Headlines:

  • Iowa Senator Says Expect Fewer Biofuel Waivers from Wheeler’s EPA
    The U.S. Environmental Protection Agency (EPA) may issue fewer biofuel waivers to small refineries under Acting Administrator Andrew Wheeler than it did under its previous leadership, Republican Senator Chuck Grassley of Iowa said on Tuesday. “I sense that Wheeler has a feeling that (former administrator, Scott Pruitt) was very liberal on his issuing of waivers,” Grassley told a conference call. Asked if he thought such an attitude change could lead to fewer waivers, Grassley, one of the most powerful voices for U.S. agriculture interests, said: “Yes.” The small refinery waiver program is among the most controversial issues dividing the U.S. corn industry and Big Oil. Under the U.S. Renewable Fuel Standard (RFS), refiners are required to blend increasing amounts of biofuels like corn-based ethanol into the nation’s fuel supply each year to help expand the market for farm products. But small refineries can apply for waivers if they demonstrate that complying would cause them hardship. Under Pruitt, the number of waivers granted to small refiners soared, angering the biofuels industry which argued the program was being used to benefit energy companies while undermining demand for corn-based fuel. Wheeler took over the EPA in July after Pruitt resigned in a flurry of ethical controversies. While Wheeler has said little about his approach to the small refinery waiver program, he has said he would like to introduce reforms to the RFS that can please both the energy and agriculture industries. At Trump’s direction, the EPA is currently working on a proposal to expand sales of higher ethanol gasoline blends year-round, a move meant to help corn growers stung by soft domestic demand and a loss of export markets from trade disputes.
  • No Early Resolution Seen for U.S., China Trade Tariffs, Economist Says
    Farmers already know that trade uncertainty affects them. A trade dispute with China is currently costing soybean producers about $2 a bushel, a former chief economist for the USDA told lenders at the National Agricultural Bankers Conference in Omaha, Nebraska, on Monday. Yet, there is good news, too, on trade in the new U.S. Mexico Canada Agreement (USMCA) that could replace NAFTA if it’s approved by Congress, said Joseph Glauber, the former top USDA economist who is now a senior research fellow at the International Food Policy Research Institute. “I think you could hear a collective sigh of relief by everyone on October 1 when it was announced that we had reached an agreement with Canada,” Glauber said at the Omaha meeting organized by the American Bankers Association. Canada’s commitment to an updated NAFTA followed Mexico’s. It opens some new markets for U.S. dairy exports to our northern neighbor.

Summary:

Oversupply in world production and poor demand pushed crude oil prices lower. The March contract gave up over $5 dollars intraday (about 8%). The last time it had a drop of this magnitude was in the middle of the 2014-2015 crude oil bear market. The prolonged declining crude oil prices was a drag on commodities today pulling corn and beans down with it. Unfavorable weather caused some producers to switch and transition from beans to corn this past week. Corn export inspections were essentially in line with trade estimates. It was marginally over coming in at 1.301 million metric tons (mmt). Soybean futures posted some gains in response to strong import inspections but would later surrender to the overall pressure from corn and crude. Cool and wet weather this past week delayed farmers ability to finish their beans. t in the fields and finish up. Soybean export inspections were on the higher end of trade estimates that ranged from 0.800 – 1.200mmt coming in at 1.136mmt. Soybean export inspections ran above the USDA pace for the first time this marketing year. Weekly wheat export inspections came in line with the lower end of trade estimates that ranged from 300,000 – 500,000 mt, coming in at 342,157 mt. Price failed to follow through after a huge short covering rally yesterday.