I wonder if the politicians in Mississippi know how to read or listen, as the news of the hundreds of millions wasted on so-called renewable energy by the Obama administration doesn't seemed to have reached the deep south, with Mississippi throwing around $75 million in low interest loans for the building of cellulosic biofuels plant in the state.
They also have offered up $155 million in tax incentives to get the boondoggle going. What a criminal waste of the taxpayer's money. And yes it is taxpayers money because they're the ones that will have to pay for it when it crashes and burns.
The company confisgating the state loan is named Virdia, which just changed its name from HCL Cleantech. They take natural matter such as woodchips and other plant matter and convert it into sugar, which is then converted into ethanol.
Virdia CEO Philippe Lavielle admits the amount of money offered by the state, along with $10 million in venture debt and another $20 million in venture capital equity isn't enough to build a viable plant that can successfully operate at a commercial level and compete against corn-based ethanol. He confessed concerning the money that "it takes more than that. It takes a chemical firm that will want to build it to have access to sugars for their own conversion processes."
According to Lavielle, the costs of building a commerical plant which would produce about 500,000 tons of sugar on an annual basis is $380 million. That could supply a 25-million-gallon ethanol plant, according to the CEO.
Another negative factor and complication to the success of such a plant would be the need for it to be located close to a chemical plant or a paper mill so it could be able to tap into the power infrastructure serving those businesses, and in the case of the paper mill, to be able to use the existing equipment for handling wood. Lavielle says it'll take up to three years for a plant like that to be built.
Historically capital requirements and projections are almost without exception much higher and take a lot longer to reach the expected goals.
To be able to compete with the scammy and damaging corn-based ethanol, Lavielle says corn would have to remain at a price of over $4 a bushel. While corn prices in the United States are higher now because of droughts in Argentina and Brazil which are expected to generate more exports for U.S. corn, that's a temporary situation, and corn could easily plummet below the $4 mark very rapidly.
Add to this the cost factors associated with cellulosic, which includes the requirement of having a wood production facility very close or the cost of shipping wood and plant matter to the facility soars.
Looking at the overall picture, ethanol, no matter what the form, is a waste of valuable time and money.
New discoveries of oil and gas shale, along with the technology to extract it from the rock, has changed the entire energy game in the United States, which now has enough energy to last possibly for centuries.
The known reserves already are estimated to last for well over a century in the United States, and there are many areas where it is unknown as to how much there actually is in America, let alone across the world. That's the future of American energy independence, not these idiotic and irresponsible projects that are truly nothing more than a scam. Ethanol, whether produced by corn, wood chips or plant material, is nothing more than that.
The people of Mississippi should be outraged over this travesty, but they're surely drinking the kool aide of jobs being created, even though not too long afterwards when the company declares bankruptcy, they'll all be lost.
Showing posts with label Corn Prices. Show all posts
Showing posts with label Corn Prices. Show all posts
Tuesday, March 6, 2012
Monday, March 5, 2012
Corn and Midwest Storms and Hurricanes
Damage to corn and other crops have yet be assessed from the destructive hurricanes and storms which ravage much of the midwest and parts of the south.
States and surrounding regions most affected by the storms are Kentucky, Illinois and Indiana.
Of particular interest will be the extent of damage to any stored grains or crops, as well as on the building and storage units themselves.
It'll probably take some time before we know if there is enough damage to have a significant impact on crop prices or exports.
States and surrounding regions most affected by the storms are Kentucky, Illinois and Indiana.
Of particular interest will be the extent of damage to any stored grains or crops, as well as on the building and storage units themselves.
It'll probably take some time before we know if there is enough damage to have a significant impact on crop prices or exports.
Thursday, February 16, 2012
Deere & Co. (DE) Projects Lower Corn Prices
Agriculture equipment maker Deere & Co. (NYSE:DE) said on Wednesday they see corn prices dropping for 2012-2013, along with the price of soybeans, cotton and wheat.
Using a date for the starting the year of September 1, Deere said they see corn prices falling on average to $5.30 a bushel for 2012-2013, down from the average of $6.40 a bushel in 2011.
Soybeans are expected to drop significantly by Deere, with estimates of price per bushel falling from $13 a bushel in 2011 to $10.50 a bushel for 2012-2013. That's down from the November estimate of $11.25 a bushel.
For wheat, Deere sees prices dropping from $7.40 a bushel in 2011 to an average of $6.70 a bushel for 2012-2013. That's a little up from the November estimates of $6.60 a bushel for wheat.
Cotton is forecast to plummet from 88 cents a pound in 2011 to 75 cents a pound on average for 2012-2013.
Using a date for the starting the year of September 1, Deere said they see corn prices falling on average to $5.30 a bushel for 2012-2013, down from the average of $6.40 a bushel in 2011.
Soybeans are expected to drop significantly by Deere, with estimates of price per bushel falling from $13 a bushel in 2011 to $10.50 a bushel for 2012-2013. That's down from the November estimate of $11.25 a bushel.
For wheat, Deere sees prices dropping from $7.40 a bushel in 2011 to an average of $6.70 a bushel for 2012-2013. That's a little up from the November estimates of $6.60 a bushel for wheat.
Cotton is forecast to plummet from 88 cents a pound in 2011 to 75 cents a pound on average for 2012-2013.
Friday, January 27, 2012
Corn, Ag, Looking for Direction
A variety of factors have generated uncertainty for corn and other agriculture futures, as corn was the only pit ending the Friday session higher.
Continual macro-economic concerns over the European debt crisis, as well as the extent of the corn production, and other crop shrinkage in South America related to weather, has made traders tentative.
Another factor in the mix is the hint of an export ban in Russia, which would offer up more support.
Expectations are grains still have some room to move upwards before leveling off or falling.
Friday corn closed 7 1/4 cent a bushel higher on the nearby contract, ended the trading day at $6.41 3/4.
