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.
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Showing posts with label Ethanol Demand. Show all posts
Showing posts with label Ethanol Demand. Show all posts
Thursday, February 24, 2011
Corn Supplies Tight on Record Demand
Corn and soybean supplies will remain tight this year even as increased plantings set the stage for record or near-record harvests, U.S. Department of Agriculture chief economist Joe Glauber said Feb. 24.
Exports and ethanol demand are expected to grow, keeping corn prices near historic highs and squeezing profit margins for beef, dairy and pork producers, Glauber said during an address at the USDA’s annual Outlook Forum in Arlington, Va.
“Unless this year’s weather is better than normal or plantings increase more than expected, stock levels for corn and soybeans should see only modest rebuilding in 2011-12,” Glauber said. “This will likely mean continued volatility in those markets.”
Corn futures in Chicago rallied 52 percent last year as the U.S. harvest produced weaker than expected results and prices continued higher in 2011, reaching a 31-month high near $7.25 a bushel earlier this week.
Rapidly escalating feed costs are an increasing concern for beef and pork producers, who in early 2010 returned to profitability after the 2008-09 recession contributed to deep losses.
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Exports and ethanol demand are expected to grow, keeping corn prices near historic highs and squeezing profit margins for beef, dairy and pork producers, Glauber said during an address at the USDA’s annual Outlook Forum in Arlington, Va.
“Unless this year’s weather is better than normal or plantings increase more than expected, stock levels for corn and soybeans should see only modest rebuilding in 2011-12,” Glauber said. “This will likely mean continued volatility in those markets.”
Corn futures in Chicago rallied 52 percent last year as the U.S. harvest produced weaker than expected results and prices continued higher in 2011, reaching a 31-month high near $7.25 a bushel earlier this week.
Rapidly escalating feed costs are an increasing concern for beef and pork producers, who in early 2010 returned to profitability after the 2008-09 recession contributed to deep losses.
Full Story
Friday, October 8, 2010
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).
Saturday, July 3, 2010
States Want Opt-out Option on Ethanol
U.S. Senator Jim Inhofe, R-Oklahoma, will introduce legislation which would offer gas stations to decide whether or not they want to use gas without ethanol at the pump.
A draconian law will soon go into effect which will force everyone to offer gas with ethanol in it, even though many people don't want to put the stuff into their cars and equipment, because of the proven ethanol causes.
Some foolish and ignorant proponents of ethanol, for example, Terry Dietrich, President of American Farmers and Ranchers Insurance, say things like this, "We think it's high time that we quit fighting wars overseas and funding both sides. We've lost enough American soldiers."
This is so stupid as to not even be able to be taken seriously. In other words, all that oil in Afghanistan you mean? Is that why we need ethanol? Demagogues like this don't even attempt to use their brain when making their statements.
Some even pretend the proven higher costs of food coming from pushing ethanol isn't true either. That's an outright lie. Just ask the meat industry if that's what they have found out.
Just one way this happens is through the higher cost of feeding animals, which when we buy their meat, creates higher costs at the supermarket. How hard is that to understand.
Ethanol needs to be allowed to stand on its own, and the subsidies which make it survive need to be removed. Then we'll see if there's really a demand for it or not. I think we already know the answer to that.
A draconian law will soon go into effect which will force everyone to offer gas with ethanol in it, even though many people don't want to put the stuff into their cars and equipment, because of the proven ethanol causes.
Some foolish and ignorant proponents of ethanol, for example, Terry Dietrich, President of American Farmers and Ranchers Insurance, say things like this, "We think it's high time that we quit fighting wars overseas and funding both sides. We've lost enough American soldiers."
This is so stupid as to not even be able to be taken seriously. In other words, all that oil in Afghanistan you mean? Is that why we need ethanol? Demagogues like this don't even attempt to use their brain when making their statements.
Some even pretend the proven higher costs of food coming from pushing ethanol isn't true either. That's an outright lie. Just ask the meat industry if that's what they have found out.
Just one way this happens is through the higher cost of feeding animals, which when we buy their meat, creates higher costs at the supermarket. How hard is that to understand.
Ethanol needs to be allowed to stand on its own, and the subsidies which make it survive need to be removed. Then we'll see if there's really a demand for it or not. I think we already know the answer to that.
Saturday, April 10, 2010
Ethanol Plant Closing in Minnesota
Low ethanol prices continue to take a toll on the so-called industry, as an ethanol plant was closed in Buffalo Lake by Minnesota Energy.
