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Veteran Advisor

EPA Raises Biofuel Levels, Big Corn Win

What do you think of this news that you can feast on, this Thanksgiving. EPA raises biofuel requirements. Are you surprised? Let's all watch the corn market surge higher now, you think?

 

Full story:   U.S. Raises Biofuel Requirements

 

Is this Huge news for the corn market, or what?

 

Mike

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8 Replies
Veteran Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

I don't track the details of ethanol closely enough to know if we are going to meet the target anyway or if theis will mean more corn will be ground.  Can someone educate me?

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Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

Sure, there's now plenty of room. Although I fear it may not quite cancel out downward revisions in feed going forward. After adding back the DDG's that's like, what 100-150mb?

 

I was doing some research that indicated that the average US fracker is getting about $30/BOE* and bleeding red ink. Kinda makes ya wonder who's going to put up the cash for drill baby drill.

 

*resource on primary oil properties are listed as Barrel of Oil Equivalent so that includes oil, NG and natural gas liquids and the price for the latter two is a lot lower on a BOE basis.

 

They'd also mostly be losing money at the 48 headline price, but less.

 

 

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Veteran Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

I'm  long  on  oil  side  -  just  seems  $40 numbers  on 2017  horizon are to low with  all of  the economic events coming ---

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Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

1 issue with ddgs is the product lacks Starch.

yes ddgs are great for growing things ( from a protien and fiber stand ) but it's tough to fatten anything without Starch.

 

 

oh well, such be life.

 

 

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Veteran Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

"should" boost corn prices, but the chicago crowd will look at it and turn up their nose........it didn't use up all the

surplus, so we've got to go down.  But, then again, we are at some pretty high levels of ethanol production at the

current time........to require even more, may require some buildin of plants perhaps ??

 

but........this could come back to bite us in the #$%^.....i'm working on a study right now........and what would the

result be, if say we have this higher level of ethanol required, and say we have a 30% decline in corn

production the comming year.....could force ethanol prices, and thus maybe cut our export, and cause the

cost of gas to be higher.......

 

 

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Honored Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

This news really doesn't mean much.  Until the traders see the stockpile of corn disappear with their own eyes, it won't matter. Then, by the time that happens, let's say February or so, the USDA will be on the doorstep with their predictions of yet another record crop heading to the bins and piles.   Smiley Wink

Veteran Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

roarintiger1,

 

You could right. I could see that scenario playing out.

 

Mike

 

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Senior Advisor

Re: EPA Raises Biofuel Levels, Big Corn Win

Yeap - Tiger nailed it .

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