biggest receiver, China, is importing 18.6mbu.

The Morris River Terminal has been busy taking grain and loading barges. There is talk that the Marseilles Lock is currently being repaired due to a barge hitting the lock. So far it has not hindered our ability to receive barges. The weather for much of northern Illinois is looking partly cloudy for the next week. There is a chance of snow this Saturday. It's appears weather will remain fairly quiet in the Midwest. South America weather is still looking favorable for Argentina and Brazil.

Regards,
Nathaniel Dubravec

Current Olympic Medal Count:
Germany 9
America 8
France 7