Nearby contract for soybeans dropping trading 3 3/4 cents and 6 1/4 cents lower, to $12.19 and $6.47 1/4.
Continual macro-economic concerns over the European debt crisis, as well as the extent of the corn production, and other crop shrinkage in South America related to weather, has made traders tentative.
Another factor in the mix is the hint of an export ban in Russia, which would offer up more support.
Expectations are grains still have some room to move upwards before leveling off or falling.
Friday corn closed 7 1/4 cent a bushel higher on the nearby contract, ended the trading day at $6.41 3/4.
Nearby contract for soybeans dropping trading 3 3/4 cents and 6 1/4 cents lower, to $12.19 and $6.47 1/4.
Thursday, May 5, 2011
CF Industries (CF) (IPI) (TNH) (AGU) Trade Down as Wheat, Soybeans Plunge
Fertilizer companies CF Industries (NYSE:CF), Intrepid Potash (NYSE:IPI), Terra Nitrogen Company, L.P. (NYSE:TNH) and Agrium (NYSE:AGU) were under pressure Wednesday, closing down on the day as wheat and soybean prices plummeted. Corn prices were able to generate a gain on the day.
In July agriculture contracts, wheat was down 21.25 cents to settle at $7.72 a bushel. Soybeans dropped 11.75 cents to settle at $13.52 a bushel.
Corn climbed 5.75 cents to settle at $7.295 a bushel.
Wheat and corn are expected to jump by about 5 cents to 10 cents over the next couple of days.
Companies supplying fertilizer will usually move in unison with the direction crop prices are going, as it is an indicator of the level farmers will spend on inputs.
Agrium (AGU) closed Wednesday at $84.02, falling $3.75, or 4.27 percent.
In July agriculture contracts, wheat was down 21.25 cents to settle at $7.72 a bushel. Soybeans dropped 11.75 cents to settle at $13.52 a bushel.
Corn climbed 5.75 cents to settle at $7.295 a bushel.
Wheat and corn are expected to jump by about 5 cents to 10 cents over the next couple of days.
Companies supplying fertilizer will usually move in unison with the direction crop prices are going, as it is an indicator of the level farmers will spend on inputs.
Agrium (AGU) closed Wednesday at $84.02, falling $3.75, or 4.27 percent.
Potash (POT) (CMP) (MOS) (SYT) Trade Down as Wheat, Soybeans Prices Plunge
Fertilizer companies Compass Minerals (NYSE:CMP), Mosaic (NYSE:MOS), Syngenta (NYSE:SYT), Potash Corp (NYSE:POT) were under pressure Wednesday as wheat and soybean prices plummeted. Corn prices were able to generate a gain on the day.
In July agriculture contracts, wheat was down 21.25 cents to settle at $7.72 a bushel. Soybeans dropped 11.75 cents to settle at $13.52 a bushel.
Corn climbed 5.75 cents to settle at $7.295 a bushel.
Wheat and corn are expected to jump by about 5 cents to 10 cents over the next couple of days.
Companies supplying fertilizer will usually move in unison with the direction crop prices are going, as it is an indicator of the level farmers will spend on inputs.
Potash closed Wednesday at $53.42, falling $0.77, or 1.42 percent.
In July agriculture contracts, wheat was down 21.25 cents to settle at $7.72 a bushel. Soybeans dropped 11.75 cents to settle at $13.52 a bushel.
Corn climbed 5.75 cents to settle at $7.295 a bushel.
Wheat and corn are expected to jump by about 5 cents to 10 cents over the next couple of days.
Companies supplying fertilizer will usually move in unison with the direction crop prices are going, as it is an indicator of the level farmers will spend on inputs.
Potash closed Wednesday at $53.42, falling $0.77, or 1.42 percent.
Friday, April 15, 2011
Fertilizers (POT) (MOS) (AGU) Down on Falling Corn, Wheat Soybean Prices
Corn, wheat and soybean prices all dropped on Thursday, as did the major fertilizer companies Potash Corp. (NYSE:POT), Mosaic (NYSE:MOS) and Agrium (NYSE:AGU).
In May contracts, wheat dropped 12.25 cents to settle at $7.405 a bushel, corn fell 1.25 cents to $7.5425 a bushel and soybeans lost 2.5 cents to $13.31 a bushel.
For the first time since 1996, Corn prices were higher than wheat Wednesday and Thursday, as corn was also short supply at that time, although this time it's a man-made problem from the misguided and highly controversial forcing of ethanol into the gas tanks of American car, pressuring the corn supply and pushing corn prices up.
Some farmers are buying wheat against corn to feed their livestock because corn prices have risen so quickly because of tight supplies,
Fertilizer companies usually fall when the price of wheat, corn and soybeans fall, as it's perceived farmers will cut back on spending on inputs.
Mosaic was trading at $75.49, falling $1.30, or 1.69 percent. Agrium was trading at $88.20, down $0.70, or 0.79 percent. Potash was trading at $56.19, dropping $0.49, or 0.86 percent.
In May contracts, wheat dropped 12.25 cents to settle at $7.405 a bushel, corn fell 1.25 cents to $7.5425 a bushel and soybeans lost 2.5 cents to $13.31 a bushel.
For the first time since 1996, Corn prices were higher than wheat Wednesday and Thursday, as corn was also short supply at that time, although this time it's a man-made problem from the misguided and highly controversial forcing of ethanol into the gas tanks of American car, pressuring the corn supply and pushing corn prices up.
Some farmers are buying wheat against corn to feed their livestock because corn prices have risen so quickly because of tight supplies,
Fertilizer companies usually fall when the price of wheat, corn and soybeans fall, as it's perceived farmers will cut back on spending on inputs.
Mosaic was trading at $75.49, falling $1.30, or 1.69 percent. Agrium was trading at $88.20, down $0.70, or 0.79 percent. Potash was trading at $56.19, dropping $0.49, or 0.86 percent.
