Crystal Ball Gazing: Ethanol
At the end of 2011 Congress allowed the tax credit for ethanol blending to expire, along with the tariff on imported ethanol, as well as the blenders’ credit for biodiesel fuel. The tax credit for production of ethanol from biomass remains, but is scheduled to expire at the end of the current year. Since the expiration of the ethanol supports, the EPA has allowed the ethanol blend in motor fuel to rise from 10% to 15%, but automaker acceptance and the needed infrastructure are dynamics that are not yet in motion to support ethanol. Given all of those issues, what is the future for ethanol and its consumption for a large quantity of US corn? That is an important follow-up question to the preceding Farmgateblog posting about the impact of ethanol’s savings on the price of gasoline.
Posted by Stu Ellis on 05/16 at 05:19 AM | (0) Comments | Permalink
Does Ethanol Really Lower The Price Of Gasoline?
The latest USDA Supply Demand Report indicated that corn processing for ethanol purposes would not increase much from the 2011 crop to the 2012 crop. About 5 billion bushels would be converted to ethanol. One reason is the blend wall that serves as a maximum for the 10% fuel blend to be incorporated into the nation’s motor fuel supply. And since the demand for gasoline is declining due to the recession, the demand for ethanol is not growing. But while ethanol will be consuming nearly one-third of the US corn crop, it will also have another significant benefit to family budgets and the US economy.
Posted by Stu Ellis on 05/15 at 05:16 AM | (0) Comments | Permalink
Crystal Ball Gazing: Soybeans
Did you increase your bean acres after the March 30 USDA planting intentions report? A significant swing in market prices has benefitted soybean production. Fundamentals include the South American shift to corn and fewer bean acres, China’s aggressive buying of soybeans, and fewer US bean acres for 2012. Ag economists report there was a $48 advantage for corn on March 1 which has evolved into a $78 advantage for beans on May 10. Most farmers were planting corn for the revenue opportunities, but what is the market opportunity for soybeans?
Posted by Stu Ellis on 05/13 at 11:43 PM | (0) Comments | Permalink
USDA: One Surpise After Another
There are always surprises, and the May USDA Supply-Demand report did not disappoint anyone. Even when you knew USDA was going to forecast a very large corn crop, the projection for 14.8 billion bushels and a 166 bushel national yield average were well over the top of expectations. Let’s take a survey and see what the experts thought about the numbers…
Posted by Stu Ellis on 05/10 at 10:52 PM | (3) Comments | Permalink
Fasten Your Seatbelt For Today’s USDA Corn Production Forecast
An eye-popping forecast of 14.8 billion bushels of corn has been issued by USDA in the May Supply-Demand report, which is up 2.4 billion from the 2011-12 crop. Even though consumption projections are raised by more than 1 billion bushels, there will be a lot left over, and while the corn market expectedly opened lower, the bean market opened strongly higher due to increased use and low ending stocks for this year and next.
Posted by Stu Ellis on 05/10 at 10:12 AM | (1) Comments | Permalink