July 20, 2017

Corn Belt Crop Tour July 18-22

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July 13, 2017

2018 EPA RFS Still a Biofuels Push

by Scott Irwin & Darrel Good, Agricultural Economists
University of Illinois
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Implications

We analyzed the magnitude of the “push” in production and consumption of biofuels implied by the proposed rulemaking for the Renewable Fuels Standard (RFS) for 2018 released last week. We find that the proposed standard for 2018 implies a measurable push in the consumption of conventional ethanol since the mandate exceeds expected domestic consumption. The magnitude of that gap is estimated at 640 million gallons for 2018, compared to the estimate for a record large gap in 2017 of 738 million gallons. The gap ranged from 260 to 457 million gallons in 2014–2016. The advanced biofuels mandate is estimated at 684 million gallons in 2018, compared to the estimate of 900 million gallons in 2017 and the actual gap of 438 million gallons in 2016. Our analysis of the proposed rulemaking for 2018 implies:

(1) The EPA under the new Administration is “staying the course” on the implied conventional ethanol mandate with that mandate at the statutory level of 15 billion gallons. If that policy continues and the rate of increase in domestic gasoline consumption does not accelerate more rapidly, there will continue to be a notable conventional ethanol gap beyond 2018.

(2) The push in advance biofuels production and consumption remains large, but is smaller than in 2017 as both the total biofuels mandate dropped and the mandate for undifferentiated advanced biofuels declined marginally. However, the minimum undifferentiated mandate will increase by statute in 2019 to 4.5 billion gallons. So, even though the biodiesel mandate is proposed to stay constant at 2.1 billion gallons for 2019, the total advanced mandate gap could jump another 260 million gallons (4.5 –4.24 billion gallons).

(3) The relatively large conventional ethanol gap implied for 2017 and 2018 suggests that the current discount in the price of D6 (ethanol) RINs relative to D4 (biomass-based diesel) RINs will continue to narrow towards equality (e.g., farmdoc daily, December 4, 2015).

(4) Biomass-based diesel is likely to remain the “marginal gallon” for filling both the conventional and advanced mandate gaps. This means relatively large levels of biodiesel production will continue to be required which in turn will require large levels of fats and oils feedstock.


July 04, 2017

Corn, the Markets, & Yield

Crunch Time for Corn
Posted on July 3, 2017 by Emerson NafzigerWhile the record will show that corn planting progressed at a more or less normal rate this spring in Illinois, wet, cool conditions that developed after nearly half of the crop had been planted resulted in a great deal of replanting, especially in the flat-soil areas of Illinois. Some fields damaged by water and some that were too wet to plant before late May likely were planted to soybeans instead of corn. The June 30 acreage report shows Illinois corn acreage dropping by 500,000 from 2016 to 2017 (to 11.1 million acres) and soybean acreage increasing by 290,000 acres, to 10.4 million acres in 2017...  READ MORE.

June 30 Stocks and Acreage Reports Implications for Corn and Soybeans
Posted July 2, 2017 by Todd Hubbs

On June 30, the USDA released the Acreage and Grain Stocks reports. The Acreage report surprised many observers and generated strong positive movements in corn and soybean prices. The following discussion recaps the information contained in the reports and the price implications for corn and soybean prices.

June 1 corn stocks were estimated at 5,225 million bushels, nearly 500 million bushels larger than last year and about 100 million bushels larger than the average trade guess. Total disappearance during the quarter was 3,400 million bushels. Estimates of corn exports during the quarter are at 688 million bushels. Corn used for ethanol and co-product production during the quarter totaled 1,342 million... READ MORE.


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