Tuesday, March 8, 2011
Potash (POT), Mosaic (MOS), CF (CF), Agrium (AGU) Fall on Corn Price Drop
Shares of Potash (POT), Mosaic (MOS), CF Industries Holdings, (NYSE:CF), Agrium (AGU) are all lower as reports the corn yield for 2010-2011 have been underestimated, which has pushed the price of corn down, along with the fertilizer companies.
Soleil Securities said this concerning the situation:
"2010-11 yield corn under-estimated. Based on recent anecdotal evidence from a number of farm belt contacts, both test weights and corn crop quality is running surprisingly high from the 2010-11 crop;
"Trend reversal. This means that corn carryover stocks could be actually higher than reflected in the latest WASDE report, that corn consumption estimates in future WASDE's could be lower than expected, increasing corn carryover estimates going forward.
Priced for perfection. These data should be negative for corn prices and for ag equities. The near-month corn price of around $7.26/bu reached its mid-June 2008 peak last week before backing off. Many ag equities, especially fertilizer equities, trade in lock-step with the corn price, and could trade off going into the March grain stocks report.
CF Industries was trading at $128.09, dropping $0.81, or 0.63 percent, as of 2:53 PM EST. Potash Corp. was at $58.15, down $0.97, or 1.64 percent. Agrium was trading at $92.62, falling $1.39, or 1.48 percent. Mosaic was at $81.94, down $0.78, or 0.94 percent.
Soleil Securities said this concerning the situation:
"2010-11 yield corn under-estimated. Based on recent anecdotal evidence from a number of farm belt contacts, both test weights and corn crop quality is running surprisingly high from the 2010-11 crop;
"Trend reversal. This means that corn carryover stocks could be actually higher than reflected in the latest WASDE report, that corn consumption estimates in future WASDE's could be lower than expected, increasing corn carryover estimates going forward.
Priced for perfection. These data should be negative for corn prices and for ag equities. The near-month corn price of around $7.26/bu reached its mid-June 2008 peak last week before backing off. Many ag equities, especially fertilizer equities, trade in lock-step with the corn price, and could trade off going into the March grain stocks report.
CF Industries was trading at $128.09, dropping $0.81, or 0.63 percent, as of 2:53 PM EST. Potash Corp. was at $58.15, down $0.97, or 1.64 percent. Agrium was trading at $92.62, falling $1.39, or 1.48 percent. Mosaic was at $81.94, down $0.78, or 0.94 percent.
Friday, March 4, 2011
Jim Rogers on Corn, Inflation, Supply an Demand
Billionaire investor and commodity expert Jim Rogers has been touting the inevitable rise in commodities in general, and agricultural commodities in particular, for some time, especially concerning the price of corn.
While monetary policies of the Federal Reserve are a disaster and have played a large part in the rise in commodity prices, it's not the entire story, says Rogers.
He points to the simple fact of supply and demand for corn and other commodities as a major factor in the price increase, and it isn't solely a dollar/inflation scenario moving corn prices.
Growing middle classes in China and India are the major impetus behind soaring corn and commodity prices, and having a growing amount of disposable income, along with the desire for better food, is a big part of the rise in food prices, even though a large part of that is from the misguided policies of the Federal Reserve and other central banks, who continue to debase currencies.
While monetary policies of the Federal Reserve are a disaster and have played a large part in the rise in commodity prices, it's not the entire story, says Rogers.
He points to the simple fact of supply and demand for corn and other commodities as a major factor in the price increase, and it isn't solely a dollar/inflation scenario moving corn prices.
Growing middle classes in China and India are the major impetus behind soaring corn and commodity prices, and having a growing amount of disposable income, along with the desire for better food, is a big part of the rise in food prices, even though a large part of that is from the misguided policies of the Federal Reserve and other central banks, who continue to debase currencies.
Corn Prices Drop on Rising Fuel Costs
Corn prices fell on speculation that rising energy costs will put a damper the global economy, cutting demand for food and livestock feed. Soybeans rose on the possibility that South American shipments may drop.
Crude oil rose to a 29-month high on concern that unrest in Libya will spread to other north African and Middle East petroleum exporters. U.S. equities dropped as data signaled that growth in wages may fail to keep up with fuel expenses. Corn has gained 90 percent in the past year as demand jumped.
“The surge in energy prices will reduce consumer- purchasing power,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “Traders are anxious to bank recent profit with all the uncertainty in the Middle East.”
Corn futures for May delivery fell 8.75 cents or 1.2 percent, to $7.28 a bushel at 1:15 p.m. on the Chicago Board. The grain rose 0.8 percent this week, the fifth straight gain. The most-active contract reached a 31-month high of $7.4425 on Feb. 22.
Soybean futures for May delivery rose 2 cents, or 0.1 percent, to $14.14 a bushel, capping a 2.8 percent weekly gain, the first since Feb. 4. On Feb. 9, the price reached a 30-month high of $14.5575.
Cargill Inc., Archer Daniels Midland Co., Alfred C Toepfer International BV, may be prevented from shipping oilseeds from Argentina after the government yesterday stripped them of their status as registered exporters amid a dispute over taxes.
Dry weather threatens about 20 percent of the Argentina soybean crop, and too much rain may slow harvesting in Brazil, according to the Commodity Weather Group LLC.
“Uncertainty about Argentina exports could give a boost to U.S. exports,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “Weather in South America is not adding to world production.”
Crude oil rose to a 29-month high on concern that unrest in Libya will spread to other north African and Middle East petroleum exporters. U.S. equities dropped as data signaled that growth in wages may fail to keep up with fuel expenses. Corn has gained 90 percent in the past year as demand jumped.
“The surge in energy prices will reduce consumer- purchasing power,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “Traders are anxious to bank recent profit with all the uncertainty in the Middle East.”
