Morning Commentary

July corn down 1 ½ at $3.76

July beans down 9 ¾ at $9.4425

The DOW is up

USD is weaker

Crude oil down $.38 at $65.98

Good morning,

Corn prices are slightly lower to start the morning, but bulls are happy to see the USDA lower U.S. ending stocks for both old and new-crop. The market is trying to claw itself back after tumbling some -30 cents during the past three weeks, but ongoing worries about trade and no major widespread weather worry here in the U.S. keeps the upside somewhat limited nearby.  Below are some of the recent USDA highlights. Looking forward, we are hearing more talk that both domestic and global ethanol demand is pushing higher, which will help keep our strong demand story in play.

U.S. Yield – Unchanged at 174.0 bushels per acre.

U.S. Demand – Old-crop exports raised higher by +75 million bushels. New-crcrop corn used for ethanol raised higher by +50 million bushels offsetting a -50 million-bushel reduction in food, seed, and industrial (FSI) use of sorghum; new-crop corn used for Feed and Residual lowered by -25 million bushels. new-crop exports left “unchanged”.

Ending Stocks – New-Crop lowered by -105 million bushels from 1.682 down to 1.577 billion bushels; Old-Crop lowered by -80 million bushels from 2.182 to 2.102 billion.

Soybean prices continue to struggle to gain much upside momentum, despite both old and new crop U.S. ending stocks being lowered on increases in U.S. domestic crush demand. Somewhat disappointing was the fact Brazil’s record crop continues to grow larger. Just two months ago, the USDA forecast the crop in Brazil at a new all-time record of 115 MMTs. In May that record estimate was bumped even higher to 117 MMTs. Now in June the record extends even further to 119 MMTs. The big numbers out of Brazil are obviously helping to offset losses in Argentina. The USDA is also looking for some fairly large numbers out of the U.S. crop.  Below are some of the highlights and most recent adjustments by the USDA.

U.S. Yield – Unchanged at 48.0 bushels per acre.

U.S. Demand – Old-crop soybeans used for crush is raised +25 million bushels. New-crop soybeans used for crush raised higher by +5 million bushels to 2.0 billion; new-crop soybean exports left “unchanged”.

Ending Stocks – New-Crop lowed by -30 million bushels from 415 to 385 million. Old-Crop lowered by -25 million bushels from 530 down to 505 million bushels.

A week after the White House suspended its bid to reform the nation’s biofuels policy to aid oil refiners, the head of the Environmental Protection Agency on Tuesday dangled a tantalizing prospect to Midwest corn farmers, saying the agency has the power to expand sales of higher ethanol-gasoline blends. EPA spokesman Lincoln Ferguson confirmed Pruitt’s comments: “The Administrator shared that he believes statutory authority to grant the … waiver for E15 exists under the Clean Air Act, and to be effective, would require a subsequent notice and comment rulemaking process.”

Remember that tv show American Chopper? Well, Paul Jr. from the show, has partnered with the Renewable Fuels Association to build a custom motorcycle complete with a patriotic theme that runs on E85. The bike was recently revealed on Discovery Channel’s American Chopper, which is some great publicity for U.S. grown ethanol and the RFA. Paul Jr. made the comment that it was easier than he expected to make the chopper run on E85. All he had to do was up the jets about 30% and advance the timing a bit and the bike runs great. The custom bike is the centerpiece for RFA’s no campaign called “Fuel Your Knowledge” to educate consumers about the proper use of ethanol-blended fuels in boats, motorcycles, lawn and garden equipment and other off-road engines. (Source: RFA)


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