Recent Biofuels Analysis
Market Commentary
Grain and soy futures markets did very little overnight and again during the day session with volume and volatility in decline. In fact, we would rate today’s market as the dullest so far in 2019. Reflecting the lack of volume, today’s daily trading ranges were collectively among th...
Finnish Supply Destruction; Slaying the Nonsense; “Other” Wins/Worst Idea
Finnish Supply Destruction Commodity supply and demand forecasts almost uniformly forecast too much of the former and not enough of the latter. A similar situation in the past gave birth to the biofuels policy that turns agricultural commodities into transportation fuel. Unfortunately, USDA als...
Market Commentary
Markets are focused on two things – the trade talks this week in Beijing and the threat of another partial U.S. government shutdown on Saturday. Today, though, there was a generally optimistic feeling about both that helped push the soybean and corn markets higher. The next round of trade...
Indian Subcontinent Regional Analysis
Cotton Imports to Surge on Lower Production; Prices Could Remain Depressed The Cotton Association of India (CAI) has now estimated cotton production in 2018/19 (October-September) at 33 million bales, down from last month’s estimate of 33.5 million bales as well as the government of India...
Oilseed Highlights: U.S. Soy Sales; Bayer Rapeseed; U.S. Biodiesel; Indian Protein
U.S. Soy Export Sales Update USDA announced yesterday that exporters had sold an additional 586,000 MT of soybeans to China with all but 63,000 MT to be shipped in the current marketing year. This brought total reported soybean sales to China since its delegation last visited Washington to 3.80...
Market Commentary
Agriculture played only a minor role in President Trump’s State of the Union speech last night. He cited the ongoing negotiations with China as an example of his aggressive trade policies but did not mention its recent soybean purchases. He also asked Congress to approve the USMCA trade a...
Market Commentary
Events have conspired to make the reports being released 8 February among the most anticipated in quite some time. The fact that all of them, except the February WASDE, are a month late has a great deal to do with it. The last WASDE before the government shutdown came out on 11 December, and mu...
Musings about Chinese Trade
This morning USDA announced a sale of 2.603 MMT of soybeans to China for 2018/19, part of the second tranche of 5 MMT that Chinese Vice-Premier Liu promised would be purchased as a negotiating “reward” when he and his group met with President Trump at the White House on 31 January...
EPA Focus on RFS Rules
With the federal government now fully reopened (at least until 15 February) and the EPA likely to soon have a full-time administrator (the Senate Environment and Public Works Committee confirmation hearing on Acting Administrator Andrew Wheeler is 5 February), there are two important rulemaking...
Oilseed Highlights: U.S. Soy Export Sales; China Soy Imports; Argentine Biodiesel; Russia-Brazil Soy Trade; South American Soy Crops
U.S. Soy Export Sales Highlights – Finally Today USDA issued its first export sales report in over a month, but only the week ending 20 December was covered (all data discussed below pertains to that week). As noted in yesterday’s Market Commentary, the normal publication schedule w...
Market Commentary
The government shutdown and suspension of USDA/FAS export sales reports occurred at a time when U.S. corn and wheat export prices were becoming increasingly competitive. Some growth in export sales volumes was likely during that period, and traders have been anxious for the reports to resume. H...
Oilseed Highlights: Brazil’s Soybean Demand; EU Approves U.S. Soy; Global Feed; U.S. Soy Inspections
Brazil’s Soybean Demand in CY 2018 Last week Oil World published soybean usage data for Brazil in CY 2018, which showed it consumed or exported more than it produced that year. This suggests either that crop was larger than estimated, or the country had more available stocks on 1 January...
Ethanol Outlook
For the first three weeks of 2019, ethanol production dropped to 1.027 million barrels/day from 1.046 million barrels/day for Q4 2018 and was well below year-ago levels. For reference, the current pace of production would result in a total 15.75 billion gallons for the year, down from more than...
Market Commentary
CME grain and soy futures struggled to find volume and price direction amid the continued lack of inputs from USDA and with little else to lead them. Trading volume today can best be described as awful. Prices moved slightly lower, mostly as a result of neglect, and remained range-bound during...
Federal Reserve Report on Economic Conditions in the Regional Ag Sectors
The Federal Reserve Banks issued the first Beige Book for 2019 on 16 January. The report is published eight times per year (the previous release was on 5 December 2018, and the next will be in March). Each bank gathers anecdotal information on the current economic conditions in its district by...
U.S. Corn Ending Supplies Will Be Smaller
As said every year at this time when we take a very preliminary look at the corn outlook for the coming marketing year, it will be all about yield. The U.S. corn farmer has enjoyed four consecutive years of incredibly good yields, but we tend to lose sight of that and automatically plug in anot...