Corn futures for May delivery fell 8.75 cents or 1.2 percent, to $7.28 a bushel at 1:15 p.m. on the Chicago Board. The grain rose 0.8 percent this week, the fifth straight gain. The most-active contract reached a 31-month high of $7.4425 on Feb. 22.
Soybean futures for May delivery rose 2 cents, or 0.1 percent, to $14.14 a bushel, capping a 2.8 percent weekly gain, the first since Feb. 4. On Feb. 9, the price reached a 30-month high of $14.5575.
Cargill Inc., Archer Daniels Midland Co., Alfred C Toepfer International BV, may be prevented from shipping oilseeds from Argentina after the government yesterday stripped them of their status as registered exporters amid a dispute over taxes.
Dry weather threatens about 20 percent of the Argentina soybean crop, and too much rain may slow harvesting in Brazil, according to the Commodity Weather Group LLC.
“Uncertainty about Argentina exports could give a boost to U.S. exports,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “Weather in South America is not adding to world production.”
Thursday, February 24, 2011
Get Rid of Ethanol, To Consume 36 Percent of US Crop in 2011
Ethanol production is outstripping levels mandated by the government, increasing pressure on corn supplies, according to the Agriculture Department.
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
Full Story
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
Full Story
Friday, October 8, 2010
Corn Prices and Iowa Corn Outlook
Corn prices soared to the 30-cent per bushel limit to $5.28 on the opening of the Chicago Board of Trade Friday after the USDA lowered its estimate of Iowa’s per bushel corn yield from 179 bushels per acre last month to 169 bushels per acre.
Soybeans soared as well, rising 70 cents per bushel to $11.35. Both corn and soybean prices are at their highs for the year.
The corn yield estimate, if confirmed in the final post-harvest tally by the USDA in January, would represent a 7 percent drop from the 2009 harvest.
Last year Iowa farmers averaged 182 bushels per acre.
The USDA lowered its national per-bushel estimates from 162.5 bushels per acre to 156 bushels.
Commodity analyst Arlan Suderman of Farm Futures Magazine called the USDA report “shocking.”
Don Roose of US Commodities in West Des Moines called the report “a game changer.”
“This means that there will be tight supplies and a real battle for corn acres next spring,” said Roose, who added that the price for the March contract on corn could reach $6 per bushel.
Des Moines commodity broker Tomm Pfitzenmaier of Summit Commodities said “the USDA was expected to lower their yield estimates, but no one expected them to lower it this much all at once.”
Darin Newsome of DTN in Omaha called the USDA report “extremely bullish for corn, with a possible limit move. Domestic ending stocks to use are the second lowest on record. Soybeans and wheat also saw bullish numbers, leading to expectations of large gains in all three grain markets.”
Iowa is the nation’s largest producer of both corn and soybeans. Together the two crops contribute about $15 billion in cash to Iowa’s economy.
The report and surge in grain prices made itself felt on the stock market. Deere & Co., Iowa’s largest manufacturing employer, was up $4.24 per share to $76.14. Monsanto, owner of the DeKalb and Asgrow seed lines and whose stock has been under pressure this year, rose $2.37 in early trading. DuPont, owner of Johnston-based Pioneer Hi-Bred, was up 44 cents per share to $46.67.
While the higher prices for corn will help farmers make up financially for the lower yields, the increased grain costs will work against the margins for Iowa’s hog and cattle producers as well as the state’s 40 ethanol plants.
Livestock producers are enjoying their first profitable year since 2007, predicated on both better market prices but also moderate corn prices. Record corn prices in 2007 and 2008 triggered three years of losses for hog and cattle raisers.
The higher corn prices had a predictable effect on cattle prices. Feeder cattle, those six months of age or older who are sent to feedlots to be fattened, were down $2.57 per hundredweight to $106.55 in early trading in Chicago.
This year’s corn and soybeans crops were hobbled by record rainfall in July, which flooded many plants just as they were pollinating. Then an unexpected cold snap in late July interfered with some pollination.
Because crops were planted earlier this year during mild weather at the beginning of April, the Iowa corn harvest had begun earlier than usual.
The smaller crop raises the specter of short supplies. Dick Gallagher of Washington, chairman of the Iowa Corn Promotion Board, said “I think, even with the slight down tick, I am confident we have the corn we need.”
Concerns about the supply of corn due to the poorer harvest had driven up the price of corn from $3.45 per bushel in June to above $5 per bushel last month. Then a week ago the USDA reported 300 million more bushels of corn in storage from last year that hadn’t been reported previously.
The USDA said that the nationwide corn harvest would be 12.7 billion bushels, down 4 percent from 2009.
Soybeans soared as well, rising 70 cents per bushel to $11.35. Both corn and soybean prices are at their highs for the year.
The corn yield estimate, if confirmed in the final post-harvest tally by the USDA in January, would represent a 7 percent drop from the 2009 harvest.
Last year Iowa farmers averaged 182 bushels per acre.
The USDA lowered its national per-bushel estimates from 162.5 bushels per acre to 156 bushels.
Commodity analyst Arlan Suderman of Farm Futures Magazine called the USDA report “shocking.”
Don Roose of US Commodities in West Des Moines called the report “a game changer.”
“This means that there will be tight supplies and a real battle for corn acres next spring,” said Roose, who added that the price for the March contract on corn could reach $6 per bushel.
Des Moines commodity broker Tomm Pfitzenmaier of Summit Commodities said “the USDA was expected to lower their yield estimates, but no one expected them to lower it this much all at once.”
Darin Newsome of DTN in Omaha called the USDA report “extremely bullish for corn, with a possible limit move. Domestic ending stocks to use are the second lowest on record. Soybeans and wheat also saw bullish numbers, leading to expectations of large gains in all three grain markets.”
Iowa is the nation’s largest producer of both corn and soybeans. Together the two crops contribute about $15 billion in cash to Iowa’s economy.
