Feb 04, 2021

Ethanol Production Steady, Stocks Higher

Russia to start formula-based grain export tax in April

Ethanol Production Steady, Stocks Higher

  • Ethanol production increased slightly to 936,000 barrels per day from 933,000 in the previous week.
  • Since mid December, production has averaged 937,000 barrels per day, in line with the amount needed to meet USDA's 4,950 million bushel corn usage forecast.
  • Blending demand was down -1%, down slightly due to continued disappointing gasoline offtake.
  • Ethanol stocks surged 30 million gallons to 1.021 billion gallons, up from 991 million the week before.
  • Stocks moved back to record levels for the week, and are at the highest in almost 10 months.
  • There was a large increase of stocks at the Gulf Coast, which may represent supplies moving into position for export.

FBN’s Take On What It Means: Demand was mildly disappointing, and stocks are likely to build seasonally until early March. Margins have improved a bit recently, and the demand outlook improves with warmer weather, the eventual rebound from the coronavirus, and an increase in exports to China.

FBN
FBN

Russia to Start Formula-Based Grain Export Tax in April

  • Starting April 1, Russia plans to launch a permanent grain export tax program.
  • It is a formula-based levy for grain exports versus the previous fixed tax that was slated to start February 15.
  • Starting April 1, Russia’s grain exporters will have to register contracts for exports and then the tax will be calculated.
  • The formula still is not finalized but currently is being considered as (price per tonne of wheat - $200)*70%, which is inline with the expected tax that was supposed to start for new crop exports.
  • While a floating wheat tax seems inevitable, there also is a chance of formula-based taxes being imposed on barley and corn.
  • Russia continues to deal with rising food costs and is trying various measures to limit further increases.
  • A recent quote for 12.5% protein wheat was at $292.50 per tonne; that translates to a tax around $65 per tonne ($1.77/bushel), which is about $5 higher than the fixed tax would be at 50 euros per tonne.

FBN’s Take On What It Means: Russia continues to face rising food prices, along with the rest of the world, but has so far failed to prohibit domestic prices from further increasing. The government could go as far as further restricting the quantity of exports in the coming months; regardless, this move by Russia is viewed as a positive to other exporters.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.



Kevin McNew

Recently Added to Buyer's Guide

VersaMix Triple Shaft Mixers

  • For mixing applications requiring efficient powder dispersion and critical homogenization of medium to high viscosity slurries, pastes, gels, creams and suspensions
  • High-shear mixer with solids/liquid injection manifold (SLIM) technology rotor/stator

GUC-F Controller

  • Multichannel feeding and dosing controller
  • Control solution for feeding and weighing applications in powder handling applications
  • Flexible and modular design with analog and digital load cells

ProFlo

  • Offers accurate and reliable continuous mass flow measurement of bulk solids with an accuracy of +/- 0.5% full scale
  • Measures mass of flowable solids with densities of 10 to 100 pounds/cubic foot and flow rates from 700 to 7,000 cubic feet/hour

Hydro-View

  • 10.1” touchscreen
  • Easy to install in new or existing systems

Sanderson Farms Feed Mill Expansion - Kinston, NC

  • Construction of a whole grain silo expansion (76’ diameter x 145’ tall) to hold 500,000 bushels
  • Expansion also includes a 12’x17’x22’ deep boot pit extension at the end of the existing receiving tunnel

Horizon Feed Ordering Automation Platform

  • Automates many processes within supply chain for efficient, sustainable and profitable production
  • Manage all bins and orders on a single software platform

Magazine

Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014