Latest Renewable Fuel Standard Proposal: Tough For Farmers
The latest proposal from Washington, DC to amend the U.S.’s Renewal Fuel Standard (RFS) contains language that does not increase the annual biofuel production level for ethanol and biodiesel for 2020 and 2021, does not reduce the number of small refiner exemptions (SRE) and walks back a proposal of how the annual volume of exempt from production are calculated.
The proposal directly contrasts comments made from the White House at the beginning of October about changes that would be beneficial to the embattled US farmers.
The Environmental Protection Agency (EPA) public hearing will take place on October 30, which will be followed by a 30-day period for open comments.
FBN’s Take On What It Means: We believe that the nation’s RFS and renewal fuel policy has been a hotly contested political football that has pitted the interests of big oil versus big corn. We believe that the changes that the EPA would like to implement to the RFA favors big oil and is not friendly to the U.S. farmer.
Australian Wheat Crop Estimates Continues to Decline
The drought in Australia continues to wreak havoc on the country’s wheat crop as production estimates for the 19/20 crop year continues to fall.
The Australia National Bank is estimating production at 19 MMT. Last year Australia is estimated to have produced 17.3 MMT of wheat.
The USDA is estimating that Australia will produce 18 MMT of wheat.
Australia, once the world's fourth largest wheat exporter, is suffering from a third year of drought, resulting in a deep reduction in agriculture output.
FBN’s Take On What It Means: We believe that lost export business for Australia can be a positive for the U.S. export programs. We expect that the Australian drought can be beneficial for the US soft white producer and for low protein red wheats.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)