This is completely based on price and margins,according to chairman of the board of the company, Randy Byro.
Byro said prices need to increase by at least 50 cents to 75 cents a gallon to even think of reopening the plant.
While not a huge plant, it does underscore the ethanol fiasco which was marketed as a savior to small communities across America, but has dashed hopes as the market for it remains small, and if not for taxpayer subsidies, would be a complete joke.
Let the free market determine whether ethanol is viable or not. If people want it they'll be willing to pay for it. Obviously people don't want it, and the program needs to be droppped along with the waste of taxpayers' dollars.
This is completely based on price and margins,according to chairman of the board of the company, Randy Byro.
Byro said prices need to increase by at least 50 cents to 75 cents a gallon to even think of reopening the plant.
While not a huge plant, it does underscore the ethanol fiasco which was marketed as a savior to small communities across America, but has dashed hopes as the market for it remains small, and if not for taxpayer subsidies, would be a complete joke.
Let the free market determine whether ethanol is viable or not. If people want it they'll be willing to pay for it. Obviously people don't want it, and the program needs to be droppped along with the waste of taxpayers' dollars.
Friday, June 5, 2009
Ethanol News | House for E-trading Agriculture and Ethanol Extended by CME
Ethanol News
CME Group Inc announced on Friday it would expand electronic trading of agricultural contracts by 75 minutes, effective July 1, in a move aimed at further boosting business on that platform.
"It allows customers based in Europe more time to trade during trading hours that are most convenient for them," said CME Group spokesperson Mary Haffenberg.
CME said it would extend electronic trading on July 1 by one hour and 15 minutes to 7:15 a.m. CDT (1215 GMT). Electronic trading currently begins at 6 p.m. (2300 GMT) and ends at 6 a.m. (1100 GMT).
The longer hours will be for contracts including corn, wheat, soybeans and ethanol.
"They're trying to capture more business. There are markets open that time of the day and they are meeting the competition," a trader said.
A number of traders said it was another step by the CME, the world's largest derivatives exchange, to eventually offer electronic trading 24 hours a day.
"The exchange thinks it will expand volume, and it might, but I don't think by a lot. But it's another step in their quest toward 24-hour trading," another trader said.
A CME trading floor source said the reason the CME will stop trading at 7:15 a.m. is because of the monthly release of sensitive U.S. Department of Agriculture crop information at 7:30 a.m. CDT.
Ethanol News
CME Group Inc announced on Friday it would expand electronic trading of agricultural contracts by 75 minutes, effective July 1, in a move aimed at further boosting business on that platform.
"It allows customers based in Europe more time to trade during trading hours that are most convenient for them," said CME Group spokesperson Mary Haffenberg.
CME said it would extend electronic trading on July 1 by one hour and 15 minutes to 7:15 a.m. CDT (1215 GMT). Electronic trading currently begins at 6 p.m. (2300 GMT) and ends at 6 a.m. (1100 GMT).
The longer hours will be for contracts including corn, wheat, soybeans and ethanol.
"They're trying to capture more business. There are markets open that time of the day and they are meeting the competition," a trader said.
A number of traders said it was another step by the CME, the world's largest derivatives exchange, to eventually offer electronic trading 24 hours a day.
"The exchange thinks it will expand volume, and it might, but I don't think by a lot. But it's another step in their quest toward 24-hour trading," another trader said.
A CME trading floor source said the reason the CME will stop trading at 7:15 a.m. is because of the monthly release of sensitive U.S. Department of Agriculture crop information at 7:30 a.m. CDT.
Ethanol News
Monday, January 5, 2009
Obama's Pick of Tom Vilsack for Agriculture Secretary Grim News for Nation
Obama hasn't shown a lot of wisdom in his cabinet choices so far, and is evidenced in relationship to ethanol, as he picked ethanol subsidy proponent Tom Vilsack, former Iowa governor, to lead the Department of Agriculture.
The conflict of interest is too obvious to have to comment on, in that Iowa has been the largest recipient of taxpayer dollars, receiving the largest portion of the over $25 billion wasted on ethanol subsidies so far.
Not only that, but Vilsack is even more radical in pushing for larger subsidies for the failing biofuel strategy.
It's hard to understand how Obama on one side of his mouth asks for a cap on subsidies for wealthy farmers, citing the excessive power the special interest group wields, and then on the other side of his mouth places someone like Vilsack in charge of the Department of Agriculture. It's a grim, complete disaster.