Indian Subcontinent Regional Analysis
Rabi Sowing Down As of 18 January 2019, the total rabi planted area was down 4.8 percent versus 2017/18. While wheat is among the crops affected, pulses and coarse cereals, most especially pearl millet, are down significantly (see table below). The overal oilseed area has been good, however, as...
Oilseed Highlights: Malaysian Biodiesel; Soymeal and DDGS; Argentine Soy Crushers; Pakistan and Cargill
Malaysia to Double Use of Palm-Based Biodiesel The glut and low prices of palm oil have caused the government of Malaysia to double the blending requirement for biodiesel with diesel from the current 10 percent to 20 percent by 2020, according to Minister of Primary Industries Teresa Kok. Oil W...
Market Commentary
The missing USDA reports due to the government shutdown receive all of the attention, but the Commodity Futures Trading Commission’s (CFTC’s) weekly Commitment of Traders (COT) report is among the missing as well. The last one was issued on 21 December with futures position data of...
EPA Administrator Confirmation Hearing and Biofuel Outlook
The Senate Environment and Public Works Committee (EPW) will hold a confirmation hearing tomorrow for Andrew Wheeler, nominated last week by President Trump to be the EPA administrator. He has been the acting in that position since July and is the former deputy administrator. Wheeler was...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Bad weather in Egypt has closed four ports on the Red Sea and two on the Mediterranean. Very strong winds are reportedly causing docking and visibility difficulties due to sand and dust storms. Egypt normally experiences strong khamaseen winds...
Market Commentary
Grain and soy futures traded quietly overnight amid low volume, and prices were not much changed by the morning recess. The overnight action (or rather the lack thereof) did not prepare traders for the big and broad sell-off that took place during the day session. Bulls like to be fed every day...
Market Commentary
Grain and soy futures prices were slightly firmer overnight across the board. Chicago and KC wheat were up 4-5 cents at one point with corn and soybeans 2-3 cents higher. This firmness carried over to the day session with all prices entirely green until late selling by index funds dropped wheat...
Flying Blind
As the partial U.S. government shutdown has moved into its third week with no end in sight, the nation’s press is increasingly focused on the ripple affect it is having on various sectors of the U.S. economy. An example is a recent article in the Washington Post that discussed how the lac...
Market Commentary
Grain and soy futures markets did very little overnight and again during the day session with volume and volatility in decline. In fact, we would rate today’s market as the dullest so far in 2019. Reflecting the lack of volume, today’s daily trading ranges were collectively among th...
Finnish Supply Destruction; Slaying the Nonsense; “Other” Wins/Worst Idea
Finnish Supply Destruction Commodity supply and demand forecasts almost uniformly forecast too much of the former and not enough of the latter. A similar situation in the past gave birth to the biofuels policy that turns agricultural commodities into transportation fuel. Unfortunately, USDA als...
Market Commentary
Markets are focused on two things – the trade talks this week in Beijing and the threat of another partial U.S. government shutdown on Saturday. Today, though, there was a generally optimistic feeling about both that helped push the soybean and corn markets higher. The next round of trade...
Indian Subcontinent Regional Analysis
Cotton Imports to Surge on Lower Production; Prices Could Remain Depressed The Cotton Association of India (CAI) has now estimated cotton production in 2018/19 (October-September) at 33 million bales, down from last month’s estimate of 33.5 million bales as well as the government of India...
Oilseed Highlights: U.S. Soy Sales; Bayer Rapeseed; U.S. Biodiesel; Indian Protein
U.S. Soy Export Sales Update USDA announced yesterday that exporters had sold an additional 586,000 MT of soybeans to China with all but 63,000 MT to be shipped in the current marketing year. This brought total reported soybean sales to China since its delegation last visited Washington to 3.80...
Market Commentary
Agriculture played only a minor role in President Trump’s State of the Union speech last night. He cited the ongoing negotiations with China as an example of his aggressive trade policies but did not mention its recent soybean purchases. He also asked Congress to approve the USMCA trade a...
Market Commentary
Events have conspired to make the reports being released 8 February among the most anticipated in quite some time. The fact that all of them, except the February WASDE, are a month late has a great deal to do with it. The last WASDE before the government shutdown came out on 11 December, and mu...
Musings about Chinese Trade
This morning USDA announced a sale of 2.603 MMT of soybeans to China for 2018/19, part of the second tranche of 5 MMT that Chinese Vice-Premier Liu promised would be purchased as a negotiating “reward” when he and his group met with President Trump at the White House on 31 January...