The report and surge in grain prices made itself felt on the stock market. Deere & Co., Iowa’s largest manufacturing employer, was up $4.24 per share to $76.14. Monsanto, owner of the DeKalb and Asgrow seed lines and whose stock has been under pressure this year, rose $2.37 in early trading. DuPont, owner of Johnston-based Pioneer Hi-Bred, was up 44 cents per share to $46.67.
While the higher prices for corn will help farmers make up financially for the lower yields, the increased grain costs will work against the margins for Iowa’s hog and cattle producers as well as the state’s 40 ethanol plants.
Livestock producers are enjoying their first profitable year since 2007, predicated on both better market prices but also moderate corn prices. Record corn prices in 2007 and 2008 triggered three years of losses for hog and cattle raisers.
The higher corn prices had a predictable effect on cattle prices. Feeder cattle, those six months of age or older who are sent to feedlots to be fattened, were down $2.57 per hundredweight to $106.55 in early trading in Chicago.
This year’s corn and soybeans crops were hobbled by record rainfall in July, which flooded many plants just as they were pollinating. Then an unexpected cold snap in late July interfered with some pollination.
Because crops were planted earlier this year during mild weather at the beginning of April, the Iowa corn harvest had begun earlier than usual.
The smaller crop raises the specter of short supplies. Dick Gallagher of Washington, chairman of the Iowa Corn Promotion Board, said “I think, even with the slight down tick, I am confident we have the corn we need.”
Concerns about the supply of corn due to the poorer harvest had driven up the price of corn from $3.45 per bushel in June to above $5 per bushel last month. Then a week ago the USDA reported 300 million more bushels of corn in storage from last year that hadn’t been reported previously.
The USDA said that the nationwide corn harvest would be 12.7 billion bushels, down 4 percent from 2009.
Low Corn Yields Drive Ethanol Futures to Highest Levels in Five Years
Ethanol futures soared the most in over than five years in Chicago after a government report estimated corn supplies will be lower than a prior forecast, signaling higher costs for plants that produce the biofuel.
Futures increased after the U.S. Agriculture Department estimated the domestic corn crop will drop 3.4 percent from last year, the second reduction to its projection in as many months.
Denatured ethanol for November delivery added 19.6 cents, or 9.9 percent, to settle at $2.184 a gallon on the Chicago Board of Trade, the highest price since Sept. 30, 2008. The percentage gain was the largest gain for one day since September 2005.
Corn production will total close to 12.664 billion bushels, lower than the 13.16 billion estimated a month ago and less than 2009’s record 13.11 billion, the U.S. Agriculture Department said.
Corn for December delivery reached the exchange limit 30 cents, or 6 percent, to $5.2825 a bushel in Chicago.
Advice is with ethanol at these prices, producers should acquire corn right away to lock in margins and hedge against corn prices soaring higher over the next few days.
Unpredictable corn prices and poor bets on the grain added to the bankruptcy of at least a dozen ethanol producers over a period of a year and a half, starting in October 2008.
Other major ethanol producers are Poet LLC, the largest U.S. ethanol maker, Archer Daniels Midland (NYSE:ADM) and Valero Energy Corp. (NYSE:VLO).
Futures increased after the U.S. Agriculture Department estimated the domestic corn crop will drop 3.4 percent from last year, the second reduction to its projection in as many months.
Denatured ethanol for November delivery added 19.6 cents, or 9.9 percent, to settle at $2.184 a gallon on the Chicago Board of Trade, the highest price since Sept. 30, 2008. The percentage gain was the largest gain for one day since September 2005.
Corn production will total close to 12.664 billion bushels, lower than the 13.16 billion estimated a month ago and less than 2009’s record 13.11 billion, the U.S. Agriculture Department said.
Corn for December delivery reached the exchange limit 30 cents, or 6 percent, to $5.2825 a bushel in Chicago.
Advice is with ethanol at these prices, producers should acquire corn right away to lock in margins and hedge against corn prices soaring higher over the next few days.
Unpredictable corn prices and poor bets on the grain added to the bankruptcy of at least a dozen ethanol producers over a period of a year and a half, starting in October 2008.
Other major ethanol producers are Poet LLC, the largest U.S. ethanol maker, Archer Daniels Midland (NYSE:ADM) and Valero Energy Corp. (NYSE:VLO).
Monday, July 19, 2010
Corn Plunges to Lowest Level in Seven Weeks
Corn plunges as expected, as it was known if wetter and dryer weather was forecast, the price of a bushel would come under pressure, after a period of consistent gains.
Already a number of corn fields, and other crops, have received almost 2 inches of rain, with other expected to get at least 1.25 inches up to 2.5 inches this week.
Over the next week there is no hot weather expected in a sustainable manner, making it almost perfect growing conditions for corn.
“The market is taking out the weather premium after weekend rains boosted crops in areas that had been dry,” said Greg Grow, the director of agribusiness at Archer Financial Services Inc. “Forecasts this week are wetter and a bit cooler than expected.
Corn futures for December delivery plunged 13.25 cents, or 3.3 percent, to $3.94 a bushel on the Chicago Board of Trade, the biggest drop for a most-active contract since the latter part of May.
Already a number of corn fields, and other crops, have received almost 2 inches of rain, with other expected to get at least 1.25 inches up to 2.5 inches this week.
Over the next week there is no hot weather expected in a sustainable manner, making it almost perfect growing conditions for corn.
“The market is taking out the weather premium after weekend rains boosted crops in areas that had been dry,” said Greg Grow, the director of agribusiness at Archer Financial Services Inc. “Forecasts this week are wetter and a bit cooler than expected.
Corn futures for December delivery plunged 13.25 cents, or 3.3 percent, to $3.94 a bushel on the Chicago Board of Trade, the biggest drop for a most-active contract since the latter part of May.