"The president-elect’s own history is difficult to square with his recent farm-reform talk. Obama ardently backed ethanol subsidies while in the Senate — his home state of Illinois trails only Iowa in corn production — and one of his closest confidants, former Senate Majority Leader Tom Daschle, is as responsible as any politician for the explosion in these subsidies."
Not only does corn-based ethanol require more inputs than other crops, but the usual unintended consequences have emerged, and as usual hurt the little people the most, as processed food prices soared in response to the artificial propping up of the prices of corn, driven only by Federal subsidies.
It looks like a lot more pain will have to be inflicted on people before politicians and environmentalist admit the failure of this venture, which was instigated by the unholy agreement between the two.
Now that the obvious results of the disaster are becoming known, green groups are trying to distance themselves from the debacle, as they're made to look like the fools they are.
All of us are still waiting to see where the reform promised by Obama is going to implemented. So far it's business as usual in Washington. And in the case of ethanol, it's an increasing disaster no one is willing to admit to and just drop off the subsidy list.
The conflict of interest is too obvious to have to comment on, in that Iowa has been the largest recipient of taxpayer dollars, receiving the largest portion of the over $25 billion wasted on ethanol subsidies so far.
Not only that, but Vilsack is even more radical in pushing for larger subsidies for the failing biofuel strategy.
It's hard to understand how Obama on one side of his mouth asks for a cap on subsidies for wealthy farmers, citing the excessive power the special interest group wields, and then on the other side of his mouth places someone like Vilsack in charge of the Department of Agriculture. It's a grim, complete disaster.
"The president-elect’s own history is difficult to square with his recent farm-reform talk. Obama ardently backed ethanol subsidies while in the Senate — his home state of Illinois trails only Iowa in corn production — and one of his closest confidants, former Senate Majority Leader Tom Daschle, is as responsible as any politician for the explosion in these subsidies."
Not only does corn-based ethanol require more inputs than other crops, but the usual unintended consequences have emerged, and as usual hurt the little people the most, as processed food prices soared in response to the artificial propping up of the prices of corn, driven only by Federal subsidies.
It looks like a lot more pain will have to be inflicted on people before politicians and environmentalist admit the failure of this venture, which was instigated by the unholy agreement between the two.
Now that the obvious results of the disaster are becoming known, green groups are trying to distance themselves from the debacle, as they're made to look like the fools they are.
All of us are still waiting to see where the reform promised by Obama is going to implemented. So far it's business as usual in Washington. And in the case of ethanol, it's an increasing disaster no one is willing to admit to and just drop off the subsidy list.
Monday, November 3, 2008
Monsanto Acquires Brazil's "Aly Participacoes" Eyeing Sugarcane for Ethanol
With demand for sugarcane starting to outstrip production, Monsanto (MON) has acquired Brazilian-based Aly Participacoes Ltda. in order to work on producing sugarcane seeds that will be much higher-yielding than present stocks.
Of course much of the demand for sugarcane has come about from the fixation of governments on using ethanol as a gas substitute, based on the non-factual idea of "peak oil." There's billions of barrels of oil available throughout the world, and even in the U.S. alone.
Most of this is ideologically driven, rather than based on facts.
While that's a misguided illusion, at the same time that illusion will stick around for some time until all that fails. So in that sense, this is a good investment for Monsanto, as the obsession with ethanol will continue based on unwarranted fears that are driving the fixation.
Of course much of the demand for sugarcane has come about from the fixation of governments on using ethanol as a gas substitute, based on the non-factual idea of "peak oil." There's billions of barrels of oil available throughout the world, and even in the U.S. alone.
Most of this is ideologically driven, rather than based on facts.
While that's a misguided illusion, at the same time that illusion will stick around for some time until all that fails. So in that sense, this is a good investment for Monsanto, as the obsession with ethanol will continue based on unwarranted fears that are driving the fixation.
Tuesday, August 5, 2008
Archer Daniels Midland Co. Acknowledges Slowdown in Agricultural Products, Especially Ethanol-related
Archer Daniels Midland (ADM) is the third-largest ethanol producer in the U.S., and the slowing demand for corn-based ethanol has had a significant impact on the company's performance for the quarter. A number of producers have stopped or closed expansion plans in response to the falling demand. Corn prices have also responded accordingly, falling to four-month low of $5.3625 a bushel today.
John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.
But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.
Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.
If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.
As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.
Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.
Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.
Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.
John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.
But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.
Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.
If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.
As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.
Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.
Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.
Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.
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