DTN Oil

Corn Higher; Crude Oil Sharply Lower

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Editor's Note: Our regular oil reporter is not available. This is actually the daily ethanol comments written Friday, 11/26/2021, by Cliff Jamieson. Much about what happened in crude oil today is mentioned here.

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December corn closed 7 cents higher at $5.86 3/4 bushel (bu) and the March contract closed 6 1/4 cents higher at $5.91 3/4 bu. The USDA reported 1.519 million metric tons (mmt) of corn sold over the past week, a marketing year high and slightly higher than the upper end of the range of pre-report estimates. Weekly shipments were below the amount needed this week to remain on track to reach the current USDA forecast, while total commitments are down 10% from last year, close to the 9.2% drop in exports forecast by USDA. Corn contracts made a nice recovery this session to close near the upper end of the session's range, despite heavy losses in crude oil, while the March contract gained 14 3/4 cents over the week after reaching its highest trade in 15 weeks as harvest ends.

January crude oil closed down $10.22 at $68.17 per barrel and February closed down $9.94 at $67.87 per barrel.

Crude oil markets were hit particularly hard with selling pressure on Black Friday. A new COVID-19 variant, named omicron and viewed as highly transmissible, was first found in South Africa but has been carried by travelers to Belgium, Botswana, Hong Kong and Israel. Travel restrictions have already been announced around the world, leading to significant uncertainty in energy markets.

The nearby January crude contract reached its weakest trade in 11 weeks, breaching the 67% retracement of the move from the August low to October high, while finding support at the contract's 200-day moving average at $67.30/barrel.

This news will be watched, while next week's focus will also be on the Dec. 1-2 OPEC+ meeting. Statements made by the organization this week signal discontent with the decision by the U.S. administration to release stocks from strategic reserves, while threatening that such an act could derail OPEC's plan to increase production monthly.

The Baker Hughes rig count data was released on Wednesday this week but is repeated for those looking for the Friday release. Baker Hughes reported U.S. oil rigs climbing for the fifth week as of Nov. 24, increasing by six rigs to 467 rigs, the highest seen since April 2020. This is 226 rigs or 94% higher than reported one year ago. The Canadian oil rig count was reported at 106 rigs, up four from the previous week while 68 rigs or 179% higher than one year ago.

December RBOB closed down 28.7 cents at $2.0294 and January RBOB was down 28.06 cents at $1.9811, following in the direction of crude oil prices.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Cliff Jamieson