"The vaccine news and crude oil influence is mildly supportive to corn prices but doesn't compare to the more bullish influences," he said.
It will take time for the economy to recover, Hultman said, but the vaccine news is easing pressure.
"Things won't go straight up but getting rid of the bearish weight of coronavirus is bullish for the U.S. and world economy and for economic demand," he said.
"The Fed (federal reserve) has interest rates near zero and OPEC and Russia have cut oil production to help get through the low-demand period, so there is room for oil prices and commodities in general to trade higher."
FUEL DEMAND YET TO RETURN
Brian Milne, editor and product manager at DTN, said while the rise in the oil market is good, full demand recovery is yet to come.
"The development (vaccines) bolsters the case for increased oil demand, although the market is likely getting ahead of itself because the demand recovery might not be seen until the second quarter 2021 or later," he said.
This week, ethanol stocks in the U.S. hit an 11-week high, while at the same time demand is at a 22-week low.
Milne said the ethanol industry should go easy on production in order to keep the price rising. Higher gasoline and diesel prices lift ethanol and biodiesel prices.
"However, if output, namely ethanol production, increases too much, it will undercut the advance," he said.
"Additionally, gasoline demand remains weak and a pop in diesel demand we saw a month ago is fading, so the durability of the uptrend has limits."
Milne said the oil rally may be difficult to sustain until the COVID-19 vaccines can be widely distributed.
"The oil market might continue to look past this fact in the short run, especially if Congress passes more stimulus," he said.
Republicans and Democrats in Congress remain worlds apart on a possible new round of COVID-19 economic stimulus.
TRANSITION DIRECTIVE
In addition, President Donald Trump's directive on Monday to work with President-elect Joe Biden's team on a transition has "turned the political temperature down substantially," Milne said.
"The market also sees what now appears to be a smooth transition from Trump to Biden as clearing a path for more stimulus, with Biden pushing for a deal to get done before year's out when many of the relief programs established in the second quarter expire."
The Dow Jones Industrial Average eclipsed 30,000 on Tuesday, an all-time high.
In addition, the Organization of the Petroleum Exporting Countries, or OPEC, plus Russia is scheduled to meet Nov. 30 to Dec. 1 to consider an extension of their current agreement to cut production by 7.7 million barrels per day (bpd) in the first quarter of 2021.
The current agreement calls for the reduction to ease to 5.7 million bpd in first quarter 2021, which would be a 2 million bpd increase.
"If OPEC-plus fails to extend their current agreement into 2021," Milne said, "the market would move lower briskly should that happen next week. After the current rally, we will likely see a downside correction in the first quarter before a bounce higher in the second quarter."
Todd Neeley can be reached at todd.neeley@dtn.com
Follow him on Twitter @toddneeleyDTN
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November 24, 2020 at 03:10PM
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Overall Anticipated Boost in Fuel Demand Seen From Vaccines - DTN The Progressive Farmer
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