Friday, July 9, 2010
Corn Futures Fall to Earth as Inventory Higher than Analysts' Estimates
Corn farmers got a dose of reality, and analysts egg on their face, as a corn inventory forecast from the government surpasses analysts' estimates.
“People were a little disappointed,” said Greg Grow, of Archer Financial Services Inc. in Chicago. “We had a big rally, so traders are lightening up on some positions.”
With supply being the driving force behind the recent surge in corn futures prices, that pretty much bursts that media-induced bubble, as corn futures dropped 0.3 percent on Friday in response to the news.
On the Chicago Board of Trade corn futures for December delivery fell to $3.9525 a bushel.
Corn prices soared 2.8 percent for the week on speculation the wet weather damaged the crop in the Midwest, because of three times more rain than normal.
“People were a little disappointed,” said Greg Grow, of Archer Financial Services Inc. in Chicago. “We had a big rally, so traders are lightening up on some positions.”
With supply being the driving force behind the recent surge in corn futures prices, that pretty much bursts that media-induced bubble, as corn futures dropped 0.3 percent on Friday in response to the news.
On the Chicago Board of Trade corn futures for December delivery fell to $3.9525 a bushel.
Corn prices soared 2.8 percent for the week on speculation the wet weather damaged the crop in the Midwest, because of three times more rain than normal.
Thursday, July 8, 2010
Corn Futures Settle Higher, Continuing Upward Trend for Week
Corn futures finished up again on Thursday, settling at 6 3/4 cents, or 1.8%, higher at $3.77 1/2.
December corn was up seven cents or 1.8 percent, at $3.96 1/4 a bushel.
Much of this is borrowed from concerns over wheat, which could yield less than projected, which would increase demand for animal feed, raising prices.
Expectations that the U.S. Department of Agriculture released on Friday will show a tighter corn balance sheet has increased interest in the corn market.
December corn was up seven cents or 1.8 percent, at $3.96 1/4 a bushel.
Much of this is borrowed from concerns over wheat, which could yield less than projected, which would increase demand for animal feed, raising prices.
Expectations that the U.S. Department of Agriculture released on Friday will show a tighter corn balance sheet has increased interest in the corn market.
Tuesday, June 8, 2010
Corn Up from 8-month Low
Corn conditions were down and corn prices were up, as corn recovered from an 8-month low and three straight days of losses.
The major change affecting prices from a U.S. Department of Agriculture was the condition of corn rated poor to very poor increased from 4 percent to 5 percent from last week.
“Corn got a little bit of a boost in the crop-conditions report” as conditions didn’t improve “like some of the trade was thinking,” said Mike Zuzolo, the president of Global Commodity Analytics. “That may cause some in the trade who wanted to be extra bearish to back off.”
Bumper corn crops in competitor nations has kept the price of corn suppressed over the last year, especially their next two major competitors Argentina and Brazil, who had record corn harvests during that time.
The major change affecting prices from a U.S. Department of Agriculture was the condition of corn rated poor to very poor increased from 4 percent to 5 percent from last week.
“Corn got a little bit of a boost in the crop-conditions report” as conditions didn’t improve “like some of the trade was thinking,” said Mike Zuzolo, the president of Global Commodity Analytics. “That may cause some in the trade who wanted to be extra bearish to back off.”
Bumper corn crops in competitor nations has kept the price of corn suppressed over the last year, especially their next two major competitors Argentina and Brazil, who had record corn harvests during that time.
Saturday, April 10, 2010
Smaller Herds Drive Corn Prices Down, Along with Oversupply
Corn surpluses continue to plague the industry as an abundance of corn has flooded the market, while smaller herds has lowered demand.
The ongoing weight of oversupply continues to dominate the price of corn, and it makes you wonder why farmers continue to plant it at such high levels, knowing the supply is outstripping demand.
Corn inventories are at their highest levels since 1987, with an 11 percent increase for the year, reaching 7.694 billion bushels as of March 1.
For the year, expectations from the USDA are corn production should reach 13.131 bushels from the 2009 crop.
The ongoing weight of oversupply continues to dominate the price of corn, and it makes you wonder why farmers continue to plant it at such high levels, knowing the supply is outstripping demand.
Corn inventories are at their highest levels since 1987, with an 11 percent increase for the year, reaching 7.694 billion bushels as of March 1.
For the year, expectations from the USDA are corn production should reach 13.131 bushels from the 2009 crop.
Wednesday, March 10, 2010
Huge Corn Harvest Cuts Prices
Corn Inventory
Corn has suffered a similar fate as wheat, because exports are low and the harvest is high.
Corn exports are expected to fall by a huge 100 million bushels, as countries are successfully growing corn, and that is decreasing the demand globally, as it is with wheat.
The corn stockpile is projected to reach about 1.799 billion bushels after harvest, a major leap by 60 million bushels over the former estimate made by the USDA, which hasn't done a great job this year in accuracy, to say the least.
To put this into perspective, corn inventory has only surpassed 1.8 billion bushels four times in the last two decades.
Some are touting a resurgence in ethanol as a potential savior for corn in 2010, but that's very unlikely, as the economy is far from recovery, no matter what the official government line is.
Wheat is also expected to be cut back by about 10 percent in seeding next year for similar reasons as corn, but many of those farmers are expected to put that acreage into corn, putting more pressure on a larger harvest.
With corn exports continuing under pressure as other countries increasingly supply their own, and a slow economy not having the strength to push ethanol forward, I don't see a great year for corn in 2010 either.
Corn Inventory
Corn has suffered a similar fate as wheat, because exports are low and the harvest is high.
Corn exports are expected to fall by a huge 100 million bushels, as countries are successfully growing corn, and that is decreasing the demand globally, as it is with wheat.
The corn stockpile is projected to reach about 1.799 billion bushels after harvest, a major leap by 60 million bushels over the former estimate made by the USDA, which hasn't done a great job this year in accuracy, to say the least.
