Dec 31, 2020

Ethanol Production Down, Stocks Rise

Demand did not pick up as much as expected going into the holidays

Argentina Restricts Corn Exports

  • The major exporter has halted corn exports until March 1.
  • That is when fresh new-crop supplies will be available.
  • Seasonally, there tends to be a decline in Argentina’s monthly corn exports this time of year until March, but the restriction underscores the tight situation for the major feed grain.
  • The reason cited for the halt was to ensure enough domestic supplies for the livestock industries ahead of new-crop supplies.
  • Argentina continues to face economic issues, including high inflation.
  • The recent labor strike that was disrupting soy crush and grain/oilseed exports was resolved earlier this week.

FBN’s Take On What It Means : The move from Argentina aligns with Brazil’s allowing tariff-free corn imports and underscores the tightness of the corn balance sheet for both countries. With prices at the Gulf still competitive, the US will likely be a key beneficiary, and may capture an additional 50 to 70 million bushels of export business.

FBN
FBN

Ethanol Production Down, Stocks Rise

  • Ethanol production in the week ended December 25 was 12% below last year at 934,000 barrels/day versus 967,000 barrels the week before.
  • The average annualized corn usage rate is near 5,000 million bushels, slightly below the USDA forecast of 5,050 million bushels.
  • Ethanol stocks for the week were up 1.4% to 987 million gallons compared to 973 million the previous week.
  • Spot profitability remains solidly negative, and though forward returns improve, they are still estimated to be slightly negative.
  • The basis needed to move corn remains high.
  • Strong distiller grain and corn oil prices have helped offset some of the weakness.

FBN’s Take On What It Means: The coronavirus epidemic continues to weigh on the ethanol market. Demand did not pick up as much as expected going into the holidays, and seasonally drops off in January. Production will likely lag into March and then increase as demand picks up with COVID vaccination efforts.

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

IE-Node

  • Industrial Ethernet Node offers remote monitoring interface
  • Provides sensor data to PLCs or other automation and control systems

GAC® 2700-UGMA

  • GIPSA-Certified as UGMA-Compatible
  • Field proven to work with all leading scale systems

PDDM Planetary Dual Disperser

  • Robust mixer offers unmatched shear intensity, rapid dispersion of dry powders into viscous batches
  • Two stainless-steel high-viscosity “HV” stirrer blades

InSight™

  • Designed to sort grain lots, kernel by kernel, at industrial speed
  • Sorts up to 15 metric tons/hour, which is equivalent to about 125,000 kernels analyzed per second

Semi-Automatic Hand-Prompt Batching Station

  • Designed to eliminate bad batches resulting from operator error and interruption
  • Operator involvement through each step in the batching process

C-LEVER EVA HE Controller

  • For bulk solids, accuracy is not impacted by different material densities, irregular material flows or extreme friction
  • All connections available (Ethernet, Profibus, CANbus, etc.) as standard equipment to easily connect/coordinate with existing systems

Magazine

Marketwatch: Aug, 07

US Corn Price Idx: ZCPAUS.CM

open: 6.7443
high: 6.8936
low: 6.7243
close: 6.8512

US Soybean Price Idx: ZSPAUS.CM

open: 14.638
high: 14.7188
low: 14.4386
close: 14.5691

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.0837
high: 8.1294
low: 7.9473
close: 7.9783

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.2701
high: 7.3501
low: 7.1751
close: 7.2359