EPA Focus on RFS Rules
With the federal government now fully reopened (at least until 15 February) and the EPA likely to soon have a full-time administrator (the Senate Environment and Public Works Committee confirmation hearing on Acting Administrator Andrew Wheeler is 5 February), there are two important rulemaking...
Oilseed Highlights: U.S. Soy Export Sales; China Soy Imports; Argentine Biodiesel; Russia-Brazil Soy Trade; South American Soy Crops
U.S. Soy Export Sales Highlights – Finally Today USDA issued its first export sales report in over a month, but only the week ending 20 December was covered (all data discussed below pertains to that week). As noted in yesterday’s Market Commentary, the normal publication schedule w...
Market Commentary
The government shutdown and suspension of USDA/FAS export sales reports occurred at a time when U.S. corn and wheat export prices were becoming increasingly competitive. Some growth in export sales volumes was likely during that period, and traders have been anxious for the reports to resume. H...
Oilseed Highlights: Brazil’s Soybean Demand; EU Approves U.S. Soy; Global Feed; U.S. Soy Inspections
Brazil’s Soybean Demand in CY 2018 Last week Oil World published soybean usage data for Brazil in CY 2018, which showed it consumed or exported more than it produced that year. This suggests either that crop was larger than estimated, or the country had more available stocks on 1 January...
Ethanol Outlook
For the first three weeks of 2019, ethanol production dropped to 1.027 million barrels/day from 1.046 million barrels/day for Q4 2018 and was well below year-ago levels. For reference, the current pace of production would result in a total 15.75 billion gallons for the year, down from more than...
Market Commentary
CME grain and soy futures struggled to find volume and price direction amid the continued lack of inputs from USDA and with little else to lead them. Trading volume today can best be described as awful. Prices moved slightly lower, mostly as a result of neglect, and remained range-bound during...
Federal Reserve Report on Economic Conditions in the Regional Ag Sectors
The Federal Reserve Banks issued the first Beige Book for 2019 on 16 January. The report is published eight times per year (the previous release was on 5 December 2018, and the next will be in March). Each bank gathers anecdotal information on the current economic conditions in its district by...
U.S. Corn Ending Supplies Will Be Smaller
As said every year at this time when we take a very preliminary look at the corn outlook for the coming marketing year, it will be all about yield. The U.S. corn farmer has enjoyed four consecutive years of incredibly good yields, but we tend to lose sight of that and automatically plug in anot...
Indian Subcontinent Regional Analysis
Rabi Sowing Down As of 18 January 2019, the total rabi planted area was down 4.8 percent versus 2017/18. While wheat is among the crops affected, pulses and coarse cereals, most especially pearl millet, are down significantly (see table below). The overal oilseed area has been good, however, as...
Oilseed Highlights: Malaysian Biodiesel; Soymeal and DDGS; Argentine Soy Crushers; Pakistan and Cargill
Malaysia to Double Use of Palm-Based Biodiesel The glut and low prices of palm oil have caused the government of Malaysia to double the blending requirement for biodiesel with diesel from the current 10 percent to 20 percent by 2020, according to Minister of Primary Industries Teresa Kok. Oil W...
Market Commentary
The missing USDA reports due to the government shutdown receive all of the attention, but the Commodity Futures Trading Commission’s (CFTC’s) weekly Commitment of Traders (COT) report is among the missing as well. The last one was issued on 21 December with futures position data of...
EPA Administrator Confirmation Hearing and Biofuel Outlook
The Senate Environment and Public Works Committee (EPW) will hold a confirmation hearing tomorrow for Andrew Wheeler, nominated last week by President Trump to be the EPA administrator. He has been the acting in that position since July and is the former deputy administrator. Wheeler was...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Bad weather in Egypt has closed four ports on the Red Sea and two on the Mediterranean. Very strong winds are reportedly causing docking and visibility difficulties due to sand and dust storms. Egypt normally experiences strong khamaseen winds...
Market Commentary
Grain and soy futures traded quietly overnight amid low volume, and prices were not much changed by the morning recess. The overnight action (or rather the lack thereof) did not prepare traders for the big and broad sell-off that took place during the day session. Bulls like to be fed every day...
Market Commentary
Grain and soy futures prices were slightly firmer overnight across the board. Chicago and KC wheat were up 4-5 cents at one point with corn and soybeans 2-3 cents higher. This firmness carried over to the day session with all prices entirely green until late selling by index funds dropped wheat...
Flying Blind
As the partial U.S. government shutdown has moved into its third week with no end in sight, the nation’s press is increasingly focused on the ripple affect it is having on various sectors of the U.S. economy. An example is a recent article in the Washington Post that discussed how the lac...