Pro Farmer Day Three: Illinois and Western Iowa
Day three of the Pro Farmer crop tour is complete with scouts finding below-average corn and soybean prospects in Illinois.
Corn yields were forecast at 171.2 BPA, down from last year at 192.6 BPA and the average at 188.9 BPA.
Pod counts totaled 998 pods, down from last year at 1,329 pods and the average at 1,293 pods.
Crop districts 1, 4, and 7 were toured Wednesday.
Across the three districts combined, corn yields were higher than average but pod counts were below.
The tour will wrap up today, forecasting an Iowa corn yield and will scout fields in Minnesota.
FBN’s Take On What It Means For The US Farmer: The crop tour continues to be eyed closely by the market. Across the five states where Pro Farmer has released corn yields and pod counts, Ohio has the largest deviation from last year. Pod counts are down a higher percentage total than corn yields. The tour findings are keeping mild support in the corn and soybean markets. FBN does look for some strength in the corn market on a lower production total than USDA’s August report. FBN recently trimmed planted and harvested area for corn and will have a yield update this week.
Weekly Ethanol Data Show Declining Stocks, Production
Production declined for the week ending August 16 to 1,023 thousand barrels per day.
This was the lowest production total since mid-April.
Stocks also declined for the week to 23.4 million barrels, but remain above last year and the five-year range.
The slower production precedes announcements from Marquis Energy and POET that ethanol production will be cut, citing weak margins and the recent waivers that the Trump Administration granted.
Marquis Energy announced a production cut of 100 million gallons per year at a plant in Necedah, WI but stated it will continue to run its 400-million-gallon plant in Hennepin, IL at full production.
POET has announced its intentions to idle a plant it Cloverdale, IN.
The EPA reported that there is “zero evidence” that small refinery exemptions have negative impacts on domestic corn ethanol producers.
FBN’s Take On What It Means for the U.S. Farmer: FBN believes that corn used for ethanol production will be flat for 2019/20 while USDA is more optimistic. The weaker margins have cut into profits for some firms. Short-term effects of production cuts for some plants could be locationally weaker basis moves whereas if production cuts continue, basis levels could weaken on a wider radius.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