To put this into perspective, corn inventory has only surpassed 1.8 billion bushels four times in the last two decades.
Some are touting a resurgence in ethanol as a potential savior for corn in 2010, but that's very unlikely, as the economy is far from recovery, no matter what the official government line is.
Wheat is also expected to be cut back by about 10 percent in seeding next year for similar reasons as corn, but many of those farmers are expected to put that acreage into corn, putting more pressure on a larger harvest.
With corn exports continuing under pressure as other countries increasingly supply their own, and a slow economy not having the strength to push ethanol forward, I don't see a great year for corn in 2010 either.
Corn Inventory
Sunday, June 21, 2009
Ethanol Will Raise Food Prices, Harm Environment
Ethanol
As usual, the U.S. government is turning a blind eye to the truth and facts, and continues down the disastrous path of subsidizing ethanol, which will continue to cause huge problems in the near and distant future.
The U.S. government's plan to increase its ethanol mandate will mean higher food prices and more harm to the environment, according to an impact study conducted for two groups that oppose the increase.
"We continue to believe the government's excessive support of the mature corn-based ethanol industry is simply wrong, since it means burning food for fuel," spokesman Gary Mickelson of Tyson Foods Inc. of Springdale said in a statement after Bill Lapp, an agricultural analyst, released his study.
"This policy has contributed to higher corn prices, which have led to increased input costs for food makers — including independent livestock producers — and higher food prices for consumers," Mickelson said.
Corn is a major expense to poultry and beef producers, who want to reduce costs. Ethanol is a fuel additive distilled from plants. That distilling is a major market for corn that corn growers want to increase.
The federal government has a mandate that 10 percent of the fuel coming out of commercial gasoline pumps must be ethanol blended into the gasoline. The Environmental Protection Agency is considering a rule to increase that mandate to 15 percent. The government also maintains a tariff of 54 cents a gallon on imported ethanol.
A recent study from the Food and Agriculture Policy Research Institute at the University of Missouri determined approval of 15-percent ethanol blends would increase corn prices by just $0.04 per bushel, ethanol advocates said in response to Lapp's study.
Increasing the ethanol mandate to 15 percent would require planting as much as 111 million acres of corn, according to Lapp's study. Ethanol would use almost half of the corn crop harvested by 2015. The Grocery Manufacturers Association commissioned the study. The U.S. corn acreage in 2008 was about 85 million acres, U.S. Department of Agriculture figures show.
"Corn and soybean meal are major production costs in the poultry industry, representing 47% of the cost of growing a chicken in 2008," Mickelson said. "Tyson's annual corn and soybean meal expenditures almost doubled from fiscal 2006 to fiscal 2008 and ethanol was a significant reason for the increase."
These arguments have been heard before, the pro-ethanol Renewable Fuels Association replied.
"Time and again, American farmers have answered the need for food, feed and renewable fuel," said association President Bob Dinneen in a statement. "Yet, time and again well-heeled groups seeking to derail the expansion of ethanol are trying to pull the wool over our eyes.
"Many will recall last summer's effort to finger ethanol as skyrocketing oil prices, a weak dollar, speculation, droughts, and global demand drove grain and food prices higher," Dinneen's statement said. "At the time, the U.S. Department of Agriculture, Texas A&M University , and scores of other reputable analysts found such claims to be biased, overblown and outrageous. Even the Congressional Budget Office has looked at the issue and found that energy prices had 3 times the impact on the rising price of food than was the increased use of ethanol. Despite being thoroughly refuted last summer and lacking credibility on the issue, these groups are back at it again."
The ethanol industry is struggling even at its current 10 percent mandate. The fall in fuel prices from last year's record highs has severely hurt ethanol interests, industry figures show.
Ethanol's chief use in the United States is for a fuel additive. Ethanol in gasoline reduces carbon emissions and the price of gasoline, advocates say. However, ethanol plants are hard-pressed to make a profit when fuel prices are as low as they are now, according to industry figures -- even though gasoline prices remain higher than $2.50 a gallon at the pump.
At least 10 ethanol companies have sought Chapter 11 bankruptcy protection in the past year, Bloomberg Business News reports. Valero Energy Corp., the nation's largest independent oil refiner, became an ethanol plant owner in April by buying up seven Midwestern ethanol plants for pennies on the dollar compared to the original investment, Associated Press reports.
"You are going to see this become a trend ... especially with the government wanting to go green," Daniel Flynn, an analyst who follows the renewable fuels industry for Chicago-based Alaron Trading, told Associated Press about the Valero buy. "There are a lot of these ethanol plants hanging by a hair. This could be the perfect time for the big companies to step in."
The U.S. Energy Department reported last week that gasoline supplies climbed 3.39 million barrels to 205 million in the week ended June 12, the largest increase since Jan. 16, Bloomberg reported.
"If you're not eating that much hamburger, you're not using as much Hamburger Helper," Peyton Feltus, president of Randolph Risk Management in Dallas, told Bloomberg. "Until demand shows a sustainable increase, we can't hold these prices up" for ethanol, he said.
Ethanol advocates received another setback earlier this month when a U.S. House panel allowed the federal Environmental Protection Agency to take a wider look at the commodity's environmental impact.
The House Appropriations Committee defeated, 29-30, an amendment to bar the Environmental Protection Agency from using so-called indirect land-use change when measuring greenhouse gases from biofuels, Reuters news service reported.
The United States is the world's major supplier of corn. Critics of ethanol claim that the environment is damaged as other nations have to put more land into farming to produce food as more U.S. corn goes to ethanol. The legislation would allow the EPA to study the question and determine if this increase in farm acreage worldwide offsets or at least mitigates ethanol's environmental benefit.
"There is a huge negative effect here," said Rep. Jo Ann Emerson, R-Missouri, who said an unfair EPA rule "could stop U.S. ethanol production in its tracks."
