EIA Reports Increased Ethanol Production
- Ethanol production, for the week ended 6/05/20, rose for the sixth consecutive week to 837,000 barrels per day from 765,000 previously.
- This now represents a 56% increase from the 537,000 barrels per day low production week in late April.
- Last week's ethanol production was still nearly 24% below last year's same-week production of 1.096 million barrels per day.
- Production also remains below the 1.0+ million barrels per day average needed over the remaining 12 weeks to meet the USDA's 4,950 million bushel corn for ethanol usage forecast.
FBN’s Take On What It Means: With the ongoing rebound in gasoline demand, along with ethanol margins at slightly positive levels, continued increases in ethanol production are expected moving forward. Unfortunately, USDA may still have to lower their corn for ethanol usage forecast. Even a decrease of 50 million bushels down to 4,900 million bushels would require ethanol production to run, on average, approximately 7% below last year.
SovEcon Increases Russia's 2020 Grain Crop Forecast
- SovEcon raised its forecast for Russia's grain crop to 128.6 million tonnes from 126.3 million tonnes.
- The agricultural consultant’s wheat forecast was raised to 82.7 million tonnes from 81.2 million tonnes, which includes Crimea.
- USDA projected wheat production for Russia at 77 million tonnes in the last report, which does not include Crimea.
- Crimea produces around 800,000 tonnes of wheat.
- The outlook for corn production was increased to 14.8 million tonnes from 13.3 million tonnes.
- The forecast for barley was lowered by 100,000 tonnes to 19.9 million tonnes due to a lower planted area estimated.
FBN’s Take On What It Means: Timely precipitation in May improved prospects for Russia’s grain crop. If realized this would be the second largest crop on record. However, this forecast stands in contrast to projections from the USDA and other private analysts, and USDA will update its world wheat projections in today’s report.
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