Headlines:
EPA Scraps Detailed Plan to Force U.S. Refiners to Blend More Biofuels
The U.S. Environmental Protection Agency ditched a detailed plan that would have forced refiners to blend more biofuels into their gasoline and diesel in 2019 to compensate for volumes likely to be exempted under the agency’s small refinery hardship waiver program, according to newly released EPA documents. The plan would have boosted the renewable fuel blending obligation for the refining industry to 11.76 percent from 10.88 percent to offset volumes lost under the waiver program, which has been expanded sharply under President Donald Trump’s EPA and keep overall blended volumes on target. The idea was aimed at assuaging the powerful U.S. corn lobby which has accused Trump’s EPA of undermining demand for biofuels like corn-based ethanol through the waiver program but was scrapped amid intense protest from the refining industry.
Importers Snap Up Cheap U.S. Soybeans as China Stops Buying
China’s retaliatory tariffs on U.S. soybeans, threatened for weeks and enacted Friday, have driven down prices and triggered a wave of bargain shopping by importers in other countries stocking up on cheap U.S. supplies, according to a Reuters analysis of government data. Chinese buyers have so far this year accounted for just 17 percent of all advanced purchases of the fall U.S. soybean harvest – down from an average of 60 percent over the past decade, the analysis found. They are instead loading up on Brazilian soybeans, which now sell at a premium of up to $1.50 a bushel as U.S. soybean futures have fallen 17 percent over six weeks to about $8.50, their lowest level in nearly a decade. The price gap has sparked a run on U.S. soybeans by importers from Mexico to Pakistan to Thailand, according to the analysis of U.S. Agriculture Department data. Even as China has retreated, all importers’ advanced purchases of the next U.S. soybean crop shot up 127 percent through June, at 8 million tonnes, compared to the same period last year, the analysis showed. The purchases are the latest example of how politics are upending billions of dollars in global trade flows as U.S. President Donald Trump fights a trade war with China.
Summary:
Corn was higher after today’s USDA Supply and Demand report was received with some bullish sentiment. The USDA estimated the 2018-19 Corn yield at 174 bushels per acre which was unchanged, harvested acres at 81.8 million acres which was up 1.1 million acres, and the US carryout at 1.552 billion bushels which was down 25 million bushels. The average trade estimate for US carryout was at 1.712 billion bushels. The USDA reported the 2018-19 Soybean yield at 48.5 bushels per acre -unchanged, harvested acres at 88.9 million acres – up 700,000 acres, and US carryout at 580 million bushels -up 195 million bushels. The average trade estimate for US carryout was seen at 471 million bushels. November Beans set new contract lows prior to the reports’ release traded higher into the close. Wheat traded stronger as well with both SRW and HRS production coming in below the average trade estimates. The USDA estimated all Wheat production at 1.881 billion bushels which was above the average estimate of 1.858 billion bushels. Ending stocks came in at 985 million bushels – above the estimate of 973 million bushels.