Scale of Consumption
Corn can produce about 200 gallons of ethanol per acre. If all the corn acreage in the United States were converted to fuel production with corn ethanol, the nation could produce 10 billion gallons of ethanol, the equivalent of about 8 billion gallons of gasoline per year, or about half a million barrels per day. The U.S. consumed about 20 million barrels of crude per day in 2007.
Ethanol
As usual, the U.S. government is turning a blind eye to the truth and facts, and continues down the disastrous path of subsidizing ethanol, which will continue to cause huge problems in the near and distant future.
The U.S. government's plan to increase its ethanol mandate will mean higher food prices and more harm to the environment, according to an impact study conducted for two groups that oppose the increase.
"We continue to believe the government's excessive support of the mature corn-based ethanol industry is simply wrong, since it means burning food for fuel," spokesman Gary Mickelson of Tyson Foods Inc. of Springdale said in a statement after Bill Lapp, an agricultural analyst, released his study.
"This policy has contributed to higher corn prices, which have led to increased input costs for food makers — including independent livestock producers — and higher food prices for consumers," Mickelson said.
Corn is a major expense to poultry and beef producers, who want to reduce costs. Ethanol is a fuel additive distilled from plants. That distilling is a major market for corn that corn growers want to increase.
The federal government has a mandate that 10 percent of the fuel coming out of commercial gasoline pumps must be ethanol blended into the gasoline. The Environmental Protection Agency is considering a rule to increase that mandate to 15 percent. The government also maintains a tariff of 54 cents a gallon on imported ethanol.
A recent study from the Food and Agriculture Policy Research Institute at the University of Missouri determined approval of 15-percent ethanol blends would increase corn prices by just $0.04 per bushel, ethanol advocates said in response to Lapp's study.
Increasing the ethanol mandate to 15 percent would require planting as much as 111 million acres of corn, according to Lapp's study. Ethanol would use almost half of the corn crop harvested by 2015. The Grocery Manufacturers Association commissioned the study. The U.S. corn acreage in 2008 was about 85 million acres, U.S. Department of Agriculture figures show.
"Corn and soybean meal are major production costs in the poultry industry, representing 47% of the cost of growing a chicken in 2008," Mickelson said. "Tyson's annual corn and soybean meal expenditures almost doubled from fiscal 2006 to fiscal 2008 and ethanol was a significant reason for the increase."
These arguments have been heard before, the pro-ethanol Renewable Fuels Association replied.
"Time and again, American farmers have answered the need for food, feed and renewable fuel," said association President Bob Dinneen in a statement. "Yet, time and again well-heeled groups seeking to derail the expansion of ethanol are trying to pull the wool over our eyes.
"Many will recall last summer's effort to finger ethanol as skyrocketing oil prices, a weak dollar, speculation, droughts, and global demand drove grain and food prices higher," Dinneen's statement said. "At the time, the U.S. Department of Agriculture, Texas A&M University , and scores of other reputable analysts found such claims to be biased, overblown and outrageous. Even the Congressional Budget Office has looked at the issue and found that energy prices had 3 times the impact on the rising price of food than was the increased use of ethanol. Despite being thoroughly refuted last summer and lacking credibility on the issue, these groups are back at it again."
The ethanol industry is struggling even at its current 10 percent mandate. The fall in fuel prices from last year's record highs has severely hurt ethanol interests, industry figures show.
Ethanol's chief use in the United States is for a fuel additive. Ethanol in gasoline reduces carbon emissions and the price of gasoline, advocates say. However, ethanol plants are hard-pressed to make a profit when fuel prices are as low as they are now, according to industry figures -- even though gasoline prices remain higher than $2.50 a gallon at the pump.
At least 10 ethanol companies have sought Chapter 11 bankruptcy protection in the past year, Bloomberg Business News reports. Valero Energy Corp., the nation's largest independent oil refiner, became an ethanol plant owner in April by buying up seven Midwestern ethanol plants for pennies on the dollar compared to the original investment, Associated Press reports.
"You are going to see this become a trend ... especially with the government wanting to go green," Daniel Flynn, an analyst who follows the renewable fuels industry for Chicago-based Alaron Trading, told Associated Press about the Valero buy. "There are a lot of these ethanol plants hanging by a hair. This could be the perfect time for the big companies to step in."
The U.S. Energy Department reported last week that gasoline supplies climbed 3.39 million barrels to 205 million in the week ended June 12, the largest increase since Jan. 16, Bloomberg reported.
"If you're not eating that much hamburger, you're not using as much Hamburger Helper," Peyton Feltus, president of Randolph Risk Management in Dallas, told Bloomberg. "Until demand shows a sustainable increase, we can't hold these prices up" for ethanol, he said.
Ethanol advocates received another setback earlier this month when a U.S. House panel allowed the federal Environmental Protection Agency to take a wider look at the commodity's environmental impact.
The House Appropriations Committee defeated, 29-30, an amendment to bar the Environmental Protection Agency from using so-called indirect land-use change when measuring greenhouse gases from biofuels, Reuters news service reported.
The United States is the world's major supplier of corn. Critics of ethanol claim that the environment is damaged as other nations have to put more land into farming to produce food as more U.S. corn goes to ethanol. The legislation would allow the EPA to study the question and determine if this increase in farm acreage worldwide offsets or at least mitigates ethanol's environmental benefit.
"There is a huge negative effect here," said Rep. Jo Ann Emerson, R-Missouri, who said an unfair EPA rule "could stop U.S. ethanol production in its tracks."
Scale of Consumption
Corn can produce about 200 gallons of ethanol per acre. If all the corn acreage in the United States were converted to fuel production with corn ethanol, the nation could produce 10 billion gallons of ethanol, the equivalent of about 8 billion gallons of gasoline per year, or about half a million barrels per day. The U.S. consumed about 20 million barrels of crude per day in 2007.
Ethanol
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