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Veteran Advisor

Record Ethanol Stocks, Corn Outlet Fades?

Folks,

Here's this week's Renewable Fuels Association presser on the weekly U.S. ethanol production. Yes, production is down, but the big story is that stocks hit a record-high. And that building of supply doesn't normally happen at this time of the year. With plants chock-full, will this cancel a buyer for this fall's corn?

 

Press Release:

According to EIA data analyzed by the Renewable Fuels Association for the week ending July 26, ethanol production averaged 1.031 million barrels per day (b/d)— equivalent to 43.30 million gallons daily. Output was down 8,000 b/d (-0.8%) from the previous week for a 13-week low and 33,000 b/d (-3.1%) under year-ago volumes. The four-week average ethanol production rate decreased for the fourth straight week, down 1.1% to 1.046 million b/d and equivalent to an annualized rate of 16.04 billion gallons.
 
In contrast, ethanol stocks jumped 3.3% to a new record high of 24.5 million barrels. Virtually all of the stocks built in the Gulf Coast (PADD 3).
 
There were no imports reported for the second consecutive week. (Weekly export data for ethanol is not reported simultaneously; the latest export data is as of May 2019.)
 
What say you?
 
Mike
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11 Replies
Contributor

Re: Record Ethanol Stocks, Corn Outlet Fades?

Ethanol plants in northwest and north central Ohio still payin 65 over what’s that tell ya ? Think they pay attention to what’s growing around them or should I say not growing... only a couple fields around that are starting to tassel still some not even shading the rows (I’m sure usda thinks that will make at least 200 bpa 😂)and it’s went from as wet as I have ever saw it be to pretty dry and no chance of rain for 8 days at least here 

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Advisor

Re: Finished gasoline usage has been pretty much flat for the past few years, ethanol production...

As you can see from the two charts below, finished gasoline usage has been pretty much flat the past few years while ethanol production has gradually increase a little.  

  We were expecting to export that extra ethanol to China but the trade war screwed that all up.  And then all those RINS exemptions aren't helping any either because there's no incentive to blend any extra ethanol there.

   We either have to mandate E15 or get the China trade going again.

chart (3).png
chart (4).png
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Advisor

Re: Record Ethanol Stocks, Corn Outlet Fades?

sounds like a shakedown going on to try to get farmers to give away their stored corn.

Hurry Hurry Hurry, the sky is falling.

Hear that sound of metal on metal....its the sound of my bin door locking up.

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Veteran Advisor

Re: Record Ethanol Stocks, Corn Outlet Fades?

rsbs,

 

How much old-crop corn are you sitting on? And, how much new-crop is unpriced? Realistically, what's it going to take for you to unlock your bins? Will you need 75¢ added to the Dec. contract, $1.00, or more?

 

Thanks,

 

Mike

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Senior Contributor

Re: Record Ethanol Stocks, Corn Outlet Fades?

7$ just out of spite of this crooked suppressing system.  Maybe not even then I’ll play the market card and wait until next year.

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Highlighted
Advisor

Re: Record Ethanol Stocks, Corn Outlet Fades?

I have plenty of storage and credit to get through all of 2020 and to the summer of 2021 if that is what it takes....I did make a few preliminary sales of $4.50 corn, but that seems cheap if the supply is shortened.

Heck, I sold corn for $5 back in the mid 90's ...we all know what $5 then is worth in today's dollars.

I am content to wait this rodeo out and see what is still going on next spring and summer, and beyond if necessary.

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Honored Advisor

Re: Record Ethanol Stocks, Corn Outlet Fades?

Here in NW Ohio we will not need 50% or more of our bin space this fall.  We can carry over quite a few bushels.   That being said, the  USDA will now count that corn that is left over in our bins AGAIN for 2019's crop totals.  

Their numbers never have to make sense or even come out correctly.  It's a moving target and they are never wrong. 

It might take a while, but wake me up when cash corn gets over $5.50.

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Advisor

Re: Mike, let me ask you this question.

First, your question, yes, I'm sitting on a couple three truck loads of unpriced corn, I always do.  Why? Because every year it gets to Sept and harvest is still a two months away here and somebody always needs some corn.

  This year, that harvest is going to be even more months away.  To be honest, I've made some of my best sales in late August, early Sept.

Now my question, in the past three months, here anyhow, every time the board drops a dime the basis has jumped a dime. The  basis is 90 cents here, at the same time the ave daily basis in Iowa today was reported to be -13 cents.  What's that tell you?

  It tells me that in some places, they think they've got more than enough corn, some places, not so much.

This year, it's going to be entirely a battle of the basis.

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Honored Advisor

Re: Mike, let me ask you this question.

Basis is eroding here

E plant has slipped from +12 to -3

Last few weeks here in central Iowa.

Feed mill coop still at +3

Good corn crop coming hwy 92 and north .

I personally have about 60% prevent plant.

Of the 40% planted to corn 60% failed. Was replanted  uninsured beans. What was saved is probably in or very near a crop insurance claim.

Whats left on the bins is in no way going to interfere with my bin busting '19 harvest.

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